Simple mathematics showed the NSW government's plan to privatise Port Kembla didn't add up, South Coast Labour Council secretary Arthur Rorris said yesterday.
Pointing out the government's planned $700 million investment to enlarge the port, Mr Rorris questioned why it would allow any prospective leaseholder to pay less than that amount for a 99-year lease.
"This is no longer about so-called voodoo economics that the treasurer and the minister accused the community of in relation to the sale," Mr Rorris said.
"This is actually about hard mathematics now.
"We're going to pump another $700 million of taxpayers' money to grow our port while at the same time flogging off the asset for only around $500 million.
"And that is sound business management? Is that the best management of public assets and public enterprises? There is a big question there for the government.
"The more we look into this proposal, the more we realise how ridiculous a proposition it is."
Mr Rorris described the port's expansion as "terrific" and said it would likely increase the $20-50 million the port generated annually.
"That's money that we say should be spent on the services we need, to upgrade our health system, our education system, the port itself, our local community and infrastructure and those things," he said.
"Why would you consciously go into a deal that you know is going to shortchange this region?"
Mr Rorris also raised the possibility that the port might never see the promised $700 million investment of taxpayers' money.
"If the government does proceed with this and privatise it, why would any future government invest public money into a private asset?" he said. "They will raise the issue that that's the responsibility of the private leaseholders. They would say that it's up to them because they get the profit.
"They get the profit, so the expectation would be for them to invest."
A spokesman for Treasurer Mike Baird said the government would, during the bidding for the lease of Port Kembla, "determine fair value through that process by valuing all profits over the length of the lease in today's dollar terms."
The spokesman added that the leaseholder would be required to continue the development of the port, which includes the financial costs.
"The long-term lease of Port Kembla will be conducted through a competitive bidding process," the spokesman said.
"Following the finalisation of the transaction, the new landlord will be required to take on the existing obligations and commitments of Port Kembla Port Corporation at the time of the transaction and one of the key criteria used to consider any long-term lease will be how a potential new landlord will invest in the future growth and development of the port.
"The landlord will also continue to earn financial returns on money it invests to expand the port, the spokesman said."
"Not only will releasing the value held in the port increase the NSW government's capacity to invest in priority infrastructure, the new landlord will take on the operating risk of the port."