In July 2026, a family in Mount Druitt opens their quarterly electricity bill and does what more households have learned to do since two winters of steep rises: they turn straight to the network charges line, the part of the bill that pays for the poles and wires running past the letterbox rather than for the electricity itself. It has gone up again. What the family may not know is that the wires overhead, and the transformer humming on the corner, are only 49.6 per cent theirs. The rest belongs, under a 99-year lease signed a decade ago, to a consortium of Australian and Canadian pension funds and Middle Eastern sovereign wealth funds.
A few suburbs away, another family is settling on their first home. The certificate proving they own it will be issued not by a government department but by a private concession, NSW Land Registry Services, operating under a 35-year deal struck in the same political era as the electricity leases. Both transactions belong to one story: a program, launched by the Coalition and substantially completed before Labor took office in March 2023, that swapped permanent public ownership of monopoly infrastructure for a large but one-off injection of cash. The cash paid for real things. The bill for the decision, in network charges and in a title system now regulated at arm's length, is still being paid, and will be paid for decades yet.
What the government did
NSW Treasury calls the program asset recycling: lease, rather than sell outright, state-owned monopoly infrastructure for terms of up to 99 years, and spend the upfront proceeds on infrastructure rather than borrowing for it. Premier Mike Baird took the policy to the March 2015 election as his campaign's centrepiece and moved fast after winning. TransGrid, the high-voltage network carrying electricity across the state, was leased in full for 99 years in December 2015 for gross proceeds of $10.258 billion — though around $3 billion was absorbed by debt attached to the business, leaving a net return closer to $7 billion (approx.) (NSW Government, TransGrid lease announcement, 18-Dec-2015). Ausgrid, the Sydney and Hunter distribution network, followed in October 2016: a 50.4 per cent, 99-year lease to IFM Investors and AustralianSuper, worth around $16.19 billion in gross proceeds (approx.), with the state keeping a 49.6 per cent stake (NSW Government; Ashurst transaction records, Oct-2016). Endeavour Energy, covering Western Sydney, the Illawarra and the Southern Highlands, completed the network deals in May 2017: another 50.4 per cent, 99-year lease, to the Advance Energy consortium — Macquarie Infrastructure and Real Assets, AMP Capital on behalf of REST, Canada's British Columbia Investment Management Corporation and the Qatar Investment Authority — for $7.624 billion (NSW Government, Endeavour Energy lease announcement, 11-May-2017). Combined, the three network leases raised roughly $34 billion (approx.) under Baird, then Gladys Berejiklian, then Dominic Perrottet.
A fourth, differently structured transaction rounded out the program. In 2017 the state granted a 35-year concession over NSW Land Registry Services — the office that registers land titles and guarantees who owns what — to Australian Registry Investments, a consortium including First State Super and Hastings Funds Management, for $2.6 billion. Unlike the network leases, this was a full transfer of operating rights with no ongoing state equity stake, protected only by a Consumer Price Index cap on fee rises and a new regulator, the Office of the Registrar General.
The strongest case
Government ownership had produced the price problem it was meant to prevent
Put the case at its strongest, because the evidence for it is real. Between 1996 and 2013, under uninterrupted government ownership, NSW's electricity network prices rose 122 per cent in real terms. Over the same period Victoria's networks, privatised in the 1990s, saw real network costs fall 18 per cent (Grattan Institute, Down to the wire, 2018). Public ownership had not protected NSW households from over-investment in poles and wires; if anything it encouraged it. A government that also owned the network businesses had every incentive to wave through generous capital spending, because a bigger approved capital base meant bigger guaranteed returns flowing back to the same government as owner. The two roles — owner chasing a return, and guardian of affordable power — sat inside the same Cabinet room.
The Baird government's answer split those roles apart. Leasing the networks moved equity risk and reward onto private investors answerable to their own boards, while price regulation had already shifted, in 2014, from the state's own tribunal to the Australian Energy Regulator (AER), an independent Commonwealth body with no financial stake in the outcome. The state converted an uncertain future dividend stream into cash it could spend immediately on schools, hospitals and public transport, without raising net debt to the same degree while its credit rating was being carefully managed. Ninety-nine-year leases, not permanent sales, meant the assets remain state property and eventually revert to full public control; NSW also kept a 49.6 per cent stake, and a seat at the table, in both Ausgrid and Endeavour Energy. On this reading, asset recycling was a structural fix to a demonstrated governance failure, not a fire sale.
The evidence
The clearest sign of what actually fixed prices sits in the AER's first full round of NSW determinations. Reviewing capital spending proposed for 2014-19, the regulator found NSW distribution businesses had sought spending around 50 per cent above what was needed and rejected large parts of it: Ausgrid, for example, requested $10.1 billion over five years and was allowed roughly $6.5 billion (approx.) (Australian Energy Regulator, NSW distribution determinations, 2014-15). That correction was estimated to cut a typical NSW household's annual bill by around $219, or ten per cent, in 2015-16 (approx.) (Australian Energy Regulator, 2015-16 pricing decisions). It landed before Ausgrid or Endeavour Energy had been leased to private investors at all — TransGrid's lease had only just settled. The independent regulator, not a change of owner, delivered the first real price relief.
