Australian Port Sold: Group Including Chinese Fund Buys Melbourne for $7.3B

The Australian Port of Melbourne has been sold for a staggering $7.3 billion to a consortium that includes investors from China.

The deal, framed as a 50-year lease, comes after the Australian government rejected a sale of the country's largest power network, Ausgrid, to a Chinese state-owned company, the State Grid Corp of China, and Cheung Kong Infrastructure Holdings, of Hong Kong last month, Reuters reported.

The agreement marks the country's largest privatization deal since its electrical grid company Transgrid was sold to a global consortium in November 2015 for $8.15 billion, Reuters noted. The lease's price tag was also more than the State of Victoria had hoped for; the sale was expected to come in around $4.38 billion.

"This is a massive vote of confidence in the strongest state in our nation," Victoria Premier Daniel Andrews told the Australian Broadcasting Corp. "Every Victorian should take great pride in the price that has been paid for this asset and all the value that can now be transferred to many other projects."

ABC reported that the purchasing consortium includes the Queensland Investment Corporation, Future Fund, and Global Infrastructure Partners. Reuters stated that the China Investment Corp is a major investor in Global Infrastructure Partners, along with South Korean pension fund NPS.

Victoria treasurer Tim Pallas told Reuters that all foreign buyers had regulatory clearance for the deal, which is expected to close on Oct. 31.

Australia's big-money privatization efforts may not be through. The news agency stated that the New South Wales state plans to move forward with its troubled Ausgrid sale while Western Australia state wants to sell ports as well.

The Australian government also plans to sell the country's Australian Security and Investments Commission's registry arm.

Victorian Opposition Leader Matthew Guy told ABC that he hopes the new money will go toward a new Metro rail station at South Yarra instead of what he calls the government's "cheap and nasty" plans to build an elevated rail through Melbourne's southeastern suburbs.

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