The Port of Newcastle is now free to progress its plans to build a large-scale container terminal after paying $13million compensation to the state government.
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The one-off payment, made on April 30, was required under the Port of Newcastle Extinguishment of Liability Act 2022 (NSW), which passed through parliament in late 2022.
The payment means the port is no longer liable to reimburse the state for compensation payments owed to NSW Ports when the Port of Newcastle competes against Port Botany in container operations
The Port of Newcastle Board voted in favour of paying the $13million, determined by the Independent Pricing and Regulatory Tribunal, at an extraordinary board meeting.
It followed 24 years of advocacy from the port's stakeholders and community, which have been steadfast in their support for the construction and operation of a container terminal in Newcastle.
"The door was once closed on Newcastle operating a container terminal, today, the legal and commercial restriction has been lifted, and we now turn our attention to removing the last regulatory / policy obstacle - the deliberately unfair NSW Freight & Ports Policy. Then planning approvals, investment and construction," Port of Newcastle chief executive Craig Carmody said.
"But first, I must recognise Member for Lake Macquarie MP Greg Piper and the many supporters that stood behind us calling for change and a fair go, it truly was a movement beyond one organisation that has led to this moment."
Mr Piper said the compensation payment paved the way for the construction of a project that that would bring major economic opportunities to the Hunter as part of the clean energy transition.
"Frankly, I'm extraordinarily pleased about it. I hope the port moves ahead quickly," Mr Piper said.
"Obviously there will be benefits from the port (container terminal) in the long term, but my concern is for my community and the community of the Upper Hunter that are going through a fairly difficult time as we move away from coal-fired power. I want them to understand there are some really good things on the horizon and I think this will be a big part of it."
Transport for NSW recently released the Freight Policy Reform Consultation Paper, which states a guiding principle is that competition must be encouraged and well balanced.
That is all Port of Newcastle has ever asked for, the opportunity to compete and this policy reform must ensure a level playing field and stop trying to pick private company winners," Mr Carmody said.
Port of Newcastle chairman Roy Green said the Port of Newcastle Board's pursuit of this outcome was a result of the market demand.
"Agreement to pay the determination was met without hesitation," Professor Green said.
"Since Port of Newcastle was privatised in 2014, it became apparent the market in the port's catchment did not want their own trade restricted, they wanted their product exported in the most efficient and cost-effective way.
"This was highlighted in the support we received during the legislative process, the Port of Newcastle Extinguishment of Liability Act became less about the Port of Newcastle and more about a collective group of organisations demanding change.
"While we eagerly await the outcome of the Freight Reform Program, Port of Newcastle will continue its planning for a container terminal, including continuing to grow container trade through the Port's Multipurpose Terminal, which has current planning approval for 350,000 containers a year," he said.
Canberra-based public affairs analyst Greg Cameron, who has a long-standing interest in the Port of Newcastle, said the deal which prevented the establishment of a container terminal was illegal.
"In his valedictory speech to Parliament last week, the now former Member for Northern Tablelands, Adam Marshall, said that he and Greg Piper had "skewered the [Coalition] government of the day" with the passing of the Port of Newcastle (Extinguishment of Liability) Act 2022 in November 2022. It wasn't the government that was skewered: it was the NSW taxpayer. In return for a $13 million payment from Port of Newcastle, the government is now facing a compensation bill estimated at between $600 million and $4 billion payable to NSW Ports," he said.
"The Minns government claims that Parliament intended to authorise the previous government to spend the proceeds of the ports privatisations to pay compensation to NSW Ports for losing container shipping business to the Port of Newcastle.
The Minns government's claim is wrong. The previous government's commitment to pay NSW Ports was not only concealed from Parliament but it was denied by the previous government before being exposed by the Newcastle Herald in July 2016."
Matthew Kelly
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
Matthew Kelly has worked as a journalist for more than 25 years. He has been working as a general reporter at the Newcastle Herald since 2018. In recent years he has reported on subjects including environment, energy, water security, manufacturing and higher education. He has previously covered issues including the health and environmental impacts of uncovered coal wagons in the Hunter Valley, the pollution of legacy of former industrial sites and freedom of information issues.