What happened once the leases settled complicates the steel-man case without erasing it. Once AER-approved returns began flowing through, the two part-privatised distributors and the still fully public Essential Energy — which covers regional and rural NSW and was never leased — posted very different results. In 2021, the return on regulated equity (the profit a network is allowed to earn on the assets its prices are calculated from) was around 6 per cent for Ausgrid, around 19 per cent for Endeavour Energy, and just 2.4 per cent for the wholly state-owned Essential Energy, the lowest of the three since 2015 (NSW Parliamentary Research Service, Privatisation in NSW: An update, Research Paper 2024-01, 2024, citing AER data).
The land registry: a quieter sale
The electricity leases drew most of the political heat, but the Land Registry Services concession changed something just as fundamental with far less scrutiny: who is trusted to keep the legal record of who owns every property in NSW. The CPI cap on fees has held consumer costs in check — that part of the deal has worked as designed. What it has not guaranteed is rigorous oversight of the private operator's work. A performance audit by the Audit Office of New South Wales, tabled 19 February 2025, examined how the Office of the Registrar General — the regulator created to police the concession — has done its job. It found 29 per cent of registered plans audited between 2017 and 2023 were non-compliant, a rate that has fallen over time but remains material; that the regulator made limited use of the penalties, audits and enforcement tools available to it under the concession deed; that it had not published a regulatory charter explaining its approach to enforcement; and that when it granted the private operator relief from a penalty, it did not disclose that publicly, nor mention it in the department's annual report (Audit Office of New South Wales, Regulation of the land titles registry, 19-Feb-2025). Land title is not a minor administrative function — it is the record every mortgage and every sale in NSW depends on. Under-resourcing the watchdog meant to check the concession holder is a governance risk with a much longer tail than any single fee rise.
The critique
Three things follow, and none erase the real 122 per cent price blowout under state ownership that opened the steel-man case — but together they show asset recycling did not close the account the way its architects promised. First, the case for selling equity, rather than simply handing price-setting power to an independent regulator, was weaker than the case for the regulatory reform itself. The AER's 2014-15 correction landed while TransGrid was still mid-transaction and before Ausgrid or Endeavour Energy had been leased at all — meaning NSW could, in principle, have kept full ownership and still captured most of the discipline the steel-man case credits to privatisation. What the equity sale added was cash today, not price restraint; treating the two as the same thing overstates what the transaction achieved.
Second, the return-on-equity gap shows where that cash-today trade-off bites. A network earning 19 per cent on regulated equity, as Endeavour Energy did in 2021, is not doing so by accident — the AER sets an allowed rate of return meant to apply evenly to efficient operators, so a gap that wide against Essential Energy points to real performance differences, with the more profitable outcomes flowing straight to the 50.4 per cent private owners: pension funds in Quebec and British Columbia, sovereign wealth funds in Abu Dhabi and Qatar, and Australian industry super funds. None of that is unlawful — it is what a well-run private infrastructure asset is meant to do for investors. But it means a share of whatever NSW households pay above the efficient cost of a wire now leaves the state altogether, in a way it never did when government owned the network outright and any surplus returned to the budget that set electricity policy.
Asset recycling did not end NSW's forty-year argument over the price of power. It changed who collects the winnings.
Third, the leases did not end the price cycle; they changed who captures its next leg. The AER's 2024-29 determination for Ausgrid, finalised 30 April 2024, lifts the network component of a typical residential bill by around $104, or 17.8 per cent, in a single year for legacy flat-tariff customers, with default-offer customers facing an 8.8 per cent, roughly $159 rise (approx.) (Australian Energy Regulator, Ausgrid Electricity Distribution Determination 2024-2029, 30-Apr-2024). Endeavour Energy's approved pricing for the same period adds roughly $29 a year to an average household's network charges and $48 to a small business's (approx.) (Australian Energy Regulator, Endeavour Energy 2024-25 Pricing Proposal, 21-May-2024). The driver this time is real — a grid rebuilt for renewables and electrification needs genuine capital — but that capital flows into a regulated asset base on which 50.4 per cent of the return now belongs, for the rest of a 99-year lease, to private investors rather than the state that built the network.
None of this is a criticism the current government can simply pass upstream. The Minns government, elected March 2023, did not sign the leases or the concession deed — Coalition governments did, between 2014 and 2017. But the Audit Office's land-registry findings were tabled in February 2025, well into Labor's term, and it is this government's Office of the Registrar General, Treasury and energy ministers who now decide how hard to push the AER on network capital spending, how transparently to police the land-registry concession, and whether the state's 49.6 per cent network stakes are used as more than a passive dividend entitlement. Managing an inherited legacy well or badly is itself a choice a government owns.
The risk to the future
Locked in for the length of a lifetime, as the grid needs rebuilding
NSW is entering the most capital-intensive phase in its network's history, as the grid is rebuilt to connect renewable generation, support batteries and electric vehicles, and replace ageing coal-era infrastructure. Every dollar of that build the AER approves flows into the regulated asset base of Ausgrid and Endeavour Energy, and 50.4 per cent of the return on it is contractually owed to private investors for the rest of leases signed to run into the 2110s. A future government wanting a larger share of that return, or to direct investment more aggressively toward affordability, has far less room to do so than one that still owned the networks outright — it can lobby the AER and use its minority board seats, but it cannot simply direct the businesses.
The land registry carries a narrower but sharper risk. If the weaknesses the Audit Office identified in February 2025 go uncorrected, the state is relying on a private operator's own diligence, more than robust independent verification, to stop a non-compliance rate running above one in four audited plans from turning into real errors in the legal record of who owns what in NSW. That risk compounds quietly until it becomes visible, expensively, on the day a title dispute exposes it. Both risks share the same shape: proceeds spent once, decades ago, against obligations that run for generations.