A consortium led by pension fund Australian Super has lodged an unsolicited proposal with the NSW government for the part privatisation of electricity distributor Ausgrid just weeks after Chinese bids were blocked on national security grounds.
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Premier Mike Baird and Treasurer Gladys Berejiklian on Friday revealed the proposal from Australian Super and IFM Investors.
The unsolicited proposal rules allow for a confidential approach to the NSW government with a unique proposal.
If accepted, the government deals directly with the proponent, without going to tender. Details are normally kept confidential until a binding agreement is struck.
A cross-agency government panel has been assembled to assess the Australian Super/IFM Investors proposal. A decision is expected later this year.
Mr Baird said the government was obliged to consider all unsolicited proposals on merit.
Ms Berejiklian said that, despite this, preparations to relaunch a public tender for Ausgrid were continuing after the initial transaction was blocked by federal Treasurer Scott Morrison last month.
Chinese-government owned State Grid Corporation and Hong Kong based company Cheung Kong Infrastructure were the sole bidders for a 99-year lease of 50.4 per cent of Ausgrid, expected to reap up to $14 billion.
But in making the decision, Mr Morrison said "national interest concerns" were paramount after receiving advice from the Foreign Investment Review Board.
The Australian Super/IFM Investors proposal could be attractive to the NSW government as it involves local companies and would not require FIRB approval.
In a statement, the 50-50 consortium partners said the "all-Australian proposal from IFM Investors and AustralianSuper is unique and represents excellent value for the NSW Government."
Australian Super CEO Ian Silk and IFM Investors CEO Brett Himbury said if the proposal is successful they "intend to manage the asset in a responsible, considered manner over the long term".
But Electrical Trades Union secretary Steve Butler said the sale of a majority stake in Ausgrid would be a bad outcome for the people of NSW regardless of the nationality of the buyer.
"Our position remains unchanged: handing over a monopoly asset that provides an essential service to the community to any private owner will result in higher prices for consumers and bad outcomes for workers," he said.
IFM Investors is owned by 29 Australian superannuation funds and manages $72 billion worth of infrastructure and other investments.
Australian Super is the nation's largest super fund, managing $100 billion on behalf of more than two million members.
In December high voltage transmission firm Transgrid was leased by the NSW government for $10.2 billion.
After Ausgrid, the government intends to offer a 99-year lease of 50.4 per cent of distributor Endeavour Energy.
It will use the proceeds from the three transactions to fund $20 billion worth road, rail and other infrastructure.
