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6427 – PORT OF NEWCASTLE Crakanthorp, Tim to the Treasurer, and Minister for Energy and Environment, October 14 2021, Answer November 18 2021

 

  1. Had the Government disclosed the Port of Newcastle container penalty to Parliament when the Ports Assets (Authorised Transactions) Bill 2012 was passed on 22 November 2012?

 

(a) If not, on what date did the Government disclose the Port of Newcastle container penalty to Parliament?

 

Answer: Please refer to the Second Reading Speech and Parliamentary debates for the Ports Assets (Authorised Transactions) Act 2012. The Port of Newcastle transaction arrangements were entered into in 2014, after the transaction legislation had passed through Parliament in 2012.

 

(a) Please see the Government submission to the Legislative Council Public Works Committee’s Inquiry into Impact of Port of Newcastle Sale Arrangements on Public Work Expenditure in NSW (January 2019), available on the Parliament website.

 

  1. Does the Ports Assets (Authorised Transactions) Act 2012 authorise the Government to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs a year as at 1 July 2013, increasing by six per cent a year for 50 years, at the Port of Newcastle?

 

(a) If yes, which section?

 

Answer: Please refer to the response to LC 5080. Section 6 of the Ports Assets (Authorised Transactions) Act 2012 gives the Treasurer the power to exercise all functions as are necessary or convenient for the purposes of an authorised transaction.

 

  1. Did Parliament, without knowing that the (then) Treasurer intended to penalise the Government, authorise the Treasurer to penalise the government, when Parliament passed the Ports Assets (Authorised Transactions) Bill 2012 on 22 November 2012?

 

Answer: The then Treasurer’s intentions in introducing the Ports Assets (Authorised Transactions) Bill 2012 are set out in the Second Reading Speech and Parliamentary debates. The Treasurer does not penalise the Government.

 

  1. Will consideration be given to the construction of a container terminal at the Port of Newcastle which could provide billions of dollars of private investment and create thousands of jobs?

 

(a) If not, why not?

 

Answer: The State is investing millions into the regional Hunter economy. The State’s position in relation to the development of a container terminal at the Port of Newcastle is set out in the NSW Freight and Ports Plan.

 

 

6420 – POLICY ON CONTAINER FACILITY DEVELOPMENT Crakanthorp, Tim to the Minister for Planning and Public Spaces, and Minister for Transport and Roads, October 14 2021, Answer November 18 2021

 

  1. In relation to the Government’s policy on container facility development, does “container” mean any moveable device, designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, TEUs, other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time and Containerised has a corresponding meaning. Container includes:
  • Overseas import containers;
  • Overseas export containers;
  • Local containers (coastal inwards or outwards); and
  • Empty containers and transhipped containers?

 

(a) If not, what is the meaning of “container” in relation to the Government’s policy on container facility development?

 

Answer: I am advised:

 

The definition provided in the question is that used within Government policy and the Port Commitment Deeds. It conforms with the definition of containers under the International Convention for Safe Containers [1981].

5718 – NEWCASTLE PORT RESTRICTIONS, Crakanthorp, Tim to the Treasurer, May 6 2021

 

(1) Is the purpose of the penalty on container traffic at the Port of Newcastle to create a disincentive or obstacle to developing a container terminal?

 

(a) If not, what is the purpose of the penalty on container traffic at the Port of Newcastle?

 

(2) Can a container terminal at the Port of Newcastle be developed?

 

(3) What consideration has been given to the Prime Minister’s view that a container terminal should be built at the Port of Newcastle?

 

Answer June 10 2021:

 

Treasury has advised me as follows:

 

(1) This is a matter currently before the Courts. The Port Commitment Deed contains commercial arrangements between the Port of Newcastle and the State of New South Wales that were agreed as part of the State’s transaction for the long-term lease of the Port of Newcastle in 2014. The State received $1.75 billion as a result of the transaction, which is helping to fund State infrastructure.

 

(2) We refer the Honourable Member to the current NSW Freight and Ports Plan as to the State’s policy position on the development of additional container capacity in New South Wales. Any decision to build a container terminal at Newcastle is a matter for the private operator of the Port of Newcastle.

 

(3) The State’s position in relation to the development of a container terminal at the Port of Newcastle is set out in the NSW Freight and Ports Plan.

 

5675 – DEFINITION OF CONTAINER Crakanthorp, Tim to the Treasurer, May 4 2021

 

(1) Was the definition of the term “container” changed by the Government in the Port Commitment Deeds for Port Botany and Port Kembla, dated 31 May 2013, following a decision announcement on 5 November 2013 to lease the Port of Newcastle to the private sector?

 

(2) When the Government leased Port Botany and Port Kembla to NSW Ports Pty Ltd on 31 May 2013, did the Port Commitment Deeds define the term “container” to be: “Container means any moveable device, designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, twenty-foot equivalent units (TEUs), other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time and containerised has a corresponding meaning. Container includes:

(a) Overseas import containers;

(b) Overseas export containers;

(c) Local containers (coastal inwards or outwards), and;

(d) Empty containers and transhipped containers?

(3) After the Government announced its decision to lease the Port of Newcastle to the private sector on 5 November 2015, did the Government and NSW Ports Pty Ltd change the definition of the term “container” in the Port Commitment Deeds for Port Botany and Port Kembla to be: “TEU”?

(a) If so, why?

 

(4) When the Government leased the Port of Newcastle to Port of Newcastle Investments Pty Ltd on 30 May 2014, did the Port Commitment Deed define “container” to be: “TEU”?

 

Answer due June 8 2021.

Answer June 3 2021:

 

Treasury has advised me as follows:

 

(1) The Port Botany and Port Kembla Port Commitment Deeds were not amended as a consequence of the announcement of the long-term lease of the Port of Newcastle in November 2013.

 

(2) The Port Commitment Deeds are commercial in confidence and the State cannot disclose the specific terms of these arrangements that have been commercially negotiated and entered into with private parties.

 

(3) Refer to answers 1 and 2 above.

 

(4) Refer to answer 2 above.

5574 – DEFINITION OF CONTAINER, Crakanthorp, Tim to the Minister for Transport and Roads, March 25 2021

 

  1. Was the definition of the term “container” changed by the Government in the Port Commitment Deeds for Port Botany and Port Kembla, dated 31 May 2013, following a decision announcement on 5 November 2013 to lease the Port of Newcastle to the private sector?

 

  1. When the Government leased Port Botany and Port Kembla to NSW Ports Pty Ltd on 31 May 2013, did the Port Commitment Deeds define the term “container” to be: “Container means any moveable device, designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, twenty-foot equivalent units (TEUs), other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time and containerised has a corresponding meaning. Container includes:

 

  1. Overseas import containers;
  2. Overseas export containers;
  3. Local containers (coastal inwards or outwards), and;
  4. Empty containers and transhipped containers?

 

  1. After the Government announced its decision to lease the Port of Newcastle to the private sector on 5 November 2015, did the Government and NSW Ports Pty Ltd change the definition of the term “container” in the Port Commitment Deeds for Port Botany and Port Kembla to be:”TEU”?

 

  1. If so, why?

 

  1. When the Government leased the Port of Newcastle to Port of Newcastle Investments Pty Ltd on 30 May 2014, did the Port Commitment Deed define “container” to be: “TEU”?

 

Answer  April 29 2021

I am advised:

This is a matter for the Treasurer

5233 – DEFINITION OF CONTAINER, Primrose, Peter to the Leader of the Government in the Legislative Council, Special Minister of State, Minister for the Public Service and Employee Relations, Aboriginal Affairs, and the Arts, Vice-President of the Executive Council representing the Minister for Transport and Roads, March 25 2021

 

  1. Was the definition of the term “container” changed by the Government in the Port Commitment Deeds for Port Botany and Port Kembla, dated 31 May 2013, following a decision announcement on 5 November 2013 to lease the Port of Newcastle to the private sector?

 

  1. When the Government leased Port Botany and Port Kembla to NSW Ports Pty Ltd on 31 May 2013, did the Port Commitment Deeds define the term “container” to be: “Container means any moveable device, designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, twenty-foot equivalent units (TEUs), other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time and containerised has a corresponding meaning. Container includes:

 

  1. Overseas import containers;
  2. Overseas export containers;
  3. Local containers (coastal inwards or outwards), and;
  4. Empty containers and transhipped containers?

 

  1. After the Government announced its decision to lease the Port of Newcastle to the private sector on 5 November 2015, did the Government and NSW Ports Pty Ltd change the definition of the term “container” in the Port Commitment Deeds for Port Botany and Port Kembla to be:”TEU”?

 

  1. If so, why?

 

  1. When the Government leased the Port of Newcastle to Port of Newcastle Investments Pty Ltd on 30 May 2014, did the Port Commitment Deed define “container” to be: “TEU”?

 

Answer April 15 2021

 

I am advised:

This is a matter for the Treasurer.

5431 – PORT OF NEWCASTLE, Crakanthorp, Tim to the Minister for Transport and Roads, March 18 2021

 

1. In relation to the Government’s policy on container facility development, does “container” mean any moveable device, designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, TEUs, other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time and Containerised has a corresponding meaning. Container includes:

a. Overseas import containers;

b. Overseas export containers; and,

c. Local containers (coastal inwards or outwards); and

d. Empty containers and transhipped containers?

 

2. If not, what is the meaning of “container” in relation to the Government’s policy on container facility development?

 

Answer due – April 22 2021

Budget Estimates Portfolio Committee No 1 – Premier and Finance TREASURY

Monday, 8 March 2021

PRESENT The Hon. Dominic Perrottet, Treasurer

SUPPLEMENTARY QUESTIONS

Answers – April 1 2021

 

Port of Newcastle

 

  1. Does the Government’s policy on container facility development apply to Port of Newcastle Investments Pty Ltd?

 

Answer: Yes.

 

  1. Is it Government policy that a container terminal will not be developed at the Port of Newcastle before Port Botany and Port Kembla become fully developed?

 

Answer: The Freight and Ports Plan states that Port Kembla has been identified as the location for the development of a future container terminal to augment capacity of Port Botany when required. Current arrangements do not prohibit the development of a container terminal at the Port of Newcastle but rather allow for the growth of container volumes through Newcastle that service the region.

 

  1. Does Port of Newcastle Investments Ply Ltd have a contractual right to develop a container terminal at the Port of Newcastle?

 

Answer: Current arrangements do not prohibit the development of a container terminal at the Port of Newcastle but rather allow for the growth of container volumes through Newcastle that service the region.

 

  1. What was the Government’s source of funds on 31 May 2013 to meet its contractual commitment to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs per year as at 1 July 2013, increasing by six per cent per year, for 50 years, at the Port of Newcastle?

 

Answer: The State’s contractual commitment to pay NSW Ports has not crystalised, so there is no need to identify a funding source.

 

  1. What was the Government’s source of funds on 30 May 2014 to meet its contractual commitment to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs per year as at I July 2013, increasing by six per cent per year, for 50 years, at the Port of Newcastle?

 

Answer: The State’s contractual commitment to pay NSW Ports has not crystalised, so there is no need to identify a funding source.

 

  1. Was the Government’s decision to lease the Port of Newcastle to the private sector, as announced on 5 November 2013, made for the purpose of funding the Government’s contractual commitment to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs per year as at I July 2013, increasing by six per cent per year, for 50 years, at the Port of Newcastle?

 

Answer: No.

 

  1. Did the Government lease the Port of Newcastle to Port of Newcastle Investments Pty Ltd on 30 May 2014 for the purpose of funding the Government’s contractual commitment to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs per year as at I July 2013, increasing by six per cent per year, for 50 years, at the Port of Newcastle?

 

Answer: No.

 

  1. If not, what is the Government’s source of funds to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs per year as at I July 2013, increasing by six per cent per year, for 50 years, at the Port of Newcastle?

 

Answer: The State’s contractual commitment to pay NSW Ports has not crystalised, so there is no need to identify a funding source.

 

  1. Why is the Government concealing the date that the ACCC was informed of the Government’s contractual commitment to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs per year as at I July 2013, increasing by six per cent per year, for 50 years, at the Port of Newcastle?

 

Answer: In asset transactions Treasury typically consults with a range of regulators including the ACCC. This was the case in relation to the ports transactions, and the ACCC was aware of the Port Commitment Deeds prior to the Port of Newcastle transaction.

 

  1. Are you aware of the Prime Minister’s support of the construction of a container terminal at the Port of Newcastle?

 

Answer: It is not my role to comment on the Prime Minister’s past statements.

 

  1. Do you agree with the Prime Minister that the Port of Newcastle should construct a container terminal?

 

Answer: It is not my role to comment on statements made by the Prime Minister.

 

  1. Is the Prime Minister correct in saying that a container terminal at the Port of Newcastle would create jobs?

 

Answer: It is not my role to comment on statements made by the Prime Minister.

 

  1. Would a container terminal at the Port of Newcastle increase competition in the freight and logistics sector?

 

Answer: This matter is currently the subject of court proceedings.

 

  1. Would a container terminal at the Port of Newcastle be beneficial for farmers in NSW?

 

Answer: This is primarily a matter for the private sector operator of the Port of Newcastle and the farming industry.

 

  1. Has NSW Treasury undertaken any economic modelling on the impacts of a container terminal at the Port of Newcastle?

 

Answer: The economic modelling has been conducted in line with the NSW Freight and Ports Plan.

5036 – PORT OF NEWCASTLE, Primrose, Peter to the Minister for Finance and Small Business representing the Treasurer, February 18 2021

 

1. Did the government cap container traffic at the Port of Newcastle for which NSW Ports Pty Ltd may not claim any payment from the government?

 

a. If so, is this cap 30,000 TEUs a year as at 1 July 2013 increasing by six per cent a year for 50 years?

 

2. Does the “Ports Assets (Authorised Transactions) Act 2012” authorise the government to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs a year as at 1 July 2013, increasing by six per cent a year for 50 years, at the Port of Newcastle?

 

a. If so, which section?

 

3. Did NSW Ports Pty Ltd become exempt from the government’s policy on container facility development by leasing Port Botany and Port Kembla from the government on May 31 2013?

 

4. Did Port of Newcastle Investments Pty Ltd become exempt from the government’s policy on container facility development by leasing the Port of Newcastle from the government on May 30 2014?

 

5. In relation to the government’s policy on container facility development, does “container” mean any moveable device designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, TEUs, other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time?

 

6. Does “Containerised” have a corresponding meaning?

 

a. Does “Container” include:

 

i.Overseas import containers?

ii. Overseas export containers?

iii. Local containers (coastal inwards or outwards)?

iv. Empty containers and transhipped containers?

 

b. If not, what is the meaning of “container” in relation to the government’s policy on container facility development?

 

Answer March 11 2021

 

  1. Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates.

 

  1. Please refer to the response to question 1 above.

 

  1. Section 6 of the Ports Assets (Authorised Transactions) Act 2012 gives the Treasurer the power to exercise all functions as are necessary or convenient for the purposes of an authorised transaction.

 

  1. No.

 

  1. Please refer to the response to question 4 above.

 

  1. Please refer to the Minister for Transport.

 

  1. Please refer to the Minister for Transport.

 

BUDGET ESTIMATES 2019-2020

Supplementary Questions

Portfolio Committee No. 1 – Premier and Finance Treasury

Hearing: Thursday 29 August 2019

Answers Tuesday 24 September 2019

 

Question 106

 

What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

Answer:

 

As indicated in the recent Parliamentary Inquiry,

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany/Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.”

 

As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

5080 – PORT OF NEWCASTLE, Crakanthorp, Tim to the Treasurer, February 11 2021

 

1. Did the Government cap container traffic at the Port of Newcastle for which NSW Ports Pty Ltd may not claim any payment from the Government?

 

2. Is this cap of 30,000 twenty-foot equivalent units (TEU) a year as at 1 July 2013 increasing by six per cent a year for 50 years?

 

3. Does the Ports Assets (Authorised Transactions) Act 2012 authorise the Government to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs a year as at 1 July 2013, increasing by six per cent a year for 50 years, at the Port of Newcastle?

 

a. If yes, which section?

 

4. Did NSW Ports Pty Ltd become exempt from the Government’s policy on container facility development by leasing Port Botany and Port Kembla from the government on 31 May 2013?

 

5. Did Port of Newcastle Investments Pty Ltd become exempt from the Government’s policy on container facility development by leasing the Port of Newcastle from the Government on 30 May 2014?

 

6. In relation to the Government’s policy on container facility development, does “container” mean any moveable device, designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, TEUs, other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time and Containerised has a corresponding meaning. Container includes:

a. Overseas import containers;

b. Overseas export containers; and,

c. Local containers (coastal inwards or outwards); and

d. Empty containers and transhipped containers?

 

7. If not, what is the meaning of “container” in relation to the Government’s policy on container facility development?

 

Answer March 18 2021-

 

(1) and (2) Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates.

 

(3) Section 6 of the Porls Assets (Authorised Transactions) Act 2012 gives the Treasurer the power to exercise all functions as are necessary or convenient for the purposes of an authorised transaction.

 

(4) and (5) No.

 

(6) and (7) Please refer to the Minister for Transport.

 

BUDGET ESTIMATES 2019-2020

Supplementary Questions

Portfolio Committee No. 1 – Premier and Finance Treasury

Hearing: Thursday 29 August 2019

Answers Tuesday 24 September 2019

 

Question 106

 

What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

Answer:

 

As indicated in the recent Parliamentary Inquiry,

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.”

 

As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

4874 – PORTS ASSETS (AUTHORISED TRANSACTIONS) ACT 2012, Crakanthorp, Tim to the Treasurer, November 19 2020

 

  1. Does the Ports Assets (Authorised Transactions) Act 2012 authorise the Government to pay NSW Ports Pty Ltd for container traffic above a minimal specific cap at the Port of Newcastle?

 

  1. Did the Ports Assets (Authorised Transactions) Amendment Act 2013 authorise the Government to lease the Port of Newcastle to the private sector for the purpose of funding the Government’s contractual commitment to pay NSW Ports Pty Ltd for container traffic above a minimal specific cap at the Port of Newcastle?

 

Answer published December 21 2020-

 

The Act gives the Treasurer the power to exercise all functions as are necessary or convenient for the purposes of an authorised transaction.

This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

4541 – PORT OF NEWCASTLE DEEP WATER TERMINAL, Crakanthorp, Tim to the Treasurer, October 22 2020

 

  1. Has Treasury undertaken any economic modelling on the impact of a multipurpose deep-water terminal at the Port of Newcastle?

 

a. If so, can a copy be provided?

 

Answer November 24 2020-

 

Treasury has not undertaken economic modelling on the impact of a multipurpose deep-water terminal at the Port of Newcastle.

4091 – PORT OF NEWCASTLE ECONOMIC BOOST, Crakanthorp, Tim to the Treasurer, September 17 2020

 

  1. Has consideration been given that the Port of Newcastle stands ready to invest $1.8 billion in a multi-purpose deep water terminal at their facility which is estimated to contribute $2.2 billion to the New South Wales economy and create over 9,000 full-time equivalent direct and indirect jobs?

 

  1. Does the Government support this project?

 

a. If not, why not?

 

  1. What is the current unemployment rate in the Hunter as at 17 September 2020?

 

  1. Has consideration been given that this $1.8 billion project would reduce unemployment in the Hunter?

 

  1. Will support be given to removing the anti-competitive restrictions that the Government placed on the Port of Newcastle so this project can start without delay?

 

Answer October 20 2020-

 

The latest data by the Australin Bureau of Statistics shows that in August 2020 the unemployment rate in the Hunter was 5.0 per cent. The Government is committed to creating and supporting jobs for the people of New South Wales, including regional jobs.

 

The construction of a multi-purpose deep water terminal at Newcastle is a matter for the private sector operator of the Port of Newcastle.

 

This matter is currently the subject of Federal court proceedings and is therefore subject to the sub judice convention.

3857 – PORT OF NEWCASTLE RESTRICTIONS, Crakanthorp, Tim to the Treasurer, August 6 2020

 

  1. Has the Government considered that it is contractually committed to charging the Port of Newcastle a financial penalty per container processed above a threshold limit?

 

  1. Has the Government considered that it is contractually committed to paying compensation to the Port of Newcastle’s competitors if the Port of Newcastle competes against them?

 

  1. Has the Government considered that this reduces competition?

 

  1. Will the Government consider not charging the Port of Newcastle a financial penalty per container processed above a threshold limit?

 

  1. Will the Government consider not paying compensation to the Port of Newcastle’s competitors’ if the Port of Newcastle processes containers above a threshold limit?

 

  1. Would the construction of a container terminal at the Port of Newcastle be welcomed?

 

Answer September 10 2020-

 

Please refer to the answer to question 106 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

Any decision to build a container terminal at Newcastle is a matter for the private operator of the Port of Newcastle. Otherwise, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

3559 – PORT OF NEWCASTLE, Crakanthorp, Tim to the Treasurer, June 18 2020

 

 

  1. Has consideration been given to the significant rise in unemployment in the Hunter Region over the last few months?

 

  1. Has the Government given consideration to the Port of Newcastle’s shovel ready $1.8 billion dollar project planned for the Port?

 

  1. Will the Government consider supporting the Port of Newcastle’s $1.8 billion dollar project?

 

  1. Has the Government considered that this $1.8 billion dollar investment would create thousands of jobs in the Hunter?

 

  1. Would the Government consider the jobs created from this project as being good for the region’s economy?

 

a. If not, why not?

 

  1. Has the Government considered that it is currently charging the Port of Newcastle a financial penalty per container processed above a threshold limit?

 

  1. Has the Government considered that it is currently paying port of Newcastle’s competitors’ compensation if the Port of Newcastle competes against them?

 

  1. Does the Government support competition in markets?

 

a. If not, why not?

 

Answer July 23 2020-

 

The Government is committed to creating and supporting jobs for the people of New South Wales, including regional jobs.

 

Development applications for infrastructure projects are considered by the Department of Planning, Industry and Environment.

 

Port of Newcastle is not currently paying any financial penalty to the Government in respect of containers processed at the Port of Newcastle.

 

In addition, the Government is not currently making any payments to Port of Newcastle’s competitors in relation to containers processed at the Port of Newcastle.

 

The Government recognises that competition is a critical driver of productivity and economic growth.

Tuesday, 2 June 2020 Legislative Assembly- PROOF Page 51

 

NEWCASTLE CONTAINER TERMINAL

 

Mr TIM CRAKANTHORP (Newcastle) (18:22:45):  Last month our Treasurer declared to The Sydney Morning Herald: 

 

There is no place for pre-pandemic thinking in a post-pandemic world.

 

Minister Perrottet went on to say that a five-part economic recovery plan would include a focus on improved productivity, trade and investment—and I have just the venture. The Port of Newcastle has a $1.8 billion private investment, shovel-ready project ripe for the picking in the development of a high-volume container terminal. All it needs is the New South Wales Government to get behind it. The benefits are countless: huge employment opportunities during its construction and operation, reduced freight and export costs for regional and northern New South Wales producers and consumers, and fewer trucks trekking the M1 and clogging Sydney roads. Importantly, it would feed what should be the cornerstone of a first-world economy: fair competition. And there is the rub.

 

In complete contradiction to its own conservative free-market ideology, the Government placed initially secret restrictions on the Port of Newcastle when it was sold in 2013, effectively quashing any chance of its container capacity being expanded, so that the Government could achieve a higher price for Port Botany and Port Kembla. 

 

This was to ensure that those ports had a monopoly on the container trade in New South Wales for the next 50 years. And how? By placing a financial penalty on every container received by the Port of Newcastle over its imposed cap to the tune of roughly $1 million per ship. This financial penalty is paid straight to the State, which then passes it on to NSW Ports which operates Botany and Kembla.

 

This was a blatant port rort and once the deal was made public through the media the Australian Consumer and Competition Commission agreed. The commission even went so far as to label the deal “anti-competitive” and “illegal”. In fact, it is now being challenged in the Federal Court.

 

This is the kind of pre-pandemic thinking we do not need from this Government in a post-pandemic world. But it is more than that. This is a once-in-a-lifetime opportunity to turbocharge regional New South Wales and cement the Port of Newcastle’s place as a powerhouse of the Australian economy. Right now the Port of Newcastle handles 4,600 ship movements and 171 million tonnes of cargo each year. Its annual trade is worth around $25 billion of the State’s economy. It has a deepwater shipping channel that is operating at only 50 per cent of its capacity, significant land holdings and access to transport infrastructure to support its growth.

 

Pandemic or not, the long and the short of it is that Newcastle’s port needs to diversify. It may be the world’s largest coal port but, like it or loathe it, coal will not be around forever. We need to prepare for our future and right now, as unemployment skyrockets, we need to take advantage of this opportunity to put workers on the ground and make it happen. Newcastle is built on its port. The maritime industry lies at the heart and soul of the city. For this Government to hobble the port, one of the State’s major economic drivers, is incredibly short-sighted. There is some cause for hope because as we start to see a glimmer of movement from conservative sectors on climate change and plastics policies, so we see movement on Newcastle’s container policy. 

 

With The Nationals, including the Deputy Premier, throwing their support behind an expanded terminal, this is clearly not a partisan issue. This is a handful of powerbrokers refusing to admit to a mistake and placing a handbrake on the State’s regional economy. Now is the time to fix it. The National Party agrees; we agree. The Government has done an incredibly dodgy deal and now is the time to fix it. We are not asking for favours. All we are asking for is a level playing field. Remove the cap and initiate a fair, equitable and competitive deal for all three ports. Allow the Port of Newcastle to proceed with $1.8 billion of private investment. Scrap the pre-pandemic cap and diversify the Port of Newcastle for a post-pandemic world

2943 – PORT OF NEWCASTLE CONTAINER TERMINAL, Crakanthorp, Tim to the Premier, May 12 2020

 

1. On what date were you informed:

 

a. That the Government’s terms for developing a container terminal at the Port of Newcastle were included in the Government’s contracts leasing Port Botany and Port Kembla to NSW Ports Pty Ltd dated 31 May 2013?

b. That the Government’s terms for developing a container terminal at the Port of Newcastle included making a contractual commitment to NSW Ports to pay NSW Ports for container traffic at the Port of Newcastle above a minimal specific cap?

c. That the developer of a container terminal at the Port of Newcastle was required to pay the Government for container traffic at the Port of Newcastle above a minimal specific cap?

d. That the Government was not authorised by the Ports Assets (Authorised Transactions) Act 2012 or the Ports Assets (Authorised Transactions) Amendment Act 2013, to use consolidated revenue to pay NSW Ports for container traffic at the Port of Newcastle above a minimal specific cap?

 

2. Do the Government’s terms for developing a container terminal at the Port of Newcastle apply to the existing container terminal for general cargo ships?

 

Answer June 16 2020:

Given this matter is currently before the court, it would be inappropriate to comment.

BUDGET ESTIMATES 2019-2020

Supplementary Questions Portfolio Committee No. 1 – Premier and Finance

TREASURY

Hearing: Monday, 9 March 2020

Answers published: April 23 2020

 

Questions from the Hon Mark Buttigieg MLC (on behalf of the NSW Labor Opposition)

 

Port of Newcastle

 

  1. Did the Government reach any settlement with Mayfield Development Corporation Pty Ltd after concluding negotiations in November 2013?

 

(a) If yes, what was the Government’s authority to reach a settlement with Mayfield Development Corporation Pty Ltd?

 

(b) If any settlement was concluded, is this settlement confidential?

 

Answer 76: These matters are commercial in confidence.

 

[Note: The Federal Court ordered on February 28 2020 that the government provide: “All documents provided to Mayfield Development Corporation Pty Ltd (Mayfield) in relation to any settlement entered into with Mayfield upon ceasing negotiations in relation to the Proposed Mayfield Development (as defined in Annexure 4 and howsoever described in the documents).”

Annexure 4: “Proposed Mayfield Development – as defined in the State of NSW Defence dated 5 November 2019.”]

 

  1. What economic modelling did Treasury undertake in relation to a container terminal being developed at the Port of Newcastle under the Government’s terms for developing a container terminal at the Port of Newcastle?

 

Answer 77: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle.

 

[Note: The scoping study conducted for leasing Port Botany and Port Kembla to the private sector in the first-half of 2012 included “the optimal container strategy for NSW”, as confirmed on March 22 2012 and April 26 2012.]

 

  1. On what date did the Government inform the public and Parliament about the Government’s terms for developing a container terminal at the Port of Newcastle?

 

Answer 78: Please refer to the media release of The Hon Mike Baird MP and The Hon Duncan Gay MP dated July 27 2012 ‘Green Light Given for Long Term Lease of Port Botany and Port Kembla’. The Government’s position was confirmed in the NSW Freight and Port Strategy which was published subsequently.

 

  1. Has the Government entered into any arrangements with the lessee of the Port of Newcastle which involve penalties if the number of containers moved through the port exceeds a set threshold?

 

Answer 79: Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates.

 

  1. What is the Treasurer’s understanding of the “container cap issue” at the Port of Newcastle as identified by the Government’s spokesperson for the Hunter, The Hon Catherine Cusack MLC, in the Legislative Council on 26 February 2020?

 

Answer 80: This is a matter for The Hon Catherine Cusack MLC.

 

[Note: The “container cap issue” is about the government’s terms for developing a container terminal at the Port of Newcastle.]

 

  1. When the Government leased the Port of Newcastle to Port of Newcastle Investments Pty Ltd on May 31 2014, was a cap put on the number of containers that can be moved through the port for which a penalty did not apply?

 

(a) If yes, what is the purpose of the Government’s penalty for exceeding the cap on numbers at the Port of Newcastle?

 

Answer 81: Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates. The matter is otherwise subject to the sub judice convention.

 

  1. Did the government inform the public and the Parliament about the penalty for exceeding the cap on numbers at the Port of Newcastle for which no penalty applies?

 

(a) If yes, when?

 

Answer 82: Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates and the findings of the Parliamentary Inquiry on ‘Impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales’ in relation to the disclosure of the Port Commitment Deeds.

 

  1. Does the “Ports Assets (Authorised Transactions) Act 2012” authorise the Government to pay the lessee of Port Botany and Port Kembla in respect of any containers shipped through the Port of Newcastle?

 

(a) If yes, which section?

 

Answer 83: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

  1. Does the “Ports Assets (Authorised Transactions) Act 2012” authorise the Government’s container penalty at the Port of Newcastle?

 

(a) If yes, which section?

 

Answer 84: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

2637 – PORT OF NEWCASTLE CONTAINER TERMINAL, Crakanthorp, Tim to the Treasurer, March 5 2020

 

  1. Does the Treasurer support charging a fee for every container handled by the Port of Newcastle above a threshold level?

 

  1. What is the purpose of charging a fee for every container handled by the Port of Newcastle above a threshold level?

 

  1. Does the Treasurer support the Port of Newcastle’s decision to invest billions of dollars in New South Wales to develop a container terminal in Newcastle

(a) What would be the effect of this investment to the New South Wales economy?

 

Answer due April 9 2020

Answer received March 25 2020

 

(1) Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates and the Government’s Freight

and Ports Strategy.

 

(2) Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates. Otherwise, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

(3) The long term lease of the Port of Newcastle realised gross proceeds of $1.75 billion, which is helping to fund record investment in schools, hospitals, roads and infrastructure. Investment in ports and associated infrastructure is supported by the clear and consistent policy framework set out in the Government’s Freight and Ports Strategy. The lease arrangements do not prohibit the development of a container terminal at the Port of Newcastle and enable the growth of container volumes through Newcastle that service that region. Any decision to build a container terminal at Newcastle is a matter for the private operator of the Port of Newcastle.

 

Budget Estimates

Supplementary Questions

Portfolio Committee No. 1 – Premier and Finance Treasury

Hearing: Thursday 29 August 2019

Answers Tuesday 24 September 2019

 

Question 106

 

What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

Answer: As indicated in the recent Parliamentary Inquiry,

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.”

 

As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

2482 – NSW PORTS LEASES, Crakanthorp, Tim to the Treasurer, February 27 2020

 

  1. Did the Government inform the Parliament of its intention to pay a future lessee in the respect of containers shipped through the Port of Newcastle prior to leasing Port Botany and Port Kembla on 31 May 2013?

 

(a) If so, when was the Parliament informed?

 

  1. As at 31 May 2013, did the Ports Assets (Authorised Transactions) Act 2012 authorise the Government to pay NSW Ports Pty Ltd in respect of containers being shipped through the Port of Newcastle?

 

(a) If so, which section of the Act was this authorisation found?

 

  1. Prior to leasing the Port of Newcastle on 31 May 2014, did the Government inform Parliament that the Government intended to obtain the funds required to pay NSW Ports Pty Ltd from the lessee of the port of Newcastle?

 

(a) If so, when was the Parliament informed?

 

  1. As at 31 May 2014, did the Ports Assets (Authorised Transactions) Act 2012 authorise the Government to pay NSW Ports Pty Ltd in respect of containers being shipped through the Port of Newcastle?

 

(a) If so, which section of the Act was this authorisation found?

 

Answer due April 2 2020

Answer received March 25 2020

 

(1) Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates and the findings of the Parliamentary Inquiry on ‘Impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales’ in relation to the disclosure of the Port Commitment Deeds.

 

(2) In regards to the second question, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

(3) and (4) For questions three and four, please refer to the above answers respectively.

 

Budget Estimates

Supplementary Questions

Portfolio Committee No. 1 – Premier and Finance Treasury

Hearing: Thursday 29 August 2019

Answers Tuesday 24 September 2019

 

Question 106

 

What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

Answer: As indicated in the recent Parliamentary Inquiry,

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.”

 

As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

 

February 26 2020, Legislative Council page71

 

The Hon. CATHERINE CUSACK: I have spent some time with the Newcastle Port Corporation management and I thank them for their tour and briefing on a wide range of issues. Newcastle is the biggest coal-exporting port on earth. It is the only transport hub in Australia where road, rail and port are fully connected and this includes a direct link to the new Inland Rail. We discussed the container cap issue at length—a matter that has been taken up by the Australian Competition and Consumer Commission—the depth of the port and the redevelopment of the BHP site. They showed me what a glittering future they and the Port of Newcastle have for the Hunter. The port is one of 11 catalyst areas identified by the Department of Planning and Environment in its Greater Newcastle Metropolitan Plan 2036, launched in 2018 by then Minister Roberts. This is an excellent plan and has widespread support. It is a kind of blueprint for me for setting priorities for my role in the region…..

PORTFOLIO COMMITTEE NO. 1 – PREMIER AND FINANCE

Thursday 5 September 2019

Examination of proposed expenditure for the portfolio area PREMIER

CORRECTED

 

The Hon. PETER PRIMROSE:

 

My question relates to whether you have had discussions with your Deputy Premier, given his public statements, in relation to the removal of the cap on the number of containers and the State government fee payable on container exports?

 

Ms GLADYS BEREJIKLIAN: I do not disclose private conversations I have had with colleagues but I will make this point publicly: You would need to triple container movements at the Port of Newcastle before any penalties came into play. So I say to those communities that want to increase their container movements at the point, there is capacity to triple that under the current arrangements. I also stress that our Government has invested more in ports, intermodals and airports than any other government in the history of the State. It is no secret that when we defined our port strategy the Port of Newcastle was our primary coal port.

 

Having said that, and I stand to be corrected, from the last report I read you would need to triple existing container movements before any financial impediments came into place. Therefore I say to the community, please continue to produce, please continue to do what you are doing. What I love about Newcastle and the Hunter is that because of our Government’s investment, notwithstanding how that area votes, we are investing record amounts in that region and the diversity of the economy and the economic growth in that region are unprecedented. It used to be a one company town and now it has a diverse economy specialising in many service industries in addition to those traditional industries. Unless I am mistaken, there would need to be a significant increase in the number of containers moving to and from that port before any type of financial impediment was struck.

 

The Hon. PETER PRIMROSE: Will you table that report, Premier?

 

Ms GLADYS BEREJIKLIAN: It has been on the public record. It is not a report.

 

The Hon. PETER PRIMROSE: Can you provide a copy?

 

Ms GLADYS BEREJIKLIAN: It was information provided on the public record but I am happy to take on board any further updates on that.

 

GENERAL PURPOSE STANDING COMMITTEE NO. 1

Thursday 3 September 2015

Examination of proposed expenditure for the portfolio areas

TREASURY, INDUSTRIAL RELATIONS

CORRECTED PROOF

PRESENT

The Hon. Gladys Berejiklian, Treasurer, and Minister for Industrial Relations

 

Page 23

 

The Hon. ADAM SEARLE: When you sold the Port of Newcastle was a cap put on the number of containers that can be moved through the Port of Newcastle?

 

Ms GLADYS BEREJIKLIAN: I understand there is no legislated container cap.

 

The Hon. ADAM SEARLE: So there is no cap on container movements there?

 

Ms GLADYS BEREJIKLIAN: There is no legislated container cap.

 

The Hon. ADAM SEARLE: Is there any other restriction in the sale of the lease documents?

 

Ms GLADYS BEREJIKLIAN: I am not aware of that.

 

The Hon. ADAM SEARLE: What about in the contracts?

 

Ms GLADYS BEREJIKLIAN: I am not aware.

 

The Hon. ADAM SEARLE: Will you take that on notice?

 

Ms GLADYS BEREJIKLIAN: I am happy to take that on notice.

 

BUDGET ESTIMATES 2015-2016
Supplementary Questions
General Purpose Standing Committee No. 1 Treasury, Industrial Relations
Thursday 3 September 2015
Answers 29 September 2015

 

  1. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

 

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

 

  1. Has the NSW Government entered into any agreements that create a disincentive or obstacle to increase the number of containers that pass through Newcastle?

 

Answer: There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

 

  1. Has the NSW Government entered into any arrangement that create a financial penalty if the number of containers moved through the Port of Newcastle exceeds a set threshold?

 

(1) If so, what is the threshold?

 

Answer:  There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

 

  1. Is the leaseholder of Port Botany entitled to receive a payment should the number of containers moved through the Port of Newcastle exceed a set figure?

 

Answer: There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

 

  1. If so, what is the payment and who pays it?

 

Answer: There is no legislated cap on the number of containers that can move through the Port of Newcastle.

 

  1. Do the Port Commitment Deeds establish any limitations or restrictions on the operation of Port Kembla or the Port of Newcastle?

 

Answer: There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

 

GENERAL PURPOSE STANDING COMMITTEE NO. 1

Thursday, 1 September 2016

Examination of proposed expenditure for the portfolio area

TREASURY AND INDUSTRIAL RELATIONS

CORRECTED PROOF

PRESENT

The Hon. G. Berejiklian, Treasurer, and Minister for Industrial Relations

 

Page 24

 

The Hon. ADAM SEARLE: I would like to ask you some questions about the Port of Newcastle and the cap on containers. Last year we asked whether or not a cap was put on the number of containers that could be put through the Port of Newcastle. You were very careful to say there was no legislated container cap.

 

Ms GLADYS BEREJIKLIAN: Correct.

 

The Hon. ADAM SEARLE: We asked also whether there was any other restriction in the sale or lease documents and you answered, “Not that I am aware of.” We also gave you some questions on notice about this and we referred you specifically to the port commitment deeds, which you refused to release. Now we know thanks to the Newcastle Herald, which published the port commitment deeds for Port Botany and Port Kembla, that there was in fact as part of the arrangement a cap on container movements through the Port of Newcastle. If they exceeded the cap the operator would have to pay to the State Government essentially a fine and your Government would then pay that to the operator of Port Botany and Port Kembla. Why were you not frank and honest with the Committee last year about the fact that there was, as a result of your Government’s policy and actions, a cap on container movements through the Port of Newcastle?

 

Ms GLADYS BEREJIKLIAN: I appreciate your question and I am happy to go into detail around those arrangements, but my concern at the time was that I was not sure what was subject to commercial in confidence and what was not.

 

The Hon. ADAM SEARLE: I asked you whether there was a cap. You were very careful to say there was no legislated cap.

 

Ms GLADYS BEREJIKLIAN: Correct.

 

The Hon. ADAM SEARLE: And I asked you whether there was anything else in the sale or the lease documents.

 

Ms GLADYS BEREJIKLIAN: That is why I had to go back.

 

The Hon. ADAM SEARLE: But you did not come back to us. You were dissembling. You said there was no legislated cap. When did you know about the cap and why did you not inform the Committee? Why have you tried to hide this?

 

Ms GLADYS BEREJIKLIAN: As I stated, I was very clear on what was publicly available at that time. I am telling you now the reason why I did not elaborate beyond what I knew was a fact was because I wanted to seek some advice as to what was commercial in confidence and what was publicly available.

 

The Hon. ADAM SEARLE: These are monopoly assets. You leased them out to monopoly operators. There is no commercial in confidence. That is just rubbish.

 

Ms GLADYS BEREJIKLIAN: No, there are specific terms within contracts of transactions which are subject to commercial in confidence.

 

The Hon. ADAM SEARLE: Treasurer, this deal is so bad for consumers in New South Wales that we have had the head of the ACCC saying the deal is so bad for consumers he is changing his mind on privatisation.

 

Ms GLADYS BEREJIKLIAN: What is your question?

 

The Hon. ADAM SEARLE: Why did your Government engage in a transaction that has put a brake on the economic development of Newcastle and the Hunter region for the better part of a century?

 

Ms GLADYS BEREJIKLIAN: I am really pleased to answer this question because I find the premise of your question quite affronting.

 

The Hon. ADAM SEARLE: So does the ACCC. They say they would prosecute the State Government but you claim an immunity.

 

The Hon. BEN FRANKLIN: Point of order—

 

The Hon. ADAM SEARLE: When did you claim the immunity?

 

The Hon. BEN FRANKLIN: Point of order—

 

The Hon. ADAM SEARLE: When did you claim the immunity from the trade practices legislation?

 

Ms GLADYS BEREJIKLIAN: There is nothing like a bit of excitement in an estimates hearing.

 

The Hon. BEN FRANKLIN: The point of order is that the Treasurer was answering the question.

 

The Hon. ADAM SEARLE: The Treasurer lied to us last year, Benjamin.

 

The Hon. BEN FRANKLIN: The Treasurer was answering your question, Mr Searle.

 

The Hon. ADAM SEARLE: She did not come clean.

 

The Hon. BEN FRANKLIN: You asked the question. She is answering the question.

 

The Hon. ADAM SEARLE: Treasurer, why did you not come clean to this Committee last year?

 

The Hon. BEN FRANKLIN: You should have more respect for this process, Mr Searle. You know better than that.

 

The Hon. ADAM SEARLE: Why are you putting a brake on economic development in Newcastle for a century?

 

The Hon. SCOTT FARLOW: There is a point of order.

 

The CHAIR: Mr Searle, let the Treasurer answer the question.

 

Ms GLADYS BEREJIKLIAN: Can I say, Mr Searle, the premise of your question is wrong at best. As you appreciate, the New South Wales Government—

 

The Hon. ADAM SEARLE: Did you get the approval of the ACCC before you engaged in the transaction?

 

The CHAIR: Let the Treasurer answer the question, Mr Searle.

 

Ms GLADYS BEREJIKLIAN: The New South Wales Government has a very detailed freight and ports strategy and we have been very public about that.

 

The Hon. ADAM SEARLE: Yes, to rip off the consumers.

 

Ms GLADYS BEREJIKLIAN: We have said very publicly that we see the particular role of the port at Newcastle to be primarily for coal and other bulk commodities.

 

The Hon. DANIEL MOOKHEY: It will be for now.

 

Ms GLADYS BEREJIKLIAN: No. When we came to government there was no freight strategy in New South Wales. You did not have a ports strategy.

 

The Hon. ADAM SEARLE: I was not here, Treasurer. Answer the question I have asked you.

 

Ms GLADYS BEREJIKLIAN: I am trying to if you would stop interrupting me.

 

The Hon. ADAM SEARLE: You are obfuscating. You dodged the question last year.

 

The Hon. SCOTT FARLOW: Point of order—

 

The Hon. ADAM SEARLE: You lied to the Committee last year. Now answer the question.

 

The Hon. BEN FRANKLIN: Let her answer the question.

 

The Hon. ADAM SEARLE: If only she would, Ben.

 

The CHAIR: Let the Treasurer answer the question.

 

The Hon. ADAM SEARLE: She is not answering the question. She is obfuscating again.

 

The Hon. SCOTT FARLOW: You are not letting her answer the question.

 

Mr JEREMY BUCKINGHAM: No more coffee.

 

Ms GLADYS BEREJIKLIAN: Can I please answer the question? We have been extremely public about the NSW Freight and Ports Strategy and what we view as the role of each major port in New South Wales. There is no doubt that we have said right at the outset that we believe Port Botany to be the main container port in New South Wales and I will tell you why.

 

The Hon. DANIEL MOOKHEY: It will be now.

 

Ms GLADYS BEREJIKLIAN: Eighty-five per cent of all containers that come off the port at Port Botany are distributed within 40 kilometres. Major freight operators do not want multiple ports of stops when they are bringing their goods to New South Wales. As a government we have to make some really sound decisions on what the primary use of each port should be to make sure we maximise the opportunities of increasing capacity at all of our ports in relation to our strategy. That is why the Government, obviously before my time, entered into arrangements. I do know for a fact because after I was asked those questions I did go back and check with the team that there was ongoing consultation. There was ongoing consultation with the ACCC during that process and ongoing consultation with all the relevant agencies.

 

Also I note not only have we been very clear and up-front about what the role of each port is but also, as my colleague in the other place identified, there are still enormous growth opportunities in Newcastle within what was agreed by Government during the transaction process. That is without doubt. Regrettably during your 16 years of government you did not invest in the Hunter. We now have record investment in infrastructure and record investment in revitalising Newcastle and the greater Hunter region, which has been made possible in part by this transaction. We are investing I think in the order of half a billion dollars and more in transport infrastructure upgrades which would not have been possible without the transaction. The reason why I find your question affronting is we made this decision to support the revitalisation of Newcastle and to reassert the Government’s strategy in relation to our ports and freight. There was no—

 

The Hon. PETER PRIMROSE: You were affronted because you were caught out.

 

Ms GLADYS BEREJIKLIAN: No.

 

The Hon. PETER PRIMROSE: You did not come back to this Committee.

 

The Hon. BEN FRANKLIN: Point of order: The Opposition’s time for question has expired.

 

Ms GLADYS BEREJIKLIAN: You asked me a question and I answered to the best of my ability at that time.

 

The Hon. PETER PRIMROSE: You did not come back and correct it.

 

Ms GLADYS BEREJIKLIAN: No, because what I told you was correct.

 

Mr Searle even accepts that.

 

The Hon. ADAM SEARLE: Yes, but you did not give the full answer.

 

Ms GLADYS BEREJIKLIAN: What I told you was correct.

 

The Hon. PETER PRIMROSE: Talk about dissembling.

 

Ms GLADYS BEREJIKLIAN: Please. Getting back to the point, I think the whole argument you are running that somehow this transaction was done intentionally to the detriment of Newcastle and the Hunter—

 

The Hon. ADAM SEARLE: The ACCC seems to think so.

 

Ms GLADYS BEREJIKLIAN: —is an affront and it is wrong. I will keep referring to the ports strategy.

 

The Hon. PETER PRIMROSE: And we will keep referring to the ACCC.

 

Ms GLADYS BEREJIKLIAN: I have outlined the rationale as to why Port Botany is the main container port for New South Wales. I have outlined the rationale for the main purpose of the Newcastle port. As I have stated previously, there was and is no legislated cap. I think it is very concerning that a party who after 16 years did not even have a ports strategy—

 

The Hon. PETER PRIMROSE: The ACCC.

 

Ms GLADYS BEREJIKLIAN: Yes, what about them?

 

The Hon. PETER PRIMROSE: The ACCC.

 

Ms GLADYS BEREJIKLIAN: What about them?

 

Mr JEREMY BUCKINGHAM: Point of order: It is my time to ask questions.

 

The CHAIR: We will move on to Mr Buckingham’s time.

 

2249 – PORT OF NEWCASTLE CONTAINER RESTRICTIONS Crakanthorp, Tim to the Treasurer February 6 2020

 

  1. What is the policy objective of the Port of Newcastle’s container penalty?

 

  1. What advice did the Australian Competition and Consumer Commission give the Government in respect to the Port of Newcastle’s container penalty?

 

  1. Is the Government required to compensate NSW Ports for container traffic through the Port of Newcastle above a threshold level?

 

  1. Is there any financial impediment that may prevent the Port of Newcastle from developing a container terminal?

 

Answer due March 12 2020

Answer published March 24 2020

(1) Please refer to the answers to questions 106 and 123 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates.

(2) Please see response to question (1) above. Otherwise, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

(3) Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates.

(4) There is no prohibition on the development of a container terminal at Newcastle.

 

Supplementary Question 106

 

What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

Answer: As indicated in the recent Parliamentary Inquiry,

 

…“under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

 

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).

 

  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.

 

  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.”

 

As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

 

Supplementary Question 123

 

Is the fact that the lessee of the Port of Newcastle can develop a container terminal if it wishes to do so, consistent with Government policy that the State’s next container terminal will be developed at Port Kembla after Port Botany reaches capacity?

 

Answer: Please refer to the NSW Government submission to the Public Works Committee’s Inquiry into the impact of Port of Newcastle Sale Arrangements on public works expenditure in New South Wales and the NSW Government witness statements at the hearing on 31 January 2019.

2170- PORT OF NEWCASTLE Crakanthorp, Tim to the Treasurer, February 4 2020

 

Is Government policy for immediate development of a container terminal at the Port of Newcastle implemented by means of the lease agreements for Port Botany and Port Kembla?

 

Answer March 10 2020

The Government does not have a policy for immediate development of a container terminal at the Port of Newcastle.

2169 – PORT OF NEWCASTLE CONTAINER THRESHOLD LEVEL Crakanthorp, Tim to the Minister for Transport and Roads, February 4 2020

 

  1. Is it Government policy not to develop a container terminal at the Port of Newcastle before container capacity is reached at Port Botany followed by Port Kembla?

 

  1. How many containers a year were shipped through the Port of Newcastle since it was leased?

 

Answer March 10 2020:

 

  1. The Government’s policy is to realise the full capacity of Port Botany before investing in another port in order to maximise benefits to users and taxpayers. Port Kembla has been identified as the location for a container terminal to augment Port Botany when required.

 

  1. This information is published in the Yearly Trade Reports on the Port of Newcastle website.

2077 – NEWCASTLE PORT, November 21 2019 Crakanthorp, Tim to the Minister for Transport and Roads

 

(1) Is Government policy for immediate development of a container terminal at the Port of Newcastle implemented by means of the lease agreements for Port Botany and Port Kembla?

 

(2) Does the Government have a policy for:

(a) The immediate development of a container terminal at the Port of Newcastle?

(b) The development of a dedicated container terminal at the Port of Newcastle to be considered when both Port Botany and Port Kembla become fully developed?

 

(3) Can the operator of the Port of Newcastle develop a container terminal?

 

Answer due December 26 2019

Answer received January 10 2020

Answer published January 16 2020

 

(1) This question is a matter for the Treasurer.

 

(2) (a) and (b) The Government’s policy is to realise the full capacity of Port Botany before investing in another port in order to maximise benefits to users and taxpayers. Port Kembla has been identified as the location for a container terminal to augment Port Botany when required.

 

(3) Yes.

 

 

1901 – PORT OF NEWCASTLE CONTAINER TERMINAL November 14 2019 Crakanthorp, Tim to the Treasurer

 

Answer November 27 2019

 

  1. Do the confidential Port Commitment Deeds specify government policy for developing a container terminal at the Port of Newcastle?

 

Answer: The lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 New South Wales Government’s Freight and Ports Strategy and the 2018 New South Wales Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity.

 

  1. Has the Port of Newcastle the capacity to handle one million containers per annum and what payments would this rate trigger?

 

Answer: This question is more appropriately directed to the private port operator. In addition, please refer to the answer to question 106 of the supplementary questions provided by the Treasurer for the Budget Estimates, which provides a detailed description of when the payments are triggered under the Port Commitment Deeds.

 

  1. What contractual payments and obligations would the Government have to make to NSW Ports as a result of one million containers being handled by the Port of Newcastle in one year?

 

Answer:

 

(3) Please refer to the answer to question 106 of the supplementary questions by the Treasurer for the 2019-20 Budget Estimates.

 

  1. Does the Government’s policy make provision for the development of a container terminal at the Port of Newcastle at any time?

 

Answer: (4) The 2018 New South Wales Freight and Ports Plan states that “The NSW Government policy position is that Port Kembla has been identified as the location for the development of a future container terminal to augment capacity of Port Botany when required. Current arrangements do not prohibit the development of a container terminal at the Port of Newcastle but rather allow for the growth of container volumes through Newcastle that service the region.”

 

  1. Does the Government’s policy provide for development of Port Kembla as the next long-term container facility once Port Botany reaches capacity?

 

Answer: Please refer to answer to question (4) above.

 

  1. Does the Government’s policy require Ports Botany and Kembla to reach capacity before a dedicated container terminal is developed at the Port of Newcastle?

 

Answer: Please refer to answer to question (4) above.

 

 

Answer to Supplementary Question 106

 

As indicated in the recent Parliamentary Inquiry,

 

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.”

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.” As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

https://www.parliament.nsw.gov.au/la/papers/pages/qanda-tracking-details.aspx?pk=243726

 

1721 – PORT OF NEWCASTLE CONTAINER THRESHOLD LEVEL – October 24 2019, Crakanthorp, Tim to the Treasurer

 

Answers provided November 27 2019

 

  1. What is the Government’s source of funds for paying NSW Ports for container volumes exceeding a threshold level at the Port of Newcastle?

 

Answer

 

(1) Please refer to the answer to question 124 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates. This matter is otherwise subject to the sub judice convention.

 

124 Answer: Please see response to question 121. No compensation payments to NSW Ports have been incurred under the respective Port Commitment Deeds for Port Botany and Port Kembla. The matter is otherwise subject to the sub judice convention.

 

121 Answer: The Government does not charge a fee for container traffic at the Port of Newcastle and there is no minimal specified cap. See response to question 106.

 

106 Answer:

 

As indicated in the recent Parliamentary Inquiry,

 

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.”

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.” As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

 

  1. Does Government financial support become payable to the lessee of Port Botany and Port Kembla when container volumes exceed a threshold level at the Port of Newcastle?

 

Answer

 

(2) Please refer to the answer to question 106 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

  1. Does the Government require the Port of Newcastle to pay a penalty, in the form of passing the cost of any payment made to NSW Ports, for container volumes exceeding a threshold at the Port of Newcastle?

 

Answer

 

(3) Please refer to the answer to question (2) above.

 

  1. Is it Government policy not to develop a container terminal at the Port of Newcastle before container capacity is reached at Port Botany followed by Port Kembla?

 

Answer

 

(4) I am advised that this question is more appropriately directed to the Minister for Transport and Roads.

 

  1. Do the lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 NSW Government’s Freight and Ports Strategy and the 2018 NSW Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity?

 

Answer

 

(5) Please refer to the answer to question 127 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

127 Answer: The lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 NSW Government’s Freight and Ports Strategy and the 2018 NSW Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity. Please see also the Government’s submission to the “Inquiry into the impact of Port of Newcastle sale [lease] arrangements on public works expenditure in New South Wales.”

 

  1. Under the Government’s container terminal policy, is it a condition for developing a container terminal at the Port of Newcastle that the developer pays the Government’s penalty for container volumes exceeding a threshold level?

 

Answer

 

(6) Please refer to the answer to question (2) above.

 

  1. Did the Government lease the Port of Newcastle to be able to pay NSW Ports Pty Ltd for container volumes exceeding a threshold level at the Port of Newcastle?

 

(a) If not, what is the Government’s source of funds to be able to pay NSW Ports Pty Ltd for container volumes exceeding the threshold level at the Port of Newcastle until 2063?

 

Answer

 

(7) No. Please refer to the answer to question (1).

 

 

  1. On what date did the Government inform the Australian Competition and Consumer Commission (ACCC) of its decision to pass to the developer of a container terminal at the Port of Newcastle, any cost incurred in paying the lessee of Port Botany and Port Kembla for container volumes exceeding a threshold level at the Port of Newcastle?

 

Answer

 

(8) Please refer to the answer to question 126 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

126 Answer: Please see responses to question 121 and 144. This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

121 Answer: The Government does not charge a fee for container traffic at the Port of Newcastle and there is no minimal specified cap. See response to question 106.

 

144 Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

  1. Is there agreement or disagreement between the Government and the ACCC about the date that the Government disclosed the Port Commitment Deeds for Port Botany and Port Kembla to the ACCC?

 

(a) Is the date sub judice?

 

Answer

 

(9) This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

  1. Is there agreement or disagreement between the Government and the ACCC about the date that the Government disclosed the Port Commitment Deed for the Port of Newcastle to the ACCC?

 

(a) Is the date sub judice?

 

Answer

 

(10) This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

  1. Considering that there is no legislated cap on the number of containers that can travel through the Port of Newcastle, was a container volume threshold at the Port of Newcastle given as an instruction to Morgan Stanley for a conducting a scoping study into leasing Port Botany and Port Kembla?

 

(a) If no, on what date did the Government decide on a container volume threshold at the Port of Newcastle?

 

Answer

 

(11) This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

 

  1. Was a decision made in 2012 to pass to the developer of a container terminal at the Port of Newcastle the cost of paying a lessee of Port Botany and Port Kembla for container volumes exceeding a threshold level at the Port of Newcastle?

 

(a). If no, on what date was this decision made?

 

Answer

 

(12) This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

  1. Is the Government’s decision to pass to the developer of a container terminal at the Port of Newcastle the cost of paying financial support to NSW Ports for container volumes exceeding a threshold level at the Port of Newcastle, consistent with the Government’s decision that Port Kembla will be the State’s next major container terminal after Port Botany reaches capacity?

 

Answer

 

(13) Please refer to the answer to question 134 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

134 Answer: Please see responses to questions 121,123 and 127.

 

121 Answer: The Government does not charge a fee for container traffic at the Port of Newcastle and there is no minimal specified cap. See response to question 106.

 

123 Answer: Please refer to the NSW Government submission to the Public Works Committee’s Inquiry into the impact of Port of Newcastle Sale Arrangements on public works expenditure in New South Wales and the NSW Government witness statements at the hearing on 31 January 2019.

 

127 Answer: The lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 NSW Government’s Freight and Ports Strategy and the 2018 NSW Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity. Please see also the Government’s submission to the “Inquiry into the impact of Port of Newcastle sale [lease] arrangements on public works expenditure in New South Wales.”

 

  1. Does the Government agree or disagree with the statement by the Independent Commission Against Corruption in its Operation Spicer Report dated August 30 2016 that “as a statutory state-owned corporation, the NPC [Newcastle Port Corporation] was obliged to comply with the NSW Government’s “Working with Government Guidelines”?

 

Answer

 

(14) Please refer to the answer to question 136 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

136 Answer: Please see response to question 135.

 

135 Answer: Please see response to question 129.

 

129 Answer: Newcastle Ports Corporation did not conclude a contract to build a container terminal with Newcastle Stevedores Consortium.

 

  1. Is the Ports Assets (Authorised Transactions) Amendment Act 2013 sub judice?

 

Answer

 

(15) No.

 

  1. For the purposes of the Port Commitment Deeds for Port Botany, Port Kembla and the Port of Newcastle, does the term “container” have a confidential meaning?

 

Answer

 

(16) Please refer to the answer to question 142 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

142 Answer: Details of container arrangements in the Port Commitment Deeds are commercial in confidence.

 

  1. Considering that the Government charges a penalty for container volumes above a threshold level at the Port of Newcastle, how many containers a year were shipped through the port since it was leased?

 

Answer

 

(17) Please refer to the answer to question 106 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates. With respect to how many containers a year were shipped through the Port of Newcastle, this question would be more appropriately directed to the Minister for Transport and Roads.

 

  1. Considering that the Port of Newcastle is not prevented from developing a container terminal, would a container terminal be an uneconomic enterprise contrary to market demand if the Government did not require the Port of Newcastle to pay a penalty for container volumes exceeding a threshold level?

 

Answer

 

(18) Please refer to the answer to question 146 of the supplementary questions provided by the Treasurer for the 2019-20 Budget Estimates.

