Port of Newcastle. another example of the malign impact of Sydney centric decisions that ignore the North?

Port of Newcastle. another example of the malign impact of Sydney centric decisions that ignore the North?

On 25 February 2019, the Newcastle Herald carried a story by Michael Parris (NSW port privatisation inquiry finds key details kept secret from Parliament, calls for policy review)  reporting on the preliminary report of the NSW Public Works Committee Impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales.

I first reported on the proposed sale of the Port of Newcastle back on 28 January 2014: Competition heats up for Port of Newcastle. It was only a very brief note in which I said that there appeared to be little opposition to the sale within Newcastle, perhaps because part of the sale proceeds was to be allocated to Newcastle infrastructure. Even then, I was quickly corrected when regular commenter Greg wrote :

"Actually Jim, there has been a fair amount of opposition in Newcastle. The port of Newcastle is substantially different to both Port Botany and Port Kembla in that the government would not be selling a business so much as a) a tax stream (ie. charges for use of the port facilities) and b) an awful lot of prime harbourside land which will severely restrict what can be done on and around the harbour for the next century. In particular, a container terminal was promised for the port a decade ago. That would have been logical to service the north of the state and help relieve congestion around Port Botany. This government has canned that and it is likely that the sale of the port will see hopes fade of a container terminal ever being built in Newcastle. 

There is also resentment that the money for infrastructure in Newcastle is tied in to the port sale, yet the dollar figure is set in stone. If the port gets sold for closer to say $1bn (highly likely), Newcastle won't see a zac more than that already promised from the sale. The state has made that absolutely clear. I don't think that there are too many people who believe that it is a good deal for Newcastle. The sale of the port will benefit Sydney more than it does Newcastle."

In April 2014, then NSW Premier Baird announced that a 98 year lease over the Port of Newcastle, the world's biggest coal port, had been sold for $1.75 billion. Of this amount, $340 million would go to Newcastle projects to aid the city's revitalisation. So it was sold for much more than projected, with just under 20% going to Newcastle projects.

What was not known at the time was that previous sale agreement of the leases to NSW Ports over the southern Port Kembla and Port Botany provided that the State Government would provide a financial reimbursement to NSW Ports should container traffic at the Port of Newcastle pass a certain trigger point. This clause was inserted to maximise the immediate cash to the Government in Sydney. The subsequent sale agreement for the Port of Newcastle included a clause that the new owners would have to reimburse the NSW Government should container traffic trigger the compensation clauses under the original agreement for the sale of Ports Botany and Kembla. The effect was to make a new container terminal un-economic.

These restrictive practice clauses were confidential, but inevitably peaked into the public domain. partly because the Port of Newcastle began to seek to develop a container port 

On 10 December 2018,  the ACCC (Australian Competition & Consumer Commission) announced that had instituted proceedings in the Federal Court against NSW Ports Operations Hold Co Pty Ltd and its subsidiaries Port Botany Operations Pty Ltd and Port Kembla Operations Pty Ltd for making agreements with the State of New South Wales that the ACCC alleges had an anti-competitive purpose and effect.
“We are alleging that making these agreements containing provisions which would effectively compensate Port Kembla and Port Botany if the Port of Newcastle developed a container terminal, is anti-competitive and illegal,” said ACCC Chair Rod Sims.

The following day, 11 December 2018, the Port of Newcastle released a commissioned report on the economic impact of a container terminal at the Port of Newcastle. This suggested (among other things) that a modern container terminal would cut land transport costs for northern NSW businesses by $2.8 billion by 2050. This would, according to Port of Newcastle CEO Craig Carmody, increase exports from Northern NSW including the Hunter by $1 billion by 2050

"Businesses in Newcastle, Singleton, Tamworth, Gunnedah, Port Macquarie, Kempsey, Liverpool Plains and Narrabri can look forward to savings of more than $500 per standard container, if they shipped their goods through Newcastle rather than Port Botany or Port of Brisbane," Mr Carmody said.

With these actions, the originally secret agreements preventing the Port of Newcastle competing against Port Botany and Port Kembla in the container trade finally entered full public gaze. It had been some time coming.

