AMP Capital has bought the newly built Eastern Goldfields regional prison, joining the likes of Catholic Super, Australian Super and Aberdeen Asset Management as private owners of public infrastructure assets in Western Australia. Click through to see the BNiQ listing of public assets in private hands.
AMP Capital has bought the newly built Eastern Goldfields regional prison, joining the likes of Catholic Super, Australian Super and Aberdeen Asset Management as private owners of public infrastructure assets in Western Australia.
AMP Capital has bought the prison from Lendlease Infrastructure Investments and MLC, in a deal believed to be worth between $60 million and $80 million.
Privatisation and PPP deals in WA: 1961 to 2016
|ASSET||YEAR SOLD||SALE PROCEEDS||ORIGINAL BUYER||CURRENT OWNER|
|State Building Supplies||1961||£1m||Hawker Siddeley||n/a|
|SGIO||1994||$165m||Initial Public Offering||IAG|
|Bankwest||1995||$900m||Bank of Scotland||Commonwealth Bank|
|Healthcare Linen||1996||$9m||Western Pacific||n/a|
|Perth airport||1997||$643m||Various institutional investors||Hastings (59.9%), Future Fund (29.7%), other (10.4%)|
|Dampier Bunbury natural gas pipeline||1998||$2.4bn||Epic Energy||DUET Group (80%), Alcoa (20%)|
|Jandakot airport||1998||$7m||Jandakot Airport Holdings (Hans Versteeg and Kevin Pollock)||Ascot Capital and Kirsh Group|
|Westrail Freight||2000||$585m||Aust Railroad Group (Wesfarmers and Genesee & Wyoming)||Aurizon (above rail assets), Brookfield Rail (below rail assets)|
|AlintaGas||2000||$615m||Initial Public Offering (Utilicorp as cornerstone investor)||Alinta Energy (power stations), ATCO Group (gas network)|
|Kaleeya Hospital||2014||$17.5m||Southern Cross Care||Southern Cross Care|
|Port Hedland International Airport||2015||$165m||AMP Capital consortium||AMP Capital consortium|
|Water Corp engineering business||2015||$10.5m||RCR Tomlinson||RCR Tomlinson|
|Market City||2016||$135m||Perth Markets||Perth Markets|
|Keystart loan book||2016||$1.35bn||Bendigo and Adelaide Bank||Bendigo and Adelaide Bank|
|PUBLIC PRIVATE PARTNERSHIIPS|
|ASSET||YEAR BUILT||COST||DEVELOPER||CURRENT OWNER|
|DOLA building (Midland)||1993||$55m||Consolidated Constructions||n/a|
|Joondalup Health Campus*||1996||n/a||Ramsay Healthcare||Ramsay Healthcare|
|Peel Health Campus||1997||n/a||Health Solutions WA||Ramsay Healthcare|
|Fremantle Justice Complex||2001||$15m||Multiplex||n/a|
|PCEC||2003||$225m||Multiplex (private and govt funding)||Wyllie Group|
|District Court||2004||$195m||Western Liberty - Multiplex, G4S Custodial, Merrill Corporation||Australian Super|
|Mundaring water plant||2011||$370m||Helena Water - Acciona Agua, TRILITY||Aberdeen Asset Management (49.9%), Acciona Agua (25.05%), TRILITY (25.05%)|
|QEII car park||2011||$140m||Capella Parking - Capella Capital, ProBuild and Ezipark||Catholic Super (67%), Lendlease (33%)|
|Eastern Goldfields Regional Prison||2012||$232m||Assure Partners - Capella Capital, John Holland, Pindan Contracting, Honeywell.||AMP Capital|
|Midland Health Campus*||2012||$430m||St John of God Health Care + Multiplex||St John of God Health Care|
|Perth Stadium||2014||$902m||Westadium consortium - Brookfield, Multiplex and John Laing||John Laing Investments, Aberdeen Infrastructure Investments|
|New Schools PPP||2015||$370m||Eduwest - Macquarie Capital, Spotless, Perkins Builders, Badge Constructions||Macquarie Corporate Holdings, Aberdeen Infrastructure Investments|
* Public and private hospitals co-located.
Lendlease and MLC were the original equity investors in the Assure Partners consortium, which was contracted by the state government in 2012 to design, build, fund and operate the 350-bed prison at an up-front cost of $232 million.
Debt funding was provided by the Commonwealth Bank and Japan’s Mizuho Corporate Bank, which are still lenders to the project.
The new prison, which has replaced a 100-bed facility, took its first inmates in August, about eight months after the targeted completion date.
The private consortium will run the prison for a period of 25 years and will be paid $140 million to do so, according to details published on the state government's tenders web site in 2013.
Honeywell has signed-up as the facilities management and security sub-contractor.
AMP Capital Community Infrastructure Fund manager Andrea McElhinney said it was an attractive investment opportunity.
“This project provides long-term, highly predictable cash flows that are underpinned by the Western Australian government,” she said in a statement.
“It has an attractive risk and return profile that fits perfectly with CommIF’s investment mandate.”
CommIF is currently invested in 13 social infrastructure assets in Australia and New Zealand in the education, health, justice, defence, water and community sectors.
CommIF’s investor base is made up primarily of domestic institutional investors and high-net-worth individuals.
Ms McElhinney said social infrastructure provided investors with both attractive returns and community benefits.
“Offshore interest in Australian infrastructure has been a major theme of the local market during the last two years and social infrastructure has not been immune to this, with the first offshore investor coming into CommIF this year,” she said.
AMP Capital’s purchase of the prison comes 15 months after it led a consortium that paid $165 million for ownership of Port Hedland International Airport.
The 50-year lease with the Town of Port Hedland also included a $40 million capital investment requirement.
The Kalgoorlie prison and Port Hedland airport are among nearly 20 infrastructure assets in WA that have either been sold to the private sector (via long-term leases) or developed through a public private partnership (see table).
PPP projects currently underway include the $900 million sporting stadium at Burswood.
While these projects are often associated with the construction contractor – Multiplex is building the stadium – they are only possible when investors put up equity to underpin the funding.
In the case of the stadium, this is UK-based groups John Laing Investments and Aberdeen Infrastructure Investments, which will be part-owners with the state government.
Aberdeen also owns half the $370 million Mundaring water treatment plant, completed in 2011, and is an investor in the Eduwest consortium which has been contracted by the WA government to design, build, finance and maintain eight new schools in Perth.
Other investors in PPP projects in WA include Catholic Super, which is the majority owner of the multi-storey car park at QEII medical centre, Australian Super, which owns the privately-run District Court building in the city, and Wyllie Group, which owns the PCEC.
The term PPP encompasses a range of business models.
In many cases, government agencies continue to deliver the core services, such as teaching in the planned new schools.
In other cases, like the recently completed Midland Health Campus, the government has been a co-investor but the services will be provided by St John of God Health Care.