Transurban chief Scott Charlton: value in foreign buyers

Transurban’s Scott Charlton says to get the best value for state assets all foreign buyers must be allowed to compete.

Transurban chief executive Scott Charlton. Picture: Cameron Richardson

Transurban chief executive Scott Charlton says Australian taxpayers will only get the best value for state-owned infrastructure assets if all foreign buyers are allowed to compete in the sale processes.

Mr Charlton’s comments came as the giant Abu Dhabi Investment Authority last night sold a $253.6m block of Transurban shares to institutional investors after the market closed.

ADIA had a holding of less than five per cent in the toll road group and was a partner with AustralianSuper in the Transurban-led consortium that paid $7.1 billion for Queensland Motorways in 2014.

Three years ago ADIA sold off a 4.8 per cent stake in Transurban. The stake sold at a $11.75 a share a discount to $11.90 close.

Earlier yesterday as the toll-roads operator swung to a full-year profit after last year’s results were severely affected by $418 million in costs relating to its Queensland Motorways purchase, Mr Charlton reiterated the importance of foreign investment to Australia.

“If governments want to get the most value for money for the taxpayers, we need the best pools of capital globally to be in competition. If you want the best value for money, we should be competing on a global scale, not just competing among ourselves,’’ Mr Charlton told The Australian yesterday.

“It is very important to fund the asset sale agendas in both NSW and Victoria, which are both quite ambitious.’’

His comments come as Scott Morrison said national security ­issues would be his “prime consideration” in deciding whether to allow the sale of NSW electricity distributor Ausgrid to a Chinese company. The Victorian government is also selling the Port of Melbourne.

All trans­actions involving state govern­ments selling or leasing infra­structure to foreign investors now need FIRB approval following the lease of Darwin Port to a private Chinese investor last year.

In reporting an after-tax profit of $22m yesterday, a stark improvement on last year’s $373m loss, Transurban met guidance for a full-year dividend of 45.5c a share, which it had revised upwards in February after earlier predicting a 44.5c payout. The shares closed 1.4 per cent lower yesterday.

The rapid rise has made Transurban the target of short sellers. A month ago, about 100 million of its shares were being shorted, but that has now fallen back to 20 million.

Part of the short-selling has been related to suggestions by former Victorian premier Jeff Kennett that Transurban’s grip on its flagship CityLink toll road in Melbourne could be challenged if its returns from the asset exceed the hurdles designed to protect the state’s taxpayers from so-called “windfall” profits at their expense.

Mr Charlton yesterday questioned the motivations of critics of its concession deed to operate CityLink, reiterating that the company was not at risk of having the deed terminated early by the Victorian government.

“Most contracts are agreements between two parties. We have multiple concession agreements with state governments and they have their own processes they follow,” he said.

“We are very comfortable with our position (on CityLink). It is our job to administer the concession agreement, not some third party.’’

Asked why details of the agreements on CityLink were not public, Mr Charlton replied that no publicly listed company provided forecasts out for the next 30-40 years. The Victorian government has also endorsed Transurban as party to exclusive negotiations for the $5.5 billion Western Distributor in Melbourne.

Additional reporting: Gretchen Friemann