Australia's Queensland state to auction Brisbane toll road assets
SYDNEY Dec 13 (Reuters) - Australia's Queensland state government said on Friday it plans to auction off its Brisbane area toll roads - a sale that might raise more than $4 billion - to capitalise on strong demand for the country's infrastructure assets.
The state intends to sell Queensland Motorways, which owns the tolling rights to five motorways in Brisbane, Australia's third-biggest city.
Australian Treasurer Joe Hockey has encouraged states to consider privatising infrastructure projects, to potentially collect billions of dollars to fund new such projects and to buffer the economy from a decline in mining investment.
Queensland Investment Corporation (QIC), an investment arm of the Queensland government, last month announced plans to monetise toll road assets, but didn't say how it intended to proceed until Friday.
QIC said it also considered an initial public offering for Queensland Motorway, but decided to conduct an auction for the assets. Indicative bids will be due by the end of January.
An auction "is in the best interests of maximising the return to Queensland's Defined Benefit Fund, which holds the Queensland Motorways investment," said QIC chief executive officer Damien Frawley.
The Queensland government transferred the toll road assets to QIC in 2011 for a market-value price of A$3.09 billion. Since then, the business has been "substantially turned around" and has just agreed to acquire the tolling rights for three additional Brisbane roads, QIC said.
Last month, the Australian Financial Review newspaper said sale of the Brisbane toll road assets could raise more than A$5 billion ($4.47 billion).
Australian infrastructure assets are in demand from both domestic and overseas investors, thanks to the country's relatively stable economy.
In April, the New South Wales government sold the long-term leases on two major ports - Port Botany and Port Kembla - to a consortium led by Industry Funds Management for A$5.07 billion.
New South Wales has put its Macquarie Generation electricity power station up for sale, in a bid to raise A$3 billion. ($1 = 1.1195 Australian dollars) (Reporting by Maggie Lu Yueyang; Editing by Richard Borsuk)
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