The Port of Melbourne investment will be part of GIP’s new Australian infrastructure fund. Across Australia, state-run asset sales are fetching higher-than-expected prices as yield-hungry fund managers search for recurring revenue from infrastructure businesses.
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The pricetag was well above expectations with the Victorian state government initially expecting Aus$6 billion for one of Australasia’s largest maritime hubs for containerised, automotive and general cargo.
State Treasurer Tim Pallas said the money was owed to Victorian taxpayers and must be spent on Victorian projects.
The story Labor secures .7b Port of Melbourne windfall, but claims federal funds fall short first appeared on The Age.
The decision comes just months after the government introduced tougher rules for the sale of major Australian state-owned infrastructure to private foreign investors following concerns over a 99-year lease for the Port of Darwin to China’s Landbridge Group.
The Port of Melbourne’s new owners expect the container port will eventually be fully automated as they prepare to invest in transport links and marketing the port to a broader range of customers.
While the state government will retain responsibility for the Harbour Master, Station Pier, relevant safety and environmental regulation, waterside emergency management and marine pollution response, Lonsdale will maintain access to public walkways and bike paths for community use.
The Wall Street Journal reports that the Australian infrastructure sector has been reaping the benefits of lower interest rates over the past three years, reducing the cost of the borrowing required to construct roads, ports and railways.
Ten per cent of the lease’s value, or around $970 million Australian, will be invested in regional and rural infrastructure projects, Andrews said.
The extra cash will give the government even more leeway to deliver future infrastructure, including big road projects such as the “missing link” connecting the Ring Road and Greensborough with EastLink.
“Now that an agreement has been reached on the long term lease of the Port, ALC encourages the State and Commonwealth Governments to prioritise infrastructure investment to the port to ensure it can meet its economic potential”, said Michael Kilgariff, ALC Managing Director. GIP owned a stake of nearly 27 per cent in the Port of Brisbane before selling it to Canadian pension fund Caisse de Depot et Placement du Quebec in 2013.
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“Leasing the port reinforces Victoria’s position as the freight and logistics capital of Australia”.