 

146 Answer: Please see response to question 145.

 

145 Answer: The response provided by the Minister for Transport and Roads was a general comment. He also noted that the container port did not proceed and there is no decision to review. Please see response to question 121. In addition, any decision to build a container terminal at Newcastle is a matter for the private operator of the Port of Newcastle.

 

121 Answer: The Government does not charge a fee for container traffic at the Port of Newcastle and there is no minimal specified cap. See response to question 106.

 

Greg’s answers:

 

  1. What is the Government’s source of funds for paying NSW Ports for container volumes exceeding a threshold level at the Port of Newcastle?

 

Greg Cameron’s answer: The developer of a container terminal at the Port of Newcastle. The developer is the lessee, Port of Newcastle Investments Pty Ltd.

 

  1. Does Government financial support become payable to the lessee of Port Botany and Port Kembla when container volumes exceed a threshold level at the Port of Newcastle?

 

Greg Cameron’s answer: Yes. For details see https://www.containerterminalpolicyinnsw.com.au/government-responses/#1568419169650-b83b67c8-34dc

 

  1. Does the Government require the Port of Newcastle to pay a penalty, in the form of passing the cost of any payment made to NSW Ports, for container volumes exceeding a threshold at the Port of Newcastle?

 

Greg Cameron’s answer: Yes.

 

  1. Is it Government policy not to develop a container terminal at the Port of Newcastle before container capacity is reached at Port Botany followed by Port Kembla?

 

Greg Cameron’s answer: This is the Government’s announced policy. The Government concealed its decision to require the developer of a container terminal at the Port of Newcastle to reimburse the Government for any payment made to the lessee of Port Botany and Port Kembla for container volumes exceeding a threshold level at the Port of Newcastle.

 

  1. Do the lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 NSW Government’s Freight and Ports Strategy and the 2018 NSW Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity?

 

Greg Cameron’s answer: No.

 

  1. Under the Government’s container terminal policy, is it a condition for developing a container terminal at the Port of Newcastle that the developer pays the Government’s penalty for container volumes exceeding a threshold level?

 

Greg Cameron’s answer: Yes.

 

  1. Did the Government lease the Port of Newcastle to be able to pay NSW Ports Pty Ltd for container volumes exceeding a threshold level at the Port of Newcastle?

 

Greg Cameron’s answer: Yes.

 

(a) If not, what is the Government’s source of funds to be able to pay NSW Ports Pty Ltd for container volumes exceeding the threshold level at the Port of Newcastle until 2063?

 

Greg Cameron’s answer: None.

 

  1. On what date did the Government inform the Australian Competition and Consumer Commission (ACCC) of its decision to pass to the developer of a container terminal at the Port of Newcastle, any cost incurred in paying the lessee of Port Botany and Port Kembla for container volumes exceeding a threshold level at the Port of Newcastle?

 

Greg Cameron’s answer: It appears that the ACCC was not informed before the Port of Newcastle was leased on May 31 2014, however, the actual date is undisclosed.

 

  1. Is there agreement or disagreement between the Government and the ACCC about the date that the Government disclosed the Port Commitment Deeds for Port Botany and Port Kembla to the ACCC?

 

Greg Cameron’s answer: Disagreement.

 

(a) Is the date sub judice?

 

Greg Cameron’s answer: No.

 

  1. Is there agreement or disagreement between the Government and the ACCC about the date that the Government disclosed the Port Commitment Deed for the Port of Newcastle to the ACCC?

 

Greg Cameron’s answer: Disagreement.

 

(a) Is the date sub judice?

 

Greg Cameron’s answer: No

 

  1. Considering that there is no legislated cap on the number of containers that can travel through the Port of Newcastle, was a container volume threshold at the Port of Newcastle given as an instruction to Morgan Stanley for a conducting a scoping study into leasing Port Botany and Port Kembla?

 

Greg Cameron’s answer: Yes.  By “cap on numbers” The Hon Duncan Gay on October 17 2013 was referring to container volumes exceeding a threshold level.

 

(a) If no, on what date did the Government decide on a container volume threshold at the Port of Newcastle?

 

Greg Cameron’s answer: The government admitted to a container volume threshold when it was exposed by The Newcastle Herald on July 28 2016.

 

  1. Was a decision made in 2012 to pass to the developer of a container terminal at the Port of Newcastle the cost of paying a lessee of Port Botany and Port Kembla for container volumes exceeding a threshold level at the Port of Newcastle?

 

Greg Cameron’s answer: Yes.

 

(a). If no, on what date was this decision made?

 

Greg Cameron’s answer: The Government gave an unauthorised and unfunded contractual commitment on May 30 2013 to pay NSW Ports for container volumes exceeding a threshold level at the Port of Newcastle. One container ship a week visiting the port will cost the Government $3 billion in payments to NSW Ports by 2063 at the current average price of a container at Port  Botany of $150.

 

  1. Is the Government’s decision to pass to the developer of a container terminal at the Port of Newcastle the cost of paying financial support to NSW Ports for container volumes exceeding a threshold level at the Port of Newcastle, consistent with the Government’s decision that Port Kembla will be the State’s next major container terminal after Port Botany reaches capacity?

 

Greg Cameron’s answer: No.

 

  1. Does the Government agree or disagree with the statement by the Independent Commission Against Corruption in its Operation Spicer Report dated August 30 2016 that “as a statutory state-owned corporation, the NPC [Newcastle Port Corporation] was obliged to comply with the NSW Government’s “Working with Government Guidelines”?

 

Greg Cameron’s answer: The government disagrees with the ICAC’s statement.

 

  1. Is the Ports Assets (Authorised Transactions) Amendment Act 2013 sub judice?

 

Greg Cameron’s answer: No. The Act to did not authorise the government to lease the Port of Newcastle for the purpose of requiring the lessee to reimburse the Government for paying financial support to NSW Ports for container volumes exceeding the threshold level at the Port of Newcastle.

 

  1. For the purposes of the Port Commitment Deeds for Port Botany, Port Kembla and the Port of Newcastle, does the term “container” have a confidential meaning?

 

Greg Cameron’s answer: Yes. The meaning is provided in the Term Sheets between the Government and Newcastle Stevedores Consortium.

 

  1. Considering that the Government charges a penalty for container volumes above a threshold level at the Port of Newcastle, how many containers a year were shipped through the port since it was leased?

 

Greg Cameron’s answer: The number of containers, as defined, easily exceeds the threshold level.

 

  1. Considering that the Port of Newcastle is not prevented from developing a container terminal, would a container terminal be an uneconomic enterprise contrary to market demand if the Government did not require the Port of Newcastle to pay a penalty for container volumes exceeding a threshold level?

 

Greg Cameron’s answer: No. See the statement by Anglo Ports Pty Ltd.

 

 

Answers due November 28 2019

 

https://www.parliament.nsw.gov.au/la/papers/pages/qanda-tracking-details.aspx?pk=243726

 

1721 – PORT OF NEWCASTLE CONTAINER THRESHOLD LEVEL – October 24 2019, Crakanthorp, Tim to the Treasurer

 

  1. What is the Government’s source of funds for paying NSW Ports for container volumes exceeding a threshold level at the Port of Newcastle?

 

  1. Does Government financial support become payable to the lessee of Port Botany and Port Kembla when container volumes exceed a threshold level at the Port of Newcastle?

 

  1. Does the Government require the Port of Newcastle to pay a penalty, in the form of passing the cost of any payment made to NSW Ports, for container volumes exceeding a threshold at the Port of Newcastle?

 

  1. Is it Government policy not to develop a container terminal at the Port of Newcastle before container capacity is reached at Port Botany followed by Port Kembla?

 

  1. Do the lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 NSW Government’s Freight and Ports Strategy and the 2018 NSW Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity?

 

  1. Under the Government’s container terminal policy, is it a condition for developing a container terminal at the Port of Newcastle that the developer pays the Government’s penalty for container volumes exceeding a threshold level?

 

  1. Did the Government lease the Port of Newcastle to be able to pay NSW Ports Pty Ltd for container volumes exceeding a threshold level at the Port of Newcastle?

 

(a) If not, what is the Government’s source of funds to be able to pay NSW Ports Pty Ltd for container volumes exceeding the threshold level at the Port of Newcastle until 2063?

 

  1. On what date did the Government inform the Australian Competition and Consumer Commission (ACCC) of its decision to pass to the developer of a container terminal at the Port of Newcastle, any cost incurred in paying the lessee of Port Botany and Port Kembla for container volumes exceeding a threshold level at the Port of Newcastle?

 

  1. Is there agreement or disagreement between the Government and the ACCC about the date that the Government disclosed the Port Commitment Deeds for Port Botany and Port Kembla to the ACCC?

 

(a) Is the date sub judice?

 

  1. Is there agreement or disagreement between the Government and the ACCC about the date that the Government disclosed the Port Commitment Deed for the Port of Newcastle to the ACCC?

 

(a) Is the date sub judice?

 

  1. Considering that there is no legislated cap on the number of containers that can travel through the Port of Newcastle, was a container volume threshold at the Port of Newcastle given as an instruction to Morgan Stanley for a conducting a scoping study into leasing Port Botany and Port Kembla?

 

(a) If no, on what date did the Government decide on a container volume threshold at the Port of Newcastle?

 

  1. Was a decision made in 2012 to pass to the developer of a container terminal at the Port of Newcastle the cost of paying a lessee of Port Botany and Port Kembla for container volumes exceeding a threshold level at the Port of Newcastle?

 

(a). If no, on what date was this decision made?

 

  1. Is the Government’s decision to pass to the developer of a container terminal at the Port of Newcastle the cost of paying financial support to NSW Ports for container volumes exceeding a threshold level at the Port of Newcastle, consistent with the Government’s decision that Port Kembla will be the State’s next major container terminal after Port Botany reaches capacity?

 

  1. Does the Government agree or disagree with the statement by the Independent Commission Against Corruption in its Operation Spicer Report dated August 30 2016 that “as a statutory state-owned corporation, the NPC [Newcastle Port Corporation] was obliged to comply with the NSW Government’s “Working with Government Guidelines”?

 

  1. Is the Ports Assets (Authorised Transactions) Amendment Act 2013 sub judice?

 

  1. For the purposes of the Port Commitment Deeds for Port Botany, Port Kembla and the Port of Newcastle, does the term “container” have a confidential meaning?

 

  1. Considering that the Government charges a penalty for container volumes above a threshold level at the Port of Newcastle, how many containers a year were shipped through the port since it was leased?

 

  1. Considering that the Port of Newcastle is not prevented from developing a container terminal, would a container terminal be an uneconomic enterprise contrary to market demand if the Government did not require the Port of Newcastle to pay a penalty for container volumes exceeding a threshold level?

 

Answers due November 28 2019

1589 – PORT OF NEWCASTLE CONTAINER CAP AND FEE – October 17 2019, Crakanthorp, Tim to the Treasurer

 

  1. What is the Government’s case for its stance in 2014 that:

 

(a) “A container terminal at the Port of Newcastle was an “uneconomic enterprise contrary to market demand””?

 

(b) The Government’s negotiation to develop a container terminal at the Port of Newcastle was an example of “the kind of rent seeking activity likely to encourage influence peddling or corruption”?

 

  1. Does the Government apply a penalty, in the form of a fee, to the developer of a container terminal at the Port of Newcastle for container volumes exceeding a threshold?

 

(a) Did you advise that “the Government does not charge a fee for container traffic at the Port of Newcastle and there is no minimal specified cap”?

 

Answer November 21 2019

 

Please refer to the answers to supplementary questions 145 and 106 provided by the Treasurer for the 2019-20 Budget Estimates.

 

Supplementary Question 106

Answer: As indicated in the recent Parliamentary Inquiry,

 

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction.

During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.”

 

As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

 

549 LEGISLATIVE COUNCL Transport and Roads – October 2 2019, CONTAINER TERMINAL INFORMATION

 

Primrose, Peter to the Special Minister of State, Minister for the Public Service and Employee Relations, Aboriginal Affairs, and the Arts, Vice-President of the Executive Council representing the Minister for Transport and Roads

 

ANSWERS OCTOBER 23 2019

 

  1. Is rail access to a container terminal a key consideration for regional economic development?

 

ANSWER: No.

 

  1. Has Transport for NSW modelled the economic benefit of a container terminal in Newcastle?

(a) If so, when was this completed?

(b) If not, why not?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Has Transport for NSW modelled how many jobs a Newcastle container terminal would create?

(a) If so, when was this completed?

(b) How many jobs is it estimated that a container terminal in Newcastle deliver for Newcastle and the Hunter?

(c) How many jobs is it estimated that a container terminal in Newcastle deliver for regional NSW?

(d) If not, why not?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Has there been any modelling⁄ business case studies⁄ draft documents done or proposed that looks at truck transport on the M1 and Sydney road networks should a container terminal in Newcastle, with no cap on the number of containers and removal of the state government fee payable on container exports, go ahead?

 

(a) If so, when where they completed?

(b) If not, why not?

 

ANSWER: No. Road planning is based on total use of the road for all purposes.

 

  1. Would a container in Newcastle reduce freight costs for businesses in Newcastle, the Hunter and Northern NSW?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Is the Minister aware that the 2019 NSW Nationals Conference passed the following motion: “That conference call on the NSW Nationals to ensure: The removal of all obstacles facing the Newcastle Container Terminal Expansion Plans, including the cap on the number of containers and the State Government fee payable on container exports and The Port’s development of a high intensity container terminal.”?

(a) Does the Minister support the motion as passed by the 2019 NSW Nationals Conference?

(b) Does the Minister agree with the Deputy Premier’s comments that western district farmers and primary producers would “absolutely” benefit from a container port at Newcastle?

 

ANSWER: I refer you to the answer given at the Budget Estimates 2018-19 hearing.

 

  1. Would a container terminal in Newcastle, with no cap on the number of containers and removal of the state government fee payable on container exports, lower freight costs for northern NSW exports?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. What would be the benefit to western district farmers and primary producers if there was a container terminal at the Port of Newcastle, with no cap on the number of containers and removal of the state government fee payable on container exports?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Given that the Government’s NSW Freight and Ports Strategy notes that the Port of Newcastle would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities, how does the Government define the term “container” in respect of charging a fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Do the Port Commitment Deeds for Port Botany, Port Kembla and the Port of Newcastle all include the same meaning of the term “container”?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. What is the definition of container with respect to the Port Commitment Deeds?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Given that the Government charges a fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap, how many “containers” a year were shipped through the port since it was leased?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

 

  1. What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Are the restrictions placed on the Port of Newcastle effecting the efficiency of the NSW port network?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. What is the government’s current cap on container numbers at the Port of Newcastle?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Does the cap on containers at the Port of Newcastle drive up costs of farming exports?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. What is the rationale for the Government not disclosing the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle, in the Government’s freight and ports strategy?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. On what date did the Government inform the Parliament about the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Does the Government charge a legislated fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Does the Government charge any fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. What is the government’s source of funds to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the government’s minimal specified cap?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. On what date did the government inform the ACCC of its decision to require the developer of a container terminal at the Port of Newcastle to pay the government’s fee for container traffic at the Port of Newcastle above the government’s minimal specified cap?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. What percentage of containers are moved by road in Sydney?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Is it the case that there will be an estimated five million container truck movements a year through Port Botany by 2040 and six million without the Moorebank Intermodal Terminal compared with one million truck movements a year at present?

 

ANSWER: The number of heavy vehicle movements will depend on rail mode share, the development of the Western Sydney Freight Line and intermodal terminal, and landside investment by NSW Ports to support rail capacity.

 

  1. What is the cost of road improvements to the local road network serving the Moorebank Intermodal Terminal?

(a) 2013⁄14

(b) 2014⁄15

(c)2015⁄16

(d) 2016⁄17

(e)2017⁄18

(f) 2018⁄19

 

ANSWER: The Department of Planning, Industry and Environment is assessing development applications for this site.

 

All information, including relevant traffic reports and the Voluntary Planning Agreement for Moorebank Precinct West and the development consent for Moorebank Precinct East, is available via the Department of Planning, Industry and Environment’s Major Project Portal.

 

  1. How much is Moorebank intermodal terminal operator is required to contribute to road improvements:

(a) 2013⁄14

(b) 2014⁄15

(c) 2015⁄16

(d) 2016⁄17

(e) 2017⁄18

(f) 2018⁄19

 

ANSWER: The Department of Planning, Industry and Environment is assessing development applications for this site.

 

All information, including relevant traffic reports and the Voluntary Planning Agreement for Moorebank Precinct West and the development consent for Moorebank Precinct East, is available via the Department of Planning, Industry and Environment’s Major Project Portal.

 

  1. What is the capacity of rail freight network serving the Moorebank Intermodal Terminal?

 

ANSWER: Information is available at http:⁄⁄www.micl.com.au⁄importexportterminal.

 

  1. Given the Government’s assurances that there is no cap on containers at the Port of Newcastle – legislative or otherwise – is there competition in the NSW container port market between Port of Newcastle Investments Pty Ltd at the Port of Newcastle, and NSW Ports Pty Ltd at Port Botany?

(a) If yes, how is the Government supporting this competition?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Would removing freight from Sydney’s existing rail network enable the capacity to be used for passenger services?

 

ANSWER: Yes.

 

  1. Would removing freight from the existing rail lines between Newcastle and Sydney, and Port Kembla and Sydney, allow the capacity to be used for passenger services?

 

ANSWER: Yes.

 

  1. Was the “Ports Assets (Authorised Transactions) Act 2012” amended to authorise the Government to lease the Port of Newcastle after Port Botany and Port Kembla were leased to NSW Ports on May 30 2013?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. When the Government leased Port Botany and Port Kembla to NSW Ports on May 30 2013, did the Government have authority to require the developer of a container terminal at the Port of Newcastle to pay the Government for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

(a) If so, what was that authority?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. Does Port Botany compete with the Port of Melbourne in the East coast container port market?

(a) If yes, how many containers for the NSW market are shipped through the Port of Melbourne?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. What studies has the Government undertaken in relation to competition between the Port of Melbourne and Port Botany in the East coast container port market?

 

ANSWER: I refer you to the evidence given at the Public Works Committee’s Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be directed to the Treasurer.

 

  1. When will the $1 billion “Northern Sydney Freight Corridor Stage One” reach capacity?

 

ANSWER: This information is available on the Infrastructure Australia website.

 

  1. How much will stages 2 and 3 of the Northern Sydney Freight Corridor cost to build?

 

ANSWER: This is not yet known.

536 – Regional Transport and Roads – WESTERN SYDNEY FREIGHT LINE – October 2 2019

 

Primrose, Peter to the Special Minister of State, Minister for the Public Service and Employee Relations, Aboriginal Affairs, and the Arts, Vice-President of the Executive Council representing the Minister for Regional Transport and Roads

 

  1. What is the estimated cost of the Western Sydney Freight Line, between Chullora and Eastern Creek?

 

Answer October 22 2019

 

On 2 October 2019, the following question was asked by Primrose, Peter to the Special Minister of State, Minister for the Public Service and Employee Relations, Aboriginal Affairs, and the Arts, Vice-President of the Executive Council

What is the estimated cost of the Western Sydney Freight Line, between Chullora and Eastern Creek?

I have directed the question to the Minister for Transport and Roads as the responsible Minister.

 

535 – Regional Transport and Roads – MALDON-DOMBARTON FREIGHT LINE – October 2 2019

 

Primrose, Peter to the Special Minister of State, Minister for the Public Service and Employee Relations, Aboriginal Affairs, and the Arts, Vice-President of the Executive Council representing the Minister for Regional Transport and Roads

 

  1. Will the cost of the estimated $800 million for the Maldon-Dombarton freight line connecting Port Kembla to the main southern line be met by railing containers to a Port Kembla container terminal after Port Botany reaches capacity?

 

Answer October 23 2019

 

I am advised:

Infrastructure Australia completed a review of the Maldon to Dombarton freight line in 2017 and found the project costs outweigh the economic benefits. As such, there is no plan to complete construction of the freight line at this time. Future Transport 2056 identifies completion of the line as a project for investigation in the 10 to 20 year horizon.

517 – Transport and Roads – MOOREBANK INTERMODAL TERMINAL – October 2 2019

 

Primrose, Peter to the Special Minister of State, Minister for the Public Service and Employee Relations, Aboriginal Affairs, and the Arts, Vice-President of the Executive Council representing the Minister for Transport and Roads

 

  1. What is the capacity of the rail freight network serving the Moorebank Intermodal Terminal, as at 30 June 2019?

(a) What is the current operational capacity of the rail freight network serving the Moorebank Intermodal Terminal as at 30 June 2019?

 

(2) If this information is available in a readable and searchable format, with the specific information for the Moorebank Intermodal Terminal, please provide the specific document name, year of print, page number and specific url.

 

Answer October 23 2019

 

I am advised:

I refer you to my answer to the supplementary question on this topic from Budget Estimates 2018-2019, which is publicly available

 

Supplementary question 375

 

  1. What is the capacity of rail freight network serving the Moorebank Intermodal Terminal?

 

ANSWER I am advised: This information is publicly available.

500 – Planning and Open spaces – NEWCASTLE RAIL CORRIDOR – October 2 2019

 

Primrose, Peter to the Minister for Mental Health, Regional Youth and Women representing the Minister for Planning and Public Spaces

 

  1. Which parts of the Newcastle Rail corridor has the Government sold in the last 5 years?

 

  1. How much money has the Government received from the sale of parts of the Newcastle Rail corridor over the last 5 years?

 

  1. What is the timeframe for the Government to implement legislation to hypothecate 100% of the proceeds of the rail corridor development to Newcastle urban renewal?

 

Answer October 23 2019

 

I am advised that:

  1. Refer to answer (1) of Question on Notice 695.
  2. Refer to answer (2) of Question on Notice 695.
  3. All proceeds from land sales are being reinvested into urban renewal, including the delivery of:
  • 12,000m2 of new public spaces including Market Street Lawn and Museum Park
  • 10,000m2 of tourism uses including heritage restoration at Newcastle Station
  • 30 new affordable housing dwellings.

 

 

1435 – PORT OF NEWCASTLE CONTAINER CAP AND FEE, September 26 2019, Crakanthorp Tim to the Treasurer,

 

  1. When did the Government announce its policy decision to offer lease bidders for Port Botany and Port Kembla payment of financial support for container traffic at the Port of Newcastle and to pass this cost to the developer of a Newcastle container terminal?

 

  1. Will you remove the cap on the number of containers the Port of Newcastle can process before having to pay the Government a fee?

 

  1. Is the cap and fee on the number of containers that the Port of Newcastle can process anti-competitive?

 

Answer October 22 2019

 

The Port of Newcastle Port transaction arrangements do not prevent the development of a container terminal. In any case, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

1250 – NEWCASTLE CONTAINER TERMINAL EXPANSION PLANS

 

Crakanthorp, Tim to the Minister for Transport and Roads

 

September 18 2019

 

Do you support removing obstacles facing the Newcastle Container Terminal Expansion Plans, including the State Government fee payable on container exports?

 

Answer October 22 2019

 

The Liberal and Nationals Government is proud of its asset recycling strategy which has powered its record investment in schools, hospitals, roads, and rail infrastructure.

 

$1.75 billion was unlocked with the long term lease of port assets, including $100 million for the Hunter Infrastructure Investment Fund, $18 million for the John Hunter Hospital Neonatal Intensive Care Unit, $24 million for the redevelopment of Muswellbrook Hospital, and funding for the Newcastle Light Rail.

 

The lease arrangements do not prohibit the development of a container terminal at the Port of Newcastle and enable the growth of container volumes through Newcastle that service that region. Any decision to build a container terminal at Newcastle is a matter for the private operator of the Port of Newcastle. Otherwise, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

….

 

PORTFOLIO COMMITTEE NO. 1 – PREMIER AND FINANCE

Thursday 5 September 2019

Examination of proposed expenditure for the portfolio area PREMIER

UNCORRECTED

 

https://www.parliament.nsw.gov.au/lcdocs/transcripts/2231/Transcript%20-%205%20September%2019%20-%20UNCORRECTED%20-%20%20PC%201%20-%20Premier%20-%20Berejiklian.pdf

 

page 29

 

The Hon. PETER PRIMROSE: My question relates to whether you have had discussions with your Deputy Premier, given his public statements, in relation to the removal of the cap on the number of containers and the State government fee payable on container exports?

 

Ms GLADYS BEREJIKLIAN: I do not disclose private conversations I have had with colleagues but I will make this point publicly: You would need to triple container movements at the Port of Newcastle before any penalties came into play. So I say to those communities that want to increase their container movements at the point, there is capacity to triple that under the current arrangements. I also stress that our Government has invested more in ports, intermodals and airports than any other government in the history of the State. It is no secret that when we defined our port strategy the Port of Newcastle was our primary coal port.

 

Having said that, and I stand to be corrected, from the last report I read you would need to triple existing container movements before any financial impediments came into place. Therefore I say to the community, please continue to produce, please continue to do what you are doing. What I love about Newcastle and the Hunter is that because of our Government’s investment, notwithstanding how that area votes, we are investing record amounts in that region and the diversity of the economy and the economic growth in that region are unprecedented. It used to be a one company town and now it has a diverse economy specialising in many service industries in addition to those traditional industries. Unless I am mistaken, there would need to be a significant increase in the number of containers moving to and from that port before any type of financial impediment was struck.

 

BUDGET ESTIMATES 2015-2016
Supplementary Questions
General Purpose Standing Committee No. 1 Treasury, Industrial Relations
Thursday 3 September 2015
Answers 29 September 2015

https://www.parliament.nsw.gov.au/lcdocs/other/7658/150929%20TREASURER%20BE%20-%20Answers%20to%20Supplementary%20Questions.pdf

PORTS ISSUES

 

  1. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

 

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

1201 – CONTAINER TERMINAL AT THE PORT OF NEWCASTLE, Crakanthorp, Tim to the Treasurer, September 17 2019

 

When the Government signed lease agreements for Port Botany and Port Kembla on 30 May 2013, what was the Government’s source of funds to meet its contractual commitment to pay the lessee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

Answer October 22 2019

 

There is no minimal specified cap and no compensation payments to NSW Ports have been incurred under the respective Port Commitment Deeds for Port Botany and Port Kembla. The matter is otherwise subject to the sub judice convention.

BUDGET ESTIMATES 2019-2020

Supplementary Questions

Portfolio Committee No. 4 – Industry REGIONAL NEW SOUTH WALES, INDUSTRY AND TRADE

Hearing: Friday 13 September 2019

Answers due by: Wednesday 9 October 2019

 

 

Benefits of a container terminal at the Port of Newcastle

 

  1. Is the Deputy Premier aware that the 2019 NSW Nationals Conference passed the following motion:

 

“That conference call on the NSW Nationals to ensure: The removal of all obstacles facing the Newcastle Container Terminal Expansion Plans, including the cap on the number of containers and the State Government fee payable on container exports and The Port’s development of a high intensity container terminal.”?

 

  1. Does the Deputy Premier support the motion passed by the 2019 NSW Nationals Conference?

 

  1. What action has the Deputy Premier taken to implement this motion?

 

  1. Has the Deputy Premier discussed this motion with the Premier or Minister for Transport and Roads?

 

(a) If so, what has been the outcome of these discussions?

 

(b) If not, why not?

 

  1. Does the cap on containers at the Port of Newcastle drive up costs of farming exports?

 

  1. Does the cap on containers at the Port of Newcastle drive up costs for Regional NSW exports?

 

  1. Would a container terminal in Newcastle lower freight costs for western district farmers and primary producers exports?

 

  1. Have any farmers contacted you to express concerns about the NSW Government’s restrictions on the Port of Newcastle?

 

(a) If so, what action have you taken to address these concerns?

 

  1. How many jobs would a container terminal in Newcastle deliver for Regional NSW?

 

  1. Would a container in Newcastle reduce freight costs for businesses in Newcastle, the Hunter and Regional NSW? 53. What would be the economic benefit to Regional NSW of a container terminal in Newcastle?

BUDGET ESTIMATES 2019-2020

Supplementary Questions Portfolio Committee No. 1 – Premier and Finance

PREMIER Hearing: Thursday 5 September 2019

Answers due by: Tuesday 1 October 2019

 

https://www.parliament.nsw.gov.au/lcdocs/other/12440/Supplementary%20questions%20-%20PC1%20-%20Minister%20Premier.pdf

 

 

Port of Newcastle

 

  1. Is the Premier aware that the 2019 NSW Nationals Conference passed the following motion: “That conference call on the NSW Nationals to ensure:

 

  1. The removal of all obstacles facing the Newcastle Container Terminal Expansion Plans, including the cap on the number of containers and the State Government fee payable on container exports and The Port’s development of a high intensity container terminal.”?

 

  1. Does the Premier support the motion as passed by the 2019 NSW Nationals Conference?

159–160. Motions passed by the National Party at their state conference are a matter for the
National party.

 

  1. Does the Premier agree with the Deputy Premier’s comments that western district farmers and primary producers would “absolutely” benefit from a container port at Newcastle?

161. Any decision to build a container terminal at Newcastle is a matter for the operator of the Port
of Newcastle

 

  1. Does the cap on containers at the Port of Newcastle drive up costs of farming exports?

Answer 162–207. I refer you to the Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales. Requests for further detail should be referred to the Treasurer. 

  1. Would a container terminal in Newcastle lower freight costs for northern NSW exports?

 

  1. What would be the benefit to western district farmers and primary producers?

 

  1. Would a container terminal in Newcastle remove trucks from the M1 and Sydney’s choked road network?

 

  1. What would be the benefit of removing these trucks from the road network and transporting these containers by railing at the Port of Newcastle?

 

  1. This committee has previously been told that a container terminal can be developed in Newcastle, does the Premier agree?

 

  1. What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

  1. The Port of Newcastle stands ready to invest $1.8 billion into a container terminal in Newcastle, will you remove the cap and allow the port to diversify?

 

  1. Has the NSW Government modelled how many jobs a Newcastle container terminal would create?

 

  1. How many jobs would a container terminal in Newcastle deliver for Newcastle and the Hunter?

 

  1. How many jobs would a container terminal in Newcastle deliver for regional NSW?

 

  1. Would a container in Newcastle reduce freight costs for businesses in Newcastle, the Hunter and Northern NSW?

 

  1. Has the NSW Government modelled the economic benefit of a container terminal in Newcastle?

 

  1. What would be the economic benefit to NSW of a container terminal in Newcastle?

 

  1. What would be the economic benefit to the Hunter of a container terminal in Newcastle?

 

  1. Is the restriction on NSW ports adding to gridlock in Sydney?

 

(a) If so, what is this impact?

 

  1. Are the restrictions placed on the Port of Newcastle effecting the efficiency of the NSW port network?

 

  1. What percentage of containers are moved by road in Sydney?

 

  1. Do you see a benefit for the NSW economy with competition between ports?

 

  1. Are you aware of any anti-competitive restrictions facing the development of a container terminal at the Port of Newcastle?

 

  1. Does the Government charge a legislated fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

  1. Does the Government charge any fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

  1. Now the NSW Government has been named as a defendant alongside NSW Ports in the Federal Court case begun in December last year by the Australian Competition and Consumer Commission, and the State of NSW is now directly accused by the ACCC of “illegal and anticompetitive” conduct in privatising Botany and Kembla to Newcastle’s disadvantage – do you believe that the original contract is hugely deficient?

 

  1. Is the fact that the lessee of the Port of Newcastle can develop a container terminal if it wishes to do so, consistent with Government policy that the State’s next container terminal will be developed at Port Kembla after Port Botany reaches capacity?

 

  1. What is the government’s source of funds to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the government’s minimal specified cap?

 

  1. Did the Government lease the Port of Newcastle to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the Government’s minimal specified cap until 2063?

 

(a) If not, what is the Government’s source of funds to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the Government’s minimal specified cap until 2063?

 

  1. On what date did the government inform the ACCC of its decision to require the developer of a container terminal at the Port of Newcastle to pay the government’s fee for container traffic at the Port of Newcastle above the government’s minimal specified cap?

 

  1. Do the lease arrangements for the Port of Newcastle reflect the Government’s policy that Port Kembla will be the State’s next container terminal when Port Botany reaches capacity?

 

  1. What is the government’s current cap on container numbers at the Port of Newcastle?

 

  1. Given that there is no legislated cap on the number of containers that can travel through the Port of Newcastle, did the Government make a cap on numbers at the Port of Newcastle a rule for a scoping study into leasing Port Botany and Port Kembla?

 

  1. Was the cap on numbers given as an instruction to the government’s financial adviser, Morgan Stanley for conducting a scoping study in the first half of 2012 into leasing Port Botany and Port Kembla?

 

  1. Is the government’s decision that the developer of a container terminal at the Port of Newcastle is required to pay the government’s fee for exceeding the minimal specified cap on container traffic at the Port of Newcastle, consistent with the government’s decision that Port Kembla will be the State’s next major container terminal after Port botany reaches capacity?

 

  1. Was the “Ports Assets (Authorised Transactions) Act 2012” amended to authorise the Government to lease the Port of Newcastle after Port Botany and Port Kembla were leased to NSW Ports on May 30 2013?

 

  1. When the Government leased Port Botany and Port Kembla to NSW Ports on May 30 2013, did the Government have authority to require the developer of a container terminal at the Port of Newcastle to pay the Government for container traffic at the Port of Newcastle above the Government’s minimal specified cap; and, if so, what was that authority?

 

  1. Given that the Government’s NSW Freight and Ports Strategy notes that the Port of Newcastle would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities, how does the Government define the term “container” in respect of charging a fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

  1. Do the Port Commitment Deeds for Port Botany, Port Kembla and the Port of Newcastle all include the same meaning of the term “container”?

 

  1. What is the definition of container with respect to the Port Commitment Deeds?

 

  1. Given that the Government charges a fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap, how many “containers” a year were shipped through the port since it was leased?

 

  1. Given that the Port of Newcastle is not prevented from developing a container terminal, would a container terminal be “an uneconomic enterprise contrary to market demand” if the Government abolished its fee charged for container traffic above the Government’s minimal specified cap?”

 

  1. Given the Government’s assurances that there is no cap on containers at the Port of Newcastle – legislative or otherwise – is there competition in the NSW container port market between Port of Newcastle Investments Pty Ltd at the Port of Newcastle, and NSW Ports Pty Ltd at Port Botany?

 

(a) If yes, how is the Government supporting this competition?

 

  1. Does Port Botany compete with the Port of Melbourne in the East coast container port market?

 

(a) If yes, how many containers for the NSW market are shipped through the Port of Melbourne?

 

  1. What studies has the Government undertaken in relation to competition between the Port of Melbourne and Port Botany in the East coast container port market?

 

  1. Is the government’s unlegislated cap on container traffic at the Port of Newcastle consistent with the Government’s freight and ports strategy?

 

  1. Is the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle, consistent with the Government’s freight and ports strategy?

 

  1. Why does the Government not disclose the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle, in the Government’s freight and ports strategy?

 

  1. On what date did the Government inform the Parliament about the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle?

 

Answer 208–210. Optimal efficiency at Port Botany is achieved through having a modal split between road and rail as some freight will be destined for locations that are not served by rail.

  1. Would it be appropriate for all freight entering Sydney by land to be carried by rail, and for landside transportation of freight through Port Botany to be carried by rail?

 

  1. Is it desirable that all Port Botany container traffic is railed?

 

  1. Is rail access to a container terminal a key consideration for regional economic development?

 

Answer 211–212. This is a matter for the Minister for Transport and Roads.

  1. Is it the case that there will be an estimated five million container truck movements a year through Port Botany by 2040 – and six million without the Moorebank Intermodal Terminal – compared with one million truck movements a year at present?

 

  1. What is the cost of road improvements to the local road network serving the Moorebank Intermodal Terminal?

 

  1. How much is Moorebank intermodal terminal operator is required to contribute to road improvements?

213. The Department of Planning, Industry and Environment is the relevant planning authority for assessing/determining the development applications for this site. All information, including relevant traffic reports and conditions of development consent for Moorebank Precinct East and West is available via the Department of Planning, Industry and Environment’s Major Project Portal.

 

  1. Can the increase in container truck movements at Port Botany be handled without connecting Port Botany to WestConnex?

214. By 2036 around 50 per cent of port-bound heavy vehicles will use Sydney Gateway. This will help reduce congestion and create more capacity on major arterial routes, including the M5 East and King Georges Road, to support the future growth of Port Botany.

 

Answer 215 – 220

  1. What is the capacity of rail freight network serving the Moorebank Intermodal Terminal?

 

  1. Would removing freight from Sydney’s existing rail network enable the capacity to be used for passenger services?

 

  1. Would removing freight from the existing rail lines between Newcastle and Sydney, and Port Kembla and Sydney, allow the capacity to be used for passenger services?

 

  1. When will the $1 billion “Northern Sydney Freight Corridor Stage One” reach capacity?

 

  1. How much will stages 2 and 3 of the Northern Sydney Freight Corridor cost to build?

 

  1. Has the government abandoned stages 2 and 3 of the Northern Sydney Freight Corridor?

 

  1. Is it the government’s intention that the estimated $800 million cost of the Maldon-Dombarton freight line – connecting Port Kembla to the main southern line – be met by railing containers from a Port Kembla container terminal after Port Botany reaches capacity?

221. Government policy on the Maldon to Dombarton Rail Line is discussed in Future Transport 2056 and the Freight and Ports Plan 2018-2023.

 

  1. What is the estimated cost of the Western Sydney Freight Line, between Chullora and Eastern Creek?

222. This question should be directed to the Minister for Transport and Roads.

 

  1. What is the cost of upgrading the rail freight line into Port Botany?

223. This is an Australian Government funded and delivered project. The Australian Government
has announced a commitment of $400 million.

224. The NSW Government has committed to investigate a new rail alignment between Woy Woy
and Northern Sydney as part of plans to start early works for the Fast Rail Network.

  1. Are there any plans to build a second rail bridge over the Hawkesbury River?

 

Newcastle Cruise Terminal

 

  1. How much has the government committed to the cruise ship terminal in Newcastle?

238. The NSW Government committed $12.7 million for a cruise terminal at Newcastle.

 

Answer 239–240. This information is on the public record.

  1. What was the original budget for the Eden cruise ship terminal?

 

  1. How much has the government spent on the cruise ship terminal in Eden?

 

Answer 241–242, 246, 248–250. The NSW Government funding for this project is sourced from the Hunter Infrastructure Investment Fund, which is part of the Restart NSW fund and is administered by Infrastructure NSW. I am advised that earlier this year the Port of Newcastle wrote to Infrastructure NSW seeking a
significant reduction to the scope of the project. Infrastructure NSW was unable to approve these changes. The funding has not been withdrawn and remains available to the Port of Newcastle should they proceed with the project as per the scope of works described in the funding deed. Infrastructure for cruise ships to visit Newcastle is available and Newcastle is benefiting from cruise ship visits. Developing a cruise terminal is a commercial decision for the Port operator (Port
of Newcastle).

 

  1. Is the Premier aware that the Port of Newcastle sought additional funds in order to deliver the Newcastle cruise ship terminal?

 

(a) Why was this requested denied?

 

  1. Why was the request for additional funds rejected when the government’s contributions to the Eden terminal has continually increased?

 

Answer 243–245. The NSW Government’s position is stated in the NSW Cruise Development Plan available on Department of Planning, Industry and Environment website.

  1. On 27 September former Premier Mike Baird said the Newcastle cruise terminal “secures the future of cruise shipping in Newcastle and gives the city and the region the opportunity to compete for the growing east coast tourism trade”, does the Premier share this view?

 

  1. On 27 September the then Minister for Planning said “the project will also deliver new economic benefits to the region” does the Premier share this view?

 

  1. The government’s NSW Cruise Development Plan identifies “ensuring cruise infrastructure is fitfor-purpose” as key priority, does the Premier believe passengers disembarking ships in Newcastle in to a tent is fit-for-purpose infrastructure?

 

  1. An action from the government’s NSW Cruise Development Plan is “The NSW Government will investigate funding options for suitable infrastructure to support calls at current and potential regional ports, in partnership with local authorities”, why does the government refuse to provide the funds required in Newcastle?

 

  1. Is the Premier aware that Dream Cruises have cancelled cruises from Newcastle later this year? 248. Has the government’s inaction to deliver this infrastructure hurt the Newcastle tourism sector and local economy?

247. This is a matter for the cruise operator and port operator.

 

  1. Will the Premier commit to getting on with the job and deliver the Newcastle cruise terminal?

 

  1. What action has the Premier taken to ensure a cruise terminal is delivered in Newcastle?

PORTFOLIO COMMITTEE NO. 1 – PREMIER AND FINANCE

Thursday 5 September 2019

Examination of proposed expenditure for the portfolio area PREMIER

 

CORRECTED

 

page 29

 

The Hon. PETER PRIMROSE:

 

My question relates to whether you have had discussions with your Deputy Premier, given his public statements, in relation to the removal of the cap on the number of containers and the State government fee payable on container exports?

 

Ms GLADYS BEREJIKLIAN: I do not disclose private conversations I have had with colleagues but I will make this point publicly: You would need to triple container movements at the Port of Newcastle before any penalties came into play. So I say to those communities that want to increase their container movements at the point, there is capacity to triple that under the current arrangements. I also stress that our Government has invested more in ports, intermodals and airports than any other government in the history of the State. It is no secret that when we defined our port strategy the Port of Newcastle was our primary coal port.

 

Having said that, and I stand to be corrected, from the last report I read you would need to triple existing container movements before any financial impediments came into place. Therefore I say to the community, please continue to produce, please continue to do what you are doing. What I love about Newcastle and the Hunter is that because of our Government’s investment, notwithstanding how that area votes, we are investing record amounts in that region and the diversity of the economy and the economic growth in that region are unprecedented. It used to be a one company town and now it has a diverse economy specialising in many service industries in addition to those traditional industries. Unless I am mistaken, there would need to be a significant increase in the number of containers moving to and from that port before any type of financial impediment was struck.

 

The Hon. PETER PRIMROSE: Will you table that report, Premier?

 

Ms GLADYS BEREJIKLIAN: It has been on the public record. It is not a report.

 

The Hon. PETER PRIMROSE: Can you provide a copy?

 

Ms GLADYS BEREJIKLIAN: It was information provided on the public record but I am happy to take on board any further updates on that.

 

[Note: There is no container terminal at the Port of Newcastle. In 2020, 451 general cargo ships carried 2,957 containers through the port.  An average container ship carries 10,000 containers per visit.]

https://www.parliament.nsw.gov.au/lcdocs/other/12551/Answers%20to%20supplementary%20questions-%20UPDATED%20-%20PC%206%20-%20Transport%20and%20Roads%20-%20Constance%20-%20received%2016%20October%202019.PDF

 

BUDGET ESTIMATES 2019-2020

Supplementary Questions Portfolio Committee No. 6 – Transport and Customer Service TRANSPORT AND ROADS Hearing: Friday 30 August 2019

Answers: September 25 2019

 

Question 368-370

 

368. Would it be appropriate for all freight entering Sydney by land to be carried by rail, and for landside transportation of freight through Port Botany to be carried by rail?

 

369. Is it desirable that all Port Botany container traffic is railed?

 

  1. Is rail access to a container terminal a key consideration for regional economic development?

 

ANSWER I am advised: No. Optimal efficiency at Port Botany is achieved through having a modal split between road and rail. Some freight will be destined for locations that are not served by rail. Metropolitan intermodal terminals enable some freight to be hauled from Port Botany by rail to strategically located facilities for transfer to road. Please refer to the NSW Government submission to the Public Works Committee’s Inquiry into the impact of Port of Newcastle Sale Arrangements on public works expenditure in New South Wales.

 

Question 371

 

  1. Is it the case that there will be an estimated five million container truck movements a year through Port Botany by 2040 – and six million without the Moorebank Intermodal Terminal – compared with one million truck movements a year at present?

 

ANSWER I am advised: The number of heavy vehicle movements needed at Port Botany to support the port container task will depend on rail mode share, the development of the Western Sydney Freight Line and intermodal terminal and landside investment by NSW Ports to support rail capacity.

 

Question 372-374

 

  1. What is the cost of road improvements to the local road network serving the Moorebank Intermodal Terminal?

 

  1. How much is Moorebank intermodal terminal operator is required to contribute to road improvements? 374. Can the increase in container truck movements at Port Botany be handled without connecting Port Botany to WestConnex?

 

374. Can the increase in container truck movements at Port Botany be handled without connecting Port Botany to WestConnex?

 

ANSWER I am advised: The Department of Planning and Environment is assessing development applications for this site. All information, including relevant traffic reports and the Voluntary Planning Agreement for Moorebank Precinct West and the development consent for Moorebank Precinct East, is available via the Department of Planning’s Major Project Portal.

 

Question 375

 

  1. What is the capacity of rail freight network serving the Moorebank Intermodal Terminal?

 

ANSWER I am advised: This information is publicly available.

 

Question 376-377

 

  1. Would removing freight from Sydney’s existing rail network enable the capacity to be used for passenger services?

 

  1. Would removing freight from the existing rail lines between Newcastle and Sydney, and Port Kembla and Sydney, allow the capacity to be used for passenger services?

 

ANSWER I am advised: Removing freight from shared parts of the existing rail network could release capacity that could be used for passenger services subject to rolling stock, crew availability and demand.

 

Question 378-379

 

  1. When will the $1 billion “Northern Sydney Freight Corridor Stage One” reach capacity?

 

  1. How much will stages 2 and 3 of the Northern Sydney Freight Corridor cost to build?

 

ANSWER I am advised: The projects to be included in the Northern Sydney Freight Corridor stages 2 and 3 are yet to be confirmed. The scope of future stages of the Northern Sydney Freight Corridor will be subject to demand projections and business cases.

 

Question 380

 

  1. Has the government abandoned stages 2 and 3 of the Northern Sydney Freight Corridor?

 

ANSWER I am advised: Stages 2 and 3 will be determined by the business cases.

 

Question 381

 

  1. Is it the government’s intention that the estimated $800 million cost of the Maldon-Dombarton freight line – connecting Port Kembla to the main southern line – be met by railing containers from a Port Kembla container terminal after Port Botany reaches capacity?

 

ANSWER I am advised: This is a matter for the Minister for Regional Transport and Roads.

 

Question 382

 

  1. What is the estimated cost of the Western Sydney Freight Line, between Chullora and Eastern Creek?

 

ANSWER I am advised: This is a matter for the Minister for Regional Transport and Roads.

 

Question 383

  1. What is the cost of upgrading the rail freight line into Port Botany?

 

ANSWER I am advised: The Australian Government announced a funding commitment of $400 million for the project. The project includes the Cabramatta Loop Project on the Southern Sydney Freight Line.

 

Question 384

 

  1. Are there any plans to build a second rail bridge over the Hawkesbury River?

 

ANSWER I am advised: The NSW Government has committed to investigate a new rail alignment between Woy Woy and Northern Sydney as part of plans to start early works for the Fast Rail Network. These detailed investigations will consider a range of options to improve services along the corridor, including potential rail crossing options of the Hawkesbury River to support faster train speeds between Sydney and the Central Coast as a first step to reduce travel times between Sydney, Newcastle and Port Macquarie.

 

Question 4

 

  1. Does the Planning Assessment Commission’s planning approval for the Moorebank Intermodal Freight Terminal place a condition of 250,000 twentyfoot equivalent unit containers for import/export containers?

 

ANSWER I am advised: This information is publicly available.

 

Question 5

 

  1. Does the Planning Assessment Commission’s planning approval for the Moorebank Intermodal Freight Terminal place a condition that traffic generated by the terminal not exceed the current capacity of the roads serving the terminal?

 

ANSWER I am advised: This information is publicly available.

 

 

Question 6-7

 

  1. Did the Government spend $3.4 million or thereabouts to progress studies into road infrastructure options to manage traffic impacts from the proposed Moorebank Intermodal Terminal and forecast growth in the broader Liverpool and Moorebank area?

(a) If yes:

i. What was the purpose of those studies?

ii.Did the Government released the scope of each study?

iii. If not, will the Government release the scope of each study?

iv. Are the studies confidential?

v. If so, why?

vi. What circumstances caused the Government to undertake the studies?

vii. Who undertook the studies?

viii. Did the project proponents participate in the studies?

ix. Did the local community participating in the studies?

x. Has approval to develop the project been given subject to these studies?

xi. Who is funding the rail connection between the Southern Sydney Freight Line and the terminal site?

xii. Will the Government release the cost of necessary road upgrades before deciding the project application?

xiii. What proportion of necessary road upgrades will be paid by the terminal operator if planning approval is given?

 

  1. What specific transport infrastructure is required to be built / enhanced to ameliorate current traffic congestion, background growth, and the introduction into East Liverpool of heavy truck movements into the East Liverpool bridge traffic?

 

(a) What is the cost of this specific transport infrastructure?

 

ANSWER I am advised: As the intermodal terminal is at the planning stage, the final cost for road improvements is not yet known. The Department of Planning, Industry and Environment is the relevant planning authority for assessing/determining the development applications for this site. All information, including relevant traffic reports, conditions of development consent for Moorebank Precinct East and West is available via the Department of Planning, Industry and Environment’s Major Project Portal https://www.planningportal.nsw.gov.au/major-projects.

 

Question 8

 

  1. What specific transport infrastructure is required through the Liverpool suburbs West of its CBD to meet the demands of the MIFT heavy vehicle transport to the Cumberland Highway as a major route to the freight’s final destination?

 

ANSWER I am advised: The NSW Government has started early planning for a future upgrade and extension of Cambridge Avenue, Glenfield. This upgrade will improve access to the Moorebank Intermodal Terminal and address the long term population and employment growth in the Liverpool Moorebank sub region. For more information, please visit https://www.rms.nsw.gov.au/projects/sydney-west/cambridge-ave-glenfieldupgrade/index.html.

 

Question 9

 

  1. Are there plans to develop roads from the M5 freeway west of the Hume Highway through the Liverpool open flood zone spaces to the Cumberland Highway?

 

ANSWER I am advised: The proposed Liverpool West Bypass would connect the M5 Motorway to the Cumberland Highway via the Brickmakers Creek corridor.

https://www.parliament.nsw.gov.au/lcdocs/other/12532/Answers%20to%20supplementary%20questions%20-%20PC%201%20-%20Treasury%20-%20Perrottet%20-%20received%2024%20September%202019.PDF

BUDGET ESTIMATES 2019-2020

Supplementary Questions

Portfolio Committee No. 1 – Premier and Finance Treasury

Hearing: Thursday 29 August 2019

Answers Tuesday 24 September 2019

 

Port of Newcastle

 

Question 95

 

Is the Treasurer aware that the 2019 NSW Nationals Conference passed the following motion: “That conference call on the NSW Nationals to ensure: The removal of all obstacles facing the Newcastle Container Terminal Expansion Plans, including the cap on the number of containers and the State Government fee payable on container exports and The Port’s development of a high intensity container terminal.”?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 96

 

Does the Treasurer support the motion as passed by the 2019 NSW Nationals Conference?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 97

 

Does the Treasurer agree with the Deputy Premier’s comments that western district farmers and primary producers would “absolutely” benefit from a container port at Newcastle?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 98

 

Does the cap on containers at the Port of Newcastle drive up costs of farming exports?

 

Answer: Please refer to question 106. Otherwise, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 99

Would a container terminal in Newcastle lower freight costs for northern NSW exports?

 

Answer: This question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 100

 

What would be the benefit to western district farmers and primary producers?

 

Answer: This question would be more appropriately directed to the Minister for Primary Industries.

 

Question 101

 

Would a container terminal in Newcastle remove trucks from the M1 and Sydney’s choked road network?

 

Answer: This question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 102

 

What would be the benefit of removing these trucks from the road network and transporting these containers by railing at the Port of Newcastle?

 

Answer: This question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 103

 

If the court finds the cap on containers is anti-competitive and illegal what is the financial implication/impact for the NSW government?

(a) Has Treasury modelled the different outcomes of the ACCC court case?

(b) What will the port rort cost the tax payers of NSW?

 

Answer: Please refer to question 106. Otherwise, this matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 104

 

Does the Treasurer stand by their methods of privatising ports in NSW?

 

Answer: The Government’s successful asset recycling strategy has delivered a once in a generation infrastructure boom that is benefiting the people of NSW. The proceeds from the leases, and other asset recycling initiatives, have enabled the Government to fund infrastructure projects, including public transport and roads, education, health, culture and sport and water security.

 

Question 105

 

This committee has previously been told that a container terminal can be developed in Newcastle, does the Treasurer agree?

 

Answer: I am advised the Newcastle Port transaction arrangements do not prevent the development of a container terminal at the Port of Newcastle.

 

Question 106

 

What is the current container threshold at the Port of Newcastle for which compensations is payable to NSW ports?

 

Answer: As indicated in the recent Parliamentary Inquiry,

… “under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany I Kembla Port Manager if all of the following conditions are met:

• Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twentyfoot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess?. The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU- see below).

• The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.

• The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany I Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future. The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction. During the Port Botany!Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.” As at June 2019, the threshold for compensation is currently at around 43,000 TEU.

 

Question 107

 

The Port of Newcastle stands ready to invest $1.8 billion into a container terminal in Newcastle, will you remove the cap and allow the port to diversify?

 

Answer: Please refer to question 106.

 

Question 108

 

Has Treasury modelled how many jobs a Newcastle container terminal would create? Answer: No.

 

Question 109 How many jobs would a container terminal in Newcastle deliver for Newcastle and the Hunter?

 

Answer: Please see response to question 108.

 

Question 110

 

How many jobs would a container terminal in Newcastle deliver for regional NSW?

 

Answer: Please see response to question 108.

 

Question 111

 

Would a container in Newcastle reduce freight costs for businesses in Newcastle, the Hunter and Northern NSW?

 

Answer: This question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 112

 

Has Treasury modelled the economic benefit of a container terminal in Newcastle? Answer: No.

 

Question 113

 

What would be the economic benefit to NSW of a container terminal in Newcastle?

 

Answer: Please see response to question 112.

 

Question 114

 

What would be the economic benefit to the Hunter of a container terminal in Newcastle?

 

Answer: Please see response to question 112.

 

Question 115

 

Is the restriction on NSW ports adding to gridlock in Sydney? If so, what it this impact?

 

Answer: This question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 116

 

Are the restrictions placed on the Port of Newcastle effecting the efficiency of the NSW port network?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 117

 

What percentage of containers are moved by road in Sydney?

 

Answer: This question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 118

 

Do you see a benefit for the NSW economy with competition between ports?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 119

 

Are you aware of any anti-competitive restrictions facing the development of a container terminal at the Port of Newcastle?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub ju dice convention.

 

Question 120

 

Does the Government charge a legislated fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

Answer: No, the Government does not charge a legislated fee for container traffic at the Port of Newcastle.

 

Question 121

 

Does the Government charge any fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

Answer: The Government does not charge a fee for container traffic at the Port of Newcastle and there is no minimal specified cap. See response to question 106.

 

Question 122

 

Now the NSW Government has been named as a defendant alongside NSW Ports in the Federal Court case begun in December last year by the Australian Competition and Consumer Commission, and the State of NSW is now directly accused by the ACCC of “illegal and anticompetitive” conduct in privatising Botany and Kembla to Newcastle’s disadvantage – do you believe that the original contract is hugely deficient?

 

Answer: The State of NSW is not directly accused by the ACCC of illegal and anti-competitive conduct in privatising Botany and Kembla. The matter is otherwise subject to the sub judice convention.

 

Question 123

 

Is the fact that the lessee of the Port of Newcastle can develop a container terminal if it wishes to do so, consistent with Government policy that the State’s next container terminal will be developed at Port Kembla after Port Botany reaches capacity?

 

Answer: Please refer to the NSW Government submission to the Public Works Committee’s Inquiry into the impact of Port of Newcastle Sale Arrangements on public works expenditure in New South Wales and the NSW Government witness statements at the hearing on 31 January 2019.

 

Question 124

 

What is the government’s source of funds to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the government’s minimal specified cap?

 

Answer: Please see response to question 121. No compensation payments to NSW Ports have been incurred under the respective Port Commitment Deeds for Port Botany and Port Kembla. The matter is otherwise subject to the sub judice convention.

 

Question 125

 

Did the Government lease the Port of Newcastle to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the Government’s minimal specified cap until 2063?

 

Answer: No. There is no cap on containers at the Port of Newcastle. The matter is subject to the sub ju dice convention.

 

(a) If not, what is the Government’s source of funds to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the Government’s minimal specified cap until 2063?

 

Answer: Please see response to question 124.

 

Question 126

 

On what date did the government inform the ACCC of its decision to require the developer of a container terminal at the Port of Newcastle to pay the government’s fee for container traffic at the Port of Newcastle above the government’s minimal specified cap?

 

Answer: Please see responses to question 121 and 144. This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 127

 

Do the lease arrangements for the Port of Newcastle reflect the Government’s policy that Port Kembla will be the State’s next container terminal when Port Botany reaches capacity?

 

Answer: The lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 NSW Government’s Freight and Ports Strategy and the 2018 NSW Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity. Please see also the Government’s submission to the “Inquiry into the impact of Port of Newcastle sale [lease] arrangements on public works expenditure in New South Wales.”

 

Question 128

 

Last year, in answer to supplementary question 91, you said “the ACCC was informed of the Port Commitment Deeds prior to the Newcastle Port transaction”, on what date was the ACCC informed?

 

Answer: Please see response to question 126.

 

Question 129

 

Last year, when you were asked supplementary question 126, “on which date did the Government inform the Australian Competition and Consumer Commission of its formal decision to invite Newcastle Stevedores Consortium to develop a container terminal at the Port of Newcastle subject to Newcastle Stevedores Consortium making the Government whole for any cost the Government incurred to NSW Ports in respect of this development?”, you did not provide the date. What was that date?

 

Answer: Newcastle Ports Corporation did not conclude a contract to build a container terminal with Newcastle Stevedores Consortium.

 

Question 130

 

What is the government’s current cap on container numbers at the Port of Newcastle?

 

Answer: There is no cap on containers at the Port of Newcastle. Please see response to question 106.

 

Question 131

 

Given that there is no legislated cap on the number of containers that can travel through the Port of Newcastle, did the Government make a cap on numbers at the Port of Newcastle a rule for a scoping study into leasing Port Botany and Port Kembla?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub ju dice convention.

 

Question 132

 

Was the cap on numbers given as an instruction to the government’s financial adviser, Morgan Stanley for conducting a scoping study in the first half of 2012 into leasing Port Botany and Port Kembla?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 133

 

Last year, when you were asked supplementary question 127, “Was a decision made in 2012 to require any future operator of a container terminal at the Port of Newcastle to make the government whole for any cost the government incurred from paying the operator of Port Botany in respect of future container capacity development at the Port of Newcastle?” you advised no, do you stand by that answer?

 

Answer: The long-term lease of the Port of Newcastle occurred in 2014.

 

Question 134

 

Is the government’s decision that the developer of a container terminal at the Port of Newcastle is required to pay the government’s fee for exceeding the minimal specified cap on container traffic at the Port of Newcastle, consistent with the government’s decision that Port Kembla will be the State’s next major container terminal after Port botany reaches capacity?

 

Answer: Please see responses to questions 121,123 and 127.

 

Question 135

 

Was the Government required to comply with the “Working With Government Guidelines” as they were replaced in 2012 by the “Public Private Partnerships Guidelines” for conducting its negotiation with Newcastle Stevedores Consortium at the Port of Newcastle between 2010 and November 2013?

 

Answer: Please see response to question 129.

 

Question 136

 

Does the Government disagree with the statement by the ICAC in its “Operation Spicer Report” dated August 30 2016 that “as a statutory state owned corporation, the NPC [Newcastle Port Corporation] was obliged to comply with the NSW Government’s “Working with Government Guidelines”?

 

Answer: Please see response to question 135.

 

Question 137

 

Was the “Ports Assets (Authorised Transactions) Act 2012” amended to authorise the Government to lease the Port of Newcastle after Port Botany and Port Kembla were leased to NSW Ports on May 30 2013?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub ju dice convention.

 

Question 138

 

When the Government leased Port Botany and Port Kembla to NSW Ports on May 30 2013, did the Government have authority to require the developer of a container terminal at the Port of Newcastle to pay the Government for container traffic at the Port of Newcastle above the Government’s minimal specified cap; and, if so, what was that authority?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 139

 

When the Government amended the Term Sheets with Newcastle Stevedores Consortium in 2013 requiring payment for container traffic above the Government’s minimal specified cap, did the Government ask the ACCC to advise whether this requirement was likely to comply with the “Competition and Consumer Act 2010”; and, if not, why not?

