An enlightening exchange with Fitzie

By Stephen Mayne
January 17, 2008

The following stories appeared in The Daily Telegraph after the Australian Infrastructure Fund AGM on October 21, 1998.

Wearning a shareholder's hat, a full and frank exchange with Fitzie was most enlightening yesterday in a hall out the back of St Michael's church in Melbourne's prestigious Collins St.

Fitzie is Mike Fitzpatrick, the former Carlton premiership captain and chairman of the Australian Sports Commission who climbed the ranks of CS First Boston in the 1980s and now is managing director of the listed Australian Infrastructure Fund, which held its AGM yesterday.

Fitzie launched a searing attack on the ACCC and the Victorian Regulator General for their ruling on gas returns and said AIF was now looking to invest more in unregulated projects such as tollroads.

However, he gave the distinct impression of being once bitten twice shy about buying into rail assets again after a bad experience with the Sydney Light Rail which saw AIF's 38.9 per cent stake written down by $5.7 million to $16.5 million as at June 30, 1998.

Even so, throwing out the previous managers for French group CGEA, buying 20 per cent of the monorail and merging the managements has lifted the operation's prospects.

However, Australia's best known infrastructure manager said Light Rail's future profit would depend on extensions at both ends of the line and the Carr government was far more interested in taking it further west beyond Star City casino.

"I'm very optimistic it can do very well if we get the extensions," he told about 30 shareholders at the annual meeting yesterday.

Australia's biggest infrastructure fund manager again rejected criticism from AGL boss Len Bleasel that Fitzie's consortium went way over the top in paying $2.4 billion for the Bunbury to Dampier gas pipeline in WA earlier this year.

And yes, Fitzie admitted it was a blunder selling out of Telstra at $2.90 but the reverse applies with Melbourne tollroad company Transurban which he said was now arguably overpriced at the present level of $1,431 a unit.

Australia's biggest infrastructure project since the Snowy Mountains scheme was floated at just $500 a unit in March 1996.

The Australian Shareholders Association also attended the meeting raising criticisms about distributions exceeding cash flows.

Fitzie calls Redbank mess as he sees it

Australia's number one infrastructure man and former Carlton Premiership captain Mike Fitzpatrick does not mince his words.

Asked at the Australian Infrastructure Fund annual meeting last week how they missed out on buying into the notorious Hunter Valley Redbank power station, Fitzie got straight to the point and said their proposed partner, Californian company National Power, weren't exactly straight up and down.

"In negotations a document was forged and we thought it was inapproporate to go forward," he said, after acknowledging it was a "very attractive" power purchase agreement.

Unfortunately for NSW taxpayers, this forgery was not enough to get EnergyAustralia out of its 30 year commitment to buy all Redbank's power at more than double market prices.

Fitzie is also in the midst of a bitter war of words with Carlton President and former Elders IXL boss John Elliott. Fitzie labelled Elliott "a disgrace" for costing Carlton an $80,000 sponsorship from VicHealth by smoking at Carlton games.

Elliott was not slow in responding, claiming that "the Carlton committee was delighted when he (Fitzpatrick) left the board".