Australia’s busiest container port leased for US$7.3 billion

SYDNEY, Australia – An Australian-led consortium has won a 50-year lease on the country’s busiest container port for 9.7 billion Australian dollars (US$7.3 billion), officials announced Monday.

The Lonsdale consortium, which includes Ontario pension fund manager OMERS Private Markets, multinational firm Global Infrastructure Partners LLC and Australia’s sovereign wealth fund, among others, secured the lease for the Port of Melbourne in a deal expected to create thousands of jobs and boost investment in local infrastructure projects, Victoria Premier Daniel Andrews said.

The lease is the latest in a series of port privatizations in Australia in recent years. Last year, the prime minister was forced to defend the leasing of the strategically important port of Darwin on the country’s north coast to the Chinese government-linked Landbridge Group. The Darwin deal attracted criticism because the port is near an important military base where up to 2,500 U.S. Marines train as part of increasing U.S. defence resources in the Asia-Pacific region.

The Melbourne port lease was only expected to fetch around AU$7 billion, said Victoria Treasurer Tim Pallas, who signed the contracts on Monday.

“I think we’ve been very lucky in terms of timing … couldn’t have picked a better time to go to the market,” Pallas told reporters. “To say it was a good day and this was a pleasant surprise would be a mild understatement.”

Ten per cent of the lease’s value, or around AU$970 million, will be invested in regional and rural infrastructure projects, Andrews said.

The deal has passed competition and foreign investment checks, he said.