September 28, 2018 Read More →

The $13 billion deal Australians should be concerned about

Daily Telegraph:

Australians are just starting to realise how much of the country’s electricity and gas assets are owned by Chinese-linked companies and the huge dominance they now have.

The latest move from Hong Kong-based company Cheung Kong Infrastructure (CKI) to take over Australian-owned company APA will give it control over 60 per cent of Australia’s gas pipelines.

But the picture becomes even more concerning if you look at all the other assets that are essentially controlled by the Chinese Government.

This is what’s going on.

APA is the company at the centre of the deal and it’s easy to understand why.

The company owns or manages $20 billion worth of energy assets.

It has a 15,000km network of pipelines that deliver half of Australia’s natural gas usage. It supplies gas to 1.3 million Australian homes and businesses, as well as having interests in gas-fired power stations and wind farms.

As Institute for Energy Economics and Financial Analysis (IEEFA) energy analyst Bruce Robertson told “It is a fabulously profitable company.”

In fact if you bought shares in APA when it first listed on the stock exchange in 2000, your investment would now be worth 18 times more than what it was.

But this impressive profit actually points to one of the reasons why people are so worried about the sale.

When the Australian Competition and Consumer Commission (ACCC) looked into the gas market in 2016 it found evidence of monopoly pricing among the pipeline operators that transport gas along the east coast of Australia.

This is because the pipelines are owned by a small group of companies that can essentially charge what they like.

The $13 billion deal Australians should be concerned about

Posted in: IEEFA In the News

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