Three teams in the race for Port of Newcastle lease

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Three teams in the race for Port of Newcastle lease

According to local sources, Asciano, Hastings Funds Management and Deutsche Asset & Wealth Management are in the race for the 98-year lease of the Port of Newcastle, an asset the New South Wales state government values at $700 million. 

Each of the companies is trying to partner with Japanese companies such as Marubeni Corporation. Japanese companies are seen as an ideal partners because more than half of the coal exported through the port goes to Japan and coal exports represent 90 % of total throughput tonnage at the port.

However Japanese companies are worried that a deadline to bid for the asset before May does not give them enough time to throughly examine the asset.

The deadline for lodging responses to the Government's Request for Expressions of Interest was December 9, 2013. "Suitably qualified parties have been invited to participate in a competitive bidding process for the port," the NSW Treasurer's office said in a statement.

Morgan Stanley is managing the sale on behalf of the government. Law firm Minter Ellison and accounting firm PwC have also been retained by NSW government after advising on earlier privatizations.

Asciano is a rail and port operator. Hastings Funds Management, is an infrastructure investor while Deutsche Asset & Wealth, a unit of Deutsche Bank AG, has more than $1 trillion in invested assets.

The contract will include a 99-year lease of Newcastle port's precincts where three coal terminals sit. They are owned and operated by Port Waratah Coal Services (PWCS) and Newcastle Coal Infrastructure Group (NCIG). In 2012, Newcastle port's three terminals together shipped around 132.5 million mt of coal - 105.8 million mt for PWCS and 26.7 million mt for NCIG.

The lease will include more than 700 hectares of land owned by the Newcastle Port Corporation (NPC), as well as all road and rail infrastructure and wharves owned by NPC within the port boundary.

NSW Government indicated that NPC will retain a number of important maritime functions and services, including the Harbour Master, dangerous goods approvals, emergency response and administration of the existing coal chain Capacity Framework Arrangements.

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