Port of Newcastle chief executive Craig Carmody says Treasurer Matt Kean's decision to appoint the state's independent pricing tribunal to decide how much compensation the port operator must pay for building a container terminal will provide a "fair outcome".
Mr Kean told a media conference in Newcastle on Wednesday that the process of determining the value of the compensation was "well under way".
"Those provisions are about getting a fair deal for taxpayers but also giving certainty to the Port of Newcastle and the broader Hunter community ... so they can get on with the job of building their container terminal," he said.
The Newcastle Herald reported on Wednesday that the Independent Pricing and Regulatory Tribunal would determine the compensation level over the next six months after Parliament passed legislation in November which opened the door to removing controversial penalties on Newcastle competing for container traffic against the privatised Botany and Kembla ports.
Mr Carmody said the decision to appoint IPART was an "elegant solution".
"I must admit when the legislation was passed I thought it would be some sort of eminent person and there'd be a whole thing about is that person suitable and are they qualified," he said.
"IPART is truly independent and they do this sort of stuff with electricity and tolls and whatnot.
"We believe this will be a fair outcome."
The legislation, tabled by Lake Macquarie MP Greg Piper, requires an independent reviewer to determine what Port of Newcastle would have paid for its 98-year port lease had the penalty provisions not been in place.
Mr Carmody said IPART's involvement would make it harder for the port or the government to challenge the assessment in court.
Labor has floated a possible compensation figure of $733 million, and Mr Carmody has told the Newcastle Herald that a contract top-up figure of $1 billion, on top of the $1.75 billion Port of Newcastle paid in 2014, would render the container project unviable.
"Hopefully in six months we get the number from IPART and get cracking on delivering," he said.
"The number will be the number. That does mean that whatever the number is it's going to be a lot harder for us to be unhappy with. Same with the state.
"From an investor point of view this is the most certain process we could have hoped for."
Anyone trying to speculate publicly about a compensation figure "probably aren't doing the right thing".
"Let the people who actually know what they're doing decide that," he said.
Mr Kean said IPART was the "right body" to achieve "the right balance" between the interests of taxpayers and the port operators.
The government is liable for compensating Botany and Kembla private operator NSW Ports if a Newcastle freight terminal handles containers above a set cap.
NSW Farmers acting president Rebecca Reardon said on Wednesday that IPART's appointment was welcome news for Newcastle and rural producers looking to cut freight costs.
"At present, farmers in the north-west have their produce trucked past Newcastle to Port Botany, which is wildly inefficient and results not only in extra wear and tear on our country roads but more strain on an already-congested Sydney road network," she said.
To see more stories and read today's paper download the Newcastle Herald news app here.
