The Port of Newcastle will need to pay millions of dollars in compensation, if it wants to progress with plans to establish a container terminal.
It comes following legislation introduced by Lake Macquarie MP Greg Piper in 2022, aimed at unshackling the port from a deal which was signed off by the former state government over a decade ago.
That agreement imposed financial penalties on the Newcastle facility if it exceeded 50,000 container movements per year.
But, getting out of the deal was never going to come without a cost and on Friday the Independent Pricing and Regulatory Tribunal has determined a one off payment of $13 million will be required to remove the financial penalties.
Chair Carmel Donelly says the value was determined according to the requirements set out in Mr Piper’s legislation.
“IPART was appointed under that legislation to determine this value and the law requires that determination to be made in a very specific way.
“IPART was required to determine how much the inclusion of the reimbursement provision would have reduced the financial value of the right to operate and lease the assets of the Port of Newcastle for 98 years, in the opinion of a reasonable person, at the time the Port of Newcastle Deed was entered into.
“This could be described as what a reasonable person, bidding for the right to operate and lease the Port of Newcastle in 2014, would have reduced their bid by, because of the requirement to reimburse the State for payments to NSW Ports,” Ms Donnelly said.