NSW Public Works Inquiry

On 10 November, 2018, a month before the ACCC action, the NSW Public Works committee established an inquiry into the matter. It's terms of reference were;  

"1. That the Public Works committee inquire into and report on the impact of Port of Newcastle sale arrangements on public works expenditure in New South Wales, including: 

(a) The extent to which limitations on container port operations currently in place following the sale of the Port of Newcastle contribute to increased pressure for transport and freight infrastructure in New South Wales, specifically: 

(i) the Westconnex Gateway project (ii) the Port Botany Rail Line duplication 

(iii) intermodal terminals and rail road connections in southwest and western Sydney 

(iv) other additional public road infrastructure requirements due to the additional road freight movements in Sydney under the existing port strategy.

 (b) The nature and status of the port commitment deeds, the extent to which they contain limitations on container port movements, and the terms and binding nature of any such commitments.

 (c) The extent to which container port limitations contribute to additional costs for NSW industries who are importing or exporting from New South Wales, especially in the Port of Newcastle catchment.

(d) Any other related matters.

2. That the committee report by 28 February 2019".  

The committee members were:

• The Hon Robert Brown MLC   Shooters, Fishers and Farmers Chair  
• The Hon Taylor Martin MLC Liberal Party Deputy Chair*  
• Ms Cate Faehrmann MLC The Greens
• The Hon John Graham MLC Australian Labor Party   
• The Hon Trevor Khan MLC The Nationals   
• The Hon Scot MacDonald MLC Liberal Party
• The Hon Lynda Voltz MLC Australian Labor Party

The Committee reported on 25 February 2019. It found:

:

• Finding 1: The Port Commitment Deeds including the conditions of sale and the levy were not disclosed to the public or the Parliament:  
• Finding 2 26 That the limitations on Newcastle container port operations following the ports transactions have not significantly impacted expenditure required on transport infrastructure projects in Sydney.

It recommended:

• Recommendation 1: That the Legislative Council consider establishing an inquiry into the ports transactions, and specifically container limitations and associated financial obligations contained within the Port Commitment Deeds, at the conclusion of the Federal Court proceedings involving the Australian Competition and Consumer Commission and NSW Ports or at such time as the House determines. 
• Recommendation 2: That the NSW Government conduct a detailed investigation of freight rail options between Ports Botany, Newcastle and Kembla, including options for line duplication and dedicated freight-line construction, to ensure strategic future corridors are preserved, to optimise rail modal share of freight transport, to better align capacity to meet future demand and to improve the rail service reliability. 
• Recommendation 3 35 That the NSW Government conduct a review of the state's ports policy, including the potential for a container terminal at the Port of Newcastle, at the conclusion of the Federal Court proceedings involving NSW Ports, or at such time as the House determines.

Commentary

I am still working my way through the analysis, However, some things stand out. Note that I am looking at the report from a Northern NSW, a broader New England, perspective. I make no apologies for that.

The analysis is very Sydney centric. I have seen this type of analysis before dating right back to the Cohen Commission inquiry into a proposed Northern state. There the analysis focused on railways, the apparent economies associated with the Sydney port rail network and the additional costs associated with developing an alternative system. Leaving aside costing and pricing issues, the way that then NSW rail freights were set provided an artificial surplus to the Sydney railway network carrying Northern good that then became a cost, the analysis was based on what was not what might be.

I thought that was the case here too. It is heavily set within existing plans, existing structures. The Port of Newcastle is seen as an extension of the Sydney network and analysed in that context. In a way, the approach adopted by the Port of Newcastle in emphasising certain savings that would accrue to Sydney through (for example) reduced infrastructure spend encouraged that approach. Disprove those, or at least cast doubt on them, and the case starts to fall to ground.

Assuming that I understand the arguments correctly, the evidence ran that the majority of container traffic was Sydney bound and that, further, the economic locus was shifting to the south and south west, effectively isolating Newcastle, The argument here seems to have been two fold. That expenditure and planning should be focused on the existing infrastructure and that these trends made it unlikely that a container port at Newcastle could be viable.

I have commented before about the way in which present development dynamics are progressively disadvantaging and indeed fragmenting the North The evidence presented to the committee seems to support that view. However, the whole analysis misses certain key points.

