Victoria was expecting $7 billion for the Melbourne port lease but a stroke of luck has delivered a bumper $9.7 billion return.
The 50-year lease of the Port of Melbourne will go to the Lonsdale consortium and Treasurer Tim Pallas says the timing was fortunate for Victoria.
“I think we’ve been very lucky in terms of timing … couldn’t have picked a better time to go to the market,” Mr Pallas told reporters on Monday.
He said they had expected closer to $7 billion.
“To say it was a good day and this was a pleasant surprise would be a mild understatement.”
Premier Daniel Andrews said the bid from the Lonsdale consortium, which includes the Future Fund, QIC and international investors, had passed competition and foreign investment checks.
“This is a massive vote of confidence … every Victorian should take great pride in the price that has been paid for this asset,” Mr Andrews told reporters.
More than $970 million of the purchase price will be spent on regional and rural infrastructure projects.
Mr Andrews said he would work to finalise the extra 15 per cent Victoria will now be due under the federal government’s asset recycling scheme.
The previous government had booked about $5 billion for the sale of the port lease, but estimates of the final price had ranged as high as $7 billion before Monday’s announcement.
Opposition leader Matthew Guy welcomed the sale and said the hard-fought negotiations over the port lease legislation had done nothing to drive the price down.
“The final lease price shows that Daniel Andrews and Tim Pallas’ claims that our amendments would damage the value of the asset were wrong,” Mr Guy said.
The legislation includes a 15-year compensation period if a competing government-funded port is built – the government originally wanted a 50-year compensation period.
Greens leader Greg Barber said the sale would hurt Victorian businesses.
“These new owners will want a return on investment and that will come from squeezing Victorian exporters,” he said.
Mr Pallas signed the contracts on Monday morning, with commercial close expected on October 31.