The Hon Scott Morrison MP
Prime Minister
Via PM’s contact page

Dear Mr Morrison,

I refer to your support for a container terminal at the Port of Newcastle. You may wish to consider that the Port of Newcastle lease is unlawful under NSW legislation: the Commonwealth’s “Competition and Consumer Act 2010” (CCA) does not apply.

The NSW “Ports Assets (Authorised Transactions) Act 2012” (the Act) did not authorise the state government to lease the Port of Newcastle to the private sector for the purpose of funding the government’s contractual commitment to pay NSW Ports Pty Ltd for container traffic above a minimum specified cap at the Port of Newcastle. This cap is 30,000 TEUs per year on July 1 2013, increasing by six per cent per year, for 50 years.

Consequently, the Port of Newcastle was unlawfully leased to Port of Newcastle Investments Pty Ltd (PoN) on May 30 2014.

The Act did not authorise the government to lease Port Botany and Port Kembla to NSW Ports on May 31 2013 with an unfunded contractual commitment to pay NSW Ports for container traffic above the cap.

The government’s intended source of funds was the developer of a container terminal at the Port of Newcastle. The government required Mayfield Development Corporation Pty Ltd (Mayfield) to provide the funds as a condition of negotiating with the government to develop container capacity at the Port of Newcastle.

The government was not exempt from the CCA. Consequently, the government and NSW Ports may have contravened the CCA when Mayfield was required to fund the government’s commitment to pay NSW Ports. The government terminated its negotiation with Mayfield on November 8 2013 when Mayfield advised that it considered the requirement to be illegal under the CCA.

Unless the government leased the Port of Newcastle to the private sector for the purpose of a lessee funding the commitment to pay NSW Ports, the commitment remained unfunded.

The NSW Treasurer, the Hon Dominic Perrottet, has been asked to identify the section of the Act which the government claims authorises NSW Ports to be paid. The question asked is:

“Does the “Ports Assets (Authorised Transactions) Act 2012” authorise the government to pay NSW Ports Pty Ltd for container traffic above 30,000 TEUs a year as at 1 July 2013, increasing by six per cent a year for 50 years, at the Port of Newcastle?

“If so, which section?”

The Treasurer’s answer is due this week.

Yours faithfully,

Greg Cameron