But it also found that terminal wouldn’t be needed for at least another 20 years, with Port Botany expected to be able to handle the state’s container traffic until at least 2040.

The report was commissioned by NSW Ports – the leaseholder of Port Kembla and Port Botany.

READ MORE: Government backs Port Kembla terminal

Not surprisingly, it favoured Kembla as the location of the second port over Newcastle, which is leased by a rival consortium. 

The Australian Competition and Consumer Commission is investigating provisions in the lease agreement that NSW Ports would get compensation if Newcastle opened a container terminal.

NSW Ports CEO Maria Calfas stated that keeping the status quo at Port Botany for the next two decades made sense.

“Port Botany is less than half full, is directly connected to dedicated freight rail, road and intermodal infrastructure and is supported by modern warehousing and logistics facilities in Sydney’s west and south west,” Ms Calfas said.

“The KPMG modelling shows Port Kembla is the obvious next choice for the state’s next container port, once Port Botany nears capacity.”

The KPMG report found Port Kembla’s “proximity to the population and employment growth areas” of greater western Sydney made it an attractive option for another terminal.

“Port Kembla enjoys better existing and planned transport connections to customers in Sydney’s southwest and west, which are known and substantially less costly than similar connections to the Hunter,” the report stated.

The report noted Port Kembla had two rail connections compared to the one at the Port of Newcastle and the road network in the Illawarra would offer a more direct route to Sydney, while the run from Newcastle included road routes that are heavy with traffic during the morning and evening peaks.