INDUSTRY OPINION: A competitive and efficient container terminal alternative

Date: 29 May 2018

Container Terminal
By Simon Gelder, Port of Newcastle's Acting CEO and Chief Financial Officer 
The Port of Newcastle believes efficient markets competing on a level playing field should determine the location of an alternative to the Port Botany container terminal.  A lack of competition means higher costs for importers, exporters, consumers and businesses across the State. 
Recent comments reported in the media promote Port Kembla as the best option for a second container port in NSW. What wasn't mentioned is that NSW Ports (owner of Port Botany and Port Kembla) is protected by an anti-competitive arrangement struck with the NSW State Government designed to undermine the financial viability of a Newcastle alternative. This arrangement, now under investigation by the Australian Competition and Consumer Commission, would see it paid "compensation" for every TEU handled (above a nominal threshold) if a successful container terminal is operated in Newcastle.   

The Port of Newcastle has no objection to the development of a container terminal at Port Kembla, which together with Port of Newcastle could provide a competitive and efficient freight network for Australian businesses. Our interest, and the wider public interest, is to have the opportunity for a level playing field to unlock productivity-enhancing competition. There is no credible case for distorting the market through governments spending taxpayers' money on infrastructure that benefits select private businesses without assessing lower cost alternatives.   

The Port of Newcastle remains ready to move on the development of a world class container terminal to service regional Australia. To make this happen, Newcastle does not need anything like the billions of dollars of government investment that is required to develop Port Botany and Port Kembla, however it does need an opportunity to compete on a level playing field. 

The benefits for NSW and the wider national economy are now well established. The Port of Newcastle set out these benefits in a recent submission to the Draft NSW Freight and Ports Plan. To read this submission and the Deloitte Access Economics report, click here.