NSW government sells Port Botany and Port Kembla facilities

Following a six-month bidding process, the 99-year lease of State-owned port assets Port Botany and Port Kembla has been awarded to the NSW Ports Consortium for $5.07 billion, with net proceeds of around $4 billion to be invested in the NSW Government’s infrastructure fund Restart NSW.

Thirty per cent of the funds will be reserved for projects in regional areas and a further $100 million dedicated for infrastructure projects in the Illawarra region. The funds generated will speed up the construction of various infrastructure projects critical to improving road transport in the state.

NSW Treasurer Mike Baird said, “There are now vital funds for the delivery of WestConnex, Bridges for the Bush, the Pacific Highway and the Princes Highway. The Government has now funded its commitment to WestConnex and there is $100m for spending on new infrastructure projects in the Illawarra region.”

NSW Ports Consortium comprises Industry Funds Management (“IFM”), Australian Super, QSuper and Tawreed Investments Limited, a wholly-owned subsidiary of the Abu Dhabi Investment Authority (“ADIA”).

Baird said each member of NSW Ports is a highly experienced asset owner who will ensure the operational integrity of the ports and will bring greater access to capital to ensure the ongoing development of the critical trade gateways of NSW.

“The NSW Government’s announcement it will lease Port Kembla and Port Botany to a consortium for more than $5 billion is welcomed by the Australian Logistics Council, which is particularly encouraged by the involvement of Australian industry super funds,” said Michael Kilgariff, ALC Managing Director.

“It also sends a message to Governments they should continue focusing on the identification of infrastructure assets that are appropriate to be transferred to the private sector as a means of raising much needed funds to boost national freight efficiency.”

Kilgariff also encouraged the NSW Government to maximise the amount it invests in critical freight logistics projects from the proceeds of the long term lease of Port Botany and Port Kembla.

“Using the funds from the lease of these two ports for freight logistics projects, which have passed rigorous cost benefit analysis, would help drive further efficiencies along the supply chain and reduce business costs which can be passed on through to consumers,” he said.

As with the experience of other ports subject to privatisation, potential exists for fee increases and industry and public concerns have centred on the implications especially related to the cost of petroleum based fuels. Since the closure of the Caltex Kurnell and Shell Clyde refineries, NSW is now reliant upon almost all of its fuel supplies via Port Botany.

Paul Zalai from the Freight and Trade Alliance told Prime Mover that assurances had be received from the Treasurer that pricing safeguards are in place. “The consortium will have to notify the government of any charge increase allowing the Minister to seek further detail and/or refer the matter for consideration by the Independent Pricing and Remuneration Tribunal (IPART),” he advised.

Zalai also highlighted the importance of the Port Botany Landside Improvement Strategy (PBLIS) stating that it had significantly reduced truck queues, delays to deliveries and waiting time detention fees.

Leave a Reply

  1. Australian Truck Radio Listen Live
Send this to a friend