The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court over the agreements signed between NSW Ports Operations Hold Co Pty Ltd and the State of New South Wales, claiming that these have an anti-competitive purpose and effect.
Namely, the ACCC claims that entering into the Botany and Kembla Port Commitment Deeds was possible to prevent or hinder the development of a container terminal at the Port of Newcastle, and aimed or was likely to have the effect of, substantially decreasing competition.
The ACCC supports that the reimbursement provision in the Port of Newcastle Deed is an anti-competitive consequence of the Botany and Kembla Port Commitment Deeds, and that it makes the development of a container terminal at Newcastle uneconomic.
Also, the ACCC looks for declarations that the compensation provisions in the 2013 Port Commitment Deeds contravene the Competition and Consumer Act 2010 (CCA), injunctions restraining the operators of Port Botany and Port Kembla from seeking compensation under these provisions, pecuniary penalties and costs.
The CCA only applies to the conduct of state governments in certain limited circumstances. The State of NSW is not currently a party to the ACCC’s proceedings and the ACCC is not seeking orders against the state.
On the contrary, NSW Ports highlights that the ACCC announcement has instituted proceedings in the Federal Court in relation to the 2013 Port Commitment Deeds.
Moreover, NSW Ports claims that the agreements signed with the NSW Government, to rental its assets at Port Botany and Port Kembla, operate in the best interests of all stakeholders, the economy and people of NSW.
By paying about $5.1 billion to the NSW Government in 2013 based on the full contractual terms contained in the agreements, NSW Ports expect to be vigorously defending the proceedings.
NSW Ports 80% belong to Australian superannuation funds investing on behalf of more than six million individual Australians. The NSW Ports support that the success of Port Botany and Port Kembla is in the national interest.
What’s more, the NSW Government privatised Port Botany and Port Kembla in May 2013 and the agreements, known as Port Commitment Deeds, were entered into as part of the privatisation process, for a term of 50 years.
Finally, on May 2014, a 50-year-deed urges the port of Newcastle to reimburse the State of NSW for any compensation paid to operators of Port Botany and Port Kembla under the Botany and Kembla Port Commitment Deeds.