PORT PRIVATISATION - PORT OF BOTANY

Showdown looms over Botany privatisation

Sydney’s Port Botany will be privatised, setting the stage for a row with the maritime union and putting pressure on the Victorian and West Australian governments to consider selling their general cargo ports. NSW Treasurer Mike Baird unveiled the plan to put the Port Botany facility out for a 99-year lease as necessary to unlock funds to pour into the government's infrastructure fund, Restart NSW, reported The Australian. Investment bankers have been anticipating such a move for months given the change of government in NSW, and because ports assets are less politically sensitive than national icons such as the Snowy Hydro scheme, where a privatisation was abandoned in 2006 because of strong public opposition. Baird said that proceeds from the transaction, which could be finished in the first half of 2013, would be used to fund upgrades to the Pacific and Princes highways. The NSW plan is modelled on the Port of Brisbane privatisation, which reaped US$2.23 billion by putting the port out to a 99-year lease. Maritime Union of Australia national secretary Paddy Crumlin lashed out at the plan, saying Premier Barry O'Farrell was trying to sell the port to the highest bidder rather than attempting to ensure sustainable investment for public infrastructure. ``O'Farrell is stripping public assets for short-term political gain rather than putting in place long-term plans for increased capital productivity in the port, which services Australia's largest city,'' Crumlin said. ``Furthermore, O'Farrell is selling public assets into a capital market which is currently experiencing severe decline.'' Ports Australia boss David Anderson said that the possibilities of privatising ports was ``increasingly coming to the minds of governments''. Infrastructure Partnerships Australia head Brendan Lyon said other states across the country should be looking at their seaports and other assets to unlock funds. ``Asset sales will need to be a consistent theme for governments, because it allows them to shrink their balance sheets and recycle capital to fund new projects,'' Lyon said. The Port of Melbourne is the country's busiest container port and has just had a channel deepening to allow larger ships to trade through its facilities; it could be worth about $2.55 billion, compared with about $2.23 billion for Port Botany. Business Council of Australia chief executive Jennifer Westacott said NSW had taken an important step in ``building the capacity of the state economy over the long term'' by setting up its infrastructure fund. The NSW government is also putting its controversial desalination plant out to lease. Baird said the $66.51 billion in infrastructure spending over four years outlined in the budget was a record. Of this, $6.69 billion has been allocated to transport and roads.