DP World close to new Port Botany lease

It is understood it could be finalised within a fortnight.

In an address to a Shipping Australia lunch in Sydney, NSW ports minister Joe Tripodi said Sydney Ports Corporation had agreed on terms for the lease.

The document now awaits final approval.

Past efforts to renew the stevedore's lease at the port had stalled at then-treasurer Michael Costa's desk in 2007, with the State Government's refusing to ratify the plan.

That had caused considerable frustration within DP World's ranks and prompted the stevedore to delay plans for up to $50m of capital investment at the port on the basis that it could not justify to its shareholders that they should fund investment in a terminal it may not have been operating within two years.

Subsequent cabinet reshuffles have since given Mr Tripodi responsibility for infrastructure, in addition to his existing ports title.

The infrastructure portfolio had previously been the responsibility of past treasurers Michael Egan and Mr Costa.

Mr Tripodi unveiled tough new reforms for Port Botany last year designed to give both DP World and Asciano's Patrick Terminals incentives to meet performance benchmarks and disincentives for not meeting the targets.

Those targets focus on landside performance, but that plan was packaged with an overhaul of the state's port lease arrangements which will see all new leases subject to new statutory powers given to the State Government under the Ports and Maritime Administration Act.

The new lease is understood to allow DP World to reduce the amount it pays to lease the site if it can meet performance benchmarks and provided it follows through on its commitments to invest in the port.

The lease terms will also reward the stevedore for helping the State Government reach its 40% on-rail target.

Mr Tripodi said the lease would include provisions for handing over the site at the end of the term.

He did not specify the length of the new lease.