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Canberra blocks NSW electricity deal with China

Two weeks after Britain’s prime minister Theresa May called a halt to a Vhinese state owned company taking a major stake in a planned new $ 38 billion nuclear power station, Australia has blocked a deal that would have given China State Grid Corporation or Hong Kong’s Cheung Infrastructure group from taking a 100-year lease in the country’s largest electricity distributor.

Stating the decision was made on undefined security grounds, federal treasurer Scott Morrison has given both companies until August 18 to respond to the government’s concerns before the decision becomes final. However Morrison declined to detail what these concerns are.

He denied that his ruling was based on pressure from independent senators that hold the balance of power in the upper house of Parliament.

The decision has infuriated the NSW government which agreed a long term lease of 54 per cent of  the state’s electricity distribution network, known as Ausgrid, a move that is opposed by the Opposition and the trade union movement. State ministers point to the fact that China State Grid already controls 34 per cent of Victoria’s United Energy Network, and 46.56 per cent of South Australia’s electricity transmission, as well as numerous gas pipelines.

Beijing is certain to question yet again Australia’s commitment to foreign investment. Neither side has mentioned China’s aggression in the South Chinea Sea, but that is the unspoken fear that has caused Canberra to act, thoughbelatedly.  But Canberra can be blamed for failing to make clear in a transparent way what types of foreign investment are seen to create security concerns, or even to discuss them. It is another example of bungling by the frail Turnbull government.