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Newcastle Herald
Newcastle Herald
National
Matthew Kelly

Newcastle port left at the altar after government dumped container terminal announcement

Port of Newcastle staff with a cake that was ordered to celebrate the $250 million container terminal funding announcement scheduled for May 6.
The stage and marquee that was set up near Mayfield 4 berth where Deputy Prime Minister Barnaby Joyce was due to make the funding announcement.
Promotional materials that were ordered to in anticipation of the container terminal funding announcement.

The stage was set and a giant freight container-shaped cake ordered to celebrate the announcement of $250 million in federal funding to help establish a container terminal at the Port of Newcastle.

But like a jilted bride, the Port of Newcastle was left standing at the altar after the Morrison government had a last-minute change of heart on its commitment, which was set down for the afternoon of Friday, May 6.

The Newcastle Herald can confirm concerns that the funding would be seen as promoting Chinese interests, intense lobbying by the coal industry and the state government's opposition to the project combined to have the announcement spectacularly dumped.

A source close to Scott Morrison who was involved in the intense political machinations that took place in the lead up to the scheduled announcement said the then-prime minister was initially due to announce the project during the first week of the election campaign.

However, it was replaced by the announcement that a $100 million green hydrogen hub would be established at the port instead.

A media conference was then organised for May 6 where then-deputy prime minister Barnaby Joyce would make the container terminal announcement.

But in the hours before it was due to occur Coalition campaign headquarters told Mr Joyce not to proceed and to go to Cairns instead.

"They (campaign headquarters) said the NSW government had raised concerns. We checked with (NSW transport minister) David Elliott, (NSW planning minister) Anthony Roberts and the Premier's Office, who told us they weren't going to say anything about it (the container terminal) because they were still in the High Court with the ACCC appeal," the source said.

Opposition by Glencore, NSW Minerals Council and some National Party MPs about the implications of a container terminal on future coal exports then emerged as reasons not to proceed.

"They (the project's opponents) just kept running interference... they seemed to have the view that if there was any other use of the port than for coal it was going to make their life difficult. It wasn't, there is a 10,000-ship capacity per year and they only use 5000," the source said. "We countered every argument they threw at us but there always seemed to be a new problem."

Shortly afterwards, in an about-face, the NSW Premier's Office formally advised it was opposed to the establishment of a Newcastle container terminal and it would trigger compensation if the project proceeded.

Scott Morrison with Port of Newcastle special project director and National Party senator -elect Ross Cadell and port chief executive officer Craig Carmody in March last year.

"We spoke to the PM. He said 'I have given a commitment. You know I support this. It will be done'," the source said.

"The next morning he (Mr Morrison) sent a text that said 'the state government is the problem'."

"We understood from that it would be done after the election."

The Herald has also confirmed the $250 million package to fund stage 1 works for a fully automated port in Newcastle was approved by the Expenditure Review Committee and Cabinet in early March without controversy.

The project was approved as a concessional loan, which would leverage the federal government's balance sheet.

"You are simply leveraging the Commonwealth's balance sheet by allowing a debt to occur. Either the Commonwealth will guarantee the debt through another provider or it would be a contingent liability from the port to the Commonwealth," a source said.

"The bottom line is the Commonwealth would leverage its position to create the nation's sixth container port because of the constrained nature of capital (accessible by the Port of Newcastle) because they are the world's largest coal export port.

"It was a sensible decision that took all of five minutes to make."

In the weeks and days leading up to the scheduled announcement, the office of Mr Joyce and the Port of Newcastle discussed how the project would benefit the port and the wider economy.

Draft media releases, briefing notes and fact sheets were also prepared.

"Announcement is shaping up for Friday at this stage," an email from Mr Joyce's office sent on April 23 said.

"Are you able to provide further detail around how the $250 million will be used and the outcome that will be achieved?."

The Port of Newcastle spent up big to celebrate what it believed would be a milestone event in the port's history on May 6.

A corporate marquee and stage were set up adjacent to Mayfield No.4 Berth. A container-shaped cake that required two people to lift was also ordered in addition to caps, cookies and wine.

But when the big moment arrived the government was nowhere to be seen.

The marquee at Mayfield No.4 berth was removed last week after it became obvious the announcement would not happen.

The Port of Newcastle confirmed it did not receive notification that the event was cancelled.

It held out hope the announcement would still be made in the final days of the campaign.

But it never happened.

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