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Port of Newcastle looks to build container terminal

The privatized Australian coal port is looking to build a container terminal despite limitations from the uncapped capacity of the neighboring Port Botany.

   The private operators of the Australian Port of Newcastle say they want to build a container terminal at the port, according to a report from local newspaper the Newcastle Herald.
   Known for its coal handling, the port is a 50/50 joint venture of Australian and Chinese interests, which paid $1.75 billion for a 98-year lease of the facility in April 2014. The Newcastle lease came a year after the Australian government raised $5.1 billion for a 99-year lease of Port Botany, the state’s main container port, and Port Kembla, the Newcastle Herald reported.
   The new chair of the privatized Port of Newcastle, Prof. Roy Green, says the port and the region need a large-scale container terminal as insurance against the decline of coal.
   
However, “the Coalition State government privatized the state’s three biggest ports in a way that hog-ties Newcastle into compensating Port Botany should it go into competition with it over containers,” the Newcastle Herald reported.
   “Coal has been at the heart of the [economy] for the better part of two centuries, and it will continue to be central to the prosperity of the region and Port of Newcastle. There is also an urgent need to diversify the [economy] and the port’s business,” Green told the Newcastle Herald. “Whilst the outlook for coal is what it is, it also provides a stable foundation, enabling us to invest in new sources of growth and innovation. Among our challenges will be ensuring a level playing field for the development of a viable and competitive container terminal.”
   Green said the port’s 98-year lease meant the consortium was “obliged to think long term, and it will,” adding that the port was already diversifying, through investments in a new cruise terminal and non-coal freight facilities. Newcastle has always been marked as the state’s next container terminal after Botany, but “the real barrier is the protection given to Botany in its privatization, which means any Newcastle container terminal must compensate Botany by about $100 per container, or enough to make such a business unviable,” reported the Newcastle Herald.
   Newcastle is currently limited to 30,000 containers a year, with 6 percent annual growth, while Botany handles about 2 million boxes a year with no capacity limit.

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