Treasurer Scott Morrison has formally ruled out Chinese companies obtaining a 50.4% share of Ausgrid, the NSW electricity distribution network.
In a statement late Friday, Morrison said that after considering the bidders' responses to his preliminary decision to block the purchase of the 99-year lease – when he cited national security concerns - he had decided the acquisition by foreign investors under the current proposed structure of the lease would be contrary to the national interest. His decision was consistent with what the Foreign Investment Review Board had recommended, he said.
“In making this decision, national interest concerns have been paramount. They relate to the transaction structure as currently proposed and the nature of the assets,” Morrison said.
The two competing bidders were State Grid, a Chinese state-owned enterprise, and Cheung Kong Infrastructure, which is owned by Hong Kong billionaire Li Ka-shing.
Morrison said the government had worked closely with NSW to make sure it was aware of the concerns. “We will continue to work closely with New South Wales to ensure that national security requirements are met under any future transaction process,” Morrison said.
Authors: Michelle Grattan, Professorial Fellow, University of Canberra