| HONG KONG, Sept 20
HONG KONG, Sept 20 Australia aims to rework its
offer to sell a controlling stake of the country's biggest
energy grid to take into account the security concerns that led
the government to reject two bids from Asia, Trade Minister
Steven Ciobo said.
Ciobo told reporters on Tuesday that while Australia was
fully committed to lease Ausgrid - expected to fetch around
A$10 billion ($7.54 billion) - and continue with its
privatisation programme, security concerns had to be considered
when offering the power grid to the market.
In August, Australian Treasurer Scott Morrison rejected
offers for Ausgrid by Li Ka-Shing's Cheung Kong Infrastructure
and state-owned State Grid of China Corp,
citing unspecified security concerns. The move sparked criticism
that Australia was being protectionist.
The asset and a 99-year lease on it was offered to the
market by Australia's most populous state, New South Wales, but
the deal required sign-off by the country's treasurer.
Australia's rejection was one of only five made on overseas
business applications for investment, excluding residential real
estate, since 2001, the minister said.
"We are looking at what a restructured offer (of Ausgrid)
may look like," Ciobo said in Hong Kong.
"There is ongoing discussion between New South Wales and
Australia Federal government."
The reworked offer would entail some mitigating factors
aimed at allaying security concerns, Ciobo said without
The rejected Ausgrid bids contrasted with the approval a
consortium offer for the Australian Port of Melbourne received
on Monday, despite it involving backing from foreign groups
whose backers include state-owned China Investment Corp (CIC).
Matthew FitzGerald, a partner of law firm Herbert Smith
Freehills, said that the winning port bid involved several
countries with minority interests.
"Clearly on these big infrastructure type deals, it's not
that Chinese investors aren't welcome, but if they're seeking a
controlling stake and it's seen to be critical infrastructure...
that's what causes problems," FitzGerald said.
Ciobo, asked whether Australia would look differently at
bids from state-owned enterprises (SOEs) such as State Grid and
privately- owned foreign enterprises, said the level of scrutiny
would be different but Australia was not discriminating against
foreign state-owned firms.
"There is a difference in scrutiny between those two. But
Australia has also demonstrated we are happy to take SOEs into
the Australian market," Ciobo said.
Ciobo said his immediate priority was for Australia to seek
a more comprehensive bilateral trade agreement with Indonesia
than the existing one.
"We can certainly put in place a high-quality, commercially
meaningful agreement and I want to make sure we do that by the
end of next year," he said. "Indonesia presents a terrific
In March, the two countries announced they were resuming
bilateral trade negotiations that stalled after relations were
strained due to disagreements over spying, the execution of
Australian citizens in Indonesia and Canberra's tough
($1 = 1.3261 Australian dollars)
(Additional reporting by Byron Kaye in Sydney; Editing by