It’s a Fine Mess You’ve Got Us Into

It seems to be everyone’s fault – maybe we should start over.

NSW Ports Pty Ltd agrees with the ACCC that the Port of Newcastle container penalty is illegal under the “Competition and Consumer Act 2010” (CCA).

NSW Ports is seeking a court order restraining Port of Newcastle Investments Pty Ltd (PNI) from paying the penalty. This will enable PNI to develop a container terminal. But NSW Ports will not go empty-handed: it will still claim payment from the NSW government if PNI develops a container terminal.

However, the ACCC is seeking a court order restraining NSW Ports from claiming payment from the government. If NSW Ports is so restrained, the government cannot claim payment from PNI. This, too, will enable PNI to develop a container terminal.

The ACCC alleges that NSW Ports acted illegally, but not PNI.

NSW Ports alleges that PNI acted illegally.

PNI cannot allege that anyone acted illegally, because PNI agreed to pay the penalty.

This legal fiasco being played out in the Federal Court starting October 12 is irrelevant, because the government unlawfully leased the Port of Newcastle to PNI.

Under the “Ports Assets (Authorised Transactions) Act 2012” (PAA), the government was not authorised to lease the Port of Newcastle to PNI for the purpose of funding the government’s contractual commitment to pay NSW Ports for container traffic above a minimal specific cap at the Port of Newcastle. The government concealed its contractual commitment from the public and Parliament. The government claims that the ACCC was informed. The ACCC does not corroborate this claim.

The government unlawfully leased Port Botany and Port Kembla to NSW Ports.

Under the PAA, the government was not authorised to lease the ports to NSW Ports with an unfunded contractual commitment to pay for any container traffic at the Port of Newcastle. The government is not authorised to pay NSW Ports using consolidated revenue.

NSW Ports was able to develop a container terminal at the Port of Newcastle, contrary to government policy.

NSW Ports and the government agreed that if NSW Ports developed a container terminal at the Port of Newcastle, or leased the port from the government, the penalty was not payable. This agreement was concealed from the public and Parliament because it disproved government policy that a container terminal would not be developed at the Port of Newcastle before Port Botany reached capacity, followed by Port Kembla.

NSW Ports and the government agreed that Mayfield Development Corporation Pty Ltd (Mayfield) would be required to pay the penalty, to fund the government’s contractual commitment to pay NSW Ports. The government terminated its negotiation with Mayfield after Mayfield informed the government it considered the requirement to pay the penalty to be illegal under the CCA.

Mayfield alleges it was prevented from developing a container terminal because it was required to pay an illegal penalty. Mayfield is alleging that NSW Ports acted illegally by agreeing to be paid with funds provided by Mayfield.

The allegation by NSW Ports that PNI acted illegally is an admission by NSW Ports that it acted illegally by agreeing to be paid with funds provided by Mayfield.

Mayfield’s court action will establish that the all three port lease agreements are unlawful and unenforceable under the PAA.

NSW Ports, PNI, and the government got themselves into this mess. It makes sense to start again – this time with ACCC involvement

Greg Cameron

Mr Cameron is public affairs consultant. His interest in the Port of Newcastle is to use container freight to pay for a rail freight bypass of Sydney, between Newcastle, Badgery’s Creek and Port Kembla.