



Queensland port sales 'not as valuable as NSW'


Tony Moore

Ports play a significant role in the state government's asset sale agenda.

Ports play a significant role in the state government's asset sale agenda. Photo: Glenn Hunt

Australia's leading pro-infrastructure body says the Queensland Government will receive more for the long-term leases of port assets than the Newman Government is estimating.

The Queensland Government conservatively estimates it could receive $1.68 billion for offering a long-term lease for both Gladstone Ports Corporation and the Port of Townsville Limited.

Infrastructure Partnerships Australia chief executive Brendan Lyon believed the government's estimates for the ports at Gladstone and Townsville were conservative.

IPA estimates between $2.8 billion and $3 billion could be received for offering a long-term lease for the Port of Gladstone and are still assessing the mix of rail and coal facilities to estimate a value for Townsville's Port and the Mt Isa rail line.

"Certainly in terms of Gladstone we would expect a higher level of price (than what the government estimates) given the level of interest in Australian seaports at the point in time," he said.

In 2010 Anna Bligh's Labor Government received $2.3 billion for the 99-year lease of the Port of Brisbane and $603 million for Forestry Plantations Queensland.

Mr Lyon said IPA believed interest in Queensland's ports would not be as high as in New South Wales.

"It is not exactly the same as the New South Wales ports that have gone out for sale, or the Port of Brisbane," he said.

"But still we would expect a more optimistic price than has gone into the Strong Choices campaign assumptions."  

The News South Wales government received $5.07 billion for a 99-year lease of Port Kembla and Port Botany, of which $2 billion was returned to road projects.

Mr Lyon disputed that private industry interest in Australian ports could be satisfied with the sale of New South Wales ports and the assets would not raise sufficient funds.

"No, quite the reverse," he said.

"What we are seeing is a bunch of very well-credentialled and strong consortia made up of cornerstone Australian super funds, but also significant offshore pension and sovereign wealth companies showing interest," he said.

"Those consortia are here because there is a long pipeline of port assets coming up.

"They are in the market to bid specifically for these sorts of assets."  

Strong Choices indicates $28 billion could be raised from selling off the electricity generators, Stanwell and CS Energy.

Mr Lyon said it was very difficult to gauge the level of interest in the electricity generators, CS Energy and Stanwell because their value was decreasing.

"There will be a level of interest in the electricity generators - they are valuable assets - but they are worth substantially less than they were 15 years ago, 10 years ago, even five years ago," he said.

However Mr Lyon said the electricity networks - Powerlink , Energex and Ergon - were "highly valuable" assets.

He argued that the fact Queenslanders were paying high electricity prices demonstrated the public sector ownership of these resources was out-moded.

"We are paying more than we should for electricity and that has damaged the Queensland economy."

Queensland Electrical Trades Union says the government's plans to sell electricity generators and networks were a bombshell to staff worried about their jobs.

The union fears private sector firms will cut jobs to make the businesses profitable, raising problems with safety and maintenance backlogs.

"This budget and its lazy asset sales agenda will see private companies controlling 49% of Queensland's electricity distribution poles and wires network," state organiser Stuart Trail said.

"This lays bare the government's lies and deceit for the last two years," he said.

"The poles and wires bombshell and the wholesale privatisation of generators CS and Stanwell will put the state's public electricity industry at risk, leaving many thousands of workers and regional towns facing uncertain economic futures."

Mr Trail said it was the government's responsibility to fix the rising cost of living, which they promised when they were elected.

"They said they would fix it," he said.

"Jobs are going faster than Nicholls' excuses and cost of living is skyrocketing highlighted by the massive 36% increase in power prices since last July."

10 comments so far

  • What we need is a "state of origin" style port sell off where the winner takes the lowest price possible. I feel like a proud Queenslander just thinking about it.

    Lord Derp of Derp
    Date and time
    June 04, 2014, 7:03AM
    • Just sell em off cheap so LNP mates can get a bargain and make huge profits . JUST VOTE THIS MOB OUT

      Date and time
      June 04, 2014, 7:12AM
      • Not surprised that the Newman Government has again underestimated the value of OUR assets.

        Recently heard that the old Supreme Court site was sold for $63m when the government's own valuers said it was worth $155m.

        The same applies to the DIstance Education site in West End sold to developers for half to a third its real value by putting it up as a fire sale rather than the normal process of making the sale subject to Council approval.

        If we have to sell the family silver why is this government giving it away?

        Date and time
        June 04, 2014, 7:33AM
        • Lease cost = approx $23 million a year
          Dividend paid last year $54 million
          wish I had a spare 2.3 billion

          Date and time
          June 04, 2014, 9:03AM
          • Well yes the present point in time it is an excellent investment, but will it be so in 30, 50, 80 years?

            Newcastle just went for 1.7 billion and the traffic in and out at the moment seems pretty good. Plenty of coal coming down the railway, an apparently inexhaustible supply of coal in the Valley and beyond.

            Now, I'm not pretending to have an insight into the future, but, in the event that an efficient renewable or alternative power source is developed, well Newcastle Port (and I suspect Gladstone) will end up a big lemon for the investors. From what I see come in and out of Newcastle, 80% at least would have to be coal carriers.

            Without the coal, those ports would be lucky to pull 200 mil

            Taree Sth
            Date and time
            June 04, 2014, 10:24AM
        • Here's how it will work: Whoever buys it will negotiate the contract so that if they end up getting it cheap, they get to laugh all the way to the bank all by themselves. But if they end up paying to much, in their eyes of course, they will be able to call on the government to compensate them somehow. Privatised profits and nationalised losses.

          Date and time
          June 04, 2014, 10:10AM
          • Absolutely Antoniolino, the public will end up subsidising any fall in promised profits. That's the way this rip-off works.

            Date and time
            June 04, 2014, 11:41AM
        • Ahh short term Newman - short term in thinking - short term in office. Visionary leaders think in 20, 50 and 100 year horizons not 1-2 years. Certainly an injection of cash in year 1 looks good on the books but no residual cash in year 2 or beyond. When will these LNP fools realise that government is not a business and should not be operated as such. I sometimes think the LNP in state and federal governments, think that running a government for a term is like trying to a flip a business rather than providing a service. Buy cheap, 'manipulate the books' by sacking workers and adding cash flow by selling assets, and then sell high. It would be a fantastic strategy if it was a business because the risk of not having a functional business goes to the next owner. However government is enduring so it is just the next set of elected officials that have to make the services functional again. Usually the ALP who then has to inject huge amounts of cash to make it all work again. The LNP then decries the loans and the new debt and the cycle starts again.

          Date and time
          June 04, 2014, 10:22AM
          • If public assets weren't such a good investment, other countries governments or international corporations from around the world wouldn't be lining up to buy them. Selling these assets is betraying Australia's long term interests for short-term political gain. Jail these politicians now.

            Date and time
            June 04, 2014, 11:26AM
            • The Generators and Electricity networks pay over a billion dollars off the States interest bill in their operating budgets every year.
              They also deliver the Government $1.2 billion in dividends and tax equivalent payments which the state use to subsidise public transport ($1.65 billion) and Ergon's customers electricity bills ($555 million).
              They want to lose all this so they can save $1.3 billion in interest payments.
              Selling profitable assets has no fiscal merit.

              Date and time
              June 05, 2014, 6:11AM

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