Australian critical asset sales under scrutiny

Foreign private investors looking to bid for the likes of Ausgrid and Port of Melbourne will now have to apply for review by a dedicated board.

All strategic asset sales to foreign investors by Australian states will now have to be reviewed by a non-statutory body advising the Treasurer, according to the amended Foreign Acquisitions and Takeovers Regulation.

“While we welcome foreign investment in Australia, it is imperative that critical infrastructure sales are scrutinised to ensure any potential national security risks can be addressed,” Treasurer Scott Morrison said in a statement. 
Critical infrastructure assets now subject to formal review by the Foreign Investment Review Board (FIRB) include a wide range of transport sectors (airports, ports, public transport, railways and roads), some intermodal facilities, energy and water networks, sewerage systems, telecoms and nuclear facilities, according to the statement. 

The new measure, which takes effect on 31 March 2016, will apply to investments of more than A$250 million ($187 million; €168 million).

FIRB assessment of critical infrastructure was so far only required when assets were sold to state-owned enterprises. 
Concerns over foreign ownership had first been aroused by the award of a century-long lease for Port of Darwin to China’s Landbridge Group for A$506 million last October. 
Morrison, who declined to comment on the Port of Darwin sale at a press conference, said the new rule will be applied to the sales of Melbourne and Fremantle ports as well as the privatisation of the New South Wales electricity network. 
“Every country in the world has their own set of arrangements and it's up to every country to set those arrangements and investors and corporations and others are very familiar with this sovereignty that attaches to all of these arrangements,” commented Morrison, adding that he didn't think the new measure would deter foreign investors from taking part in privatisation processes.