As it stands, PoN must pay a penalty for developing and operating a container terminal but a container terminal is contrary to government policy. Announced in July 2012, government policy is that a container terminal will be "considered" for the Port of Newcastle after Port Botany reaches capacity followed by Port Kembla.

Announcing this policy in 2012 enabled the government to conceal its intention to allow a container terminal to be developed at the Port of Newcastle. The government intended that the developer would be contractually required to pay the government if container volumes exceeded a minimal threshold level of 30,000 containers, equivalent to less than 2 per cent of annual container volumes at Port Botany.

The government announced its decision to lease Port Botany/Port Kembla in July 2012. But it concealed its intention to pay the lessee should they handle less than 98 per cent of all container shipments in NSW. The government intended to obtain the necessary funds from the developer of a container terminal at the Port of Newcastle.

The government concealed these intentions from the public and the Parliament when Parliament approved the "Ports Assets (Authorised Transactions) Act 2012" in November 2012, authorising Botany/Kembla to be leased. The Parliament, obviously, did not authorise actions by the government which were the opposite of what the government had told the public and the Parliament was government policy. This makes the penalty unlawful and unenforceable.

The government also concealed its intentions from the Australian Competition and Consumer Commission (ACCC). Had the government sought advice from the ACCC before leasing Botany/Kembla to NSW Ports Pty Ltd in May 2013, that advice would have been that requiring payment from the developer of a Newcastle container terminal was likely to place the government and NSW Ports in contravention of the anti-competition provisions of the "Competition and Consumer Act 2010" (CCA).

There is no doubt about that because the ACCC started legal action against NSW Ports, in December 2018. The ACCC is alleging that NSW Ports contravened the anti-competition provisions of the CCA due to the lease agreements for Botany/Kembla and the Port of Newcastle. The ACCC is asking the Federal Court for an order restraining NSW Ports from seeking payment from the government.

The ACCC is not alleging the government contravened the CCA. This is because the government became exempt from the CCA when it announced a decision in November 2013 to lease the Port of Newcastle.

The epic started in 1997, when BHP proposed a container terminal was the best use of its steelworks site when steelmaking finished in 1999. For the first time, all of northern NSW would have direct rail access to a container terminal. A rail freight line between Hexham and Fassifern was proposed to bypass the Newcastle urban area. This would open up the Central Coast and even northern Sydney markets.

Alarmed about competition for Port Botany, the Labor state government blocked BHP's plan by assuming ownership of the contaminated steelworks site in 2002. The reason became clear in 2004. The Labor government announced a $1 billion expansion of Port Botany container terminal.

But in 2009, Jodi McKay, as member for Newcastle, fought back. She convinced the Labor government to support a plan by the state-owned Newcastle Port Corporation to develop a container terminal with minimum capacity of one million containers a year on the former steelworks land. Public tenders were called in 2010 and a preferred proponent, Newcastle Stevedores Consortium Pty Ltd (NSC), was selected. Before the March 2011 state election, Joe Tripodi famously intervened to block NPC's plan. Mr Tripodi's campaigning against Ms McKay's re-election also succeeded.

After the election, the new Liberal government blocked the container terminal by announcing an official container terminal policy to mislead the public and the Parliament about the government's real intentions. In 2012, NSC was the government's intended source of funds for paying a Botany/Kembla lessee. In August 2013, after Botany/Kembla were leased to NSW Ports, the government informed NSC that it must cover the government's obligation to pay NSW Ports if it wanted to continue negotiating with NPC. In November 2013, the government ordered NPC to terminate its negotiation with NSC to ensure that the public, Parliament and ACCC did not find out about the lease arrangements.

A rail-based container terminal at Newcastle will justify building a new freight line to Badgery's Creek and Port Kembla thereby enabling all of NSW, Sydney included, having direct rail access to a container terminal capable of handling the world's largest container ships.

Greg Cameron is a former BHP Newcastle public affairs manager and now Canberra-based public affairs analyst.