OPINION: How did the government get into this mess in the first place?

Further to my article published in the May 2023 edition of the Daily Cargo News (Page 18) “New South Wales port privatisation saga”, Freight & Trade Alliance (FTA) and the Australian Peak Shippers Association (APSA) remain focussed on the Independent Pricing and Regulatory Tribunal (IPART) deliberations and the quantum of the upfront compensation payable by the Port of Newcastle to the state.

As readers would be aware, under the Port of Newcastle (Extinguishment of Liability) Act 2022, the one-off compensation is to be calculated as the amount by which the financial value of the right to operate and lease the assets of the Port of Newcastle for 98 years would have been reduced.

In essence, instead of paying transactional fees for each container movement above the cap (as established by the previous state government in privatising its port assets), an upfront one-off compensation payment can be made to the state.

The arrangements between NSW Ports and the state will remain unchanged. The state will still be required to compensate NSW Ports at the established fee for every container handled by the Port of Newcastle above the cap.

Advice has been received that IPART will require an extended period, until the end of the year, to determine the value of the compensation payment from the Port of Newcastle.

Spicing things up a little more is the Federal Court action by the Mayfield Development Corporation, being a joint venture between APM Terminals and Anglo Ports.

The parties claim they had a successfully negotiated a tender issued by the NSW government in 2009 to build and operate a container terminal at the Port of Newcastle.

While the claimants lost an opportunity of competing with Port Botany for containerised trade because of the then state government’s privatisation actions, it will be fascinating to see the outcome of the court case, any potential compensation payment to the joint venture, revelations as to the state government deliberations a decade ago and any potential implications for this ongoing saga.

IPART has since advertised an invitation for interested parties to help inform their review and assist in determining the value of the one off compensation amount to be paid by the Port of Newcastle.