Greiner endorses Newcastle port decision

THE architect of the Hunter Valley coal chain Nick Greiner has defended premier Barry O’Farrell's decision to knock back Nathan Tinkler’s proposed $2.5 billion Newcastle port development, describing the decision as “rational” and establishing a framework to handle export growth.
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Newly appointed Infrastructure NSW chair Nick Greiner

Lou Caruana

The decision to back the Port Waratah Coal Services Terminal 4 proposal was consistent with his original strategy for ports and infrastructure in the Hunter Valley to be scaled up to handle 300 million tonnes, according to Greiner, who now chairs Infrastructure NSW.

“I am totally, totally supportive of the government’s position,” Greiner told ILN

“The truth is the industry took a long time – years – to get to a rational industry view, which is the model that came out of what I was involved in about three and a half years ago.

“That model is a rational cooperative model. The notion of breaking that model which has just been fixed seems to me to be a very high risk, low return thing for the people of NSW, which is the relevant bottom line.

“I have not the slightest doubt that they have made the right decision.”

In a low key announcement last weekend O’Farrell announced the knockback to Tinkler – who is a Liberal-National party donor. An advisor to Tinkler told ILN no warning was given to Tinkler before the decision was announced.

Tinkler’s Hunter Ports T5 proposal, which he had slated for the old BHP steelworks site at Mayfield, would have boosted capacity at the port by 100Mtpa and would have competed with a 120Mt Xstrata and Rio Tinto-backed Port Waratah Coal Services T4 proposal on Kooragang Island.

“The decision by the O’Farrell government is condemning Newcastle to a future as Old Sydney Town despite it being the lifeblood of the NSW economy through its export earnings for the state,” Tinkler said at the time.

Greiner – a former NSW Premier himself – has stepped in to defend the government’s decision.

The government’s strategies focus coal facilities on Kooragang Island, away from residential areas.

Its position was that Tinkler’s Mayfield site is more suited to handling multi-product, container, general cargo and dry bulk terminal freight.

PWCS had nameplate capacity of 113Mt, which rose to 133Mt in late 2011 under an existing $670 million expansion program. The company has planning approvals in place for 145Mt.

T4 is a critical plank of the Hunter Valley’s long-term commercial framework brokered by the coal industry and the NSW government, with input from Greiner.

The plan was endorsed by the Australian Competition and Consumer Commission ahead of coming into effect on January 1, 2010. Underpinned by long-term contractual agreements between coal producers and PWCS, the framework positions PWCS to deliver required coal-loading infrastructure for all Hunter Valley producers.

“When I started [at Hunter Valley Coal Chain] there was capacity for less than 100 million tonnes,” Greiner told ILN.

“There’s now effectively commitments with a clear pathway to doubling that and everyone that talks to me says that the PWCS and the industry model will go to 300 [Mt] in a fair and rational way.

“Nothing is perfect. This is a vexed problem – where you have got lots of users of a single port it’s clearly a difficult issue but I think what is obvious is that a … cooperative model, an industry model, is better than a ‘breakout’ type model.

“I think it’s working quite well. Everyone from the smallest to the largest companies – they think it’s working well and they think it will continue to work well even if throughput has to go well towards 300 million.”