Newcastle container terminal: a matter of when, not if

The Port of Newcastle (PoN), Australia, has disclosed the explicit interest on the part of global port operators to develop a container terminal at the port, informs The Newcastle Herald. According to Craig Carmody, Port of Newcastle CEO, the port has received a number of “unsolicited bids” in the weeks since potential operator DP World confirmed it was no longer interested in the port.

“I can confirm that the Port of Newcastle has been approached by a number of globally significant container port operators who are eager to take advantage of our proximity to exporters and importers, the availability of large tracts of low cost land around the port and our access to dedicated freight transport infrastructure,” Craig Carmody said.

Although Mr. Carmody does not disclose who these interested port operators are, he says: “These bids clearly demonstrate that there is no doubt in the minds of private investors that a container terminal in the Port of Newcastle is economically viable… It’s really a matter of when, not if, we will see preparatory work commencing on the container port in Newcastle.”

As we wrote earlier, Newcastle has been promoting for some time the idea to construct a new container terminal, as an alternative to those already operating in Port Botany and Port Kembla in the same state of New South Wales. However, its privatization terms prevent it from building a container terminal to compete with these.

During the privatization of Newcastle port in 2014, the “secret” container fee was agreed to protect NSW Ports, the company that had bought Port Botany and Port Kembla from the state government the year before. The fee doubles Newcastle’s container handling costs by charging a levy that is paid to the state. Now, PoN expects the Australian Competition and Consumer Commission to declare the fee illegal, so that it can be removed and the port may proceed with the project.

The PoN aims to develop a 2 mln TEU container terminal on the Mayfield site within five years. The project involves constructing a modern integrated container port and a freight handling facility, all on one site.

Craig Carmody does not expect Newcastle’s proximity to Sydney to affect negatively the future port’s volumes: “In the next 20 years, the number of containers moving through ports in NSW is likely to double. Evidence from Deloitte Access Economics and other studies suggests that the development of a highly automated, state of the art container port in Newcastle has the capacity to help ease congestion in Sydney while boosting the competitiveness of the NSW and national economies.”

He also points to the success of the Tauranga Container Terminal in New Zealand, which competed with the nearby Auckland that was larger initially. He sees it as an evidence that their vision can be brought to fruition.

PoN hoped that DP World would build the Mayfield terminal, but their agreement came to an end in July after three years of negotiations.

Earlier, we wrote that China Merchants Port Holdings Company Ltd. had completed the deal to acquire the Port of Newcastle in June, 2018.

But the port refused to confirm whether CMPort was one of the bidding operators.

Julia Louppova:
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