Port of Newcastle has welcomed the Independent Pricing and Regulatory Tribunal’s (IPART) determination for the one-off compensation payment of $10,120,000 (approx. $13,100,000 when adjusted for CPI) it must make to the state under the Port of Newcastle Extinguishment of Liability Act 2022 (NSW).
While the details of the ruling are yet to be fully-examined, once complete, this payment will bring an end to the legislative process, meaning Port of Newcastle will no longer be penalised for competing against Port Botany.
Port of Newcastle CEO Craig Carmody said with the determination figure handed down, the Port has one final regulatory roadblock to remove before meaningful progression can occur on a container terminal.
“Today is a significant and historic milestone for Port of Newcastle and regional NSW, a path forward that means we will no longer be penalised for wanting to offer choice and competition in NSW container trade,” he stated.
The Port of Newcastle extends its appreciation to all sides of parliament for their pragmatic approach to the legislative process.
“Support across the political divide for this Act has been wonderful to see, but I must extend particular thanks to the Member for Lake Macquarie, Greg Piper MP, who courageously fought for regional NSW and ensured all political parties aligned for the benefit of the state,” Mr Carmody said.
With the legislative process nearing completion, attention for the Port turns to the NSW Freight Reform Review, which is a determinant of state planning decisions.
“While we are delighted that the determination has been made, we now need to ensure the NSW Freight Reform Review, which the NSW Government has commenced, also reflects the decision by Parliament to promote competition through the Port of Newcastle Extinguishment of Liability Act,” Mr Carmody said.
“The current Freight and Ports Policy states that Port Kembla is the designated second port for a container terminal in NSW, which impacts Port of Newcastle’s ability to get planning approvals for its own container terminal.
“We hope the NSW Freight Reform Review will agree that there should be a level playing field for competition rather than the state trying to pick winners,” he said.
The IPART determination process included the opportunity for all interested parties to make submissions, informing IPART’s review and determination for the one-off compensation payment. We can now assume, with the determination made by an independent body, that we have the support of all sides of parliament to move toward the expansion of container operations at Port of Newcastle.
With the legislative process nearing completion and the NSW Freight Reform Review underway, Port of Newcastle will continue to focus on growing exiting container trade through its new Multipurpose Terminal.
“Our immediate focus will be the continued growth of container trade through our existing Multipurpose Terminal, which we have invested over $35 million in and currently has planning approval for 350,000 containers a year,” Mr Carmody said.
Business Hunter also welcomed IPART’s ruling on Friday 5 April.
“We’ve always advocated for a level playing field for the Port of Newcastle,” CEO Bob Hawes said.
“If there is an opportunity for it to offer container freight services, it should be left to the market to determine where it’s cheaper and more efficient option to freight materials.
“This judgement brings us significantly closer to realising that goal.
“The IPART determination would appear to set a reasonable hurdle price for the PoN to consider… and we sincerity hope they confirm their long-held ambition to diversify activity in the port and proceed with further development of their capacity to handle container freight.
“In time, the diversification of trade in the port will form a significant part of the transition story for the Hunter region, with the promise of jobs and economic activity to help balance the decline in coal trade they might experience in the medium-to-long term.”
Approximately 12 months ago, the Productivity Commission released a report that noted inefficiencies in our nation’s ports were costing the Australian economy about $600 million and indicated that “lack of competition in some parts of the marine logistics system” was contributing to the inefficiency and costs.
Mr Hawes said businesses were experiencing pressure from sharp increases in freight costs, which ultimately dampen economic growth.
“A container facility in Newcastle will increase competition and give the market more choice and potentially address this concern,” he explained.
“That’s got to be good for the economy, business and consumers.
“It’s an issue greatly magnified for industries producing at scale, such as the agriculture sector stretching up into the state’s northwest and particularly the grain growers.”
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