Funding for Port Botany expansion disappearing

Work is well advanced on the 60 ha reclamation which will provide five new berths stretching 1,850 metres and to a 16.5 metre draught.

But the global economic slowdown has caused a marked fall in cargo volumes moving through the port and that has meant the port corporation is earning less in shipping and wharfage revenue.

The project was predicated on continued growth in container throughput that was to have seen the new terminal come online about the time the existing facilities reached capacity.

New South Wales ports minister Joe Tripodi confirmed yesterday that with trade below expectation, the revenue needed for the expansion of the port was also below where it needed to be.

Sydney Ports considered increasing its charges to make up the difference, but had opted not to, Mr Tripodi said.

"Normally in these financial circumstances businesses would either slow up the investment spend or seek new sources of funds – and in the case of a port corporation, to look at an increase in wharfage," Mr Tripodi said.

Instead, the NSW Government will absorb the cost.

Mr Tripodi said the State Government had "authorised the suspension of dividends to be paid to the government over the next few years to allow retained earnings to be used in funding the company’s capex program".

Wharf fees will continue to be charged in line with the original plan outlined at the start of the project, limited only to biennial increases based on CPI.