ECONOMICS

National security crucial in decision on whether to allow Chinese investment in power grid: Australian treasurer

PUBLISHED : Monday, 08 August, 2016, 11:09pm
UPDATED : Monday, 08 August, 2016, 11:12pm

Australia’s treasurer said on Monday that national security would be his overriding consideration when he makes a decision on whether to allow a Chinese consortium to lease a major Sydney electricity grid.

Scott Morrison said he was close to making a decision on whether to allow Chinese state-owned State Grid Corp. and Hong Kong-registered Cheung Kong Infrastructure Group to buy a 99-year lease for half of the New South Wales state-owned electricity network Ausgrid for more than A$10 billion (US$7.6 billion).

“This is not an easy decision,” Morrison told Sydney Radio 2GB. “National security out ranks everything.”

Chinese foreign investment, particularly from state-owned companies, has become increasingly contentious in Australia has China takes a more aggressive stance in territorial disputes in the South China Sea.

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President Barack Obama raised questions with Prime Minister Malcolm Turnbull last year after Australia allowed a Chinese company, Landbridge, to secure a 99-year lease over the strategically important Port of Darwin, which has become a US Marines training hub in northern Australia. Turnbull said Australian defence and security officials determined the A$506 million deal did not threaten national interests.

Senator Nick Xenophon, the leader of three senators whose support could be crucial to the government to pass legislation through the upper chamber when Parliament resumes this month, said the foreign investment decision-making process lacked transparency.

“I don’t believe it is in the national interest for a state-owned enterprise to control one of our biggest power assets in this country,” Xenophon told Australian Broadcasting Corp.

New South Wales state Premier Mike Baird is relying on the Ausgrid deal to fund major infrastructure projects. Baird and Morrison are members of the state wing of the conservative Liberal Party.

Opposition leader Bill Shorten said Morrison should not be swayed by Baird’s political needs in deciding on Ausgrid, which provides power to 1.7 million homes and businesses in Sydney and its surrounds.

“What we don’t need is for the Liberal Party just to rush this through at they did with the Port of Darwin,” he told reporters.

Morrison in May blocked a Chinese-led consortium from buying Australia’s largest private landholding, S. Kidman & Co Ltd, saying the cattle empire was too big to be owned by foreigners.