Labor has stopped short of offering full-throated support for legislation which would scrap penalties on Newcastle building a freight terminal, instead offering amendments it hopes will ensure the terminal is built.
Newcastle MP Tim Crakanthorp emerged from a caucus meeting on Tuesday to say Labor wanted Lake Macquarie independent MP Greg Piper's bill, tabled last week, to be "better".
"The people of the Hunter and the businesses that make up our local economy need certainty," he said.
"We will work with Greg Piper to make this bill better.
"The bill contains no protections for the public or guarantees the delivery of a container terminal at all.
"Labor will amend this bill because the people of the Hunter deserve a guarantee that, if a future government terminates this bad deal, then the Hunter will actually get the container terminal it needs and the direct and indirect jobs that will follow."
Mr Piper introduced what he termed "simple" legislation before Parliament which would establish that financial penalties on Port of Newcastle for developing a rival container terminal to Botany and Kembla before 2065 have "no legal effect".
The penalties are contained in a "commitment deed" between the government and the port's owners.
The proposed Labor amendments, seen by the Newcastle Herald, would place the decision whether to scrap the penalties in the hands of whoever is treasurer at the time.
They say the treasurer can terminate the deed only if an independent reviewer has certified that the owners have "shown a genuine commitment to the construction of a container terminal at the port of Newcastle".
Under the amendments, the treasurer must be satisfied that a terminal is feasible without "taxpayers having to build major infrastructure, unless it is in the public interest to do so".
The treasurer also must make "all reasonable efforts" to ensure that no compensation is payable by the Crown to the lessee of Port Botany and Port Kembla.
The proposed amendments also say a NSW government ports strategy must consider the needs of Kembla and other ports, including their needs in relation to renewable energy zones.
Mr Crakanthorp's statement and the proposed amendments reflect concerns within the Opposition that Mr Piper's bill could leave the next government and taxpayers open to costly compensation to NSW Ports, which holds the long-term lease for Botany and Kembla.
They also address a scenario in which Port of Newcastle could seek to sell its lease on the port if the legislation passes, though port executives have said they stand ready to start work on a $1.8 billion automated freight terminal at Mayfield funded by private investors.
"There would be little point to extinguishing the port's liability if we were then faced with a situation where the private operator sells off its stake in the port, makes a windfall gain and leaves our community high and dry with no new container terminal, and with the NSW public on the hook for the bill," Mr Crakanthorp writes in an opinion piece for the Herald on Wednesday.
The NSW Ports consortium, which includes an Abu Dhabi sovereign wealth fund, paid $5.07 billion in 2013 for Botany and Kembla and an effective monopoly over container freight movements in and out of NSW.
Port of Newcastle, which is 50 per cent Chinese-owned, paid $1.75 billion for a 98-year lease of Newcastle port knowing that it was effectively barred from the container market.
Scrapping the Newcastle commitment deed could increase the value of the lease.
Mr Piper told Parliament last week that the port privatisation deals were a "straitjacket" on the NSW economy.
He said on Tuesday that he had seen Labor's amendments and was awaiting feedback from Parliamentary legal counsel.
Northern Tablelands Nationals MP Adam Marshall, who has spoken publicly in support of allowing Newcastle to develop a freight terminal, described the proposed legislation as a "great bill" in Parliament last week.
Mr Marshall and Upper Hunter Nationals MP Dave Layzell have flagged they could cross the floor to vote in favour of legislation supporting a Newcastle terminal.
The government's diminished numbers in the lower house mean the legislation could pass with the support of Labor, the crossbench and a couple of Nationals MPs.
The Coalition did not discuss Mr Piper's bill when government MPs met on Tuesday morning, but Mr Layzell said he supported its intent.
He confirmed that he was "absolutely" still open to crossing the floor.
"As a policy position it's great, but as a policy document we've got some work to do," Mr Layzell said.
"I see some issues with the actual bill. Obviously the concept is fine. You've got to get the best policy as well as getting the result.
"We're still progressing discussions. The Deputy Premier's leading discussions on it. It's a negotiation to try to get that result."
Nationals rank-and-file party members have voted in favour of allowing Newcastle to develop a freight terminal.
"In my mind we're just prosecuting what the members want," Mr Layzell said.
"It's great because there is really good, productive discussions going on, and it's put it on the table.
"This is a priority for our area, and we want those discussions to happen."
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