NSW ports monopoly case returns to court

The ACCC is appealing a Federal Court judge's dismissal of its NSW ports monopoly case.
The ACCC is appealing a Federal Court judge's dismissal of its NSW ports monopoly case.

A judge's decision on two 50-year deals affecting nearly every product entering NSW by sea has been appealed.

The competition watchdog says it still believes stopping competition was the purpose and likely effect of compensation provisions established when NSW privatised the ports of Botany and Kembla in 2013.

A case alleging those provisions breached competition law was dismissed in June, with the judge saying the port's new owner had "derivative crown immunity".

If Justice Jayne Jagot was wrong about that, she said the case would fail anyway as the provisions' purpose and likely effect wasn't to substantially lessen competition.

The judge also described the Port of Newcastle's hopes of competing with Botany as "speculative".

The Australian Competition and Consumer Commission says agreements to privatise state-owned monopoly businesses are "inherently anti-competitive" when they seek to maximise profit from the sale by protecting the monopoly from future competition.

"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," ACCC chair Rod Sims said on Tuesday.

Newcastle is the world's largest coal export port and the country's third-largest port by volume.

But it handles few containers, lacking the specialist equipment that allows Port Botany to handle 2.7 million standard container units each year.

Port of Newcastle chief executive Craig Carmody said in a statement that alternative export routes would increase regional NSW global competitiveness and allow suppliers to avoid congested supply chains.

Botany, which has a capacity of about seven million containers annually, and Kembla, which primarily handles imported vehicles, grain and other bulk cargo, are both owned by NSW Ports, a consortium of industry superannuation funds.

It described Justice Jagot's decision as "an emphatic win" for it and the people of NSW.

Australian Associated Press