Answer: Please see response to question 129.

 

Question 140

 

Given that the Government’s NSW Freight and Ports Strategy notes that the Port of Newcastle would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities, how does the Government define the term “container” in respect of charging a fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

 

Answer: Please see response to questions 121 and 142.

 

Question 141

 

Do the Port Commitment Deeds for Port Botany, Port Kembla and the Port of Newcastle all include the same meaning of the term “container”?

 

Answer: Yes.

 

Question 142

 

What is the definition of container with respect to the Port Commitment Deeds?

 

Answer: Details of container arrangements in the Port Commitment Deeds are commercial in confidence.

 

Question 143

 

Given that the Government charges a fee for container traffic at the Port of Newcastle above the Government’s minimal specified cap, how many “containers” a year were shipped through the port since it was leased?

 

Answer: Notwithstanding the response to question 121, this question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 144

 

Given that the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions, on what date did the Government advise the ACCC of the content of the Port Commitment Deeds for Port Botany and Port Kembla?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

Question 145

 

Given that the Government’s NSW Freight and Ports Strategy notes that the Port of Newcastle would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities, why did the government advise this Committee on 22 August 2014 that a container terminal at the Port of Newcastle was “an uneconomic enterprise contrary to market demand” but fail to advise it of the government’s fee charged for container traffic above the Government’s minimal specified cap?

 

Answer: The response provided by the Minister for Transport and Roads was a general comment. He also noted that the container port did not proceed and there is no decision to review. Please see response to question 121. In addition, any decision to build a container terminal at Newcastle is a matter for the private operator of the Port of Newcastle.

 

Question 146

 

Given that the Port of Newcastle is not prevented from developing a container terminal, would a container terminal be “an uneconomic enterprise contrary to market demand” if the Government abolished its fee charged for container traffic above the Government’s minimal specified cap?”

 

Answer: Please see response to question 145.

 

Question 147

 

Given that the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions, was the government subject to the “Competition and Consumer Act 2010” in respect to Term Sheets with Newcastle Stevedores Consortium requiring Mayfield Development Corporation Pty Ltd to make the State of New South Wales pay for any cost the State incurred to NSW Ports with respect to future container capacity development at the Port of Newcastle?

 

Answer: Please see response to question 129.

 

Question 148

 

Given the Government’s assurances that there is no cap on containers at the Port of Newcastle – legislative or otherwise – is there competition in the NSW container port market between Port of Newcastle Investments Pty Ltd at the Port of Newcastle, and NSW Ports Pty Ltd at Port Botany?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

(a) If yes, how is the Government supporting this competition?

 

Question 149

 

Does Port Botany compete with the Port of Melbourne in the East coast container port market?

 

Answer: This matter is currently the subject of court proceedings and is therefore subject to the sub judice convention.

 

(b) If yes, how many containers for the NSW market are shipped through the Port of Melbourne?

 

Question 150

 

What studies has the Government undertaken in relation to competition between the Port of Melbourne and Port Botany in the East coast container port market?

 

Answer: This question would be more appropriately directed to the Minister for Transport and Roads.

 

Question 151

 

Is the government’s unlegislated cap on container traffic at the Port of Newcastle consistent with the Government’s freight and ports strategy?

 

Answer: Please see responses to question 121 and 127.

 

Question 152

 

Is the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle, consistent with the Government’s freight and ports strategy?

 

Answer: Please see responses to question 121 and 127.

 

Question 153

 

Why does the Government not disclose the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle, in the Government’s freight and ports strategy?

 

Answer: Please see responses to questions 121 and 142.

 

Question 154

 

On what date did the Government inform the Parliament about the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle?

 

Answer: Please see response to question 121 and refer to the 10 August 2016 statement by the then Minister for Roads, Maritime and Freight, available on the Legislative Council’s Hansard.

 

Question 155

 

In terms of Treasury’s leasing process for Port Botany and Port Kembla, before these ports were leased, did the Government inform the ACCC about the Government’s intention to pay the lessee for container traffic above the Government’s minimum specified cap at the Port of Newcastle?

 

Answer: Please see responses to questions 121, 126 and 144.

 

(a) If yes, on what date?

 

Question 156

 

In terms of Treasury’s leasing process for Port Botany and Port Kembla, after these ports were leased, did the Government inform the ACCC about the Government’s contractual commitment to pay the lessee for container traffic above the Government’s minimum specified cap at the Port of Newcastle?

 

Answer: Please see responses to questions 121, 126 and 144.

 

(a) If yes, on what date?

 

Question 157

 

In terms of Treasury’s leasing process for the Port of Newcastle, before this port was leased, did the Government inform the ACCC about the Government’s intention to require the lessee to pay the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle?

 

Answer: Please see responses to questions 121, 126 and 144.

 

(a) If yes, on what date and what did the ACCC advise?

 

Question 158

 

In terms of Treasury’s leasing process for the Port of Newcastle, after this port was leased, did the Government inform the ACCC about the Government contractually requiring the lessee to pay the Government’s fee for container traffic above the Government’s minimum specified cap at the Port of Newcastle?

 

Answer: Please see response to questions 121, 126 and 144.

 

(a) If yes, on what date?

 

Question 159

 

Did Treasury procure information indicating that a container terminal at the Port of Newcastle would be an uneconomic enterprise contrary to market demand, as disclosed by the then Treasurer, The Hon Andrew Constance MP, in answer to supplementary question 53 of the August 22 2015 Budget Committee hearing?

 

Answer: Treasury is not aware of any such information being procured and please see response to question 145.

 

(a) If yes, what is that information?

https://www.parliament.nsw.gov.au/lcdocs/transcripts/2220/Transcript%20-%2029%20August%202019%20-%20UNCORRECTED%20-%20%20PC%201%20-%20Treasury%20-%20Perrottet.pdf

 

PORTFOLIO COMMITTEE NO. 1 – PREMIER AND FINANCE

Examination of proposed expenditure for the portfolio area

TREASURY

UNCORRECTED

At Jubilee Room, Parliament House, Sydney, on Thursday, 29 August 2019

The Committee met at 9:30

 

PRESENT

 

Ms Tara Moriarty (Chair); Ms Abigail Boyd; The Hon. Mark Latham; The Hon. Shayne Mallard; The Hon. Taylor Martin; The Hon. Daniel Mookhey; The Hon. Adam Searle; The Hon. Walt Secord; Mr David Shoebridge; The Hon. Natalie Ward

 

The Hon. Dominic Perrottet, Treasurer

 

JOANN WILKIE, Deputy Secretary, Economic Strategy and Productivity, NSW Treasury

SAN MIDHA, Deputy Secretary, Policy and Budget, NSW Treasury

MICHAEL PRATT, Secretary, NSW Treasury

KIM CURTAIN, Interim Deputy Secretary, Trade, Tourism, Investment and Precincts, NSW Treasury

PHILIP GARDNER, Deputy Secretary, Commercial, Commissioning and Procurement, NSW Treasury

JOHN NAGLE, Chief Executive Officer and Managing Director, icare, sworn and examined

 

page 32

 

The CHAIR:  The witnesses have already been sworn or affirmed, so we will resume the hearing. We are straight into questions and we will begin with the Opposition.

 

The Hon. WALT SECORD:  I am not sure to whom I should direct this question. Mr Pratt, maybe you could direct it to the appropriate representative. I need to get an update on the Australian Competition and Consumer Commission [ACCC] case involving the Newcastle port. Who would that be?

 

Mr PRATT:  Mr Gardner will deal with that question.

 

Mr GARDNER:  The court proceedings are currently underway with the ACCC proceedings in the Federal Court. With respect to the proceedings, no parties are seeking any court orders or compensation from the State. NSW Ports supports the New South Wales Government in the cross-claim against the Port of Newcastle on the basis that the State is a proper party to the case. As a consequence, the courts joined the State in the proceedings and it was not at the ACCC’s behest. Apart from that, obviously anything to do with anything that is in scope for the proceedings in court we would decline to answer today on the basis that it will prejudice the court’s proceedings.

 

The Hon. WALT SECORD:  Okay. I understand you are a public servant so I will be careful, but have there been responses or representations from country MPs expressing their concern or their desire to see expansion of the port?

 

Mr GARDNER:  I am not aware of any beyond what has been in the press.

 

The Hon. WALT SECORD:  I will come back to you on this. Thank you very much.

 

The Hon. ADAM SEARLE:  Maybe the head of Treasury could answer whether or not the Treasurer has received representations from country MPs and, if so, from who?

 

Mr PRATT:  Not that I am aware of, no.

 

The Hon. DANIEL MOOKHEY:  I have a follow-up. Mr Gardner, you said the State has cross-claimed?

 

Mr GARDNER:  No. NSW Ports has cross-claimed—

 

The Hon. NATALIE WARD:  Joined on costs.

 

Mr GARDNER:  —and joined the State, which the court accepted.

 

The Hon. WALT SECORD:  I understand that there have been more than 200 questions on notice involving the container depot. What is the volume of the number of ships or containers that come through the Newcastle port?

 

The Hon. DANIEL MOOKHEY:  The twenty-foot equivalent units [TEUs].

 

The Hon. WALT SECORD:  TEUs, yes. That is right.

 

Mr GARDNER:  I will either have to take it on notice or direct it to the transport department.

 

The Hon. WALT SECORD:  Have there been any studies on capacity or expansion? What would be the size of the expansion?

 

Mr GARDNER:  Again, that is a matter that would be within scope for the Federal Court to give consideration to.

 

The Hon. DANIEL MOOKHEY:  Has there been any forecast of TEU growth that Treasury has prepared for the Port of Newcastle?

 

Mr GARDNER:  Again, it sort of fits into that same scope of things that the Federal Court would be wanting to consider. Therefore, we would respectfully decline to answer.

 

The Hon. ADAM SEARLE:  Just on that, unless something is actually legally prejudicial to the State’s interests, you are not entitled to withhold information from the Committee if you have it. How would answering that question prejudice the State’s position in the litigation?

 

Mr GARDNER:  As to whether or not Treasury had done any modelling?

 

The Hon. ADAM SEARLE:  Yes.

 

Mr GARDNER:  I am not aware of any Treasury modelling.

 

The Hon. ADAM SEARLE:  That is a different answer, then, is it not? You are actually answering the question now. So there is no Treasury modelling that you are aware of.

 

Mr GARDNER:  I am not aware of any Treasury modelling.

 

The Hon. ADAM SEARLE:  Mr Pratt, is that your understanding?

 

Mr PRATT:  That is my understanding also, yes. If that modelling were done, it would be done through Mr Gardner’s area.

 

The Hon. DANIEL MOOKHEY:  But NSW Treasury would of course maintain modelling on freight growth in New South Wales, I presume.

 

Mr PRATT:  That responsibility primarily would rest with Transport who would do that model.

 

The Hon. DANIEL MOOKHEY:  It is not as a part of your economic growth forecast and the trade work that you would do? You would not be modelling predicted TEU growth as a function of changing trade volumes? You would not be preparing advices on the extent to which each port will grow as a way in which to accommodate that growth?

 

Mr PRATT:  I am not aware of specific modelling to that extent, no.

 

…………

 

page 90

 

The Hon. WALT SECORD:  Earlier I asked some questions about the Newcastle port. Does Treasury have concerns or has it done an analysis of western district farmers expressing the desire for the container port to be expanded?

 

Mr PRATT:  Not to my knowledge.

 

Mr GARDNER:  Not to our knowledge at all, no.

 

The Hon. DANIEL MOOKHEY:  Have you prepared any formal data as to whether or not the expansion of agricultural freight movements through the Port of Newcastle has an impact on the New South Wales farming economy?

 

Mr GARDNER:  Any analysis relating to regional economic activity is the responsibility of the Department of Premier and Cabinet, is my understanding—Premier and Cabinet.

 

The Hon. DANIEL MOOKHEY:  Do you rely on their forecasts?

 

Ms WILKIE:  The relevant team in the Department of Premier and Cabinet has a CGE model that they use. It is a computerised general equilibrium model, which is a particular type of economic model that they use for undertaking economic modelling of a variety of issues affecting regional New South Wales. As Mr Pratt mentioned earlier but not specifically by name, there is the common planning assumptions group. There is a series of economic parameters and this sort of modelling work that is done in various parts of State government is shared throughout the common planning assumptions group to underpin economic policy across the State. The sort of modelling that you are talking about is undertaken specifically in DPC.

LEGISLATIVE Assembly

August 22 2019

 

1115 – NEWCASTLE COURT CASE

 

Crakanthorp, Tim to the Minister for Transport and Roads

 

  1. Is it true that the Government has been added as a respondent in the Australian Competition and Consumer Commission’s (ACCC) court case against NSW Ports?

 

  1. Is it true that the ACCC has alleged the cap placed on the Port of Newcastle is anti-competitive and illegal?

 

  1. Will the Minister support the Deputy Premier’s call for the Government to remove the anti-competitive cap placed on container movements at the Port of Newcastle?

 

  1. Why does the Port of Newcastle have to pay a fine to the Government if it handles more than 30,000 containers?

 

Answer September 26 2019

It would be inappropriate for me to comment on this matter as it is before the courts.

Legislative Assembly

August 8 2019

 

1003 – NEWCASTLE CONTAINER TERMINAL

 

Crakanthorp, Tim to the Treasurer

 

  1. Did the Government lease the Port of Newcastle to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the Government’s minimal specified cap until 2063?

 

a. If no, what is the Government’s source of funds to be able to pay NSW Ports Pty Ltd for container traffic at the Port of Newcastle above the Government’s minimal specified cap until 2063?

 

Answer September 12 2019

Given the Parliamentary convention of sub judice, it is not appropriate to make any comment on the purpose and effect of the Port Commitment Deed arrangements as this matter is currently the subject of court proceedings.

Legislative Assembly

August 1 2019

 

930 – CONTAINER TERMINAL AT THE PORT OF NEWCASTLE

 

Crakanthorp, Tim to the Minister for Transport and Roads

 

1.When the Government signed lease agreements for Port Botany and Port Kembla on 30 May 2013, what was the Government’s source of funds to meet its contractual commitment to pay the lessee for container traffic at the Port of Newcastle above the Government’s minimal specified cap?

2. Does the Minister support a container terminal at the Port of Newcastle?

3. Is the Minister aware that the NSW National Party Conference supports a container terminal at the Port of Newcastle?

Answer September 4 2019

 

1. This is a matter for the Treasurer.

2. This is a private business decision for the Port of Newcastle.

3. Yes.

Legislative Assembly

August 1 2019

 

929 – BENEFITS FOR WESTERN NEW SOUTH WALES

 

Crakanthorp, Tim to the Minister for Agriculture and Western New South Wales

 

  1. What benefit would a container terminal at the Port of Newcastle have for agricultural exporters in Western New South Wales?

 

  1. Does the Minister support the motion passed at the New South Wales Nationals Conference calling for the removal of obstacles preventing a container terminal at the Port of Newcastle?

 

  1. Does the Minister support the export of agricultural products from the Port of Newcastle?

 

Answer September 5 2019

Any expansion of export facilities may have flow-on benefits for agricultural industries. Motions passed at the NSW Nationals Conference are a matter for the Secretariat.

Legislative Assembly

August 1 2019

 

901 – HIGH INTENSITY CONTAINER TERMINAL AT THE PORT OF NEWCASTLE

 

Crakanthorp, Tim to the Deputy Premier, Minister for Regional New South Wales, Industry and Trade

 

  1. What impact would a  high intensity container terminal at the Port of Newcastle have on trade for New South Wales?

 

  1. Would a container terminal at the Port of Newcastle have benefits for Regional New South Wales?

 

  1. Is the Deputy Premier aware that the New South Wales National Party Conference supports a container terminal at the Port of Newcastle?

 

  1. Do you support removing obstacles facing the Newcastle Container Terminal Expansion Plans, including the cap on the number of containers and the State Government fee payable on container exports?

 

Answer September 4 2019

(1) to (3) Current arrangements – which do not prohibit the development of a container terminal and allow for the growth of container volumes through Newcastle – are delivering benefits for the region.

(4) This is a matter for the Minister for Transport and Roads.

June 6 2019

453 – PORT OF NEWCASTLE DECISION

Crakanthorp, Tim to the Treasurer

 

  1. On what date did the Government inform each of the following parties of the decision to require a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs to a lessee of Port Botany and Port Kembla for container traffic at the Port of Newcastle above a minimal specified cap:

(a) Parliament;

(b) Australian Competition and Consumer Commission;

(c) IFM Investors;

(d) Hastings Funds Management;

(e) Newcastle Port Corporation?

Answer: July 11 2019

Information has been provided in Questions on Notice and on Hansard to similar questions on this matter.

The Port of Newcastle Transaction unlocked valuable resources which have been used to revitalise Newcastle. The opening and successful operation of the Newcastle Light Rail throughout the CBD is a sigh of the Government’s commitment to Newcastle, alongside our major investments in health and schools in the area.

We encourage the Opposition to stand with the Government to support Newcastle and stop talking the city down.

May 30 2019

0243 – Port of Newcastle

Crakanthorp, Tim to the Minister for Transport and Roads

 

  1. How many bids for the Port of Newcastle lease did the Government:

(a) Receive;

(b) Consider?

(2)      On what date did the Government require Newcastle Port Corporation (NPC) to amend the Term Sheets with Newcastle Stevedores Consortium (NSC) to require NSC to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

 

(3)      On what date did the NPC amend the Term Sheets with NSC to require NSC to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

 

(4)      On what date did NPC conclude its negotiation with NSC without reaching an agreement for developing the container terminal site?

 

Answer  July 4 2019

The Port of Newcastle transaction unlocked valuable resources which have been used to revitalise central Newcastle. Newcastle received $340 million of the gross proceeds from the transaction, alongside investment from the Government, which was able to fund and build the Newcastle CBD Light Rail.

 

The opening and successful operation of the Newcastle Light Rail throughout the CBD is a sign of the Government’s commitment to Newcastle, alongside our major investments in health and schools in the area.

 

We encourage the Opposition to stand with the Government to support Newcastle and stop talking the city down.

For background see this article in The Australian Financial Review May 17 2014 

LEGISLATIVE ASSEMBLY

155 – NEWCASTLE PORT

Crakanthorp, Tim to the Treasurer

May 9 2019

 

  1. What authorisation did the Government obtain to require a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs in paying compensation to a lessee of Port Botany and Port Kembla, for container traffic at the Port of Newcastle above a minimal specified cap?

 

  1. Did the Government lease the Port of Newcastle for the purpose of requiring a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports for container traffic at the Port of Newcastle above a minimal specified cap?

 

  1. Does the Government have a source of funds, other than the developer of a container terminal at the Port of Newcastle, to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

 

  1. Did Hastings Funds Management write to the Government in 2013 proposing that the Government should require a developer of a container terminal at the Port of Newcastle to reimburse the Government for any cost the Government incurs in paying compensation to NSW Ports, for container traffic at the Port of Newcastle above a minimal specified cap?

Answer June 13 2019

The Port of Newcastle transaction unlocked valuable resources which have been used to revitalise central Newcastle. Newcastle received $340 million of the gross proceeds from the transaction, alongside investment from the Government, which was able to fund and build the Newcastle CBD Light Rail.

The opening and successful operation of the Newcastle Light Rail throughout the CBD is a sign of the Government’s commitment to Newcastle, alongside our major investments in health and schools in the area.

We encourage the Opposition to stand with the Government to support Newcastle and stop talking the city down.

https://www.parliament.nsw.gov.au/lcdocs/submissions/62602/016%20NSW%20Government%20ORIGINAL.pdf

 

“When Newcastle Port was leased in 2014, some of the State’s obligations to NSW Ports were contractually passed through to the Lessee of Newcastle Port. This arrangement was known to bidders and the ACCC ahead of the transaction and is documented in the Port of Newcastle PCD.”

 

NSW Government submission

Legislative Council Public Works Committee Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales

January 2019

 

Page 15

 

Leasing process and Port Commitment Deeds

 

The Government’s policy for meeting the State’s future container trade needs is to minimise costs to customers and taxpayers by realising the full capacity of Port Botany. Port Kembla has been identified as the location for the development of a future container terminal to augment capacity of Port Botany when required. Port Kembla is closer than Newcastle to the existing warehouses in Sydney and closer to the expanding populations in Western Sydney.  This has been a consistent position in strategies including the draft NSW Freight and Ports Strategy 2012, NSW Freight and Ports Strategy 2013, NSW Freight and Ports Plan 2018-2023, State Infrastructure Strategy 2018-2038 and Future Transport 2056.

 

The rationale behind this policy, as discussed elsewhere in this submission, is to maximise efficiency and minimise the total cost of container movements to the community, including transport and logistics costs to industry and, importantly, landside infrastructure costs to Governments and ultimately to taxpayers.

 

The Government is of the view that the development of a container terminal at the Port of Newcastle would require large road and rail infrastructure upgrades to address congestion/capacity issues that would arise. This would require the State to invest in infrastructure in Newcastle when Port Kembla is closer to container customers, distribution centres and intermodal facilities and has an existing corridor in place which supports dedicated rail freight.

 

Port Botany and Port Kembla were leased in 2013. Both the draft and final December 2012 NSW Long Term Transport Master Plan stated “Port Botany will continue to serve as NSW’s major container port and will be supported to maintain its productivity and competitiveness while managing growing freight volumes.”

 

Both the draft (November 2012) and final (November 2013) NSW Freight and Ports Strategy stated “Over the next 20 years, NSW ports will need to focus on their primary markets. Port Botany will remain the key container port in NSW, given current planning and investments to date” and also stated in the draft (November 2012) and final (December 2013) that “Port Kembla has been identified as the location for the development of a future (“high intensity” – in draft version) container terminal to augment the capacity of Port Botany when required.”

 

This policy position is reflected in the Port Botany and Port Kembla Port Commitment Deeds (PCDs).

 

When Newcastle Port was leased in 2014, some of the State’s obligations to NSW Ports were contractually passed through to the Lessee of Newcastle Port. This arrangement was known to bidders and the ACCC ahead of the transaction and is documented in the Port of Newcastle PCD.

NSW Government submission

Legislative Council Public Works Committee

Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales

January 2019

 

page 16

 

In summary, under the Port Botany and Port Kembla Port Commitment Deeds, (PCD) support (in the form of foregone wharfage) is payable by the State to the Port Botany / Kembla Port Manager if all of the following conditions are met:

  • Container volumes through Newcastle exceed a threshold level of 30,000 TEUs (twenty-foot equivalent units) as at June 2013 escalated at the higher of 6% pa or the growth rate of container throughput at Port Botany (‘excess’). The threshold has to be exceeded for two years. (Container volumes at Newcastle are currently about 10,000 TEU – see below).
  • The Port Manager demonstrates to the reasonable satisfaction of the State that Port Botany or Port Kembla is not at full capacity.
  • The Port Manager demonstrates to the reasonable satisfaction of the State that container throughput is less than it would have been if Newcastle did not exceed the threshold and that there is a reasonable, material, causal connection between the ‘excess’ at Newcastle and the reduction in trade at Botany / Kembla.

 

Under the Newcastle Port Commitment Deed, the financial obligations of the State under this arrangement are passed to the Newcastle Port lessee.

 

To date, Port of Newcastle has not paid any PCD support related amounts to the State. The State’s container trade needs will be able to be accommodated by Port Botany well into the future.

 

The PCDs are contractual agreements which both NSW Ports and the Port of Newcastle agreed to and signed at the time of each transaction.  During the Port Botany/Kembla and Newcastle Port transactions, bidders were aware of the PCD arrangements.

[Note: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle. See question 77 here.]

 

page 9

 

The NSW port policy first released in 2012, and reinforced in the NSW Freight and Ports Plan 2018-2023, represents the least-cost approach for customers, industry and government and aligns with current freight and logistics systems which are predominantly based in Western Sydney.  Our approach is flexible and can cater for future growth driven by new investments such as Western Sydney Airport and Inland Rail as well as the future plans of our ports. NSW freight and port policy:

  • Is based on evidence which considers broader market forces and evidence-based population growth and demand forecasts;
  • Benefits NSW customers, producers and workers through the accumulated effect of targeted infrastructure investment close to where they live, work and trade – and where these activities are most likely to grow over the next 20 years; and
  • Is guided by industry investment and providing certainty for investment which is key to growing the NSW economy.

[Note: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle. See question 77 here.]

page 10

 

The rationale of this policy is to maximise efficiency and minimise the total cost of container movements to the community, including transport and logistics costs to industry and, importantly, landside infrastructure costs to Governments and ultimately to taxpayers.

[Note: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle. See question 77 here.]

page 12

 

NSW Government policy is based on evidence which considers broader market forces and evidence-based population growth and demand forecasts. This demonstrates that NSW customers and businesses benefit from the accumulated and targeted infrastructure investment in close proximity to where people work, live and trade, and where these activities are most likely to grow over the next 20 years.

[Note: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle. See question 77 here.]

page 13

 

Containerised freight traffic accounts for a small proportion of overall traffic using transport infrastructure across Sydney. Transport projects are largely aimed at realising benefits for private and general commercial vehicles.  These points are explained further below.

 

The NSW Government is delivering projects to address critical gaps in the state’s road network. WestConnex, Sydney Gateway, NorthConnex, upgrades to the Pacific Highway and other regional road improvements will provide travel time savings, improved reliability and safety for motorists across NSW. These projects will reduce the cost of transporting goods including rapidly growing ecommerce deliveries to homes, offices, parcel lockers and other drop off locations. Leasing arrangements for major ports in NSW including Newcastle have no connection with these projects.

 

Trucks carrying containers make up a small subset of all truck movements, making up just 3 per cent of M5 total traffic

[Note: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle. See question 77 here.]

page 15

 

The Government is of the view that the development of a container terminal at the Port of Newcastle would require large road and rail infrastructure upgrades to address congestion/capacity issues that would arise. This would require the State to invest in infrastructure in Newcastle when Port Kembla is closer to container customers, distribution centres and intermodal facilities and has an existing corridor in place which supports dedicated rail freight.

 

Both the draft (November 2012) and final (November 2013) NSW Freight and Ports Strategy stated “Over the next 20 years, NSW ports will need to focus on their primary markets. Port Botany will remain the key container port in NSW, given current planning and investments to date” and also stated in the draft (November 2012) and final (December 2013) that “Port Kembla has been identified as the location for the development of a future (“high intensity” – in draft version) container terminal to augment the capacity of Port Botany when required.”

 

This policy position is reflected in the Port Botany and Port Kembla Port Commitment Deeds (PCDs).

 

When Newcastle Port was leased in 2014, some of the State’s obligations to NSW Ports were contractually passed through to the Lessee of Newcastle Port. This arrangement was known to bidders and the ACCC ahead of the transaction and is documented in the Port of Newcastle PCD.

 

page 20

 

At present, 90 per cent of import containers remain within 60 km of Port Botany. The remaining 10 per cent are transported to regional locations across NSW, such as Newcastle and Wollongong, with some minor volumes transferred interstate. The importance of Sydney as a destination for imported freight has grown over the past decade with population growth, changes in supply chains and growth in new markets for imported goods. With forecast growth in population and businesses in Western Sydney, it is likely that the majority of the import task will continue to be moved between Port Botany and Western Sydney for the foreseeable future.

[Note: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle. See question 77 here.]

page 23

 

Improving the use of existing infrastructure continues to be a key part of NSW Government Policy, and improving the efficiency of existing infrastructure and ensuring greater connectivity and access along key freight routes is a key objective of the NSW Freight and Ports Plan. This includes a goal to improve the flow of freight through trade gateways through the use of new technology and outcomes-based regulation. The NSW Freight and Ports Plan also includes initiatives to support the development and operation of intermodal terminals including the Moorebank Intermodal Terminal Road Access Program.

 

page 24

 

Any significant volume of containers imported through Newcastle Port which had to be transported back to Sydney by rail would have to use the Main North Line which would conflict with passenger trains and other rail freight services. A significant number of freight services already use this line including interstate intermodal trains, coal, steel, construction materials and import export freight. Growing container volumes to levels identified by Deloitte Access Economics and AlphaBeta would generate train movements equivalent to or exceeding the current number of trains currently moving to and from Port Botany which occur on dedicated rail freight infrastructure. A container terminal at Newcastle Port would also significantly increase trucks on the M1 Motorway and roads within the immediate vicinity of the port. Various long-term road and rail projects which support freight future capacity projects are identified in the NSW Freight and Ports Plan including Maldon to Dombarton (10 + years), Lower Hunter Freight Corridor (10 + years), Northern Sydney Freight Corridor Stage 2 (5 – 10 years), M1, Hexham, Raymond Terrace Upgrades (5 – 10 years).

[Note: Treasury has not undertaken economic modelling specifically in relation to the development of a container terminal at the Port of Newcastle. See question 77 here.]

10045 – PORT OF NEWCASTLE

November 22 2018

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

 

  1. Can the Port of Newcastle develop a container terminal if it wished to do so?

 

  1. Is it government policy to disallow a container terminal to be developed at the Port of Newcastle?

 

  1. Has the Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

 

  1. Is the Minister concerned that the leasing arrangements at the port of Newcastle may breach the Competition and Consumer Act 2010?

Answer December 19 2018

I am advised:

The port transaction arrangements do not prohibit the development of a container terminal at the Port of Newcastle.

The Freight and Ports Plan 2018 – 2023 acknowledges the interest of the Port of Newcastle to diversify and expand the Port’s trade base and includes an initiative to support the Port of Newcastle as it explores trade opportunities in new markets. It notes that the Government will work with commercial infrastructure operators, including NSW Ports and Port of Newcastle, as they deliver their master plans.

9977 – MAINTENANCE ON HAWKESBURY RIVER BRIDGE

 

November 15 2018

 

Tesch, Liesl to the Minister for Roads, Maritime and Freight

 

  1. When was the most recent maintenance work on the Hawkesbury River Railway Bridge completed?

 

  1. How are completed repairs signed off on?

 

  1. Who conducted the most recent safety audit on the bridge?

 

  1. Were any further safety concerns addressed by engineers who examined the options of an additional freight rail bridge?

 

  1. Why do the exclusion zone buoys at the southern end of the bridge remain in place?

 

  1. When was the checking of the fresh water wells on the bridge pylons removed from the maintenance schedule?

 

(a) Why was checking of the fresh water wells removed from the maintenance schedule?

 

Answer due December 20 2018

9974 – PORT OF NEWCATLE GRAIN SHIPMENTS

 

November 15 2018

 

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

 

 

  1. Does the Minister support increasing the export of grain in shipping containers through the Port of Newcastle?

 

  1. Does the Minister agree that an increase in grain shipped through containers at the Port of Newcastle will benefit farmers?

 

  1. Will the Minister remove the cap on the number of containers that can be shipped through the Port of Newcastle to help facilitate this?

 

(a) If not, why not?

 

Answer December 19 2018

I am advised:

 

  1. The NSW Freight and Ports Plan 2018 – 2023 acknowledges the interest of the Port of Newcastle to diversify and expand the Port’s trade base and includes an initiative to support the Port of Newcastle as it explores trade opportunities in new markets. The Government will work with commercial infrastructure operators, including NSW Ports and Port of Newcastle, as they deliver their master plans.

 

  1. The Port of Newcastle has multiple grain terminals for loading ships with grain and already handles some grain exports. Those in the grain supply chain are in the best position to consider the most appropriate means of transporting their goods to market. The port transaction arrangements do not prohibit the development of a container terminal at the Port of Newcastle.

 

  1. The arrangements do not prohibit the development of a container terminal at the Port of Newcastle.

9965 – NEWCASTLE CRUISE TERMINAL

 

November 15 2018

 

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

 

1.Why has the Government not met its commitment to deliver the Newcastle Cruise Terminal by the end of 2018?

 

  1. Why has Eden received a total of $44 million from Government sources on a cruise terminal in Eden, and Newcastle Cruise Terminal only received $13 million?

 

Answer due December 20 2018

9894 – PORT OF NEWCASTLE LEASING ARRANGEMENTS

November 15 2018

 

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

 

 

  1. Did the Government announce on 27 July 2012 a policy decision that a container terminal will be developed at the Port of Newcastle after Port Botany reaches capacity, followed by Port Kembla?

 

  1. Is the “Port Commitment” a contractual commitment by the Government to New South Wales Ports to pay NSW Ports for containers shipped through the Port of Newcastle, as specified by the formula “Calculation of Support”?

 

  1. Did the Government’s “Term Sheets” with Newcastle Stevedores Consortium (NSC) require NSC to pay the Government for any cost the Government incurred to NSW Ports under the Port Commitment due to the activities of NSC in the Port of Newcastle?

 

  1. Did the Government contractually require NSC to comply with the Term Sheets as a condition of conducting its negotiation with Newcastle Port Corporation (NPC) to lease the parcel of land known as the “Mayfield Site”?

 

  1. Was the Port of Newcastle being leased as at October 28 2013?

 

  1. Did the Australian Competition and Consumer Commission (ACCC) inform the Government that the Government’s decision to lease the Port of Newcastle meant the lease arrangements were unlikely to fall within the definition of “carrying on a business” for the purposes of the “Commonwealth Competition and Consumer Act 2010”?

 

  1. Is the Port of Newcastle lessee required to pay the Government on the same terms as NSC was required to pay the Government?

 

  1. Has the ACCC disclosed to the Government the ports arrangements which the ACCC considers may breach the Competition Act?

 

  1. Did the Government sign a confidentiality agreement with the ACCC which prevents the ACCC from disclosing the ports arrangements it is currently investigating?

 

Answer December 20 2018

  1. Media releases can be found at https:⁄⁄www.treasury.nsw.gov.au⁄media-releases.

 

  1. Details of container arrangements in the Port Commitment Deeds are commercial in confidence.

 

  1. and 7. The negotiations with Newcastle Stevedores Consortium are commercial in confidence.

 

  1. A contract was not concluded from the negotiations between Newcastle Port Corporation and Newcastle Stevedores Consortium.

 

  1. Media releases can be found at https:⁄⁄www.treasury.nsw.gov.au⁄media-releases.

 

  1. It is ultimately a matter of law as to whether the State is carrying on business. Based on our review to date of discussions with the Australian Competition and Consumer Commission (ACCC) at the time we are not aware of the ACCC definitely expressing such view.

 

  1. The ACCC has commenced proceedings against NSW Ports and has filed documents with the Federal Court. The Government is not party to the ACCC’s proceedings.

 

  1. No.

9726 – PORT OF NEWCASTLE
October 25 2018
Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

  1. On what date did the Government inform the Australian Competition and Consumer Commission (ACCC) of its decision to pay the lessee of Port Botany and Port Kembla for containers shipped through the Port of Newcastle?

 

  1. On what date did the Government inform the ACCC that it required the developer of a container terminal at the Port of Newcastle to pay a fine of $150 for every container shipped over a certain limit?

 

Answer: November 29 2018

 

  1. Please see answer to LA Q4621.

 

  1. The developer of a container terminal at the Port of Newcastle is not required to pay a fine of $150 for every container shipped over a certain limit.

 

November 17 2016

4621 – PORT OF NEWCASTLE

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

 

  1. Did the Government advise Newcastle Stevedores Consortium that the Government considered itself to be exempt from the Commonwealth Competition and Consumer Act 2010 in respect of the negotiations that occurred between Newcastle Port Corporation and Newcastle Stevedores Consortium pursuant to a tender conducted by Newcastle Port Corporation?

 

  1. Did the Government advise the Australian Competition and Consumer Commission that the Government considered itself to be exempt from the Commonwealth Competition and Consumer Act 2010 in respect of the negotiations that occurred between Newcastle Port Corporation and Newcastle Stevedores Consortium pursuant to a tender conducted by Newcastle Port Corporation?

 

  1. In answering part (3) of Question On Notice 4008, was the Minister referring to section 51(1) of the Commonwealth Competition and Consumer Act 2010, which provides that conduct that would normally contravene the law may be permitted if it is specifically authorised under other Australian, state or territory legislation?

 

  1. Did the Government establish that changing the Term Sheets with Newcastle Stevedores Consortium by way of requiring payment of a fee for “containers”, complied with the Commonwealth Competition and Consumer Act 2010?

 

Answer December 22 2016

 

(1) and (4) The Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

 

(2) Please see my answer to question 4271, dated 17 November 2016. [Answer to 4271: I am advised that no exemption was claimed.]

 

(3) As the response to question 4008 was provided by the Minister, points of clarification should be directed to the Minister.

 

2494 – Treasurer – PARTIES TO THE PORT COMMITMENT DEEDS
October 23 2018
Voltz, Lynda to the Minister for Resources, Minister for Energy and Utilities, Minister for Arts, Vice-President of the Executive Council representing the Treasurer, and Minister for Industrial Relations

  1. In your answer to Budget Estimates supplementary question 91 you said: ‘The parties to the Port Commitment Deeds (PCDs) are the Treasurer and the private sector port operators. Parties to the PCDs are set out in the leases, which are publicly available.’

(a) Does the word “Treasurer” appear anywhere in the lease for the Port of Newcastle?

(i) If so, on which page?

(ii) If not, how can the Treasurer be a party to the lease if the word “Treasurer” does not appear once in the document?

(b) Do the Port Commitment Deeds include any signatures?

(i) If so, who signed the Port Commitment Deeds?

(ii) If not, why not?

(c) Did the Treasurer sign the Port of Newcastle lease?

(i) If so, on which page?

(II) If not, why not?

(iii) Are there any signatures on the lease apart from those on page 250 and if so, whose signatures are they?

Answer due: November 27 2018

8899 August 7 2018 – Port of Newcastle Containers

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

1. How much money is the Government contractually committed to paying NSW Ports if a Newcastle container terminal is built and handles one million containers a year between 2023 and 2063?

2. What is the economic justification for imposing a fine of $150 on containers shipped through the Port of Newcastle?

Answer September 11 2018

I am advised-

1. The lease arrangements for the Port of Newcastle reflect the Government’s policy that Port Kembla will be the State’s next container terminal when Port Botany reaches capacity. The arrangements aim to promote trade and port development in a manner consistent with Government policy.

2. The owners of the Port of Newcastle have entered into an agreement with the State that facilitates ongoing organic growth in container trade at Newcastle.

8895 – BHP SITE AT NEWCASTLE

 

August 7 2018

 

Barr, Clayton to the Minister for Planning, Minister for Housing, and Special Minister for State

 

  1. Was a foreign trade zone created for the expiring BHP site and the Steel River on which it sits?
  2. If so:
  3. What was the extent, west along Steel River, to which the foreign trade arrangement applied?
  4. Did the foreign trade zone agreement create duty exemptions for non-coal imports and exports on the BHP site, and along the Steel River, that would be value added?
  5. Was there a time limit applied to these duty exemptions?
  6. Are the duty exemptions still in place?

 

  1. Did the 98 year lease of the Port of Newcastle affect this agreement?

 

Answer – September 12 2018

 

I am advised that this is an issue for NSW Treasury to respond to and as such should be referred to the Hon. Dominic Perrottet MP.

Link to Word file for ease of copying click here

BUDGET ESTIMATES 2018-2019

Supplementary Questions Portfolio Committee No. 1 – Premier and Finance

TREASURY, INDUSTRIAL RELATIONS

Hearing: Monday 3 September 2018

Answers September 27 2018

 

Port of Newcastle

 

  1. Has any submission been made or information provided to the ACCC inquiry into ports?

 

Answer: Treasury has previously provided information to the ACCC about the ports long term lease transactions. Treasury has offered to assist the ACCC with the current inquiry, but to date the ACCC has not sought a submission or any further information.

 

  1. Will there be any implications for NSW should the ACCC decide that the port commitment deeds are anti-competitive and not valid?

 

Answer: The NSW Government does not believe the Port Commitment Deeds are anticompetitive. It is not appropriate to speculate about the outcome of an ACCC inquiry that is currently in progress.

 

  1. Whose signatures are on the port commitment deeds and which organisations did they represent?

(a) Was the ACCC informed of this at the time of the sales?

 

Answer: The parties to the Port Commitment Deeds (PCDs) are the Treasurer and the private sector port operators. Parties to the PCDs are set out in the leases, which are publicly available. The ACCC was informed of the PCDs prior to the Newcastle Port transaction.

 

  1. Could the private owners of the Port Botany lease have a claim against NSW should the ACCC strike out the port commitment deeds?

(a) If so, would NSW be liable to compensate them?

 

Answer: It is not appropriate to speculate about the outcome of an ACCC inquiry that is currently in progress.

 

  1. In the event that the ACCC strikes out the port commitment deeds, and the owners of Port Botany have a claim against the NSW Government, would NSW be able to claim against its professional advisers on the sale?

 

Answer: It is not appropriate to speculate about the outcome of an ACCC inquiry that is currently in progress.

 

  1. Will you release the port commitment deeds in full?

 

Answer: This information is commercial in confidence.

 

Port of Newcastle

 

  1. Does the port commitment deed restrict the number of containers that can pass through the Port of Newcastle?

(a) If so, does the Treasurer agree that this is anti-competitive?

 

Answer: No, the Port Commitment Deed does not restrict the number of containers that can pass through the Port of Newcastle.

 

  1. Has the Treasurer, any of his staff or his department been interviewed by the ACCC as part of their investigation into the ports transaction?

 

Answer: Treasury met with the ACCC about the ports transactions during and shortly after the transactions occurred, but there have not been any meetings or interviews between the ACCC and the Treasurer, his staff or Treasury as part of the current investigation.

 

  1. On which date did the Government inform the Australian Competition and Consumer Commission of its formal decision to invite Newcastle Stevedores Consortium to develop a container terminal at the Port of Newcastle subject to Newcastle Stevedores Consortium making the Government whole for any cost the Government incurred to NSW Ports in respect of this development?

 

Answer: Please see answer to LA question on notice number 5670.

 

LEGISLATIVE ASSEMBLY

May 11 2017

 

5670 – PORT OF NEWCASTLE

 

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

On which date did the Government inform the Australian Competition and Consumer Commission of its formal decision to invite Newcastle Stevedores Consortium to develop a container terminal at the Port of Newcastle subject to Newcastle Stevedores Consortium making the Government whole for any cost the Government incurred to NSW Ports in respect of this development?

 

Answer June 15 2017

 

The Government’s transaction team engaged with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

 

  1. Was a decision made in 2012 to require any future operator of a container terminal at the Port of Newcastle to make the government whole for any cost the government incurred from paying the operator of Port Botany in respect of future container capacity development at the Port of Newcastle?

 

Answer: Please see answer to LA question on notice number 5764

 

LEGISLATIVE ASSEMBLY

May 25 2017

Answer June 29 2017

 

5764 – CONTAINER TERMINAL AT THE PORT OF NEWCASTLE

 

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

 

  1. Did the Government decide in 2009 to develop a container terminal at the Port of Newcastle?

 

Answer: This Government was not in office in 2009.

 

  1. Was a decision made in 2012 to require any future operator of a container terminal at the Port of Newcastle to make the government whole for any cost the government incurred from paying the operator of Port Botany in respect of future container capacity development at the Port of Newcastle?

 

Answer: No.

 

  1. Was Newcastle Stevedores Consortium required in 2013 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

Answer: Newcastle Ports [sic] Corporation did not conclude a contract to build a container terminal with Newcastle Stevedores Consortium in 2013.

 

  1. Was a decision made in 2013 to require any future lessee of the Port of Newcastle to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

Answer: Any decision regarding NSW ports is consistent with the Government’s policy that Port Kembla will be the State’s next major container terminal after Port Botany has reached capacity.

 

  1. Was the lessee of the Port of Newcastle required in 2014 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

Answer: No compensation payments to NSW Ports were incurred in 2014.

 

  1. Did the Government inform the Australian Competition and Consumer Commission in 2012 that the Government decided not to develop a container terminal at the Port of Newcastle?

 

Answer: The Government’s transaction team engaged extensively with the Australian Competition and Consumer Commission regarding the competition and regulatory framework supporting the port transactions.

 

 

  1. Was Newcastle Stevedores Consortium required in 2013 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

Answer: Please see answer to LA question on notice number 5764.

 

  1. Was a decision made in 2013 to require any future lessee of the Port of Newcastle to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

Answer: Please see answer to LA question on notice number 5764.

 

  1. Was the lessee of the Port of Newcastle required in 2014 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

Answer: Please see answer to LA question on notice number 5764.

 

  1. Did the Government inform the Australian Competition and Consumer Commission in 2012 that the Government decided not to develop a container terminal at the Port of Newcastle?

 

Answer: Please see answer to LA question on notice number 5764.

 

  1. Why does the Government charge a fee for containers shipped through the Port of Newcastle?

 

Answer: Please see answer to LA question on notice number 8026

 

LEGISLATIVE ASSEMBLY

 

8026 April 12 2018 Port of Newcastle container cap

 

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

 

  1. Why does the Government charge a fee for containers shipped through the Port of Newcastle?
  2. Does the Minister consider that this fee is anti-competitive?
  3. Will the Minister abolish the anti-competitive fee on containers shipped through the port of Newcastle and allow a container terminal to be built in Newcastle?

 

Answer  May 17 2018 –

 

I am advised:

 

The Government’s policy in relation to ports is reflected in the draft Freight and Ports Plan which is available on the Future Transport website.

The port transaction arrangements do not prohibit the development of a container terminal at the Port of Newcastle.

 

  1. Does the Minister consider that this fee is anti-competitive?

 

Answer: The NSW Government does not believe the Port Commitment Deeds are anticompetitive.

 

  1. Will the Minister abolish the anti-competitive fee on containers shipped through the port of Newcastle and allow a container terminal to be built in Newcastle?

 

Answer: The NSW Government does not believe the container arrangements are anticompetitive.

 

  1. Does the Minister support the development of a container terminal at the Port of Newcastle, which would drive growth, provide local jobs and provide a boost to business in the Hunter and Northern New South Wales?

 

Answer: Any decision to build a container terminal at Newcastle is a matter for the operator of the Port of Newcastle.

 

  1. Is the Minister aware of the Australian Competition and Consumer Commission (ACCC) investigation into the Government’s anti-competitive cap on container movements at the Port of Newcastle?

 

Answer: The Treasurer is aware of the ACCC’s investigations into arrangements affecting container terminals at New South Wales ports.

 

  1. What is the purpose of the fine charged to the Port of Newcastle for every container shipped over a certain limit?

 

Answer: Please refer to answer to question 132.

 

  1. Will the Minister immediately remove this anti-competitive government restriction and allow the development of a container terminal at the Port of Newcastle?

 

Answer: Please refer to answer to question 134.

 

  1. Is the Minister aware of the Australian Competition and Consumer Commission (ACCC) investigation into the Government’s anti-competitive cap on container movements at the Port of Newcastle?

 

Answer: Please refer to answer for question 136.

 

  1. What is the purpose of the fine charged to the Port of Newcastle for every container shipped over a certain limit?

 

Answer: Please refer to answer for question 137.

 

  1. Will the Minister immediately remove this anti-competitive government restriction and allow the development of a container terminal at the Port of Newcastle?

 

Answer: Please refer to answer for question 138.

 

BUDGET ESTIMATES 2018-2019 Supplementary Questions

Portfolio Committee No. 1 – Premier and Finance

PREMIER

Hearing: Thursday 6 September 2018

Answers October 2 2018

 

Port of Newcastle

 

  1. I refer to the Minister for Roads, Maritime and Freight support of a container terminal at the Port of Newcastle (Budget Estimates 7/9/18), does the Premier support a container terminal at the Port of Newcastle?

(a) If so, will the Premier remove the anti-competitive cap on containers at the port?

(b) If not, why not?

 

Answer: Any decision to build a container terminal at Newcastle is a matter for the operator of the Port of Newcastle.

 

  1. Does the port commitment deed restrict the number of containers that can pass through the Port of Newcastle?

(a) If so, does the Premier agree that this is anti-competitive?

 

Answer: No, the Port Commitment Deed does not restrict the number of containers that can pass through the Port of Newcastle.

 

  1. Has the Premier, any of her staff or her department been interviewed by the ACCC as part of their investigation into the ports transaction?

 

Answer: No staff from the Office of the Premier or the Department of Premier and Cabinet have been interviewed by the ACCC as part of their investigation into the ports transaction.

 

Answers 54 – 58: I understand this question has already been answered by the Treasurer.

 

  1. On which date did the Government inform the Australian Competition and Consumer Commission of its formal decision to invite Newcastle Stevedores Consortium to develop a container terminal at the Port of Newcastle subject to Newcastle Stevedores Consortium making the Government whole for any cost the Government incurred to NSW Ports in respect of this development?

 

  1. Was a decision made in 2012 to require any future operator of a container terminal at the Port of Newcastle to make the government whole for any cost the government incurred from paying the operator of Port Botany in respect of future container capacity development at the Port of Newcastle?

 

  1. Was Newcastle Stevedores Consortium required in 2013 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

  1. Was a decision made in 2013 to require any future lessee of the Port of Newcastle to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

  1. Was the lessee of the Port of Newcastle required in 2014 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

  1. Did the Government inform the Australian Competition and Consumer Commission in 2012 that the Government decided not to develop a container terminal at the Port of Newcastle?

 

Answer: The Government has not charged any fees on containers through the Port of Newcastle.

 

  1. Why does the Government charge a fee for containers shipped through the Port of Newcastle?

 

Answer: The Government has not charged any fees on containers through the Port of Newcastle.

 

  1. Does the Premier consider that this fee is anti-competitive?

 

Answer: I refer you to my above answer.

 

  1. Will the Premier abolish the anti-competitive fee on containers shipped through the port of Newcastle and allow a container terminal to be built in Newcastle?

 

Answer: Any decision to build a container terminal at Newcastle is a matter for the operator of the Port of Newcastle.

 

  1. Does the premier support the development of a container terminal at the Port of Newcastle, which would drive growth, provide local jobs and provide a boost to business in the Hunter and Northern New South Wales?

 

Answer: Any decision to build a container terminal at Newcastle is a matter for the operator of the Port of Newcastle.

 

  1. Is the Premier aware of the Australian Competition and Consumer Commission (ACCC) investigation into the Government’s anti-competitive cap on container movements at the Port of Newcastle?

 

Answer: The ACCC regularly undertakes reviews into matters of interest.

 

  1. What is the purpose of the fine charged to the Port of Newcastle for every container shipped over a certain limit?

 

Answer: The Government has not charged any fees on containers through the Port of Newcastle.

 

  1. Will the Premier immediately remove this anti-competitive government restriction and allow the development of a container terminal at the Port of Newcastle?

 

Answer: The Government has not charged any fees on containers through the Port of Newcastle.

 

  1. Is the Premier aware of the Australian Competition and Consumer Commission (ACCC) investigation into the Government’s anti-competitive cap on container movements at the Port of Newcastle?

 

Answer: Answer: I refer you to my previous answer.

 

  1. What is the purpose of the fine charged to the Port of Newcastle for every container shipped over a certain limit?

(a) Will the Premier immediately remove this anti-competitive government restriction and allow the development of a container terminal at the Port of Newcastle?

 

Answer: I refer you to my previous answer.

 

 

BUDGET ESTIMATES 2018-2019

Supplementary Questions

Portfolio Committee No. 5 – Industry and Transport

ROADS, MARITIME AND FREIGHT

Hearing: Friday 7 September 2018

Answers  October 3 2018

 

Port Deed and container port

 

  1. With the doubling of port freight demand in NSW by 2040 – how much funding is being directed to reducing heavy vehicles off already congested areas around Port Botany?

 

Answer

I am advised:

The Sydney Gateway program will improve road and freight rail transport to and from Sydney Airport and Port Botany, reducing congestion and making journeys to these key logistics centres easier, safer and faster.

 

Sydney Gateway will provide critical road connections from St Peters Interchange to Sydney Airport domestic and international terminals and towards Port Botany.

 

This will help increase the proportion of freight transported by rail, reduce the number of trucks that would otherwise be on local roads and will provide more efficient links between Port Botany and freight intermodal terminals.

 

The recently announced Freight and Ports plan highlights the Government’s priority initiatives to handle the increase in the freight task across NSW.

 

To improve the Airport precinct traffic flow, the NSW and Australian governments are investing $500 million to improve traffic flow in and around the precinct:

  • Airport West was open to traffic in July 2017. Marsh Street, Arncliffe was widened to three lanes westbound to relieve congestion and improve traffic flow.
  • Airport East: Work is progressing well and includes replacing General Holmes Drive rail level crossing with a road underpass linking General Holmes Drive, Botany Road and Wentworth Avenue, and widening Joyce Drive.

 

The NSW Government has allocated $47 million in 2018/19 for completion of the project which is due to be opened by the second quarter of 2019.

 

Further to the works carried out by the NSW Government, the Federal Government has also committed funding for the Port Botany Rail line duplication as part of its recently announced $400 million commitment to Port Botany Rail Duplication and Cabramatta loop.

 

  1. Given the growing congestion problems in Sydney and, the freight task for NSW is set to double by 2040 why isn’t Newcastle considered a sensible option given that this comes at no cost to the taxpayers through significant private investment?

 

Answer

I am advised:

The NSW Government outlined our key initiatives in dealing with the predicted increases in freight volumes in NSW in the recently released Freight and Ports Plan. This Plan outlines the importance of all the Ports to the NSW economy, and supports the Port of Newcastle in exploring diversification opportunities.

 

  1. Newcastle has existing land and channel capacity, it has existing road and freight dedicated rail connectivity, it has a market which demands efficient access to global markets and has a viable proponent ready to build a container port at no cost to the NSW taxpayers. It would seem obvious that Newcastle is a sensible cost effective option to alleviate congestion through development of a diversified northern freight strategy along with Port Kembla in the South.

 

Answer

I am advised:

The NSW Government outlined our key initiatives in dealing with the predicted increases in freight volumes in NSW in the recently released Freight and Ports Plan. This Plan outlines the importance of all the Ports to the NSW economy, and supports the Port of Newcastle in exploring diversification opportunities.

 

  1. What is the anticipated cost for accounting for doubling of heavy vehicles on Sydney’s roads?

 

Answer

I am advised:

The NSW Government recently announced its Freight and Ports Plan, which outlined key initiatives that will be deliuvered [sic] to accommodate the increasing freight volumes across the State as the economy continues to grow.

Key features of this plan include increasing the rail modal share, the use of more productive vehicle, and working with industry to improve the efficiency of urban freight deliveries. Initiatives such as these, will enable us to fully realise the existing capacity on current freight networks.

 

  1. With regards to infrastructure and transport planning, 87 per cent of NSW containers are initially transported to the greater Sydney area for unpacking, After unpacking 67 per cent of containerised imports stay in Sydney while 27 per cent are then transported to the ‘natural’ catchment area of the Port of Newcastle. Has the department undertaken any modelling around what a 27 per cent reduction in freight movement through Sydney would mean for congestion reduction?

 

Answer

I am advised:

That no modelling of this nature has been done, given the premise of the question is incorrect.

 

Newcastle Port Rort

 

  1. What action will the Minister take to readdress the Newcastle port rort?

 

Answer

I am advised:

The premise of your question is incorrect.

 

  1. Does the Minister hold free market values?

(a) If so, why will you not remove the cap on container at the Port of Newcastle?

(b) If the market decides to develop a container terminal at the Port of Newcastle, will the Minister remove the cap on containers?

 

Answer

I am advised:

Yes. The Port of Newcastle came to a leasing agreement with the NSW Government in 2013. The Port operators are bound by the terms of the lease they entered in to.

 

  1. The chief executive of stevedoring company DP World, Paul Scurrah has said a Newcastle container terminal would be an “attractive opportunity” without the compensation the Port of Newcastle would have to pay Port Botany to set up in competition, does the Minister agree with this statement?

(a) Does the Minister agree that the port commitment deed was a key factor in DP World ending its negotiations with the Port of Newcastle in July 2018?

(b) If so, will you remove the cap on container at the Port of Newcastle?

 

  1. I refer to the Minister’s comments in Budget Estimates “We have the market deciding where those containers are going”, does the Minister agree the cap on containers at the Port of Newcastle also influences what port containers are shipped through?

 

Answer

I am advised: (56) – (57)

Recent media reports indicate negotiations between Port of Newcastle and stevedore DP World to build a new container terminal at Newcastle have broken down due to the uneconomic nature of the proposal (even without considering Port of Newcastle’s contractual arrangements with the State). DP World has indicated that Newcastle is too close to Sydney to justify the expense of a second stop by ships.1

 

1 Article 16 Aug 2018: Newcastle Herald: Port of Newcastle and DP World no longer talking over containers https://www.theherald.com.au/story/5588299/breakdown-of-container-negotiations/

 

  1. I refer to the Minister’s comments in Budget Estimates “There is nothing stopping the Port of Newcastle doing extra containers”, has the Minister read the Port Commitment Deed?

(a) Is the Minister aware of the anti-competitive cap on container at the Port of Newcastle?

 

  1. Does the port commitment deed restrict the number of containers that can pass through the Port of Newcastle?

(a) If so, does the Minister agree that this is anti-competitive?

 

Answer

I am advised: (58) – (59)

The arrangements of the Port Commitment deed entered into by the Port of Newcastle do not prohibit the development of a container terminal at the Port of Newcastle. The decision to operate a container facility at the Port of Newcastle would be a commercial one based on market considerations.

 

  1. Has the Minister, any of her staff or her department been interviewed by the ACCC as part of their investigation into the ports transaction?

 

Answer

I am advised:

There have not been any meetings between the Minister, staff, Transport for NSW and the ACCC as part of the current investigation.

 

  1. On which date did the Government inform the Australian Competition and Consumer Commission of its formal decision to invite Newcastle Stevedores Consortium to develop a container terminal at the Port of Newcastle subject to Newcastle Stevedores Consortium making the Government whole for any cost the Government incurred to NSW Ports in respect of this development?

 

  1. Was a decision made in 2012 to require any future operator of a container terminal at the Port of Newcastle to make the government whole for any cost the government incurred from paying the operator of Port Botany in respect of future container capacity development at the Port of Newcastle?

 

  1. Was Newcastle Stevedores Consortium required in 2013 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

  1. Was a decision made in 2013 to require any future lessee of the Port of Newcastle to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

  1. Was the lessee of the Port of Newcastle required in 2014 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?

 

  1. Did the Government inform the Australian Competition and Consumer Commission in 2012 that the Government decided not to develop a container terminal at the Port of Newcastle?

 

Answer

I am advised:

(61) – (66) This is a matter for the Treasurer and the Minister for Industrial Relations

 

Background

Question 61 answer by the Treasurer LA 5670

62 – 66 answered by the Treasurer LA 5764

 

  1. Why does the Government charge a fee for containers shipped through the Port of Newcastle?

 

  1. Does the Minister consider that this fee is anti-competitive?

 

  1. Will the Minister abolish the anti-competitive fee on containers shipped through the port of Newcastle and allow a container terminal to be built in Newcastle?

 

Answer

I am advised: (67) – (69)

The government has not charged any additional fee for containers that have been moved through the Port of Newcastle.

 

  1. Does the Minister support the development of a container terminal at the Port of Newcastle, which would drive growth, provide local jobs and provide a boost to business in the Hunter and Northern New South Wales?

 

Answer I am advised: Any decision to build a container terminal at Newcastle is a matter for the operator of the Port of Newcastle. The NSW Government recognises the interest of the Port of Newcastle in diversifying and expanding the port’s trade base. The NSW Freight and Ports Plan supports the diversification of the Port of Newcastle into other commodities.

 

  1. Is the Minister aware of the Australian Competition and Consumer Commission (ACCC) investigation into the Government’s anti-competitive cap on container movements at the Port of Newcastle?

 

Answer

I am aware of the Australian Competition and Consumer Commission investigation.

 

  1. What is the purpose of the fine charged to the Port of Newcastle for every container shipped over a certain limit?

 

  1. Will the Minister immediately remove this anti-competitive government restriction and allow the development of a container terminal at the Port of Newcastle?

 

Answer I am advised: (72) – (73)

I refer you to my previous responses.

 

  1. Is the Minister aware of the Australian Competition and Consumer Commission (ACCC) investigation into the Government’s anti-competitive cap on container movements at the Port of Newcastle?

