A Chinese sovereign wealth fund has secured a 20 percent share in the Port of Melbourne lease, sold this week for 7.2 billion U.S. dollars.
China Investment Corporation (CIC) Capital contributed 1.5 billion U.S. dollars to the Lonsdale Consortium, which also included Queensland Investment Corporation (QIC) and the Future Fund, which was confirmed Monday as the successful bidder for Australia's busiest port.
CIC Capital's involvement in the consortium marks China's first investment in an Australian infrastructure asset since Treasurer Scott Morrison controversially blocked Chinese companies from buying a majority stake in New South Wales' (NSW) power network, Ausgrid.
The head of the Australian Industry Group in Victoria, Tim Piper, said the decision reaffirmed that Australia was open to international investors.
"As far as I'm aware, this is the first major government infrastructure project that has been allowed since the Ausgrid decision in NSW," Piper told News Limited on Tuesday.
"While you can speculate as to why this has been allowed, one would assume, because there are a number of overseas investors in this project and no one has a majority position, that it probably made the Foreign Investment Review Board (FIRB) feel more comfortable with its decision."
The FIRB granted "conditional approval" to the sale of the 50-year lease of the port to the Lonsdale Consortium, but Morrison declined to disclose those conditions.
The 7.2-billion-U.S. dollar sale, which far exceeded optimistic price estimates, marked the biggest privatization of Victorian state-owned assets since 18 billion U.S. dollars worth of energy assets were sold in the 1990s.
