Newcastle container terminal block may be ‘unlawful’, says ACCC – Newcastle Herald

By IAN KIRKWOOD

Oct. 30, 2014, 12:34 p.m.

AUSTRALIA’S competition regulator says any restrictions on container trade through the Port of Newcastle may be ‘‘unlawful and . . . unenforceable’’.

In an annual report on stevedoring published on Thursday, the Australian Competition and Consumer Commission has investigated the way the state government leased Port Botany and Port Kembla to one consortium for $5.07billion and Newcastle to another group for $1.75billion.

The ACCC quoted a Newcastle Herald report of May 11 this year, which said: ‘‘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 ACCC noted that the government had planned Port Kembla as the next container port after Botany, but 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’’.

‘‘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,’’ the report says.

‘‘Such restrictions may be unlawful and could be unenforceable.’’

The state government has repeatedly said there is no ‘‘legislated cap’’ on container trade through Newcastle but after months of investigation, the Herald believes that restrictions have been written in to various legal and commercial documents produced for the privatisations.

Port Botany did about 2.2million containers in 2013 and and the former BHP steelworks berths in Newcastle could handle 3million containers a year.

But the apparent restrictions on Newcastle mean its operator would have to pay Botany a substantial per-container fee if Newcastle’s container trade grew much beyond the 15,000 or so containers done at present.

The fee is large enough to make a Newcastle expansion commercially prohibitive.

Answering a parliamentary question in October 17, 2013 Ports Minister Duncan Gay acknowledged ‘‘a cap on numbers’’ at Newcastle but said ‘‘we do not envisage that any compensation will need to be put in place’’.

Analyst Greg Cameron, who has spent years from his Canberra home promoting the benefits of a Newcastle container terminal, said the ACCC report showed the importance of the issue.

‘‘I will continue to push for answers on this because a Newcastle container terminal would be a massive economic boost for the Hunter and regional NSW, while easing a lot of the road congestion around southern Sydney from container-laden trucks,’’ Mr Cameron said.

The Herald is seeking responses from the government, the ACCC and the operator of the Port of Newcastle.

http://www.theherald.com.au/story/2661695/container-terminal-block-may-be-unlawful/?cs=303