 

Answer

I am advised:

I refer you to my response to supplementary question 71.

 

  1. What is the purpose of the fine charged to the Port of Newcastle for every container shipped over a certain limit?

(a) Will the Minister immediately remove this anti-competitive government restriction and allow the development of a container terminal at the Port of Newcastle?

 

Answer

I am advised:

I refer you to my response to supplementary question 72 to 73.

 

  1. Why does the Port of Newcastle have to pay the NSW Government/Port Botany $150 fee per container shipped over a 30,000 cap?

 

Answer

I am advised:

The government has not charged any additional fee for containers that have been moved through the Port of Newcastle. 77. Is the Minister aware that the $150 fee per container is a barrier to the free market developing a container terminal at Newcastle?

 

  1. Is the Minister aware that the $150 fee per container is a barrier to the free market developing a container terminal at Newcastle?

 

Answer

I am advised:

The arrangements of the Port Commitment deed entered into by the Port of Newcastle do not prohibit the development of a container terminal at the Port of Newcastle. The decision to operate a container facility at the Port of Newcastle would be a commercial one based on market considerations.

 

  1. Why is the Government intervening in the free market to prevent the development of a container terminal in Newcastle?

 

Answer

I am advised:

The Port of Newcastle came to a leasing agreement with the NSW Government in 2013. The Port operators are bound by the terms of the lease they entered in to.

 

  1. What action would the Minister take if the port of Newcastle imported more than 30,000 containers through the port in one year?

 

  1. How would the Government enforce the $150 fine per container over the 30,000 container cap?

 

Answer

I am advised: (79) – (80)

This is a matter for the Treasurer and the Minister for Industrial Relations.

 

  1. Is the NSW Government required to pay compensation to Port Botany if the Port of Newcastle imports more than 30,000 containers per year?

 

Answer

I am advised:

The transaction arrangements enable the growth of container volumes through Newcastle that service that region and do not prohibit the development of a container terminal at the Port of Newcastle.

 

  1. Is the Minister opposed [to] the Port of Newcastle developing a container terminal?

 

Answer

No. The arrangements of the Port Commitment deed entered into by the Port of Newcastle do not prohibit the development of a container terminal at the Port of Newcastle. The decision to operate a container facility at the Port of Newcastle would be a commercial one based on market considerations.83. Does the Minister think the $150 fine per container would be disincentive for a container terminal operator?

 

  1. Does the Minister think the $150 fine per container would be disincentive for a container terminal operator?

 

Answer

I am advised:

The arrangements of the Port Commitment deed entered into by the Port of Newcastle do not prohibit the development of a container terminal at the Port of Newcastle. The decision to operate a container facility at the Port of Newcastle would be a commercial one based on market considerations.

 

  1. Why does the Minister believe it is acceptable for the Government to intervene in the market and fine a business for competing with another business?

 

Answer

I am advised:

The Port of Newcastle came to a leasing agreement with the NSW Government in 2013. The Port operators are bound by the terms of the lease they entered in to.

 

  1. How many containers originating from and destined for the Hunter region are currently being transported along the M1 to and from Port Botany?

 

Answer

I am advised:

Using 2016 figures, there were an estimated 200 daily container trips between Port Botany and the Hunter region on the M1.

 

  1. How much would a truck carrying a container from a business located in Macksville pay today in tolls to import/export through Port Botany?

 

  1. How much would a truck carrying a container from a business located in Macksville pay in tolls to import/export through Port Botany once the Northconnex and Westconnex are completed?

 

Answer

I am advised: (106) – (107)

Vehicle fees are dependent on the route taken. Vehicle tolls are available on the RMS and project websites.

 

  1. How much would a truck carrying a container from a business located in Macksville pay in tolls to import/export through the Port of Newcastle if this port were to develop a container terminal?

 

Answer

I am advised:

There are currently no road tolls on any routes between Macksville and Port of Newcastle.

 

  1. How many trucks travelling to and from Port Botany each day?

What will this figure be in the future – say 2030 – or a date that has been previously modelled?

(a) How much is to be spent to accommodate this increase?

(b) Would the establishment of a container terminal in Newcastle mean that some of this expenditure could be avoided or deferred?

 

Answer

I am advised:

As freight movements expect to double in metropolitan Sydney, daily container trips to/from Port Botany are expected as follows 2021: 6,211 2026: 6,566 2031: 7,239

8644 June 7 2018 PORT OF NEWCASTLE CONTAINER FEE

 

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

 

  1. Is the Minister aware of the Australian Competition and Consumer Commission (ACCC) investigation into the Government’s anti-competitive cap on container movements at the Port of Newcastle?

 

  1. What is the purpose of the fine charged to the Port of Newcastle for every container shipped over a certain limit?

 

  1. Will the Minister immediately remove this anti-competitive government restriction and allow the development of a container terminal at the Port of Newcastle?

 

Answer – July 12 2018

 

I am advised:

 

(1) The Minister is aware of the Australian Competition and Consumer Commission Investigation.

(2) and (3) I refer you to my previous response, LA Q8026

 

 

8026 April 12 2018 PORT OF NEWCASTLE CONTAINER CAP

 

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

 

  1. Why does the Government charge a fee for containers shipped through the Port of Newcastle?
  2. Does the Minister consider that this fee is anti-competitive?
  3. Will the Minister abolish the anti-competitive fee on containers shipped through the port of Newcastle and allow a container terminal to be built in Newcastle?

 

Answer  May 17 2018 –

 

I am advised:

 

The Government’s policy in relation to ports is reflected in the draft Freight and Ports Plan which is available on the Future Transport website.

The port transaction arrangements do not prohibit the development of a container terminal at the Port of Newcastle.

 

BUDGET ESTIMATES 2015

Supplementary Questions

September 29 2015

The Hon Gladys Berejiklian MP, Treasurer and Minister for Industrial Relations

 

Question 29: Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

 

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

LEGISLATIVE COUNCIL 17 OCTOBER 2013

 The Hon. ADAM SEARLE: My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

 The Hon. DUNCAN GAY: The rules in the organisation that did the scoping study for Port Botany and Port Kembla and introduced guidelines there indicate that while general cargo is allowed there will not be an extension under the rules for the lease of Newcastle Port. So the short answer to the question is that we do not envisage that any compensation will need to be put in place. The Government has been clear on this all the way through the process, even before it indicated it would lease the port at the stage when Newcastle Port Corporation was in place. I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there. I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension. The only time an extension is allowed is when a specific number is reached and is tripped in Port Botany and Port Kembla.

8605 June 7 2018 NEWCASTLE PORT NEWCASTLE STEVEDORES CONSORTIUM CONTAINER FEE Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

1 Did the Public Private Partnership Guidelines require there to be a legally enforceable contract between the Government and Newcastle Stevedores Consortium during the term of their negotiation between 2010 and November 2013?

2 Was the Government required to comply with the Commonwealth Competition and Consumer Act 2010 in respect of requiring Newcastle Stevedores Consortium to pay the Government’s fee for exceeding the Government’s cap on containers?

Answer July 12 2018

1 I am advised that the negotiation process between Newcastle Port Corporation and Newcastle Stevedores Consortium was not undertaken as a Public Private Partnership and that a contract was not concluded.

2 Please refer to the responses to questions LA Q4271, LA Q4621 and LC Q4008

 

LEGISLATIVE ASSEMBLY OCTOBER 13 2016

 

4271 – PORT OF NEWCASTLE

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

 

Did the Government claim exemption from the Trade Practices Act 1974 (as replaced on 1 January 2011 by the Competition and Consumer Act 2010) when Newcastle Port Corporation conducted a tender in 2010 for a multi-purpose terminal, including a container terminal with minimum capacity of 1 million twenty-foot container equivalent unit (TEU) per year, at the Port of Newcastle?

 

Answer 17 2016

 

I am advised that no exemption was claimed.

 

November 17 2016

4621 – PORT OF NEWCASTLE

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

 

  1. Did the Government advise Newcastle Stevedores Consortium that the Government considered itself to be exempt from the Commonwealth Competition and Consumer Act 2010 in respect of the negotiations that occurred between Newcastle Port Corporation and Newcastle Stevedores Consortium pursuant to a tender conducted by Newcastle Port Corporation?

 

  1. Did the Government advise the Australian Competition and Consumer Commission that the Government considered itself to be exempt from the Commonwealth Competition and Consumer Act 2010 in respect of the negotiations that occurred between Newcastle Port Corporation and Newcastle Stevedores Consortium pursuant to a tender conducted by Newcastle Port Corporation?

 

  1. In answering part (3) of Question On Notice 4008, was the Minister referring to section 51(1) of the Commonwealth Competition and Consumer Act 2010, which provides that conduct that would normally contravene the law may be permitted if it is specifically authorised under other Australian, state or territory legislation?

 

  1. Did the Government establish that changing the Term Sheets with Newcastle Stevedores Consortium by way of requiring payment of a fee for “containers”, complied with the Commonwealth Competition and Consumer Act 2010?

 

Answer December 22 2016

 

(1) and (4) The Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

 

(2) Please see my answer to question 4271, dated 17 November 2016. [Answer to 4271: I am advised that no exemption was claimed.]

 

(3) As the response to question 4008 was provided by the Minister, points of clarification should be directed to the Minister.

 

Legislative Assembly
15 September 2016

 

4008 – PORT OF NEWCASTLE

 

Crakanthorp, Tim to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council

 

  1. Has the operator of the Port of Newcastle entered into an agreement for the development of a container terminal at the Port of Newcastle?

 

  1. If a container terminal was developed in Newcastle during this term of Government, does the Government plan to charge the port operator, or the operator of the container terminal, a fee for container movements?

 

  1. Did the Government claim immunity from the Commonwealth Competition and Consumer Act 2010 in respect of the Term Sheets with Newcastle Stevedores Consortium?

 

Answer – 20 October 2016

 

(1) This is a matter for the operator of the Port of Newcastle.

(2) and (3) No.

8026 April 12 2018 PORT OF NEWCASTLE CONTAINER CAP

 

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

 

  1. Why does the Government charge a fee for containers shipped through the Port of Newcastle?
  2. Does the Minister consider that this fee is anti-competitive?
  3. Will the Minister abolish the anti-competitive fee on containers shipped through the port of Newcastle and allow a container terminal to be built in Newcastle?

 

Answer  May 17 2018 –

 

I am advised:

 

The Government’s policy in relation to ports is reflected in the draft Freight and Ports Plan which is available on the Future Transport website.

The port transaction arrangements do not prohibit the development of a container terminal at the Port of Newcastle.

 

BUDGET ESTIMATES 2015

Supplementary Questions

September 29 2015

The Hon Gladys Berejiklian MP, Treasurer and Minister for Industrial Relations

 

Question 29: Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

 

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

 

LEGISLATIVE COUNCIL 17 OCTOBER 2013

 The Hon. ADAM SEARLE: My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

 The Hon. DUNCAN GAY: The rules in the organisation that did the scoping study for Port Botany and Port Kembla and introduced guidelines there indicate that while general cargo is allowed there will not be an extension under the rules for the lease of Newcastle Port. So the short answer to the question is that we do not envisage that any compensation will need to be put in place. The Government has been clear on this all the way through the process, even before it indicated it would lease the port at the stage when Newcastle Port Corporation was in place. I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there. I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension. The only time an extension is allowed is when a specific number is reached and is tripped in Port Botany and Port Kembla.

Legislative Council October 10 2017

1792 – Roads, Maritime and Freight – NSW PORTS GOVERNMENT CAP

Nile, Fred to the Minister for Primary Industries, Minister for Regional Water, Minister for Trade and Industry representing the minister for Roads, Maritime and Freight

  1. Does the Ports Assets (Authorised Transactions) Act 2012 authorise the Government lease the Port of Newcastle?
  2. Did the Government enter into an agreement with NSW Ports in April 2013 to pay NSW Ports for container shipments above the Government’s cap at the Port of Newcastle?
  3. Is the use of consolidated revenue to pay NSW Ports for container shipments above the Government’s cap at the Port of Newcastle authorised by the 2012 Act, and if so, under what section?
  4. Does the Government fine the lessee of the Port of Newcastle under the 2012 Act for container shipments above the Government cap?
  5. Is the consolidated revenue to pay NSW Ports for container shipments above the Government’s cap at the Port of Newcastle authorised by the Ports Assets (Authorised Transactions) Amendment Act 2013, and if so, under what section?

Answer November 14 2017-

  1. Yes.
  2. The State entered into Commitment Deeds in May 2013, which can require payments by the State, in certain circumstances. To date, the State has not made any such payments under these Deeds.
  3. No.
  4. The Ports Assets (Authorised Transactions) Act 2012 does not contain provisions to fine parties to the Commitment Deeds in respect of payments under the Commitment Deeds.
  5. No.

LEGISLATIVE ASSEMBLY

May 25 2017

5764 – CONTAINER TERMINAL AT THE PORT OF NEWCASTLE

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

  1. Did the Government decide in 2009 to develop a container terminal at the Port of Newcastle?
  2. Was a decision made in 2012 to require any future operator of a container terminal at the Port of Newcastle to make the government whole for any cost the government incurred from paying the operator of Port Botany in respect of future container capacity development at the Port of Newcastle?
  3. Was Newcastle Stevedores Consortium required in 2013 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?
  4. Was a decision made in 2013 to require any future lessee of the Port of Newcastle to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?
  5. Was the lessee of the Port of Newcastle required in 2014 to make the Government whole for any cost the Government incurred from paying NSW Ports in respect of future container capacity development at the Port of Newcastle?
  6. Did the Government inform the Australian Competition and Consumer Commission in 2012 that the Government decided not to develop a container terminal at the Port of Newcastle?

Answer June 29 2017

  1. This Government was not in office in 2009.
  2. No.
  3. Newcastle Ports Corporation did not conclude a contract to build a container terminal with Newcastle Stevedores Consortium in 2013.
  4. Any decision regarding NSW ports is consistent with the Government’s policy that Port Kembla will be the State’s next major container terminal after Port Botany has reached capacity.
  5. No compensation payments to NSW Ports were incurred in 2014.
  6. The Government’s transaction team engaged extensively with the Australian Competition and Consumer Commission regarding the competition and regulatory framework supporting the port transactions.

LEGISLATIVE ASSEMBLY

May 11 2017

5670 – PORT OF NEWCASTLE

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

On which date did the Government inform the Australian Competition and Consumer Commission of its formal decision to invite Newcastle Stevedores Consortium to develop a container terminal at the Port of Newcastle subject to Newcastle Stevedores Consortium making the Government whole for any cost the Government incurred to NSW Ports in respect of this development?

Answer June 15 2017

The Government’s transaction team engaged with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

Legislative Assembly May 4 2017

5508 – PORT OF NEWCASTLE

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight
  1. Did the Australian Competition and Consumer Commission (ACCC) advise that the Government was carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 in respect of the Government’s ‘Invitation To Submit Detailed Proposal, Mayfield Site’ contract as signed by Newcastle Stevedores Consortium in 2010?
  1. Did the ACCC advise the Government that the Government was not carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 in respect of the Government’s ‘Invitation To Submit Detailed Proposal, Mayfield Site’ contract as signed by Newcastle Stevedores Consortium in 2010?
  1. What is the reason for the Government’s contractual commitment to pay NSW Ports in respect of future container capacity development at the Port of Newcastle?
  1. What is the reason for the Government requiring Port of Newcastle Investments to make the Government whole for any cost the Government incurs to NSW Ports in respect of future container capacity development at the Port of Newcastle?

Answer June 8 2017

No. The Government has arrangements with NSW Ports and the Port of Newcastle, which recognise that Port Botany has significant capacity for container growth. Future demand for containers is expected in the South West of Sydney which is closer to Port Kembla.

Legislative Assembly

February 14 2017

4716 – INFRASTRUCTURE AT THE PORT OF NEWCASTLE

Crakanthorp, Tim to the Minister for Roads, Maritime and Freight

Considering your media statement on September 27 2016 about there being a massive requirement for infrastructure to support a container terminal at the Port of Newcastle, what infrastructure did the government identify as associated with a container terminal at the Port of Newcastle?

Answer – March 21 2017

I refer the member to the previous answer to question LA 4617.

November 17 2016

4617 – INFRASTUCTURE IDENTIFIED AT THE PORT OF NEWCASTLE

Crakanthorp, Tim to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council

What infrastructure did the Government identify as associated with a container terminal at the Port of Newcastle?

Answer December 22 2016

Analysis was carried out as part of the development of the NSW Freight and Ports Strategy. This included examination of capital investment costs required for the port infrastructure and supporting road and rail enhancements, associated with a container terminal at Newcastle.

November 17 2016

4621 – PORT OF NEWCASTLE

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

  1. Did the Government advise Newcastle Stevedores Consortium that the Government considered itself to be exempt from the Commonwealth Competition and Consumer Act 2010 in respect of the negotiations that occurred between Newcastle Port Corporation and Newcastle Stevedores Consortium pursuant to a tender conducted by Newcastle Port Corporation?
  2. Did the Government advise the Australian Competition and Consumer Commission that the Government considered itself to be exempt from the Commonwealth Competition and Consumer Act 2010 in respect of the negotiations that occurred between Newcastle Port Corporation and Newcastle Stevedores Consortium pursuant to a tender conducted by Newcastle Port Corporation?
  3. In answering part (3) of Question On Notice 4008, was the Minister referring to section 51(1) of the Commonwealth Competition and Consumer Act 2010, which provides that conduct that would normally contravene the law may be permitted if it is specifically authorised under other Australian, state or territory legislation?
  4. Did the Government establish that changing the Term Sheets with Newcastle Stevedores Consortium by way of requiring payment of a fee for “containers”, complied with the Commonwealth Competition and Consumer Act 2010?

Answer December 22 2016

(1) and (4) The Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

(2) Please see my answer to question 4271, dated 17 November 2016. [Answer to 4271: I am advised that no exemption was claimed.]

(3) As the response to question 4008 was provided by the Minister, points of clarification should be directed to the Minister.

November 17 2016

4617 – INFRASTUCTURE IDENTIFIED AT THE PORT OF NEWCASTLE

Crakanthorp, Tim to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council

What infrastructure did the Government identify as associated with a container terminal at the Port of Newcastle?

Answer December 22 2016

Analysis was carried out as part of the development of the NSW Freight and Ports Strategy. This included examination of capital investment costs required for the port infrastructure and supporting road and rail enhancements, associated with a container terminal at Newcastle.

November 17 2016

4612 – CONTAINERS AT THE PORT OF NEWCASTLE

Crakanthorp, Tim to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council

  1. How many containers passed through the Port of Newcastle in the 12 months to 30 June 2016?
  2. In the 12 months to 30 June 2016, what was the maximum number of containers permitted to pass through the Port of Newcastle before compensation became payable to NSW Ports?
  3. In the 12 months to 30 June 2016, was the maximum number of containers permitted to pass through the Port of Newcastle before compensation became payable to NSW Ports in the amount of 35,916?
  4. How does the Government determine the number of containers that pass through the Port of Newcastle annually?
  5. For purposes of the Government’s lease agreement with “Port of Newcastle Investments”, does the meaning of container have the same meaning as contained in the “Port Commitment – Port Botany and Port Kembla”?

Answer December 22 2016

(1) to (4) The Port of Newcastle is managed by a private port operator.

(5) The details of container in the Port Commitment Deeds are commercial in confidence.

November 17 2016

4611 – INFRASTRUCTURE AT THE PORT OF NEWCASTLE

Crakanthorp, Tim to the Premier, and Minister for Western Sydney

Considering your media statement on September 27 2016 about there being a massive requirement for infrastructure to support a container terminal at the Port of Newcastle, what infrastructure did the government identify as associated with a container terminal at the Port of Newcastle?

Answer:

As this matter primarily relates to the portfolio of the Minister for Roads, Maritime and Freight, I have referred the question to the Hon Duncan Gay MLC.

November 10 2016

4475 – CONTAINER MOVEMENTS AT THE PORT OF NEWCASTLE

Crakanthorp, Tim to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council

  1. What is the reason for the Government charging a fee for container movements at the Port of Newcastle?
  2. What is the reason for the Government paying compensation to NSW Ports for container movements at the Port of Newcastle?

Answer December 15 2016

I am advised:

The Government does not charge a fee for container movements at the Port of Newcastle and no compensation payments have been paid.

LEGISLATIVE ASSEMBLY OCTOBER 13 2016

4271 – PORT OF NEWCASTLE

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

Did the Government claim exemption from the Trade Practices Act 1974 (as replaced on 1 January 2011 by the Competition and Consumer Act 2010) when Newcastle Port Corporation conducted a tender in 2010 for a multi-purpose terminal, including a container terminal with minimum capacity of 1 million twenty-foot container equivalent unit (TEU) per year, at the Port of Newcastle?

Answer November 17  2016-

I am advised that no exemption was claimed.

LEGISLATIVE COUNCIL 13 OCTOBER 2016
 
1166 – Planning – MOOREBANK INTERMODAL FREIGHT TERMINAL
 
Faruqi, Mehreen to the Minister for Ageing, Minister for Disability Services and Minister for Multiculturalism representing the Minister for Planning

1.

Regarding the Planning Assessment Commission planning approval of the Moorebank Intermodal Freight Terminal, which places a condition that 250,000 twenty-foot equivalent unit not exceed the current capacity of the transport network?

a. Is the only possible road transport solution through the Liverpool Military Area?

b. What is the current status of the Liverpool Military Area? Can its status be altered and if so, how?

2.

Relating to the answer to question 127 in the supplementary questions for the 2016⁄2017 Budget Estimates hearing for the portfolio of Roads, Maritime and Freight, specifically that: “The NSW Government has committed $3.4 million to progress studies into road infrastructure options to manage traffic impacts from the proposed Moorebank Intermodal Terminal and forecast growth in the broader Liverpool and Moorebank area.”

a. What is the purpose of these studies?

b.Have all previous planning studies been sufficient for the Government to decide the Moorebank Intermodal Terminal planning application?

c. If so, why is the Government conducting studies?

d. Has the Government released the scope of each study?

e. If not, will you release it?

f. Are the studies confidential?

g. If so, why?

h. What circumstances caused the Government to undertake the studies?

i. Who is undertaking the studies?

j. Are the project proponents participating in the studies?

k. Is the local community participating in the studies?

l. Has approval to develop the project been given subject to these studies?

m. If so, what features of previous studies, if any, are being rectified by the Government

n. Will community comment be invited in respect of the studies before the studies are adopted?

o. Who is funding the rail connection between the Southern Sydney Freight Line and the terminal site?

p. Will the Government release the cost of necessary road upgrades before deciding the project application?

q.What proportion of necessary road upgrades will be paid by the terminal operator if planning approval is given?

Answer November 17 2016-

I am advised-

1.

a. The EIS proposed access from Moorebank Ave. b. This is a matter for the Department of Defence.

2.

a.This question should be directed to the Minster for Roads, Maritime and Freight.

b.Yes

c. These questions should be directed to the Minster for Roads, Maritime and Freight.

d. These questions should be directed to the Minster for Roads, Maritime and Freight.

e. These questions should be directed to the Minster for Roads, Maritime and Freight.

f. These questions should be directed to the Minster for Roads, Maritime and Freight.

g. These questions should be directed to the Minster for Roads, Maritime and Freight.

h. These questions should be directed to the Minster for Roads, Maritime and Freight.

i. These questions should be directed to the Minster for Roads, Maritime and Freight.

j. These questions should be directed to the Minster for Roads, Maritime and Freight.

k. These questions should be directed to the Minster for Roads, Maritime and Freight.

l. No

m. Not applicable.

n. This question should be directed to the Minster for Roads, Maritime and Freight.

o. This is not a matter for the Minister for Planning.

p. This question should be directed to the Minster for Roads, Maritime and Freight.

q.This would be a matter subject to assessment of future staged applications if they are made.

Legislative Assembly
15 September 2016

 

4008 – PORT OF NEWCASTLE

 

Crakanthorp, Tim to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council

  1. Has the operator of the Port of Newcastle entered into an agreement for the development of a container terminal at the Port of Newcastle?
  2. If a container terminal was developed in Newcastle during this term of Government, does the Government plan to charge the port operator, or the operator of the container terminal, a fee for container movements?
  3. Did the Government claim immunity from the Commonwealth Competition and Consumer Act 2010 in respect of the Term Sheets with Newcastle Stevedores Consortium?

Answer October 20 2016-

(1) This is a matter for the operator of the Port of Newcastle.

(2) and (3) No.

Legislative Council
13 September 2016

 PORT OF NEWCASTLE

The Hon. PAUL GREEN ( 16:17 ): My question without notice is directed to the Minister for Roads, Maritime and Freight. On 28 July the Newcastle Herald published that it had received a strictly confidential port commitment document outlining that an operator of the Newcastle container terminal would have to pay compensation to the Government if it moved more than 30,000 containers per year, which would cost a minimum of $1 million. Will the Minister comment on the validity of this claim? Is this true? Given that the unemployment rate in Newcastle is 12 per cent and higher for youth unemployment at 20 per cent, should not the Government be working towards building shipments through the Port of Newcastle in order to provide additional employment opportunities?

The PRESIDENT: Order! I call the Hon. Sophie Cotsis to order for the first time.

The Hon. DUNCAN GAY (Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council) ( 16:17 ): I thank the honourable member for his question and I know that it is an issue for certain people in the Newcastle area, not the least of which is the fine periodical, the Newcastle Herald.

The Hon.Walt Secord: It is a journal.

The Hon. DUNCAN GAY: It is unbelievable that the Labor Party is mocking the Newcastle Herald.

The Hon.Walt Secord: Point of order: I cannot let this pass. Hansard must show that the Opposition was not mocking the Newcastle Herald; it loves that publication.

The PRESIDENT: I will leave the matter there. The Minister has the call.

The Hon. DUNCAN GAY: As the Government has consistently said, the leasing terms of ports Botany and Kembla do not prohibit the development of a container terminal at the Port of Newcastle. In fact, there is ample opportunity for increased container trade at the port. The port transaction deeds do not trigger any cross‑payments until a threshold container throughput is reached. That threshold is based on 30,000 containers each year, plus an extra 6 per cent growth in volume. Based on current growth rates, it is highly unlikely that current container trade at Newcastle will reach the applicable threshold—

The PRESIDENT: Order! I am having difficulty hearing the Minister. There is too much audible conversation in the Chamber.

The Hon. DUNCAN GAY: before such time as Newcastle is required to establish high-intensity container terminals to meet the forecasted population and business needs of the Hunter. Yearly container trade at Newcastle is currently holding steady at about 9,000 boxes. Remember, 30,000 is the threshold, plus 6 per cent growth in volume per annum. It is not within a bull’s roar of that trigger. In other words, it would take a massive 230 per cent increase in container trade volume to reach the 30,000 twenty-foot equivalent unit [TEU] threshold—and that is before one applies the extra 6 per cent growth rate.

There is a long way to go. If we apply the formula to the outer years we see that by 2030 the threshold at Newcastle will be approximately 80,000 boxes. By 2040 it will be 144,000 boxes and by 2050 it will be almost 260,000 boxes. That is the trend. The Port of Newcastle will continue to be the primary coal export facility for New South Wales and will continue to diversify into bulk grain and other commodities. The recent diversification into fuel is very important for Newcastle and the Hunter region. The Government worked closely with the Australian Competition and Consumer Commission [ACCC] and other regulatory bodies as part of the transactions.

Port Botany remains the key container facility for New South Wales, for a range of logistical and commercial reasons. It is the second largest container facility in Australia—just behind the Port of Melbourne—and acts as a gateway to the most populous city in the nation. Approximately 85 per cent of imported containers landing at Port Botany are distributed within 40 to 50 kilometres of the terminal. That is important to note. A person sending a container wants it to go to its destination for the least cost. Eighty-five per cent of containers go to Sydney. [Time expired.]

The PRESIDENT: Order! The Minister will resume his seat.

BUDGET ESTIMATES 2016-2017
GENERAL PURPOSE STANDING COMMITTEE NO. 1
Thursday, 1 September 2016
Examination of proposed expenditure for the portfolio area
TREASURY AND INDUSTRIAL RELATIONS

The Committee met at 9:00

MEMBERS

Reverend the Hon. F. Nile (Chairman)
Mr J. Buckingham
The Hon. S. Farlow
The Hon. B. Franklin
The Hon. D. Mookhey
The Hon. P. Primrose
The Hon. A. Searle
The Hon. B. Taylor
PRESENT

The Hon. G. Berejiklian, Treasurer, and Minister for Industrial Relations

 

Page 24

 

The Hon. ADAM SEARLE: I would like to ask you some questions about the Port of Newcastle and the cap on containers. Last year we asked whether or not a cap was put on the number of containers that could be put through the Port of Newcastle. You were very careful to say there was no legislated container cap.

 

Ms GLADYS BEREJIKLIAN: Correct.

 

The Hon. ADAM SEARLE: We asked also whether there was any other restriction in the sale or lease documents and you answered, “Not that I am aware of.” We also gave you some questions on notice about this and we referred you specifically to the port commitment deeds, which you refused to release. Now we know thanks to the Newcastle Herald, which published the port commitment deeds for Port Botany and Port Kembla, that there was in fact as part of the arrangement a cap on container movements through the Port of Newcastle. If they exceeded the cap the operator would have to pay to the State Government essentially a fine and your Government would then pay that to the operator of Port Botany and Port Kembla. Why were you not frank and honest with the Committee last year about the fact that there was, as a result of your Government’s policy and actions, a cap on container movements through the Port of Newcastle?

 

Ms GLADYS BEREJIKLIAN: I appreciate your question and I am happy to go into detail around those arrangements, but my concern at the time was that I was not sure what was subject to commercial in confidence and what was not.

 

The Hon. ADAM SEARLE: I asked you whether there was a cap. You were very careful to say there was no legislated cap.

 

Ms GLADYS BEREJIKLIAN: Correct.

 

The Hon. ADAM SEARLE: And I asked you whether there was anything else in the sale or the lease documents.

 

Ms GLADYS BEREJIKLIAN: That is why I had to go back.

 

The Hon. ADAM SEARLE: But you did not come back to us. You were dissembling. You said there was no legislated cap. When did you know about the cap and why did you not inform the Committee? Why have you tried to hide this?

 

Ms GLADYS BEREJIKLIAN: As I stated, I was very clear on what was publicly available at that time. I am telling you now the reason why I did not elaborate beyond what I knew was a fact was because I wanted to seek some advice as to what was commercial in confidence and what was publicly available.

 

The Hon. ADAM SEARLE: These are monopoly assets. You leased them out to monopoly operators. There is no commercial in confidence. That is just rubbish.

 

Ms GLADYS BEREJIKLIAN: No, there are specific terms within contracts of transactions which are subject to commercial in confidence.

 

The Hon. ADAM SEARLE: Treasurer, this deal is so bad for consumers in New South Wales that we have had the head of the ACCC saying the deal is so bad for consumers he is changing his mind on privatisation.

 

Ms GLADYS BEREJIKLIAN: What is your question?

 

The Hon. ADAM SEARLE: Why did your Government engage in a transaction that has put a brake on the economic development of Newcastle and the Hunter region for the better part of a century?

 

Ms GLADYS BEREJIKLIAN: I am really pleased to answer this question because I find the premise of your question quite affronting.

 

The Hon. ADAM SEARLE: So does the ACCC. They say they would prosecute the State Government but you claim an immunity.

 

The Hon. BEN FRANKLIN: Point of order—

 

The Hon. ADAM SEARLE: When did you claim the immunity?

 

The Hon. BEN FRANKLIN: Point of order—

 

The Hon. ADAM SEARLE: When did you claim the immunity from the trade practices legislation?

 

Ms GLADYS BEREJIKLIAN: There is nothing like a bit of excitement in an estimates hearing.

 

The Hon. BEN FRANKLIN: The point of order is that the Treasurer was answering the question.

 

The Hon. ADAM SEARLE: The Treasurer lied to us last year, Benjamin.

 

The Hon. BEN FRANKLIN: The Treasurer was answering your question, Mr Searle.

 

The Hon. ADAM SEARLE: She did not come clean.

 

The Hon. BEN FRANKLIN: You asked the question. She is answering the question.

 

The Hon. ADAM SEARLE: Treasurer, why did you not come clean to this Committee last year?

 

The Hon. BEN FRANKLIN: You should have more respect for this process, Mr Searle. You know better than that.

 

The Hon. ADAM SEARLE: Why are you putting a brake on economic development in Newcastle for a century?

 

The Hon. SCOTT FARLOW: There is a point of order.

 

The CHAIR: Mr Searle, let the Treasurer answer the question.

 

Ms GLADYS BEREJIKLIAN: Can I say, Mr Searle, the premise of your question is wrong at best. As you appreciate, the New South Wales Government—

 

The Hon. ADAM SEARLE: Did you get the approval of the ACCC before you engaged in the transaction?

 

The CHAIR: Let the Treasurer answer the question, Mr Searle.

 

Ms GLADYS BEREJIKLIAN: The New South Wales Government has a very detailed freight and ports strategy and we have been very public about that…..

 

GENERAL PURPOSE STANDING COMMITTEE NO. 1 Thursday 3 September 2015

 

The Hon. ADAM SEARLE: When you sold the Port of Newcastle was a cap put on the number of containers that can be moved through the Port of Newcastle?

 

Ms GLADYS BEREJIKLIAN: I understand there is no legislated container cap.

 

The Hon. ADAM SEARLE: So there is no cap on container movements there?

 

Ms GLADYS BEREJIKLIAN: There is no legislated container cap.

 

The Hon. ADAM SEARLE: Is there any other restriction in the sale of the lease documents?

 

Ms GLADYS BEREJIKLIAN: I am not aware of that.

 

The Hon. ADAM SEARLE: What about in the contracts?

 

Ms GLADYS BEREJIKLIAN: I am not aware.     

 

The Hon. ADAM SEARLE: Will you take that on notice?

 

Ms GLADYS BEREJIKLIAN: I am happy to take that on notice

 

BUDGET ESTIMATES 2015-2016
Supplementary Questions
General Purpose Standing Committee No. 1 Treasury, Industrial Relations
Thursday 3 September 2015
Answers 29 September 2015

https://www.parliament.nsw.gov.au/lcdocs/other/7658/150929%20TREASURER%20BE%20-%20Answers%20to%20Supplementary%20Questions.pdf

PORTS ISSUES

 

24. Has the NSW Government imposed any restrictions on the movement of containers through the Port of Newcastle?

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Answer 24-25: There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

26. In the interest of transparency, will you release the Port Commitment Deeds that set out details of arrangements for containers?

Answer: The Port Commitment Deeds are commercial in confidence documents.

27. Now that the port transactions are concluded, will you release the Scoping Study that was undertaken ahead of the transaction for the three ports?

Answer: The Scoping Study documents remain Cabinet-in-confidence. The Government, and previous Governments, have not released Scoping Studies for previous transactions.

28. Minister Gay has said: “The only time an extension is allowed is when a specific number is reached and tripped in Port Botany and Port Kembla.” What is the number? For Port Kembla? For Port Botany?

Answer:

28: See http://freight.transport.nsw.gov.au/strategy/

a. How much money was raised by the sale/lease of Newcastle port?
b. What was money spent on?
c. How much has gone into consolidated revenue?
d. How much has been allocated to, or spent in, the Newcastle electorate?

Answer 28 (a) – (d): For publicly available information, see http://www.transport.nsw.gov.au/media-releases/transforming-newcastle-port-lease-securesfunds-revitalisation

Note: This media release is now found at https://www.transport.nsw.gov.au/newsroom-and-events/media-releases/transforming-newcastle-port-lease-secures-funds-for

29. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

30. Has the NSW Government entered into any agreements that create a disincentive or obstacle to increase the number of containers that pass through Newcastle?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

31. Has the NSW Government entered into any arrangement [sic] that create a financial penalty if the number of containers moved through the Port of Newcastle exceeds a set threshold?

a. If so, what is the threshold?

Answer:  Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

32. Is the leaseholder of Port Botany entitled to receive a payment should the number of containers moved through the Port of Newcastle exceed a set figure?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

33. If so, what is the payment and who pays it?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

34. Do the Port Commitment Deeds establish any limitations or restrictions on the operation of Port Kembla or the Port of Newcastle?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

35. Will you release the Port Commitment Deeds for the port transactions?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

36. Will you release the Scoping Study for the port transactions?

Answer: Please refer to answer 27. [The Scoping Study documents remain Cabinet-in-confidence. The Government, and previous Governments, have not released Scoping Studies for previous transactions.]

BUDGET ESTIMATES 2016-2017
GENERAL PURPOSE STANDING COMMITTEE NO. 1
Thursday, 1 September 2016
Examination of proposed expenditure for the portfolio area
TREASURY AND INDUSTRIAL RELATIONS

The Committee met at 9:00

MEMBERS

Reverend the Hon. F. Nile (Chairman)
Mr J. Buckingham
The Hon. S. Farlow
The Hon. B. Franklin
The Hon. D. Mookhey
The Hon. P. Primrose
The Hon. A. Searle
The Hon. B. Taylor
PRESENT

The Hon. G. Berejiklian, Treasurer, and Minister for Industrial Relations

Page 24

The Hon. ADAM SEARLE: I would like to ask you some questions about the Port of Newcastle and the cap on containers. Last year we asked whether or not a cap was put on the number of containers that could be put through the Port of Newcastle. You were very careful to say there was no legislated container cap.

Ms GLADYS BEREJIKLIAN: Correct.

The Hon. ADAM SEARLE: We asked also whether there was any other restriction in the sale or lease documents and you answered, “Not that I am aware of.” We also gave you some questions on notice about this and we referred you specifically to the port commitment deeds, which you refused to release. Now we know thanks to the Newcastle Herald, which published the port commitment deeds for Port Botany and Port Kembla, that there was in fact as part of the arrangement a cap on container movements through the Port of Newcastle. If they exceeded the cap the operator would have to pay to the State Government essentially a fine and your Government would then pay that to the operator of Port Botany and Port Kembla. Why were you not frank and honest with the Committee last year about the fact that there was, as a result of your Government’s policy and actions, a cap on container movements through the Port of Newcastle?

Ms GLADYS BEREJIKLIAN: I appreciate your question and I am happy to go into detail around those arrangements, but my concern at the time was that I was not sure what was subject to commercial in confidence and what was not.

The Hon. ADAM SEARLE: I asked you whether there was a cap. You were very careful to say there was no legislated cap.

Ms GLADYS BEREJIKLIAN: Correct.

The Hon. ADAM SEARLE: And I asked you whether there was anything else in the sale or the lease documents.

Ms GLADYS BEREJIKLIAN: That is why I had to go back.

The Hon. ADAM SEARLE: But you did not come back to us. You were dissembling. You said there was no legislated cap. When did you know about the cap and why did you not inform the Committee? Why have you tried to hide this?

Ms GLADYS BEREJIKLIAN: As I stated, I was very clear on what was publicly available at that time. I am telling you now the reason why I did not elaborate beyond what I knew was a fact was because I wanted to seek some advice as to what was commercial in confidence and what was publicly available.

The Hon. ADAM SEARLE: These are monopoly assets. You leased them out to monopoly operators. There is no commercial in confidence. That is just rubbish.

Ms GLADYS BEREJIKLIAN: No, there are specific terms within contracts of transactions which are subject to commercial in confidence.

The Hon. ADAM SEARLE: Treasurer, this deal is so bad for consumers in New South Wales that we have had the head of the ACCC saying the deal is so bad for consumers he is changing his mind on privatisation.

Ms GLADYS BEREJIKLIAN: What is your question?

The Hon. ADAM SEARLE: Why did your Government engage in a transaction that has put a brake on the economic development of Newcastle and the Hunter region for the better part of a century?

Ms GLADYS BEREJIKLIAN: I am really pleased to answer this question because I find the premise of your question quite affronting.

The Hon. ADAM SEARLE: So does the ACCC. They say they would prosecute the State Government but you claim an immunity.

The Hon. BEN FRANKLIN: Point of order—

The Hon. ADAM SEARLE: When did you claim the immunity?

The Hon. BEN FRANKLIN: Point of order—

The Hon. ADAM SEARLE: When did you claim the immunity from the trade practices legislation?

Ms GLADYS BEREJIKLIAN: There is nothing like a bit of excitement in an estimates hearing.

The Hon. BEN FRANKLIN: The point of order is that the Treasurer was answering the question.

The Hon. ADAM SEARLE: The Treasurer lied to us last year, Benjamin.

The Hon. BEN FRANKLIN: The Treasurer was answering your question, Mr Searle.

The Hon. ADAM SEARLE: She did not come clean.

The Hon. BEN FRANKLIN: You asked the question. She is answering the question.

The Hon. ADAM SEARLE: Treasurer, why did you not come clean to this Committee last year?

The Hon. BEN FRANKLIN: You should have more respect for this process, Mr Searle. You know better than that.

The Hon. ADAM SEARLE: Why are you putting a brake on economic development in Newcastle for a century?

The Hon. SCOTT FARLOW: There is a point of order.

The CHAIR: Mr Searle, let the Treasurer answer the question.

Ms GLADYS BEREJIKLIAN: Can I say, Mr Searle, the premise of your question is wrong at best. As you appreciate, the New South Wales Government—

The Hon. ADAM SEARLE: Did you get the approval of the ACCC before you engaged in the transaction?

The CHAIR: Let the Treasurer answer the question, Mr Searle.

Ms GLADYS BEREJIKLIAN: The New South Wales Government has a very detailed freight and ports strategy and we have been very public about that.

The Hon. ADAM SEARLE: Yes, to rip off the consumers.

Ms GLADYS BEREJIKLIAN: We have said very publicly that we see the particular role of the port at Newcastle to be primarily for coal and other bulk commodities.

The Hon. DANIEL MOOKHEY: It will be for now.

Ms GLADYS BEREJIKLIAN: No. When we came to government there was no freight strategy in New South Wales. You did not have a ports strategy.

The Hon. ADAM SEARLE: I was not here, Treasurer. Answer the question I have asked you.

Ms GLADYS BEREJIKLIAN: I am trying to if you would stop interrupting me.

The Hon. ADAM SEARLE: You are obfuscating. You dodged the question last year.

The Hon. SCOTT FARLOW: Point of order—

The Hon. ADAM SEARLE: You lied to the Committee last year. Now answer the question.

The Hon. BEN FRANKLIN: Let her answer the question.

The Hon. ADAM SEARLE: If only she would, Ben.

The CHAIR: Let the Treasurer answer the question.

The Hon. ADAM SEARLE: She is not answering the question. She is obfuscating again.

The Hon. SCOTT FARLOW: You are not letting her answer the question.

Mr JEREMY BUCKINGHAM: No more coffee.

Ms GLADYS BEREJIKLIAN: Can I please answer the question? We have been extremely public about the NSW Freight and Ports Strategy and what we view as the role of each major port in New South Wales. There is no doubt that we have said right at the outset that we believe Port Botany to be the main container port in New South Wales and I will tell you why.

The Hon. DANIEL MOOKHEY: It will be now.

Ms GLADYS BEREJIKLIAN: Eighty-five per cent of all containers that come off the port at Port Botany are distributed within 40 kilometres. Major freight operators do not want multiple ports of stops when they are bringing their goods to New South Wales. As a government we have to make some really sound decisions on what the primary use of each port should be to make sure we maximise the opportunities of increasing capacity at all of our ports in relation to our strategy. That is why the Government, obviously before my time, entered into arrangements. I do know for a fact because after I was asked those questions I did go back and check with the team that there was ongoing consultation. There was ongoing consultation with the ACCC during that process and ongoing consultation with all the relevant agencies.

Also I note not only have we been very clear and up-front about what the role of each port is but also, as my colleague in the other place identified, there are still enormous growth opportunities in Newcastle within what was agreed by Government during the transaction process. That is without doubt. Regrettably during your 16 years of government you did not invest in the Hunter. We now have record investment in infrastructure and record investment in revitalising Newcastle and the greater Hunter region, which has been made possible in part by this transaction. We are investing I think in the order of half a billion dollars and more in transport infrastructure upgrades which would not have been possible without the transaction. The reason why I find your question affronting is we made this decision to support the revitalisation of Newcastle and to reassert the Government’s strategy in relation to our ports and freight. There was no—

The Hon. PETER PRIMROSE: You were affronted because you were caught out.

Ms GLADYS BEREJIKLIAN: No.

The Hon. PETER PRIMROSE: You did not come back to this Committee.

The Hon. BEN FRANKLIN: Point of order: The Opposition’s time for question has expired.

Ms GLADYS BEREJIKLIAN: You asked me a question and I answered to the best of my ability at that time.

The Hon. PETER PRIMROSE: You did not come back and correct it.

Ms GLADYS BEREJIKLIAN: No, because what I told you was correct. Mr Searle even accepts that.

The Hon. ADAM SEARLE: Yes, but you did not give the full answer.

Ms GLADYS BEREJIKLIAN: What I told you was correct.

The Hon. PETER PRIMROSE: Talk about dissembling.

Ms GLADYS BEREJIKLIAN: Please. Getting back to the point, I think the whole argument you are running that somehow this transaction was done intentionally to the detriment of Newcastle and the Hunter—

The Hon. ADAM SEARLE: The ACCC seems to think so.

Ms GLADYS BEREJIKLIAN: —is an affront and it is wrong. I will keep referring to the ports strategy.

The Hon. PETER PRIMROSE: And we will keep referring to the ACCC.

Ms GLADYS BEREJIKLIAN: I have outlined the rationale as to why Port Botany is the main container port for New South Wales. I have outlined the rationale for the main purpose of the Newcastle port. As I have stated previously, there was and is no legislated cap. I think it is very concerning that a party who after 16 years did not even have a ports strategy—

The Hon. PETER PRIMROSE: The ACCC.

Ms GLADYS BEREJIKLIAN: Yes, what about them?

The Hon. PETER PRIMROSE: The ACCC.

Ms GLADYS BEREJIKLIAN: What about them?

Mr JEREMY BUCKINGHAM: Point of order: It is my time to ask questions.

The CHAIR: We will move on to Mr Buckingham’s time.

https://www.parliament.nsw.gov.au/lcdocs/other/10299/GPSC1%20ASQ%20-%20Treasury,%20Industrial%20Relations.pdf

BUDGET ESTIMATES 2016-2017
Supplementary Questions
General Purpose Standing Committee No. 1
TREASURY, INDUSTRIAL RELATIONS
Hearing: Thursday 1 September 2016
Answers: Tuesday 27 September 2016

 Questions from the Hon Shaoquett Moselmane MLC (on behalf of the NSW Labor Opposition)

Newcastle Port

  1. When did you become aware of the content of the Port Commitment Deeds for Ports Botany and Kembla?

Answer: As you are aware the NSW Government was a counterparty to the port transactions.

  1. Did the Government advise the Australian Competition and Consumer Commission (ACCC) of the content of the Port Commitment Deeds for Ports Botany and Kembla and its content before entering into any lease for Port Botany and Port Kembla?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

  1. If the answer to 2. is yes, what was the response of the ACCC?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

  1. Now that the Port Commitment Deeds for Ports Botany and Kembla have been released into the public arena, have the terms in the document been agreed to by the NSW Government?

Answer: Please see response by my colleague, Minister Gay, available on the Legislative Council’s Hansard.

  1. Was there, or is there agreement between the Government and the ACCC that the Government was carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle, when the government-owned Newcastle Port Corporation was the port’s operator?

Answer: I am advised that the extent to which the Government carries on a business for the purposes of the Competition and Consumer Act 2010 is a matter of law not agreement.

  1. Was there, or is there agreement between the Government and the ACCC about the date upon which the NSW Government ceased carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle, when the government-owned Newcastle Port Corporation was the port’s operator? If so, what is that date?

Answer: I am advised that the extent to which the Government carries on a business for the purposes of the Competition and Consumer Act 2010 is a matter of law not agreement.

  1. Does the Government’s charge on containers at the Port of Newcastle potentially breach Section 45 of the Commonwealth Competition and Consumer Act 2010?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

  1. When did the NSW Government claim immunity from competition law regarding the Port Commitment Deeds?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

  1. What contact or discussions with the ACCC has the NSW Government, or any part of the NSW Government, had regarding the Port Commitment Deeds?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

  1. Why did the government advise this Committee on 22 August 2014 that a container terminal at the Port of Newcastle was “uneconomic enterprise contrary to market demand” but fail to advise it of the cap on container movements and the payment required for exceeding the cap contained in the Port Commitment Deeds?

Answer: The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.

  1. Why did the government agree to the cap for container movements at the Port of Newcastle and the payment required for breaching the cap Port Commitment Deeds?

Answer: The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.

Newcastle Port

  1. When did the Treasurer and/or NSW Treasury become aware of the content of the Port Commitment Deeds for Ports Botany and Kembla?

Answer: I refer you to answers 41- 51

  1. Did the Government advise the Australian Competition and Consumer Commission (ACCC) of the content of the Port Commitment Deeds for Ports Botany and Kembla and its content before entering into any lease for Port Botany and Port Kembla?

(a) If yes, what was the response of the ACCC?

Answer: I refer you to answers 41- 51

  1. Was there, or is there agreement between the Government and the ACCC that the Government was carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle, when the government-owned Newcastle Port Corporation was the port’s operator?

Answer: I refer you to answers 41- 51

  1. Was there, or is there agreement between the Government and the ACCC about the date upon which the NSW Government ceased carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle, when the government-owned Newcastle Port Corporation was the port’s operator? If so, what is that date?

Answer: I refer you to answers 41- 51

  1. Does the Government’s charge on containers at the Port of Newcastle potentially breach Section 45 of the Commonwealth Competition and Consumer Act 2010?

Answer: I refer you to answers 41- 51

  1. When did the NSW Government claim immunity from competition law regarding the Port Commitment Deeds?

Answer: I refer you to answers 41- 51

  1. What contact or discussions with the ACCC has the NSW Government, or any part of the NSW Government, had regarding the Port Commitment Deeds?

Answer: I refer you to answers 41- 51

  1. Why did the government advise this Committee on 22 August 2014 that a container terminal at the Port of Newcastle was “uneconomic enterprise contrary to market demand” but fail to advise it of the cap on container movements and the payment required for exceeding the cap contained in the Port Commitment Deeds?

Answer: I refer you to answers 41- 51

  1. Why did the government agree to the cap for container movements at the Port of Newcastle and the payment required for breaching the cap Port Commitment Deeds?

Answer: I refer you to answers 41- 51

  1. Did the NSW Government receive any advice that entering into the Port Commitment Deed would increase the proceeds that the NSW Government would receive from the port transactions?

(a) If so, will you release this advice?

Answer: The Government seeks advice on a range of issues when undertaking significant transactions and much of this advice is commercial in confidence to ensure value for money for NSW taxpayers.

  1. Did the NSW Government receive any advice that selling Port Botany and Port Kembla to the same buyer would increase the proceeds that the NSW Government would receive from the transaction?

(a) If so, will you release this advice?

Answer: The Government seeks advice on a range of issues when undertaking significant transactions and much of this advice is commercial in confidence to ensure value for money for NSW taxpayers.

Port of Newcastle

  1. Did the government claim immunity from the “Competition and Consumer Act 2010” in respect of Term Sheets with Newcastle Stevedores Consortium requiring Mayfield Development Corporation Pty Ltd to make the State of New South Wales whole for any cost the State incurred to NSW Ports in respect of future container capacity development at the Port of Newcastle?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. Was the government subject to the “Competition and Consumer Act 2010” in respect of Term Sheets with Newcastle Stevedores Consortium requiring Mayfield Development Corporation Pty Ltd to make the State of New South Wales whole for any cost the State incurred to NSW Ports in respect of future container capacity development at the Port of Newcastle?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. Was the Government excluded from the requirements of the Commonwealth Competition and Consumer Act 2010 in respect of Newcastle Port Corporation:

(a) Conducting a public tender in 2010 for a multi-purpose terminal, including a 1-million per year capacity container terminal, at the Port of Newcastle?

(b) Changing its requirements pursuant to its 2010 tender?

(c) Charging Anglo Ports Pty Ltd a fee for container movements at the Port of Newcastle, pursuant to its tender conducted in 2010?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. On what date did the Government inform the Australian Competition and Consumer Commission about Newcastle Port Corporation charging a fee for container movements at the Port of Newcastle?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. Was the Government excluded from the requirements of the Commonwealth Competition and Consumer Act 2010 in respect of charging a fee for container movements at the Port of Newcastle after Newcastle Port Corporation terminated its negotiations with Anglo Ports?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. On what date did the Government impose a charge on containers at the Port of Newcastle?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. Does the Government use its charge on containers at the Port of Newcastle to fund compensation payments to NSW Ports in respect of container movements at the Port of Newcastle?

(a) If not, what is the source of the funds for these payments?

Answer: I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. When was the Treasurer first made aware of the Port Commitment Port Botany and Port Kembla document?

Answer: Please refer to the response to question 41. [As you are aware the NSW Government was a counterparty to the port transactions.]

  1. When was the Treasurer first made aware of the “contractual commitments” outlined in the Port Commitment Port Botany and Port Kembla document?

Answer: Please refer to the response to question 41 [As you are aware the NSW Government was a counterparty to the port transactions.]

  1. The Minister for Roads, Maritime and Freight recently stated that cross payments are required to be made between the operator of the Port of Newcastle and the operator of Port Botany and Kembla, does the Treasurer understand these cross payments to be lawful?

(a) Does the Treasurer accept these payments are of an anti-competitive nature?

Answer: Please refer to the response to question 135. [I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.]

  1. Why does the Government charge a fee for container movements at the Port of Newcastle?

Answer: Please refer to the response to questions 50. [The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.]

  1. Why did the Government keep secret its charging a fee for container movements at the Port of Newcastle until 10 August 2016?

Answer: Please refer to the response to questions 50. [The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.]

  1. Why does the Government pay NSW Ports compensation in respect of container movements at the Port of Newcastle?

Answer: Please refer to the response to questions 50. [The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.]

  1. How does the Government define the term “container” in respect of charging a fee for container movements at the Port of Newcastle?

Answer: Please refer to the response to questions 50. [The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.]

  1. Does the Government charging a fee for container movements at the Port of Newcastle affect the commercial viability of developing a container terminal?

Answer: Please refer to the response to questions 50. [The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.]

  1. Does the Government claim immunity from the Commonwealth Competition and Consumer Act 2010 in respect of charging a fee for container movements at the Port of Newcastle?

Answer: Please refer to the response to question 135. [I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.]

  1. Did the Government claim immunity from the Commonwealth Competition and Consumer Act 2010 when it requested Newcastle Stevedores Consortium and Mayfield Development Corporation Pty Ltd to pay a fee for container movements at the Port of Newcastle?

Answer: Please refer to the response to question 135. [I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.]

  1. Was Newcastle Port Corporation’s contract with Anglo Ports, pursuant to its 2010 tender, subject to the government’s “Working With Government Guidelines”?

Answer: I am advised that Newcastle Port Corporation did not conclude a contract with Anglo Ports.

  1. Did the government claim immunity from the Commonwealth Competition and Consumer Act 2010 in respect of its contract with Anglo Ports pursuant to Newcastle Port Corporation’s 2010 tender?

Answer: Please refer to the response to questions 135 and 152. [I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions. No compensation payments have been payable in respect to container movements at the Port of Newcastle.

  1. Does the government support a court determining whether a breach of the Commonwealth Competition and Consumer Act 2010 occurred when the government required Anglo Ports to pay a fee for container movements?

Answer: Please refer to the response to question 152. [I am advised that Newcastle Port Corporation did not conclude a contract with Anglo Ports.]

  1. When the government instructed Anglo Ports not to build a container terminal, on 30 August 2012 and 26 July 2013, but required payment of a fee for container movements based on a container terminal, did the government terminate the tender because Anglo Ports did not withdraw its proposal?

Answer: Please refer to the response to question 152. [I am advised that Newcastle Port Corporation did not conclude a contract with Anglo Ports.]

  1. Why did the government advise this Committee on 22 August 2014 that a container terminal at the Port of Newcastle was “uneconomic enterprise contrary to market demand” but fail to advise that it charges a fee for container movements?

Answer: Please refer to the response to question 50. [The Government’s comprehensive NSW Freight and Ports Strategy noted that the Port would continue to be NSW’s primary coal export and will continue to service bulk grain and other commodities.]

  1. Why does the government charge a fee for container movements at the Port of Newcastle?

Answer: Please refer to the response to question 47. [I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.]

  1. Would a container terminal at the Port of Newcastle be “an uneconomic enterprise contrary to market demand” if the government abolished its fee charged for container movements?

Answer: The Port of Newcastle is not prevented from developing container facilities.

  1. Can the private operator of the Port of Newcastle develop a container terminal if it wished to do so subject to paying the government’s fee charged for container movements above a threshold level?

Answer: The Port of Newcastle is not prevented from developing container facilities.

BUDGET ESTIMATES 2016-2017
Supplementary Questions General Purpose Standing Committee No. 2
ROADS, MARITIME AND FREIGHT
Hearing: Monday 29 August 2016
Answers: Thursday 22 September 2016

Questions from Hon Shaoquett Moselmane MLC (on behalf of the NSW Labor Opposition)

Newcastle Port Privatisation

  1. Did the Government intentionally mislead the people of Newcastle by not giving any information about the cap placed on the Port of Newcastle until the Newcastle Herald uncovered the Port Commitment Deed, yes or no?

Answer: These are matters for the Treasurer.

  1. Does the Government’s charge on containers at the Port of Newcastle render a container terminal an uneconomic enterprise?

Answer: These are matters for the Treasurer.

  1. Is economic development in northern NSW constrained by access to Port Botany container terminal?

Answer: These are matters for the Treasurer.

  1. Given that intermediate goods comprise 50 per cent of imported containers into Port Botany (source: NSW Ports Master Plan page 36) is this the reason why manufacturing firms locate as close as they can to Port Botany?

Answer: Decisions about locating or relocating a business to a regional area is a matter for individual businesses. Manufacturing firms set up their operations in areas where land is zoned for that purpose.

  1. Is the impediment to manufacturing firms locating in regional areas of NSW because they need direct, low-cost access to a container port?

Answer: Decisions about locating or relocating a business to a regional area is a matter for individual businesses. Manufacturing firms set up their operations in areas where land is zoned for that purpose.

  1. Does the Government’s charge on containers at the Port of Newcastle potentially breach Section 45 of the Commonwealth Competition and Consumer Act 2010?

Answer: These are matters for the Treasurer.

Port of Newcastle

  1. Was the Government excluded from the requirements of the Commonwealth Competition and Consumer Act 2010 in respect of Newcastle Port Corporation:

(a) Conducting a public tender in 2010 for a multi-purpose terminal, including a 1-million per year capacity container terminal, at the Port of Newcastle?

(b) Changing its requirements pursuant to its 2010 tender?

(c) Charging Anglo Ports Pty Ltd a fee for container movements at the Port of Newcastle, pursuant to its tender conducted in 2010?

Answer: This is a matter for the Treasurer.

  1. On what date did the Government inform the Australian Competition and Consumer Commission about Newcastle Port Corporation charging a fee for container movements at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

  1. Was the Government excluded from the requirements of the Commonwealth Competition and Consumer Act 2010 in respect of charging a fee for container movements at the Port of Newcastle after Newcastle Port Corporation terminated its negotiations with Anglo Ports?

Answer: This is a matter for the Treasurer.

  1. On what date did the Government claim immunity from the Commonwealth Competition and Consumer Act 2010 in respect of its charge on containers at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

  1. On what date did the Government impose a charge on containers at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

  1. Does the Government use its charge on containers at the Port of Newcastle to fund compensation payments to NSW Ports in respect of container movements at the Port of Newcastle?

(a) If not, what is the source of the funds for these payments?

Answer: This is a matter for the Treasurer.

  1. When was the Minister first made aware of the Port Commitment Port Botany and Port Kembla document?

Answer: This is a matter for the Treasurer.

  1. When was the Minister first made aware of the “contractual commitments” outlined in the Port Commitment Port Botany and Port Kembla document?

Answer: This is a matter for the Treasurer.

  1. The Minister recently stated that cross payments are required to be made between the operator of the Port of Newcastle and the operator of Port Botany and Kembla, does the Minister understand these cross payments to be lawful?

(a) Does the Minister accept these payments are of an anti-competitive nature?

