KPMG Pans Newcastle Development Plan

A new KPMG report has added fuel to a long running dispute over port development in New South Wales (NSW) by finding that container investment at the Port of Newcastle is the worst choice for the Australian state with the highest costs and lowest benefit.

‘Quay conclusions: Finding the best choices for additional port capacity in NSW’ concluded that the NSW Government’s container port strategy, which would see Port Kembla developed as the next container port in NSW to augment capacity at Port Botany, makes the most sense for containers, but only once Botany nears capacity, but added a new container terminal will not be needed until the mid-2040s.

NSW Ports CEO, Marika Calfas, said that Kembla would be the most efficient as it best serves the population and business needs of NSW.

“Port Botany is closer, better and cheaper for most container freight in NSW,” stated Ms Calfas.

“Port Botany is less than half full, is directly connected to dedicated freight rail, road and intermodal infrastructure and is supported by modern warehousing and logistics facilities in Sydney’s west and south west.

“The KPMG modelling shows Port Kembla is the obvious next choice for the state’s next container port, once Port Botany nears capacity.”

Conflicting reports

A report by AlphaBeta, published in January this year, found the container terminal at the Port of Newcastle could provide a A$6bn (US$4.1bn) boost to the New South Wales economy, but according to the KPMG report, the current proposal for a container port in Newcastle had significant issues including being furthest away from the freight consumption and employment growth in western Sydney and the most expensive to develop, connect and use for containers.

The report also emphasised that premature port investments will result in higher costs for NSW businesses and families,

In December last year, the Australian Competition and Consumer Commission (ACCC) began investigating NSW Ports Operations Hold and its subsidiaries Port Botany Operations and Port Kembla Operations for making deals with the Australian state of New South Wales (NSW) that the ACCC claims had an “anti-competitive” purpose and impact.

This follows a declaration in October by the Port of Newcastle’s chief executive Craig Carmody that the port remained committed to a container terminal, despite the Government of New South Wales’ support for Port Botany and Port Kembla in the NSW Freight and Ports Plan 2018-2023.

In 2016, it was revealed that Port Botany and Port Kembla were protected by the NSW Government from container competition after privatisation with a secret fee on any Newcastle container development.
Source: Platts