A new cruise terminal and sharing Garden Island are among suggestions for fixing Sydney Harbour’s chronic lack of space to accommodate the burgeoning cruise industry.

Amid warnings that the city is missing out on as much as $65 million worth of jobs and business, the NSW State Government has called in former Liberal Leader Peter Collins, an officer in the naval reserve, to find a solution.

The problem: modern ships won’t go under the iconic Sydney Harbour Bridge to where the NSW government built a new $57 million cruise terminal at White Bay.

And while the Overseas Passenger Terminal has been upgraded at a further cost of $22 million, it still houses only one mega liner a day.

One way around the lack of capacity could be sharing the defence facility at Garden Island. But Royal Australian Navy chiefs are not showing any signs they want to help.

While cruise ships were once allowed to tie up at Garden Island, there hasn’t been a cruise vessel there since 2013, and an upgrade threatens to make it even more difficult.

It is hoped Mr Collins, as a senior naval reserve officer, could, will bring some key contacts and diplomatic leverage to the negotiations.

A new cruise ship industry reference group led by Mr Collins has been given three months to find a way to stop the city loosing out to other ports – and even other countries.

Singapore and Hong Kong both have modern terminals. Shanghai and Beijing also have new ports.

This growth should be great for Australia – the Opera House and bridge make it the first port of call for all foreign ships. But without new facilities, cruise operators like Royal Caribbean, Carnival and Norwegian say they can’t step up investment or homeported ships.

“The government is looking at all options but the most obvious one is a shared facility at Garden Island,” Mr Collins said on Friday, after the new moves broke in Sydney’s Daily Telegraph.

“It’s not a case of bumping the navy out at all.

“The government wants to keep every sailor ship and navy dollar in Sydney and at the same time enable the tourism industry to grow because it’s serious dollars.”

It won’t be easy. NSW Maritime Minister Melinda Pavey and her colleagues have been working on a report for years – with little sign of any progress.

The reference group will report in September.