* Governor once hailed W.Australia as economic engine for
* But state has suffered since mining boom collapsed
* Wants to regain triple-A rating
* Sell-off to include part of giant Port Hedland iron ore
(Adds comment, detail)
By James Regan
SYDNEY, Aug 28 The state of Western Australia on
Thursday said it planned to sell government-owned assets,
including part of the Port Hedland shipping terminal, for an
estimated A$1 billion to A$2 billion ($1.9 billion) as its
resource-heavy economy adjusts to the collapse of a decade-long
The move will precede other unspecified sales of land and
assets that could fetch another A$4 billion to A$5 billion over
the next two or three years, said state premier Colin Barnett.
Barnett, said his priority was to reduce debt and regain a
triple-A credit rating for Western Australia. He once hailed the
state as the economic engine for Australia, but it is now
struggling to pay its bills.
"These are the first assets we will open up to the market.
They have been identified as priority assets for sale," Barnett
said in a statement.
Moody's this week downgraded Western Australia's credit
rating to Aa1 from Aaa.
"The ratings downgrade reflects the state's ongoing deficit
position, the deterioration in its debt metrics, and a growing
risk that this trend may not be reversed soon," the ratings
In the years following the global financial crisis, a mining
frenzy spurred by a voracious appetite among Chinese steel mills
for rich Australian ores had miners scrambling to fill orders,
flooding the state with thousands of highly-paid workers.
Multinationals such as BHP Billiton and Rio
Tinto spent billions of dollars digging iron
ore mines and crisscrossing the arid outback known as the
Pilbara with rail hauling line.
But a cooling in China's economic growth turned the boom to
"History shows that this classic mine-and-boom phase is
either followed by an evolution into multiple but related
industries, or a decline into ghost towns and tumble weed," said
Jemma Green, a researcher at Curtin University in Perth.
A report co-authored by Green notes there are at least 87
'ghost towns' across Western Australia, most of them former
Debt for the state, which is more than three times the size
of Texas in the United States, stands at A$22 billion, up from
about $3 billion in 2008 at the height of the boom.
Port Hedland's Utah Point Bulk Handling facility has been
earmarked for the sell off, according to the government.
The facility is used by mining companies, including Atlas
Iron and Consolidated Minerals, to ship
millions of tonnes of ore annually.
The Kwinana Bulk Terminal, used to export bulk products such
as liquefied petroleum gas and cement, along with the Perth
Market City agricultural distribution arm will also be placed on
the block, according to the government.
Port Hedland's Utah Point Bulk Handling facility is one of
four berths owned by the Pilbara Ports Authority. It includes a
shiploader, two stockyard product storage facilities and
In fiscal 2013 it generated A$86.5 million in revenue and is
likely to be sold under long-term lease
(1 US dollar = 1.0686 Australian dollar)
(Editing by Joseph Radford)