Fruit, veg industry may buy markets
WA's fruit and vegetable wholesaling industry has emerged as a possible buyer of the Canning Vale Markets site - one of three State-owned assets the Barnett Government has put up for sale to try to contain ballooning debt.
Premier Colin Barnett and Treasurer Mike Nahan announced yesterday that the 55ha markets site would join port assets at Utah Point in Port Hedland and the Kwinana Bulk Terminal in the first tranche of a sale program that aims to raise between $1 billion and $2 billion.
Further announcements around the sale of what the Premier termed "lazy" government land are expected in the next few weeks, which is predicted to include the Princess Margaret Hospital site in Subiaco.
It will become surplus to requirements once the new children's hospital at QEII Medical Centre opens next year.
Mr Barnett admitted that the State's net debt of $22 billion was higher than he would like and he hoped to raise $2 billion a year on an ongoing basis from asset sales.
"This is not a fire sale, it is not a panicked response," he said.
It is believed the Utah Point ship-loading facility - a critical export avenue for the Pilbara's small iron ore miners - is likely to attract the highest price. The Kwinana Bulk Terminal was first offered for sale by former treasurer Troy Buswell to BGC founder, the late Len Buckeridge.
The port assets are likely to be offered as 50-year leases but the markets site, which is a centre for fruit and vegetable wholesaling, is set to be sold freehold on the condition markets continue to operate on the land. The markets' value was $180 million according to its 2012-13 annual report, with liabilities of $47 million.
It generated just $2 million in profit last year on $18 million revenue a year. It is understood much of the value in the site is in the surplus land - about 15ha of which is undeveloped.
The surplus land would be an attractive proposition given Canning Vale's location close to transport links.
Chamber of Fruit and Vegetable Industries chief executive Martin Clark said wholesalers and market tenants had started to discuss a plan to mount a bid for the markets, including writing to Dr Nahan. He said industry-led privatisations of markets in Sydney, Newcastle, Adelaide and Brisbane had been successful.
"We have the expertise to run a market, we know exactly what goes on," he said. "If we could generate some economies and efficiencies, the rents wouldn't have to climb through the roof."
Shadow treasurer Ben Wyatt said the asset sales plan was like "taking your TV down to Cash Converters to make your next mortgage payment". "Mr Barnett still refuses to admit he has a spending problem," he said.