Answer: This is a matter for the Treasurer.

  1. Why does the Government charge a fee for container movements at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

  1. Why did the Government keep secret its charging a fee for container movements at the Port of Newcastle until 10 August 2016?

Answer: This is a matter for the Treasurer.

  1. Why does the Government pay NSW Ports compensation in respect of container movements at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

  1. How does the Government define the term “container” in respect of charging a fee for container movements at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

  1. Does the Government charging a fee for container movements at the Port of Newcastle affect the commercial viability of developing a container terminal?

Answer: This is a matter for the Treasurer.

  1. Does the Government claim immunity from the Commonwealth Competition and Consumer Act 2010 in respect of charging a fee for container movements at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

  1. Did the Government claim immunity from the Commonwealth Competition and Consumer Act 2010 when it requested Newcastle Stevedores Consortium and Mayfield Development Corporation Pty Ltd to pay a fee for container movements at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

Freight

  1. Will the Government fund the cost of building the Western Sydney Freight Line?

Answer: I am advised: Transport for NSW is currently undertaking preliminary work to identify a corridor for the Western Sydney Freight Line for corridor protection. At this stage, the delivery model for its construction has not been determined.

  1. Will the Government pay the cost of connecting the Southern Sydney Freight Line to the Moorebank intermodal terminal site?

Answer: This is a matter for the Federal Government.

  1. What is the cost of road upgrades for the Moorebank intermodal terminal proposal?

Answer: The NSW Government has committed $3.4 million to progress studies into road infrastructure options to manage traffic impacts from the proposed Moorebank Intermodal Terminal and forecast growth in the broader Liverpool and Moorebank area.

  1. The Government promised $14 Million for initial funding for the Hexham to Fassifern rail bypass – what will this money be spent on?
  • Will the government commit to funding the construction of the by-pass?

Answer: I am advised: The Lower Hunter Freight Corridor was allocated $14 million in the 2016-17 NSW Budget for Planning and Pre-Construction. This includes extensive consultation with the community and key stakeholders, route investigation and identifying and securing potential environmental offset lands.

Questions from Dr Mehreen Faruqi MLC

Ports

Answer:

  1. Did the NSW Government claim it was not carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle during its long term lease?

Answer: This is a matter for the Treasurer.

  1. Did the NSW Government claim it was not carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Botany during its long term lease?

Answer: This is a matter for the Treasurer.

  1. Did the NSW Government claim it has never carried on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle?

Answer: This is a matter for the Treasurer.

Freight Rail

  1. What is the current percentage of freight that is moved by rail in NSW?

Answer: I am advised: As outlined in the November 2013 NSW Freight and Ports Strategy, 33 per cent of freight is moved by rail. The next iteration of the Freight and Ports Strategy is due in 2017.

  1. What is the current percentage of freight that is moved by rail from Port Botany?

Answer: I am advised: As outlined in the November 2013 NSW Freight and Ports Strategy, 33 per cent of freight is moved by rail. The next iteration of the Freight and Ports Strategy is due in 2017.

Moorebank Intermodal Freight Terminal (MIFT)

  1. What specific transport infrastructure is required to be built / enhanced to ameliorate current traffic congestion, background growth, and the introduction into East Liverpool of heavy truck movements into the East Liverpool bridge traffic?

(a) What is the cost of this specific transport infrastructure?

Answer: The NSW Government has committed $3.4 million to progress studies into road infrastructure options to manage traffic impacts from the proposed Moorebank Intermodal Terminal and forecast growth in the broader Liverpool and Moorebank area.

  1. What specific transport infrastructure is required through the Liverpool suburbs West of its CBD to meet the demands of the MIFT heavy vehicle transport to the Cumberland Highway as a major route to the freight’s final destination.?

Answer: The NSW Government has committed $3.4 million to progress studies into road infrastructure options to manage traffic impacts from the proposed Moorebank Intermodal Terminal and forecast growth in the broader Liverpool and Moorebank area.

  1. Are there plans to develop roads from the M5 freeway west of the Hume Highway through the Liverpool open flood zone spaces to the Cumberland Highway?

Answer: The NSW Government has committed $3.4 million to progress studies into road infrastructure options to manage traffic impacts from the proposed Moorebank Intermodal Terminal and forecast growth in the broader Liverpool and Moorebank area.

  1. The Planning Assessment Commission in its planning approvals has placed a condition for approval of MIFT operations beyond 250,000 TEU to not “exceed the capacity of the transport network” Is the only possible road transport solution for the proposed MIFT through the Liverpool Military Area?

(a) What is the current status of this land? Can its use be altered? If so, how?

Answer: This is a matter for the Minister for Planning.

 

LEGISLATIVE ASSEMBLY – 25 AUGUST 2016

3885 – PORT OF NEWCASTLE

Crakanthorp, Tim to The Treasurer, and Minister for Industrial Relations

1. Was the Government excluded from the requirements of the Commonwealth Competition and Consumer Act 2010 in respect of Newcastle Port Corporation:

a. Conducting a public tender in 2010 for a multi-purpose terminal, including a 1-million per year capacity container terminal, at the Port of Newcastle?

b. Changing its requirements pursuant to its 2010 tender?

c. Charging Anglo Ports Pty Ltd a fee for container movements at the Port of Newcastle, pursuant to its tender conducted in 2010?

2. On what date did the Government inform the Australian Competition and Consumer Commission about Newcastle Port Corporation charging a fee for container movements at the Port of Newcastle?

3. Was the Government excluded from the requirements of the Commonwealth Competition and Consumer Act 2010 in respect of charging a fee for container movements at the Port of Newcastle after Newcastle Port Corporation terminated its negotiations with Anglo Ports?

Answer: 28 September 2016.

 1) to (3) The Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

Legislative Council

Thursday, 11 August 2016

PORTS PRIVATISATION

 

The Hon. ADAM SEARLE (14:30):  My question without notice is directed to the Minister for Roads, Maritime and Freight. What is the Government’s response to community and business concerns expressed by Rod Sims, Chair of the Australian Competition and Consumer Commission, about the Government’s privatisation of ports Botany, Kembla and Newcastle and his repudiation of this approach as a tax on consumers?

The Hon. Greg Donnelly:  Be careful.

The Hon. DUNCAN GAY (Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council) (14:30):  I am always careful. In large part I answered this question earlier in the week. I probably gave too much information. Being the generous man that I am, I thought it was appropriate. I will go back over that information. When the Government sought to lease the ports, the arrangements were properly examined by the then chair of the commission. Mr Sims was not the commissioner at that time. I think it was his predecessor, Mr Samuel. I am seeing nods around the Chamber. The Government went through all proper processes to ensure that everything received the appropriate approval. Mr Sims has made public comments and it is within his purview to do that. I can only reiterate my answer from earlier in the week, which is that the Government went through the proper processes at the time.

NEW SOUTH WALES PORTS PRIVATISATION

The Hon. SHAOQUETT MOSELMANE (14:55):  My question without notice is directed to the Minister for Roads, Maritime and Freight. What is the Government’s response to comments by Australian Competition and Consumer Commission chairman Rod Sims, who said of the New South Wales ports privatisation, “… there’s no regulation on how they set the price of a monopoly. How dopey is that?”

The Hon. DUNCAN GAY (Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council) (14:55):  Despite the temptation to add comment to Mr Sim’s words, I point out that I am relying on the Hon. Shaoquett Moselmane as to the accuracy of the quote. Sometimes in the past that accuracy has not quite been there. I believe I have answered that in large part in response to a previous question. In fact, I believe I have answered all of it.

Legislative Council Hansard – 10 August 2016

PORT OF NEWCASTLE PRIVATISATION

The Hon. ADAM SEARLE (14:30):  My question without notice is directed to the Minister for Roads, Maritime and Freight. Following the release of the confidential Newcastle port commitment documents revealing the details of caps and penalties applying to container movements, will the Minister now admit that his Government’s port privatisation will restrict Newcastle’s economic development for the next 100 years?

The Hon. DUNCAN GAY (Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council) (14:30):  Will I admit that the Government’s port privatisation will restrict Newcastle’s economic development for the next 100 years? No, absolutely not—never ever. We have done more for Newcastle than any other government has in the last several decades. Gone is the day when the Labor Party got the votes out of Newcastle but left it to become a rust belt. We are working to encourage and fix up Newcastle. As the Government has consistently said, the leasing terms of Botany and Port Kembla do not prohibit the development of a container terminal at the Port of Newcastle. In fact, there is ample opportunity for increased container trade at the port.

This is the important thing that the Labor Party does not understand. The port transaction deeds do not trigger any cross-payments until a threshold container throughput is reached. That threshold is based on 30,000 containers each year, plus an extra 6 per cent growth in volume each year—and that 6 per cent compounds. Based on current growth rates, it is highly unlikely current container trade in Newcastle will reach the applicable threshold before such time as Newcastle is required to establish high-intensity container terminals to meet the forecast population and business needs of the Hunter.

Yearly trade at Newcastle is currently at a steady 9,000 containers. In other words, it would take a massive 230 per cent increase in container trade volume just to reach the 30,000 TEU threshold. That is where it is now. It is at 9,000 and it can go to 30,000. That is a 230 per cent increase to get to that threshold—and that still does not take into account the compounding 6 per cent growth allowed for each year.  Labor Party members have had their Cuisenaire rods out, but they have not been adding up properly.

The Hon. Greg Donnelly:  What rods?

The Hon. DUNCAN GAY:  Cuisenaire rods. It is what our grandfathers would have used to do arithmetic in days gone by. Applying the formula to the outer years gives the result that by 2030 the threshold at Newcastle will be approximately 80,000 boxes, by 2040 it will be 144,000 boxes, and by 2050 it will be almost 260,000 boxes. The Port of Newcastle will continue to be the primary coal export facility for New South Wales and will continue to diversify into bulk grain and other commodities, including fuel. The New South Wales Government engaged closely with the Australian Competition and Consumer Commission and other regulatory bodies as part of these transactions. Port Botany remains the key container facility for New South Wales for a range of logistical and commercial reasons. [Time expired.]

The Hon. ADAM SEARLE (14:34):  I ask a supplementary question. Given his answer, can the Minister elucidate on why the port commitment documents have a container terminal cap in the first place?

The Hon. DUNCAN GAY (Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council) (14:34):  I really appreciate that supplementary question—it is good to work together— because I had not reached the key part of my answer. About 85 per cent of the imported containers landing at Port Botany are distributed within 40 or 50 kilometres of the terminal gates, to warehouses, distribution centres and freight hubs in western and south-western Sydney. This is key. We are not running a cargo cult in New South Wales. If the stuff is intended to go into Sydney, it should come to Sydney. We are not going to pay people to clog up the M1 and the rail infrastructure between Newcastle and Sydney. We are not going to pay them, as some sort of inverse cargo cult, to send things up to Newcastle just for them to come back again.

That is something the Labor Party did. People will remember when it decided that shipments of cars would go to Port Kembla rather than Sydney. I was the shadow Minister at the time and—as a diligent shadow Minister—I found that there was a parking lot on Glebe Island. Those black BMWs that were shipped down to Port Kembla were then put on a truck and brought back to Sydney, because that is where they were going to be sold—to those rich Labor supporters in the eastern suburbs. That was the wrong thing to do.

What we need to do is develop Newcastle, and there is huge scope for development in niche areas, so that it can provide for the Hunter region. It is a great port and it will be even better—and it will become even better because we are making sensible, grown-up decisions in this State. We are not running cargo cults as the Labor Party did.

Legislative Council Notice Paper No. 66—Wednesday 10 August 2016

  1. Mr Searle to move—
  1. That General Purpose Standing Committee No. 2 inquire into and report on the privatisation of New South Wales ports, and in particular:

(a) the terms of the Port Commitment Deeds for Botany, Kembla and Newcastle,

(b) whether the privatisation of the New South Wales ports was structured to limit competition, or has that effect,

(c) whether anti-competitive restrictions have been imposed on the development of the Port of Newcastle as part of the sale strategy followed by the NSW Government,

(d) whether any agreement has been designed to restrict the development of container capacity at Newcastle by imposing a financial penalty that would make such a development economically unviable,

(e) the nature and effectiveness of port pricing regulatory arrangements and the impacts that these arrangements may have on port users, consumers and the economy, and

(f) any other related matter.

  1. That the committee report by 24 November 2016.

(Notice given 9 August 2016—expires Notice Paper No. 85)

LEGISLATIVE ASSEMBLY 4 August 2016

3686 – PORT OF NEWCASTLE

  

Crakanthorp, Tim to the Treasurer, and Minister for Industrial Relations

  1. When was the Treasurer first made aware of the Port Commitment Port Botany and Port Kembla document?
  2. When was the Treasurer first made aware of the “contractual commitments” outlined in the Port Commitment Port Botany and Port Kembla document?
  3. When did the Government first advise the Australian Competition and Consumer Commission (ACCC) of the Port Commitment Port Botany and Port Kembla document and its content?
  4. When did the Government first advise the ACCC of the “contractual commitments” outline in the Port Commitment Port Botany and Port Kembla document?
  5. Now that the Port Commitment Port Botany and Port Kembla has been released into the public arena, will the Treasurer now indicate whether the Port Commitment Terms in the document have been agreed to?
  6. The Port Commitment Port Botany and Port Kembla document outlines that after the 30,000 containers have passed through the Port of Newcastle compensation must be paid to the Government which is then provided to the private operator of Port Botany and Port Kembla, can the Treasurer confirm this is correct?
  7. The Port Commitment Port Botany and Port Kembla document outlines that approximately $1 million in compensation per ship has to be paid to the Government which is then provided to the private operator of Port Botany and Port Kembla, after 30,000 containers have passed through the Port of Newcastle, can the Treasurer confirm this is correct?
  8. Is there agreement between the Government and the ACCC that the Government was carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle, when the government-owned Newcastle Port Corporation was the port’s operator?
  9. Is there agreement between the Government and the ACCC about the date upon which the NSW Government ceased carrying on a business for the purposes of the Commonwealth Competition and Consumer Act 2010 at the Port of Newcastle, when the government-owned Newcastle Port Corporation was the port’s operator?

(a) If so, what is that date?

Answer 7 September 2016-

(1) to (2) As you are aware the Government was a counterparty to the Port Botany and Port Kembla lease, and the Port of Newcastle lease, which occurred in 2013 and 2014 respectively.

(3) to (4) I am advised the Government’s transaction team engaged extensively with the ACCC from the early stages of all the port transactions regarding the competition and regulatory framework supporting the transactions.

(5) to (7) Please see response by my colleague, Minister Gay, available on the Legislative Council’s Hansard.

(8) to (9) I am advised that the extent to which the Government carries on a business for the purposes of the Competition and Consumer Act 2010 is a matter of law not agreement

LEGISLATIVE ASSEMBLY 4 August 2016

 3687 – PORT OF NEWCASTLE

 

 Crakanthorp, Tim to the Premier, and Minister for Western Sydney

  1. When was the Premier first made aware of the Port Commitment Port Botany and Port Kembla document and its content?
  2. When was the Premier first made aware of the ‘contractual commitments’ outlined in the Port Commitment Port Botany and Port Kembla document?
  3. When did the Government first advise the Australian Competition and Consumer Commission (ACCC) of the Port Commitment Port Botany and Port Kembla document and its content?
  4. When did the Government first advise the ACCC of the “contractual commitments” outlined in the Port Commitment Port Botany and Port Kembla document?
  5. The Port Commitment Port Botany and Port Kembla document outlines that after the 30,000 containers have passed through the Port of Newcastle compensation must be paid to the Government which is then provided to the private operator of Port Botany and Port Kembla, can the Premier confirm this is correct?
  6. The Port Commitment Port Botany and Port Kembla document outlines that approximately $1 million in compensation per ship has to be paid to the Government which is then provided to the private operator of Port Botany and Port Kembla, after 30,000 containers have passed through the Port of Newcastle, can the Premier confirm this is correct?

Answer 8 September 2016

It is appropriate for the Treasurer to respond to questions relating to the Port Botany and Port Kembla document. I, therefore, refer you to the Treasurer’s response to QoN 3686.

 

Hansard

LEGISLATIVE ASSEMBLY

3 August 2016

NEWCASTLE CONTAINER TERMINAL

Mr TIM CRAKANTHORP ( Newcastle ) ( 15:35 ): I move:

That the General Business Notice of Motion (General Notice) given by me this day [Newcastle Container Terminal] have precedence on Thursday 4 August 2016.

The House should consider my motion because of the huge impact that dodgy port privatisations will have not only on the people of Newcastle and the Hunter but also on all the people of New South Wales. Since my first day in this place I have been working to get answers from this Liberal Government on the detail of the dodgy deal done to privatise the Port of Newcastle. It is a dodgy deal that penalises the Port of Newcastle for competing against Port Botany and Port Kembla for shipping container trade for close to the next 100 years.

The SPEAKER: Order! Government members will cease interjecting or I will grant the member a further five minutes.

Mr TIM CRAKANTHORP: Please do. I have asked 37 questions in Parliament about this matter, only to be given non-answers, redirections and contradictions. In total, 160 questions have been asked about this issue and ignored.

The SPEAKER: Order! Opposition members will cease interjecting. They are not assisting the member.

Mr TIM CRAKANTHORP: This Government has been avoiding questions for long enough. We now have some answers in the strictly confidential port document exposed by the Newcastle Herald. It explains that the operator of any future Newcastle container terminal will have to pay compensation to the Government, Port Kembla and Port Botany. It states:

The State of New South Wales has made contractual commitments to the private lessee of Port Botany and Port Kembla to make certain payments to New South Wales ports in respect of future container capacity development for the Port of Newcastle.

It is no wonder that Australian Competition and Consumer Commission Chairman Rod Sims says that the privatisation of New South Wales ports was designed to limit competition and, having proceeded without any pricing regulation, it is a failure he regards as “dopey”. This document reveals that after 30,000 containers, or three ships, the Port of Newcastle must pay $1 million per ship in compensation. That would make any container capacity in Newcastle unviable. This Government is robbing Newcastle blind. It is robbing us of jobs and opportunity for investment and that is why we are calling for a parliamentary inquiry into this issue. The Premier was Treasurer when he sold those ports and he has his fingerprints all over this deal. He needs to step up and tell the truth. The only way that the people of Newcastle will get the truth about how much they are being ripped off by this Government is through a parliamentary inquiry. [Time expired]

The SPEAKER: The question is that the notice of motion standing in the name of the member for Drummoyne have precedence tomorrow on Thursday 4 August 2016.

The House divided.

Ayes49

Noes34

Majority15

LEGISLATIVE ASSEMBLY 2 August 2016

 

PORT OF NEWCASTLE

Mr TIM CRAKANTHORP ( Newcastle ) ( 13:07 ): Since October 2014 when I was elected to this Parliament I have been working to obtain answers from this Liberal Government about the detail of the dodgy deal done to privatise Newcastle port. That dodgy deal penalises the Port of Newcastle if it competes against other privatised ports in the State in relation to shipping containers coming into Newcastle. I have asked 37 questions in Parliament about this issue only to receive non-answers, redirection and contradictory responses. In total, 160 questions have been asked and ignored. This Government has been lying through its teeth for a long time, but now we have the answers.

The Newcastle Herald has exposed this strictly confidential port commitment in a document that explains how the operator of any future Newcastle container terminal will have to pay compensation to the government, and ultimately to Port Botany and Port Kembla. The document states: “The State of New South Wales has made contractual commitments to the private lessee of Port Botany and Port Kembla to make certain payments to New South Wales ports in respect of future container capacity development at the Port of Newcastle”. This document reveals that Newcastle will have to pay compensation of more than $1 million per ship to rival ports if it moves more than 30,000 containers per year. That amounts to only three ships before payments have to be made.

What was the Treasurer’s response to this dodgy deal? It has been to provide more non-answers, more redirections, and more contradictory statements. It is outrageous that the Treasurer has failed to acknowledge the dodgy deal that the Government has done to the detriment of the people of Newcastle, but it is not surprising given this Government’s past behaviour. On face value, this dodgy deal could rob Newcastle of jobs, investment and opportunities. The Government would have the Parliament and my constituents believe that it is trying to revive Newcastle and to make it a world-class city, but it is simply robbing us blind. Not only has it given the job of manufacturing the light rail components to Spain, closed down regional State government offices, and continued to slash and burn TAFE to the ground, but it has also destroyed future jobs, industry and opportunities in Newcastle.

Newcastle is home to a major port that could be developed as a container terminal, which would supercharge local job opportunities, improve linkages across the State, and provide new commercial opportunities. This document demonstrates that the privatisation process includes provisions designed to restrict the development of container capacity in Newcastle by imposing a financial penalty that would make such a development uneconomical. I was concerned when I read this document because it is designed to present a serious obstacle to the development of a container terminal and to prevent jobs creation in Newcastle. It will also have an anti‑competitive effect on the provision of port services in New South Wales.

The Opposition is calling for a parliamentary inquiry into this secret government agreement because it penalises the Port of Newcastle for competing against other ports in the State. We need an inquiry into all the terms of the deal so that the public is fully aware of any other details the Government has hidden. It is time that the Government set the record straight. The only way that the people will know how they are being ripped off by Mike Baird is if we have a parliamentary inquiry. Mike Baird was the Treasurer when the ports were sold. Were these secret agreements drafted by his team? He must step up, face the music and be clear about what happened.

Mike Baird would rather treat Novocastrians as mushrooms—forever kept in the dark. We will not accept that, nor should we. This dodgy deal is an outrage, and it has Mike Baird’s fingerprints all over it. The Premier should tell the people of Newcastle the truth, and establishing a parliamentary inquiry is the only way to ensure that happens. Newcastle has been artificially restrained for the benefit of the private owners of Port Kembla and Port Botany. This is an absolute disgrace.

Mr GARETH WARD ( Kiama ) ( 13:12 ): I will not be lectured to by the Labor Party about dodgy privatisation deals. It was the Labor Party that shut down Parliament to stop an inquiry into its sale of the State’s electricity generators in the dying days of its last term in government. The Labor Government sold NSW Lotteries and the electricity retailers without any recourse to the public. The member for Newcastle continues to oppose a transaction that shifted old capital from one side of the balance sheet to the other so that the proceeds could be reinvested in his community. He opposed and voted against investment in his community. He talks in this place about dividing communities while supporting the retention of the rail line running through the middle of Newcastle and voting in his capacity as a local councillor to extend the light rail. The member for Newcastle is a basket of contradictions, and what we have witnessed today demonstrates that he is a basket case in action.

 

LEGISLATIVE COUNCIL, 23 JUNE 2016

1064 – Treasurer – PORT OF NEWCASTLE

The Hon. Lynda Jane Voltz to the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council representing the Treasurer, and Minister for Industrial Relations

            1. What are the terms and conditions for the Government undertaking to pay compensation to NSW Ports?
            1. What is the date that the Government undertook to pay compensation to NSW Ports?
            1. What is the amount of compensation the Government undertook to pay NSW Ports?
            1. What is the Government’s source of funds for paying compensation to NSW Ports?
            1. Does the Government’s cap on numbers at the Port of Newcastle mean the number of containers for which the Government does not apply a charge? If not, what does the cap on numbers mean?
            1. Did the Government undertake to pay compensation to NSW Ports for loss of business when container ships use the Port of Newcastle instead of Port Botany?
            1. What is the date nominated by the Government that Newcastle Port Corporation ceased carrying on a business for the purpose of the Commonwealth Competition and Consumer Act 2010?
            1. Did Newcastle Port Corporation amend the terms of its tender conducted in 2010 for a multi-purpose terminal at the Port of Newcastle? If so, how was the tender amended and on what dates?
            1. Did Newcastle Port Corporation amend the terms of this tender to include a charge on containers? If so, on what date was this amendment made?
            1. Did Newcastle Port Corporation advise Anglo Ports Pty Ltd of any amendments to the terms of the tender it conducted in 2010 for a multi-purpose terminal at the Port of Newcastle and for which this company was the selected tenderer? If so, on what date or dates?
Answer –
1.     to 6. I am advised this information is contained within previous answers, available on the NSW Parliament website.
7. I am advised there has been no nomination.
8 to 10. I am advised this information is commercial in confidence.
Question asked on 23 June 2016 (session 56-1) and published in Questions & Answers Paper No. 65
Answer received on 28 July 2016 and to be printed in a Questions & Answers Paper on 9 August 2016

2802—PORT OF NEWCASTLE CAP

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

            1. Did the Government make a cap on numbers at the Port of Newcastle a rule for a scoping study into leasing Port Botany?
            2. Did the Government appoint Morgan Stanley in December 2011 to undertake a scoping study into leasing Port Botany?
            3. Did the Government include a cap on numbers at the Port of Newcastle in the negotiations with Anglo Ports Pty Ltd pursuant to a tender conducted by Newcastle Port Corporation in 2010?
            4. Does the cap on numbers at the Port of Newcastle conform to the Competition and Consumer Act 2010?

20 April 2016

Answer—

(1) to (4) There is material already available on the NSW Parliament website that addresses these questions, including:

            • my response to questions   24 and 25 in Budget Estimates 2015: Answers to Supplementary Questions General Purpose Standing Committee 1, dated 3 September 2015
            • the answer to question LA 2191 -Newcastle Port- published in Questions and Answers Paper No. 61, dated 22 March 2016
            • the answer to question LA 0765 – Cap on Container Movement- published in Questions and Answers Paper No. 26 dated 8 September 2015
            • the answers to question LC 0001 – Port of Newcastle- published in Questions and Answers Paper No. 12, dated 23 June 2015
            • the answers to question LA 6677 – Port of Newcastle and Port Botany Leases – published in Question and Answers Paper No. 24, dated 2 March 2015.

LEGISLATIVE ASSEMBLY 18 FEBRUARY 2016

2326—PORT OF NEWCASTLE

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

What is the cap on numbers at the Port of Newcastle?

Answer 23 March 2016

Please see my anser to this question in Budget Estimates 2015: Answers to Supplementary Questions General Purpose Standing Committee 1, dated 3 September and available on the NSW Parliament website.

Ms Berejiklian’s answer on 29 September 2015 was:

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?

b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?

c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?

d. When were these arrangements agreed?

Answer:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

LEGISLATIVE ASSEMBLY – 16 February 2016

2191 – Newcastle Port

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

            1. When did the Competition and Consumer Act 2010 stop applying to the Government in respect to the operation of the Port of Newcastle?
            1. Do the Port Commitment Deeds include a fee on container throughput at Newcastle Port under certain specified conditions?

Answer 22 March 2016:

1.The operation of the Port of Newcastle is the responsibility of the private sector lessee, Port of Newcastle Investments.

2. Please refer to my response to questions 24 & 25 at Budget Estimates 2015, Answers to Supplementary Questions, General Purpose Standing Committee 1, 9 am, Thursday 3 September 2015.

* The answer Ms Berejiklian gave to questions 24 and 25 was the same for both: “There is no legislated cap on the number of containers that can travel through the Port of Newcastle.”

Comment:

Q: When did the Competition and Consumer Act 2010 stop applying to the Government in respect to the operation of the Port of Newcastle?

The answer is the date that Newcastle Port Corporation ceased carrying on a business for the purpose of this Act.

Q: Do the Port Commitment Deeds include a fee on container throughput at Newcastle Port under certain specified conditions?

This “Port Commitment” document reveals the contractual arrangement.

LEGISLATIVE ASSEMBLY 19 November 2015

2107—AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

1. Did the Treasury, or any entity of which the Treasurer is a shareholder, receive a request for information from the Australian Competition and Consumer Commission in 2015?

2. Did the Treasury, or any entity of which the Treasurer is a shareholder, receive a notice from the Australian Competition and Consumer Commission under section 155 of the Competition and Consumer Act 2010 in 2015?

18 December 2015

Answer—

As a normal part of my role as Treasurer I receive correspondence from a variety of organisations.

For information regarding correspondence to individual entities, you may wish to contact them directly.

Comment: The “Competition and Consumer Act 2010” (CCA) applied to the government when it was leasing Port Botany, Port Kembla and the Port of Newcastle unless the government claimed immunity.

A government may claim immunity from the CCA in respect of a public asset while it is privatising that asset. The government has not disclosed that it claimed immunity from the CCA when leasing the ports. It is presumed the government did not claim immunity.

Section 155 of the CCA gives the ACCC authority to require provision of information where a breach of the CCA may have occurred.

The ACCC is able to clarify whether it sought information from the government under section 155.

LEGISLATIVE ASSEMBLY 29 October 2015

1848—NEWCASTLE PORT

Mr Tim Crakanthorp to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

1. When did the Competition and Consumer Act 2010 stop applying to the Government in respect to the operation of the Port of Newcastle?

2. Do the Port Commitment Deeds include a fee on container throughput at Newcastle Port under certain specified conditions?

Answer 4 December 2015:

I am advised :

This is a matter for the Treasurer.

Comment:

1. The government and the ACCC have not disclosed when the “Competition and Consumer Act 2010” (CCA) stopped applying to the government in relation to the businesses the government was “carrying on” at Port Botany, Port Kembla and the Port of Newcastle.

The CCA applies to governments to the extent they “carry on a business”. The NSW government was “carrying on” businesses at the three ports. The CCA stopped applying when the government stopped “carrying on” those businesses for the purposes of the CCA. It is presumed that the CCA stopped applying to the government in respect of Port Botany and Port Kembla, when they were leased on 12 April 2014; and, in respect of the Port of Newcastle, when Port of Newcastle Investments became the port operator on 30 May 2014, after becoming the leaseholder on 30 April 2014.

However, a government that is “carrying on” a business may claim immunity from the CCA when it is in the process of privatising that business. The government and the ACCC have not disclosed that the government claimed immunity from the CCA in respect of the ports leases. It is presumed that the government did not claim immunity.

2. The Port Commitment Deeds “include a fee on container throughput at Newcastle Port under certain specified conditions” as disclosed in this document.

The government disclosed its unlegislated “cap on numbers” at the Port of Newcastle on 17 October 2013. This “cap on numbers” is presumed to be included in the Port Commitment Deeds. The Hon. Gladys Berejiklian MP disclosed on 9 June 2015 that the terms of the government’s compensation payment to NSW Ports are included in the Port Commitment Deeds:

Question 1.

(a) Is compensation payable to the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle?

(b) If so, what is the annual threshold?

(c) What is the amount of compensation per twenty-foot equivalent unit (TEU)?

Answer:

(a) The terms of the Port Botany transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port Botany lease is a public document.

(b) The details of the container arrangements in the Port Commitment Deeds are commercial in confidence.

The source of funds for paying compensation to NSW Ports is a fee applied to the Port of Newcastle operator as disclosed in this document.

LEGISLATIVE ASSEMBLY 10 September 2015

1337—PRIVATE OPERATOR OF PORT BOTANY

Mr Tim Crakanthorp to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

Is compensation payable to the private operator of Port Botany for container throughput at Newcastle port in excess of a cap?

15 October 2015

Answer

This is a matter for the Treasurer.

LEGISLATIVE ASSEMBLY 15 October 2015

1612—PRIVATE OPERATOR OF PORT BOTANY

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

Is compensation payable to the private operator of Port Botany for container throughput at Newcastle port in excess of a cap?

16 November 2015

Answer:

Please refer to my response to questions 24 & 25 at Budget Estimates 2015 Answers to Supplementary Questions, General Purpose Standing Committee 1, 9 am, Thursday 3 September 2015.

PORTS ISSUES

24. Has the NSW Government imposed any restrictions on the movement of containers through the Port of Newcastle?

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Answer 24-25:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

Comment: Container terminal policy in NSW is for the state government to compensate NSW Ports every time a container ship visits the Port of Newcastle that otherwise would visit Port Botany. The government sees no need to put any funds in place because there is no container terminal at the Port of Newcastle and the government’s unlegislated “cap on numbers” will not be extended.

This “cap on numbers” is 30,000 container movements per year as at 1 July 2013 increasing by six per cent a year. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss.

This unlegislated “cap on numbers” is confidential and cannot be examined for lawfulness, enforceability and benefit. It may have been imposed when former Treasurer, The Hon. Mike Baird MP, announced the appointment of Morgan Stanley as the government’s financial advisor for leasing Port Botany on 14 December 2011.

A “cap on numbers” was a “rule” the government set for a Port Botany lease “Scoping Study”, as disclosed by The Hon. Duncan Gay MLC on 17 October 2013. Mr Gay disclosed that the government did not envisage a need to put any funds in place to pay compensation to the Port Botany leaseholder when he answered this question from The Hon. Adam Searle MLC:

My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

NSW Treasurer, The Hon. Gladys Berejiklian MP, does not consider the unlegislated “cap on numbers” to be a “disincentive or obstacle” to building a container terminal at the Port of Newcastle. At a NSW Budget Estimates hearing on 3 September 2015, Ms Berejiklian was asked:

Question 29: Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer 29 September 2015:

I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

Ms Berejiklian’s disclosure overturns government policy as announced by Mr Baird on 27 July 2012:

The development of intermodal terminals across South and West Sydney, [sic] the Government’s freight strategy to be released later in 2012 would seek to develop Port Kembla as the logical next long term tranche of container capacity after Port Botany.

In February 2013, government policy was described by Newcastle Port Corporation in the following terms:

In July 2012 the NSW Government announced that Port Kembla will be the logical next long-term tranche of container capacity after Port Botany. In accordance with the government’s announcement, subject to any relevant government approvals, any future container terminal development at Newcastle will occur only once Port Botany and Port Kembla are fully developed and developable handling capacity is fully utilised at both Port Botany and Port Kembla. (Newcastle Port Corporation, Draft Strategic Development Plan for the Port of Newcastle, February 2013, page 23)

In statement to media on 1 May 2014, NSW Treasury described government policy in the following terms:

The [Port of Newcastle] lease has been drawn up in accordance with the current NSW Government freight policy of Port Botany being the first container facility priority, with Port Kembla designated to take the overflow once Port Botany is full. Newcastle will be further developed once Port Kembla is full. Newcastle container throughput is, in the meantime, fully able to grow organically.

Ms Berejiklian disclosed that a container terminal can be built at the Port of Newcastle at any time, including immediately, if Port of Newcastle Investments “wished to do so”.

There is no mention of an unlegislated “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012; and, the “Discussion Paper” dated February 2012.

BUDGET ESTIMATES 2015-2016
Supplementary Questions
General Purpose Standing Committee No. 1 Treasury, Industrial Relations
Thursday 3 September 2015
Answers 29 September 2015

https://www.parliament.nsw.gov.au/lcdocs/other/7658/150929%20TREASURER%20BE%20-%20Answers%20to%20Supplementary%20Questions.pdf

PORTS ISSUES

 

29. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

24. Has the NSW Government imposed any restrictions on the movement of containers through the Port of Newcastle?

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Answer 24-25: There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

26. In the interest of transparency, will you release the Port Commitment Deeds that set out details of arrangements for containers?

Answer: The Port Commitment Deeds are commercial in confidence documents.

27. Now that the port transactions are concluded, will you release the Scoping Study that was undertaken ahead of the transaction for the three ports?

Answer: The Scoping Study documents remain Cabinet-in-confidence. The Government, and previous Governments, have not released Scoping Studies for previous transactions.

28. Minister Gay has said: “The only time an extension is allowed is when a specific number is reached and tripped in Port Botany and Port Kembla.” What is the number? For Port Kembla? For Port Botany?

Answer:

28: See http://freight.transport.nsw.gov.au/strategy/

a. How much money was raised by the sale/lease of Newcastle port?
b. What was money spent on?
c. How much has gone into consolidated revenue?
d. How much has been allocated to, or spent in, the Newcastle electorate?

Answer 28 (a) – (d): For publicly available information, see http://www.transport.nsw.gov.au/media-releases/transforming-newcastle-port-lease-securesfunds-revitalisation

Note: This media release is now found at https://www.transport.nsw.gov.au/newsroom-and-events/media-releases/transforming-newcastle-port-lease-secures-funds-for

29. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

30. Has the NSW Government entered into any agreements that create a disincentive or obstacle to increase the number of containers that pass through Newcastle?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

31. Has the NSW Government entered into any arrangement [sic] that create a financial penalty if the number of containers moved through the Port of Newcastle exceeds a set threshold?

a. If so, what is the threshold?

Answer:  Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

32. Is the leaseholder of Port Botany entitled to receive a payment should the number of containers moved through the Port of Newcastle exceed a set figure?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

33. If so, what is the payment and who pays it?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can move through the Port of Newcastle.]

34. Do the Port Commitment Deeds establish any limitations or restrictions on the operation of Port Kembla or the Port of Newcastle?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

35. Will you release the Port Commitment Deeds for the port transactions?

Answer: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

36. Will you release the Scoping Study for the port transactions?

Answer: Please refer to answer 27. [The Scoping Study documents remain Cabinet-in-confidence. The Government, and previous Governments, have not released Scoping Studies for previous transactions.]

OMISSION TO ANSWER QUESTION ON NOTICE
GENERAL PURPOSE STANDING COMMITTEE NO. 1
Thursday 3 September 2015
Answer 29 September 2015

The Hon. Gladys Berejiklian MP omitted to answer a “Question On Notice” asked by The Hon. Adam Searle MLC at the Budget Estimates hearing on 3 September 2015. The question concerned any restrictions on container throughput at the Port of Newcastle in lease contracts. The words struck out did not appear in the answer provided on 29 September 2015, but did appear in the original transcript on 3 September 2015.

The Hon. ADAM SEARLE: When you sold the Port of Newcastle was a cap put on the number of containers that can be moved through the Port of Newcastle?

Ms GLADYS BEREJIKLIAN: I understand there is no legislated container cap.

The Hon. ADAM SEARLE: So there is no cap on container movements there?

Ms GLADYS BEREJIKLIAN: There is no legislated container cap.

The Hon. ADAM SEARLE: Is there any other restriction in the sale of the lease documents?

Ms GLADYS BEREJIKLIAN: I am not aware of that.

The Hon. ADAM SEARLE: What about in the contracts?

Ms GLADYS BEREJIKLIAN: I am not aware.

The Hon. ADAM SEARLE: Will you take that on notice?

Ms GLADYS BEREJIKLIAN: I am happy to take that on notice.

The Hon. ADAM SEARLE: You are aware of the $20 20-foot equivalent container charge at the Port Botany on throughput that was in place for a number of years?

Ms GLADYS BEREJIKLIAN: I will ask Mr Spencer to answer your questions in this regard.

The Hon. ADAM SEARLE: Mr Spencer, are you aware of that container tax, if I can put it that way?

Mr SPENCER: For clarification, was it what was called a port container charge?

The Hon. ADAM SEARLE: I think it was a $20 charge on every 20-foot equivalent unit. It was originally to build a truck marshalling yard but when the marshalling was constructed it remained in place. At the moment, the value, I think, over the life of the lease would be in excess of the price that was achieved for the lease of Port Botany. The Government did not talk about that when the sale of the lease went through. Will the Minister confirm her understanding that that is still in place and is still being charged?

Mr SPENCER*: To provide an accurate answer, I will take that question on notice.

(*TIMOTHY JOHN SPENCER, Deputy Secretary, Commercial Group, NSW Treasury)

Answer:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

The Port Botany Landside Improvement Strategy function now rests with Transport for NSW and is funded from TfNSW’s annual allocation from the State Budget.

BUDGET ESTIMATES 2015-2016
Supplementary Questions
General Purpose Standing Committee No. 2 Roads, Maritime and Freight
Monday 31 August 2015
Answers: Thursday 24 September 2015

Questions from The Hon Shaoquett Moselmane MLC [on behalf of the NSW Labor Opposition]

Question:

31. I refer to the comments you made in the Legislative Council on 17 October 2013 about the movement of containers through the Port of Newcastle that, “part of the lease and the rationalisation was a cap on numbers there.” What are the arrangements that cap, inhibit or restrict the number of containers that pass through the Port of Newcastle?

Answer:

I am advised:

There is no legislated container cap at Port of Newcastle. The Government fully expects that organic growth of containers at Newcastle will continue.

Comment: Container terminal policy in NSW is for the state government to compensate NSW Ports every time a container ship visits the Port of Newcastle that otherwise would visit Port Botany. The government sees no need to put any funds in place because there is no container terminal at the Port of Newcastle and the government’s unlegislated “cap on numbers” will not be extended.

This “cap on numbers” is 30,000 container movements per year, increasing by six per cent per year as disclosed in this document. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss

Question:

32. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer:

I am advised:

The port leases do not seek to constrain trade, but aim to incentivise trade and port development in a manner that is consistent with the Freight and Ports Strategy.

Comment: See comment 31. The “NSW Freight and Ports Strategy” is dated November 2013. This Strategy reflects the government’s “rule” of an unlegislated “cap on numbers” at the Port of Newcastle. There is no mention in this Strategy of an unlegislated “cap on numbers” or a fee for exceeding it.

Question

33.

Has the NSW Government entered into any agreements that create a disincentive or obstacle to increase the number of containers that pass through Newcastle?

Answer:

The port leases do not seek to constrain trade, but aim to incentivise trade and port development in a manner that is consistent with the Freight and Ports Strategy.

Comment: See comment 31.

Question:

34. I refer to your comments in the Legislative Council on 17 October 2013 about containers and the Port of Newcastle, that “the only time an extension is allowed is when a specific number is reached and tripped in Port Botany and Port Kembla.”

(a) What is the number for Port Kembla?

(b) What is the number for Port Botany?

Answer:

The transaction arrangements that the State entered into with the successful bidders for Port Botany and Kembla and the Port of Newcastle reflect the Freight and Ports Strategy.

Comment: NSW Treasurer, The Hon. Gladys Berejiklian MP, does not consider the unlegislated “cap on numbers” to be a “disincentive or obstacle” to building a container terminal at the Port of Newcastle. At a NSW Budget Estimates hearing on 3 September 2015, Ms Berejiklian was asked:

Question 29: Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer 29 September 2015:

I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

Ms Berejiklian’s disclosure overturns government policy as announced by Mr Baird on 27 July 2012:

The development of intermodal terminals across South and West Sydney, [sic] the Government’s freight strategy to be released later in 2012 would seek to develop Port Kembla as the logical next long term tranche of container capacity after Port Botany.

In February 2013, government policy was described by Newcastle Port Corporation in the following terms:

In July 2012 the NSW Government announced that Port Kembla will be the logical next long-term tranche of container capacity after Port Botany. In accordance with the government’s announcement, subject to any relevant government approvals, any future container terminal development at Newcastle will occur only once Port Botany and Port Kembla are fully developed and developable handling capacity is fully utilised at both Port Botany and Port Kembla. (Newcastle Port Corporation, Draft Strategic Development Plan for the Port of Newcastle, February 2013, page 23)

In statement to media on 1 May 2014, NSW Treasury described government policy in the following terms:

The [Port of Newcastle] lease has been drawn up in accordance with the current NSW Government freight policy of Port Botany being the first container facility priority, with Port Kembla designated to take the overflow once Port Botany is full. Newcastle will be further developed once Port Kembla is full. Newcastle container throughput is, in the meantime, fully able to grow organically.

Ms Berejiklian disclosed that a container terminal can be built at the Port of Newcastle at any time, including immediately, if Port of Newcastle Investments “wished to do so”.

There is no mention of an unlegislated “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012; and, the “Discussion Paper” dated February 2012.

Questions from Dr Mehreen Faruqi MLC

Question:

179. Two-thirds of the projects in the NSW Freight and Ports Strategy Infrastructure Program are road-freight projects, and only 1/3 are rail freight. Moreover, 73% of the fully-funded projects are road-freight. How does the government intend to reach the target of 28% rail share of containers moved through port? (a) Is this still the target? (b) Will the government reach the target in this term of government?

Answer:

I am advised:

The Government maintains its 28% rail share target and since November 2014, the highest volumes of rail freight have been handled at Port Botany in five years.

The Cargo Movement Coordination Centre, established in 2014 in accordance with the objectives in the NSW Freight and Ports Strategy, has been working to increase freight rail by addressing issues around reliability, available intermodal terminal capacity, transit time and cost.

The 2015-16 Budget provides $6 million for the Airport East Precinct project, which includes removal of the General Holmes Drive level crossing on the Port Botany freight rail line to allow freight trains to travel at increased speeds. The project will also involve building twin rail bridges over the Wentworth Avenue underpass, which will allow for future duplication of the rail line.

Customer education about the advantages of rail has led to the transition of major freight customers from road to rail. This includes Kmart, Bunnings and Officeworks, and the movement of Visy shipments from Melbourne to Sydney.

Capacity at intermodal terminals drives increased demand for rail over road. The NSW Government policy is to identify and protect land and freight corridors for future intermodal capacity.

Comment: Increasing the rail component of container transportation requires completion of the following projects:

Stages 2 and 3 of the Northern Sydney Freight Corridor (NSFC), costing $5 billion, would provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield, which is required by 2028 to meet predicted freight demand. There are no funds available for building stages 2 and 3 of the NSFC. Presumably, these stages will not be built. An option for the government to increase freight capacity on the rail line between Newcastle and Strathfield is to reduce passenger services.

The Western Sydney Freight Line, between Chullora and Eastern Creek, costing about $1 billion, is required to rail containers between Port Botany and Eastern Creek, which is the proposed site for an intermodal terminal. However, there are no funds available for building the Western Sydney Freight Line. Presumably, this line will not be built.

A new rail freight line is required between Port Botany and Mascot. Funding for this line has not been disclosed.

In February 2014 the NSW Bureau of Transport Statistics released detailed forecasts of container movements to and from Port Botany. These estimates were in line with estimates by NSW Ports. NSW Ports estimated container movements by truck between the port and western Sydney to increase from 2 million in 2014 to 5.4 million in 2045. Movement of containers by rail is estimated to increase from 0.3 million in 2014 to 3 million by 2045. No analysis is provided for how the increase in container transportation by rail will be achieved.

The NSW government had not disclosed the economic implications of trucking containers between Port Botany and western Sydney destinations. In a report dated 3 June 2011, Deloitte Access Economics evaluated the cost of truck transportation of freight compared with rail transportation. This report indicates that the full real cost of freight transportation by road is not recovered.

The RTA reports that a container truck using the M5 East westbound tunnel is the equivalent of six passenger cars and the equivalent of three passenger cars using the eastbound tunnel. Container trucks are 2 per cent of vehicle use on the M5 East (NSW Ports). In the eastbound tunnel, this equates to 6 per cent of capacity and in the westbound tunnel it equates to 3 per cent of capacity. In 2045, when container trucks will require 4 per cent of current M5 East capacity, this will equate to 12 per cent of the current westbound tunnel and 6 per cent of the eastbound tunnel.

Question:

180. What is the status of the Inland Rail project? What is the NSW Government doing to make sure this important freight connection is built?

(a) The Inland Rail website says an Implementation Group will provide the delivery plan and business case for Inland Rail to the federal government by mid-2015. Is this project on track?

(b) Given that most of this will be constructed in NSW, has the NSW government seen the plan and business case?

Answer:

I am advised:

(a) On 11 September 2015, the Inland Rail Implementation Group’s Chair, the Hon John Anderson AO delivered the Final Report on the proposed Melbourne to Brisbane Inland Rail and the Australian Rail Track Corporation’s 2015 Inland Rail Programme Business Case to the Hon. Warren Truss, MP, Deputy Prime Minister and Minister for Infrastructure and Regional Development.

Transport for NSW’s Secretary is a member of the Australian Government’s Inland Rail Implementation Group and Transport for NSW has been represented at meetings to date.

Transport for NSW has now established a NSW Interagency Steering Committee to provide a whole-of-government position to facilitate advancing the Inland Rail.

(b) Yes.

Comment: A rail freight bypass of Sydney – between the Port of Newcastle and Glenfield – would compete for freight between Melbourne-Sydney and Brisbane-Sydney,  where Sydney is the end destination.

Question:

198. What is the purpose of the container throughput cap at Newcastle port?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: Container terminal policy in NSW is for the state government to compensate NSW Ports every time a container ship visits the Port of Newcastle that otherwise would visit Port Botany. The government sees no need to put any funds in place because there is no container terminal at the Port of Newcastle and the government’s unlegislated “cap on numbers” will not be extended.

This “cap on numbers” is 30,000 container movements per year, increasing by six per cent per year as disclosed in this document. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss.

This unlegislated “cap on numbers” is confidential and cannot be examined for lawfulness, enforceability and benefit. It was imposed when former Treasurer, The Hon. Mike Baird MP, announced the appointment of Morgan Stanley as the government’s financial advisor for leasing Port Botany on 14 December 2011.

A “cap on numbers” was a “rule” the government set for a Port Botany lease “Scoping Study”, as disclosed by The Hon. Duncan Gay MLC on 17 October 2013. Mr Gay disclosed that the government did not envisage a need to put any funds in place to pay compensation to the Port Botany leaseholder when he answered this question from The Hon. Adam Searle MLC:

My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

NSW Treasurer, The Hon. Gladys Berejiklian MP, does not consider the unlegislated “cap on numbers” to be a “disincentive or obstacle” to building a container terminal at the Port of Newcastle. At a NSW Budget Estimates hearing on 3 September 2015, Ms Berejiklian was asked:

Question 29: Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer 29 September 2015:

I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

Ms Berejiklian’s disclosure overturns government policy as announced by Mr Baird on 27 July 2012:

The development of intermodal terminals across South and West Sydney, [sic] the Government’s freight strategy to be released later in 2012 would seek to develop Port Kembla as the logical next long term tranche of container capacity after Port Botany.

In February 2013, government policy was described by Newcastle Port Corporation in the following terms:

In July 2012 the NSW Government announced that Port Kembla will be the logical next long-term tranche of container capacity after Port Botany. In accordance with the government’s announcement, subject to any relevant government approvals, any future container terminal development at Newcastle will occur only once Port Botany and Port Kembla are fully developed and developable handling capacity is fully utilised at both Port Botany and Port Kembla. (Newcastle Port Corporation, Draft Strategic Development Plan for the Port of Newcastle, February 2013, page 23)

In statement to media on 1 May 2014, NSW Treasury described government policy in the following terms:

The [Port of Newcastle] lease has been drawn up in accordance with the current NSW Government freight policy of Port Botany being the first container facility priority, with Port Kembla designated to take the overflow once Port Botany is full. Newcastle will be further developed once Port Kembla is full. Newcastle container throughput is, in the meantime, fully able to grow organically.

Ms Berejiklian disclosed that a container terminal can be built at the Port of Newcastle at any time, including immediately, if Port of Newcastle Investments “wished to do so”.

There is no mention of an unlegislated “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012; and, the “Discussion Paper” dated February 2012.

Question:

199. What is the purpose of paying compensation to the Port Botany leaseholder if the container throughput cap at Newcastle port is exceeded during the term of the Port Botany lease?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: See comment 198.

Question:

200. How much compensation is payable to the Port Botany leaseholder per container if the container throughput cap is exceeded at Newcastle port?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: Compensation is not payable to NSW Ports when containers imported and exported by the Port of Newcastle are less than 30,000 per year as at 1 July 2013, increasing annually by six per cent. Once this no-payment “cap” is exceeded, NSW Ports may claim compensation.

When claiming payment, NSW Ports must satisfy the State that either of Port Botany and Port Kembla are not operating at full capacity. NSW Ports must also demonstrate to the satisfaction of the State that the number of containers imported and exported by Port Botany was less than it would have been had not the cap been exceeded at the Port of Newcastle and that there is both a reasonable, and a material, causal connection and correlation between the amount of excess above the cap and the amount of reduction at Port Botany. Since Port Botany is the only container port in NSW, any use of a container terminal developed at the Port of Newcastle fits these criteria.

Payment per container to NSW Ports comprises the weighted average per TEU of the wharfage charge actually imposed by NSW Ports at Port Botany on users of Port Botany in respect of containers at Port Botany. The weighted average is currently about  $100 per container. For a typical container ship with capacity for 5,000 TEU, visiting the Port of Newcastle fully loaded, and leaving fully loaded, will cost $1 million more than visiting Port Botany.

Question:

201. What is the source of funds for paying compensation to the Port Botany leaseholder if the container throughput cap at Newcastle port is exceeded?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: See above.

Question:

202. Are stevedore tenants of Newcastle port charged a fee for each container that exceeds the container throughput cap?

(a) If so, what is the amount?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: See question 200.

Question:

203. Did the government decide not to put any funds in place to pay compensation to the Port Botany leaseholder if the container throughput cap is exceeded at Newcastle port because no extension will be allowed in the container throughput cap until an unspecified container throughput is reached at Port Botany and Port Kembla?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: See comment 198.

Question:

204. Is Minister Gay responsible for enforcing the container throughput cap at Newcastle port?

(a) If not, which Minister is responsible?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: It is presumed the unlegislated “cap on numbers” is a provision in the confidential ports leasing arrangements, which are the responsibility of the Treasurer.

Question:

205. Has the government claimed an exemption from complying with the ”Competition and Consumer Act 2010” in respect of Port Commitment Deeds?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: The government has not disclosed that it claimed an exemption from the “Competition and Consumer Act 2010” (CCA) in respect of the Port Commitment Deeds. It is presumed the government did not claim an exemption and that the CCA applies to the unlegislated “cap on numbers”, and fee for exceeding it.

Question:

206. How many Port Commitment Deeds are there?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: Leasing arrangements for Port Botany, Port Kembla and Port of Newcastle are contained in confidential “Port Commitment Deeds”. It is presumed there are three such Deeds.

Question:

207. Did the government provide the ACCC with all Port Commitment Deeds?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: The government does not disclose what information was provided to the ACCC, including in relation to the “cap on numbers” and fee charged for exceeding it. The ACCC does not disclose what information, if any, was provided by the government in relation to the ports leasing arrangements, including the Port Commitment Deeds.

Question:

208. If not, did the government supply the ACCC with extracts of Port Commitment Deeds?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: See 207 above.

Question:

209. Do the ports lease arrangements prohibit the development of a container terminal at the Port of Newcastle and enable the growth of container volumes through Newcastle servicing that region?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: A container terminal at the Port of Newcastle is a permissible development and Port of Newcastle Investments may develop a container terminal if it wishes to do so. The government does not consider the unlegislated “cap on numbers” to be a “disincentive or obstacle” to building a container terminal at the Port of Newcastle, as disclosed by Ms Berejiklian on 29 September 2015. See also comment 198 and 200.

Question:

210. Did the government decide not to put any funds in place to pay compensation to the Port Botany leaseholder because no extension will be allowed in the container throughput cap at Newcastle port until an unspecified container throughput is reached at Port Botany and Port Kembla?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: See comment 198 and 200.

Question:

211. Has the government been clear that while general cargo will be allowed at Newcastle, there will be no extension until a specific number of containers is reached and exceeded in Port Botany and Port Kembla?

a. If so, to whom has the government communicated this information?

Answer: This transaction was led by Treasury and should be referred to the Treasurer.

Comment: The only disclosure by the government about an unlegislated “cap on numbers” and compensation being payable to NSW Ports was made on 17 October 2013.

LEGISLATIVE ASSEMBLY 10 September 2015

1337—PRIVATE OPERATOR OF PORT BOTANY

Mr Tim Crakanthorp to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

Is compensation payable to the private operator of Port Botany for container throughput at Newcastle port in excess of a cap?

15 October 2015

Answer

This is a matter for the Treasurer.

LEGISLATIVE ASSEMBLY 15 October 2015

1612—PRIVATE OPERATOR OF PORT BOTANY

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

Is compensation payable to the private operator of Port Botany for container throughput at Newcastle port in excess of a cap?

16 November 2015

Answer:

Please refer to my response to questions 24 & 25 at Budget Estimates 2015 Answers to Supplementary Questions, General Purpose Standing Committee 1, 9 am, Thursday 3 September 2015.

PORTS ISSUES

24. Has the NSW Government imposed any restrictions on the movement of containers through the Port of Newcastle?

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Answer 24-25:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

Comment: Container terminal policy in NSW is for the state government to compensate NSW Ports every time a container ship visits the Port of Newcastle that otherwise would visit Port Botany. The government sees no need to put any funds in place because there is no container terminal at the Port of Newcastle and the government’s unlegislated “cap on numbers” will not be extended.

This “cap on numbers” is 30,000 container movements per year, increasing by six per cent per year as described in this document. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss.

This unlegislated “cap on numbers” is confidential and cannot be examined for lawfulness, enforceability and benefit. It was imposed when former Treasurer, The Hon. Mike Baird MP, announced the appointment of Morgan Stanley as the government’s financial advisor for leasing Port Botany on 14 December 2011.

A “cap on numbers” was a “rule” the government set for a Port Botany lease “Scoping Study”, as disclosed by The Hon. Duncan Gay MLC on 17 October 2013. Mr Gay disclosed that the government did not envisage a need to put any funds in place to pay compensation to the Port Botany leaseholder when he answered this question from The Hon. Adam Searle MLC:

My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

NSW Treasurer, The Hon. Gladys Berejiklian MP, does not consider the unlegislated “cap on numbers” to be a “disincentive or obstacle” to building a container terminal at the Port of Newcastle. At a NSW Budget Estimates hearing on 3 September 2015, Ms Berejiklian was asked:

Question 29: Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer 29 September 2015:

I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

Ms Berejiklian’s disclosure overturns government policy as announced by Mr Baird on 27 July 2012:

The development of intermodal terminals across South and West Sydney, [sic] the Government’s freight strategy to be released later in 2012 would seek to develop Port Kembla as the logical next long term tranche of container capacity after Port Botany.

In February 2013, government policy was described by Newcastle Port Corporation in the following terms:

In July 2012 the NSW Government announced that Port Kembla will be the logical next long-term tranche of container capacity after Port Botany. In accordance with the government’s announcement, subject to any relevant government approvals, any future container terminal development at Newcastle will occur only once Port Botany and Port Kembla are fully developed and developable handling capacity is fully utilised at both Port Botany and Port Kembla. (Newcastle Port Corporation, Draft Strategic Development Plan for the Port of Newcastle, February 2013, page 23)

In statement to media on 1 May 2014, NSW Treasury described government policy in the following terms:

The [Port of Newcastle] lease has been drawn up in accordance with the current NSW Government freight policy of Port Botany being the first container facility priority, with Port Kembla designated to take the overflow once Port Botany is full. Newcastle will be further developed once Port Kembla is full. Newcastle container throughput is, in the meantime, fully able to grow organically.

Ms Berejiklian disclosed that a container terminal can be built at the Port of Newcastle at any time, including immediately, if Port of Newcastle Investments “wished to do so”.

There is no mention of an unlegislated “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012; and, the “Discussion Paper” dated February 2012.

GENERAL PURPOSE STANDING COMMITTEE NO. 1 Thursday 3 September 2015

The Hon. ADAM SEARLE: When you sold the Port of Newcastle was a cap put on the number of containers that can be moved through the Port of Newcastle?

Ms GLADYS BEREJIKLIAN: I understand there is no legislated container cap.

The Hon. ADAM SEARLE: So there is no cap on container movements there?

Ms GLADYS BEREJIKLIAN: There is no legislated container cap.

The Hon. ADAM SEARLE: Is there any other restriction in the sale of the lease documents?

Ms GLADYS BEREJIKLIAN: I am not aware of that.

The Hon. ADAM SEARLE: What about in the contracts?

Ms GLADYS BEREJIKLIAN: I am not aware.

The Hon. ADAM SEARLE: Will you take that on notice?

Ms GLADYS BEREJIKLIAN: I am happy to take that on notice

 

BUDGET ESTIMATES 2015-2016
Supplementary Questions
General Purpose Standing Committee No. 1 Treasury, Industrial Relations
Thursday 3 September 2015
Answers 29 September 2015

 

PORTS ISSUES

 

  1. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

 

  1. Has the NSW Government imposed any restrictions on the movement of containers through the Port of Newcastle?
  2. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

 

Answer 24-25: There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

 

  1. In the interest of transparency, will you release the Port Commitment Deeds that set out details of arrangements for containers?

Answer: The Port Commitment Deeds are commercial in confidence documents.

 

  1. Now that the port transactions are concluded, will you release the Scoping Study that was undertaken ahead of the transaction for the three ports?

Answer: The Scoping Study documents remain Cabinet-in-confidence. The Government, and previous Governments, have not released Scoping Studies for previous transactions.

 

  1. Minister Gay has said: “The only time an extension is allowed is when a specific number is reached and tripped in Port Botany and Port Kembla.” What is the number? For Port Kembla? For Port Botany?

