The Botany Club – Bad Bad Monopoly & How to Beat Them


The privatised NSW Ports are the monopoly provider of container services in Sydney, and in 2015 and since promised the same Botany railing target as Wran in 1981 and Turnbull in the 2018 Budget, namely 40% railed.  It is part of a monopolistic chain that includes the Moorebank intermodal terminal (IMT) and the mute Port Kembla.

Turnbull and his allies in NSW, especially Mike Baird and Gladys Berejiklian, sterilised Ports Kembla and Newcastle and undermined the economics of Inland Rail, the “Hail Mary” infrastructure solution, in protecting the monopoly.

Ports Australia put it recently, that Berejiklian’s (and NSW Ports’) approach “lacks clarity and is likely to raise ambiguity among the community and uncertainty for businesses looking to invest … it does not translate to meaningful actions for the future of this State and its ports network”.

iA’s Calfas Panel report proposed a strengthening of the monopoly – what else could its chair, the Botany CEO, have said!  When truck congestion, rail capacity shortfalls and community views are considered, that 2035 looks typically optimistic.  DIRD is as reclusive as are industry bodies in rejecting outside expertise.

The Ports’ Masterplan estimated Botany’s maximum containerised throughput to be at least 7.2 million TEU a year, with 35.7% railed after 2045, not 40%  (56 trains a day compared with 16 in 2015).  By that time they estimate up to 6,900 truck movements a day at Botany compared with 3,900 in 2015.  (Given rail deficiencies, that is an under-estimate.)

The publication of the international economists’ report in 2016 meant that the Ports’ estimate of rail capacity is 58.7% higher than calculated reality.  That first econometrical study found that rail duplication would not put even one extra train on the tracks, such is the inefficiency of the Botany chain.  ARTC misled Turnbull into believing that the $400 million in the 2018 Budget would do much more.

The industry is at sixes-and-sevens, see these submissions to Berejiklian’s abortive process:

Submissions summary table matrix

Note how the monopoly has proceeded recently and how to beat it:

  1. The Calfas Panel failed to develop a credible framework for meeting genuine critical issues, most especially a recently fractured Federal stratum to – unbelievably – replicate a long-festering NSW “planning stench” (Premier O’Farrell). It did not present a professional SWOT and also misunderstood the nature of “critical issues” and “scenario planning”, so the methodological and empirical gaps are fatal.  It proposed
    1. Relaxing competition laws thus reinforcing Botany’s and Moorebank’s holds
    2. Implementing “social licenses” but proposing specific elements inconsistent with that – all iNSW says about freight is to “overcome local obstacles” etc
    3. As-of-right access by the largest trucks to all roads and extended operating hours at airports and the like
    4. A raft of reforms in governmental processes and procedures but without awareness of systemic failures as reflected in Terry Moran’s and like opinions that the standard of governmental decision-making is at its lowest point and cannot be trusted.
  2. That a Botany clique is setting rules over competing cities and ports is absurd and wrong.
  3. The Turnbull Government took PM Abbott’s “belt and braces” approach to the Badgerys Second Airport to the next level, with a “$7 billion” commitment to rail, a massive employment centre at the Aerotropolis including air freight hub, and miscellaneous economic stimuli. The result of the City Deal is that all bets are off – the outcomes are worse than even the most cynical observer could anticipate.  The incompetence is breathtaking.
  4. Not one agency has done the analysis that is required to re-plan Sydney’s thin port capacities to cover an end-demand some three times the total of their potentials. The two-thirds will be coming from Parkes.  A world-class IMT operation is needed in or near Eastern Creek (as proposed in my 2012 Thinking Logical Logistics ll).  The economics of Inland Rail require full integration across cities and regions – it faces enough trouble ‘n’ strife without having Kembla and Newcastle sterilised.
  5. There are no countervailing or self-correcting forces:
    1. Wollongong and Newcastle City Councils have recused themselves
    2. Industry lobbies make sense occasionally but campaign quietly
    3. The Business Chamber’s network has the WS chapter cannibalising the Hunter and Illawarra siblings, with none realising the destructive effects of quite sloppy work – both satellites relying on impractical and ineffective legacy rail links (a mythical outer orbital including 10+ km tunnel has been floated by TfNSW as with the equally mythical long western rail by-pass of Sydney) in pretending they can compete against Botany.
  6. No governmental or industry body has conducted the basic empirical and analytical work to test the limits to Port Botany’s hegemony. None have thought through the implications of broken trucking promises for Kembla and Botany.  The industry expects the community to give obeisance but industry boards are out of touch with the true base for “social contracts”.
  7. The competition impediments are both structural and “policy”: Port Kembla can be split off from Botany as NSW Ports is failing Port Kembla and the “owners” deserve a discount, while the Baird super-tax and Calfas anti-competitive policies can be squashed by government actions.  (Any compensation to Botany would sit on Baird’s tombstone.)  Given the duopolistic situation, and the known benefits to come from efficiency improvements, it is more important to implement competition in ports than in most other products.
  8. I have done detailed capacity and productivity projections and a social impact matrix – all for the first time – in order to give a boundary to the social contract and say that Botany must overspill by 2022 if truck numbers are not to explode beyond all acceptable limits: at 2025 the level 1of trucking will be almost double the 2015 level and politically explosive.  At 2030 it’s 3 times or 5,600 trucks day – 300 per hour outside of peaks Vs 85 now.
  9. The only possible remedy that is likely to succeed in changing directions in a sensible “social contract” manner is a levy of $5,000 per truck movement (c 2 TEU) in excess of 2015 levels from 2020, to be paid 75:25 by TfNSW and Ministerial offices. The levy would rise to  $10,000 per truck from 2022.  No imposts would be put on truckers.    The spirit is the provision for surcharging miscreant decision-makers under the Local Government Act.

The final betrayal is the ACCC’s.  It is investigating Baird’s secret levy that penalises Newcastle and rewards Botany, on the basis that Newcastle had “developed a concept”.  No, Newcastle had not (see

ACCC has refused to use the profound structural monopoly as a case study of how competition laws are failing in Australia.

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