Australia’s treasurer has formally blocked Chinese bidders from leasing a Sydney electricity grid, saying the deal would not have been in the nation’s best interests. It is also a blow to the New South Wales state government, which has spent months negotiating the sale of Ausgrid and may not be able to command the same price tag now foreigners are blocked for taking a controlling stake.
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“Above all, there will be no delays to our infrastructure pipeline and the commitments we made to the people of NSW to transform this State”, Mr Baird and NSW Treasurer Gladys Berejiklian said in a joint statement.
The actions by Chinese companies were normal business activities in line with market principles, MOC spokesman Sun Jiwen said, adding that they had followed worldwide bidding procedures and cooperated in Australia’s security inspection.
Chinese Commerce Ministry spokesman Sun Jiwen said in a statement Friday the decision reflects the uncertainty of the investment environment in Australia.
The re-run of the Ausgrid tender opens the way for a local bidder, with Australia’s pension funds likely to play a role as a partner in any fresh offers.
The Treasurer said he had reviewed responses from the bidders, but said he did not believe the foreign investment should go ahead.
“Typically around the world the Chinese have been the highest payers”, said the investment manager, who declined to be identified.
“(But) obviously, we need to move forward”, Baird said, confirming the bidding process will begin once again. “This might open the door but it’s very early”.
A sale under the now proposed structure “would be contrary to the national interest”, Treasurer Scott Morrison said in his statement. He has previously cited “national security issues”, without elaborating.
This led for calls – such as from The National Farmers Federation – for a clear national interest test for foreign investors.
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“One example would be that rather than have a majority Chinese consortium buying the asset, you might have three or four different investors, some of whom are Australian, some of whom are Chinese”, Fitzgerald said.
