The NSW government will support a move to lift the financial constraints it imposed on Newcastle Port, paving the way for a new container terminal at the world’s largest coal port.
New legislation, to be discussed in parliament on Tuesday, aims to lift a financial fine that will force the Port of Newcastle to compensate competitors if they transport more than about 50,000 sea containers a year.
In a breakthrough, brokered by independent MP Greg Piper, the financial restrictions could be lifted within months if legislation passes parliament, allowing Newcastle’s economy to move away from coal exports for decades to come.
The state government will support a bill that aims to lift financial restrictions on Newcastle Port.Credit:Getty
Less than a month after Nationals MPs warned they would be willing to speak to support Piper’s bill, the NSW government has agreed to back the legislation, subject to a major amendment requiring the port to hand over a lump sum.
The government change requires the port to write to the NSW treasurer requesting a review of the fine. The treasurer will then ask for an independent assessment of what the port would have cost if it had been sold without the financial constraints.
Newcastle Port must pay the difference between the original cost and the amount determined by the independent appraiser to the NSW Government. That amount can amount to hundreds of millions of dollars.
The financial fine was imposed on Newcastle as part of the Baird government’s lucrative privatization deal, which sold Port Kembla and Botany for more than $5 billion. The consumer watchdog labeled the deal “inherently anticompetitive”.
Hastings Funds Management and China Merchants, who paid $1.75 billion for the 98-year lease of the Port of Newcastle, agreed to all facets of the original deal in 2014.
Lake Macquarie member Piper said the removal of the financial penalty for the Port of Newcastle was the best outcome for regional NSW farmers and exporters.
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