A new study commissioned by NSW Ports says its plan to develop Port Kembla as the state’s next container port is the most efficient way to meet growth, refuting claims by the Port of Newcastle that regulation is hurting the market by limiting development at the Hunter port.
A report by KPMG on long-term container needs says Port Botany will remain NSW’s key container port, and the state will not need more capacity elsewhere until the mid-2040s. NSW Ports’ planned development of Port Kembla will help augment that capacity, according to the paper.
NSW Ports boss Marika Calfas said KPMG had confirmed what the operator had said in the past.
“Port Botany is less than half full, is directly connected to dedicated freight rail, road and intermodal infrastructure and is supported by modern warehousing and logistics facilities in Sydney’s west and south west,” Calfas said.
“The KPMG modelling shows Port Kembla is the obvious next choice for the state’s next container port, once Port Botany nears capacity.”
The Australian Competition and Consumer Commission in December said it would take legal action to address what it viewed as “anti-competitive and illegal” provisions baked into State Government deals to privatise Port Botany, Port Kembla and the Port of Newcastle.
NSW Ports, a superannuation-backed private consortium, acquired Port Botany and Port Kembla on long-term lease deals in 2013. The 50-year deed for those ports would force the state to pay NSW Ports if container traffic at Newcastle exceeds 30,000 teu (twenty-foot equivalent units) per annum – it currently handles roughly 10,000 teu per annum.
The long-term deed signed when Newcastle was privatised in 2014 in turn includes a provision which will force that port’s owners, The Infrastructure Fund and CMPort, to pay the state a fee for all containers exceeding that 30,000 teu cap.
The Port of Newcastle wants to build more container capacity, and has argued the legislation is anti-competitive. The ACCC appears to agree.
But NSW Ports remains steadfast that its business is in the best interest of the public.
“NSW Ports is 80 per cent owned by Australian superannuation funds investing on behalf of more than six million individual Australians,” the NSW Ports ownership group said in December. “Having paid a consideration of $5.1 billion to the NSW Government in 2013 based on the full contractual terms contained in the agreements, NSW Ports will be vigorously defending the proceedings.”
Releasing the KPMG report this week, Calfas said premature investment in new port capacity would lead to higher costs for NSW businesses and families.
“NSW container ports are most efficient when close to consumers and connected to the market by good rail, road and intermodal infrastructure,” she said.
“Sydney and the south west population is set to grow from 5 million now to 6.5 million by 2036. Port Botany then Port Kembla makes sense as the ports to service this growth and is the right decision for the people and businesses of NSW.”