Australia eyes A$100bn privatisation wave
Baku, February 13 (AZERTAC). Australian utility AGL Energy has agreed to buy the state-owned power company Macquarie Generation for A$1.5bn (US$1.4bn), in a deal that is expected to spark a A$100bn sale of government-owned assets.
The disposal by the New South Wales government comes after the ruling federal Liberal-National coalition encouraged cash-strapped states to sell assets to raise money to invest in new infrastructure.
The Abbott government is also considering the privatisation of some federally owned assets, including Medibank Private, a health insurer worth up to A$4bn.
“The sale [to AGL] will allow us to recycle the value of the asset on our balance sheet, which means more money for critical road, school and hospital projects across New South Wales,” said Mike Baird, state treasurer.
Three bidders - Australia`s AGL Energy and ERM Power, and Japan`s Marubeni Corp - submitted bids for Macquarie Generation. AGL Energy`s winning bid must still be cleared by Australia`s competition regulator, with a decision due in March.
Canberra wants to boost spending on infrastructure to stimulate its economy, which is cooling following a decade-long mining investment boom. Joe Hockey, Australian treasurer, is keeping a tight rein on public finances and has urged states to explore asset sales.
Infrastructure Australia, a state advisory body, has estimated that A$100bn in commercial infrastructure assets held by Australian governments could be transferred to the private sector relatively quickly. In a recent report, it pointed to the lease of Port Botany and Port Kembla, which raised A$4.3bn last year for the NSW government to spend on new projects.
The NSW government, which is leading the way on privatisations of state assets, said on Monday it had already begun sales processes for two additional energy assets - Green State power and Delta Electricity - which it owns. It is selling the Port of Newcastle, which may raise A$700m.
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