Port Play – Newcastle Herald

By IAN KIRKWOOD
August 12, 2015

Chief reveals container terminal on agenda

THE private operator of the Port of Newcastle is looking at a container terminal for Newcastle, the first project proposed by BHP as the replacement for the steelworks.

The apparent confirmation came from the Port of Newcastle’s executive manager of trade and business development, Peter Francis, at a Newcastle Business Club lunch on Tuesday.

One of four port figures to address the meeting, Mr Francis did not refer to containers in his speech. But when asked by an audience member about the potential for ‘‘cars and containers’’ in the port, he said ‘‘all of those options are available to us now we are looking at all options for the use of [the] 200 hectares of vacant land’’ that Port of Newcastle has leased.

‘‘… the challenge for containers is being able to get the inbound container trade into Newcastle given that the majority of NSW container freight is consumed within the Sydney basin area; that becomes a bit challenging,’’ Mr Francis said.

‘‘Having said that, we are looking at it, and if there is demand for a container operation in Newcastle, we will absolutely pursue that and we can pursue that.

‘‘There is no limit on us doing that despite what we hear sometimes.’’

This comment was taken as a reference to a belief in some quarters that the state government leased Port Botany in 2013 and Newcastle in 2014 in such a way that restricted or effectively prohibited Newcastle from building a major container terminal.

Port of Newcastle is an equal joint venture between the Westpac-backed Hastings Funds Management and the Chinese government’s China Merchants.

It paid $1.75 billion last year for a 98-year lease on the port and 792 hectares of port-side land.

In 2003, the Carr Labor government said Newcastle would be the next container terminal after Port Botany reached capacity in about 2020 but it then allowed Botany to substantially expand, a decision kept in place by the Coalition. Labor and Greens MPs have repeatedly questioned the government about the Newcastle container terminal.

Last October, the Australian Competition and Consumer Commission wrote a report implying the existence of restrictions, saying ‘‘sale conditions designed to boost asset sale prices by reducing potential competitive pressures on the asset operator would be of concern’’.

Mr Francis told the business lunch there were ‘‘natural freight corridors for exports through Newcastle … but locating distribution centres and getting the inbound containers is probably the critical element and that’s easier said than done’’.

‘‘Changing established supply chains is very difficult but in a competitive environment, the opportunity always exists,’’ he said.

Aware of the importance of the comments, the Newcastle Herald sought further information after the lunch.

The company’s email response seemed to back away from Mr Francis’ comments, saying: ‘‘We are committed to the continued growth and development of existing and new trades within the Port of Newcastle including containers.’’

The port handled fewer than 10,000 containers a year, it said.

‘‘There is no business case at this point in time for a container terminal. If there is a market or demand … in the future, we will look at it.’’