Australia Hits Back at China; Bans China from Taking over Ausgrid

Ausgrid runs the largest power grid in the state of New South Wales, with some 1.6 million customers.

Cheung Kong Infrastructure, a unit of Hong Kong conglomerate CK Hutchison Holdings, said in a statement Thursday that the decision by Australia to block the sale of Ausgrid does not concern the company.

“The problem for Sydney’s poles and wires is that ownership by a Chinese state-owned enterprise makes it enormously challenging to protect the security of the grid without there being a risk that Chinese intelligence services may try to exploit the connection”, Mr Jennings wrote.

“The (federal) treasurer has indicated a timeframe for considering the process, and I want to stress this – no matter what the outcome in a week’s time – this is a valuable asset with a lot of interest”, she said.

“Ausgrid’s footprint includes critical power and communication services provided to businesses and government”, said Morrison.

The federal government has stepped in to prevent the sale of NSW electricity distributor Ausgrid to state-owned Chinese companies.

The bidders have been given until next Thursday to respond before the decision is made final.

Australia generally welcomes foreign investment, approving almost $123 billion (Aus$160 billion) in sales in 2013-2014.

Treasurer Scott Morrison has blocked the sale of Ausgrid.

Mr Morrison was asked why State Grid could buy SA power assets but not those in NSW.

“That has involved extensive effort, and so those issues are real, they’re matters, obviously, of national security interests to the Commonwealth.and elaborating on those obviously would not be in the national interest either”.

“While the treasurer showed a willingness to engage in cheap point-scoring on foreign investment decisions in the election campaign, the opposition is prepared to accept this decision as being in the national interest on the basis that it was based on advice from the national security agencies”, Bowen said. So I think that would contravene that.

China’s State Grid Corp also has investments in energy infrastructure in the Australian Capital Territory, Queensland, South Australia and Victoria.

As a result, state government asset sales would have to scrutinised by FIRB and former chief spy David Irvine was added to the FIRB board.

Australia itself now has no nuclear power generating plants and the government’s decision to block – at least temporarily – Chinese and Hong Kong investors centred on the purchase of a controlling stake in Ausgrid, New South Wales’s electricity distribution network.