The Independent Pricing and Regulatory Tribunal (IPART) has determined that the Port of Newcastle would need to make a one-off payment to the NSW Government of $13 million ($10 million in 2014 dollars, adjusted for CPI to the date of payment) if it intends to become a competitive container terminal.
In comparison, preliminary modelling from Deloitte Access Economics released last month shows the NSW Government faces a potential liability of between $600 million and $4.3 billion to compensate NSW Ports, should the Port of Newcastle fully containerise.
The Liberal National government sold off Port Botany and Port Kembla to NSW Ports in 2013. Port Kembla was sold off for $760 million and Port Botany went for $4.31 billion.
The Port of Newcastle was sold off a year later for $1.75 billion to a separate buyer.
Under the former government’s ports deal, the state would be liable to compensate NSW Ports if the Port of Newcastle were to develop a competing container terminal.
The former government initially signed a deal requiring the Port of Newcastle to reimburse the state – dollar-for-dollar, should the state be required to pay NSW Ports.
In 2022, NSW Parliament passed a law enabling the Port of Newcastle to extinguish the reimbursement provision under a different arrangement.
IPART has now determined the amount that would be payable.
Treasurer Daniel Mookhey said:
“IPART has made its decision. Work will continue on contingency planning, should the liability arise.
“The Hunter region should always have been able to decide the future of its port free from any competitive restraint.
“It would have been preferable to have had an elected government making decisions that affect the people of NSW.
"Privatisation under the previous government has had a real impact on household budgets when it comes to electricity, tolls and container movements.”