The sale of the New South Wales government asset required approval from the country’s Treasurer Scott Morrison who is part of a new parliament that appears hostile to the sale of sensitive infrastructure to foreign entities.
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‘And we have been unable to identify mitigations which we would believe would be suitable, ‘ Mr Morrison told reporters in Brisbane.
It was now up to the bidders to respond.
Speaking shortly after Mr Morrison’s announcement, Ms Berejiklian said the government would “remain well on track to deliver our promise to transform the state”.
“When it comes to foreign investment, particularly in an asset such as this, the national security issues are paramount”, he said.
“I have invited the bidders to make submissions to me by 18 August 2016 in order to make a final decision after that time”, he said.
Morrison declined to detail the security issues raised by the deal.
“We will continue to actively engage with the rest of the world, because foreign investment capital is important to Australian jobs”, he said.
The government was considering leasing a 50.4 per cent stake into Ausgrid, NSW’s state-owned enterprise, on a 99-year contract.
State Grid is China’s dominant power distributor while Cheung Kong Infrastructure (CKI) is controlled by billionaire tycoon Li Ka-Shing.
But an alternative non-Chinese bidder ended up winning the auction in December, sparing Mr Morrison a decision similar to the one over Ausgrid.
“When we assess these applications – and I stress we do this on every case, case by case, we pursue the national security issues to the nth degree, and that’s what we’ve done”.
“The issues of Australia’s national security are only disclosed to those who are in a position to be cleared for that goal”. Australia’s national security is Australia’s business, and it will always be Australia’s business. “That does not mean breaching that national security with others who obviously wouldn’t have an expectation, let alone an entitlement, to be accessing that sort of information”.
He has recently added emphasis to the national security aspects of that decision-making process by appointing a former spy agency chief and former defense consultant to that board.
Against the background of mounting public debate about the extent of Chinese ownership of utility assets and land, Morrison said his preliminary view was that the “foreign investment proposals put to me for this transaction are contrary to the national interest on the grounds of national security”.
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