Flood of infrastructure assets to go on market

Pension funds in the bidding consortiums that miss out on the $6 billion-plus Queensland Motorways business over the next week can take heart -- a lucrative pipeline of infrastructure assets up for offer is on its way, according to sources.

Likely to be tipped on to the market by the Queensland and NSW governments over the next 18 months are ports, more roads and electricity assets.

“In terms of opportunities, there’s a fair few. Not just in the toll road space, but also infrastructure,” said one industry source.

“As long as interest rates remain low, everyone’s cost of capital is so low they (consortiums) are happy to bid up the price, making it attractive for governments to sell.”

After the election in NSW, NSW Rail could be sold, along with the state’s power assets, thought to be worth almost $30bn and likely to be sold off in multiple deals.

NSW is also selling the Port of Newcastle. It is yet to announce the successful bidder, for which sources say at least four consortiums are bidding.

The wheels are already turning for a sale of Gladstone and Townsville ports in Queensland, with a scoping study under way through JPMorgan, while the Port of Melbourne is also up for sale.

Around the time government privatisations start to gain momentum, pipeline assets owned by oil and gas giants are also expected to be auctioned off.

First to go are likely to be those linked to British Gas’ $20bn Curtis Island liquefied natural gas project in Queensland, for which four bidding consortiums have already been formed.

BG’s pipelines and water treatment plants worth between $2bn and $4bn are expected to be on offer by the fourth quarter, and its rivals Origin Energy and Santos will also tip infrastructure on to the market.

The successful bidder for Queensland Motorways is also expected to be the buyer of BrisConnections, the Brisbane airport link tunnel operator, which went into receivership in February last year, just seven months after opening.

Leighton wrote off its $200m investment because of poor traffic flows.

Fort Street Advisers is expected to place the asset back on the market once the sale of Queensland Motorways is finalised on behalf of corporate advisory firm PPB.

It means infrastructure sales are expected to be one of the big sources of deal activity for 2014, a source said, and “one of the main pillars for the market”.

“They are big chunky deals, so they are good for the street.”