The Australian federal and state governments are embarking on
major asset privatisation programs, with the first assets about to
hit the market. The privatisation programs are being boosted by
federal government incentives to state governments, which recycle
the proceeds into infrastructure under an Asset Recycling
Initiative, as well as the infrastructure needs of a growing
Many offshore operators and financiers are involved in exploring
the opportunities, given the recent drop in value of the Australian
dollar and the relative stability and growth prospects for the
State Government Asset Privatisations
On June 4, 2015, the New South Wales Parliament passed
legislation to authorise the privatisation of its statewide
electricity transmission network and two electricity distribution
networks in Sydney. The total value of these assets is expected to
be in the range of A$13 billion. Bidding and financing consortia
are currently forming in anticipation of the sales kicking off in
the next few months, with interest from Australian funds as well as
US, Asian and European industry players and sovereign wealth
The Victorian government has just announced the privatisation of
the Port of Melbourne, with media reports indicating price
expectations of A$5 billion for a long-term lease. Legislation has
recently been passed by the Northern Territory Parliament that will
lead to the sale of the Port of Darwin in Northern Australia. The
Western Australian government has also announced the privatisation
of two separate ports.
Federal Government Asset Privatisations Under
In 2014, the National Commission of Audit identified a number of
federal government assets that may be suitable for privatisation.
These included assets in the energy, transport, health, defence,
communications, government services and postal sectors.
At present, four federal government businesses are the subject
of scoping studies (hearing services, corporate registry,
government communications network and government property). Upon
completion of these studies, decisions will be made on whether they
will be privatised.
It is anticipated that a number of additional assets will also
be considered for privatisation in the medium term.
Federal Infrastructure Growth Package
The federal government intends to recycle the proceeds of
privatisation into other specific infrastructure projects by the
use of tax and other incentives for the states and industry. In its
recent 2015–16 budget, it has also confirmed significant
infrastructure spending in the period leading up to 2020,
A Western Sydney Infrastructure Plan, which will include design
and construction of the A$2.4 billion Second Sydney International
A A$5 billion Northern Australia Infrastructure Facility
comprising grants and loans (in partnership with state governments)
for the construction of ports, pipelines, electricity and water
infrastructure to open up Australia's undeveloped northern
frontier for business, particularly with other countries in the
Metropolitan road projects (including tunnels) and interstate
highways with an estimated cost of A$50 billion to 2020;
Metropolitan rail transit projects and interstate rail projects
with an expected cost of A$20 billion to A$30 billion;
Major new hospital construction and redevelopment projects with
an expected cost of A$3 billion to A$5 billion; and
Social and defence infrastructure projects with an expected cost
of A$2 billion to A$5 billion.
A number of these projects are expected to be undertaken as
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