Li Ka-shing's burgeoning presence in Australia's power sector may strengthen there, with Hongkong Electric Holdings and parent company Cheung Kong Infrastructure (CKI) joining forces to bid on a power plant in Western Australia. Western Power, a government utility in Australia's largest state, has shortlisted four consortiums to bid for a 240-megawatt greenfield power plant. The bid is part of a strategic push by the Li Ka-shing controlled firms into the tightly regulated Australian market after it suffered setbacks in the uncertain conditions of the mainland power sector. The Hongkong Electric-led consortium, which includes Australian energy firm Griffin Energy, is competing with groups led by Mitsui & Co of Japan, Origin Energy and Transfield Services. Hongkong Electric and CKI have in recent years bought Australian power distribution assets in South Australia through a 50:50-owned joint venture, ETSA, and in Victoria through a 50:50 joint venture, Powercor Australia. If successful, the Western Australia project will be the Hong Kong group's first foray into Australian power generation. The plant is expected to be built at Pinjar gas turbine station, just north of Wanneroo, or in the Kwinana Industrial Area or Kemerton Industrial Park, near Bunbury, the company said. Analysts estimated the power plant would cost US$120 million to build, based on an average market price of US$500,000 per megawatt. Mr Li, the chairman of Cheung Kong (Holdings), recently commented that he preferred investing in democracies, a comment that was taken by some analysts to express dissatisfaction with the uncertain regulatory climate in China. Hongkong Electric declined to comment on the bidding yesterday. However, a senior executive said Australia offered more stable returns than regional markets, in particular, China. Last year CKI sold its interest in projects in Shantou, Guangdong province, after a dispute with the local price-setting bureau over tariffs. Other power firms have complained of government moves to cap returns by reducing tariffs earlier guaranteed in supply contracts. Bill Laukka, head of regional utility research at JP Morgan, said: 'The bidding is in line with Hongkong Electric's low-risk strategy.' He estimated that the average return on Australia power plants was between 12 per cent and 15 per cent. The new plant, expected to enter operation in 2005, will supply electricity to Western Power's grid in the southwest of the state. The proposed plant is intended to satisfy periods of high demand. Peter Winner, a Western Power spokesman, said yesterday the shortlisted bidders were expected to finalise concrete proposals in May and Western Power would pick a preferred bidder and sign a power purchase agreement in July next year. 'The price offered will be a key factor. Others factors include the reliability of electricity supply, financial soundness of the bidders and proven ability to operate power plants,' Mr Winner said. With an installed capacity of 3,300 megawatts, Western Power provides services to 830,000 customers.