Deals

Morgan Stanley sails into NSW port advisory role

Morgan Stanley prevailed in a competitive bidding process for a potential 99-year lease of Port Botany, one of Australia’s busiest trade hubs. The lease could net the Australian state of New South Wales up to A$2.2bn.

-

As promised, New South Wales (NSW) treasurer Mike Baird and the state government have selected an advisor for a potential long-term lease of its second-largest port, Port Botany, before the year ended, with Morgan Stanley winning the coveted advisory mandate following a competitive bidding process.

To begin, Morgan Stanley will – alongside the state – perform a scoping study for the project. This includes an analysis of market conditions as well as gauging the availability of trade participants. The state is banking on using the up to A$2.2 billion (€1.7 billion; $2.2 billion) it expects to net from a potential 99-year lease of Port Botany to address pressing infrastructure needs in the region and secure the state's future position in international trade.

“First and foremost, the proposed transaction will release a significant amount of capital for those critical infrastructure projects that have been neglected by NSW Labour for so many years, including the Pacific Highway and Princes Highway,” noted Baird in a press release. “However, the long-term lease of Port Botany to the private sector also presents a huge opportunity to lift the overall productivity of our state.”

He added: “The combination of critical infrastructure upgrades and improved efficiencies under private management will enhance economic productivity. This will be particularly important to long-term trade growth and the future of our state’s economy, which is why the next scoping phase will be vital.”

NSW has an ambitious plan for the study, which Morgan Stanley will present to the state by the end of the second quarter of 2012. The state has a long-term port lease completion date of mid-2013 in its sights, and the proposal will reflect this vantage point. Port Botany is in the midst of a major expansion of its container port facilities.

Morgan Stanley ended up being the sole recipient of the advisory mandate, although an earlier Request for Information suggested that more than one advisor could have been named.