Daily Times

SYDNEY: Australia will block the sale of its largest electricity network to foreigners, the government said Friday, as two Chinese bids for the grid were rejected over national security concerns.

Canberra has become increasingly concerned about the purchase of Australian infrastructure and land by foreigners, and recently banned a sale by the country’s biggest private landowner to a Chinese-led consortium.

Treasurer Scott Morrison last week said in a preliminary decision that bids by China’s State Grid Corp and Hong Kong’s Cheung Kong Infrastructure Holdings for a 99-year lease on 50.4 percent of Ausgrid — the electricity grid of its most populous state of New South Wales — were “contrary to the national interest”.

Morrison confirmed the decision on Friday, saying he had “made an order under the Foreign Acquisitions and Takeovers Act prohibiting the proposed acquisition by foreign investors” of Ausgrid under the current proposed lease structure. “The acquisition by foreign investors under the current proposed structure… of the lease of 50.4 percent of Ausgrid… would be contrary to the national interest,” Morrison said in a statement. The lease of Ausgrid was estimated to raise more than US$7.6 billion for the New South Wales government to help fund new infrastructure investments in the state, which is home to the nation’s biggest city Sydney. Both Hong Kong billionaire Li Ka-shing’s Cheung Kong Infrastructure Holdings and State Grid Corp already have investments in numerous Australian state energy infrastructure.

Morrison’s announcement last week was slammed by Chinese state media, with the official Xinhua news agency calling the latest decision “absurd and almost comical”.

The decision came just months after the government introduced tougher rules for the sale of major Australian state-owned infrastructure to private foreign investors after concerns about a 99-year lease for the Port of Darwin to China’s Landbridge Group.

Canberra also recently knocked back the sale of the country’s biggest private landowner, cattle firm S. Kidman and Co., to a Chinese-led consortium, citing national interest. Australia’s decision to block grid sale to Chinese firms showed uncertainty in its investment environment and will seriously hurt the willingness of Chinese companies to invest in the country, China’s commerce ministry said on Friday. The decision will have a negative impact on the China-Australia trade relationship, and China hopes Australia will provide a fair and transparent environment for foreign investment, the commerce ministry said in a statement on its website.