IAN KIRKWOOD: Tracking down the half-share owners of the Port of Newcastle

7 Jun 2016, 11:30 p.m.

IT was April 2014 when Premier Mike Baird and Treasurer Andrew Constance announced that a “a consortium which comprises Hastings Funds Management and China Merchants” had successfully bid $1.75 billion for a 98-year lease of the Port of Newcastle.

ROUND THE BEND: Aerial view of the harbour entrance.

“Hastings has been involved in many successful government asset transactions, including the Sydney Desalination Plant and Cairns and Mackay Airports,” Mr Constance said at the time.

“China Merchants has a 140-year history as an owner and operator of ports and transport businesses. It has been operating in the trading and retail sector in Australia for more than 20 years. In 2010, it acquired leading Australian-based container pallet logistics provider, Loscam.”

Type “Port of Newcastle” and “lease” into Google or any other search engine and you will see oodles of articles describing Hastings Funds Management as a 50 per cent owner of the port. Hastings, in turn, is fully owned by the Westpac Bank.

In November 2014, when then prime minister Tony Abbott signed the China Australia Free Trade Agreement into existence, the Newcastle port lease was named as one of 14 “commercial agreements” between Chinese and Australian businesses that would ‘‘further strengthen and broaden the relationship between Australia and China’’.

A ‘‘Hastings-China Merchants Group Strategic Partnership Agreement’’ was signed by then Westpac chief executive Gail Kelly and the chairman of the China Merchants Group, Li Jianhong.

Fast forward to late last year when word spread across financial markets that Westpac was looking to offload Hastings, which was founded in 1994. Westpac took a part share in 2002 and full ownership in 2005.

I wrote about this in March this year, asking what implications a Hastings sale would have for the port. The port management declined to comment, and referred me to Westpac, which said the sale was off, adding that Hastings was still looking for top-quality infrastructure assets in developed markets.

A month of so later, the Newcastle Herald was sent a letter by Queensland company, Gardior, which said it wanted to clarify “some inaccuracies in the media’s reporting of [the port’s] shareholders”.

This letter said that the Australian share of the port was owned by an entity called The Infrastructure Fund, which had Gardior as its “trustee” and Hastings as its “manager”.

The letter went on to say that: “This distinction is important as it means the Port of Newcastle’s ownership would not be affected if Westpac sold Hastings Funds Management as Hastings is not and has never been a shareholder [in the port].”

The italics are mine. Until last year, Gardior was known as The Private Capital Group. Gardior’s website says The Infrastructure Fund was formed in 1998 “with the support of Gardior’s founding shareholders and investors”. Its first asset was the privatised Gold Coast Airport. It now had 11 airport, port, hospital power and transport investments in Australia, the US and the UK.

The letter to the Herald, signed by Gardior’s chairman, Bob Lette, said The Infrastructure Fund had $1.6 billion invested on behalf of super funds with two million members, as well as “family offices” (or high-net-worth individuals), insurance companies and other institutional investors. This means, as far as I can see, that more than two million Australians have a share in the world’s biggest coal port. But it is complicated, and I can forgive the government for not being entirely sure, apparently, who it leased the port to.