An alliance of NSW councils has welcomed news that Parliament will debate legislation to remove the "handbrake" on Newcastle developing a freight terminal.
Regional Cities NSW chair and Tamworth mayor Russell Webb said on Wednesday that the alliance "believes that the Port of Newcastle should be developed as a priority port for regional NSW".
Premier Dominic Perrottet, addressing Parliament on Tuesday, defended the government's decision to bar Newcastle from developing a rival container terminal to Sydney when it privatised the state's three container ports almost 10 years ago.
The privatisation agreements include "commitment deeds" which penalise the Port of Newcastle consortium financially if it develops a large-scale container terminal before 2064.
Independent Lake Macquarie MP Greg Piper, fed up with inactivity from both major parties on the issue, plans to table a bill in Parliament on Thursday which seeks to scrap the financial penalties.
Mr Piper has the parliamentary support to suspend standing orders, which will allow him to table his bill and open the door for debate on the matter next week.
Mr Perrottet told Parliament the government's ports strategy was "designed to reduce the cost of moving containers for the industry, consumers and taxpayers", despite a Productivity Commission report finding last month that the opposite has occurred.
The commission found "privatisation processes in NSW have conferred protection on port lessees that are impeding economically efficient outcomes in the development of the state's ports system".
The Australian Competition and Consumer Commission says the port deals are "illegal and anti-competitive".
It lost a Federal Court challenge over the issue in 2021 and is awaiting the outcome of an appeal.
The state's peak farming body, NSW Farmers, told the Newcastle Herald in August that it was "hugely unlikely" Port Botany would "ever be as attractive or efficient as the Port of Newcastle" for agriculture exports.
Nevertheless, Mr Perrottet defended the government's strategy to fully develop Botany then Kembla before allowing a container terminal to be built in Newcastle.
In response to a question from Mr Piper about whether he would remove the Newcastle penalty, Mr Perrottet said the "asset recycling" of Botany, Kembla and Newcastle had allowed the government to make "significant investment" in the Hunter.
"The matter is before the courts and it would be inappropriate for me to prejudice that case," he said.
"I also note that the good member for Lake Macquarie has given notice to introduce a bill on this matter, which he has spoken to me personally about.
"Like all private members' bills, particularly those from the member for Lake Macquarie, the government will consider it carefully."
Mr Perrottet told the Newcastle Herald on Wednesday that he stood by his comments to the lower house.
Deputy Premier Paul Toole, some of whose Nationals MPs have expressed public support for scrapping the Newcastle penalty, met with port executives in Sydney on Wednesday.
Port of Newcastle chief executive Craig Carmody said Mr Toole had given the port representatives a "sympathetic" hearing.
"The Deputy Premier has an understanding of the impact the current restrictions have on regional NSW," he said.
"Port of Newcastle continues to encourage members of Parliament to support the bill put forward by Greg Piper and remove the handbrake on regional NSW."
Mr Toole told the Newcastle Herald after the meeting that the Nationals "know there's an appetite to build a container terminal at the Port of Newcastle and we are having productive discussions with the port to try and find a path forward".
"I'm yet to see the bill, but the government will consider it carefully," he said.
Business Hunter chief executive Bob Hawes said Mr Perrottet's comments in Parliament had "left the door slightly open".
"It will be relatively easy to demonstrate 'industry, consumers and taxpayers' are not getting the best deal and, based on the recent Productivity Commission report on our ports, we are paying a cost for inefficiencies," he said.
"The diversification and levelling of the playing field when it comes to container trade for the Port of Newcastle will provide NSW with a unique opportunity to address this."
Nationals MPs Dave Layzell and Adam Marshall have expressed public support for scrapping the commitment deeds and flagged they could cross the floor on the issue, but the junior Coalition partner has not publicly endorsed Mr Piper's bill.
Labor also remains uncommitted to the bill, despite the party's Hunter MPs long railing against the port deals.
Regional Cities NSW said Newcastle was the "strategic solution for regional NSW, particularly given the ongoing issues with congestion, reliability, access and interaction with the passenger rail network that continue to plague Port Botany's current capacity and Port Kembla's future capacity".
"The time to act on this issue is now. Investment in the Port of Newcastle offers a strategic opportunity to help coal communities transition to new industries, boost regional NSW's export capabilities and grow regional economies," Cr Webb said.
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