The NSW government will tip more than $1 billion into its infrastructure fund Restart NSW from the privatisation of the Port of Newcastle, leaving it with a potential $2 billion war chest before next year’s election. Premier Mike Baird and Treasurer Andrew Constance announced the 98-year lease of the port on Wednesday to Port of Newcastle Investments, a joint venture between Hastings Funds Management and China Merchants. The gross proceeds of the sale are $1.75 billion, of which $340 million will be spent on revitalisation of the Newcastle CBD, including a new light rail project. This is in addition to $120 million already set aside for the project from previous privatisations including the sale of Port Kembla, Port Botany, electricity generators and the desalination plant. After transaction costs and debt are repaid, about $1.2 billion will go into Restart NSW. Mr Baird said the government was “surprised by the final result” having initially estimated sale proceeds of about $700 million in last year’s budget. The sale price was 27 times earnings, which Mr Baird said exceeded the result for Port Botany and was “an amazing result”. The sale brings the total amount of funds in Restart NSW to more than $6 billion, however much of this has been allocated to projects. They include $1.8 billion towards the WestConnex motorway, $403 million for the Pacific Highway, $170 million for the Princes Highway, $135 million for Bridges for the Bush and $130 million for Resources for Regions and $100 million for the Illawarra infrastructure fund. A spokesman for Mr Constance said the Port of Newcastle sale meant there was more than $2 billion in unallocated funds in Restart NSW. He noted that under the legislation governing Restart NSW, projects may only be funded by the Treasurer on the recommendation of Infrastructure NSW. Mr Baird would not nominate specific projects the remainder of the money would fund, but indicated it would allow the government to “bring forward” some of its priority projects. These are likely to include a second Sydney harbour rail crossing. Nor would he be drawn on whether announcements would be made in the June 17 state budget. “There’s obviously more announcements to come, but the firepower of NSW just got stronger,” he said. Mr Constance said the sale was “an enormous vote of confidence on the part of business in what we’re doing as a government”. He said the Port of Newcastle is the world’s largest coal port, handling about 40 per cent of Australia’s coal exports. The NSW government will retain regulatory oversight of the Port of Newcastle and responsibility for maritime and safety and security functions. But opposition leader John Robertson said the announcement was an “insult” to the Hunter region, given just 20 per cent of the proceeds would be directed there. Shadow Treasurer Michael Daley accused Mr Baird of deliberately talking down the potential proceeds “to make himself look like a genius when it turned out to be worth more”.
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