Updated December 11, 2018 16:01:10

Photo: The Port of Newcastle says it's ready to build a container terminal. (ABC News: Kim Honan)

Hundreds of thousands of trucks could be taken off Sydney's roads if a container terminal is built at the Port of Newcastle, according to a report released today.

But an O'Farrell-era privatisation deal means the terminal can not be built, according to the ACCC, which launched legal proceedings yesterday to scrap the cap on container traffic through the Port of Newcastle.

The report, commissioned by the Port of Newcastle, found a container terminal in Newcastle would cut up to 750,000 truck trips through Sydney in 2050 and save the state $4.5 billion in freight, pollution and associated infrastructure costs.

However, the port currently can not exceed a cap of 30,000 containers each year without having to pay compensation to NSW Ports, a private entity which owns Port Kembla and Port Botany.

The ACCC is alleging this cap in the 2013 privatisation deal drawn up by the O'Farrell government with NSW Ports is "anti-competitive and illegal".

"If a competing container terminal cannot be developed at the Port of Newcastle, NSW Ports will remain the only major supplier of port services for container cargo in NSW for 50 years", said ACCC chair Rod Sims.

"These anti-competitive decisions ultimately cost consumers."

The Port of Newcastle-commissioned report projected an economic boon to the Hunter region if the container terminal was constructed, with 4,600 new jobs in the Hunter and Northern NSW regions by 2050.

The report found $6 billion would also be added to the NSW Gross State Product (GSP) by cutting freight costs in half.

Port of Newcastle chairman Roy Green said once the cap was removed, they would "absolutely be ready to go" on the construction of the container terminal.

"We have a well-designed business plan, we have the investors and the infrastructure already in place," Mr Green said.

NSW Ports said it would vigorously fight the proceedings.

Premier Gladys Berejiklian, whose government is not a party to the legal action, defended the Baird-era agreement.

"We stand by those decisions," she said.

"Obviously the ACCC is doing their job and we are looking forward to the outcome."

A spokesperson for NSW Treasurer Dominic Perrottet reinforced this position.

"The Government's position in 2013 was, and remains, that no competition issue arises as a result of the arrangement which provided certainty to all parties involved."

Topics: business-economics-and-finance, government-and-politics, trade, road-transport, sea-transport, transport, newcastle-2300, nsw

First posted December 11, 2018 10:23:05