Answer:

28: See http://freight.transport.nsw.gov.au/strategy/

  1. How much money was raised by the sale/lease of Newcastle port?
    b. What was money spent on?
    c. How much has gone into consolidated revenue?
    d. How much has been allocated to, or spent in, the Newcastle electorate?

 

Answer 28 (a) – (d): For publicly available information, see http://www.transport.nsw.gov.au/media-releases/transforming-newcastle-port-lease-securesfunds-revitalisation

GENERAL PURPOSE STANDING COMMITTEE NO. 2 Monday 31 August 2015

The Hon. SOPHIE COTSIS: Is there a cap on container movements at the Port of Newcastle? If so, what is it?

The Hon. DUNCAN GAY: No.

The Hon. SOPHIE COTSIS: You are sure about that answer?

The Hon. DUNCAN GAY: Yes.

The Hon. SOPHIE COTSIS: In answer to a question in October 2013 you said in part: I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there. I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension. Are you saying that statement in October is wrong?

The Hon. DUNCAN GAY: My understanding is there is not a cap into Newcastle. We have indicated a preference and a sensible way of doing it. The large majority of boxes come into New South Wales through Port Botany. The bulk of those boxes need to get to Sydney so the best location to put them into is Sydney in the first instance. Secondly it is Port Kembla, which is half the distance of Newcastle to bring them up. Once we reach a number where there are too many, certainly we would be looking at a spillage into Newcastle. The general freight and boxes that need to go to Newcastle certainly will be going to Newcastle.

The Hon. SOPHIE COTSIS: It is my understanding that there is a cap on container movements. We would like that confirmed. If there is a cap and if it is breached, is a fee, fine or a charge imposed? Who pays for it? Where does the money go? It is my understanding that there is a cap and you indicated in your answer on 17 October that part of the lease and the rationalisation was a cap on numbers there. Were you misleading the House?

The Hon. DUNCAN GAY: There is no container cap at the Port of Newcastle. I indicated that there is a cap in New South Wales at Sydney and once that is reached we then look at other places. But you specifically asked me a question whether there was a cap at Newcastle and I specifically answered that there is not.

The Hon. SOPHIE COTSIS: On container movements?

The Hon. DUNCAN GAY: There is no legislated cap.

The Hon. SOPHIE COTSIS: Is there an internal document?

The Hon. DUNCAN GAY: I think I have answered the question. I am happy to keep going around.

The Hon. SOPHIE COTSIS: You said one thing in the House and you are saying another thing to the Committee.

The Hon. DUNCAN GAY: No, I have said the same thing in both places.

The Hon. SOPHIE COTSIS: I am not going to waste my time, but you are quoted as saying in the House that part of the lease and the rationalisation was a cap on numbers there. Now you are saying that there is no cap. About the movement of containers through Newcastle you also said on 17 October 2013: The only time an extension is allowed is when a specific number is reached and is tripped in Port Botany and Port Kembla. What is the number for Port Kembla and what is the number for Port Botany?

The Hon. DUNCAN GAY: Which is exactly what I said a moment ago. I will have to come back to you with that number.

The Hon. SOPHIE COTSIS: Will you release the scoping study for the sale of the ports?

The Hon. DUNCAN GAY: That is not a question for me. That is a question for either Treasury or Finance.

The Hon. SOPHIE COTSIS: Will you take that on notice?

The Hon. DUNCAN GAY: No.

The Hon. SOPHIE COTSIS: Will you release the port commitment deeds?

The Hon. DUNCAN GAY: No, for the same reasons as the previous answer.

The Hon. Dr PETER PHELPS: It is the wrong portfolio.

The Hon. SOPHIE COTSIS: I refer to a media release by the head of the Australian Competition and Consumer Commission [ACCC] issued on 23 April in which Mr Sims outlines a number of concerns about actions taken by governments to sell significant assets without appropriate market structures and regulatory arrangements. He cited the example of the recent sale of Port Botany and Port Kembla to the same owner. He stated: We need to be careful to ensure that privatisation boosts economic efficiency rather than detracts from it … Otherwise we risk giving privatisation a bad name because consumers will continue to associate privatisation with higher prices. Do you agree with Mr Sims that the sale of Port Botany and Port Kembla proceeded without appropriate market structures and regulatory arrangements being put in place?

The Hon. DUNCAN GAY: The Government had all the proper procedures in place. It was not a sale; it was a lease. The lease of Newcastle went to a different body. So the concerns you are raising on behalf of that gentleman have been addressed within that, if they were valid.

The Hon. SOPHIE COTSIS: That gentleman is the chair of the ACCC and he has grave concerns about competition and governments selling—

The Hon. DUNCAN GAY: I just answered that. I just indicated that the lease that happened for Port Botany and Port Kembla went to one group; the lease for the Port of Newcastle went to a different group. There is competition. Do not forget that we are also in competition with Melbourne and Brisbane every day of the week—and beating them. We are beating them hands down, so it cannot be too bad. I do, however, have the ability to refer the port to the Independent Pricing and Regulatory Tribunal if the pricing behaviour of the port’s lessee is inappropriate.

The Hon. SOPHIE COTSIS: What can that trigger?

The Hon. DUNCAN GAY: It would be very much part of price monitoring.

The Hon. SOPHIE COTSIS: In terms of the cap on containers, are any fees paid if the number of containers through Newcastle exceeds a set amount?

The Hon. DUNCAN GAY: Not that I am aware of.

The Hon. SOPHIE COTSIS: You are not aware of that?

The Hon. DUNCAN GAY: You asked me whether there was a cap in Newcastle and I said there is not. Now you are asking me whether there is a fee paid if they go beyond a certain number. General cargo containers are part of what happens in Newcastle. My understanding is that within the general cargo that needs to go to Newcastle that is fine.

The Hon. SOPHIE COTSIS: Will you speak to your bureaucrats and take that on notice?

The Hon. DUNCAN GAY: If we need to deliver more of an answer we will.

The Hon. SOPHIE COTSIS: The ACCC submission to the Harper competition report stated: However, the ACCC remains concerned over arrangements designed to maximise proceeds received by a government by reducing the prospect of competitive provision of port services. Another example relates to Port Botany and the Port of Newcastle. An article in the Newcastle Herald on 11 May 2014 stated: “The government has confirmed it leased Botany with a clause that prevented Newcastle from competing against it with a container terminal. And the Newcastle lease is believed to contain a similar undertaking”. What is your response to the ACCC’s concerns about reducing the prospect of competitive provision of port services?

The Hon. DUNCAN GAY: I think you will notice, as I said earlier, that people wishing to use the New South Wales ports are voting with their feet—they are coming to us. Rather than there being a lack of competition, there appears to be better pricing and more competition in New South Wales than we have seen in Queensland and Victoria. For the first time, we are getting trade out of the Riverina in New South Wales. It is coming back to Port Botany whereas in the past it traditionally went to the Port of Melbourne. I will ask the chief executive officer of Sydney Ports whether he wishes to add anything at this point.

Mr GILFILLAN: During the transaction process over the ports at Port Botany, Port Kembla and Newcastle a lot of consideration was given to the issue of competition. As the Minister said, the reality is that there is very limited scope for competition between these ports because of the transport issues between the ports and the fact that each port is geared towards a specific type of cargo. Some things are contestable—for example, cars were moved from Sydney down to Port Kembla in November 2008. That was contestable and the Government took a position on that and moved cars. For most other commodities, from a financial and a commercial perspective, it simply does not make sense for these ports to compete between each other. In fact, it gives a perverse outcome—you end up with the commodity costing more because you incur more transport costs. Despite what the Australian Competition and Consumer Commission [ACCC] may have said, the reality is that there is very little scope for competition between our main ports adjacent to Sydney. As the Minister said, our reality is that we lose more cargo to Melbourne from our ports than we do internally between our ports in New South Wales. So competition is not really an issue.

The Hon. SOPHIE COTSIS: Have you spoken to the ACCC about the concerns it has raised? These are pretty big concerns.

Mr GILFILLAN: I was not a party to any conversation with the ACCC. This process during the transaction—

The Hon. DUNCAN GAY: This is not Mr Gilfillan’s area. I invite Mr Reardon to add something here.

Mr REARDON: In terms of any lease or sale process within government of a public asset, there will always be a consideration by the ACCC about the market, market reform and market structure. At the end of the day, the processes have gone forward. It would be a unique situation if the ACCC did not have a comment on it in terms of what the market structure would be—whether it is ports, banks or any other part of the economy. As we pointed out, though, competition within ports is a whole of east coast matter. It is not simply a matter for Newcastle, Port Kembla or Port Botany. It is also about the Port of Melbourne and the Port of Brisbane. I have to add that places like the Port of Brisbane have grown quite strongly.

So I would not subscribe to the view that there is not competition because of the leases. There is competition on the east coast, and it is up to New South Wales to position itself as strongly as possible within that to ensure its ports continue to grow. As the Minister has pointed out also, in terms of a legislative cap within Newcastle there is no such thing. So in terms of what we are focused on it is the growth of Port Botany.

CHAIR: The Minister said there was no cap at all, not that there was no legislative cap. The Minister said there was no cap at all. That was his answer. You are now talking about a legislative cap. I think this is where there is some confusion creeping in.

The Hon. DUNCAN GAY: No, I said both. I said there is no cap in Newcastle and there is no legislative cap overall.

………

The Hon. PAUL GREEN: I have a question about container caps and the leasing of ports. We were discussing the possibility of up to eight million containers moving around Port Botany, and large numbers at Port Kembla and Newcastle. If Botany were leased and had a cap of several million, would there be statutory caps?

The Hon. DUNCAN GAY: I answered that earlier. My answer now is no different.

The Hon. PAUL GREEN: Are there caps for Port Kembla?

The Hon. DUNCAN GAY: No.

The Hon. PAUL GREEN: So it is open to any number?

The Hon. DUNCAN GAY: Yes.

The Hon. Dr PETER PHELPS: Let us hope that it gets bigger.

The Hon. PAUL GREEN: The problem is that the freight comes onto the roads.

The Hon. Dr PETER PHELPS: Unless the Maldon to Dombarton railway is built.

The Hon. PAUL GREEN: That is right. I will have a problem if it gets bigger and the railway is not built.

The Hon. DUNCAN GAY: It is in our interest to grow all of them but not to unnecessarily use one to take freight that could have gone to another and been carried by road or rail. We need to be sensible. The ports need to specialise and grow. New South Wales ports are doing well compared to interstate ports.

CHAIR: The Minister said earlier that there are no caps, legislative or otherwise, on the Port of Newcastle.

The Hon. DUNCAN GAY: That is correct. That is for Newcastle.

The Hon. PAUL GREEN: So Port Kembla could grow to any size, as long as the containers keep coming in.

The Hon. DUNCAN GAY: It can grow within the constraints of its infrastructure.

The Hon. PAUL GREEN: There would have to be a cap, according to the capacity of that infrastructure?

The Hon. DUNCAN GAY: The infrastructure is the cap. Mr Reardon would like to clarify an earlier answer on Infrastructure NSW.

Grant Gilfillan Chief Executive Officer, Sydney Ports

Tim Reardon Secretary, Transport for NSW

LEGISLATIVE ASSEMBLY 13 August 2015

PORT OF NEWCASTLE

Mr LUKE FOLEY: My question is directed to the Treasurer. Why has the Government imposed constraints on the growth of container movements through the Port of Newcastle?

Ms GLADYS BEREJIKLIAN: The Labor Party opposed at every stage the Government’s improvements to the port and maritime strategy. At every stage the Labor Party opposed asset recycling in Newcastle. Now the proceeds of that asset recycling are going back into the community.

Mr Michael Daley: On a point of order: My point of order is taken under Standing Order 129. The Minister does not know the answer and she has no notes.

The SPEAKER: Order! The member for Maroubra has no knowledge of those matters. There is no point of order.

Ms GLADYS BEREJIKLIAN: We are yet to find out—

The SPEAKER: Order! Members will be directed to leave the Chamber if the interjections continue.

Ms GLADYS BEREJIKLIAN: The Leader of the Opposition has previously highlighted his opposition to what this Government has done in the Port of Newcastle. He has no credibility raising the issue now. The Government ensures that it uses the State’s assets in the best way possible and returns the proceeds to the community, where they belong. Daily in this place, members from the Hunter region talk about jobs, infrastructure, education and health—

Mr Michael Daley: Point of order: You had better coach her; she has got no idea, Premier.

The SPEAKER: Order! Members should not make inappropriate comments when they take a point of order.

Mr Michael Daley: I apologise. My point of order is taken under Standing Order 129. It was a simple question: Why is there a cap on containers coming out of Newcastle? That is constraining the growth of the Port of Newcastle.

The SPEAKER: Order! The Treasurer is being relevant to the question. There is no point of order

Ms GLADYS BEREJIKLIAN: I find it quite ironic that those opposite care about growth and activity when they opposed the Government’s plans to maximise that asset for the people of New South Wales. They have no credibility on this issue. They opposed everything that this Government proposed to do in relation to the ports. As I was saying, before I was rudely interrupted by the member for Maroubra—who does not know very much about this or any other issue regarding the budget—whilst the current member for Newcastle, the Leader of the Opposition and all those opposite, including the members for the Hunter, come in here and complain about lack of jobs in the Hunter and other issues, this side of the House is using the proceeds from that asset recycling to invest back into the community.

The SPEAKER: Order! I call the member for Maitland to order for the first time. I call the member for Maitland to order for the second time.

Ms GLADYS BEREJIKLIAN: I was extremely pleased when every time I had the pleasure of visiting the Hunter—

The SPEAKER: Order! The member for Maitland will come to order.

Mr Michael Daley: Point of order: It is under Standing Order 129 again. If the Treasurer does not know the answer she can take the question on notice. The Port of Newcastle is being constrained and the Minister will not answer the question. The question is very, very simple.

The SPEAKER: Order! The Minister is being relevant to the question and, pursuant to the standing order, that is all I can ask of her.

Ms GLADYS BEREJIKLIAN: I reiterate the hypocrisy of the Labor Government’s question in relation to this matter. Why does it not care about investment in the Hunter?

Ms Linda Burney: Point of order: I suggest if the Minister does not know the answer and cannot get a note she should sit down.

The SPEAKER: Order! There is no point of order.

Ms GLADYS BEREJIKLIAN: When those opposite have a straight answer on what they want for the Hunter and about what they want for the port strategy then they will have the right to ask about it. I say to those opposite: Do not stop progress in the Hunter, because that is what matters to the people of this State.

LEGISLATIVE ASSEMBLY 13 August 2015

PORT OF NEWCASTLE

Mr TIM CRAKANTHORP: My question is directed to the Treasurer. Why, when there is double digit unemployment in the Hunter, has the Government imposed restrictions on growing Newcastle port just to increase the sale price of Port Botany?

The SPEAKER: Order! The member for Hornsby will come to order.

Ms GLADYS BEREJIKLIAN: The member for Newcastle raises an important issue regarding growth and jobs in Newcastle and the Hunter. I was extremely disappointed when this side of the House brought in the Jobs Action Plan legislation to support more job creation in this State the member for Newcastle and every other member on that side of the House opposed that legislation.

The SPEAKER: Order! Opposition members will come to order.

Ms GLADYS BEREJIKLIAN: I put this to the member of the Newcastle: Why is it when this side of House determined that funds from asset recycling should go back into revitalising Newcastle and the Hunter region the member for Newcastle again opposed this Government’s actions to revitalise Newcastle and the Hunter?

Ms Jodi McKay: Point of order: My point of order is Standing Order 129.

The SPEAKER: Order! I call the member for Hornsby and the member for Kiama to order for the first time. Members will be heard in silence.

Ms Jodi McKay: It appears that the Treasurer does not know the answer to the question.

The SPEAKER: Order! That is not a point of order. The member is just entering into an argument and making inappropriate comments. It is up to me to decide relevance. The Treasurer has been relevant. There is no point of order.

Ms GLADYS BEREJIKLIAN: I refer the former member for Newcastle and the current member for Newcastle, the member for Maroubra and the Leader of the Opposition—

The SPEAKER: Order! I warn the member for Maitland that she is already on three calls to order.

Ms GLADYS BEREJIKLIAN: —to the Government’s New South Wales—

The SPEAKER: Order! The member for Maitland will remove herself from the Chamber until the conclusion of question time.

[Pursuant to sessional order the member for Maitland left the Chamber at 2.34 p.m.]

The SPEAKER: Order! I call the member for Hornsby and the member for Kiama to order for the second time.

Ms GLADYS BEREJIKLIAN: I say to those opposite that when we came to government, after 16 years they did not have a New South Wales ports or maritime strategy. What have we done?

The SPEAKER: Order! The member for Strathfield will come to order. The Treasurer remains relevant.

Mr Michael Daley: Point of order: I ask that the Treasurer take the question on notice. The former Treasurer knows the answer to this but he will not help her.

The SPEAKER: Order! The member for Maroubra will resume his seat. I call the member for Maroubra to order for the second time.

Ms GLADYS BEREJIKLIAN: I say to members opposite: When the Government wants to recycle assets such as ports why do they oppose them? They now come into this House and question policies that will support growth and investment in the Hunter. I say to the member for Newcastle and the former member for Newcastle: if they care about jobs, infrastructure and growth in the Hunter region, they will support the Government’s investment strategy. There is no doubt that there is a serious issue with the growth of employment in the Hunter region. That is why this side of the House is investing millions and millions of dollars in infrastructure and millions and millions in revitalising Newcastle.

Mr Tim Crakanthorp: Point of order: My point of order is under Standing Order 129. The question was about restrictions on growing the port; it was very specific.

The SPEAKER: Order! The Treasurer remains relevant. There is no point of order.

Ms GLADYS BEREJIKLIAN: This is the Labor Party’s hopeless attempt to win back the support of the business community in the Hunter. For the last 20 years— [Time expired.]

———-

LEGISLATIVE ASSEMBLY 13 August 2015

 

PORT OF NEWCASTLE

Mr TIM CRAKANTHORP (Newcastle) [6.06 p.m.]: Since 2013 the city of Newcastle has been waiting—waiting for an answer from the Government, waiting for the benefits of the $1.75 billion sale of the Port of Newcastle to come home and be invested into the new future for our harbour city. More than two years later we are still waiting and it has been revealed that will become the status quo because the Government does indeed have plans for the port, they just do not involve investing in Newcastle.

Mr Gareth Ward: You don’t want it though.

Mr Matt Kean: We’re building you a tramline, aren’t we?

Mr TIM CRAKANTHORP: In fact, you gave us $400 million in the last budget and you took it away this year. How about that? Shame.

ACTING-SPEAKER (Mr Bruce Notley-Smith): Order! The member will be heard in silence.

Mr TIM CRAKANTHORP: This week in the Newcastle Herald the topic was reignited when it was rumoured that the private operator of the Port of Newcastle may have been looking at a container terminal for Newcastle, the first project proposed by BHP as the replacement for the steelworks. Journalist Ian Kirkwood has shared my interest in the topic over the years. On Tuesday last he attended a lunch with the Port of Newcastle executive manager of trade and business development, Peter Francis. He wrote that when Mr Francis was asked about the potential for containers in the port he said: “… the challenge for containers is being able to get the inbound container trade into Newcastle given that the majority of NSW container freight is consumed within the Sydney basin area; that becomes a bit challenging.” That comment was as close as anyone has come to admitting that the way the State Government had leased the Port of Newcastle restricted or effectively prohibited Newcastle from building a major container terminal.

This discussion has been coming for a long time. In the late 1990s BHP’s major parting gift to the region was a plan to convert the steelworks site into a multipurpose terminal that would compete with or rival Botany as the State’s premier container port. But it never happened. Longstanding caps on the size of Botany Bay were lifted and then scrapped altogether and Newcastle lost its place as the next container port to Kembla. The development of a container terminal at the Port of Newcastle would give the city and surrounding Hunter area a massive economic boost. Industry has left the city of Newcastle with the closure of the steelworks and the downturn of the coal industry. Manufacturing is closing with Goninan and EDI Downer begging for the Sydney train contacts, and Forgacs is hanging in the balance if it does not get more Federal defence contracts. Our city needs growth. It needs jobs and it needs the support of the Government to do it.

Under this Government we have had our poles and wires and our port proceeds flogged off. The Government also cut our mass public transport network to the central business district. Enough is enough. It is now time for our fair share and it is the best time for the Government to make a contribution to the unemployment epidemic. If Newcastle was granted the development of a container terminal a new distribution hub could be created and it could utilise the existing heavy rail freight network to service the Hunter region.

Although Newcastle is a major coal port, developing a container terminal would supercharge local job opportunities, improve linkages across the State and provide new commercial opportunities. The Baird Government stopped this happening before it could start by making an anti-competitive decision to impose a cap on the number of containers moving across Newcastle wharves. The Government’s ineptitude regarding this matter was made abundantly clear today in question time when the Treasurer was asked by the Leader of the Opposition: “Why has the Government imposed constraints on the growth of container movements?” The answer from the Treasurer was abysmal. I then asked the Treasurer, “Why, when unemployment has reached double digits in the Hunter, has the Government imposed restrictions on growing the Port of Newcastle just to increase the sale price of Botany?” The answer was even more abysmal and prompted Newcastle Herald journalist Michelle Harris to tweet: “Govt’s farcical efforts to avoid giving an actual answer on port container cap questions reaches new low in QT today.” What a disgrace.

Worse still are intimations that should Newcastle ever exceed its mega cap, the owners of Port Botany will be financially compensated. This makes the development of a container terminal at Newcastle very difficult. Restricting port activity in Newcastle protects the container monopoly at Port Botany from facing competition. Preserving the monopoly at Port Botany is how the Government inflated its sale price—it fattened the pig when it was privatised. Restricting activity at Newcastle and protecting Botany’s monopoly is market rigging by the New South Wales Government at the highest level. Ports are strategic assets for open trading economies like ours. Many of the goods we consume arrive in containers. The port should be freely competing for sea trade cargo. I want Newcastle to be a vibrant, smart city that nurtures creativity and innovation that attracts investment. Premier Baird must be held accountable for hurting Newcastle and its prospects.

Mr MATT KEAN (Hornsby—Parliamentary Secretary) [6.11 p.m.]: I appreciate the member for Newcastle has passion for his community but while he is entitled to his own opinions, he is not entitled to his own facts. The reality is that the proceeds from the sale of the Port of Newcastle are going exactly where the member for Newcastle wants them—back into Newcastle. In addition to the $120 million allocated by the Government for the revitalisation of the Newcastle central business district, proceeds to the value of $340 million is being allocated for the project. The only flaw in the argument made by the member for Newcastle is that he voted against the money going to Newcastle in the first place.

ACTING-SPEAKER (Mr Bruce Notley-Smith): Order! The member for Newcastle will restrain himself.

Mr MATT KEAN: I appreciate that the member is advocating for his community and that he is passionate about achieving the best deal for it, but the money is flowing back to Newcastle for its revitalisation. It is long overdue because it was put on hold by the former Labor Government.

———-
LEGISLATIVE ASSEMBLY 13 August 2015

1030—LEASE OF THE PORT OF NEWCASTLE

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

How much of the $1.75 billion from the long term lease of the Port of Newcastle has been spent in Newcastle?

16 September 2015

Answer—

(1) Details of the Restart NSW projects can be found at insw.com⁄restart-nsw.aspx.

LEGISLATIVE ASSEMBLY 4 August 2015

0765—CAP ON CONTAINER MOVEMENT

Mr Tim Crakanthorp to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

1. Does a cap on container movement currently apply to the Port of Newcastle?

(a) If so, does the Government charge a fee for each container shipped through the Port of Newcastle above the prescribed cap?

(b) Is that fee paid as compensation to the operator of Port Botany?

8 September 2015

Answer—

I am advised:

The terms of the Port Botany transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port Botany lease is a public document.

The details of the container arrangements in the Port Commitment Deeds are commercial in confidence.

There is no legislated container cap at the Port of Newcastle.

Comment:

Q: 1. Does a cap on container movement currently apply to the Port of Newcastle?

The answer is yes. A cap applies to the number of containers that may be moved through the Port of Newcastle without compensation being payable to NSW Ports.

Q: If so, does the Government charge a fee for each container shipped through the Port of Newcastle above the prescribed cap?

The answer is yes. The fee is charged to fund compensation payable to NSW Ports. Compensation is payable to NSW Ports when the cap is exceeded and container ships use the Port of Newcastle instead of Port Botany, as detailed in this document.

Q: Is that fee paid as compensation to the operator of Port Botany?

The answer is yes.

LEGISLATIVE ASSEMBLY 4 August 2015

0794—LEASE SCOPING STUDIES

Ms Jodi McKay to the Treasurer, and Minister for Industrial Relations—

1. Were scoping studies prepared for the transactions to lease Port Botany, Port Kembla and the Port of Newcastle?

(a) If not, why not?

(b) If so, will the Minister release the scoping studies considering that the transactions have now been completed?

8 September 2015

1.1 I have advice that there were.

(a)N⁄A.

(b) Scoping study documents are commercial in confidence documents. It is standard government practice not to release scoping studies to ensure value for money for NSW taxpayers is optimised.

Comment: Ms Berejiklian said on 9 June 2015:

The scoping study for the transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State.

The Hon. Mike Baird MP was NSW Treasurer when Morgan Stanley was appointed on 14 December 2011 to undertake a Scoping Study for leasing Port Botany. One of the “rules” the Treasurer issued for this study was an unlegislated “cap on numbers” at the Port of Newcastle. This “cap on numbers” was disclosed by The Hon. Duncan Gay MLC on 17 October 2013. Details are contained in this document.

There is no mention of a “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012; and, the “Discussion Paper” dated February 2012.

 

LEGISLATIVE ASSEMBLY 25 June 2015

0701 CAP ON CONTAINER MOVEMENT—Mr Tim Crakanthorp to ask the Premier, and Minister for Western Sydney—

Does a cap on container movement currently apply to the Port of Newcastle?

(a) If so, does the Government charge a fee for each container shipped through the Port of Newcastle above the prescribed cap?

(b) Is that fee paid as compensation to the operator of Port Botany?

30 July 2015

Answer:

Given this question relates to the portfolio of the Minister for Roads, Maritime and Freight, I have referred this question to Minister Gay.

Comment: The Hon. Mike Baird MP was Treasurer when Morgan Stanley was appointed on 14 December 2011 to undertake a Scoping Study for leasing Port Botany. One of the “rules” the Treasurer set for this Scoping Study was a “cap on numbers” at the Port of Newcastle. This “cap on numbers” was disclosed by The Hon. Duncan Gay MLC on 17 October 2013. Details are contained in this document.

LEGISLATIVE ASSEMBLY 4 June 2015

0490 PORT OF NEWCASTLE—Mr Tim Crakanthorp to ask the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

Does the cap on container movements at the Port of Newcastle still exist?

(a) If so, is the cap on container movements lawful?

(b) Is the cap on container movements enforceable?

9 July 2015

Answer:

I am advised:

The container arrangements at the Port of Newcastle are consistent with the NSW Freight and Ports Strategy which was released in 2013.

Comment: There is no mention of a “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012; and, the “Discussion Paper” dated February 2012.

Container terminal policy in NSW is for the state government to compensate NSW Ports every time a container ship visits the Port of Newcastle that otherwise would visit Port Botany. The government sees no need to put any funds in place because there is no container terminal at the Port of Newcastle and the government’s contractual  “cap on numbers” will not be extended.

This “cap on numbers” is 30,000 container movements per year, adjusted increasing by six per cent per year. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss.

This “cap on numbers” is confidential and cannot be examined for lawfulness, enforceability and benefit. It was imposed when former Treasurer, The Hon. Mike Baird MP, announced the appointment of Morgan Stanley as the government’s financial advisor for leasing Port Botany on 14 December 2011.

A “cap on numbers” was a “rule” the government set for a Port Botany lease “Scoping Study”, as disclosed by The Hon. Duncan Gay MLC on 17 October 2013. Mr Gay disclosed that the government did not envisage a need to put any funds in place to pay compensation to the Port Botany leaseholder when he answered this question from The Hon. Adam Searle MLC:

My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

NSW Treasurer, The Hon. Gladys Berejiklian MP, does not consider the unlegislated “cap on numbers” to be a “disincentive or obstacle” to building a container terminal at the Port of Newcastle. At a NSW Budget Estimates hearing on 3 September 2015, Ms Berejiklian was asked:

Question 29: Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer 29 September 2015:

I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

Ms Berejiklian’s disclosure overturns government policy as announced by Mr Baird on 27 July 2012:

The development of intermodal terminals across South and West Sydney, [sic] the Government’s freight strategy to be released later in 2012 would seek to develop Port Kembla as the logical next long term tranche of container capacity after Port Botany.

In February 2013, government policy was described by Newcastle Port Corporation in the following terms:

In July 2012 the NSW Government announced that Port Kembla will be the logical next long-term tranche of container capacity after Port Botany. In accordance with the government’s announcement, subject to any relevant government approvals, any future container terminal development at Newcastle will occur only once Port Botany and Port Kembla are fully developed and developable handling capacity is fully utilised at both Port Botany and Port Kembla. (Newcastle Port Corporation, Draft Strategic Development Plan for the Port of Newcastle, February 2013, page 23)

In statement to media on 1 May 2014, NSW Treasury described government policy in the following terms:

The [Port of Newcastle] lease has been drawn up in accordance with the current NSW Government freight policy of Port Botany being the first container facility priority, with Port Kembla designated to take the overflow once Port Botany is full. Newcastle will be further developed once Port Kembla is full. Newcastle container throughput is, in the meantime, fully able to grow organically.

Ms Berejiklian disclosed that a container terminal can be built at the Port of Newcastle at any time, including immediately, if Port of Newcastle Investments “wished to do so”.

LEGISLATIVE COUNCIL 5 May 2015

0001—Treasurer—PORT OF NEWCASTLE

Dr Faruqi to the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council representing the Treasurer, and Minister for Industrial Relations—

Question:

1.

(a) Is compensation payable to the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle?

(b) If so, what is the annual threshold?

(c) What is the amount of compensation per twenty-foot equivalent unit (TEU)?

9 June 2015

Answer:

(a) The terms of the Port Botany transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port Botany lease is a public document.

(b) The details of the container arrangements in the Port Commitment Deeds are commercial in confidence.

(c) Please see the answer to question 1 (b).

Comment: The Hon Duncan Gay MLC disclosed that compensation is payable to the Port Botany leaseholder in answer to a question from The Hon. Adam Searle MLC on 17 October 2013.

The government imposed a contractual “cap on numbers” at the Port of Newcastle as detailed in this document.

The “cap on numbers” is estimated to be 30,000 container movements per year, adjusted for CPI. To pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Compensation is not payable to NSW Ports until the “cap on numbers” at the Port of Newcastle is exceeded by container ships using this port instead of Port Botany.

Question:

2.

(a) Is the Port of Newcastle leaseholder required to pay the Government a fee for container movements through the Port of Newcastle on the same or similar terms as the Government is required to compensate the Port Botany leaseholder?

(b) If so, when did the Government undertake to pay compensation to the Port Botany leaseholder and to impose a fee on the Port of Newcastle leaseholder?

Answer:

(a) The terms of the Port of Newcastle transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port of Newcastle lease is a public document.

(b) Please refer to the answer to questions 1 (a) and 2(a).

Comment: As for 1. above. Presumably, agreement to pay compensation was in place when Port Botany lease negotiations concluded on 12 April 2013. There is no disclosure of a “cap on numbers” at the Port of Newcastle in the Strategy.

Question:

3.

How many containers must be moved through Port Botany and Port Kembla before an extension is allowed in the number of container movements at the Port of Newcastle that do not attract the compensation payment and fee respectively?

Answer:

Please refer to the answers to questions 1 (a) and 2(a). The details of the Port Commitment Deeds are commercial in confidence.

Comment: Mr Gay disclosed, on 17 October 2013, that “the only time an extension is allowed [to the “cap on numbers” at the Port of Newcastle] is when a specific number is reached and is tripped in Port Botany and Port Kembla”. In a media statement on 1 May 2014, NSW Treasury referred to Port Botany and Port Kembla capacity becoming “full”:

The [Port of Newcastle] lease has been drawn up in accordance with the current NSW Government freight policy of Port Botany being the first container facility priority, with Port Kembla designated to take the overflow once Port Botany is full. Newcastle will be further developed once Port Kembla is full. Newcastle container throughput is, in the meantime, fully able to grow organically.

In February 2013, Newcastle Port Corporation noted:

In July 2012 the NSW Government announced that Port Kembla will be the logical next long-term tranche of container capacity after Port Botany. In accordance with the government’s announcement, subject to any relevant government approvals, any future container terminal development at Newcastle will occur only once Port Botany and Port Kembla are fully developed and developable handling capacity is fully utilised at both Port Botany and Port Kembla. (Newcastle Port Corporation, Draft Strategic Development Plan for the Port of Newcastle, February 2013, page 23)

Question:

4.

(a) Is the purpose of the fee charged of the Port of Newcastle leaseholder to constrain the number of containers passing through the Port of Newcastle?

(b) If not, what is the purpose of the fee?

Answer:

(a) Please refer to the answer to question 2(a).

(b) Please refer to the answer above.

Comment: The unlegislated “cap on numbers” at the Port of Newcastle is estimated to be 30,000 container movements per year, adjusted for CPI. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss. Shipping lines would not use the Port of Newcastle and pay $200 per container when the charge at Port Botany is $100 per container. The effect of a fee on container movements at the Port of Newcastle is to make a container terminal commercially unviable and, therefore, a terminal will not be built.

Question:

5.

(a) Is the purpose of the fee charged of the Port of Newcastle leaseholder to prevent development of a container terminal at the Port of Newcastle?

(b) If not, what is the purpose of the fee?

Answer:

(a) Please refer to the answer to question 2(a).

(b) Please refer to the answer above.

Comment: See comment 4 above.

Question:

6.

Did the Government abolish the cap on container movements at Port Botany to increase the value of the lease to potential purchasers?

Answer:

Please refer to former Treasurer Baird’s second reading speech on introducing the Ports Assets (Authorised Transactions) Bill 2012.

Comment: In his second reading speech for the “Ports Assets (Authorised Transactions) Bill” on 17 October 2012, The Hon. Mike Baird said:

By allowing for the throughput limit to be removed, the Government is ensuring that taxpayers receive value for the investment, which has been made already; aligns Port Botany with major ports around the world, none of which has such a cap; and allows the State to receive full value for the lease.

Leasing Port Botany enabled repaying Sydney Port Corporation’s residual debt of $622 million (in 2012).

The ACCC said, on 25 June 2014 (p.38):

The ACCC remains concerned over arrangements designed to maximise proceeds received by a government by reducing the prospect of competitive provision of port services, of which the leasing of Port Botany and the Port of Newcastle were examples.

The Sydney Morning Herald reported on 31 July 2012:

THE state government will allow unrestricted container movements from Port Botany as a carrot to the private sector bidding for the port, a move the opposition says will worsen congestion on some of Sydney’s most clogged roads.

The Treasurer, Mike Baird, confirmed the government intends to lift the existing cap of 3.2 million container movements as part of the transaction of the port in a 99-year lease.

The cap was established following widespread expansion of the port under the former Labor government and fears that unrestricted movement would worsen congestion.

But the adviser to the state government on the port sale, investment bank Morgan Stanley, told the government the sale price would be more than $1 billion higher if the cap was lifted.

Mr Baird said the cap needed to be removed in the short to medium term. ”On current estimates, Port Botany is likely to reach the cap by approximately 2017 – many years earlier than originally anticipated,” he said. ”The removal of the cap is in line with the recommendations of the scoping study to get the best outcome for NSW taxpayers.”

It was reported that there was a “marked increase” between indicative bids for Port Botany/ Kembla between December 2012 and April 2013. “The Australian” newspaper wrote on 21 June 2013:

What transpired was one of the closest races for a major asset seen in Australia. Research by the deal makes it clear that there was a marked increase between the indicative bids given to the government advisers in December [2012] and the final numbers submitted in April [2013]. In the end, according to sources, the top two contenders were separated by less than $20 million.

“The Australian Financial Review” described the Port Botany cap as “antiquated” in commentary about the Port Botany lease, on 3 January 2014:

There were two important reasons the [leasing] process had attracted four seemingly serious offers.

…The second reason was Baird’s decision to scrap a cap limiting the number of containers that could be moved at the ports. The antiquated rule was even more silly, given the NSW government had just spent $1 billion expanding the port by a third. This meant bidders were offered a near monopoly on container shipping in NSW with increased capacity. Port Botany handles almost three-quarters of the two million containers that move through the state’s ports, transporting everything from furniture to heavy machinery.

Mr Baird did not mention an unlegislated “cap on numbers” at the Port of Newcastle or payment of compensation to the Port Botany lessee in his second reading speech on 17 October 2012:

The vast majority—some 85 per cent of all containers—has an origin or destination within 40 kilometres of the port. It is clear that the ongoing imposition of the cap on throughput at Port Botany would result in a massive inefficiency in the future that would greatly constrain the State’s economy.

Port Botany’s dominant market position relies exclusively on its monopoly status as the state’s only container port. Most containers are trucked within 40 km of Port Botany to minimise cost. Government policy supports an increase in container transportation by truck from 2 million per year in 2014 to 5.4 million per year by 2045.

Government policy supports railing 3 million containers in 2045 up from 0.3 million in 2014. But achieving this 10-fold increase in rail transportation requires building a new rail freight line, the “Western Sydney Freight Line”, between Chullora and Eastern Creek. The cost, $1 billion, is unfunded. Additionally, a new rail freight line is required between Port Botany and Mascot. This line, too, is unfunded. The government is unable to demonstrate how a major increase in rail transportation will be accomplished.

The optimum use of Sydney’s existing rail network is people, not freight. Deloitte Access Economics commented extensively on the cost comparison between road and rail for freight transportation in its June 2011 report, “The True Value of Rail”, see extracts.

Question:

7.

Did the Government agree to compensate the Port Botany leaseholder in respect of container movements at the Port of Newcastle to preserve the commercial value of the Port Botany lease?

Answer:

The terms of the Port Botany transaction reflect the Government’s NSW Freight and Ports Strategy which was released in 2013.

Comment: Compensation is payable to NSW Ports when container movements at the Port of Newcastle exceed the unlegislated and confidential, “cap on numbers” at the Port of Newcastle. It is presumed that paying compensation preserves the commercial value of the Port Botany lease.

The “NSW Freight and Ports Strategy” reflects the Scoping Study and its unlegislated “cap on numbers” at the Port of Newcastle. There is no mention of a “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012;  and, the “Discussion Paper” dated February 2012.

Question:

8.

(a) Was a cost-benefit study of the proposal to compensate the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle undertaken?

(b) If so, will the Government release it?

Answer:

(a) The scoping study for the transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State.

(b) The scoping study is Commercial in Confidence.

Comment: As disclosed in questions 10 and 11 below, the government transport planning section, “Transport for NSW”, did not “specifically” analyse (1) the additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle; and (2) the additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales.

However, the government is able to disclose its “non-specific” analysis.

Presumably, Morgan Stanley advised the government about the transport, economic and commercial implications of applying an unlegislated “cap on numbers” at the Port of Newcastle, and charging a fee for exceeding it. However, such information not has been disclosed by the government for analysis because the Scoping Study is confidential. Confidentiality also prevents the unlegislated “cap on numbers” at the Port of Newcastle from being examined for lawfulness and enforceability.

On 3 September 2015, Ms Berejiklian was asked:

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Ms Berejiklian answered on 29 September 2015:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

Ms Berejiklian did not acknowledge the unlegislated “cap on numbers” at the Port of Newcastle.

Question:

9.

What will be the impact on the New South Wales economy of preventing competition between New South Wales ports for handling containers?

Answer:

The New South Wales ports are not prevented from competing for handling of containers.

Comment: The unlegislated “cap on numbers” at the Port of Newcastle prevents competition on equal terms with Port Botany.

This “cap on numbers” is estimated to be 30,000 container movements per year, adjusted for CPI. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss.

The ACCC said, on 25 June 2014 (p.38):

The ACCC remains concerned over arrangements designed to maximise proceeds received by a government by reducing the prospect of competitive provision of port services, of which the leasing of Port Botany and the Port of Newcastle were examples.

Ms Berejiklian’s answer to a similar question asked on 5 May 2015, was:

The New South Wales ports are not prevented from competing for handling of containers.

Question:

10.

What are the estimated additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle?

Answer:

This question should be referred to the Minister for Roads, Maritime and Freight.

When this question was directed to Mr Gay on 23 October 2014, the answer provided was:

Specific analysis of this nature has not been undertaken by Transport for NSW. However, a significant proportion of exports originating in northern NSW are bulk exports, which can be processed at the Port of Newcastle.

Question:

11.

What are the estimated additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales?

Answer:

This question should be referred to the Minister for Roads, Maritime and Freight.

When this question was directed to Mr Gay on 23 October 2014, the answer provided was:

Specific analysis of this nature has not been undertaken by Transport for NSW. However, 85 percent of Port Botany container imports have a destination within the greater Sydney metropolitan area.

Comment on answers 10 and 11: The government transport planning section, “Transport for NSW”, did not undertake “specific analysis”. However, the Minister is able to disclose non-specific analysis of: (1) the additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle; and (2) the additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales.

Ms Berejiklian disclosed in answer to question 8 above:

The scoping study for the [Port Botany lease] transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State.

Morgan Stanley’s analysis for the Scoping Study may or may not have included implications of the government’s unlegislated “cap on numbers” at the Port of Newcastle for the northern NSW economy. However, container freight policy is based on this Scoping Study. The government decided against developing a container terminal at the Port of Newcastle after considering this confidential Scoping Study, as disclosed on 27 July 2012. A container terminal at the Port of Newcastle would be competitive without a government fee, and an unlegislated “cap on numbers” at this port.

Question:

12.

What will be the impact on the New South Wales economy of predicating future growth in Port Botany container movements on transportation by truck?

Answer:

This question should be referred to the Minister for Roads, Maritime and Freight.

Comment: When Mr Gay was asked a similar question on 23 October 2014, the answer provided was:

It is necessary to model road and rail forecasts for container movements to and from Port Botany, so the NSW Government can respond with appropriate policy levers, and so industry can respond with appropriate business models. NSW Government forecasts of road and rail container movements take into account our commitment to double the 2011-12 container rail mode share by 2020.

In February 2014 the NSW Bureau of Transport Statistics released its forecast of container movements to and from Port Botany. These estimates were in line with estimates by NSW Ports. NSW Ports estimated container movements by truck between the port and western Sydney to increase from 2 million in 2014 to 5.4 million in 2045. Movement of containers by rail is estimated to increase from 0.3 million in 2014 to 3 million by 2045. No specific analysis is provided for how the increase in container transportation by rail will be achieved, or funded.

The NSW government is able to disclose the economic implications of trucking containers between Port Botany and western Sydney destinations. Deloitte Access Economics evaluated the cost of truck transportation compared with rail. This report indicates that the full cost of freight transportation by road is not recovered, see report extracts.

The RTA reports that a container truck using the M5 East westbound tunnel is the equivalent of six passenger cars and the equivalent of three passenger cars using the eastbound tunnel. Container trucks are 2 per cent of vehicle use on the M5 East (NSW Ports). In the eastbound tunnel, this equates to 6 per cent of capacity and in the westbound tunnel it equates to 3 per cent of capacity. In 2045, when container trucks will require 4 per cent of current M5 East capacity, this will equate to 12 per cent of the current westbound tunnel and 6 per cent of the eastbound tunnel.

Increasing the rail component of container transportation requires completion of three major rail projects.

Stages 2 and 3 of the Northern Sydney Freight Corridor (NSFC), costing $5 billion, would provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield, which is required by 2028 to meet predicted freight demand. There are no funds available for building stages 2 and 3 of the NSFC. Presumably, these stages will not be built. An option for the government to increase freight capacity on the rail line between Newcastle and Strathfield is to reduce passenger services.

The Western Sydney Freight Line, between Chullora and Eastern Creek, costing about $1 billion, is required to rail containers between Port Botany and Eastern Creek, which is the proposed site for an intermodal terminal after Moorebank. However, there are no funds available for building the Western Sydney Freight Line. Presumably, this line will not be built.

A new rail freight line is required between Port Botany and Mascot. Funding for this line has not been disclosed.

Question:

13.

What is the container-carrying capacity of the rail line serving Port Botany?

Answer:

This question should be referred to the Minister for Roads, Maritime and Freight.

When Mr Gay was asked this question on 23 October 2014, the answer provided was:

The Australian Rail Track Corporation is the network operator of the Port Botany rail line, which forms part of the Metropolitan Freight Network. Any questions relating to the network capacity are a matter for the Australian Rail Track Corporation.

Comment: Mr Gay did not disclose the container carrying capacity of the rail line serving Port Botany.

In answer to question 8, Ms Berejiklian said:

The scoping study for the [Port Botany lease] transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State.

The confidential Scoping Study was deficient if it failed to estimate the container-carrying capacity of the rail line serving Port Botany. This Scoping Study was the basis of the government deciding on 27 July 2012 not to develop a container at the Port of Newcastle. The government considers a container terminal at the Port of Newcastle is “uneconomic”, as disclosed on 22 August 2014.

In 2014, 0.3 million containers were railed between Port Botany and western Sydney. NSW Ports estimates this number will increase to 3 million by 2045. Building the increased capacity will require a new rail freight line between Port Botany and Mascot; a new rail freight line – the Western Sydney Freight Line – between Chullora and Eastern Creek; and, completing stages 2 and 3 of the Northern Sydney Freight Corridor. No plans have been disclosed for building or financing these lines, or how the increased use of rail will be accomplished

Question:

14.

(a) Will the Government fund the Western Sydney Freight Line?

(b) If not, who will fund this line?

Answer:

This question should be referred to the Minister for Roads, Maritime and Freight.

Comment: When Mr Gay was asked this question on 23 October 2014, the answer provided was:

This is yet to be determined.

The government is unable to fund the Western Sydney Freight line, between Chullora and Eastern Creek, and no other source of funds has been identified. This line is not required if a rail freight bypass is built between the Port of Newcastle and Glenfield and is paid for by railing containers and general freight to intermodal terminals in western Sydney. The cost of the Western Sydney Freight Line will be in the order of $1 billion.

Question:

15.

When will the Commonwealth Government respond to the Government’s request for funds to build stages 2 and 3 of the Northern Sydney Freight Corridor?

Answer:

This question should be referred to the Minister for Roads, Maritime and Freight.

Comment: When Mr Gay was asked this question on 23 October 2014, the answer provided was:

This is a matter for the Commonwealth Government.

Comment: The Commonwealth Government has not responded to the NSW government’s request to funds stages 2 and 3 of the NSFC costing approximately $5 billion. It is unlikely the Commonwealth will fund this line. The stages are required to be finished before 2028 to provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield, using the existing passenger line corridor. The NSFC is not required if a rail freight bypass is built between the Port of Newcastle and Glenfield and paid for by railing containers and general freight.

An option for the NSW government is to increase freight capacity on the NSFC by reducing passenger capacity. Alternatively, the government can cancel plans for stages 2 and 3 of the NSFC, and remove all freight so that all capacity is used for passengers. This can be accomplished by developing a rail freight bypass line, between the Port of Newcastle and Glenfield.

A report by Deloitte Access Economics “provides evidence on the level of the benefits not captured in prices or costs that arise from shifting passengers or freight from road to rail”. The following are extracts from this report, ”The true value of rail, 3 June 2011”:

page ii

Benefits of rail

A key part of ensuring correct investment decisions are made is to recognise the true value of rail. This report provides evidence on the level of the benefits not captured in prices or costs that arise from shifting passengers or freight from road to rail. The benefits identified are:

Passenger transport:

            • Road travel produces more than 40% more carbon pollution than rail travel per passenger kilometre.
            • Road transport generates almost eight times the amount of accident costs as rail transport does.
            • In the longer term, high speed rail provides the potential to alleviate pressures that will emerge to move people between major cities and along east coast corridors as Australia’s population grows.

Urban passenger transport:

            • An additional commuter journey by rail reduces congestion costs alone by between around $2 and $7.
            • For every passenger journey made on rail rather than road in Australia’s four largest cities, between $3 and $8.50 can be saved in congestion, safety and carbon emission costs.
            • In Sydney, for example, if rail absorbed 30% of the forecast increase in urban travel then congestion, safety and carbon emission costs could be reduced by around $1 billion a year by 2025.

Interstate freight transport:

            • Heavy vehicle road freight users do not face the full maintenance costs that they cause. Under-recovery of these costs has been estimated at between $7,000 and $10,500 per truck each year (Productivity Commission 2006 and NTC 2006). The National Transport Commission (NTC) has recommended changes which seek to address this issue.
            • Freight moved between Melbourne and Brisbane by rail instead of road reduces carbon costs by around $56 per container and reduces accident costs by around $92 per container.
            • Along the North-South freight corridor, for example, if rail was to achieve a 40% share of the market then savings, in terms of carbon pollution and accidents, would currently be around $300m a year or $630m a year by 2030.

Freight transport within urban centres:

            • Along with the use of the mass transit of people, a greater use of rail for freight within, especially, Sydney and Melbourne will be needed to alleviate the increasing congestion on road networks. Environmental and safety benefits would also accrue.
            • The NSW and Victorian Governments have recognised the need to develop more effective rail freight services within their cities and have set targets accordingly. These goals aim to ease congestion on arterial roads and improve use of existing rail infrastructure and port land. These costs have tangible effects on the lives of all Australian’s and the economy. Congestion eats away at leisure time and reduces economic productivity as workers and goods take longer to reach their destination and cost more to transport. Carbon pollution creates social costs to be borne by future generations who will face the duel costs of a changed climate and the need to reduce emissions. In addition to deaths caused by vehicle accidents, injuries create ongoing effects in terms of pain, reduced ability to work and the need for care.

page iv

There are currently some key bottlenecks holding back the efficient use of rail in Australia. Freight movements between Melbourne and Brisbane are constrained by congestion in northern Sydney. The North Sydney Freight Corridor would go a long way to addressing this issue. Fixing this key point of infrastructure is estimated to cost around $4.4 billion today. A number of other projects on this route such as modern intermodal facilities in Sydney and Melbourne and many minor adjustments to the track might also be needed.

These investments are costly but will help drive a modal shift towards rail freight which creates benefits from reduced carbon pollution and accidents. If rail was to achieve a 40% market share then by 2030 the savings from accidents and carbon pollution could be worth well over $600 million a year.

The key choke point for freight is intimately linked with Sydney’s metropolitan network. The metropolitan network is currently constrained by capacity through the city. Expanding capacity in the city, through the Western Express project, would currently cost around $4.5 billion. Again, there are large savings in carbon pollution, accident and congestion costs which work to offset the initial infrastructure investment. If a congestion charge and carbon tax were introduced, this could result in around 150 million extra rail journeys a year. All these extra passengers would reduce carbon pollution, congestion and accident costs on the roads by around $1.2 billion a year.

page 50

5.1.3 Required investments

The initial investment required to free up capacity on the north-south corridor is to establish the northern Sydney freight corridor (NSFC). A project outline for the NSFC has recently been made by Transport NSW (2010a). The proposed NSFC is not a separate freight line but is, instead, a series of augmentations to the existing shared network which would allow passenger and freight trains to interoperate more freely and would therefore create additional freight train paths. The proposed NSFC would operate in three stages, initially increasing the daily number of train paths from 16 to 26 in both directions while stage two would increase this to at least 33 paths in both directions. Stage three would transition towards a dedicated freight line

The NSFC is forecast to cost around $1.2bn for stage one, $3.4bn for stage two and $3.2bn for stage three, for a total of around $7.8bn. This expenditure would be spread over the next 12 years and so, in present value terms the capital cost is around $5.2bn. Of this, $0.8bn has already been allocated under the Nation Building program. This leaves an unfunded capital cost of around $4.4bn in present value terms.

page 65

On the north-south corridor, where there is significant room for rail to grow its market share, it is currently being held back by inefficient network infrastructure which leads to reliability issues. The main constraint on the north-south corridor is currently in the Sydney metropolitan network. Trains attempting to move through the network must avoid peak passenger periods. This is complicated by a lack of necessary infrastructure in the north of Sydney. There is currently only a single extra freight train path available each day heading north out of Sydney and this path is likely to be used up within the next year or two. The north-south corridor is therefore facing imminent capacity constraints which will hamper any growth in rail freight along the east coast. This constraint could be alleviated with investment in the north Sydney rail freight corridor, which has been proposed to Infrastructure Australia but is currently only partially funded.

Question:

16.

Are there state or Commonwealth Government funds available for building the Western Sydney Freight Line and stages 2 and 3 of the Northern Sydney Freight Corridor?

Answer:

This question should be referred to the Minister for Roads, Maritime and Freight.

Comment: When a similar question was asked of Mr Gay on 23 October 2014, the answer was:

Transport for NSW has allocated funding for planning works associated with the Western Sydney Freight Line. Residual funds from stage one of the Northern Sydney Freight Line have been allocated for planning for stage two.

There are no funds allocated for building stages 2 and 3 of the Northern Sydney Freight Corridor at a cost of around $5 billion. Without funding, the stages will not be built.

LEGISLATIVE ASSEMBLY 12 December 2014

*6677 PORT OF NEWCASTLE AND PORT BOTANY LEASES—Mr Tim Crakanthorp asked the Treasurer, and Minister for Industrial Relations—

(1)      Did the Government advise the Australian Competition and Consumer Commission (ACCC) of a cap on container numbers at the Port of Newcastle prior to leasing the Port of Newcastle and Port Botany?

(2)      Did the Government agree to compensate NSW Ports for container numbers in excess of the cap at the Port of Newcastle?

(3)      Did the Government advise bidders for the ports leases to obtain regulatory approval from the ACCC in relation to the cap on container numbers at the Port of Newcastle?

(4)      Will the cap on container numbers at the Port of Newcastle reduce competition between ports in New South Wales for the container trade?

(5)      Has the ACCC advised the Government that the cap on container numbers at the Port of Newcastle may be unlawful and could be unenforceable?

16 January 2015

Answer:

The transaction arrangements that the State entered into with the successful bidders for Port Botany and Kembla and the Port of Newcastle reflect its Freight and Ports Strategy, that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity.

This strategy recognises that Port Botany has significant capacity for container growth; most containers travel within a relatively short distance of Port Botany; future demand for containers is expected to occur in the South West of Sydney and thereby closer to Port Kembla than Newcastle; and the landside infrastructure costs to support a major container facility at Newcastle are higher than for Port Kembla.

The arrangements do not prohibit the development of a container terminal at the Port of Newcastle and enable the growth of container volumes through Newcastle servicing that region.

The Government’s transaction team engaged extensively with the Australian Competition and Consumer Commission regarding the competition and regulatory framework, including the container arrangements.

Comment: The questions are capable of being answered “yes” or “no”. For policy comment, see Home Page.

Question:

1. Did the Government advise the Australian Competition and Consumer Commission (ACCC) of a cap on container numbers at the Port of Newcastle prior to leasing the Port of Newcastle and Port Botany?

Comment: It is not known what, if anything, the government advised the ACCC about an unlegislated “cap on numbers” at the Port of Newcastle. The ACCC would have been aware of an unlegislated “cap on numbers” at the Port of Newcastle from the Hansard of 17 October 2013 The government capped the number of containers for which there is no fee payable by Port of Newcastle Investments to the government. When this “cap” is exceeded and container ships use the Port of Newcastle instead of Port Botany, the government is liable to pay compensation to NSW Ports for every container above the “cap”.

The ACCC became aware of restrictive clauses in the ports leasing arrangements from a report in The Newcastle Herald on 11 May 2014. The ACCC said, on 25 June 2014 (p.38):

However, the ACCC remains concerned over arrangements designed to maximise proceeds received by a government by reducing the prospect of competitive provision of port services. Another example relates to Port Botany and the Port of Newcastle. An article in the Newcastle Herald on 11 May 2014 stated: ”The government has confirmed it leased Botany with a clause that prevented Newcastle from competing against it with a container terminal. And the Newcastle lease is believed to contain a similar undertaking”.

Question:

(2) Did the Government agree to compensate NSW Ports for container numbers in excess of the cap at the Port of Newcastle?

Comment: Compensation is payable to NSW Ports when an unlegislated “cap on numbers” at the Port of Newcastle is exceeded, as disclosed by The Hon. Duncan Gay MLC on 17 October 2013 and container ships visit the Port of Newcastle instead of Port Botany.

Question:

(3) Did the Government advise bidders for the ports leases to obtain regulatory approval from the ACCC in relation to the cap on container numbers at the Port of Newcastle?

Comment: The government has not disclosed that it advised bidders to consult the ACCC in relation to the unlegislated “cap on numbers” at the Port of Newcastle, as disclosed by Mr Gay on 17 October 2013. Additionally, the ACCC has not disclosed if bidders sought information from the ACCC in respect of the unlegislated “cap on numbers” at the Port of Newcastle.

It is improbable that bidders would not have examined a fee on container movements at the Port of Newcastle for conformity to Section 45 of the “Competition and Consumer Act 2010” (CCA). However, bidders might have been unaware that the government, trading as Newcastle Port Corporation (NPC), was conducting negotiations with Anglo Ports pursuant to a tender conducted by NPC in 2010. NPC was carrying on a business for the purpose of the CCA and the government was obliged to disclose to Anglo Ports changes to its requirements under the tender. NPC stopped carrying on a business for the purpose of the CCA on a specific date. The government refuses to disclose this date.

Question:

(4) Will the cap on container numbers at the Port of Newcastle reduce competition between ports in New South Wales for the container trade?

Comment: The unlegislated “cap on numbers” at the Port of Newcastle will reduce competition between ports in New South Wales for the container trade by providing for trade on unequal terms.

This “cap on numbers” at the Port of Newcastle  is estimated to be 30,000 container movements per year, adjusted for CPI. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when the government charges a fee of $100 per container for exceeding its “cap on numbers” at the Port of Newcastle. A container terminal would not be built to operate at a loss.

Question:

5. Has the ACCC advised the Government that the cap on container numbers at the Port of Newcastle may be unlawful and could be unenforceable?

Comment: The ACCC does not disclose what, if anything, it knows about an unlegislated “cap on numbers” at the Port of Newcastle. The ACCC does not disclose what, if anything, it has advised the government about a “cap on numbers” at the Port of Newcastle.

An example of advice the ACCC has given the government is included in ”Container stevedoring monitoring report No. 16” dated 30 October 2014, page 21:

(1) The structure and/or conditions of the sale should promote competition

The ACCC considers that the sale of port assets should promote competition where possible, for example by separating rather than integrating potentially competitive facilities and avoiding anti-competitive provisions from agreements with successful bidders.

For instance, once Port Botany and the Port of Newcastle were privatised, it was reported that:

The government has confirmed it leased Botany with a clause that prevented Newcastle from competing against it with a container terminal. And the Newcastle lease is believed to contain a similar undertaking. [The Newcastle herald, 11 May 2014]

The ACCC notes that Port Kembla has been identified by the NSW Government as the location for the development of a future container terminal to augment the capacity of Port Botany when required and notes that the NSW Government considers that:

Port Kembla is naturally placed to accommodate Sydney’s future container growth when Port Botany reaches capacity, due to its proximity to Sydney as well as existing and planned transport links, including several intermodal facilities planned for south-west Sydney…

Importing containers through the Port of Newcastle is less attractive than importing them through Port Botany or Port Kembla due to the landside transport infrastructure upgrades that would be required and the port’s distance from Sydney’s logistics centres, which are located primarily in the Botany industrial area and in south-west and western Sydney.

While there may be legitimate reasons why a government would want to plan for port development, for example, given the significant investments in road and rail connections required to support a container port, any sale conditions designed to boost asset sale prices by reducing potential competitive pressures on the asset operator would be of concern to the ACCC.

The ACCC encourages early engagement from State governments on any competition issues that may arise in relation to the proposed sale structures or sale conditions for any monopoly or near monopoly assets, including any restrictions on competition proposed in the arrangements. Such restrictions may be unlawful and could be unenforceable.

