Deputy Premier John Barilaro says the Nationals are gearing up for a "fight" with their Liberal Coalition partners over port privatisation deals which "discriminate" against regional NSW.
The Federal Court on Tuesday dismissed an Australian Competition and Consumer Commission action over the legality of the deals, which the ACCC says present an "enormous hurdle" to developing a Newcastle container terminal.
The 2013 and 2014 deals require the Port of Newcastle consortium to fund state compensation payments to the lessee of Port Botany and Port Kembla if Newcastle handles more than 30,000 containers a year, an arrangement the ACCC maintains is "brazenly anti-competitive".
The fees would effectively double the cost of handling any containers above the cap. Port of Newcastle wants a terminal capable of handling at least 1 million containers a year.
Port of Newcastle, Botany lessee NSW Ports and the NSW and federal governments are poring over the 450-page Federal Court judgement, which will remain confidential until Tuesday.
I hate seeing deals by governments, and this is our government, that discriminate against regional and rural NSW. I think it's something we'll have to fight for.John Barilaro
Mr Barilaro told the Newcastle Herald that his government now needed to look at ways to "unpick" the container fees.
"I hate seeing deals by governments, and this is our government, that discriminate against regional and rural NSW," he said.
"The idea that, off the back of privatisation, we've limited the ability of a port like Newcastle that has great benefit to regional and rural NSW, in my mind, is an issue we need to address."
Transport Minister Andrew Constance told the Sydney Morning Herald on Wednesday that the state's container policy had always focused on Botany and Kembla.
He said Newcastle had "very real" opportunities for growth up to 30,000 containers a year without paying the fee.
"The court decision is sound and we should now all move on," Mr Constance was quoted as saying.
But Mr Barilaro said the penalties built into the $6.8 billion privatisation deals remained a "grey area" which needed to be resolved.
"Some will say let them get to that 30,000 capacity and then we'll deal with it then, but the reality is that the investment that they're going to require, unless there's certainty, you'll never get it," he said.
"Regardless of what the court has said, the ACCC has determined one thing and the courts have said something else entirely.
"This could easily end up back in the courts in the future.
"It's never black and white, but maybe we have an opportunity here as a government to lead and find some middle ground for everybody."
Mr Barilaro's comments reflect simmering tensions between the government's Coalition bedfellows since he threatened to move Nationals MPs to the crossbench in September over koala protection policy.
Mr Barilaro subsequently took four weeks off on self-imposed mental health leave after being forced to back down, but he appears ready to take on the Liberals again over the container terminal issue.
Asked if he anticipated the Nationals' Coalition partners to agree with revisiting the port deals, he said: "No, I don't. I think it's something we'll have to fight for."
But Mr Barilaro said he expected support from Prime Minister Scott Morrison, who said in March he wanted the port to operate "as competitively as possible", and newly restored Deputy Prime Minister Barnaby Joyce.
"The Prime Minister was very supportive of the idea of a container port at the port of Newcastle, and I'll hold him to those words and get his backing and his support," Mr Barilaro said.
"I may also have to have a conversation with Barnaby Joyce as the new leader federally.
"For Barnaby, one of his platforms when he was last deputy prime minister was inland rail, and he knows the potential of inland rail, and he knows the port of Newcastle's connection to inland rail is so important.
"I think my federal colleagues will definitely be behind this, and we've heard support from the Prime Minister, so let's explore all that, try and find a way forward, and I think we can."
The port's special projects director, Ross Cadell, was pre-selected two weeks ago on the Coalition's NSW Senate ticket for the coming federal election.
Port of Newcastle has declined to comment about the court judgement until it is published, but chairman Roy Green and chief executive officer Craig Carmody sent staff an email on Wednesday expressing the company's "absolute and unwavering" commitment to the container terminal.
"We all understand that this is not something that is a nice-to-have; we must diversify. Just like the region we live in," the email says.
The head of the NSW Minerals Council, Stephen Galilee, said in an opinion piece in Friday's Newcastle Herald that Port of Newcastle's fight against the NSW Ports monopoly on container traffic was "ironic" given it was trying to establish its own "unregulated monopoly" in regard to coal shipping fees.
Mr Galilee said the port had undertaken an "intense, well-connected political lobbying campaign" to "eliminate" via legislation an earlier ACCC determination on shipping fees.
The port has also appealed to the High Court in a dispute with mining giant Glencore over port access fees.
"Until this deadlock is broken, the port will continue to be seen by its major users as an unrestrained monopoly using its own anti-competitive powers while claiming competitive unfairness elsewhere," Mr Galilee said.
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