Australia’s second-largest port up for sale

The government of New South Wales has announced the 99-year lease of Sydney’s Port Botany in a bid to net around $2bn to help fund other infrastructure projects. A $2bn desalination plant in Sydney will also be privatised, with expressions of interest expected later this year.

The government of New South Wales (NSW), Australia’s most populous state, announced today that it will lease the country’s second-largest port – Port Botany – to raise money to fund other infrastructure projects across the state.

Port Botany will be privatised under a 99-year lease and is expected to net the NSW government “somewhere between A$1.8 billion (€1.35 billion; $1.89 billion) and A$2.2 billion,” state treasurer Mike Baird told reporters following the presentation of NSW’s budget for 2011-2012. However, the tender process is only expected to commence on October 2012, finishing in mid-2013, the government said.

“The Port Botany assets include three container terminals with six container vessel berths, increasing to 11 berths upon completion of the Terminal 3 expansion project in 2012, and a bulk liquids berth,” Baird said, adding: “The recent A$2.1 billion transaction of a 99-year lease to operate the Port of Brisbane demonstrated strong private sector interest in operating port facilities and the value that can be realised for taxpayers.”

Last November, a consortium including Global Infrastructure Partners, Industry Funds Management, Queensland Investment Corporation and a subsidiary of the Abu Dhabi Investment Authority won the A$2.1 billion, 99-year lease for the Port of Brisbane.

The NSW budget presentation also contained an update on the upcoming privatisation of the A$2 billion Sydney Desalination Plant, operated by state-backed Sydney Water. Baird said he expected expressions of interest for the deal later this year, with the transaction to be completed by mid-2012. KPMG, Mallesons Stephan Jaques, and Goldman Sachs are advising the government on the sale.

Proceeds from the asset sales “will be invested in Restart NSW – the fund established by the NSW government to deliver vital infrastructure projects,” Baird explained.