NSW Premier Mike Baird.
NSW Premier Mike Baird. Trevor Veale

Ausgrid sale falls flat but Baird swears by $10b lease

PREMIER Mike Baird is adamant New South Wales will still sell off a 50.4% stake in energy distribution network Ausgrid despite the Australian Government blocking its sale.

Federal Treasurer Scott Morrison on Friday confirmed bids from the State Grid Corporation of China and Hong Kong's Cheung Kong Infrastructure had been rejected for national security reasons.

The NSW Government had hoped the 99-year lease would reap $10 billion in infrastructure funding for the state.

Mr Baird and NSW Treasurer Gladys Berejiklian issued a statement saying there were still potential buyers waiting in the wings.

"The NSW Government will now move immediately to relaunch the transaction process for the partial lease of Ausgrid and notes the strong market interest for this valuable asset," it stated.

"The NSW Government acknowledges the Federal Government's decision in relation to the Ausgrid lease, noting that national security and national interest considerations are ultimately matters for the Commonwealth Government and its agencies."

The duo promised no delays to infrastructure commitments made under the assumption the long-term lease would go through.

"We have always said that the proceeds of the Ausgrid transaction will be booked in the 2017-18 NSW Budget and that remains the case," the statement read.

A statement from State Grid published on Bloomberg said the corporation - the biggest utility company in the world - had "absolutely" followed all the rules the NSW Government had set out.

"We find it hard to understand and are very disappointed," the company said.

Both State Grid and Cheung Kong Infrastructure are reportedly weighing up their options as whether to submit another bid proposal. -ARM NEWSDESK

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