Quay lease tender ads written: court

The NSW Maritime Authority was determined to have Circular Quay leases, including two owned by Eddie Obeid's family, put out to tender as soon as they expired in August 2005, a court has heard.

But the authority's plan was delayed by a proposed overhaul of all leases in the waterfront precinct, and ultimately never transpired.

Obeid, a former NSW Labor MP, is standing trial at the NSW Supreme Court after pleading not guilty to wilful misconduct in public office.

It's alleged that between August and November 2007, while serving as an upper house MP, Obeid lobbied a senior bureaucrat to secure a "favourable outcome" over the Circular Quay leases without divulging that two of the businesses belonged to his family.

The crown has argued his actions were a grave breach of duty as a parliamentarian which warrant criminal punishment.

The 72-year-old's lawyers have instead argued he did nothing more than organise a meeting between an official and a mediator representing a number of Circular Quay tenants involved in a protracted dispute.

Former Maritime Authority chief executive Christopher Oxenbould took the witness box on Thursday, telling the court it was always made clear the leases were five-year agreements with no option of renewal.

Mr Oxenbould said despite strong and sustained opposition from existing leaseholders, expression of interest advertisements for the leases were ready to go to print in early 2005.

He said the authority had no interest in negotiating new agreements directly with existing tenants, nor any inclination to grant them the "last right of refusal" once the leases were put out to tender.

He said the only thing stopping him placing the EOI ads in the paper was a final tick of approval from then-NSW ports minister Phillip Costa.

"The ads were ready to go. They were booked. We were deferring the ads on a week-to-week basis," Mr Oxenbould told the court.

However, the final clearance sought from the minister never came.

The court heard Mr Costa was bothered by a perceived inconsistent approach to Circular Quay leases, with four agencies involved in separate pockets of the area.

The minister indicated he wanted all leases brought under the same umbrella, and set aside six months for a large-scale review.

A pause was placed on dealing with the Circular Quay leases in question while the overhaul was mapped out.

But days later, a major cabinet reshuffle took place, and the ports portfolio changed hands.

The proposal to harmonise the leases fell by the wayside, and the Circular Quay tenants were given month-to-month "handover" leases once their agreements expired.

The court has heard the businesses were eventually granted new leases in 2008, but the accused's son Damian Obeid has said the terms were "very harsh".

The trial continues on Friday.