NSW Ports warns against new container terminal

NSW Ports parliamentary inquiry submission Newcastle Port Kembla

NSW Ports has warned that the Port of Newcastle’s proposal to introduce a fourth container terminal into NSW could push up costs for NSW importers and exporters.

In its submission to a NSW Upper House Parliamentary Inquiry, NSW Ports outlined the arguments supporting the existing long-term freight and ports strategy – which is that Port Botany followed by Port Kembla will support NSW’s container needs.

NSW Ports says its existing strategy reflects the population, demographic and economic growth trends which are to the west and south-west of Sydney.

Chief Executive Officer of NSW Ports, Marika Calfas, said that the benefits of the $2 million TEU (Twenty-foot Equivalent Units) container terminal proposed by the Port of Newcastle are not supported by credible evidence and ignore the negative impacts of overturning long standing NSW ports planning.

“The simple facts are that there is no demand for a new terminal at present and if there were, Newcastle is the wrong place to build it as it is too far away from the container destinations,” Ms Calfas said.

The submission argued that of all the containers imported each year through Port Botany, 80 per cent are unloaded within 40km of the port. Less than two per cent of these containers are destined for the Hunter, Newcastle and Central Coast regions.

Ms Calfas said it makes no sense to have these containers unloaded in Newcastle, as most of the containers or goods in them would then need to be delivered over 160km back into Sydney.

“Based on the Port of Newcastle’s own estimates of capacity, this would create more than 2,700 extra truck movements a day in Newcastle, with most trucks travelling on the F3 between Newcastle and Sydney, and that’s assuming that half of the volume will be moved by rail, which is doubtful.

“Billions of dollars of investment in road and rail infrastructure would be required to support such a terminal.

“There is currently a huge amount of excess capacity in the existing three competing container terminal facilities at Port Botany.

“Port Botany has the capacity to handle more than 7 million TEU a year, currently only 2.6 million TEU are handled at the port. A fourth container terminal is unlikely to be needed until after 2040,” she said.

Ms Calfas observed that the Port of Newcastle Port Commitment Deed is an agreement solely between the Port of Newcastle (owned by China Merchants Port Holdings and The Infrastructure Fund) and the NSW Government, knowingly entered into by the Port of Newcastle as part of its purchase of the Newcastle Port lease in 2014.

“The Port of Newcastle is attempting to have the conditions of the sale changed without compensating the NSW Government. It could be argued that the Port of Newcastle’s investors, China Merchants Port Holdings and The Infrastructure Fund, are seeking business value uplift at the expense of the NSW taxpayers,” Ms Calfas said.

The submission argued that Port Botany, not the Port of Newcastle, underpins the NSW economy, contributing $3.7 billion a year to NSW, and supports 25,000 jobs.

NSW Ports and port tenants have invested $1.6 billion in port and other infrastructure since 2013 and are currently investing a further $450 million.

View NSW Ports’ full submission here.

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