News, Ports

NSW port privatisation deals made public

2023 trade challenges

In a significant move towards greater transparency, the NSW Treasurer revealed on 21 March the financial implications stemming from the privatisation of the state’s ports, uncovering a potential liability ranging from $600 million to $4.3 billion for the people of NSW. This announcement was made as the NSW Labor Government takes steps to honour its commitment to transparency by tabling the contracts of Port Botany and Port Kembla’s privatisation deals, along with other related documents, in Parliament.

The deals, initiated by the previous Liberal National government, included the sale of Port Botany and Port Kembla to NSW Ports in 2013 and the Port of Newcastle to a different buyer the following year. A significant condition of these sales was the stipulation that the state compensate NSW Ports if a competing container terminal was developed at the Port of Newcastle.

A NSW Treasury-commissioned report by Deloitte Access Economics offers preliminary estimates of the government’s liability, projecting a range between $600 million and $4.3 billion through to the end of the contract period in 2063. These figures were disclosed as Treasurer Daniel Mookhey, who had requested the port owners’ consent to publicise these contracts last October, seeks to fulfil the government’s transparency pledge.

Moreover, the documentation includes a port commitment deed with the Port of Newcastle, which could potentially see the Port reimbursing the state should the stipulated payments to NSW Ports be triggered. The Independent Pricing and Regulatory Tribunal (IPART) is in the process of determining the price for a one-off payment that would allow the Port of Newcastle to nullify this reimbursement clause.

This disclosure does not impact the Port Commitment Deeds with NSW Ports, emphasising the independent valuation and regulation process. Treasurer Mookhey, in delivering a Ministerial Statement and tabling the contracts, emphasised the importance of public access to these documents, criticising the prolonged secrecy surrounding the privatisation deals and commending the cooperation of all contractual parties in this revealing process.

The NSW Labor Government’s actions are a towards addressing the public’s right to understand the fiscal and strategic ramifications of privatising significant state assets, highlighting a significant shift towards accountability and openness in government dealings.

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