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ACCC appeals Port of Newcastle Federal Court ruling

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A judge’s decision on two 50-year deals affecting nearly every product entering NSW by sea has been appealed.

The competition watchdog says it still believes stopping competition was the purpose and likely effect of compensation provisions established when NSW privatised the ports of Botany and Kembla in 2013.

A case alleging those provisions breached competition law was dismissed in June, with the judge saying the port’s new owner had “derivative crown immunity”.

If Justice Jayne Jagot was wrong about that, she said the case would fail anyway as the provisions’ purpose and likely effect wasn’t to substantially lessen competition.

The judge also described the Port of Newcastle’s hopes of competing with Botany as “speculative”.

The Australian Competition and Consumer Commission (ACCC) says agreements to privatise state-owned monopoly businesses are “inherently anti-competitive” when they seek to maximise profit from the sale by protecting the monopoly from future competition.

“We remain concerned that the Port Commitment Deeds will effectively hinder or prevent the development of a competing container terminal at the Port of Newcastle for 50 years,” ACCC chair Rod Sims said.

“This is a matter of significance for the Australian economy.”

Newcastle is the world’s largest coal export port and the country’s third-largest port by volume.

But, it handles few containers, lacking the specialist equipment that allows Port Botany to handle 2.7 million standard container units each year.

Port of Newcastle CEO Craig Carmody said in a statement on Tuesday 27 July that alternative export routes would increase regional NSW global competitiveness and allow suppliers to avoid congested supply chains.

“We welcome the ACCC’s decision to appeal the ACCC v NSW Ports case following the Federal Court’s recent judgment,” he said.

“Development of another container terminal in NSW, even while Port Botany still has capacity, would provide a viable alternative and more cost-effective export routes for regional NSW farmers and manufacturers.

“Such competition would increase regional NSW global competitiveness and allow these suppliers to avoid congested supply chains. 

“Port of Newcastle is confident that it has the ability to compete in the same market as Port Botany. 

“We’ll continue to monitor the progress of the Federal Court proceedings with a keen interest and await the outcome of the appeal.”

Botany, which has a capacity of about seven million containers annually, and Kembla, which primarily handles imported vehicles, grain and other bulk cargo, are both owned by NSW Ports, a consortium of industry superannuation funds.

It described Justice Jagot’s decision as “an emphatic win” for it and the people of NSW.

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