Port of Newcastle explores investment opportunities

The Port of Newcastle has met with local producers and council in an effort to explain the capabilities of the Hunter-based facility.

A delegation of port officials recently met with Narrabri Shire Council as part of a fact-finding mission in the North West.

The Port of Newcastle has also expressed a desire to become invested in the region.

The port is strategically placed to cater for the needs of the many agriculture-related business and growers in the Narrabri Shire and other parts of the North West.

Due to restrictions placed on the Port of Newcastle, the local agriculture industry is currently using port facilities at Brisbane and Botany (Sydney) for exporting.

The extra distance adds significant costs, and economic analysis has shown that the cost saving for exports from Narrabri would equate to $567 per container. The ability to use the port would be of particular benefit to the North West and Hunter regions.

At a per tonne rate, the saving is estimated at $20.68, and in terms of distance, 32 per cent of the journey in kilometres is slashed.

Port of Newcastle chief executive officer Craig Carmody said the Narrabri visit was also about getting a sense of what is happening here and the volume of what is produced locally.

“We explained to the farmers and growers what we can do for them at Newcastle,” he said.

While the port itself has two new mobile harbour cranes, the development of a container terminal is being blocked by the NSW government.

“If we are allowed to build the container terminal, which the state government still prevents us from doing so, Narrabri will get business out of it,” Mr Carmody said.

Mr Carmody described his meeting with mayor Ron Campbell and shire general manager Rob Williams as incredibly encouraging.

He has encouraged growers and businesses to talk to local state MPs about the need to ease restrictions on the port.

“Growers need to say don’t worry about the port. It’s us who pays for this,” he said.

“It’s quite terrible.”

Pressing need to ease restrictions on port: MP

Substantial shipping costs for growers could be saved if the NSW government eases operations restrictions on the Port of Newcastle.

That is according to North West MP, and former NSW cabinet member Adam Marshall.

The state Member for Northern Tablelands said there is a pressing need to change the port commitment deed, which Mr Marshall described as an outdated concept that restricts the current operations of the port.

“I refer specifically to the unfair and outdated embargo that continues to stymie regional development and drains the back pockets of our hardworking farmers and manufacturers in the North West of New South Wales,” Mr Marshall told parliament.

“The North West of the state, including a large section of the Northern Tablelands, boasts the very best grain-growing areas in this country, if not the world.”

Mr Marshall’s speech to the parliament came as the Member for Lake Macquarie, Greg Piper, gave notice to introduce the ‘Port of Newcastle Extinguishment of Liability Bill 2022’.

Port commitment deeds signed during the privatisation of Port Botany and Port Kembla in 2013 require the state to compensate the operators of the two ports if container traffic at Newcastle exceeds 50,000 containers a year.

Mr Marshall said a bumper harvest would easily breach that container cap.

“To double down on that party pooper, when the Port of Newcastle was privatised in 2014, another port commitment deed required that port’s operators to reimburse the state government for any compensation paid to the operators of Kembla and Botany that exceeded the cap—a double whammy,” he said.

“The provisions have not only created an artificial monopoly, which we are against, but have also made establishing a container terminal and increasing capacity at the Port of Newcastle financially unviable for the operators of that port, and our grain growers and regional manufacturers cop it in the neck. We are the ones who pay the price.

“The Productivity Commission recently released a report blaming the government’s embargo on container shipments through Newcastle for ‘raising import and export costs across the container logistics chain’.”

Mr Marshall told the NSW parliament this had led to congestion at Port Botany and a lack of competition.

“Meanwhile, the Port of Newcastle, a shining regional jewel, is a natural gateway to many parts of New South Wales. It is ideally placed to open up the state’s container trade, but it is blocked by state government decisions made a decade ago, before COVID-19 and the war in Ukraine.

“Legislators in this place must relook at the port commitment deeds and create an environment which at least removes the reimbursement provisions so the Port of Newcastle can operate in a freer market. This would allow the port to pursue expansion plans without being burdened by the ridiculous compensation requirements. Establishing a container terminal at the Port of Newcastle has the potential of cutting the costs of grain rail freight from my region by $16 to $22 a tonne, putting huge dollars back into the pockets of growers and, ultimately, our local bush communities and economies.”