Australia blocks $10bln sale of Ausgrid to Chinese state owned companies

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The Australian government has made a preliminary ruling to block the potential sale of a 50.4 per cent stake in New South Wales network operator Ausgrid to a Chinese state owned consortium, citing national security issues.

The announcement was made by Treasurer Scott Morrison in relation to the proposed $10 billion lease of the majority stake in Ausgrid, a major plank of the NSW government’s privatisation plan.

“When we assess these applications – and I stress we do this on every case, case by case, and we pursue the national security issues to the nth degree as I said on the weekend, and that’s what we’ve done,” Morrison told reporters.

“That process has not enabled us to identify suitable mitigations to protect against the national security issues in this case. And that, at the end of the day, is paramount.”

Ausgrid supplies power to parts of Sydney, Wollongong and the Hunter region.

NW Treasurer Gladys Berekjiklian expressed surprise at the move, saying that the federal government had raised no concerns when potential bidders were identified earlier in the sales process.

She said it was an asset that had attracted a lot of interest. “There is a lot of interest out there … the proceeds of this sale will be banked in the next budget.”

Morrison said foreign investment was welcome in Australia, and promised the government would “actively engage” with the rest of the world, “ because foreign investment capital is important to Australian jobs”.

He has given the parties until August 18 to produce arguments against his preliminary decision.

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