IN the months before Port Botany and Port Kembla were privatised in 2013, the market was expecting something north of $2 billion - an amount in line with the amount the Queensland government obtained in leasing the Port of Brisbane.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Political and financial commentators were stunned when the price was announced as $5.07 billion, with $4.31 billion of that for Botany, and $760 million for Kembla.
The reason for the high price only became clear after the Port of Newcastle was privatised the following year for $1.75 billion: there were restrictions on Newcastle developing a container terminal. Despite this acknowledgement, it took until 2016 - when the Newcastle Herald was leaked documentary evidence of the arrangement - for the government to confirm the mechanism it had put in place to protect Botany from container competition.
Since then, the restrictions to competition embedded in the two port privatisations have become a matter of national contention, with the Australian Competition and Consumer Commission reversing an initial decision not to intervene by taking the Botany operator - but not the government - to the Federal Court over the allegedly "illegal and anti-competitive" agreement between them.
In the NSW parliament, an upper house committee - albeit one with the Coalition in the minority - called on the government to review the restrictions on Newcastle, and to look again at the long-promised Newcastle freight rail bypass. Despite these developments and other pressure points - including Australia's biggest rail freight company, Pacific National, raising congestion concerns over Botany - the government's response this week to the parliamentary inquiry shows it has no real intention to divert from its Botany-monopoly policy.
Yes, it said it would consider a review if economic circumstances changed, but it rated the chances of such change "unlikely".
For a government usually keen to promote the benefits of free enterprise and competition, the Coalition is sticking doggedly to the mantra of centralised planning when it comes to denying the Port of Newcastle the chance to expand its business.
Even if the ACCC case does not force the issue, the government can only stonewall its critics for so long. The container restrictions should never have been entertained in the first place, and should be withdrawn as soon as possible, by whatever means necessary.
ISSUE: 39,353.
While you're with us, did you know The Herald is now offering breaking news alerts, daily email newsletters and more? Keep up-to-date with all the local news - sign up here.
