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Friday, August 19, 2016, 18:30

Australian treasurer formally rejects Chinese grid bids

By Xinhua & Agencies

Australian treasurer formally rejects Chinese grid bids
Australian Treasurer Scott Morrison speaks to the media in Sydney on July 7, 2016. (PETER PARKS / AFP)
SYDNEY - Australian Treasurer Scott Morrison on Friday officially rejected bids by two Chinese companies in the A$10-billion (US$7.67-billion) sale of the country's biggest energy grid, Ausgrid, after they failed to overcome security concerns.

Last week, Morrison announced that neither State Grid Corp of China or Hong Kong's Cheung Kong Infrastructure Holdings, the preferred bidders, would be allowed to seal a deal.

Morrison said the decision was based on unspecified national interests.

"After due consideration of responses from bidders to my preliminary view of 11 August 2016, I have decided that the acquisition by foreign investors under the current proposed structure of the lease of 50.4 per cent of Ausgrid, the New South Wales electricity distribution network, would be contrary to the national interest," Morrison said in a statement.

"This is consistent with the recommendation from the Foreign Investment Review Board."

Morrison said on Friday that the privatization of Ausgrid remained central to a plan by the New South Wales state government to unlock capital for local infrastructure projects, but it was not immediately clear how and when it would proceed.

Ausgrid had been expected to fetch over 10 billion Australian dollars (US$7.6 billion) for New South Wales (NSW) state coffers to fund Australia's largest infrastructure renewal program through capital recycling from infrastructure privatisation.

"There are many bidders that are interested in this asset," NSW state Premier Mike Baird told reporters in Sydney on Friday, assuring the ambition has not been derailed.

The price-tag, however, will almost certainly be at a discount.

Baird said he respected Morrison's decision, adding national interest is paramount; however, he reiterated his frustration that "these issues should have been resolved much earlier."

"(But) obviously, we need to move forward," Baird said, confirming the bidding process will begin once again.

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