Sydney traffic would be less congested and shopping in New South Wales would be cheaper if the state had another freight container terminal, the Port of Newcastle says.
But a 2013 privatisation agreement between the state government and NSW Ports – which operates Port Botany and Port Kembla – makes it “uneconomic” for Newcastle, according to the competition watchdog.
The ACCC on Monday began proceedings in the Federal Court, alleging the $5.1 billion deal was “anti-competitive and illegal”.
The controversial deal contained provisions requiring the Port of Newcastle, which was also privatised in 2014, to compensate NSW Ports if it exceeds a cap on container traffic.
It means Port Botany essentially has a monopoly of container movements for the next 50 years, and the ACCC wants it lifted.
The Port of Newcastle commissioned a report, released on Tuesday, to imagine what it would mean for NSW if it could develop a large-scale container terminal.
The analysis, by economic consultancy AlphaBeta, found NSW’s gross state product would increase by $6 billion by 2050.
It could take 750,000 trucks off Sydney roads by 2050 and save $130 million in congestion and pollution costs.
Another $400 million saving would come from avoided infrastructure costs in Sydney.
Currently, Botany is the sole container port in NSW.
Kembla operates cars and steel, while Newcastle moves coal, wheat and fuel.
The analysis for Port of Newcastle found the Hunter region and northern NSW would get another 4600 jobs.
It could deliver $2.8 billion in freight savings for businesses and consumers in the Hunter Valley and northern NSW, mainly due to shorter journeys.
Increased competition would likely lower port prices at Port Botany, saving NSW businesses and consumers $1.2 billion in freight by 2050.
Tuesday’s report says a terminal at Newcastle could reduce freight costs by up to $500 per shipping container.
“The report clarifies for us that not only will Hunter and northern NSW businesses and households benefit from a container port at Newcastle, but so will Sydney in terms of pollution, congestion and freight costs, which will come down with competition from Newcastle,” Port of Newcastle CEO Craig Carmody said in the report’s foreword.
Opposition Leader Michael Daley vowed to put the NSW ports privatisation to a judicial inquiry if Labor wins the March election.
“If I become the premier I intend to shine a light on this and overturn the bad behaviour of this government so that no government can do this again,” Mr Daley told reporters.
Premier Gladys Berejiklian has said the Coalition stood by its decisions.
NSW Ports said it would “vigorously defend the proceedings” against the ACCC.
A statement on Monday said NSW Ports believes the agreement was in “the best interests of all stakeholders, the economy and people of NSW”.
The competition watchdog expects the court case could run for up to two years.
If the ACCC wins it would effectively “undo” the compensation arrangements, freeing up Newcastle to build a container terminal, chairman Rod Sims said on Monday.
“We are taking legal action to remove a barrier to competition in an important market, the supply of port services, which has significant implications for the cost of goods across the economy,” he said.
“These anti-competitive decisions ultimately cost consumers.”