IN a significant win for Newcastle ratepayers, Port Waratah Coal Services has offered to stump up a $12 million deal to offset the impacts of its planned T4 coal loader on Kooragang Island.

The coal giant has been under increasing pressure to increase the developer levy it would pay on the project after state planning bureaucrats recommended it pay just $528,140.

The Newcastle Herald can reveal that a new deal offered by the company includes a $2.03 million  upfront payment to Newcastle council when construction starts, and $400,000 a year  (plus inflation) for 25 years.

Under council regulations, the $4.8 billion project would have attracted a $48 million levy (known as Section 94a contributions) if it was considered by the council. But because it was classified as a state significant development, the approval process was undertaken by the state Planning Department which has no fee structure for such levies.

Port Waratah had come under heavy fire from some quarters, and again last week when the T4 project was discussed at public hearings held by the Planning Assessment Commission.

Reports obtained by the Newcastle Herald show the company has signalled its intention to enter an agreement with the council which will reap ratepayers at least $12 million.

Newcastle council is yet to agree to the offer but is expected to debate it at its meeting next Tuesday.

Port Waratah boss Hennie Du Plooy and the council’s general manager Ken Gouldthorp have both confirmed the proposed deal, but neither wanted to comment before  the meeting.

The deal is a significant win for Greens councillor Michael Osborne, the council and the Newcastle Herald which had lobbied for a better deal from  what is the most expensive development application ever proposed for Newcastle.

Cr Osborne, though, said that though the new offer was welcomed,  ‘‘it still doesn’t go far enough’’.

‘‘There’s still no rhyme or reason to it and it’s still selling Newcastle short,’’ he said.

Rio Tinto is the largest shareholder in PWCS and it is  undertaking a similar project in Mongolia. Company records show that in Mongolia, Rio is paying the equivalent of $27 million in ‘‘other taxes and payments’’ to the provincial council of Khanbogd Sum.

‘‘In other words, they’re happy to pay $27 million in Mongolia but only contribute $12 million in Australia’s second oldest city,’’ Mr Osborne said.

Newcastle lord mayor Nuatali Nelmes described the revised offer ‘‘as a major step forward in the process’’. She would not comment further, other than to say, ‘‘I appreciate Port Waratah being very pro-active and acknowledge that the offer is vastly improved’’.

A report prepared by Mr Gouldthorp recommends the council accept the new deal because mediation and talks between it and PWCS had been ‘‘exhausted’’. 

He also warns that if the council doesn’t accept the offer, the Planning Assessment Commission may recommend that Port Waratah pay less than it is now offering.

In a letter to Mr Gouldthorp, Mr Du Plooy said that ‘‘over the 25-year life of the agreement this proposal provides benefits to council and the community which mitigates any potential impact on the demand for council services’’ and was ‘‘over and above’’ what would be reasonably expected of the company.