The Australian government has announced it will build a $A5bn ($US3.77bn) airport in Western Sydney after the private company that runs Sydney Airport declined to take up the right to build it.
Sydney Airport Group had a first right of refusal to build Sydney’s second airport, which has been a hot political issue for years, but was widely tipped to decline the project.
The airport group said it made the decision after considering feedback about the costs of the project as well as from investors. It has also taken into account the outcome of its own evaluation.
“Sydney Airport’s decision not to accept the Western Sydney Airport Notice of Intention on the terms provided is in the best interests of our investors who represent millions of Australians through their superannuation funds,’’ Sydney Airport chief executive Kerrie Mather said. “Despite the opportunities that WSA will present, the risks associated with the development and operation of WSA are considerable and endure for many decades without commensurate returns for our investors.’’
A statement from Australian Prime Minister Malcolm Turnbull’s office said details of the government’s plans to build the airport would be announced by Treasurer Scott Morrison in next week’s federal budget.
“It is a vitally important project for Western Sydney, for Sydney, and the nation, which is why the Coalition Government ended decades of indecision by committing to the project in 2014,’’ the statement said.
“The Government has worked carefully to meet our obligations and we have been planning for either contingency – acceptance or rejection by Sydney Airport Group. We are well positioned to move forward on terms that are consistent with the terms of the Notice of Intention.
“The airport will be a major catalyst for jobs and economic growth in Western Sydney, injecting more than $1.9 billion into the economy during the construction phase alone. It is expected to deliver 9,000 new jobs to Western Sydney by the early 2030s, and 60,000 in the long-term.”
The first stage of the airport is expected to feature a terminal capable of handling up to 10 million domestic and international passengers a year with a single 3,700m runway. It is expected to be operational by the middle of next decade with leisure carriers likely to feature highly among its initial customers.
The Australian Competition and Consumer Commission argued the consumer benefits of an independently owned second Sydney airport in a March report which highlighted the high profit margins earned by Australia’s big four airports
“A second international airport competing with Sydney Airport will yield significant benefits to both consumers and airlines,” ACCC chairman Rod Sims said.
“On the other hand, a common owner of the two airports would have an incentive to restrict investment and delay the new airport in order to maximise returns from its existing assets.
“If Sydney Airport does not build and operate the new airport, the Government can build the airport and sell the assets once it is already established.”
NSW Premier Gladys Berejiklian welcomed the federal government commitment to build the airport.
“We are certainly doing our part in investing hundreds of millions of dollars in projects around the precinct already and we will do all we can to make sure it is built as quickly as possible,” she said.
The State’s Transport Minister, Andrew Constance, said work was already underway for major road and transport infrastructure to prepare for the airport’s delivery.
“With work well progressed on the $3.6 billion Western Sydney Infrastructure Plan to build new roads and upgrade local roads across seven local government areas, we are also scoping the work to connect the Western Sydney Airport by rail,'' he said.
One issue certain to be the subject of dispute are the flight paths servicing the airport. A final determination has yet to be made but indicative flight paths released in 2016 caused a furore among communities near the project. There have also been arguments about whether the airport should be subject to a curfew.
