Australia could tweak trade policy in wake of Ausgrid row: newspaper

[SYDNEY] Australia could change its foreign investment policy to ensure a level playing field for all countries, after it was criticised for rejecting bids from China and Hong Kong for a A$10 billion (S$10.2 billion) energy grid, a newspaper reported on Monday.

Citing notes for a speech at a Hong Kong investor conference later on Monday, The Australian Financial Review reported Trade Minister Steven Ciobo is expected to suggest that the government could update its foreign investment policy for critical infrastructure.

"The policy will ensure that Australia's approach to foreign investment is non-discriminatory between nation-states, proportionate to the risks involved (and) supportive of continued foreign investment and Australia's reputation as a foreign investment destination," the newspaper said of Mr Ciobo's speech without giving further details.

The minister's comments appear to be at odds with remarks from a source within the Ausgrid sale process who has said North American bidders will be allowed to make offers without partnering with an Australian entity.

Mr Ciobo is visiting Hong Kong after the government blocked bids last month from Cheung Kong Infrastructure Holdings Ltd (CKI), one of Hong Kong's biggest listed companies, and the Chinese government's State Grid Corp of China for a half share in Ausgrid, Australia's biggest power network.

Rebuffing those bids, Australia cited unspecified security concerns.

But China's commerce ministry reacted angrily, saying the move was protectionist, and warned that it "seriously impacts the willingness of Chinese companies to invest in Australia".

According to the newspaper, Mr Ciobo won't discuss the State Grid bid but he will say that CKI has invested in Australian energy utilities for nearly 20 years and is considered a trusted member of the business community.

Australia's decision not to sell Ausgrid to a company as reputable as CKI "underscores that the Ausgrid decision pertains to the asset itself, not to the potential owners", the newpaper quoted Mr Ciobo's speech notes as saying.

Ausgrid supplies power and communications services to business and government.

"The national security concerns relate to the transaction structure and the nature of the assets, not to any particular investor," Mr Ciobo's speech notes said.

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