The anti-competitive clause itself should never have been there in the first place. It artificially increased the price that was paid for the long term lease at the cost of the Port of Newcastle, Newcastle and indeed importers and exporters across Northern NSW who might have benefited from alternative shipping options. It also artificially increased traffic through the Botany Bay and Port Kembla, creating an economic incentive for further investment to manage the increased traffic.

One can argue about the quantum, one can argue about the extent to which container traffic at Newcastle would be viable, but it remains an economic distortion introduced by the Sydney Government whose costs are born by those in the North.

In this context, and this in part reflects the way the committee's terms of reference were written., there is actually no recognition in any of this of the North as an economic and geographic entity with its own interests. How might we use a container terminal at Newcastle? How might we combine it with other infrastructure to encourage Northern development.? I think that these questions are worth asking.

The grab for cash that affected New England exporters - short backgrounder on the sales of Ports Botany and Port Kembla

Container Ship entering Newcastle Harbour. A Sydney grab for cash imposed costs on New England exporters that are only now emerging. 

On 10 December 2018,  the ACCC (Australian Competition & Consumer Commission) announced that had instituted proceedings in the Federal Court against NSW Ports Operations Hold Co Pty Ltd and its subsidiaries Port Botany Operations Pty Ltd and Port Kembla Operations Pty Ltd for making agreements with the State of New South Wales that the ACCC alleges had an anti-competitive purpose and effect.

“We are alleging that making these agreements containing provisions which would effectively compensate Port Kembla and Port Botany if the Port of Newcastle developed a container terminal, is anti-competitive and illegal,” said ACCC Chair Rod Sims.

The following day, 11 December 2018, the Port of Newcastle released a commissioned report on the economic impact of a container terminal at the Port of Newcastle. This suggested (among other things) that a modern container terminal would cut land transport costs for northern NSW businesses by $2.8 billion by 2050. This would, according to Port of Newcastle CEO Craig Carmody, increase exports from from Northern NSW including the Hunter by $1 billion by 2050

"Businesses in Newcastle, Singleton, Tamworth, Gunnedah, Port Macquarie, Kempsey, Liverpool Plains and Narrabri can look forward to savings of more than $500 per standard container, if they shipped their goods through Newcastle rather than Port Botany or Port of Brisbane," Mr Carmody said.

With these actions, the originally secret agreements preventing the Port of Newcastle competing against Port Botany and Port Kembla in the container trade finally entered full public gaze. It had been some time coming.

Genesis

In April 2013, then NSW Treasurer Mike Baird announced that a consortium, NSW Ports, had agreed to pay $4.31 billion for for a 99-year lease over Port Botany with a further $760 million for a similar lease over Port Kembla. After net debt was repaid, the net proceeds of $4.3 billion would be funneled into the state government's investment fund, Restart NSW. There would  lso be an annual lease payment of $5 million to the government.

Mr Baird said that the transaction meant the government's $1.8 billion commitment to the $10 billion WestConnex motorway between the M4 and Port Botany was funded. In addition it would provide $400 million for the Pacific Highway, $170 million for the Berry bypass on the Princes Highway, $135 million for the ''Bridges for the Bush'' program and a further $100 million for projects in the Illawarra region.

What was not said at the time, was that a commercial agreement provided that the State Government would provide a financial reimbursement to NSW Ports should container traffic at the Port of Newcastle pass a certain trigger point.

Just over twelve months later, now Premier Baird announced that a 98 year lease over the Port of Newcastle, the world's biggest coal port, had been sold for $1.75 billion. Of this amount, $340 million would go to Newcastle projects to aid the city's revitalisation.

The sale agreement included a clause that the new owners would have to reimburse the NSW Government should container traffic trigger the compensation clauses under the original agreement for the sale of Ports Botany and Kembla. The effect was to make a new container terminal un-economic.

Discussion

The original agreement would appear a restraint of trade designed to maximise the sale value of the southern ports. I know of no evidence to suggest that the potential adverse effects on exporters across the broader New England were even identified, let alone discussed in the context of the sale. It is only now that we are starting to get the data to assess the economic costs to the North of Sydney's decisions.

Could Newcastle trams have come back?

