pretty sure that photo is a rendering, not a photo
As far as Port Kembla for the Navy, the outer harbour is quite large. If the Navy wants in, they better do their stuff soon, as there is a new development proposed.
There are two vacant areas, one to the west of the Grain terminal (inner harbour) , and a potentially much much larger one on the south side of the outer harbour
Its been a long time since I have been to the Port Kembla harbour. I remember the wharves on the South side, not really used much these days. That is where the new container port is proposed. Its been a long time (25 years) since I was at Garden Island, looking at google maps, GI is about 1km x 500m approx.
There is this space available in Port Kembla harbour, if the Navy acts soon. The steel works is still there (the south west corner) and not going anywhere. To the north in the inner harbour there is the grain handling terminal, there is a vacant 'future development area to the west of the grain terminal, but I think it is a fraction too small, not in terms of area, but in meters of wharf space.
There might be spare land south of Old Port Road and foreshore road There is some industry there, but that could be moved if even more space was wanted. This would allow for heaps of future expansion space if needed
a few images that give an idea of the space in the harbour. Plenty of space for many large ships, (all the fleet if need be) if the Navy goes faster than the container port. I dont think the container port work has started,,, just plans as yet, but once that is go, the only space left will be the smaller area to the west of the grain terminal
Trouble is that all this costs money,,, and that seems is short supply
There is an old miilitary reserve (now nature reserve) to the SE of the port. The secret squirrell mob could put there sensors and high tech stuff there.
Wollongong is a bit over an hour commute from Sydney, would allow people to work in Wollongong and keep their family in Sydney. One day they might smooth out those darn bends on the rail line between Helensberg and Coledale, and save a good 20 minutes on the train ride (need a long straight tunnel), very much worth doing IMHO (not cheap, but would be awesome for Wollongong)
a few images of the harbour to get an idea of what it looks like. So yes Port Kembla harbour is feasable, trouble is that I think the Navy has left it too late, even if they wanted to move (and thats a big if). I am not sure if the Navy wants to move, and they may not enjoy being relocated next to a yucky steel works.
some images of what the harbour looks like
http://www.rms.nsw.gov.au/images/maritime/property-planning/leasing/kembla-aerial-lg.gif
Outer Harbour development gets the go ahead : Port Kembla Port Corporation
https://cdn.fairfaxregional.com.au/storypad-fCYJja9iKCnEpjnTRSxRRL/port_kembla_harbour_expansion.jpg
http://transform.fairfaxregional.co...75bb61.jpg/r0_0_3862_2171_w1200_h678_fmax.jpg
the vacant area in the north inner harbour (proposed development), further away from the steel works, might be more pleasant, but wharf space would be limited to about four large ships (that aint enough?). I guess they could put in another wharf, allow 8 ships at any one time if need be
http://www.portstrategy.com/__data/assets/image/0010/189253/ps20060901_09.jpg