SYDNEY—Competition to run Sydney Harbor’s ferries is fierce, with 28 companies expressing interest in an initiative by New South Wales state to attract global infrastructure investment.

Several European companies have made inquiries, as have two of Australia’s biggest banks.

The state government said Wednesday that it will begin winnowing the list of candidates to operate Sydney Ferries, which transports more than 14 million tourists, residents and workers annually across the harbor and along the main river that bisects Australia’s largest city.

Bloomberg News

Passengers sit on a Sydney Ferry at Circular Quay. The New South Wales state is shortlisting candidates to operate the Sydney Ferries in an effort to attract global investment in infrastructure.

“The extremely strong interest from the private sector shows the NSW government should be confident that this process will deliver excellent outcomes and much better transport services,” said Brendan Lyon, chief executive of Infrastructure Partnerships Australia, an industry lobby.

New South Wales is keen to reduce its infrastructure commitments as it grapples with more than 12.2 billion Australian dollars (US$ 13.03 billion) in net debt. The state recently appointed Nick Greiner, a former premier, as its infrastructure chief with a view toward attracting more private money and investment from sovereign-wealth funds.

Sydney Ferries, which traces its roots to the late 18th century, when Great Britain established a penal colony in Australia, has been in the red for years as the cost of operating and maintaining an aging fleet has exceeded stagnant revenue. The company lost A$ 7.1 million in the fiscal year through last June, narrowing from a deficit of A$ 14.5 million in fiscal 2009.

Among the companies to register interest ahead of the May 31 deadline were units of France’s Thales SA and Veolia Environnement SA, along with U.K.-based Serco Group PLC. Commonwealth Bank of Australia Ltd. and Macquarie Capital Advisers Ltd., part of Macquarie Group Ltd., also are in the running.

Ministers hope privatization will lead to the reinstatement of hundreds of ferry services and encourage people to swap their cars for travel within Sydney’s harbor.

The New South Wales government will continue to own Sydney Ferries and control fare structures, but private operators will be handed the right to lease, maintain and run the fleet. The government aims to have a new operator for Sydney Ferries in place by year-end.

Sydney Ferries operates 28 vessels traveling between Sydney’s business district and nearly 40 destinations, including the Taronga Zoo and the beach suburb of Manly. The ferries make a combined 175,000 trips a year.

Private operators are allowed to run competing services. Closely held Sydney Fast Ferries has operated two vessels between central Sydney and Manly since April 2010.

Write to David Winning at and Enda Curran at

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