Nice piece by Mike Scanlon in the Newcastle Herald on the ending of Newcastle trams and the possibility but, for just one vote, they may have been returned.

At this point I am just recording the story for later reference.

New England shipwreck

There have been many stories of maritime disaster in New England's history. This is one -  History revisited - tragedy at sea.

A Robinson service car on the Dorrigo mountain road

This photograph comes from the Bellingen and Urunga Museums. It shows the Robinson service car going down the Dorrigo mountain.

It is historically significant for two reasons.

First, it shows the state of that mountain road in the early days of motor transport. Prior to that bullock drays crawled down that stretch.

Secondly, it is another example of the transport services offered by the Robinsons, an entrepreneurial New England family who had so much impact on New England transport and well beyond.  

Wednesday Forum: improving public transport

This Wednesday Forum focuses on public transport in New England, looking for information and suggestions.

In Results from Wednesday's forum on overcoming division, I reported on a comment from Lynne about the costs of Bellingen-Armidale buses and the absence of public transport between Armidale and Tamworth. I suggested that one outcome of the progressive centralisation of services might be forced depopulation of some areas if rising transport costs associated with peak oil stopped people using cars to get to the services.

In  one of my Express columns, Belshaw's World - inner city dwellers put the choke on car ownership, I mentioned the increased costs of getting and maintaining a drivers license, of buying and maintaining a car. I suggested that this most disadvantaged those most dependant on the car and especially those on lower incomes.

In Ancient Thera, I mentioned in passing the extensive bus services on the small Greek island of Santorini.

Three very different posts, but with linked themes.

At present, discussions on public transport in NSW are dominated by Sydney. However, Sydney trains as an example, may be hot, not run on time, but they exist. The great majority of taxpayer funds spent on public transport are spent in Sydney. There is no comparison between Sydney public transport and that existing (non-existing) across much of New England.

We have a NSW election coming up in March. Based on experience, issues associated with public transport are unlikely to get a mention. I would like to change that.

To help thinking, what is public transport like in your area. What would you like to see done to promote better public transport?  

Moree train photo puzzle

 

Can you date this photo of Moree Railway Station carried by Archives Outside? Andrew did a pretty good job when he wrote in a comment:  

The car in the foreground has the licence plate 1775. The photo is between 1910, when the first NSW licence plates were issued, and 1912 when the Govt. started to issue them with NSW on the plate.

The photo may in fact be a little bit older than 1912 depending upon then Government attitudes to the retention of older plates.

I was wondering if anybody could add anything more? For example, there appear to be two trains. From the photo, from which directions were the trains running? Or is it just one train passing through, with the other having arrived earlier.

The thing that puzzles me is that the train on the left has clearly unloaded (note the whicker-ware baskets), while the one on the right is getting ready to go. Yet my memory is that goods vans were in the back, which suggests that both trains came in from the same direction. Was one the train to Moree from Sydney, the second the through train to Inverell?  

What else can you see in the photo that I have missed?

In memoriam - the Great Northern Railway

The following 1988 photo from Gordon Smith's archives shows the railway station at Black Mountain north of Armidale on what was once The Great Northern Railway.

It still distresses me that the Sydney Government should have first stopped trains, then closed and failed to maintain what was once the main railway north. You see, as time passed it became harder and harder to do anything about it.

Call me sentimental if you like, but "hard headed" - I have inserted the italics advisedly - economic decisions that ignore history, sentiment and the the possibilities of future changes are not always sensible.

The Queensland Government has at least kept its part of the line open.

It is no coincidence that Queensland has been far more effective than Sydney in promoting its country rail system. The Sydney lot see rail lines as just transport, Brisbane as transport plus tourism. This is part and parcel of Sydney's failure to develop an effective tourism branding strategy that I have written about before.    

New England Motor Company - Lismore

Over time, I have carried a fair number of posts dealing with New England Airways.

In those posts I picked up references to George A Robinson's motor transport interests. However, I had no idea until I finally read Joan Priest's Virtue in Flying, a biography of pioneer aviator Keith Virtue (Angus & Robertson, Sydney 1975) just how important those transport interests were.

This photo shows two of the buses belonging to Robinson's Lismore based New England Motor Company.

