PROJECTS

Privatization of the Port of Newcastle, Australia

The problem

The Government of New South Wales, Australia, announced its intention to privatize the Port of Newcastle, the world’s biggest coal port, through a 98-year lease. The Newcastle Port Consortium, comprising business people with strong local knowledge and commitment to the future of Newcastle, wanted to develop a growth strategy that would be beneficial to the Port and align with one of the bidders to help implement it. The Consortium firmly believed that it would matter who owned the Port and what they intended to do with it.

How we helped

Castalia helped the Consortium develop business cases for growth projects, including container and vehicle import terminals. We identified possible operators and led initial discussions with key customers. We proposed pricing and contracting strategies that would ensure competitiveness with other NSW ports. We helped the Consortium negotiate an alliance agreement with one of the bidders.

Impact

The bidder aligned with the Consortium did not succeed. The Port was sold for AUS$1.75 billion to a consortium made up of Hastings Funds Management and China Merchants. Port of Newcastle is currently implementing the key elements of the proposed growth strategy.