Container terminal at Port of Newcastle a “mere mirage”
• Federal Court releases reasons for judgment in dismissing ACCC case against NSW Ports.
• Court finds that the Port Commitment Deeds did not have the purpose or likely effect of substantially lessening competition.
• Court finds the "mere speculative hopes" of a container terminal at Port of Newcastle "were and remain far-fetched and fanciful on the evidence and were and are not a real chance or real possibility".
• Judgment supports that the State’s container port strategy (Port Botany followed by Port Kembla), is in the public interest as it provides for the most effective use of investment and efficiency of the freight task in NSW.
• Outcome an "emphatic win" for the people of NSW and NSW Ports.
NSW Ports welcomes the publication today of the reasons for judgment of the Federal Court of Australia dismissing all the claims brought against it by the Australian Competition and Consumer Commission (ACCC).
NSW Ports Chief Executive Marika Calfas said the outcome was "an emphatic win for the State of NSW and NSW Ports. NSW Ports will continue to focus on ensuring the key trade gateways of Port Botany and Port Kembla deliver efficiently and sustainably for the people and businesses of NSW."
In her judgment, Justice Jayne Jagot noted that the prospect of Port of Newcastle developing a container terminal in the reasonably foreseeable future while Port Botany has capacity "is fanciful, far-fetched, infinitesimal or trivial".
The judgment supports the principle of NSW’s container port strategy, that container terminal development should be conducted in sequence, with existing capacity at Port Botany utilised first, followed by Port Kembla and only then Port of Newcastle. This strategy delivers the most effective use of significant public infrastructure investment in support of the overall cost and efficiency of the NSW freight task.
Ms Calfas said Port Botany and Port Kembla underpin the State’s economy contributing $4.4 billion a year to NSW gross state product and creating 29,000 jobs.
"Since privatisation in 2013, $2.2 billion has been invested by NSW Ports and other private sector operators to grow port capacity and improve productivity.
"Premature development of another container terminal in NSW whilst Port Botany still has capacity would increase the overall cost of moving freight in NSW, to the detriment of the State’s economy," Ms Calfas said.
Her Honour found that in the seven years since privatisation, Port of Newcastle has not formulated an investment grade business case suitable of being put to its own board and shareholders for the development of a container terminal, even without the provisions of the Port Commitment Deeds in place.
The Court also found that the provisions in the Port Commitment Deeds were used to provide investors with certainty about the State’s container port strategy to ensure that the State received maximum value for the asset sales.
On 29 June 2021, Justice Jagot dismissed in full the ACCC’s allegations that the provisions of the Port Commitment Deeds between the State of NSW and NSW Ports were anti-competitive.
NSW Ports is 80 percent owned by Australian superannuation funds investing on behalf of more than six million individual Australians. The NSW Ports consortium comprises IFM Investors, AustralianSuper, QSuper and Tawreed Investments.
NSW Ports operates Port Botany and Port Kembla under 99-year leases from the State of NSW, acquired in 2013 for $5.1 billion.
The proceedings by the ACCC in the Federal Court concerned agreements, known as Port Commitment Deeds (PCD), which were entered with the NSW Government as part of the privatisation of Port Botany and Port Kembla in May 2013, and the privatisation of Port of Newcastle in May 2014.
Port of Newcastle is 50% owned by each of China Merchant Port Holdings, one of the world’s largest port developers and operators, and The Infrastructure Fund.
Audio news grabs can be downloaded here.
Media contact: Vida Cheeseman, NSW Ports, Vida.Cheeseman@nswports.com.au or 0410 597 547.