And while we're on the LNP (NSW this time) Old news, but it just shows the midset of LNP".......
That was bizarre, but in Newcastle’s container-port struggle it was just the start. When the O’Farrell-Baird government took office, it predicated its budget numbers on selling everything not nailed down – first poles-and-wires, then ports; Kembla, Botany and Newcastle.In 2011, then treasurer Mike Baird told Parliament he expected $2.5 billion for Port Botany, the only port in NSW with dedicated container terminal facilities. In 2012, with Port Kembla added, the expected figure was mid-threes. But by April 2013, when the deal was executed, the two ports fetched an astounding $5.1billion.
What we didn’t know then, but know now, is why. Newcastle is the world’s largest coal export port, but even then coal was widely seen as a stranded asset. The bidders had not only baulked at buying the Port of Newcastle for that reason but had also extracted a government promise to hobble Newcastle as potential competitor for the next 50 years.
It worked via two secret contracts, or Port Commitment Deeds. The first, signed in April 2013 between the government and the new owners of ports Botany and Kembla, NSW Ports, commits the government to compensating NSW Ports $100 for every container (or equivalent) above a 30,000 limit handled by any future Newcastle container terminal. The second, signed roughly a year later between government and the Port of Newcastle’s new owners, commits those new owners to the same payment upon the same trigger.
A word of explanation. Thirty thousand is nothing. Standard containers are 20 feet long (although many are now much bigger) so ship or port capacity is measured in TEUs, or Twenty-foot Equivalent Units. A single new ultra-large container vessel, or ULCV, can carry up to 20,000 TEUs and a container-port at Newcastle could expect an annual throughput over a million TEUs. So limiting Newy to 30,000 before a punitive tariff kicks in essentially kills the port.
Further, the twin deed - obliging the Port of Newcastle to reimburse government for its Ports NSW payout - makes the whole thing cost-neutral to government, excepting, of course, the huge windfall gain for putting an effective monopoly in private hands."
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