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New South Wales Completes Ports' Privatization

by Mary Swire, Tax-News.com, Hong Kong

18 April 2013


The NSW Ports consortium, led by Industry Funds Management and including three Australian superannuation funds AustralianSuper, Cbus as well as HOSTPLUS, HESTA, and Tawreed Investments Limited, a wholly-owned subsidiary of the Abu Dhabi Investment Authority, has been named by the Government of New South Wales (NSW) as the successful bidder for the 99-year leases of Port Botany and Port Kembla with a bid worth AUD5.07bn (USD5.3bn).

Chief Executive Officer of the Industry Funds Management Brett Himbury said the transaction would benefit the Australian economy and the people of NSW, while having a positive impact on the retirement savings of millions of Australians. "It is a great outcome for the people of NSW and we commend the government for achieving this result. Globally, it sets a strong precedent for using private investment to grow essential public infrastructure. Australia continues to be a leader in global infrastructure management and this is a good model for governments."

"With over 80% ownership by Australian industry superannuation funds, the investment will benefit the superannuation savings of an estimated five million Australians - including more than 1.5 million in NSW."

NSW Treasurer Mike Baird explained that the divestment of the ports would prop up the province's finances: "The financial challenges facing NSW are clear, given the decision by Standard & Poor's to change our triple-A credit rating outlook to negative. We inherited AUD55bn of net debt, a AUD30bn infrastructure backlog, and before the last Budget, NSW lost AUD5.2bn in GST revenue."

Under the agreement, port workers that have been kept on by the consortium will receive a two-year employment guarantee, a transfer payment of up to 30 weeks' pay, continuation of current superannuation arrangements, transfer of all sick leave and the ability to transfer or cash out annual and long service leave. "Remaining Sydney Ports Corporation and Port Kembla Port Corporation employees will continue to manage and administer those important maritime functions which will remain with the State," Baird confirmed.

TAGS: marine | Australia

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