AN INDEPENDENT determination of the value of Port of Newcastle’s container reimbursement provisions has begun, marking the final step in the process to allow the port to compete in container trade free from penalty.
Under the original long-term lease arrangements for the Newcastle Deepwater Container Terminal, PON was required to reimburse NSW Ports if the planned facility breached a specified cap on container volume.
The NSW Independent Pricing and Regulatory Tribunal has been appointed to determine the amount PON can pay to extinguish the liability, creating a pathway for PON to invest in and develop Newcastle’s first dedicated container terminal.
This comes after NSW Parliament amended the Port of Newcastle (Extinguishment of Liability) Act 2022 to provide more investment certainty for PON to build a container terminal if it chose to do so.
NSW Treasurer Matt Kean said the provisions were focused on getting a fair outcome for taxpayers while giving PON more investment certainty to build a container terminal.
“Our ports are the State’s gateway to the world, helping connect NSW farmers and energy producers with overseas markets to grow the economy,” Mr Kean said.
“This determination will provide a pathway for Port of Newcastle to invest with confidence in a container terminal if it chooses to do so, helping to keep pace with a constantly changing global market and keeping our competitive advantage.”
PON CEO Craig Carmody welcomed the appointment of an independent valuer.
“With this announcement, the NSW Government is providing manufacturers and agri-businesses with a cost-effective alternative to export their goods that will drive growth and investment both here and in the regions,” Mr Carmody said.
“This will create new opportunities for exporters and importers that will ultimately lead to benefits for consumers.
“Now that the Treasurer has appointed the independent valuer, we look forward to seeing the process through to completion over the next six months.”
Terminal in works
PON is working on plans to construct the $2.4B Newcastle Deepwater Container Terminal which, when fully operational, will have a throughput capacity of 2 million TEUs (standard twenty-foot containers).
NSW Ports, operators of Port Botany, has argued that another container terminal was not needed for the state’s economic future.
NSW Ports CEO Marika Calfas said the NSW Government’s long-term container port strategy stipulates that using capacity at Port Botany first, followed by a new container terminal at Port Kembla, best supports the state’s trade needs.
Ms Calfas said this strategy delivers the most effective use of public infrastructure, while catering for population and economic growth in Sydney’s west and south-west.
NSW Ports contends that developing a container terminal at the PON, rather than using available container capacity at Port Botany, which is less than half full, would increase supply-chain costs for Australian exporters, importers and consumers.
NSW Ports has said the Newcastle facility would add up to 5400 truck movements a day to Newcastle’s roads and the M1 Pacific Motorway, and worsen congestion and greenhouse-gas emissions.
Source: Port of Newcastle, NSW Government and NSW Ports