Terminal 4: Submission to Planning and Assessment Commission

by Rod Campbell

The Australia Institute (TAI) gave evidence to the NSW Planning and Assessment Commission on the Terminal 4 project. The proposal is to expand the capacity of the coal terminal at the Newcastle Port managed by Port Waratah Coal Services (PWCS). TAI was asked to provide an expert report on the economic assessment of the project by the Environmental Defenders Office NSW (EDO NSW) acting on behalf of the Hunter Community Environment Centre (HCEC).

Key points:

  • Under PWCS’ own forecasts there is no need for the extra capacity that is being applied for. The PWCS Annual Capacity Assessments for 2010 to 2013 were obtained by HCEC under the Government Information Public Access (GIPA) Act and show that the company is forecasting demand for throughput at the terminal at levels below their current 145 million tonne capacity.
  • PWCS forecasts obtained under GIPA are consistent with other analysts’ price forecasts, but are different to the forecasts used in economic assessments submitted to the Department of Planning, which form the basis of the Environmental Impact Statement (EIS) of the project.
  • The EIS forecasts are flawed as they ignore the economic reality that the amount of coal shipped through Newcastle will be limited by the price world buyers are prepared to pay for it and will not grow as a portion of world demand.
  • As it is unlikely the T4 capacity will ever be required, the project will not bring economic benefit to NSW.
  • Even if the project were required, the external costs related to expansion of the coal industry relating to dust, health and environmental impacts could well outweigh the extra royalty revenue.

Full report