Port container cap would hobble growth – Newcastle Herald

Restrictions on Newcastle need to be made clear, writes Tim Crakanthorp.

IT would seem there is interest from the private operator of the Port of Newcastle in building a container terminal.

However it would also seem that the Baird government wants to take this opportunity for Newcastle’s employment and growth off the table.

The development of a container terminal at the Port of Newcastle would provide the city with a massive economic boost.

It would create a new distribution hub, which could use the existing heavy rail freight network to service the Hunter and northern NSW.

A container terminal on the site of the former BHP steelworks could handle 3 million containers a year. To put this in perspective, Sydney’s Port Botany handled just over 2 million containers in 2013.

While Newcastle is a major coal port, developing it as a container terminal would supercharge local job opportunities, improve linkages across the state and provide new commercial opportunities.

But it seems the government has stopped all this before it even starts with an anti-competitive decision to impose a cap on the number of containers that can go across Newcastle’s wharves. It has also intimated that, should Newcastle exceed its meagre cap, the owners of Port Botany would be financially compensated. These arrangements make the development of a container terminal at Newcastle commercially impossible.

Restricting port activity in Newcastle protects the container monopoly at Port Botany from competition. And preserving that monopoly was how the NSW government achieved the sale price it did when it was privatised in 2013.

I would question whether this is market rigging.

For an open trading economy like ours, ports are strategic economic assets. Many of the goods we consume, from clothes to computers, from food to televisions, arrive in containers.

The ports should be freely competing for sea trade and cargo. This would keep costs in check, benefiting shippers and consumers.

Instead, with a monopoly in place, the forces of competition cannot come into play and the freight industry will pass on the extra costs that will arise.

I believe Premier Mike Baird has created a penalty regime to punish anyone who wants to invest in Newcastle and trade from our port. The apparent restrictions provide that the only time an increase in container numbers through Newcastle will be allowed is when a specified minimum of containers through Port Botany and Port Kembla has been reached.

Novocastrians deserve better and we deserve answers. But the government refuses to disclose the details of these anti-competitive arrangements and is claiming that the Port Commitment Deeds, which govern the privatisation of the three NSW ports, are commercial in confidence.

Given the nature of the government’s actions, I have written to the Australian Competition and Consumer Commission (ACCC) seeking an investigation into the restrictions imposed on Newcastle.

The chairman of the ACCC, Rod Sims, has already signalled his concerns about the port privatisations. But we need more than hand wringing – we need action to get the Port Commitment Deeds released and the restrictions lifted.

I want Newcastle to be a vibrant, smart city that nurtures creativity and innovation. A city that attracts investment, creates jobs and is free to compete on its own merits.

Mr Baird needs to be held to account for hurting our city.

Tim Crakanthorp is state member for Newcastle