The two latest billion dollar infrastructure sales are further proof that the sector will deliver highly lucrative work for lawyers in years to come, a leading infrastructure partner has told Australasian Lawyer
Last week’s announcements of the $1.75 billion sale of Newcastle’s port and the sale of the Queensland government’s toll roads for nearly $7 billion demonstrates the ongoing strong interest from investors in government-owned projects.
“The sale of infrastructure projects will continue for many years, because there just haven’t been enough assets for sale in the past,” Gilbert + Tobin partner Damian McNair said.
However, as Australia’s transport and service needs are now a political priority, with Tony Abbott himself declaring he wants to be known as the ‘infrastructure Prime Minister,’ the number infrastructure deals is expected to increase sharply.
A particular area of growth will come from governments wanting to unlock capital for future projects by divesting its assets through privatisations and sales.
McNair said that firms were eagerly chasing the opportunities to work on these deals, and that competition between them was fierce.
“What you will see with this type of work going forward is firms putting forward their best senior partners from their banking, finance and corporate groups towards this kind of work,” McNair said.
McNair explained that the ability of firms to efficiently combine and coordinate their practice areas could give them an edge when competitive bids were being made.
However, McNair also noted that the size and number of deals, frequently involving a number of partners, meant that multiple firms could become engaged in single deals.
The NSW government’s sale of Newcastle’s port to the Hong Kong based China Merchants group saw King & Wood Mallesons and Minter Ellison take leading roles.
King & Wood Mallesons also advised the consortium, led by Australian road operator Transurban on its acquisition of regional competitor Queensland Motorways.
Up for sale
The following infrastructure and service sell-offs have been rumoured:
|Australian Rail Track Corporation||The $1bn Southern Seawater Desal Plant|
|Snowy Hydro||$300m Utah Point export facility|
|Australia Post||Muja Power station|
|Defence Housing Australia||Pole and wires of Western Power|
|Royal Australian Mint||Berths at Fremantle port|
|Comcar||Wastewater treatment plants|
NSW is also expected to sell off its electrical service assets, and the Victorian government is expected to sell off its ports.
Related: Airport company signs $400m bond deal