CEO Craig Carmody announced that the storage penalty in the Port Commitment Deed has ceased to exist following the Port of Newcastle’s payment of $13 million. Photo: Linkedin/Craig Carmody.
The Port of Newcastle board has voted in favour of paying the one-off compensation payment recently handed down by IPART – severing their liability to the NSW Government and allowing the port to finally grow its container trade.
The course of events began in 2013 when the state’s Liberal-National government sold Port Botany and Port Kembla to NSW Ports, along with the Port of Newcastle to a separate buyer one year later.
Modelling by Deloitte Access Economics in a report commissioned by NSW Treasury showed the state’s liability to these operators could range between $600 million in 2024 and up to $4.3 billion in 2063 when the contract is set to end.
Legislation passed in 2022 eliminated the Port of Newcastle’s liability to the state for developing a new container port. However, it was on the condition they agreed to compensate the state with an amount determined by the NSW Independent Pricing and Regulatory Tribunal (IPART), which was last month announced to be $13.1 million.
Since the one-off payment has been made, the Port of Newcastle can handle container trade above a specified level and will no longer have to reimburse the State Government for compensation payments owed to NSW Ports.
Port of Newcastle CEO Craig Carmody said in a post that when he began in the role nearly six years ago, his primary objective was clear: “Remove the liability that stopped the port from making any commercial investment in a container terminal”.
“I look forward to working with policymakers to ensure NSW freight policy aligns with our future objective of constructing a large-scale container terminal in Newcastle,” he said.
Mr Carmody thanked the alliance of supporters behind the port, including Lake Macquarie MP Greg Piper who said he hopes the port moves ahead quickly.
“Frankly, I’m extraordinarily pleased about it,” said Mr Piper.
“Obviously there will be benefits from the port (container terminal) in the long term, but my concern is for my community and the community of the Upper Hunter that are going through a fairly difficult time as we move away from coal-fired power.
“I want them to understand there are some really good things on the horizon and I think this will be a big part of it.”
Professor Roy Green – who is Chair for the Port of Newcastle – said the agreement to pay the determination was met without hesitation.
“Since Port of Newcastle was privatised in 2014 it became apparent the market in the Port’s catchment did not want their own trade restricted, they wanted their product exported in the most efficient and cost-effective way,” said Professor Green.
“This was highlighted in the support we received during the legislative process; the Port of Newcastle Extinguishment of Liability Act became less about the Port of Newcastle and more about a collective group of organisations demanding change.
“While we eagerly await the outcome of the Freight Reform Program, Port of Newcastle will continue its planning for a container terminal, including continuing to grow container trade through the port’s multipurpose terminal, which has current planning approval for 350,000 containers a year.”
