Thursday, 16 March 2017

Berejiklian continues Baird privatisation madness

The Sydney Morning Herald, 12 March 2017:

Serious concerns are being raised about the Berejiklian government's land titles registry sell-off, with multiple parties privy to the process claiming it is being rushed and the wrong model is being used.

One source in the data room says the auction of Land and Property Information (LPI) is going too fast and critical details are being missed, while another insider warns the public might be short-changed $3-4 billion.

The well-placed insider questioned why the government was treating LPI as an infrastructure asset when it was a data and technology one. 

"They're using a model that works for ports, toll roads and power stations, but LPI is completely different; it's a technology asset on the cusp of the biggest technological change in 150 years [moving from paper to electronic titles]," he said.

"They should be using the Telstra model and progressively privatising LPI, which will raise capital, create a commercial focus and fund the building of digital technology and services."

The government is leasing LPI for 35 years and hoping to reap $2 billion, which it plans to spend on rebuilding sports stadiums, despite protests from peak bodies for lawyersdevelopers and surveyors, that say the integrity of the state's world-class land titles system is at stake.

LPI, which enjoys a 70 per cent profit margin, generated $190 million in revenue in 2015-16. Fees for regulated products will rise by CPI each year.
"It's a bargain, and I believe they're under-selling it by $3-4 billion," the insider said.

He says there's confusion as to why the government was rushing the process, especially with an enviable balance sheet. This claim was backed by a potential buyer.

"There's a sense of urgency and it's very end-date driven," he said. "It's been more about getting this done and not about whether it's being done in the right way."

The source revealed there was a small group within government "hell bent" on privatising LPI. He added there was an "unhealthy influence" of the big infrastructure companies.

"There's an unholy alliance of consultants and advisers, all of whom are earning good fees, and there seems to be a pre-destined outcome," he said. "It's a privatisation feeding frenzy."…

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