Watchdog poses Port Kembla lease hurdle

A legal firm has flagged problems that could arise in the leasing of Port Kembla port.The Australian Competition and Consumer Commission could stand in the way of a consortium keen to lease Port Kembla port, according to an international law firm.
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In July, the NSW government signed off on a plan to lease the port for 99 years. Port Botany will also be leased for the same time, with both ports possibly going to the same private consortium.

Legal firm Norton Rose Australia has acted in matters relating to various ports around Australia, including the privatisation of Geelong and Hastings ports in Victoria.

In a legal update released in April, the firm flagged problems that could arise in the leasing of Port Kembla port.

The legal update raised the possibility that the ACCC could be worried about “a substantial lessening of competition”, depending on the shareholders of the consortium granted the lease.

“Concerns could arise, for example, if one of the consortium parties was a potential or actual acquirer of services at the port, such as a stevedore,” the update said.

In such circumstances, the report suggested that the ACCC may be concerned about the potential for the lease-holder “to discriminate in favour” of its own port activities.

This would be to the detriment of other users of the port facilities.

However, the legal update from Norton Rose Australia stated that a port user in a consortium “is not necessarily fatal to any ACCC clearance”.

“The port user or associate could have an immaterial shareholding or role that gave it no practical influence,” it said.

It added that the NSW government could pre-empt competition concerns by following the lead of the Queensland government, which imposed cross-ownership restrictions in the privatisation of the port of Brisbane.

Those restrictions meant port users and associates were limited to a 20 per cent stake in the successful consortium.

NSW Treasurer Mike Baird said the ACCC would be involved in granting any lease over Port Kembla.

“As is usual for transactions such as this, the ACCC will be responsible for looking at any potential competition issues as the process develops,” Mr Baird said.

“Any successful bid would have to have regulatory approval from the ACCC.

“Treasury expects to have ongoing engagement with the ACCC throughout the transaction process to ensure it has the information it needs to assess any potential competition issues which might arise.”

He said the “transaction process” was expected to start in the fourth quarter of 2012, with the planned handover of the port to the leaseholder to be in the first half of 2013.

Meanwhile, a public rally organised by the Save Our Ports Committee opposing the privatisation of Port Kembla will be held tomorrow at the boat ramp end of Foreshore Road at 2pm.

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