NSW faces billions in compensation costs if Newcastle gets a new container port. 

As a consequence of privatisation agreements made a decade ago, involving Newcastle and two other major ports, Botany and Kembla, the people of NSW are set to be saddled with a potential liability.

NSW Treasurer, Daniel Mookhey, says modelling by Deloitte Access Economics for the NSW Treasury indicates the state's liability to competing terminals could range from $600 million in 2024 to as much as $4.3 billion by 2063.

The state’s Labor government has pledged to dismantle the secrecy surrounding major privatisation deals, allowing the public to see the ramifications of the controversial transactions. 

Mookhey criticised the previous government's lack of transparency, emphasising the public's right to understand the impact of selling off state assets.

Under the privatisation agreements, NSW Ports, the owner of Port Botany and Port Kembla, would receive compensation from the government if Newcastle developed a competing container terminal. 

Despite legislation passed in 2022 to absolve the Port of Newcastle from developing container capabilities, the state's financial obligation to NSW Ports persists, as revealed by the treasury's modelling.

The government says IPART (Independent Pricing and Regulatory Tribunal) is working to set what the price of a 1-off payment to the state would be, to enable the Port of Newcastle to extinguish the reimbursement provision should it wish to do so.