LEGISLATIVE ASSEMBLY 6 November 2014

6494—PORT OF NEWCASTLE AND PORT BOTANY LEASES

Mr Tim Crakanthorp to the Minister for Transport, and Minister for the Hunter representing the Minister for Roads and Freight, Minister for the North Coast, and Vice-President of the Executive Council—

1. Did the Government advise the Australian Competition and Consumer Commission (ACCC) of a cap on container numbers at the Port of Newcastle prior to leasing the Port of Newcastle and Port Botany?

2. Did the Government agree to compensate NSW Ports for container numbers in excess of the cap at the Port of Newcastle?

3. Did the Government advise bidders for the ports leases to obtain regulatory approval from the ACCC in relation to the cap on container numbers at the Port of Newcastle?

4. Will the cap on container numbers at the Port of Newcastle reduce competition between ports in New South Wales for the container trade?

5. Has the ACCC advised the Government that the cap on container numbers at the Port of Newcastle may be unlawful and could be unenforceable?

Answers 11 December 2014:

Questions 1 – 5:  This is a matter for the Treasurer.

Comment: On 12 December 2014, Mr Crakanthorp referred questions 1 – 5 to the Treasurer who answered them on 16 January 2015.

Question:

6.

Does the Government forecast a four-fold increase in container movements by truck between Port Botany and Western Sydney by 2046?

Answer: With the opening of new intermodal terminals in Western Sydney, it is anticipated that the growth in truck trips from Port Botany to Western Sydney will be lower than the overall growth at Port Botany.

Comment: In February 2014, the NSW Bureau of Transport Statistics estimated the number of container movements through Port Botany in 2046 at 10,851,400 with 64 per cent, or  6,944, 896 being transported by road.

NSW Ports estimates that containers trucked between Port Botany and western Sydney will increase from 2 million in 2014 to 5.4 million in 2045. By 2045, NSW Ports hopes to achieve 3 million containers on rail, compared with 0.3 million in 2014.

7. What steps is the Government taking to secure a corridor for a rail freight bypass of Sydney?

Answer: The Australian Government has commissioned Australian Rail Track Corporation to design and construct an inland rail route between Melbourne and Brisbane. A New South Wales Inter-agency Steering Group with representatives from core agencies will be established to provide whole of- government input from New South Wales.

Comment: The Inland Rail Line is for freight between Melbourne and Brisbane. A rail freight bypass of Sydney applies to Melbourne-Sydney freight and Brisbane-Sydney freight. Government rail bypass policy is for a line between Newcastle and Glenfield. Presumably, steps are being taken to secure a corridor for this rail freight bypass of Sydney.

A rail freight bypass is self-funding by railing containers between the Port of Newcastle and outer western Sydney, southern NSW and possibly Victoria. Road freight between Melbourne-Sydney and Brisbane-Sydney can be transferred to rail. Without a rail freight bypass, stages 2 and 3 of the Northern Sydney Freight corridor are required, costing $5 billion; the Western Sydney Freight Line is required, costing $1 billion; and a new rail freight line is required between Port Botany and Mascot.

A rail freight bypass removes the need for these lines and allows all of Sydney’s rail capacity to be used for passengers, with the significant economic benefits described by Deloitte Access Economics, see report extracts.

The following are government policy statements in relation to a rail freight bypass:

Northern Sydney Freight Corridor Scoping Phase Completion Report, 9 February 2012

page 37
Sydney rail bypass

As part of its options development phase, TCA considered alternatives for bypassing Sydney. Given the existing congestion on the Main North Line and restrictions on freight train movements into Sydney, a rail bypass may offer benefits if it can be constructed as a dedicated freight corridor capable of servicing all east coast markets. In order to provide at least four reliable paths per hour in each direction, the bypass would need to be double track from the outset.

More than 75% of road and rail interstate traffic entering the Sydney metropolitan area has its destination within Sydney. Consequently a bypass rail route would need dedicated links to the Metropolitan Freight Network and Sydney rail freight terminals (including Port Botany), in order to remove trains serving Sydney from the congested Main North Line. These include through-services between Melbourne and Brisbane that add and detach wagons in Sydney. This occurs regularly as the traffic volumes available to particular operators do not, at present, support separate services for each destination (refer to Figure 10).

A route could come off the Main South Line, in the vicinity of Glenfield, parallel to the alignment of the Westlink Motorway. Following completion of the SSFL, unrestricted freight access from that direction will be secured.

There is the possibility of a line further west between Campbelltown and Penrith. This is a much longer route that resembles the original proposal for a line from St Marys, intended to divert western coal around Sydney to the proposed Maldon-Dombarton Line and beyond to Port Kembla.

If freight rail connections are constructed from Leightonfield to a new rail freight terminal at Eastern Creek, it would be possible to link this facility directly to the northern portion of a Sydney rail bypass. This could provide access to the south if sufficient capacity was available on the SSFL.

Development of a suitable new rail alignment around the north of Sydney is a difficult task. It would involve the resumption of a large number of properties and require numerous grade separations of existing roads and water courses. In addition, it would impact areas of national parks. The route could be considered jointly with that for a far western Sydney road bypass. The differing requirements of the two modes in terms of alignments would, however, pose significant challenges to the possibility of a joint corridor. The rail curvature and gradients would have to be much gentler than that required for a road alignment, particularly if operating speeds of approximately 115 kilometres per hour are to be achieved.

Consideration would have to be given to how Sydney-bound freight trains might use a northern Sydney bypass line to avoid the existing route as, without re-routing these trains, the current problems with congestion on the existing Main North Line would remain. The Main West Line is already busy, particularly through Parramatta and is more constrained than the Main North corridor. Amplification of the Main West Rail Line in order to feed trains to a northern Sydney rail bypass would be very difficult. The concept of constructing a rail bypass around Sydney is therefore a long-term proposition. It needs to include a link to the metropolitan freight network and would require detailed alignment analysis, environmental impact assessment and route acquisition prior to commencement of construction. In order to be of benefit the entire project would have to be completed in one stage and would need to have a dedicated connection to an extended metropolitan freight network. Whilst it is premature to estimate the possible cost, it could be expected to run into many billions of dollars and could take in the order of 10-15 years to complete. Given the components of this project could not come online incrementally, the capacity benefits of this approach would not be realised until completion.

Northern Sydney Freight Corridor Strategic Review Report, July 2012

page 21
4.5 Potential medium to long-term alternatives

If demand in the Melbourne–Sydney and Sydney–Brisbane markets continues to grow considerably, an upgrade of the infrastructure through Sydney would be necessary. This would need to involve either further investment in the NSFC Program (realignment of the Main North Line), or construction of a new bypass route within the Sydney Basin.

page 24
Sydney rail bypass

As part of its options development assessment for the NSFC Program, TfNSW considered alternatives for bypassing Sydney. Given the existing congestion on the Main North Line and restrictions on freight train movements into Sydney, a rail bypass may offer benefits if it could be constructed as a dedicated freight corridor capable of servicing all East Coast markets. In order to provide at least four reliable paths per hour in each direction, the bypass would need to be double track from the outset.

More than 75 per cent of road and rail interstate traffic entering the Sydney metropolitan area has its destination within Sydney. Consequently, a rail bypass route would need dedicated links to the metropolitan freight network and Sydney rail freight terminals (including Port Botany), in order to remove trains serving Sydney, from the congested Main North Line. These trains include through-services between Melbourne and Brisbane that add and detach wagons in Sydney. This occurs regularly, as the traffic volumes available to particular operators do not, at present, support separate services for each destination (refer Figure 9).

A rail bypass could come off the Main South Line, in the vicinity of Glenfield, parallel to the alignment of the Westlink Motorway. Following completion of the SSFL, unrestricted freight access from that direction will be secured. There is also the possibility of a line further west between Campbelltown and Penrith. This is a much longer route that resembles the original proposal for a line from St Marys, to divert western coal around Sydney to the potential Maldon-Dombarton Line and beyond to Port Kembla. If freight rail connections are constructed from Leightonfield to a new rail freight terminal at Eastern Creek, it would be possible to link this facility directly to the northern portion of a Sydney rail bypass. This could provide access to the south if sufficient capacity was available on the SSFL.

Development of a suitable new rail alignment around the north of Sydney is a difficult task. It would involve the resumption of a large number of properties and require numerous bridges over existing roads and watercourses. In addition, it would impact areas of national park. The route could be considered jointly with that for a far western Sydney road bypass. However, the differing requirements of the two modes in terms of alignment would pose significant challenges to the possibility of a joint corridor. The rail curvature and gradients would have to be much gentler than that required for a road alignment, particularly if optimal operating speeds are to be achieved.

Consideration would also have to be given to how Sydney-bound freight trains might use a northern Sydney rail bypass to avoid the existing route as, without re-routing these trains, the current problems with congestion on the existing Main North Line would remain. The Main West Line is already busy, particularly through Parramatta, and this line is more constrained than the Main North Line corridor. Amplification of the Main West Line in order to feed trains to a northern Sydney rail bypass would be very difficult. The concept of constructing a rail bypass around Sydney is, therefore, a long-term proposition. As well as investigating an appropriate link to the metropolitan freight network, the option would require detailed alignment analysis, environmental impact assessment and route acquisition prior to commencement of construction. In order to be of benefit, the entire project would have to be completed in one stage and would need to have a dedicated connection to an extended metropolitan freight network. Whilst it is premature to estimate the possible cost, it could be expected to run into many billions of dollars and could take in the order of 10-15 years to complete. Given the components of this option could not come online incrementally, the capacity benefits of this approach would not be realised until completion.

Draft NSW Freight and Ports Strategy, November 2012

Case Study 10

Proposed long term corridors support freight growth and provide opportunities to move a greater share of freight around the Sydney metropolitan area on rail. Examples of such corridors include the Outer Sydney Orbital, Inland Rail Line, Western Sydney Freight Line and Maldon to Dombarton Rail Line.

The potential for a new Outer Sydney Orbital corridor has been considered for some time as the means to address the significant industrial development occurring in the west of Sydney.

The 2007 Pearlman Review into the F3 to M7 corridor selection recommended that work commence on the identification and reservation of a corridor for a new orbital link to the west of the current M7 Motorway.

Identifying a new Outer Sydney Orbital corridor and protecting it from incompatible development is an increasingly urgent priority, particularly as the corridor is of key strategic significance to both the road and the rail task.

While the corridor offers the potential to improve mobility between emerging suburbs and employment locations on Sydney’s fringe, it is also a key enabler in progressing the separation of the passenger and freight rail networks in the Sydney metropolitan area.

The initial driver for a dedicated freight network includes the interstate freight rail task, as this traffic is the most difficult to accommodate within a densely trafficked, metropolitan passenger system (see Action 2C). The movement of coal around Sydney is another potential driver that would facilitate alternatives to the congested Metropolitan Rail Network and, in particular, the Illawarra Line.

Analysis carried out by Infrastructure Australia suggests that a multi-modal corridor from Western Sydney north to the Central Coast and lower Hunter may provide a more effective long term connection between Sydney, the Illawarra and areas to the north.

An adaptive Outer Sydney Orbital corridor would support a new level of integrated transport planning. It would potentially allow four significant modal problems to be resolved through one integrated corridor. An Outer Sydney Orbital would:

            • Provide a dedicated rail freight line north from Sydney, beyond the current Northern Sydney Freight Corridor Project
            • Identify and reserve a corridor for the new orbital road link
            • Provide a Western Sydney Freight Line
            • Provide a corridor for an Inland Rail Route.

An additional consideration is that it may be possible for energy and water infrastructure to use this corridor, where it is sensible to do so.

NSW Freight and Ports Strategy, November 2013:

Case Study 13: (Same as Case Study 10 as contained in the draft strategy, November 2012)

NSW Freight and Ports Strategy, November 2013: Page 209

Other long term infrastructure projects such as the Outer Sydney Orbital and Western Sydney Freight Corridor are unlikely to commence construction within the next 10 to 15 years. However, work is needed to plan and implement corridor preservation requirements to expand network capacity.

Operational expenditure will also need to be directed to investigate key transport corridors benefiting freight. Identifying and protecting these corridors is imperative, as the land is already under pressure from urban growth and encroachment.

LEGISLATIVE COUNCIL 23 October 2014

0144—Treasurer—LEASES FOR PORT BOTANY, PORT KEMBLA AND PORT OF NEWCASTLE

Dr Kaye to the Minister for Fair Trading representing the Treasurer, and Minister for Industrial Relations—

1. In regard to compensation payable to NSW Ports, the Port Botany leaseholder, if container movements exceed an annual threshold at the Port of Newcastle:

a. what is the annual threshold?
b. how much compensation is payable per container?

2. Did the Government consult the Australian Competition and Consumer Commission when inserting compensation provisions into the leases for Port Botany, Port Kembla and Port of Newcastle?

3. Is the amount of compensation an amount between $76 per twenty-foot equivalent unit (teu) and $120 per teu, where $76 is the fee currently charged by NSW Ports for an export container and $120 is the fee currently charged for an import container?

4.

a. Is the Port of Newcastle leaseholder required to pay the Government a fee for container movements through the Port of Newcastle on the same or similar terms as the Government is required to compensate the Port Botany leaseholder?

If so, when did the Government undertake to pay compensation to the Port Botany leaseholder and to impose a fee on the Port of Newcastle leaseholder?

5. How many containers must be moved through Port Botany and Port Kembla before an extension is allowed in the number of container movements at the Port of Newcastle that do not attract the compensation payment and fee respectively?

27 November 2014

Answer—

This question should be re-directed to the Minister for Roads and Freight.

Comment: The questions were asked by The Hon. Dr Mehreen Faruqi of The Hon. Duncan Gay MLC, Minister for Roads and Freight, on 23 October 2014. Mr Gay answered on 27 November 2014 that the questions should be re-directed to the Treasurer. Dr Faruqi asked the Treasurer the questions on 5 May 2015 and they were answered.

The “Newcastle Herald” reported these responses on 16 December 2014.

Government accused of port deal “cover up”

THE state government has been accused of a ‘‘blatant attempt at a cover up’’ after two ministers claimed the other was responsible for answering questions about whether a secret cap exists on the number of containers that can be moved through the Port of Newcastle.

Roads and Freight Minister Duncan Gay and Treasurer Andrew Constance referred to each other identical questions lodged in State Parliament by two Greens MPs about whether compensation is payable to the lease holder of Port Botany if container movements through the Port of Newcastle exceed a threshold.

Mr Gay initially referred the string of questions put by Greens MLC Mehreen Faruqi to the Treasurer. Last week, Mr Constance said the questions, lodged separately by Greens MLC John Kaye, were a matter for Mr Gay.

Container terminal advocate Greg Cameron separately contacted the Treasurer’s office on Friday and was given yet another response – ‘‘the matters you have raised are the responsibility of the Minister for Environment [Rob Stokes]’’.

The government has refused to disclose the cap, or the compensation payable, despite Mr Gay telling Parliament last year ‘‘the government has been clear on this all the way through the process…that part of the lease and the rationalisation was a cap on numbers there [Newcastle]’’.

‘‘I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension,’’ Mr Gay said in 2013.

Dr Kaye accused the government of seeking to keep secret whatever restriction had been put in place as part of the leasing of the state’s ports, including Newcastle, and said it should come clean on such significant arrangements for the state.

‘‘This is a blatant attempt at a cover up. The people of Newcastle are being treated with complete contempt,’’ Dr Kaye said.

Contacted by the Newcastle Herald, a spokesman for the Treasurer said ‘‘the arrangements do not prohibit the development of a container terminal at the Port of Newcastle and enable the growth of container volumes through Newcastle servicing that region’’.

‘‘The government’s transaction team engaged extensively with the Australian Competition and Consumer Commission regarding the competition and regulatory framework, including the container arrangements,’’ the spokesman said.

In a report released in October, the ACCC said: ‘‘any sale conditions designed to boost asset sale prices by reducing potential competitive pressures on the asset operator would be of concern to the ACCC’’.

LEGISLATIVE COUNCIL 23 October 2014

0143—Roads and Freight—PORT BOTANY, PORT KEMBLA AND PORT OF NEWCASTLE

Dr Faruqi to the Minister for Roads and Freight, Minister for the North Coast, and Vice-President of the Executive Council—

Question:

1.

(a) Is compensation payable to the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle?

(b) If so, what is the annual threshold?

(c) What is the amount of compensation per twenty-foot equivalent unit (TEU)?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

(a) The terms of the Port Botany transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port Botany lease is a public document.

(b) The details of the container arrangements in the Port Commitment Deeds are commercial in confidence.

(c) Please see the answer to question 1 (b).

Comment: The Hon. Duncan Gay MLC disclosed that compensation is payable to the Port Botany leaseholder in answer to a question from The Hon. Adam Searle MLC on 17 October 2013.

The government imposed an unlegislated “cap on numbers”, which cannot be examined for lawfulness, enforceability and benefit, because it is confidential.

The “cap on numbers” is estimated to be 30,000 container movements per year, adjusted for CPI. To pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Question:

2.

(a) Is the Port of Newcastle leaseholder required to pay the Government a fee for container movements through the Port of Newcastle on the same or similar terms as the Government is required to compensate the Port Botany leaseholder?

(b) If so, when did the Government undertake to pay compensation to the Port Botany leaseholder and to impose a fee on the Port of Newcastle leaseholder?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

(a) The terms of the Port of Newcastle transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port of Newcastle lease is a public document.

(b) Please refer to the answer to questions 1 (a) and 2(a).

Comment: As for 1. above. Presumably, agreement to pay compensation was in place when Port Botany lease negotiations concluded on 12 April 2013.

Question:

3.

How many containers must be moved through Port Botany and Port Kembla before an extension is allowed in the number of container movements at the Port of Newcastle that do not attract the compensation payment and fee respectively?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

Please refer to the answers to questions 1 (a) and 2(a). The details of the Port Commitment Deeds are commercial in confidence.

Comment: Mr Gay disclosed, on 17 October 2013, that “the only time an extension is allowed [to the “cap on numbers”] is when a specific number is reached and is tripped in Port Botany and Port Kembla”. In a media statement on 1 May 2014, NSW Treasury referred to Port Botany and Port Kembla capacity becoming “full”:

The [Port of Newcastle] lease has been drawn up in accordance with the current NSW Government freight policy of Port Botany being the first container facility priority, with Port Kembla designated to take the overflow once Port Botany is full. Newcastle will be further developed once Port Kembla is full. Newcastle container throughput is, in the meantime, fully able to grow organically.

In February 2013, Newcastle Port Corporation noted:

In July 2012 the NSW Government announced that Port Kembla will be the logical next long-term tranche of container capacity after Port Botany. In accordance with the government’s announcement, subject to any relevant government approvals, any future container terminal development at Newcastle will occur only once Port Botany and Port Kembla are fully developed and developable handling capacity is fully utilised at both Port Botany and Port Kembla. (Newcastle Port Corporation, Draft Strategic Development Plan for the Port of Newcastle, February 2013, page 23)

Question:

4.

(a) Is the purpose of the fee charged of the Port of Newcastle leaseholder to constrain the number of containers passing through the Port of Newcastle?

(b) If not, what is the purpose of the fee?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

(a) Please refer to the answer to question 2(a).

(b) Please refer to the answer above.

Comment: The unlegislated “cap on numbers” is estimated to be 30,000 container movements per year, adjusted for CPI. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss.

Question:

5.

(a) Is the purpose of the fee charged of the Port of Newcastle leaseholder to prevent development of a container terminal at the Port of Newcastle?

(b) If not, what is the purpose of the fee?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

(a) Please refer to the answer to question 2(a).

(b) Please refer to the answer above.

Comment: See comment 4 above.

Question:

6.

Did the Government abolish the cap on container movements at Port Botany to increase the value of the lease to potential purchasers?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

Please refer to former Treasurer Baird’s second reading speech on 17 October 2012 for the Ports Assets (Authorised Transactions) Bill 2012.

Comment: In his second reading speech for the “Ports Assets (Authorised Transactions) Bill” on 17 October 2012, The Hon. Mike Baird said:

By allowing for the throughput limit to be removed, the Government is ensuring that taxpayers receive value for the investment, which has been made already; aligns Port Botany with major ports around the world, none of which has such a cap; and allows the State to receive full value for the lease.

Leasing Port Botany enabled repaying Sydney Port Corporation’s residual debt of $622 million (in 2012).

The ACCC said, on 25 June 2014 (p.38):

The ACCC remains concerned over arrangements designed to maximise proceeds received by a government by reducing the prospect of competitive provision of port services, of which the leasing of Port Botany and the Port of Newcastle were examples.

The Sydney Morning Herald reported on 31 July 2012:

THE state government will allow unrestricted container movements from Port Botany as a carrot to the private sector bidding for the port, a move the opposition says will worsen congestion on some of Sydney’s most clogged roads.

The Treasurer, Mike Baird, confirmed the government intends to lift the existing cap of 3.2 million container movements as part of the transaction of the port in a 99-year lease.

The cap was established following widespread expansion of the port under the former Labor government and fears that unrestricted movement would worsen congestion.

But the adviser to the state government on the port sale, investment bank Morgan Stanley, told the government the sale price would be more than $1 billion higher if the cap was lifted.

Mr Baird said the cap needed to be removed in the short to medium term. ”On current estimates, Port Botany is likely to reach the cap by approximately 2017 – many years earlier than originally anticipated,” he said. ”The removal of the cap is in line with the recommendations of the scoping study to get the best outcome for NSW taxpayers.”

It was reported that there was a “marked increase” between indicative bids for Port Botany/ Kembla between December 2012 and April 2013. “The Australian” newspaper wrote on 21 June 2013:

What transpired was one of the closest races for a major asset seen in Australia. Research by the deal makes it clear that there was a marked increase between the indicative bids given to the government advisers in December [2012] and the final numbers submitted in April [2013]. In the end, according to sources, the top two contenders were separated by less than $20 million.

“The Australian Financial Review” described the Port Botany cap as “antiquated” in commentary about the Port Botany lease, on 3 January 2014:

There were two important reasons the [leasing] process had attracted four seemingly serious offers.

…The second reason was Baird’s decision to scrap a cap limiting the number of containers that could be moved at the ports. The antiquated rule was even more silly, given the NSW government had just spent $1 billion expanding the port by a third. This meant bidders were offered a near monopoly on container shipping in NSW with increased capacity. Port Botany handles almost three-quarters of the two million containers that move through the state’s ports, transporting everything from furniture to heavy machinery.

Mr Baird did not mention an unlegislated “cap on numbers” at the Port of Newcastle or payment of compensation to the Port Botany lessee in his second reading speech on 17 October 2012:

The vast majority—some 85 per cent of all containers—has an origin or destination within 40 kilometres of the port. It is clear that the ongoing imposition of the cap on throughput at Port Botany would result in a massive inefficiency in the future that would greatly constrain the State’s economy.

Port Botany’s dominant market position relies exclusively on its monopoly status as the state’s only container port. Most containers are trucked within 40 km of Port Botany to minimise cost. Government policy supports an increase in container transportation by truck from 2 million per year in 2014 to 5.4 million per year by 2045.

Government policy supports railing 3 million containers in 2045 up from 0.3 million in 2014. But achieving this 10-fold increase in rail transportation requires building a new rail freight line, the “Western Sydney Freight Line”, between Chullora and Eastern Creek. The cost, $1 billion, is unfunded. Additionally, a new rail freight line is required between Port Botany and Mascot. This line, too, is unfunded. The government is unable to demonstrate how a major increase in rail transportation will be accomplished.

The optimum use of Sydney’s existing rail network is people, not freight. Deloitte Access Economics commented extensively on the cost comparison between road and rail for freight transportation in its June 2011 report, “The True Value of Rail”, see report extracts.

Question:

7.

Did the Government agree to compensate the Port Botany leaseholder in respect of container movements at the Port of Newcastle to preserve the commercial value of the Port Botany lease?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

The terms of the Port Botany transaction reflect the Government’s NSW Freight and Ports Strategy which was released in 2013.

Comment: Compensation is payable to NSW Ports when container movements at the Port of Newcastle exceed the unlegislated and confidential, “cap on numbers”. It is presumed that paying compensation preserves the commercial value of the Port Botany lease.

The “NSW Freight and Ports Strategy” reflects the Scoping Study and its unlegislated “cap on numbers”. There is no mention of a “cap on numbers” at the Port of Newcastle, or a fee for exceeding it, in the “NSW Freight and Ports Strategy” dated November 2013; the “Draft Strategy” dated November 2012;  and, the “Discussion Paper” dated February 2012.

Question:

8.

(a) Was a cost-benefit study of the proposal to compensate the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle undertaken?

(b) If so, will the Government release it?

Answer 27 November 2014: These are matters for the Treasurer.

The Treasurer, The Hon. Gladys Berejiklian MP, was asked the question on 5 May 2015 and provided the following answer on 9 June 2015:

(a) The scoping study for the transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State.

(b) The scoping study is Commercial in Confidence.

Comment: As disclosed in questions 10 and 11 below, the government transport planning section, “Transport for NSW”, did not “specifically” analyse (1) the additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle; and (2) the additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales.

The government is able to disclose its “non-specific” analysis.

Presumably, Morgan Stanley advised the government about the transport, economic and commercial implications of applying an unlegislated “cap on numbers” at the Port of Newcastle, and charging a fee for exceeding it. However, such information not has been disclosed by the government for analysis because the Scoping Study is confidential. Confidentiality also prevents the unlegislated “cap on numbers” from being examined for lawfulness and enforceability.

On 3 September 2015, Ms Berejiklian was asked:

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Ms Berejiklian answered on 29 September 2015:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

Ms Berejiklian did not acknowledge the unlegislated “cap on numbers” at the Port of Newcastle.

Question:

9.

(a) Does it benefit the New South Wales economy to prevent competition between New South Wales ports for handling containers?

(b) If so, how?

Answer: (a) and (b) Refer to my answer to Budget Estimates 2014-15 Supplementary Question 249.

BUDGET ESTIMATES 2014-2015
SUPPLEMENTARY QUESTIONS ON NOTICE
The Illawarra

249. Has the State Government completed the work relating to the Maldon-Dombarton rail link for the Federal Government? If so, on what date was the report provided to the Federal Government?
I am advised:
The NSW Government delivered work relating to the Maldon to Dombarton rail link to the Australian Government on 31 July 2014.

Comment: Answer to question 249, above, does not relate in any obvious way to the question.

The unlegislated “cap on numbers” at the Port of Newcastle prevents competition on equal terms with Port Botany.

This “cap on numbers” is estimated to be 30,000 container movements per year, adjusted for CPI. In order to pay compensation to NSW Ports, the government would need to charge Port of Newcastle Investments a fee of $100 per container because this is the average fee NSW Ports charges at Port Botany.

Building a container terminal at the Port of Newcastle is unprofitable when paying the government a fee of $100 per container for exceeding this “cap on numbers”. A container terminal would not be built to operate at a loss.

The ACCC said, on 25 June 2014 (p.38):

The ACCC remains concerned over arrangements designed to maximise proceeds received by a government by reducing the prospect of competitive provision of port services, of which the leasing of Port Botany and the Port of Newcastle were examples.

Ms Berejiklian’s answer to a similar question asked on 5 May 2015, was:

The New South Wales ports are not prevented from competing for handling of containers.

Question:

10.

What are the estimated additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle?

Answer: Specific analysis of this nature has not been undertaken by Transport for NSW. However, a significant proportion of exports originating in northern NSW are bulk exports, which can be processed at the Port of Newcastle.

Question:

11.

What are the estimated additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales?

Answer: Specific analysis of this nature has not been undertaken by Transport for NSW. However, 85 percent of Port Botany container imports have a destination within the greater Sydney metropolitan area.

Comment on answers 10 and 11: The government transport planning section, “Transport for NSW”, did not undertake “specific analysis”. However, the Minister is able to disclose non-specific analysis of: (1) the additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle; and (2) the additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales.

Ms Berejiklian disclosed in answer to question 8 above:

The scoping study for the [Port Botany lease] transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State.

Morgan Stanley’s analysis for the Scoping Study may or may not have included implications of the government’s unlegislated “cap on numbers” for the northern NSW economy. However, container freight policy is based on this Scoping Study. The government decided against developing a container terminal at the Port of Newcastle after considering this confidential Scoping Study, as disclosed on 27 July 2012. A container terminal at the Port of Newcastle would be competitive without a government fee, and an unlegislated “cap on numbers”.

Question:

12.

Does it benefit the New South Wales economy to predicate future growth in Port Botany container movements on transportation by truck?

Answer:

It is necessary to model road and rail forecasts for container movements to and from Port Botany, so the NSW Government can respond with appropriate policy levers, and so industry can respond with appropriate business models. NSW Government forecasts of road and rail container movements take into account our commitment to double the 2011-12 container rail mode share by 2020.

Comment: In February 2014 the NSW Bureau of Transport Statistics released its forecast of container movements to and from Port Botany. These estimates were in line with estimates by NSW Ports. NSW Ports estimated container movements by truck between the port and western Sydney to increase from 2 million in 2014 to 5.4 million in 2045. Movement of containers by rail is estimated to increase from 0.3 million in 2014 to 3 million by 2045. No specific analysis is provided for how the increase in container transportation by rail will be achieved, or funded.

The NSW government is able to disclose the economic implications of trucking containers between Port Botany and western Sydney destinations. Deloitte Access Economics evaluated the cost of truck transportation compared with rail. This report indicates that the full cost of freight transportation by road is not recovered, see report extracts.

According to the RTA, a container truck using the M5 East westbound tunnel is the equivalent of six passenger cars and the equivalent of three passenger cars using the eastbound tunnel. Container trucks are 2 per cent of vehicle use on the M5 East. In the eastbound tunnel, this equates to 6 per cent of capacity and in the wesbound tunnel it equates to 3 per cent of capacity.

In 2045, when container trucks will require 4 per cent of current M5 East capacity, this will equate to 12 per cent of the current westbound tunnel and 6 per cent of the eastbound tunnel.

Increasing the rail component of container transportation requires completion of three major rail projects.

Stages 2 and 3 of the Northern Sydney Freight Corridor (NSFC), costing $5 billion, would provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield, which is required by 2028 to meet predicted freight demand. There are no funds available for building stages 2 and 3 of the NSFC. Presumably, these stages will not be built. An option for the government to increase freight capacity on the rail line between Newcastle and Strathfield is to reduce passenger services.

The Western Sydney Freight Line, between Chullora and Eastern Creek, costing about $1 billion, is required to rail containers between Port Botany and Eastern Creek, which is the proposed site for an intermodal terminal after Moorebank. However, there are no funds available for building the Western Sydney Freight Line. Presumably, this line will not be built.

A new rail freight line is required between Port Botany and Mascot. Funding for this line has not been disclosed.

Question:

13.

What is the container-carrying capacity of the rail line serving Port Botany?

Answer:

The Australian Rail Track Corporation is the network operator of the Port Botany rail line, which forms part of the Metropolitan Freight Network. Any questions relating to the network capacity are a matter for the Australian Rail Track Corporation.

Comment: Mr Gay did not disclose the container carrying capacity of the rail line serving Port Botany.

In answer to question 8, Ms Berejiklian said:

The scoping study for the [Port Botany lease] transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State.

The confidential Scoping Study was deficient if it failed to estimate the container-carrying capacity of the rail line serving Port Botany. This Scoping Study was the basis of the government deciding on 27 July 2012 not to develop a container at the Port of Newcastle. The government considers a container terminal at the Port of Newcastle is “uneconomic”, as disclosed on 22 August 2014.

In 2014, 0.3 million containers were railed between Port Botany and western Sydney. NSW Ports estimates this number will increase to 3 million by 2045. Building the increased capacity will require a new rail freight line between Port Botany and Mascot; a new rail freight line – the Western Sydney Freight Line – between Chullora and Eastern Creek; and, completing stages 2 and 3 of the Northern Sydney Freight Corridor. No plans have been disclosed for building or financing these lines, or how the increased use of rail will be accomplished

Question:

14.

(a) Will the Government fund the Western Sydney Freight Line?

(b) If not, who will fund this line?

Answer: (a) and (b) This is yet to be determined.

Comment: The government is unable to fund the Western Sydney Freight line, between Chullora and Eastern Creek, and no other source of funds has been identified. This line is not required if a rail freight bypass is built between the Port of Newcastle and Glenfield and is paid for by railing containers and general freight to intermodal terminals in western Sydney. The cost of the Western Sydney Freight Line will be in the order of $1 billion.

Question:

15.

When will the Commonwealth Government respond to the Government’s request for funds to build stages 2 and 3 of the Northern Sydney Freight Corridor (NSFC)?

Answer: This is a matter for the Commonwealth Government.

Comment: The Commonwealth Government has not responded to the NSW government’s request to funds stages 2 and 3 of the NSFC costing approximately $5 billion. It is unlikely the Commonwealth will fund this line. The stages are required to be finished before 2028 to provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield, using the existing passenger line corridor. The NSFC is not required if a rail freight bypass is built between the Port of Newcastle and Glenfield and paid for by railing containers and general freight.

An option for the NSW government is to increase freight capacity on the NSFC by reducing passenger capacity. Alternatively, the government can cancel plans for stages 2 and 3 of the NSFC, and remove all freight so that all capacity is used for passengers. This can be accomplished by developing a rail freight bypass line, between the Port of Newcastle and Glenfield.

A report by Deloitte Access Economics “provides evidence on the level of the benefits not captured in prices or costs that arise from shifting passengers or freight from road to rail”. The following are extracts from this report, ”The true value of rail, 3 June 2011”:

page ii

Benefits of rail

A key part of ensuring correct investment decisions are made is to recognise the true value of rail. This report provides evidence on the level of the benefits not captured in prices or costs that arise from shifting passengers or freight from road to rail. The benefits identified are:

Passenger transport:

            • Road travel produces more than 40% more carbon pollution than rail travel per passenger kilometre.
            • Road transport generates almost eight times the amount of accident costs as rail transport does.
            • In the longer term, high speed rail provides the potential to alleviate pressures that will emerge to move people between major cities and along east coast corridors as Australia’s population grows.

Urban passenger transport:

            • An additional commuter journey by rail reduces congestion costs alone by between around $2 and $7.
            • For every passenger journey made on rail rather than road in Australia’s four largest cities, between $3 and $8.50 can be saved in congestion, safety and carbon emission costs.
            • In Sydney, for example, if rail absorbed 30% of the forecast increase in urban travel then congestion, safety and carbon emission costs could be reduced by around $1 billion a year by 2025.

Interstate freight transport:

            • Heavy vehicle road freight users do not face the full maintenance costs that they cause. Under-recovery of these costs has been estimated at between $7,000 and $10,500 per truck each year (Productivity Commission 2006 and NTC 2006). The National Transport Commission (NTC) has recommended changes which seek to address this issue.
            • Freight moved between Melbourne and Brisbane by rail instead of road reduces carbon costs by around $56 per container and reduces accident costs by around $92 per container.
            • Along the North-South freight corridor, for example, if rail was to achieve a 40% share of the market then savings, in terms of carbon pollution and accidents, would currently be around $300m a year or $630m a year by 2030.

Freight transport within urban centres:

            • Along with the use of the mass transit of people, a greater use of rail for freight within, especially, Sydney and Melbourne will be needed to alleviate the increasing congestion on road networks. Environmental and safety benefits would also accrue.
            • The NSW and Victorian Governments have recognised the need to develop more effective rail freight services within their cities and have set targets accordingly. These goals aim to ease congestion on arterial roads and improve use of existing rail infrastructure and port land. These costs have tangible effects on the lives of all Australian’s and the economy. Congestion eats away at leisure time and reduces economic productivity as workers and goods take longer to reach their destination and cost more to transport. Carbon pollution creates social costs to be borne by future generations who will face the duel costs of a changed climate and the need to reduce emissions. In addition to deaths caused by vehicle accidents, injuries create ongoing effects in terms of pain, reduced ability to work and the need for care.

page iv

There are currently some key bottlenecks holding back the efficient use of rail in Australia. Freight movements between Melbourne and Brisbane are constrained by congestion in northern Sydney. The North Sydney Freight Corridor would go a long way to addressing this issue. Fixing this key point of infrastructure is estimated to cost around $4.4 billion today. A number of other projects on this route such as modern intermodal facilities in Sydney and Melbourne and many minor adjustments to the track might also be needed.

These investments are costly but will help drive a modal shift towards rail freight which creates benefits from reduced carbon pollution and accidents. If rail was to achieve a 40% market share then by 2030 the savings from accidents and carbon pollution could be worth well over $600 million a year.

The key choke point for freight is intimately linked with Sydney’s metropolitan network. The metropolitan network is currently constrained by capacity through the city. Expanding capacity in the city, through the Western Express project, would currently cost around $4.5 billion. Again, there are large savings in carbon pollution, accident and congestion costs which work to offset the initial infrastructure investment. If a congestion charge and carbon tax were introduced, this could result in around 150 million extra rail journeys a year. All these extra passengers would reduce carbon pollution, congestion and accident costs on the roads by around $1.2 billion a year.

page 50

5.1.3 Required investments

The initial investment required to free up capacity on the north-south corridor is to establish the northern Sydney freight corridor (NSFC). A project outline for the NSFC has recently been made by Transport NSW (2010a). The proposed NSFC is not a separate freight line but is, instead, a series of augmentations to the existing shared network which would allow passenger and freight trains to interoperate more freely and would therefore create additional freight train paths. The proposed NSFC would operate in three stages, initially increasing the daily number of train paths from 16 to 26 in both directions while stage two would increase this to at least 33 paths in both directions. Stage three would transition towards a dedicated freight line

The NSFC is forecast to cost around $1.2bn for stage one, $3.4bn for stage two and $3.2bn for stage three, for a total of around $7.8bn. This expenditure would be spread over the next 12 years and so, in present value terms the capital cost is around $5.2bn. Of this, $0.8bn has already been allocated under the Nation Building program. This leaves an unfunded capital cost of around $4.4bn in present value terms.

page 65

On the north-south corridor, where there is significant room for rail to grow its market share, it is currently being held back by inefficient network infrastructure which leads to reliability issues. The main constraint on the north-south corridor is currently in the Sydney metropolitan network. Trains attempting to move through the network must avoid peak passenger periods. This is complicated by a lack of necessary infrastructure in the north of Sydney. There is currently only a single extra freight train path available each day heading north out of Sydney and this path is likely to be used up within the next year or two. The north-south corridor is therefore facing imminent capacity constraints which will hamper any growth in rail freight along the east coast. This constraint could be alleviated with investment in the north Sydney rail freight corridor, which has been proposed to Infrastructure Australia but is currently only partially funded.

Question:

16.

Is it true that there are no state or Commonwealth Government funds available for building the Western Sydney Freight Line and stages 2 and 3 of the Northern Sydney Freight Corridor?

Answer: Transport for NSW has allocated funding for planning works associated with the Western Sydney Freight Line. Residual funds from stage one of the Northern Sydney Freight Line have been allocated for planning for stage two.

Comment: There are no funds allocated for building stages 2 and 3 of the Northern Sydney Freight Corridor at a cost of around $5 billion. Without funding, the stages will not be built.

BUDGET ESTIMATES 2014-2015 SUPPLEMENTARY QUESTIONS ON NOTICE TREASURY, INDUSTRIAL RELATIONS 22 August 2014

The Hon. Dr John Kaye:

Question:

53. Given that there has been significant allegations of at least influence peddling and political interference under Labor surrounding proposals to the [sic] develop a container facility in Newcastle, will Treasury be reviewing that decision?
(a) If so please provide details
(b) If not why not

Answer:

Attempts by Government to dictate uneconomic enterprises contrary to market demand are examples of the kind of rent seeking activity likely to encourage influence peddling or corruption. As the container port did not proceed, there is no decision to review.

Comment:

In August 2014, the ”Independent Commission Against Corruption” (ICAC) was conducting its ”Operation Spicer” investigation into political donations in NSW.

The ICAC investigated the leaking of extracts from a NSW Treasury report dated 4 February 2011 to the ”The Newcastle Herald”. This material was reported on 18 February 2011:

The 22-page document titled Review of Proposed Uses of Mayfield and Intertrade Lands at Newcastle Port was prepared for Mr Roozendaal on February 4.

It states that Treasury had not been provided with a rigorous analysis of the demand forecast for containers and bulk goods.

“A 2006 PWC [Port Waratah Coal] study for bulk goods berth on the [Mayfield] site was based on the Newcastle Port Corporation-generated demand forecasts that were not subjected to critical analysis,” the report says.

“A 2003 study [updated in 2009] into container demand to Newcastle identified a total current demand of 266,000 TEU [20 tonne equivalent units] pa, which is dwarfed by the current and potential capacity of Port Botany.”

Anglo Ports and Newcastle Stevedores have expressed interest in operating a Newcastle container terminal. “There is an irrefutable business case for such a terminal,” Anglo Ports spokesman Richard Setchell said.

The ICAC investigation did not uncover the person who leaked the material to the newspaper.

The ICAC investigated the Herald article in the context of negotiations between Anglo Ports and Newcastle Port Corporation for development of a multi-purpose terminal.

The author of the Treasury report, Mr Dominic Schuster, was questioned about the circumstances under which this report was prepared.

Mr Gary Webb was CEO of Newcastle Port Corporation at the time negotiations were being conducted with Anglo Ports. In testimony (page 5658) on 19 August 2014, Mr Webb was asked:

Question: What was the next phase that you were going to enter?

Mr Webb:

Well, the next phase was to develop detailed project delivery documents, lease documents so that the principles, everything that had been negotiated would be developed into final documents that could be thoroughly reviewed so that then there could be a signature.

Anglo Ports responded to the Treasury statement on 10 February 2015.

5536 – PORT OF NEWCASTLE PROPERTY LEASE, Hoenig, Ron to the Minister for Transport, and Minister for the Hunter representing the Minister for Roads and Freight, May 7 2014

 

Does the proposed lease of the Port of Newcastle contain any provision that prevents a container terminal being developed on the former steelworks site?

 

Answer June 11 2014

 

I am advised-

No.

LEGISLATIVE COUNCIL 17 OCTOBER 2013

 The Hon. ADAM SEARLE: My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

 The Hon. DUNCAN GAY: The rules in the organisation that did the scoping study for Port Botany and Port Kembla and introduced guidelines there indicate that while general cargo is allowed there will not be an extension under the rules for the lease of Newcastle Port. So the short answer to the question is that we do not envisage that any compensation will need to be put in place. The Government has been clear on this all the way through the process, even before it indicated it would lease the port at the stage when Newcastle Port Corporation was in place. I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there. I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension. The only time an extension is allowed is when a specific number is reached and is tripped in Port Botany and Port Kembla.

Note:

Mr Gay informed Budget Estimates on August 31 2015  that there is no “cap” at the Port of Newcastle:

The Hon. SOPHIE COTSIS: In terms of the cap on containers, are any fees paid if the number of containers through Newcastle exceeds a set amount?

The Hon. DUNCAN GAY: Not that I am aware of.

The Hon. SOPHIE COTSIS: You are not aware of that?

The Hon. DUNCAN GAY: You asked me whether there was a cap in Newcastle and I said there is not. Now you are asking me whether there is a fee paid if they go beyond a certain number. General cargo containers are part of what happens in Newcastle. My understanding is that within the general cargo that needs to go to Newcastle that is fine.

Mr Gay said on September 13 2016 and August 10 2016: “The port transaction deeds do not trigger any cross‑payments until a threshold container throughput is reached.”

LEGISLATIVE COUNCIL 17 OCTOBER 2013

 The Hon. ADAM SEARLE: My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

 The Hon. DUNCAN GAY: The rules in the organisation that did the scoping study for Port Botany and Port Kembla and introduced guidelines there indicate that while general cargo is allowed there will not be an extension under the rules for the lease of Newcastle Port. So the short answer to the question is that we do not envisage that any compensation will need to be put in place. The Government has been clear on this all the way through the process, even before it indicated it would lease the port at the stage when Newcastle Port Corporation was in place. I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there. I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension. The only time an extension is allowed is when a specific number is reached and is tripped in Port Botany and Port Kembla.

COMMENT

Mr Gay informed Budget Estimates on August 31 2015 that there is no “cap” at the Port of Newcastle but “within the general cargo that needs to go to Newcastle that is fine”:

The Hon. SOPHIE COTSIS: In terms of the cap on containers, are any fees paid if the number of containers through Newcastle exceeds a set amount?

The Hon. DUNCAN GAY: Not that I am aware of.

The Hon. SOPHIE COTSIS: You are not aware of that?

The Hon. DUNCAN GAY: You asked me whether there was a cap in Newcastle and I said there is not. Now you are asking me whether there is a fee paid if they go beyond a certain number. General cargo containers are part of what happens in Newcastle. My understanding is that within the general cargo that needs to go to Newcastle that is fine.

Mr Gay said on September 13 2016 and August 10 2016: “The port transaction deeds do not trigger any cross‑payments until a threshold container throughput is reached.”

PORTS ASSETS (AUTHORISED TRANSACTIONS) BILL 2012

 

Second Reading

 

17 October 2012 LEGISLATIVE ASSEMBLY 15939

 

Mr MIKE BAIRD (Manly—Treasurer, and Minister for Industrial Relations) [9.36 p.m.], in reply:

 

…….

 

In response to the points raised by the member for Heffron I advise the House that the bill is designed to maximise the proceeds from the sale and exceed the retention values set for the assets. I say to the House— and I will say this every day before the transaction—that we will not necessarily proceed with this transaction. We will only proceed if we exceed the retention values for the assets. That is not what happened with the gentrader transactions. The former Labor Government sold those assets for less than the retention value and members opposite know it. That should not have occurred, but it happened under Labor. It will not happen here. The O’Farrell-Stoner Government stands for producing transactions for the community that deliver the funds we need for infrastructure. But we will not do it at any price; we will do it only at a price that ensures there is maximum value for the people of this State. We make that commitment here today.

 

…..

 

The Government will retain oversight of all regulatory matters such as those relating to price, the environment and the handling of dangerous goods. In response to some of the claims made by the member for Heffron and the member for Maroubra during this debate, let me inform the House about issues of price control, competition, and environment and planning regulation. First, the Government is already engaged in dialogue with the national competition regulator, the Australian Competition and Consumer Commission, which is reviewing the competitive landscape around the transactions and, where required, will provide competition clearance as the transactions proceed. Competition will be governed by the Australian Competition and Consumer Commission, which is the appropriate body to oversee that competition.

 

…..

 

In response to the request by the member for Balmain for greater investment in rail, I advise that the Government is committed to implementing various steps to improve traffic flow around Port Botany and shift greater volumes of goods from road to rail. These include the announced Moorebank intermodal terminal, the development of the Southern Sydney Freight Line and the Enfield Logistics Terminal, the Sydney Ports Landside Improvement Strategy and the recently opened Sydney Ports truck marshalling yard at Port Botany. Complementing these improvements, the new port operator will be required to make a significant annual contribution to improving road and rail landside logistics. We have specifically asked for that, understanding the impacts around the local community, and we will ensure that it is part of any lease arrangements that are executed.

 

In addition, the Government is committed to delivering WestConnex, which will support freight movements between Port Botany and logistics hubs in western and south-western Sydney. I note that the long-term lease of Port Kembla is an important part of this transaction program because of its diversified revenue base and enormous potential for growth through the outer harbour development commenced by the New South Wales Government. The member for Keira and the member for Wollongong spoke about the negative impact on the Wollongong community of the transaction but they have failed to grasp what this will mean for their communities. The new lessee, having invested a substantial sum to acquire the lease of the port, will continue to invest in its future growth and development. I have stated this consistently when talking to the community and employees. Access to additional capital means that they have the means to achieve growth; they are not constrained by the State’s balance sheet.

 

They have additional capital to put into developments needed in a shorter time frame—a time frame obviously determined by them and one that can be determined without the constraints of the State Government’s balance sheet. There will be more jobs and a boost to the local economy, and at the same time the legislation contains appropriate protection measures for employees. If ever there was a win-win for a community, this is it. Members opposite have failed to acknowledge that this is complemented by an additional $100 million infrastructure spend in the Illawarra as part of the transaction. In response to a question raised by the member for Cessnock, I advise the House that the Government has no plans for the transfer of the Port of Newcastle.

The Hon. DUNCAN GAY: Earlier in question time I was asked a question by the Hon. Cate Faehrmann. I provide the following detailed answer:

Newcastle Port Corporation is currently working to finalise its Strategic Development Plan for the Port of Newcastle.

The Strategic Development Plan will guide the development of the Port of Newcastle over the next 30 years.

The plan sets out how the port will grow and develop over time taking into account global shipping trends, expected growth in task and volumes of goods, safety, channel and marine access and landside transport needs.

The plan is consistent with the planning recommended under the National Ports Strategy and will complement the NSW Freight and Ports Strategy being developed and delivered by the Freight and Regional Development Division of Transport for NSW.

The NSW Freight and Ports Strategy will be delivered later this year.

Newcastle Port Corporation will undertake public consultation about the Strategic Development Plan, once it is finalised.

Question Without Notice 12 June 2012: PORTS PRIVATISATION Page: 12534

The Hon. SOPHIE COTSIS: My question is directed to the Minister for Roads and Ports. I refer to statements the Minister made to this House on 4 August 2011 and 13 September 2011 respectively, “I have no plans to privatise New South Wales ports” and “There are no plans before me to privatise Newcastle or Port Kembla.” Given that the Minister now has announced his intention to privatise both Port Botany and Port Kembla, in direct contradiction to these statements, how does he justify these actions to local residents and the port employees?

The Hon. DUNCAN GAY: Can I simply say that my comments to the House were accurate at the time and at no stage have I misled the House on this matter.

The Hon. CATE FAEHRMANN: My question is directed to the Minister for Roads and Ports. Yesterday the Sydney Morning Herald reported that the chief executive officer of Infrastructure NSW, Paul Broad, said that Newcastle will not be developed as a container port. However, in January 2012 the Premier said that Mayfield “is more suited to handling multi-product, container, general cargo and dry bulk terminal freight”. Does the Minister agree with Infrastructure NSW or the Premier’s comments?

The Hon. DUNCAN GAY: That is a very good but tough question. If the Opposition was worthwhile it would have asked this question. On Monday and Tuesday mornings my office anticipated possible hostile questions, and that question remained each day. The member has asked an important question.

The Hon. Greg Donnelly: Then answer it.

The Hon. DUNCAN GAY: I will answer if members opposite stop interjecting. Colonel Blimp sitting on the losers lounge keeps interjecting while I am trying to answer. The Government has established some new sections in Transport for NSW, including the Freight and Regional Development Section, which is headed by Rachel Johnson. She is a terrific deputy director general who has a private enterprise background. Her job is to review the sector and the roles of the various ports. That review is underway and people will be able to express their views, either publicly or not. I know that there was a newspaper report, but I do not know whether Mr Broad said what was attributed to him. A review is underway and members will have to wait until it is completed. It is a statewide review involving not only the Port of Newcastle but also Port Botany and Port Kembla, and it will examine freight movements from roads to the ports.

24 October 2006 LEGISLATIVE COUNCIL 3149

The Hon. GREG PEARCE [3.52 p.m.]: I will speak briefly in support of the comments made by the Hon. Melinda Pavey during her excellent contribution to this debate. Having listened to the last part of the debate, it is obvious to me that there is an issue relating to the role of the Minister. The integrity of the Minister relates not only to the public interest but also to public confidence and, more generally, the economic prosperityof this State. The manner in which the ports portfolio has been managed in the past has revealed inadequate strategic planning and integration of ports with transport networks.

In the other place the Minister for Ports and Waterways cited figures relating to trade and made the point that the ports are integral to maintaining the strength of the New South Wales economy. I will not deal in detail with those figures except to say that they emphasise the paramount importance of ports and underline the basis for doubt on the part of the Opposition and many members of the community that this Government has the ability to properly administer this State’s ports or the portfolio. Concerns have also been expressed about the massive increase in trade through Port Botany as a result of recent expansion and its concomitant impact upon surrounding areas as well as transport generally. People who use the M5 East know that already it has reached its capacity and that the increased traffic associated with Port Botany will only exacerbate the M5 East’s problems.

The Government’s policy is for 40 per cent of containers to be transported by rail. However, successive Ministers have failed to implement an integrated ports development, and that is not new. Papers provided several years ago by the Government relating to the approval of the ports expansion strategy by Cabinet in 2003 show that Cabinet considered a report from Mr Chris Wilson, who was then the Director, Major Development Assessment of the then Department of Infrastructure, Planning and Natural Resources. Mr Wilson noted, when considering concerns related to the development application and the environmental impact statement for Port Botany at that stage, that there was inadequate supporting information on the wider strategic issues, particularly transport. He also noted that any consent for the port’s expansion, regardless of whether a commission of inquiry was undertaken, would not address the significant off-site issues that exist.

In the same bundle of papers, Mr Greg McDowell, Manager, Project Development of the infrastructure co-ordination unit of the Department of Infrastructure, Planning and Natural Resources, also expressed concern about the basis relied upon by the Government to determine its policy. He queried whether we really want to keep concentrating economic activity in the Sydney Basin, thereby creating further pollution, traffic and other environmental pressures, because that was what the expansion of Port Botany would do. He also questioned whether the expansion of Port Botany should proceed or whether the Government should instead consider ports development in Newcastle and Port Kembla. Although those views concern wider issues, they relate to the whole question of whether this Government can be trusted to undertake the management of vital ports in New South Wales.

I could cite many concerns expressed by other commentators and experts relating to rail freight and the failure of this Government to integrate the planning of ports development with the New South Wales transport network. Most honourable members would have read an article in the Sydney Morning Herald on 14 October by Michael Duffy dealing with the works undertaken by the Patrick Corporation in expanding its operations at Port Botany. He noted that notwithstanding that the port has the most up-to-date equipment one could expect in port operations, in his view the State Government had let down everyone else. He referred to the proposal to move 40 per cent of containers through Sydney by rail, with which everyone agrees, and noted with some concern that only half that rate has been achieved. That is a major problem that the Government has not addressed in relation to Sydney’s ports development.

The Minister in the other place was very proud of the growth of the port, something that is fundamental to the future prosperity of New South Wales. The figures for the increase in traffic through the three ports are quite extraordinary and reflect the growth of New South Wales, in spite of any proper integrated planning by the succession of Labor Ministers who have had responsibility for ports and planning. The bill deals with some administrative issues. Perhaps Ms Sylvia Hale misunderstood the legal nature of the description of the need to address purported consents and purported decisions that may have been made. Certainly the Opposition does not have any opposition to addressing any administrative oversight; that is not to say that we in any way excuse the Government for its inability to properly manage this portfolio.

Pursuant to sessional orders business interrupted.

PORT BOTANY CONTAINER TERMINAL
The Hon. ADAM SEARLE: My question is directed to the Minister for Roads and Ports. How much compensation will be paid to the private operator of Port Botany if a new container terminal is developed at Newcastle Port?

The Hon. DUNCAN GAY: The rules in the organisation that did the scoping study for Port Botany and Port Kembla and introduced guidelines there indicate that while general cargo is allowed there will not be an extension under the rules for the lease of Newcastle Port. So the short answer to the question is that we do not envisage that any compensation will need to be put in place. The Government has been clear on this all the way through the process, even before it indicated it would lease the port at the stage when Newcastle Port Corporation was in place. I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there. I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension. The only time an extension is allowed is when a specific number is reached and is tripped in Port Botany and Port Kembla.

———-

BUDGET ESTIMATES 2014-2015 SUPPLEMENTARY QUESTIONS ON NOTICE TREASURY, INDUSTRIAL RELATIONS 22 August 2014

The Hon. Dr John Kaye:

Question:
53. Given that there has been significant allegations of at least influence peddling and political interference under Labor surrounding proposals to the [sic] develop a container facility in Newcastle, will Treasury be reviewing that decision?
(a) If so please provide details
(b) If not why not

Answer:

Attempts by Government to dictate uneconomic enterprises contrary to market demand are examples of the kind of rent seeking activity likely to encourage influence peddling or corruption. As the container port did not proceed, there is no decision to review.

———-

LEGISLATIVE COUNCIL 23 October 2014

0144—Treasurer—LEASES FOR PORT BOTANY, PORT KEMBLA AND PORT OF NEWCASTLE

Dr Kaye to the Minister for Fair Trading representing the Treasurer, and Minister for Industrial Relations—

1. In regard to compensation payable to NSW Ports, the Port Botany leaseholder, if container movements exceed an annual threshold at the Port of Newcastle:

a. what is the annual threshold?
b. how much compensation is payable per container?

2. Did the Government consult the Australian Competition and Consumer Commission when inserting compensation provisions into the leases for Port Botany, Port Kembla and Port of Newcastle?

3. Is the amount of compensation an amount between $76 per twenty-foot equivalent unit (teu) and $120 per teu, where $76 is the fee currently charged by NSW Ports for an export container and $120 is the fee currently charged for an import container?

4.

a. Is the Port of Newcastle leaseholder required to pay the Government a fee for container movements through the Port of Newcastle on the same or similar terms as the Government is required to compensate the Port Botany leaseholder?
b. If so, when did the Government undertake to pay compensation to the Port Botany leaseholder and to impose a fee on the Port of Newcastle leaseholder?

5. How many containers must be moved through Port Botany and Port Kembla before an extension is allowed in the number of container movements at the Port of Newcastle that do not attract the compensation payment and fee respectively?

27 November 2014

Answer—

This question should be re-directed to the Minister for Roads and Freight.

———-

LEGISLATIVE COUNCIL 23 October 2014

0143—Roads and Freight—PORT BOTANY, PORT KEMBLA AND PORT OF NEWCASTLE

Dr Faruqi to the Minister for Roads and Freight, Minister for the North Coast, and Vice-President of the Executive Council—

1.

a. Is compensation payable to the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle?
b. If so, what is the annual threshold?
c. What is the amount of compensation per twenty-foot equivalent unit (TEU)?

2.

a. Is the Port of Newcastle leaseholder required to pay the Government a fee for container movements through the Port of Newcastle on the same or similar terms as the Government is required to compensate the Port Botany leaseholder?
b. If so, when did the Government undertake to pay compensation to the Port Botany leaseholder and to impose a fee on the Port of Newcastle leaseholder?

3. How many containers must be moved through Port Botany and Port Kembla before an extension is allowed in the number of container movements at the Port of Newcastle that do not attract the compensation payment and fee respectively?

4.

a. Is the purpose of the fee charged of the Port of Newcastle leaseholder to constrain the number of containers passing through the Port of Newcastle?
b. If not, what is the purpose of the fee?

5.

a. Is the purpose of the fee charged of the Port of Newcastle leaseholder to prevent development of a container terminal at the Port of Newcastle?
b. If not, what is the purpose of the fee?

6. Did the Government abolish the cap on container movements at Port Botany to increase the value of the lease to potential purchasers?

7. Did the Government agree to compensate the Port Botany leaseholder in respect of container movements at the Port of Newcastle to preserve the commercial value of the Port Botany lease?

8.

a. Was a cost-benefit study of the proposal to compensate the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle undertaken?
b. If so, will the Government release it?

9.

a. Does it benefit the New South Wales economy to prevent competition between New South Wales ports for handling containers?
b. If so, how?

10. What are the estimated additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle?

11. What are the estimated additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales?

12. Does it benefit the New South Wales economy to predicate future growth in Port Botany container movements on transportation by truck?

13. What is the container-carrying capacity of the rail line serving Port Botany?

14.

a. Will the Government fund the Western Sydney Freight Line?
b. If not, who will fund this line?

15. When will the Commonwealth Government respond to the Government’s request for funds to build stages 2 and 3 of the Northern Sydney Freight Corridor?

16. Is it true that there are no state or Commonwealth Government funds available for building the Western Sydney Freight Line and stages 2 and 3 of the Northern Sydney Freight Corridor?

27 November 2014

Answer—

I am advised:

1. to (8) These are matters for the Treasurer.

(9)
and (b) Refer to my answer to Budget Estimates 2014-15 Supplementary Question 249.

