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Rio Tinto says Newcastle ship bottleneck has forced it to cut production by 20 per cent; Minister says NSW government is responsible.

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Thursday 3 May 2007

Rio Tinto says Newcastle ship bottleneck has forced it to cut production by 20 per cent; Minister says NSW government is responsible


PETER CAVE: The mining industry says it has problems with Labor's industrial relations policy. But it also has problems with infrastructure around the nation. 


A leading coal exporter is today warning of more job losses in the New South Wales Hunter Valley because of the bottleneck off the port of Newcastle.  


On average, coal export ships have to queue for 28 days before they can be loaded, and there are around 70 ships waiting.  


The Federal Government maintains it's done its share of investment to improve the situation and that the New South Wales government must do more to ensure Australia's reputation as a major coal exporter isn't damaged. 


But the Federal Opposition says it's simply another example of a blame game and the Howard Government has had a decade to show leadership on the issue.  


Barney Porter reports. 


BARNEY PORTER: The latest criticisms of the Newcastle Port facilities have come from Rio Tinto's Coal and Allied Division, which says it's been forced to cut production by 20 per cent this year, because of the bottlenecks. 


It also says the current system of port allocation and planning in untenable. 


The Federal Transport Minister, Mark Vaile agrees. 


MARK VAILE: The reality is, is that there's a choke point at the port. There's a line up of ships and they've established this quota system, this queuing system, which is having a detrimental effect on the entire industry. 


BARNEY PORTER: Mr Vaile says there hasn't been enough investment by the New South Wales Government in the port of Waratah to keep up with the capacity produced in the Hunter Valley. 


MARK VAILE: John Anderson in 2004 negotiated to... for the Commonwealth to take responsibility for the coal line, the rail line, and we've been able to invest in it, but the New South Wales Government has not invested in the port facilities. 


BARNEY PORTER: Now, you've been in power for 10 years, surely the Federal Government must bear some ... more of the responsibility? 


MARK VAILE: Well, if the New South Wales Government had allowed any other entity to manage and run the port, it would have been run much for efficiently and some of the profits from the port would have been reinvested back into the port and coal loading equipment. 


We are spending $387 million on the coal line, the rail line from the Hunter Valley coalmines down to the point, to the port. We've already opened the Sandgate Flyover, which has increased the capacity of the rail line by 12 billion tonnes a year.  


BARNEY PORTER: However, the Shadow Treasurer Wayne Swan has dismissed the criticisms. 


WAYNE SWAN: Here we go again, the Federal Government playing the blame game. This Federal Government has been warned about capacity constraints, about the need for there to be national political leadership when it comes to infrastructure. 


We need to solve these problems, because at a time of prosperity, capacity constraints such as this are putting upward pressure on inflation, and upward pressure on interest rates, and inhibiting our trade performance precisely at the time when we're running a trade deficit. 


BARNEY PORTER: The government says it has pumped millions of dollars into some of the infrastructure, the rail lines into the port. 


WAYNE SWAN: Well, the Government may have put some money into rail lines in the port, but where's its vision for the future? Where's its plan?  


They're always patting themselves on the back for the benefits of the mining boom, but they're not really prepared to do the hard work and the hard long-term planning that's required if we're going to maintain and enhance prosperity well into the future in a lower inflationary environment. 


BARNEY PORTER: Don't you think the New South Wales Labor Government bears some responsibility though? 


WAYNE SWAN: Well, they may well bear some responsibility, but the responsibility of the Federal Government is for the national economy, and to stop playing the blame game. 


That's all we ever hear from Mark Vaile, Peter Costello and John Howard. What about a little bit of leadership? 


PETER CAVE: The Shadow Treasurer Wayne Swan, ending Barney Porter's report.