The national competition watchdog has launched an appeal after losing its Federal Court case over NSW's port privatisation deals.
The Australian Competition and Consumer Commission said on Tuesday that the court had erred in endorsing secretive provisions contained in the long-term port lease agreements for Botany, Kembla and Newcastle in 2013 and 2014.
The ACCC said the 50-year compensation provisions had bumped up the price of Port Botany by illegally protecting it from competition from a rival Newcastle container terminal.
"Agreements entered into when existing state-owned monopoly businesses are being privatised which seek to maximise profit from the sale by protecting that monopoly from competition in the future are inherently anti-competitive," ACCC chair Rod Sims said.
"We remain concerned that the Port Commitment Deeds will effectively hinder or prevent the development of a competing container terminal at the port of Newcastle for 50 years. This is a matter of significance for the Australian economy."
Justice Jayne Jagot's written judgement, published last week, found the provisions were not anti-competitive in purpose or effect.
The ACCC lodged the appeal on the final day of a 28-day window after the court handed down its decision on June 29.
The port deeds oblige the Port of Newcastle consortium to refund the state for any compensation paid to Botany lessee NSW Ports if container traffic at Newcastle exceeds a specified cap.
Mr Sims took issue with the court's finding that a Newcastle terminal was "fanciful" and "far-fetched".
"The ACCC's case is that there was always a meaningful possibility that some time over the 50-year period a container terminal would be developed at Newcastle, if not for the compensation provisions," he said.
"These provisions ... increased the barriers to the development of such a terminal, and this is anti-competitive."
Justice Jagot found Port of Newcastle had little chance of convincing the state to change its ports policy, which prioritises container terminals at Botany and Kembla, lending weight to the conclusion the provisions were unlikely to substantially reduce competition.
But Mr Sims said governments and policies changed "regularly" and there was a "meaningful prospect" state policy would change in the next 50 years to favour a Newcastle terminal.
The ACCC will also argue the state, and therefore NSW Ports, are not entitled to Crown immunity under competition law because the state was carrying on a business in signing the deeds.
Mayfield Development Corporation, which was negotiating with the state to build a terminal in Newcastle before the government opted to privatise the ports, also said on Tuesday that it would resume its restrictive trade practices case against NSW Ports in the Federal Court.
In the news
Our journalists work hard to provide local, up-to-date news to the community. This is how you can continue to access our trusted content: