The Hon. Malcolm Turnbull MP
Prime Minister of Australia
Dear Prime Minister,
Sydney’s passenger rail service can be boosted at no cost by removing freight. A rail freight bypass of Sydney – between the Port of Newcastle and Glenfield – can be built and paid for by railing containers. There is no greater opportunity to decentralise the NSW economy. Regional economic development can be founded on direct rail freight access to a container terminal at the Port of Newcastle. However, this opportunity is being impeded by flawed Australian and NSW government policy.
The leaseholders of Port Botany and the Port of Newcastle will benefit if they take the opportunity to participate in a rail freight bypass line, because replacing trucks with trains will profitably remove container trucks from Sydney’s roads.
The Australian government’s Moorebank Intermodal Terminal proposal would be abandoned, which would benefit the local community because the road network is already hyper-congested, while rail freight infrastructure between Port Botany and Moorebank is inadequate.
Current NSW government freight policy is founded on the lawfulness of charging a $100 per container fee at the Port of Newcastle. It would defy reality for this fee to conform to Section 45 of the “Competition and Consumer Act 2010”. The NSW government pays compensation to NSW Ports of $100 per container for loss of container business to the Port of Newcastle.
Should this $100 fee at the Port of Newcastle prove to be unlawful or unenforceable – it can’t be examined because it is secret – NSW Ports will be placed in a difficult commercial position. NSW Ports paid a premium lease price in return for being compensated for Port Botany ever losing its monopoly container port status in NSW.
Since Australian superannuation funds own 80 per cent of NSW Ports, ordinary Australians may suffer losses if the investment fails to perform. However, replacing truck transportation of containers at Port Botany with rail transportation of containers at the Port of Newcastle, is the way for all investors to gain.
A container terminal would be operating today at the Port of Newcastle were it not for the NSW government’s actions. As revealed in 2014 in evidence before the ICAC’s “Operation Spicer”, the NSW government acted “questionably” in 2010 in preventing Newcastle Port Corporation developing a container terminal with minimum capacity of 1 million per year. The O’Farrell government conducted a review of NSW transport policy. This included a secret “cap on numbers” of containers at the Port of Newcastle for which a fee of $100 per container is charged after the cap is exceeded.
Failure to disclose this “cap on numbers” makes NSW transport policy fatally flawed. In August 2014, the NSW government declared a container terminal at the Port Newcastle an “uneconomic enterprise” without acknowledging the restrictions. But with no restrictions, a container terminal is a viable enterprise of immense economic significance.
While the bypass line is being built, a container terminal at Newcastle will service northern NSW. After the bypass line is built, the Newcastle container terminal will not only service Sydney but also southern NSW and Victoria. (It will be faster and cheaper to service Victoria by rail from Newcastle than by truck from Melbourne.)
The NSW government’s transport strategy calls for spending $5 billion to build stages 2 and 3 of the Northern Sydney Freight Corridor for the equivalent of a dedicated rail freight line between Newcastle and Strathfield. There are no funds available but a rail freight bypass line makes this project redundant.
Without increased rail freight capacity, the NSW government will reduce passenger services between Newcastle and Sydney. Freight demand is estimated to increase by 50 per cent by 2028.
The NSW government’s transport strategy calls for a $1 billion rail freight line to be built between Chullora and Eastern Creek. The “Western Sydney Freight Line” is an extension of the Metropolitan Freight Line from Port Botany. There are no funds available but a rail freight bypass makes this project redundant.
There are no funds available to increase capacity of the Southern Sydney Freight Line, or to build a new rail freight line between Port Botany and Mascot. These improvements are necessary to service Port Botany container terminal and the Moorebank Intermodal Terminal proposal. Again these projects are made redundant by a rail freight bypass line.
Container truck movements between Port Botany and western Sydney are estimated by NSW Ports to increase from 2700 per day to 6900 – 9990 per day in 2045. The Australian government’s primary justification for proposing an intermodal terminal at Moorebank is to reduce the number of container trucks using the roads. This objective, obviously, can never be achieved.
I am writing to you because I believe the opportunity for NSW and Australia warrants the Prime Minister’s attention. For details, see www.containerterminalpolicyinnsw.com.au
24 February 2016
(Letter received by email from the ACCC on 18 February 2016)
Dear Mr Cameron,
Correspondence regarding NSW Ports
I refer to your email to the Chairman of the ACCC dated 10 February 2016, in which you asked whether the ACCC considers that any cap on container numbers for the Port of Newcastle would conform to the Competition and Consumer Act 2010.
