The NSW government has dodged a bullet after the Federal Court dismissed a legal challenge to its $7 billion port privatisation deals, but the devil will be in the detail.
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The nation's competition watchdog believes strongly that the government built anti-competitive and illegal compensation provisions into its leases for Port Botany and Port Kembla in 2013.
The Australian Competition and Consumer Commission also argued before the court that the subsequent 2014 lease of Newcastle port, including a container fee to be paid to the government, was the anti-competitive effect of the Botany and Kembla deal.
The ACCC said on Tuesday that the court had dismissed these claims, but it remains to be seen on what grounds Justice Jayne Jagot made her decision.
The full judgement will come to light in the coming days after the lawyers have sorted out which parts of it are subject to confidentiality agreements.
The case rested, in part, on a complex legal argument about whether the state can claim Crown immunity under the Act and, if so, whether NSW Ports can claim derivative immunity, a doctrine under which parties dealing with governments enjoy the same protection as the Crown if the application of legislation would interfere with the proprietary, contractual or other legal interests of the Crown.
If Justice Jagot's judgement is based on a Crown immunity argument, or an argument that a Newcastle container terminal was unlikely because it was not government policy to develop one, then the anti-competitive nature of the two deals may remain up in the air.
This would not be a good look for a government which should be grabbing every lever it can to boost the post-pandemic economy. Port of Newcastle says it has the financing in place to pull the trigger on the project.
Perhaps even worse, if the judgement is partially related to state policy and it is still open to interpret the deals as anti-competitive, the government will be be exposed to accusations it delivered Newcastle a one-two punch to knock it out of the market for containerised freight and boost the Botany lease price.
Again, not a good look for a conservative government which should be pushing free-market ideology and not secretive monopolies.
It now remains to be seen if and how a political solution will emerge.
The Prime Minister seems engaged in an issue which concerns two electorates, Hunter and Paterson, on the Coalition's election radar.
The Nationals have already supported the project publicly. With New England MP Barnaby Joyce back in charge, the party may push harder for its NSW Coalition relatives to sort it out.
But just what that looks like is anyone's guess.
Unpicking a 50-year, $5 billion monopoly would be messy, even if the Berejiklian government wanted to.
Ten years after Newcastle Labor MP Jodi McKay was white-anted by her own party for backing a container terminal at Mayfield, the project appears no closer to getting off the ground.
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