Fry­den­berg says he will block Hong Kong firm from buy­ing $13bn gas busi­ness

The Guardian Australia - - Headlines - Gareth Hutchens

The Mor­ri­son gov­ern­ment plans to block a Hong Kong-based con­sor­tium’s pur­chase of Aus­tralia’s largest gas trans­mis­sion sys­tem on “na­tional in­ter­est” grounds.

Trea­surer Josh Fry­den­berg made the an­nounce­ment on Wed­nes­day, say­ing he has told CK Group of Hong Kong that he plans to pro­hibit its $13bn ac­qui­si­tion of APA Group, the owner of 15,000 km of gas pipe­lines in Aus­tralia.

APA Group’s net­work of gas pipe­lines is sub­stan­tial. It rep­re­sents 56% of Aus­tralia’s gas pipe­line trans­mis­sion sys­tem, in­clud­ing 74% of New South Wales and Vic­to­rian pipe­lines, and 64% in the North­ern Ter­ri­tory.

Fry­den­berg said the for­eign in­vest­ment re­view board was un­able to reach a unan­i­mous rec­om­men­da­tion about CK Group’s bid for APA Group, but it ex­pressed con­cerns about the na­tional in­ter­est im­pli­ca­tions of such a dom­i­nant for­eign player in Aus­tralia’s gas and elec­tric­ity sec­tors over the longer term.

He said he has made a pre­lim­i­nary view to block the sale, but he will make a fi­nal de­ci­sion un­der the for­mal process within two weeks.

“My pre­lim­i­nary view is not an ad­verse re­flec­tion on CK Group or the in­di­vid­ual com­pa­nies,” he said.

“CK Group com­pa­nies are al­ready a sub­stan­tial in­vestor in Aus­tralia’s gas and elec­tric­ity sec­tors and a sig­nif­i­cant provider of in­fra­struc­ture ser­vices that mil­lions of Aus­tralians rely upon.

“My pre­lim­i­nary view re­flects the size and sig­nif­i­cance of APA Group. It is about the ex­tent to which the pro­posal is con­sis­tent with Aus­tralia’s na­tional in­ter­est.

“The ap­pli­ca­tion of our for­eign in­vest­ment pol­icy, ex­pressed through my pre­lim­i­nary view, is not dis­crim­i­na­tory against any in­vestor or coun­try.”

Fry­den­berg said his de­ci­sion was in­formed with help from the re­cently es­tab­lished Crit­i­cal In­fra­struc­ture Cen­tre, which sits in­side the De­part­ment of Home Af­fairs.

The de­ci­sion will be wel­comed by some cross­bench sen­a­tors, in­clud­ing One Na­tion’s Pauline Han­son and Cen­tre Al­liance’s Rex Pa­trick, both of whom have called for the deal to be blocked for rea­sons of na­tional se­cu­rity.

In Au­gust, the fed­eral gov­ern­ment barred Huawei and ZTE from sup­ply­ing equip­ment to Aus­tralia’s 5G net­work, claim­ing it was nec­es­sary to pro­tect na­tional se­cu­rity. Marise Payne, the for­eign af­fairs min­is­ter, said its de­ci­sion was not tar­geted specif­i­cally at Huawei and ZTE but ap­plied to any com­pany that had obli­ga­tions clash­ing with Aus­tralia’s na­tional se­cu­rity.

Last month, Aus­tralia’s spy chief then elab­o­rated on that de­ci­sion, say­ing if “high-risk ven­dor equip­ment”

was used any­where in Aus­tralia’s evolv­ing 5G net­work, the fu­ture com­mu­ni­ca­tions sys­tem un­der­pin­ning our wa­ter sup­ply and elec­tric­ity grid and health sys­tems, even self-driv­ing cars, could not be pro­tected.

Pho­to­graph: Rod McGuirk/AP

Trea­surer Josh Fry­den­berg says the for­eign in­vest­ment re­view board ex­pressed con­cernsabout a dom­i­nant for­eign player buy­ing fur­ther into Aus­tralia’s gas and elec­tric­ity sec­tors.

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