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Sign of the times: Western Australia selling $4.1bn in assets as mining revenue drops

Sign of the times: Western Australia selling $4.1bn in assets as mining revenue drops

Cranes at Western Australia’s major port facility in Fremantle. (Image courtesy of Fremantle Ports)

Western Australia’s government revealed Thursday it is selling several assets, including its largest general cargo port, as the resource-rich state tries to secure up to US$4.1 billion (A$5bn) to cut debt and fund new programs.

Premier Colin Barnett and Treasurer Mike Nahan said in a statement that declining iron ore prices and spiralling debt left the WA government needing to sell more assets more aggressively than it planned a year ago. Previously the state had estimated to obtain between A$1 billion and A$2 billion a year by trickling out assets to the market.

More than half the world’s iron ore traded by sea is produced in WA, and a string of multibillion-dollar gas-export projects are in operation or under construction along the state’s coastline.

While Barnett did not say when Fremantle Port would be put up for sale, or how much he expected from the deal, he forecast a bigger than expected $2.19bn (A$2.7 billion) budget deficit for the financial year ending June 30 2016.

“The decision to pursue a sensible program of further asset sales will enable the Government to build new infrastructure to support future growth without putting further pressure on the state’s finances,” Barnett said.

Last year the state announced the planned sale of Utah Point bulk-handling facility at Port Hedland—one of the world’s busiest iron ore ports— and the Kwinana bulk terminal south of the state capital, Perth.

Other assets on the chopping block are government office buildings, the Forest Products Commission, government regional homes, 11,000 motor vehicles, some generation assets held by Synergy and Horizon Power, as well as a portion of the government’s low-income home lender KeyStart’s loan book.

Fremantle port is just one of the many Australian urban ports currently on the market, including the much bigger Port of Melbourne, which will be the last major port on the eastern seaboard to be privatized.