(10) Specific analysis of this nature has not been undertaken by Transport for NSW. However, a significant proportion of exports originating in northern NSW are bulk exports, which can be processed at the Port of Newcastle.
(11) Specific analysis of this nature has not been undertaken by Transport for NSW. However, 85 percent of Port Botany container imports have a destination within the greater Sydney metropolitan area.
(12) It is necessary to model road and rail forecasts for container movements to and from Port Botany, so the NSW Government can respond with appropriate policy levers, and so industry can respond with appropriate business models. NSW Government forecasts of road and rail container movements take into account our commitment to double the 2011-12 container rail mode share by 2020.
(13) The Australian Rail Track Corporation is the network operator of the port Botany rail line, which forms part of the Metropolitan Freight Network. Any questions relating to the network capacity are a matter for the Australian Rail Track Corporation.
(14)

(a) and (b) This is yet to be determined.

(15) This is a matter for the Commonwealth Government.

(16) Transport for NSW has allocated funding for planning works associated with the Western Sydney Freight Line. Residual funds from stage one of the Northern Sydney Freight Line have been allocated for planning for stage two.

———-

BUDGET ESTIMATES 2014-2015

SUPPLEMENTARY QUESTIONS ON NOTICE

The Illawarra

249. Has the State Government completed the work relating to the MaldonDombarton rail link for the Federal Government? If so, on what date was the report provided to the Federal Government?
I am advised:
The NSW Government delivered work relating to the Maldon to Dombarton rail link to the Australian Government on 31 July 2014.

———-

LEGISLATIVE ASSEMBLY 6 November 2014

6494—PORT OF NEWCASTLE AND PORT BOTANY LEASES

Mr Tim Crakanthorp to the Minister for Transport, and Minister for the Hunter representing the Minister for Roads and Freight, Minister for the North Coast, and Vice-President of the Executive Council—
1. Did the Government advise the Australian Competition and Consumer Commission (ACCC) of a cap on container numbers at the Port of Newcastle prior to leasing the Port of Newcastle and Port Botany?
2. Did the Government agree to compensate NSW Ports for container numbers in excess of the cap at the Port of Newcastle?
3. Did the Government advise bidders for the ports leases to obtain regulatory approval from the ACCC in relation to the cap on container numbers at the Port of Newcastle?
4. Will the cap on container numbers at the Port of Newcastle reduce competition between ports in New South Wales for the container trade?
5. Has the ACCC advised the Government that the cap on container numbers at the Port of Newcastle may be unlawful and could be unenforceable?
6. Does the Government forecast a four-fold increase in container movements by truck between Port Botany and Western Sydney by 2046?
7. What steps is the Government taking to secure a corridor for a rail freight bypass of Sydney?

11 December 2014

Answer—

I am advised:

(1) to (5) This is a matter for the Treasurer.

(6) With the opening of new intermodal terminals in Western Sydney, it is anticipated that the growth in truck trips from Port Botany to Western Sydney will be lower than the overall growth at Port Botany.

(7) The Australian Government has commissioned Australian Rail Track Corporation to design and construct an inland rail route between Melbourne and Brisbane. A New South Wales Inter-agency Steering Group with representatives from core agencies will be established to provide whole of- government input from New South Wales.

———-

LEGISLATIVE ASSEMBLY 12 December 2014

*6677 PORT OF NEWCASTLE AND PORT BOTANY LEASES—Mr Tim Crakanthorp asked the Treasurer, and Minister for Industrial Relations—

(1)      Did the Government advise the Australian Competition and Consumer Commission (ACCC) of a cap on container numbers at the Port of Newcastle prior to leasing the Port of Newcastle and Port Botany?

(2)      Did the Government agree to compensate NSW Ports for container numbers in excess of the cap at the Port of Newcastle?

(3)      Did the Government advise bidders for the ports leases to obtain regulatory approval from the ACCC in relation to the cap on container numbers at the Port of Newcastle?

(4)      Will the cap on container numbers at the Port of Newcastle reduce competition between ports in New South Wales for the container trade?

(5)      Has the ACCC advised the Government that the cap on container numbers at the Port of Newcastle may be unlawful and could be unenforceable?

16 January 2015

Answer—

The transaction arrangements that the State entered into with the successful bidders for Port Botany and Kembla and the Port of Newcastle reflect its Freight and Ports Strategy, that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity.

This strategy recognises that Port Botany has significant capacity for container growth; most containers travel within a relatively short distance of Port Botany; future demand for containers is expected to occur in the South West of Sydney and thereby closer to Port Kembla than Newcastle; and the landside infrastructure costs to support a major container facility at Newcastle are higher than for Port Kembla.

The arrangements do not prohibit the development of a container terminal at the Port of Newcastle and enable the growth of container volumes through Newcastle servicing that region.

The Government’s transaction team engaged extensively with the Australian Competition and Consumer Commission regarding the competition and regulatory framework, including the container arrangements.

———-

LEGISLATIVE COUNCIL 5 May 2015

0001—Treasurer—PORT OF NEWCASTLE

Dr Faruqi to the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council representing the Treasurer, and Minister for Industrial Relations—

1.

a. Is compensation payable to the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle?
b. If so, what is the annual threshold?
c. What is the amount of compensation per twenty-foot equivalent unit (TEU)?

2.

a. Is the Port of Newcastle leaseholder required to pay the Government a fee for container movements through the Port of Newcastle on the same or similar terms as the Government is required to compensate the Port Botany leaseholder?
b. If so, when did the Government undertake to pay compensation to the Port Botany leaseholder and to impose a fee on the Port of Newcastle leaseholder?

3. How many containers must be moved through Port Botany and Port Kembla before an extension is allowed in the number of container movements at the Port of Newcastle that do not attract the compensation payment and fee respectively?

4.

a. Is the purpose of the fee charged of the Port of Newcastle leaseholder to constrain the number of containers passing through the Port of Newcastle?
b. If not, what is the purpose of the fee?

5.

a. Is the purpose of the fee charged of the Port of Newcastle leaseholder to prevent development of a container terminal at the Port of Newcastle?
b. If not, what is the purpose of the fee?

6. Did the Government abolish the cap on container movements at Port Botany to increase the value of the lease to potential purchasers?

7. Did the Government agree to compensate the Port Botany leaseholder in respect of container movements at the Port of Newcastle to preserve the commercial value of the Port Botany lease?

8.

a. Was a cost-benefit study of the proposal to compensate the Port Botany leaseholder if container movements exceed an annual threshold at the Port of Newcastle undertaken?
b. If so, will the Government release it?

9. What will be the impact on the New South Wales economy of preventing competition between New South Wales ports for handling containers?

10. What are the estimated additional costs to the Northern New South Wales economy to require goods to be transported to Port Botany by truck for export as opposed to the Port of Newcastle?

11. What are the estimated additional costs to the Northern New South Wales economy to require imported goods to be transported between Port Botany and western Sydney before being transported by truck to northern New South Wales?

12. What will be the impact on the New South Wales economy of predicating future growth in Port Botany container movements on transportation by truck?

13. What is the container-carrying capacity of the rail line serving Port Botany?

14.

a. Will the Government fund the Western Sydney Freight Line?
b. If not, who will fund this line?

15. When will the Commonwealth Government respond to the Government’s request for funds to build stages 2 and 3 of the Northern Sydney Freight Corridor?

16. Are there state or Commonwealth Government funds available for building the Western Sydney Freight Line and stages 2 and 3 of the Northern Sydney Freight Corridor?

9 June 2015

Answer—

1.

a. The terms of the Port Botany transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port Botany lease is a public document.
b. The details of the container arrangements in the Port Commitment Deeds are commercial in confidence.
c. Please see the answer to question 1 (b).

2.

a. The terms of the Port of Newcastle transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port of Newcastle lease is a public document.
b. Please refer to the answer to questions 1 (a) and 2(a).

3. Please refer to the answers to questions 1 (a) and 2(a). The details of the Port Commitment Deeds are commercial in confidence.

4.

a. Please refer to the answer to question 2(a).
Please refer to the answer above.

5.

a. The Newcastle Port transaction arrangements do not prevent the development of a container terminal at the Port of Newcastle.
b. Please refer to the answer to question 4(a).

6.Please refer to former Treasurer Baird’s second reading speech on introducing the Ports Assets (Authorised Transactions) Bill 2012.

7. The terms of the Port Botany transaction reflect the Government’s NSW Freight and Ports Strategy which was released in 2013.

8.

a. The scoping study for the transaction included analysis of the freight transport task, landside logistics chains, container demand patterns and logistics costs across the State
b. The scoping study is Commercial in Confidence.

9. The New South Wales ports are not prevented from competing for handling of containers.

10. This question should be referred to the Minister for Roads, Maritime and Freight

11. This question should be referred to the Minister for Roads, Maritime and Freight

12. This question should be referred to the Minister for Roads, Maritime and Freight

13. This question should be referred to the Minister for Roads, Maritime and Freight

14. This question should be referred to the Minister for Roads, Maritime and Freight

15. This question should be referred to the Minister for Roads, Maritime and Freight

16. This question should be directed to the Minister for Roads, Maritime and Freight

———-

LEGISLATIVE ASSEMBLY 4 June 2015

0490 PORT OF NEWCASTLE—Mr Tim Crakanthorp to ask the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

Does the cap on container movements at the Port of Newcastle still exist?

(a) If so, is the cap on container movements lawful?

(b) Is the cap on container movements enforceable?

9 July 2015

Answer—

I am advised:

The container arrangements at the Port of Newcastle are consistent with the NSW Freight and Ports Strategy which was released in 2013.

———-

LEGISLATIVE ASSEMBLY 25 June 2015

0701 CAP ON CONTAINER MOVEMENT—Mr Tim Crakanthorp to ask the Premier, and Minister for Western Sydney—

Does a cap on container movement currently apply to the Port of Newcastle?

(a) If so, does the Government charge a fee for each container shipped through the Port of Newcastle above the prescribed cap?

(b) Is that fee paid as compensation to the operator of Port Botany?

30 July 2015

Answer:

Given this question relates to the portfolio of the Minister for Roads, Maritime and Freight, I have referred this question to Minister Gay.

———-

LEGISLATIVE ASSEMBLY 4 August 2015

0765—CAP ON CONTAINER MOVEMENT

Mr Tim Crakanthorp to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

1. Does a cap on container movement currently apply to the Port of Newcastle?

(a) If so, does the Government charge a fee for each container shipped through the Port of Newcastle above the prescribed cap?

(b) Is that fee paid as compensation to the operator of Port Botany?

8 September 2015

Answer—

I am advised:

The terms of the Port Botany transaction are consistent with the NSW Freight and Ports Strategy which was released in 2013. The Port Botany lease is a public document.

The details of the container arrangements in the Port Commitment Deeds are commercial in confidence.

There is no legislated container cap at the Port of Newcastle.

———-

LEGISLATIVE ASSEMBLY 4 August 2015

0794—LEASE SCOPING STUDIES

Ms Jodi McKay to the Treasurer, and Minister for Industrial Relations—

1. Were scoping studies prepared for the transactions to lease Port Botany, Port Kembla and the Port of Newcastle?

(a) If not, why not?

(b) If so, will the Minister release the scoping studies considering that the transactions have now been completed?

8 September 2015

1. I have advice that there were.

(a)N⁄A.

(b) Scoping study documents are commercial in confidence documents. It is standard government practice not to release scoping studies to ensure value for money for NSW taxpayers is optimised.

———-

LEGISLATIVE ASSEMBLY 13 August 2015

PORT OF NEWCASTLE

Mr LUKE FOLEY: My question is directed to the Treasurer. Why has the Government imposed constraints on the growth of container movements through the Port of Newcastle?

Ms GLADYS BEREJIKLIAN: The Labor Party opposed at every stage the Government’s improvements to the port and maritime strategy. At every stage the Labor Party opposed asset recycling in Newcastle. Now the proceeds of that asset recycling are going back into the community.

Mr Michael Daley: On a point of order: My point of order is taken under Standing Order 129. The Minister does not know the answer and she has no notes.

The SPEAKER: Order! The member for Maroubra has no knowledge of those matters. There is no point of order.

Ms GLADYS BEREJIKLIAN: We are yet to find out—

The SPEAKER: Order! Members will be directed to leave the Chamber if the interjections continue.

Ms GLADYS BEREJIKLIAN: The Leader of the Opposition has previously highlighted his opposition to what this Government has done in the Port of Newcastle. He has no credibility raising the issue now. The Government ensures that it uses the State’s assets in the best way possible and returns the proceeds to the community, where they belong. Daily in this place, members from the Hunter region talk about jobs, infrastructure, education and health—

Mr Michael Daley: Point of order: You had better coach her; she has got no idea, Premier.

The SPEAKER: Order! Members should not make inappropriate comments when they take a point of order.

Mr Michael Daley: I apologise. My point of order is taken under Standing Order 129. It was a simple question: Why is there a cap on containers coming out of Newcastle? That is constraining the growth of the Port of Newcastle.

The SPEAKER: Order! The Treasurer is being relevant to the question. There is no point of order

Ms GLADYS BEREJIKLIAN: I find it quite ironic that those opposite care about growth and activity when they opposed the Government’s plans to maximise that asset for the people of New South Wales. They have no credibility on this issue. They opposed everything that this Government proposed to do in relation to the ports. As I was saying, before I was rudely interrupted by the member for Maroubra—who does not know very much about this or any other issue regarding the budget—whilst the current member for Newcastle, the Leader of the Opposition and all those opposite, including the members for the Hunter, come in here and complain about lack of jobs in the Hunter and other issues, this side of the House is using the proceeds from that asset recycling to invest back into the community.

The SPEAKER: Order! I call the member for Maitland to order for the first time. I call the member for Maitland to order for the second time.

Ms GLADYS BEREJIKLIAN: I was extremely pleased when every time I had the pleasure of visiting the Hunter—

The SPEAKER: Order! The member for Maitland will come to order.

Mr Michael Daley: Point of order: It is under Standing Order 129 again. If the Treasurer does not know the answer she can take the question on notice. The Port of Newcastle is being constrained and the Minister will not answer the question. The question is very, very simple.

The SPEAKER: Order! The Minister is being relevant to the question and, pursuant to the standing order, that is all I can ask of her.

Ms GLADYS BEREJIKLIAN: I reiterate the hypocrisy of the Labor Government’s question in relation to this matter. Why does it not care about investment in the Hunter?

Ms Linda Burney: Point of order: I suggest if the Minister does not know the answer and cannot get a note she should sit down.

The SPEAKER: Order! There is no point of order.

Ms GLADYS BEREJIKLIAN: When those opposite have a straight answer on what they want for the Hunter and about what they want for the port strategy then they will have the right to ask about it. I say to those opposite: Do not stop progress in the Hunter, because that is what matters to the people of this State.

———-

LEGISLATIVE ASSEMBLY 13 August 2015

PORT OF NEWCASTLE

Mr TIM CRAKANTHORP: My question is directed to the Treasurer. Why, when there is double digit unemployment in the Hunter, has the Government imposed restrictions on growing Newcastle port just to increase the sale price of Port Botany?

The SPEAKER: Order! The member for Hornsby will come to order.

Ms GLADYS BEREJIKLIAN: The member for Newcastle raises an important issue regarding growth and jobs in Newcastle and the Hunter. I was extremely disappointed when this side of the House brought in the Jobs Action Plan legislation to support more job creation in this State the member for Newcastle and every other member on that side of the House opposed that legislation.

The SPEAKER: Order! Opposition members will come to order.

Ms GLADYS BEREJIKLIAN: I put this to the member of the Newcastle: Why is it when this side of House determined that funds from asset recycling should go back into revitalising Newcastle and the Hunter region the member for Newcastle again opposed this Government’s actions to revitalise Newcastle and the Hunter?

Ms Jodi McKay: Point of order: My point of order is Standing Order 129.

The SPEAKER: Order! I call the member for Hornsby and the member for Kiama to order for the first time. Members will be heard in silence.

Ms Jodi McKay: It appears that the Treasurer does not know the answer to the question.

The SPEAKER: Order! That is not a point of order. The member is just entering into an argument and making inappropriate comments. It is up to me to decide relevance. The Treasurer has been relevant. There is no point of order.

Ms GLADYS BEREJIKLIAN: I refer the former member for Newcastle and the current member for Newcastle, the member for Maroubra and the Leader of the Opposition—

The SPEAKER: Order! I warn the member for Maitland that she is already on three calls to order.

Ms GLADYS BEREJIKLIAN: —to the Government’s New South Wales—

The SPEAKER: Order! The member for Maitland will remove herself from the Chamber until the conclusion of question time.

[Pursuant to sessional order the member for Maitland left the Chamber at 2.34 p.m.]

The SPEAKER: Order! I call the member for Hornsby and the member for Kiama to order for the second time.

Ms GLADYS BEREJIKLIAN: I say to those opposite that when we came to government, after 16 years they did not have a New South Wales ports or maritime strategy. What have we done?

The SPEAKER: Order! The member for Strathfield will come to order. The Treasurer remains relevant.

Mr Michael Daley: Point of order: I ask that the Treasurer take the question on notice. The former Treasurer knows the answer to this but he will not help her.

The SPEAKER: Order! The member for Maroubra will resume his seat. I call the member for Maroubra to order for the second time.

Ms GLADYS BEREJIKLIAN: I say to members opposite: When the Government wants to recycle assets such as ports why do they oppose them? They now come into this House and question policies that will support growth and investment in the Hunter. I say to the member for Newcastle and the former member for Newcastle: if they care about jobs, infrastructure and growth in the Hunter region, they will support the Government’s investment strategy. There is no doubt that there is a serious issue with the growth of employment in the Hunter region. That is why this side of the House is investing millions and millions of dollars in infrastructure and millions and millions in revitalising Newcastle.

Mr Tim Crakanthorp: Point of order: My point of order is under Standing Order 129. The question was about restrictions on growing the port; it was very specific.

The SPEAKER: Order! The Treasurer remains relevant. There is no point of order.

Ms GLADYS BEREJIKLIAN: This is the Labor Party’s hopeless attempt to win back the support of the business community in the Hunter. For the last 20 years— [Time expired.]

———-

LEGISLATIVE ASSEMBLY 13 August 2015

PORT OF NEWCASTLE

Mr TIM CRAKANTHORP (Newcastle) [6.06 p.m.]: Since 2013 the city of Newcastle has been waiting—waiting for an answer from the Government, waiting for the benefits of the $1.75 billion sale of the Port of Newcastle to come home and be invested into the new future for our harbour city. More than two years later we are still waiting and it has been revealed that will become the status quo because the Government does indeed have plans for the port, they just do not involve investing in Newcastle.

Mr Gareth Ward: You don’t want it though.

Mr Matt Kean: We’re building you a tramline, aren’t we?

Mr TIM CRAKANTHORP: In fact, you gave us $400 million in the last budget and you took it away this year. How about that? Shame.

ACTING-SPEAKER (Mr Bruce Notley-Smith): Order! The member will be heard in silence.

Mr TIM CRAKANTHORP: This week in the Newcastle Herald the topic was reignited when it was rumoured that the private operator of the Port of Newcastle may have been looking at a container terminal for Newcastle, the first project proposed by BHP as the replacement for the steelworks. Journalist Ian Kirkwood has shared my interest in the topic over the years. On Tuesday last he attended a lunch with the Port of Newcastle executive manager of trade and business development, Peter Francis. He wrote that when Mr Francis was asked about the potential for containers in the port he said: “… the challenge for containers is being able to get the inbound container trade into Newcastle given that the majority of NSW container freight is consumed within the Sydney basin area; that becomes a bit challenging.” That comment was as close as anyone has come to admitting that the way the State Government had leased the Port of Newcastle restricted or effectively prohibited Newcastle from building a major container terminal.

This discussion has been coming for a long time. In the late 1990s BHP’s major parting gift to the region was a plan to convert the steelworks site into a multipurpose terminal that would compete with or rival Botany as the State’s premier container port. But it never happened. Longstanding caps on the size of Botany Bay were lifted and then scrapped altogether and Newcastle lost its place as the next container port to Kembla. The development of a container terminal at the Port of Newcastle would give the city and surrounding Hunter area a massive economic boost. Industry has left the city of Newcastle with the closure of the steelworks and the downturn of the coal industry. Manufacturing is closing with Goninan and EDI Downer begging for the Sydney train contacts, and Forgacs is hanging in the balance if it does not get more Federal defence contracts. Our city needs growth. It needs jobs and it needs the support of the Government to do it.

Under this Government we have had our poles and wires and our port proceeds flogged off. The Government also cut our mass public transport network to the central business district. Enough is enough. It is now time for our fair share and it is the best time for the Government to make a contribution to the unemployment epidemic. If Newcastle was granted the development of a container terminal a new distribution hub could be created and it could utilise the existing heavy rail freight network to service the Hunter region.

Although Newcastle is a major coal port, developing a container terminal would supercharge local job opportunities, improve linkages across the State and provide new commercial opportunities. The Baird Government stopped this happening before it could start by making an anti-competitive decision to impose a cap on the number of containers moving across Newcastle wharves. The Government’s ineptitude regarding this matter was made abundantly clear today in question time when the Treasurer was asked by the Leader of the Opposition: “Why has the Government imposed constraints on the growth of container movements?” The answer from the Treasurer was abysmal. I then asked the Treasurer, “Why, when unemployment has reached double digits in the Hunter, has the Government imposed restrictions on growing the Port of Newcastle just to increase the sale price of Botany?” The answer was even more abysmal and prompted Newcastle Herald journalist Michelle Harris to tweet: “Govt’s farcical efforts to avoid giving an actual answer on port container cap questions reaches new low in QT today.” What a disgrace.

Worse still are intimations that should Newcastle ever exceed its mega cap, the owners of Port Botany will be financially compensated. This makes the development of a container terminal at Newcastle very difficult. Restricting port activity in Newcastle protects the container monopoly at Port Botany from facing competition. Preserving the monopoly at Port Botany is how the Government inflated its sale price—it fattened the pig when it was privatised. Restricting activity at Newcastle and protecting Botany’s monopoly is market rigging by the New South Wales Government at the highest level. Ports are strategic assets for open trading economies like ours. Many of the goods we consume arrive in containers. The port should be freely competing for sea trade cargo. I want Newcastle to be a vibrant, smart city that nurtures creativity and innovation that attracts investment. Premier Baird must be held accountable for hurting Newcastle and its prospects.

Mr MATT KEAN (Hornsby—Parliamentary Secretary) [6.11 p.m.]: I appreciate the member for Newcastle has passion for his community but while he is entitled to his own opinions, he is not entitled to his own facts. The reality is that the proceeds from the sale of the Port of Newcastle are going exactly where the member for Newcastle wants them—back into Newcastle. In addition to the $120 million allocated by the Government for the revitalisation of the Newcastle central business district, proceeds to the value of $340 million is being allocated for the project. The only flaw in the argument made by the member for Newcastle is that he voted against the money going to Newcastle in the first place.

ACTING-SPEAKER (Mr Bruce Notley-Smith): Order! The member for Newcastle will restrain himself.

Mr MATT KEAN: I appreciate that the member is advocating for his community and that he is passionate about achieving the best deal for it, but the money is flowing back to Newcastle for its revitalisation. It is long overdue because it was put on hold by the former Labor Government.

———-
LEGISLATIVE ASSEMBLY 13 August 2015

1030—LEASE OF THE PORT OF NEWCASTLE

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

How much of the $1.75 billion from the long term lease of the Port of Newcastle has been spent in Newcastle?

16 September 2015

Answer—

(1) Details of the Restart NSW projects can be found at insw.com⁄restart-nsw.aspx.

———-

GENERAL PURPOSE STANDING COMMITTEE NO. 2 Monday 31 August 2015

The Hon. SOPHIE COTSIS: Is there a cap on container movements at the Port of Newcastle? If so, what is it?

The Hon. DUNCAN GAY: No.

The Hon. SOPHIE COTSIS: You are sure about that answer?

The Hon. DUNCAN GAY: Yes.

The Hon. SOPHIE COTSIS: In answer to a question in October 2013 you said in part: I have indicated in the House, as I have in Newcastle—indeed, I made a special visit to Newcastle to talk to the board, the chief executive officer and the local community—that part of the lease and the rationalisation was a cap on numbers there. I am not saying that there will be no containers into Newcastle. Certainly, a number of containers will come in under general cargo, but there will not be an extension. Are you saying that statement in October is wrong?

The Hon. DUNCAN GAY: My understanding is there is not a cap into Newcastle. We have indicated a preference and a sensible way of doing it. The large majority of boxes come into New South Wales through Port Botany. The bulk of those boxes need to get to Sydney so the best location to put them into is Sydney in the first instance. Secondly it is Port Kembla, which is half the distance of Newcastle to bring them up. Once we reach a number where there are too many, certainly we would be looking at a spillage into Newcastle. The general freight and boxes that need to go to Newcastle certainly will be going to Newcastle.

The Hon. SOPHIE COTSIS: It is my understanding that there is a cap on container movements. We would like that confirmed. If there is a cap and if it is breached, is a fee, fine or a charge imposed? Who pays for it? Where does the money go? It is my understanding that there is a cap and you indicated in your answer on 17 October that part of the lease and the rationalisation was a cap on numbers there. Were you misleading the House?

The Hon. DUNCAN GAY: There is no container cap at the Port of Newcastle. I indicated that there is a cap in New South Wales at Sydney and once that is reached we then look at other places. But you specifically asked me a question whether there was a cap at Newcastle and I specifically answered that there is not.

The Hon. SOPHIE COTSIS: On container movements?

The Hon. DUNCAN GAY: There is no legislated cap.

The Hon. SOPHIE COTSIS: Is there an internal document?

The Hon. DUNCAN GAY: I think I have answered the question. I am happy to keep going around.

The Hon. SOPHIE COTSIS: You said one thing in the House and you are saying another thing to the Committee.

The Hon. DUNCAN GAY: No, I have said the same thing in both places.

The Hon. SOPHIE COTSIS: I am not going to waste my time, but you are quoted as saying in the House that part of the lease and the rationalisation was a cap on numbers there. Now you are saying that there is no cap. About the movement of containers through Newcastle you also said on 17 October 2013: The only time an extension is allowed is when a specific number is reached and is tripped in Port Botany and Port Kembla. What is the number for Port Kembla and what is the number for Port Botany?

The Hon. DUNCAN GAY: Which is exactly what I said a moment ago. I will have to come back to you with that number.

The Hon. SOPHIE COTSIS: Will you release the scoping study for the sale of the ports?

The Hon. DUNCAN GAY: That is not a question for me. That is a question for either Treasury or Finance.

The Hon. SOPHIE COTSIS: Will you take that on notice?

The Hon. DUNCAN GAY: No.

The Hon. SOPHIE COTSIS: Will you release the port commitment deeds?

The Hon. DUNCAN GAY: No, for the same reasons as the previous answer.

The Hon. Dr PETER PHELPS: It is the wrong portfolio.

The Hon. SOPHIE COTSIS: I refer to a media release by the head of the Australian Competition and Consumer Commission [ACCC] issued on 23 April in which Mr Sims outlines a number of concerns about actions taken by governments to sell significant assets without appropriate market structures and regulatory arrangements. He cited the example of the recent sale of Port Botany and Port Kembla to the same owner. He stated: We need to be careful to ensure that privatisation boosts economic efficiency rather than detracts from it … Otherwise we risk giving privatisation a bad name because consumers will continue to associate privatisation with higher prices. Do you agree with Mr Sims that the sale of Port Botany and Port Kembla proceeded without appropriate market structures and regulatory arrangements being put in place?

The Hon. DUNCAN GAY: The Government had all the proper procedures in place. It was not a sale; it was a lease. The lease of Newcastle went to a different body. So the concerns you are raising on behalf of that gentleman have been addressed within that, if they were valid.

The Hon. SOPHIE COTSIS: That gentleman is the chair of the ACCC and he has grave concerns about competition and governments selling—

The Hon. DUNCAN GAY: I just answered that. I just indicated that the lease that happened for Port Botany and Port Kembla went to one group; the lease for the Port of Newcastle went to a different group. There is competition. Do not forget that we are also in competition with Melbourne and Brisbane every day of the week—and beating them. We are beating them hands down, so it cannot be too bad. I do, however, have the ability to refer the port to the Independent Pricing and Regulatory Tribunal if the pricing behaviour of the port’s lessee is inappropriate.

The Hon. SOPHIE COTSIS: What can that trigger?

The Hon. DUNCAN GAY: It would be very much part of price monitoring.

The Hon. SOPHIE COTSIS: In terms of the cap on containers, are any fees paid if the number of containers through Newcastle exceeds a set amount?

The Hon. DUNCAN GAY: Not that I am aware of.

The Hon. SOPHIE COTSIS: You are not aware of that?

The Hon. DUNCAN GAY: You asked me whether there was a cap in Newcastle and I said there is not. Now you are asking me whether there is a fee paid if they go beyond a certain number. General cargo containers are part of what happens in Newcastle. My understanding is that within the general cargo that needs to go to Newcastle that is fine.

The Hon. SOPHIE COTSIS: Will you speak to your bureaucrats and take that on notice?

The Hon. DUNCAN GAY: If we need to deliver more of an answer we will.

The Hon. SOPHIE COTSIS: The ACCC submission to the Harper competition report stated: However, the ACCC remains concerned over arrangements designed to maximise proceeds received by a government by reducing the prospect of competitive provision of port services. Another example relates to Port Botany and the Port of Newcastle. An article in the Newcastle Herald on 11 May 2014 stated: “The government has confirmed it leased Botany with a clause that prevented Newcastle from competing against it with a container terminal. And the Newcastle lease is believed to contain a similar undertaking”. What is your response to the ACCC’s concerns about reducing the prospect of competitive provision of port services?

The Hon. DUNCAN GAY: I think you will notice, as I said earlier, that people wishing to use the New South Wales ports are voting with their feet—they are coming to us. Rather than there being a lack of competition, there appears to be better pricing and more competition in New South Wales than we have seen in Queensland and Victoria. For the first time, we are getting trade out of the Riverina in New South Wales. It is coming back to Port Botany whereas in the past it traditionally went to the Port of Melbourne. I will ask the chief executive officer of Sydney Ports whether he wishes to add anything at this point.

Mr GILFILLAN: During the transaction process over the ports at Port Botany, Port Kembla and Newcastle a lot of consideration was given to the issue of competition. As the Minister said, the reality is that there is very limited scope for competition between these ports because of the transport issues between the ports and the fact that each port is geared towards a specific type of cargo. Some things are contestable—for example, cars were moved from Sydney down to Port Kembla in November 2008. That was contestable and the Government took a position on that and moved cars. For most other commodities, from a financial and a commercial perspective, it simply does not make sense for these ports to compete between each other. In fact, it gives a perverse outcome—you end up with the commodity costing more because you incur more transport costs. Despite what the Australian Competition and Consumer Commission [ACCC] may have said, the reality is that there is very little scope for competition between our main ports adjacent to Sydney. As the Minister said, our reality is that we lose more cargo to Melbourne from our ports than we do internally between our ports in New South Wales. So competition is not really an issue.

The Hon. SOPHIE COTSIS: Have you spoken to the ACCC about the concerns it has raised? These are pretty big concerns.

Mr GILFILLAN: I was not a party to any conversation with the ACCC. This process during the transaction—

The Hon. DUNCAN GAY: This is not Mr Gilfillan’s area. I invite Mr Reardon to add something here.

Mr REARDON: In terms of any lease or sale process within government of a public asset, there will always be a consideration by the ACCC about the market, market reform and market structure. At the end of the day, the processes have gone forward. It would be a unique situation if the ACCC did not have a comment on it in terms of what the market structure would be—whether it is ports, banks or any other part of the economy. As we pointed out, though, competition within ports is a whole of east coast matter. It is not simply a matter for Newcastle, Port Kembla or Port Botany. It is also about the Port of Melbourne and the Port of Brisbane. I have to add that places like the Port of Brisbane have grown quite strongly.

So I would not subscribe to the view that there is not competition because of the leases. There is competition on the east coast, and it is up to New South Wales to position itself as strongly as possible within that to ensure its ports continue to grow. As the Minister has pointed out also, in terms of a legislative cap within Newcastle there is no such thing. So in terms of what we are focused on it is the growth of Port Botany.

CHAIR: The Minister said there was no cap at all, not that there was no legislative cap. The Minister said there was no cap at all. That was his answer. You are now talking about a legislative cap. I think this is where there is some confusion creeping in.

The Hon. DUNCAN GAY: No, I said both. I said there is no cap in Newcastle and there is no legislative cap overall.

………

The Hon. PAUL GREEN: I have a question about container caps and the leasing of ports. We were discussing the possibility of up to eight million containers moving around Port Botany, and large numbers at Port Kembla and Newcastle. If Botany were leased and had a cap of several million, would there be statutory caps?

The Hon. DUNCAN GAY: I answered that earlier. My answer now is no different.

The Hon. PAUL GREEN: Are there caps for Port Kembla?

The Hon. DUNCAN GAY: No.

The Hon. PAUL GREEN: So it is open to any number?

The Hon. DUNCAN GAY: Yes.

The Hon. Dr PETER PHELPS: Let us hope that it gets bigger.

The Hon. PAUL GREEN: The problem is that the freight comes onto the roads.

The Hon. Dr PETER PHELPS: Unless the Maldon to Dombarton railway is built.

The Hon. PAUL GREEN: That is right. I will have a problem if it gets bigger and the railway is not built.

The Hon. DUNCAN GAY: It is in our interest to grow all of them but not to unnecessarily use one to take freight that could have gone to another and been carried by road or rail. We need to be sensible. The ports need to specialise and grow. New South Wales ports are doing well compared to interstate ports.

CHAIR: The Minister said earlier that there are no caps, legislative or otherwise, on the Port of Newcastle.

The Hon. DUNCAN GAY: That is correct. That is for Newcastle.

The Hon. PAUL GREEN: So Port Kembla could grow to any size, as long as the containers keep coming in.

The Hon. DUNCAN GAY: It can grow within the constraints of its infrastructure.

The Hon. PAUL GREEN: There would have to be a cap, according to the capacity of that infrastructure?

The Hon. DUNCAN GAY: The infrastructure is the cap. Mr Reardon would like to clarify an earlier answer on Infrastructure NSW.

———-

GENERAL PURPOSE STANDING COMMITTEE NO. 1 Thursday 3 September 2015

The Hon. ADAM SEARLE: When you sold the Port of Newcastle was a cap put on the number of containers that can be moved through the Port of Newcastle?

Ms GLADYS BEREJIKLIAN: I understand there is no legislated container cap.

The Hon. ADAM SEARLE: So there is no cap on container movements there?

Ms GLADYS BEREJIKLIAN: There is no legislated container cap.

The Hon. ADAM SEARLE: Is there any other restriction in the sale of the lease documents?

Ms GLADYS BEREJIKLIAN: I am not aware of that.

The Hon. ADAM SEARLE: What about in the contracts?

Ms GLADYS BEREJIKLIAN: I am not aware.

The Hon. ADAM SEARLE: Will you take that on notice?

Ms GLADYS BEREJIKLIAN: I am happy to take that on notice.

The Hon. ADAM SEARLE: You are aware of the $20 20-foot equivalent container charge at the Port Botany on throughput that was in place for a number of years?

Ms GLADYS BEREJIKLIAN: I will ask Mr Spencer to answer your questions in this regard.

The Hon. ADAM SEARLE: Mr Spencer, are you aware of that container tax, if I can put it that way?

Mr SPENCER: For clarification, was it what was called a port container charge?

The Hon. ADAM SEARLE: I think it was a $20 charge on every 20-foot equivalent unit. It was originally to build a truck marshalling yard but when the marshalling was constructed it remained in place. At the moment, the value, I think, over the life of the lease would be in excess of the price that was achieved for the lease of Port Botany. The Government did not talk about that when the sale of the lease went through. Will the Minister confirm her understanding that that is still in place and is still being charged?

Mr SPENCER: To provide an accurate answer, I will take that question on notice.

(TIMOTHY JOHN SPENCER, Deputy Secretary, Commercial Group, NSW Treasury)

———-

LEGISLATIVE ASSEMBLY 10 September 2015

1337—PRIVATE OPERATOR OF PORT BOTANY

Mr Tim Crakanthorp to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

Is compensation payable to the private operator of Port Botany for container throughput at Newcastle port in excess of a cap?

15 October 2015

Answer-

This is a matter for the Treasurer.

———-

BUDGET ESTIMATES 2015-2016

Supplementary Questions

General Purpose Standing Committee No. 2 Roads, Maritime and Freight

Monday 31 August 2015

Answers due by: Thursday 24 September 2015

Questions from The Hon Shaoquett Moselmane MLC [on behalf of the NSW Labor Opposition]

Newcastle Port

31. I refer to the comments you made in the Legislative Council on 17 October 2013 about the movement of containers through the Port of Newcastle that, “part of the lease and the rationalisation was a cap on numbers there.” What are the arrangements that cap, inhibit or restrict the number of containers that pass through the Port of Newcastle?

Answer 31:

I am advised:

There is no legislated container cap at Port of Newcastle. The Government fully expects that organic growth of containers at Newcastle will continue.

32. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer 32:

I am advised:

The port leases do not seek to constrain trade, but aim to incentivise trade and port development in a manner that is consistent with the Freight and Ports Strategy.

33. Has the NSW Government entered into any agreements that create a disincentive or obstacle to increase the number of containers that pass through Newcastle?

Answer 33:

I am advised:

The port leases do not seek to constrain trade, but aim to incentivise trade and port development in a manner that is consistent with the Freight and Ports Strategy.

34. I refer to your comments in the Legislative Council on 17 October 2013 about containers and the Port of Newcastle, that “the only time an extension is allowed is when a specific number is reached and tripped in Port Botany and Port Kembla.”

(a) What is the number for Port Kembla?

(b) What is the number for Port Botany?

Answer 34:

I am advised:

The transaction arrangements that the State entered into with the successful bidders for Port Botany and Kembla and the Port of Newcastle reflect the Freight and Ports Strategy.

Questions from Dr Mehreen Faruqi MLC

Freight

179. Two-thirds of the projects in the NSW Freight and Ports Strategy Infrastructure Program are road-freight projects, and only 1/3 are rail freight. Moreover, 73% of the fully-funded projects are road-freight. How does the government intend to reach the target of 28% rail share of containers moved through port? (a) Is this still the target? (b) Will the government reach the target in this term of government?

Answer 179:

I am advised:

The Government maintains its 28% rail share target and since November 2014, the highest volumes of rail freight have been handled at Port Botany in five years.

The Cargo Movement Coordination Centre, established in 2014 in accordance with the objectives in the NSW Freight and Ports Strategy, has been working to increase freight rail by addressing issues around reliability, available intermodal terminal capacity, transit time and cost.

The 2015-16 Budget provides $6 million for the Airport East Precinct project, which includes removal of the General Holmes Drive level crossing on the Port Botany freight rail line to allow freight trains to travel at increased speeds. The project will also involve building twin rail bridges over the Wentworth Avenue underpass, which will allow for future duplication of the rail line.

Customer education about the advantages of rail has led to the transition of major freight customers from road to rail. This includes Kmart, Bunnings and Officeworks, and the movement of Visy shipments from Melbourne to Sydney.

Capacity at intermodal terminals drives increased demand for rail over road. The NSW Government policy is to identify and protect land and freight corridors for future intermodal capacity.

180. What is the status of the Inland Rail project? What is the NSW Government doing to make sure this important freight connection is built?

(a) The Inland Rail website says an Implementation Group will provide the delivery plan and business case for Inland Rail to the federal government by mid-2015. Is this project on track?

(b) Given that most of this will be constructed in NSW, has the NSW government seen the plan and business case?

Answer 180:

I am advised:

(a) On 11 September 2015, the Inland Rail Implementation Group’s Chair, the Hon John Anderson AO delivered the Final Report on the proposed Melbourne to Brisbane Inland Rail and the Australian Rail Track Corporation’s 2015 Inland Rail Programme Business Case to the Hon. Warren Truss, MP, Deputy Prime Minister and Minister for Infrastructure and Regional Development.

Transport for NSW’s Secretary is a member of the Australian Government’s Inland Rail Implementation Group and Transport for NSW has been represented at meetings to date.

Transport for NSW has now established a NSW Interagency Steering Committee to provide a whole-of-government position to facilitate advancing the Inland Rail.

(b) Yes.

198. What is the purpose of the container throughput cap at Newcastle port?

199. What is the purpose of paying compensation to the Port Botany leaseholder if the container throughput cap at Newcastle port is exceeded during the term of the Port Botany lease?

200. How much compensation is payable to the Port Botany leaseholder per container if the container throughput cap is exceeded at Newcastle port?

201. What is the source of funds for paying compensation to the Port Botany leaseholder if the container throughput cap at Newcastle port is exceeded?

202. Are stevedore tenants of Newcastle port charged a fee for each container that exceeds the container throughput cap?

(a) If so, what is the amount?

203. Did the government decide not to put any funds in place to pay compensation to the Port Botany leaseholder if the container throughput cap is exceeded at Newcastle port because no extension will be allowed in the container throughput cap until an unspecified container throughput is reached at Port Botany and Port Kembla?

Is Minister Gay responsible for enforcing the container throughput cap at Newcastle port?

(a) If not, which Minister is responsible?

205. Has the government claimed an exemption from complying with the ”Competition and Consumer Act 2010” in respect of Port Commitment Deeds?

206. How many Port Commitment Deeds are there?

207. Did the government provide the ACCC with all Port Commitment Deeds?

208. If not, did the government supply the ACCC with extracts of Port Commitment Deeds?

209. Do the ports lease arrangements prohibit the development of a container terminal at the Port of Newcastle and enable the growth of container volumes through Newcastle servicing that region?

210. Did the government decide not to put any funds in place to pay compensation to the Port Botany leaseholder because no extension will be allowed in the container throughput cap at Newcastle port until an unspecified container throughput is reached at Port Botany and Port Kembla?

211. Has the government been clear that while general cargo will be allowed at Newcastle, there will be no extension until a specific number of containers is reached and exceeded in Port Botany and Port Kembla?

a. If so, to whom has the government communicated this information?

Answer: 198-211

I am advised:

This transaction was led by Treasury and should be referred to the Treasurer.

———-

BUDGET ESTIMATES 2015-2016

Supplementary Questions
General Purpose Standing Committee No. 1 Treasury, Industrial Relations
Thursday 3 September 2015
Answers 29 September 2015
Questions from The Hon. Shaoquett Moselmane MLC

PORTS ISSUES

24. Has the NSW Government imposed any restrictions on the movement of containers through the Port of Newcastle?

25. Is there a cap on container movements at the Port of Newcastle

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Answer 24-25:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

26. In the interest of transparency, will you release the Port Commitment Deeds that set out details of arrangements for containers?

Answer 26:

The Port Commitment Deeds are commercial in confidence documents.

27. Now that the port transactions are concluded, will you release the scoping study that was undertaken ahead of the transaction for the three ports?

Answer 27:

The Scoping Study documents remain Cabinet-in-confidence. The Government, and previous Governments, have not released Scoping Studies for previous transactions.

28. Minister Gay has said: “The only time an extension is allowed is when a specific number is reached and tripped in Port Botany and Port Kembla.” What is the number? For Port Kembla? For Port Botany? Answer

28: See http://freight.transport.nsw.gov.au/strategy/

a. How much money was raised by the sale/lease of Newcastle port?
b. What was money spent on? 6
c. How much has gone into consolidated revenue?
d. How much has been allocated to, or spent in, the Newcastle electorate?

Answer 28 (a) – (d): For publicly available information, see http://www.transport.nsw.gov.au/media-releases/transforming-newcastle-port-lease-securesfunds-revitalisation

29. Has the NSW Government entered into any agreements that create a disincentive or obstacle to develop a container terminal at the Port of Newcastle?

Answer 29: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

30. Has the NSW Government entered into any agreements that create a disincentive or obstacle to increase the number of containers that pass through Newcastle?

Answer 30: Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

31. Has the NSW Government entered into any arrangement that create a financial penalty if the number of containers moved through the Port of Newcastle exceeds a set threshold?

a. If so, what is the threshold?

Answer 31:  Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

32. Is the leaseholder of Port Botany entitled to receive a payment should the number of containers moved through the Port of Newcastle exceed a set figure?

33. If so, what is the payment and who pays it?

Answer 32 – 33:

Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

34. Do the Port Commitment Deeds establish any limitations or restrictions on the operation of Port Kembla or the Port of Newcastle?

Answer 34:

Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

35. Will you release the Port Commitment Deeds for the port transactions?

Answer 35:

Please refer to answer 24 – 25. [There is no legislated cap on the number of containers that can travel through the Port of Newcastle.]

36. Will you release the scoping study for the port transactions?

Answer 36:

Please refer to answer 27. [The Scoping Study documents remain Cabinet-in-confidence. The Government, and previous Governments, have not released Scoping Studies for previous transactions.]

———-

LEGISLATIVE ASSEMBLY 15 October 2015

1612—PRIVATE OPERATOR OF PORT BOTANY

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

Is compensation payable to the private operator of Port Botany for container throughput at Newcastle port in excess of a cap?

Answer: 16 November 2015

Please refer to my response to questions 24 & 25 at Budget Estimates 2015 Answers to Supplementary Questions, General Purpose Standing Committee 1, 9 am, Thursday 3 September 2015.

PORTS ISSUES

24. Has the NSW Government imposed any restrictions on the movement of containers through the Port of Newcastle?

25. Is there a cap on container movements at the Port of Newcastle?

a. If so, what is it? Is it a charge per container?
b. If the cap is breached, is a fee, fine or charge imposed? Who pays it? Who do they pay the money to?
c. If the cap is breached, are any monies paid to the operators of Port Botany and/or Port Kembla? If so, how much is paid? Who pays it?
d. When were these arrangements agreed?

Answer 24-25:

There is no legislated cap on the number of containers that can travel through the Port of Newcastle.

———-

LEGISLATIVE ASSEMBLY 22 October 2015

1719—PRIVATE OPERATOR OF PORT BOTANY

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

Is compensation payable to the private operator of Port Botany for container throughput at Newcastle Port in excess of a cap?

Answer: 26 November 2015

Please refer to my response to questions 24 & 25 at Budget Estimates 2015 Answers to Supplementary Questions, General Purpose Standing Committee 1, 9am, Thursday 3 September 2015.

———-

LEGISLATIVE ASSEMBLY 29 October 2015

1848—NEWCASTLE PORT

Mr Tim Crakanthorp to the Minister for Transport and Infrastructure representing the Minister for Roads, Maritime and Freight, and Vice-President of the Executive Council—

1. When did the Competition and Consumer Act 2010 stop applying to the Government in respect to the operation of the Port of Newcastle?

2. Do the Port Commitment Deeds include a fee on container throughput at Newcastle Port under certain specified conditions?

Answer 4 December 2015:

I am advised :

This is a matter for the Treasurer.

———-

LEGISLATIVE ASSEMBLY 19 November 2015

2107—AUSTRALIAN COMPETITION AND CONSUMER COMMISSION

Mr Tim Crakanthorp to the Treasurer, and Minister for Industrial Relations—

1. Did the Treasury, or any entity of which the Treasurer is a shareholder, receive a request for information from the Australian Competition and Consumer Commission in 2015?

2. Did the Treasury, or any entity of which the Treasurer is a shareholder, receive a notice from the Australian Competition and Consumer Commission under section 155 of the Competition and Consumer Act 2010 in 2015?

18 December 2015

Answer—

As a normal part of my role as Treasurer I receive correspondence from a variety of organisations.

For information regarding correspondence to individual entities, you may wish to contact them directly.

NSW Government Container Port Policy Statements July 2012 – January 2020

 

Hon M Baird July 27 2012: The development of intermodal terminals across South and West Sydney [sic], the Government’s freight strategy to be released later in 2012 would seek to develop Port Kembla as the logical next long term tranche of container capacity after Port Botany.

 

Draft NSW Freight and Ports Strategy November 2012 (p 98): Port Kembla has been identified as the location for the development of a future high intensity container terminal to augment the capacity of Port Botany when required.

 

NSW Freight and Ports Strategy November 2013 (p117): Port Kembla has been identified as the location for the development of a future container terminal to augment the capacity of Port Botany when required.

 

Hon M Baird March 4 2014: Once Port Botany reaches capacity, Port Kembla will be developed as the next long-term container facility. The development of a dedicated container terminal at the Port of Newcastle will be considered when both Ports Botany and Kembla become fully developed.

 

Hon G Berejiklian September 29 2015: I am advised that the lessee could develop a container terminal at the Port of Newcastle if it wished to do so.

 

Draft NSW Freight and Ports Plan 2017 (p 34): Port Kembla will act as a progressive overflow facility for Port Botany once its operational capacity has been reached. This is expected to occur after 2040, with Port Kembla requiring development to increase its capacity to accommodate the overflow.

 

Hon M Pavey September 11 2018 (QON 8899): The lease arrangements for the Port of Newcastle reflect the Government’s policy that Port Kembla will be the State’s next container terminal when Port Botany reaches capacity. The arrangements aim to promote trade and port development in a manner consistent with Government policy. The owners of the Port of Newcastle have entered into an agreement with the State that facilitates ongoing organic growth in container trade at Newcastle.

 

NSW Freight and Ports Plan September 2018 (p 39): The NSW Government policy position is that Port Kembla has been identified as the location for the development of a future container terminal to augment capacity of Port Botany when required. Current arrangements do not prohibit the development of a container terminal at the Port of Newcastle but rather allow for the growth of container volumes through Newcastle that service the region.

 

NSW Government submission Legislative Council Public Works Committee Inquiry into the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales, January 14 2019, page 15:

 

“Both the draft (November 2012) and final (November 2013) NSW Freight and Ports Strategy stated “Over the next 20 years, NSW ports will need to focus on their primary markets. Port Botany will remain the key container port in NSW, given current planning and investments to date” and also stated in the draft (November 2012) and final (December 2013) that “Port Kembla has been identified as the location for the development of a future (“high intensity” – in draft version) container terminal to augment the capacity of Port Botany when required.”

 

This policy position is reflected in the Port Botany and Port Kembla Port Commitment Deeds (PCDs).”

 

QUESTIONS ON NOTICE

1901 – PORT OF NEWCASTLE CONTAINER TERMINAL November 14 2019 Crakanthorp, Tim to the Treasurer, Answer November 27 2019

 Do the confidential Port Commitment Deeds specify government policy for developing a container terminal at the Port of Newcastle?

 

Answer: The lease arrangements for the ports of Newcastle, Botany and Kembla reflect the 2013 New South Wales Government’s Freight and Ports Strategy and the 2018 New South Wales Freight and Ports Plan – that Port Kembla should be the State’s next container terminal once Port Botany reaches capacity.

 

2077 – NEWCASTLE PORT, November 21 2019 Crakanthorp, Tim to the Minister for Transport and Roads

  1. Is Government policy for immediate development of a container terminal at the Port of Newcastle implemented by means of the lease agreements for Port Botany and Port Kembla?

 

  1. Does the Government have a policy for:

 

(a) The immediate development of a container terminal at the Port of Newcastle?

(b) The development of a dedicated container terminal at the Port of Newcastle to be considered when both Port Botany and Port Kembla become fully developed?

3. Can the operator of the Port of Newcastle develop a container terminal?

 

Answer due December 26 2019; received January 10 2020; published January 16 2020

 

  1. This question is a matter for the Treasurer.

 

  1. (a) and (b) The Government’s policy is to realise the full capacity of Port Botany before investing in another port in order to maximise benefits to users and taxpayers. Port Kembla has been identified as the location for a container terminal to augment Port Botany when required.

 

  1. Yes.

https://www.comcourts.gov.au/file/Federal/P/NSD2289/2018/3843447/event/30136204/document/1548901

 

AUSTRALIAN COMPETITION & CONSUMER COMMISSION Applicant

 

NSW PORTS OPERATIONS HOLD CO PTY LTD ACN 163 262 351 and others named in the schedule Respondent

 

ORDER

 

JUDGE: JUSTICE JAGOT

DATE OF ORDER: 10 February 2020

WHERE MADE: Sydney

 

THE COURT ORDERS THAT:

 

 

  1. On or before 21 February 2020, the Third Cross-Respondent [PoN] provide the First to Third Respondents/Cross-Claimants [NSW Ports] with a schedule identifying which of its remaining privilege claims are pressed and the basis for each claim.

 

  1. On or before 28 February 2020, the First to Third Respondents/Cross-Claimants [NSW Ports] notify the Third Cross-Respondent [PoN] of any challenges to those remaining privilege claims.

 

  1. On or before 6 March 2020, the Third Cross-respondent [PoN] file and serve an affidavit identifying the documents listed in the Annexure to the interlocutory application dated 10 December 2019 and filed on 12 December 2019 by the First to Third Respondents and Cross-claimants (NSW Ports Application) over which a claim for legal professional privilege is maintained to which First to Third Respondents/CrossClaimants [NSW Ports] press their challenge and the basis for each claim.

 

  1. On or before 13 March 2020, the First to Third Respondents and Cross-claimants [NSW Ports] file and serve any submissions (limited to 10 pages) and any affidavit in reply in relation to the NSW Ports Application.

 

  1. On or before 20 March 2020, the Third Cross-respondent [PoN] file and serve any submissions in relation to the NSW Ports Application (limited to 10 pages).

 

  1. The NSW Ports Application be listed for a further hearing on a date to be fixed before a judge other than Justice Jagot, with an estimate of half to one day.

 

  1. The interlocutory application dated 15 October 2019 and filed on 17 October 2019 by the Third Cross-respondent [PoN] be listed for a case management hearing following the determination of the NSW Ports Application.

 

Date that entry is stamped: 11 February 2020

 

 

https://www.comcourts.gov.au/file/Federal/P/NSD2289/2018/3843447/event/29967511/document/1443727

 

Schedule No: NSD2289/2018

Federal Court of Australia

District Registry: New South Wales

Division: General

 

Interested Person STATE OF NSW

 

Interested Person PORT OF NEWCASTLE INVESTMENTS PTY LIMITED

 

Second Respondent PORT BOTANY OPERATIONS PTY LTD ACN 161 204 342

 

Third Respondent PORT KEMBLA OPERATIONS PTY LTD ACN 161 246 582

 

CROSS CLAIM

 

Cross-Claimant NSW PORTS OPERATIONS HOLD CO PTY LTD ACN 163 262 351

 

Second Cross-Claimant PORT BOTANY OPERATIONS PTY LTD ACN 161 204 342

 

Third Cross-Claimant PORT KEMBLA OPERATIONS PTY LTD ACN 161 246 582

 

Cross Respondent PORT OF NEWCASTLE OPERATIONS PTY LIMITED ACN 165 332 990

 

Second Cross Respondent PORT OF NEWCASTLE INVESTMENTS (PROPERTY) PTY LIMITED ACN 169 286 024

 

Third Cross Respondent PORT OF NEWCASTLE INVESTMENTS PTY LIMITED ACN 169 132 441

 

https://www.comcourts.gov.au/file/Federal/P/NSD862/2019/3858933/event/30187194/document/1549039

 

 

Federal Court of Australia District Registry: New South Wales Division: General  No: NSD862/2019

 

MAYFIELD DEVELOPMENT CORPORATION PTY LTD ACN 154 495 048 Applicant

 

NSW PORT OPERATIONS HOLD CO PTY LTD ACN 163 262 351 and others named in the schedule Respondents

 

ORDER

 

JUDGE: JUSTICE JAGOT

DATE OF ORDER: 11 February 2020

WHERE MADE: Sydney

 

THE COURT ORDERS THAT:

 

 

  1. The Interlocutory Hearing listed on 18 February 2020 be vacated.

 

  1. On or before 14 February 2020, the Respondents [NSW Ports] file and serve on the Applicant [Mayfield] and the Interested Persons [ACCC, PoN, NSW government] named in the Schedule any evidence in respect of the Applicant’s Application for the stay of the proceedings to be lifted (filed by the Applicant on 3 February 2020) (Application).

 

  1. On or before 19 February 2020, the Applicant file and serve on the Respondents and the Interested Persons named in the Schedule any written submissions (limited to 10 pages) on which they intend to rely in respect of their Application.

 

  1. On or before 12 noon on 25 February 2020, the Respondents file and serve on the Applicant and the Interested Persons named in the Schedule any written submissions (limited to 10 pages) on which they intend to rely in respect of the Application.

 

  1. On or before 12 noon on 25 February 2020 the Interested Persons named in the Schedule file and serve on the Applicant, Respondent and other Interested Persons any written submissions (limited to 5 pages).

 

  1. The Application be listed for hearing at 10.15 am on 26 February 2020 at which the parties and the Interested Persons named in the Schedule will be heard.

 

  1. The Respondents need take no further steps in the proceeding until the determination or other resolution of the Application.

 

Date that entry is stamped: 11 February 2020

 

Schedule

 

No: NSD862/2019

Federal Court of Australia District Registry:

New South Wales Division: General

 

Second Respondent PORT BOTANY OPERATIONS PTY LTD ACN 161 204 342

Third Respondent PORT KEMBLA OPERATIONS PTY LTD ACN 161 246 582

Interested Person AUSTRALIAN COMPETITION & CONSUMER COMMISSION

Interested Person PORT OF NEWCASTLE OPERATIONS PTY LIMITED ACN 165 332 990

Interested Person PORT OF NEWCASTLE INVESTMENTS (PROPERTY) PTY LIMITED ACN 169 286 024

Interested Person PORT OF NEWCASTLE INVESTMENTS PTY LIMITED ACN 169 132 441

Interested Person STATE OF NEW SOUTH WALES

Port Commitment – Port Botany and Port Kembla

 

 

  1. Limits on claims for support

 

(a) Botany Port Manager may not make a claim under the Port Commitment in respect of:

 

(i) any Support Period commencing after Botany Port Manager or Kembla Port Manager or an Associate of Botany Port Manager or Kembla Port Manager had developed or commenced development of Container handling capacity at the Port of Newcastle; or

(ii) any Support Period during which:

(A) Port of Newcastle or any material part of it is operated, managed or leased by Botany Port Manager or Kembla Port Manager; or

(B) any material Container handling capacity at Port of Newcastle is operational by Botany Port Manager or Kembla Port Manager or an Associate of Botany Port Manager or Kembla Port Manager.

(b) Botany Port Manager, Botany Port Lessee and the Purchaser must, as reasonably requested by the State from time to time, provide to the State information about:

 

(i) the number of Containers imported and exported through Port Botany and Port Kembla in any period of time;

(ii) the nature of charges imposed by Botany Port Manager under PAMA and the revenue from those charges for any period of time;

(iii) the identities of the Associates of the Botany Port Manager, Botany Port Lessee, and the Purchaser at any given time; and

(iv) the extent to which any of Botany Port Manager, Botany Port lessee, Kembla Port Manager and Kembla Port Lessee are under the common Control (direct or indirect) of any person at any given time.

(c) Each of Botany Port Manager, Port Lessee and the Purchaser must procure use their respective reasonable endeavours to minimise any loss of revenue that may be the subject of a claim by Port Manager under the Port Commitment.

 

Meaning of container

 

Container means any moveable device, designed for continuous use in loading and unloading cargoes on and from Ships, including boxes, crates, cylinders, tanks, TEUs, other stackable units and any similar cargo-carrying device which is designated as a container by international stevedoring standards from time to time and Containerised has a corresponding meaning.

Container includes:

(a) overseas import containers;

(b) overseas export containers; and,

(c) local containers (coastal inwards or outwards); and

(d) empty containers and transhipped containers.

FEDERAL COURT OF AUSTRALIA

Australian Competition and Consumer Commission v NSW Ports Operations Hold Co Pty Ltd (no3 [2020] FCA 1766

File Number :           NSD 2289 of 2018

Judgement of:          Wigney J

Date of judgement: 9 December 2020

 

18      The NSW Ports parties allege, in both their defence and their cross-claim against the Port of Newcastle parties, that if it be the case that the operators of the Port of Newcastle are unlikely to build a container terminal at the Port of Newcastle, that is the result of the reimbursement provision, not a result of the compensation provisions. Indeed, in their cross-claim, the NSW Ports parties seek both a declaration that, by making the Port of Newcastle Deed including the reimbursement provision, the Port of Newcastle parties contravened s 45(2)(a)(ii) of the Act and an order that the Port of Newcastle parties be restrained from giving effect to that provision. They also contend, in their defence, that if the Port of Newcastle parties are enjoined from giving effect to the reimbursement provision, it follows that giving effect to the compensation provisions would not have the effect of substantially lessening competition in the relevant market as alleged by the ACCC.

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