Treasurer Scott Morrison has rejected bids from China's State Grid and Hong Kong-listed Cheung Kong Infrastructure for a lease on over half of Ausgrid on national-security concerns.
He says Ausgrid provides critical power and communications services and, at this stage, no suitable mitigations have been identified that would address the risks.
Finance Minister Mathias Cormann has told Sky News the Treasurer has undertaken a thorough process, under foreign-investment guidelines, in reviewing the Chinese bid.
He says there has been extensive consultation with the New South Wales Government and appropriate information has been given to the bidders.
Mr Cormann says those bidders now have a week to state their cases before Scott Morrison makes his final decision.
"The important point here is this has got nothing to do with the country of origin of the proponents. I mean, whatever country of origin these particular foreign-investment proposals would have come from, the reality is that Ausgrid is a key power and communications piece of infrastructure providing important and essential services to business and to government."
Former foreign minister Bob Carr, now director of the Australia China Relations Institute at the University of Technology in Sydney, has told the ABC the announcement is puzzling.
"The same company, the same state-owned company, was able to buy electricity-distribution assets in Victoria and South Australia. The other puzzling thing is that, only last year, the same state-owned company, State Grid, was ticked off by the Foreign Investment Review Board to make a bid for another New South Wales electricity-distribution business -- and one that had more telecommunications content than the one they've just been excluded from."
Mr Carr went on to suggest the decision reflects rising anti-Chinese sentiment in Australia.
"It would appear to be that this is a reaction to that elevation of xenophobic and economic populist sentiment stirred up by the last federal-election result."
That is something Mathias Cormann flatly rejects.
"Bob Carr is ignorant of the facts. He's wrong. And he should know better than make such ridiculous statements, quite frankly."
Government frontbencher Christopher Pyne has told the Nine Network the decision has nothing to do with politics.
"Quite frankly, if the Government made the opposite decision, Bill Shorten would have been out in the media instantaneously, saying that we weren't taking into account national security, national interests, in the sale of Ausgrid. Labor wants to have its cake and eat it, too."
But Opposition infrastructure spokesman Anthony Albanese is questioning what he depicts as the Government's inconsistency.
"Perhaps most significantly is that the Government sat on its hands when, last year, Chinese interests were able to buy Darwin Port. Now if you think about a strategic national asset that's related to national security, I can't think of one more significant than Darwin Port."
It is a major setback to the New South Wales Liberal Government in its bid to secure around $10 billion in infrastructure funding.
Premier Mike Baird says he respects the announcement and says the move will not affect plans to deliver new schools, hospitals and other infrastructure.
South Australian senator Nick Xenophon says the issue highlights the urgent need for an overhaul of foreign-investment rules that are more transparent.
And he says national-interest tests to be set out more clearly.
The bidders now have until August the 18th to make submissions to the government.
Share
