Media: By Michael Parris November 11 2022

Port of Newcastle chief executive Craig Carmody at the site of the proposed container terminal at Mayfield.

Port of Newcastle has criticised Labor for proposing late amendments to legislation removing restrictions on it building a container terminal, saying the changes would have killed off its plans.

Labor MPs voted with the government in the lower house on Tuesday to approve amended legislation which would allow Port of Newcastle to compensate the government for removing penalties on it developing a container port rival to Port Botany and Port Kembla.

The upper house voted down the Labor amendments to Lake Macquarie MP Greg Piper’s original bill on Thursday night and approved the legislation intact.

The Labor amendments would have required the treasurer to assess whether removing the penalties was in the public interest after considering whether the state would have to pay for significant infrastructure upgrades and compensate the Botany and Kembla operator, NSW Ports.

The amendments also said the treasurer might require an independent person to report on whether a container terminal would be built in Newcastle as a result of the government removing the penalties.

The defeated amendments echoed changes the opposition proposed last month.

Mr Piper said before the upper house debate that the proposed changes were “disappointing and confusing at the same time”.

Port chief executive Craig Carmody said the amendments were “impractical” and offered “no investment certainty” for the project.

“We are very happy,” Mr Carmody said after the amendments were voted down.

Committee for the Hunter boss Alice Thompson wrote to Labor’s Hunter MPs on Thursday calling on the party to remove the proposed amendments, which “introduce more red tape and uncertainty that put the entire project at risk, including the ability to secure financing”.

“Or at least get out of the way,” she wrote.

Mr Carmody criticised Labor’s handling of the issue.

“It has become apparent that the NSW Labor party has been in reluctant agreeance regarding the Port of Newcastle Extinguishment of Liability Bill and therefore the diversification of the Port of Newcastle,” he said.

“Prior to NSW Labor’s original amendments, Port of Newcastle met with the Hunter caucus and shadow ministers to explain what this investment means for the region and state.

“Following this we received their suggested amendments and tried to discuss the barriers these presented but received no response despite follow-up.

“It is timely to remind the Hunter, when BHP closed in 1999, Labor’s Bob Carr was premier until 2005, when the Hunter was first promised a container terminal.

“There has been ample time for the Labor party to make good on its commitment to the Hunter, pre- and post-privatisation, and it appears that NSW Labor is seeking to again scuttle these efforts at the final hurdle.”

Mr Piper was scathing in his assessment of the opposition amendments.

“Labor just unanimously supported the bill in the lower house and now they want to change it into something which the Port of Newcastle itself has said is totally unworkable and would not allow them to proceed with the container terminal,” he said.

“I can’t understand the logic, but it’s now putting the entire project at risk.”

The upper house also rejected by 16 votes to 14 another Labor amendment which would have required the treasurer to publish the state’s commitment deeds with Port of Newcastle and Botany and Kembla operator NSW Ports.

The deeds were kept secret from the public and Parliament when the ports were privatised. The Newcastle Herald revealed the existence of the deeds and their container penalty provisions in 2016, but the full documents have not been published.

Under the second Labor amendment, the treasurer also would have had to publish other deeds relating to the state’s lease arrangement with NSW Ports.

Labor withdrew its original changes last month to support Coalition amendments which require Port of Newcastle to pay the state lump-sum compensation for removing the restrictions.

Labor said last month that its proposed amendments were designed to guarantee Port of Newcastle followed through with its stated plan to develop a freight terminal and did not sell off its port lease at a “windfall” profit.

The opposition move on Thursday came despite Hunter MPs speaking in support of the version of the legislation which passed unanimously through the lower house two days earlier.

The legislation approved by the lower house and now the upper house gives the port the option of asking the treasurer to appoint an independent expert to determine within six months what the fair market price for the lease would have been if the restrictions on container trade were not in the original deed of agreement.

The penalty provisions would disappear when Port of Newcastle paid the state the difference between the new valuation and the $1.75 billion it paid in 2014.

Asked on Thursday before the upper house debate why Labor had proposed changes to the legislation it supported on Tuesday, shadow treasurer Daniel Mookhey said: “Replacing one dud deal with another would be a disaster.

“Labor has fought this botched privatisation since day one and we will push for the solution that is in the best interests of the Hunter region and the NSW public.”

Shadow transport minister Jo Haylen said the public deserved to know what was in the port commitment deeds.

“Labor supported the bill in the lower house because it was the only way we could drag the government to the table and make them tear up their own bad privatisation deal,” she said.

“Labor amendments in the upper house will ensure the Hunter gets the container terminal it needs and the government’s secret privatisation deals see the light of day.”

In Thursday night’s debate, Mr Mookhey repeatedly called on the government to reveal how much compensation taxpayers would have to hand NSW Ports for removing the restrictions and whether it would exceed Newcastle’s top-up payment.

He said the compensation provisions to NSW Ports over the 50-year life of the deeds could amount to billions of dollars and questioned whether the government had done modelling on the potential costs.

Ms Thompson said in her letter that the port was the Hunter’s “most significant anchor to a stronger, more diversified economy”.

“Over $2.4 billion in private sector investment into our regional economy, 9000 construction jobs, 15,000 ongoing jobs and $2.5 billion of economic benefits to the nation are at stake at the time we most need it,” she wrote.

“The problems which NSW Labor’s last-minute amendments are designed to address have not been raised in consultations with local Members of Parliament when we have discussed this priority, or by our members and stakeholders.

“We know local members are committed to ensuring Hunter communities and businesses have a strong future as coalmining and coal power generation decline.

“The Port of Newcastle container terminal offers a solution at scale and speed using private sector funding to achieve just this.”

Shooters, Fishers and Farmers MP Mark Banasiak told Parliament the Labor amendments contained “too many exits” which would allow a future government to “weasel their way out” of scrapping the Newcastle penalties.

Mr Carmody was in a better mood after the bill passed with no amendments.

He said the port would build the terminal “as long as the independent assessment does not come back with an astronomical figure”.

He said a compensation payment of $1 billion, for instance, would make the terminal unviable.

Port of Newcastle is also keen to lodge a submission to have the compensation evaluated as soon as possible, especially with the state election looming in March.

Mr Mookhey could be NSW treasurer in four months, and questions remain about how a Labor government will deal with the process.