It's not a good reproduction, but it does give you a feel for the time.

NEMCO was a pretty big operation, big enough to provide not just financial support to the unsubsidised New England Airways, but also core technical and logistical support.

Both were critical. NEA was the only major unsubsidised airline, while it began at a time when you had to be able to maintain and sometimes rebuild your planes by yourself independent of outside support. Damage from hard landings had to be fixed, while the engines themselves could be very cranky.

Mechanical knowledge was therefore critical. Here NEMCO's need to maintain its own buses meant that it had the mechanical skills to support the airline and especially in the critical early days before NEA got big enough to establish its own service facilities.

According to scuba on the Bus Australia web site, the first bus in the top picture, the WA 20 White was built by NEMCO in their own garage. I wonder how many current Australian bus lines could actually build a bus?

The second colour photo shows another variant photographed in Kirklands Garage several years after their purchase of NEMCO.

Scuba also reports that the Ranger, the second bus in the top photo, was one of a pair built by Athol Hedges in Northgate (Brisbane). These were purchased for the Lismore - Tenterfield run, but were also used on the Lismore - Brisbane run in later years until the sale of the company in 1970.

The next photo is a more modern photo of one of the Rangers.

The roads these buses travelled along could be quite dreadful, clouds of dust when dry, clinging mud when wet.

Now I have discovered just how important the New England Motor Company was, I am keen to learn more. 

Here I discovered from scuba that there is a history of NEMCO - Kevin R Kirkland, comp, Life’s a journey: the Kirkland and New England Motor Company story. Lismore, the author, 1999.

There are two copies in the Lismore Historical Society collection. A trip to Lismore? 

Armidale Kempsey Road Passing Cars 1920s

Following Armidale Kempsey Road Bullock Drays 1920s, another photo from John Caling, this time a family shot on the Armidale Kempsey road on the way to holiday at Port Macquarie.

If you click on the photo you will get far more details. I would be interested in your comments because I think that there is some fascinating stuff in the detail.  

Armidale Kempsey Road Bullock Drays 1920s

John Caling kindly sent me these photos of the Armidale-Kempsey Road in the 1920s. If you click on them, they blow-up to a larger size.

The first photo shows a bullock dray hauling timber turning one of the narrow bends.  You can get a feel for size and the degree of difficulty involved.

The next photo shows, I think, the same dray around the bend. Again, it gives a feeling for size.

Road Tunnel Old Grafton Road

This photograph by Gordon Smith, Inside, looking out, shows the view towards Grafton down the old Glen Innes Grafton Road from inside the road tunnel.

It may seem hard to believe that this was the main road to Grafton for more than one hundred years.

Down this road crawled heavy drays and bullock waggons laden with wool for shipment from the busy port at Grafton. Is it any wonder that fights for better transport should form such a constant theme in New England's history?

Gordon noted that the road was built by convicts in the 1800’s, while the tunnel was cut by a contractor in the 1860s.

Kamilaroi Highway - Werris Creek Railway Monument and Museum

This is the fettler's sculpture from the Werris Creek Railway Monument and associated Rail Journey's Museum.

Built as a memorial to those who died whilst working to develop our nation's infrastructure, the Australian Railway Monument is a sight to behold. Opened in October 2005, the six evocative structures of the monument are set on the backdrop of the impressive historical Werris Creek Railway Station. Search the name walls of this sobering commemoration and acknowledge those who died on duty.

The associated Rail Journeys Museum is located in the Railway Refreshment Room building of the Werris Creek Railway Station. This unique Museum brings history to life with the new Audio Visual component. Designed to tell the personal social life of railway men and women, the rail journeys museum is operated by ex-railway workers who tell of the laughs, joys and tears of working on the railway.

Contact details:

Railway Avenue, Werris Creek 2343
Telephone: (02) 6768 7929
Email: railjny@nsw.chariot.net.au

Back to Kamilaroi Highway entry page.

The North Coast's Robinson Family - a note

I have referred to the Robinson family a number of times because of their pioneering role in the development of transport within New England.

A web search led me to notes prepared by Andrew Lancaster on the early history of the family, recorded here so that I do not lose later track of them.