As previously stated in correspondence to you, the ACCC was provided with information by NSW Government officials on the basis that we would keep that information confidential. The ACCC reviewed and assessed the relevant information that was available at that time and decided not to pursue the matter by way of any enforcement action.
As a general statement, the CCA applies to the conduct of Commonwealth and State governments to the extent those governments are carrying on business. To the extent they are carrying on business, any restrictions imposed by them which have the purpose or effect of substantially lessening competition in a relevant market are likely to give rise to a contravention of the CCA and could be subject of enforcement action taken by the ACCC. The ACCC has communicated this position to the NSW Government.
18 February 2016
The Hon Gladys Berejiklian MP
Treasurer, and Minister for Industrial Relations
Dear Ms Berejiklian,
Would you have the parliament – and the people of NSW – believe that the government does not charge a fee when container movements at the Port of Newcastle exceed a “cap on numbers”?
The Hon Duncan Gay MLC disclosed a “cap on numbers” on 17 October 2013.
This “cap on numbers” is the number of containers for which there is no fee.
When this “cap on numbers” is reached, the government charges a fee for every additional container moved through the port.
The government charges this fee to fund compensation payable to NSW Ports.
The impact of this fee is to make a container terminal commercially unviable whereupon one will not be built.
This fee is anti-competitive and cannot be examined for lawfulness because it is secret.
For details of what you have advised parliament, see www.containerterminalpolicyinnsw.com.au
17 February 2016
The Hon Mike Baird MP
Premier, and Minister for Western Sydney
Dear Mr Baird,
I refer to a fee the NSW government charges for every container moved through the Port of Newcastle in excess of a cap.
After what number of container movements is this fee payable?
How much is this fee?
Last year, at Budget Estimates, The Hon Gladys Berejiklian MP and The Hon Duncan Gay MLC said there is no legislated or unlegislated cap on the number of containers that can travel through the Port of Newcastle see www.containerterminalpolicyinnsw.com.au
What they failed to mention is that the government charges a fee for every container moved through the port in excess of a cap.
The government charges this fee to compensate NSW Ports for loss of container throughput at Port Botany. Compensation would need to be at least $100 per container because this is the average fee charged by NSW Ports at Port Botany.
A container terminal at the Port of Newcastle is commercially unviable when the government charges a fee of $100 per container.
Mr Gay disclosed a “cap on numbers” to the parliament on 17 October 2013.
15 February 2016
Mr Rod Sims
Dear Mr Sims,
I refer to the Port of Newcastle’s cap on container numbers.
Does the ACCC consider this “cap on numbers” conforms to the “Competition and Consumer Act 2010” (CCA)?
If you do not answer this question because you do not know what the “cap on numbers” is, the NSW parliament is in the same position. However, the parliament has been trying to find out, albeit without success – see www.containerterminalpolicyinnsw.com.au
Isn’t it your job to satisfy yourself about anti-competitive restrictions conforming to the CCA?
10 February 2016
The Hon Mike Baird MP
Premier, and Minister for Western Sydney
Dear Mr Baird,
What is the cap on numbers at the Port of Newcastle?
The Hon Duncan Gay MLC disclosed a cap on numbers at the Port of Newcastle on 17 October 2013. This cap on numbers applies to container movements. Many parliamentary “Questions On Notice” have been asked, and many questions were asked in last year’s Budget Estimates hearings, aimed at uncovering details. No details were provided, including by The Hon Gladys Berejiklian MP – see www.containerterminalpolicyinnsw.com.au
Ms Berejiklian and Mr Gay indicated there is no legislated cap on container movements at the Port of Newcastle. As you know, the cap on numbers at the Port of Newcastle is unlegislated.
No information has ever been disclosed about this cap on numbers apart from the fact it exists. Mr Gay said: “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.”
There appears to be no Hansard record relating to a cap on numbers at the Port of Newcastle except on 17 October 2013.
Without details, it is impossible to examine this cap on numbers to see if it conforms to the “Competition and Consumer Act 2010”.
You are asked to disclose details of this cap on numbers to enable it to be examined for lawfulness and enforceability, and whether it is detrimental to the NSW economy.
6 February 2016