Government to build $5bn Western Sydney Airport

By Bloomberg News, May 2 2017
Government to build $5bn Western Sydney Airport

Australia's government said it will build a long-awaited second airport for Sydney after the operator of the city's existing hub ruled out developing the project because of the "considerable" risks to shareholders.

Details of the plan for Western Sydney Airport will be unveiled in the budget next week, Prime Minister Malcolm Turnbull said in an emailed statement Tuesday.

The new airport will be a major catalyst for jobs and economic growth in the region and is a “vitally important project,” he said.

Sydney Airport Ltd., which operates Kingsford Smith Airport, was given first right of refusal to develop a second hub at Badgerys Creek after the government committed to the project in 2014.

Chief Executive Officer Kerrie Mather said earlier today the terms offered by the government didn’t meet the company’s investment criteria and that the risks would “endure for many decades without commensurate returns for our investors."

Successive governments have studied the need for a second airport in Sydney since the 1940s.

Kingsford Smith, which accounts for about 40 percent of Australia’s international and domestic services, will run out of capacity by 2037, costing the economy A$59.5 billion ($45 billion) in lost growth by 2060, according to government agency Infrastructure Australia.

Construction of the A$5 billion first stage of the second airport, which includes a single 3,700-meter runway, parallel taxiway and terminal buildings, is due to begin next year. Total development costs could reach A$38 billion, Infrastructure Australia says.

Sydney Airport has three months to review the terms on which the government develops the new hub itself, and can change its mind. Its shares declined 1.2 percent at 11 a.m. in Sydney, compared with a 0.3 percent fall for the benchmark S&P/ASX 200 Index.

The new airport will inject more than A$1.9 billion into the economy during construction and 60,000 jobs in the region in the long-term, Turnbull said.

PREVIOUS | Sydney Airport turned down the Australian government’s offer to develop and operate the city’s long-awaited second airport, saying the "considerable" risks associated with the A$5 billion project weren’t in the best interests of shareholders.

The operator of Sydney’s Kingsford Smith Airport, which was given first right of refusal to develop a second hub in the city’s west, said in a statement Tuesday the terms offered by the government didn’t meet its investment criteria.

The onus for building the new runway and terminal by 2026 at Badgerys Creek may now fall on the government, which indicated last week it’s open to more infrastructure spending to boost growth and productivity.

"The risks associated with the development and operation of Western Sydney Airport are considerable and endure for many decades without commensurate returns for our investors," Chief Executive Officer Kerrie Mather said in the statement.

The company can change its mind if the government offers more favorable terms to another operator or develops the hub itself.

Qantas - Qantas Frequent Flyer

29 Nov 2013

Total posts 475

Wow...this is really good news! 

Somebody get the Wagners on the line...

31 Mar 2014

Total posts 378

That is fantastic news. Some actual competition to Sydney airport can only mean good things.

30 Jul 2015

Total posts 134

competition by two neighbouring airports is good for the economy. 

  1. What are the implications for the current owners of SYD not building the new airport?
  2. Does this imply that Kingsford Smith will still remain the de facto airport for Sydney, particularly since only 1 runway is planned for the new airport (versus 3 runways for Kingsford Smith)
  3. What controls will be put in place by the government to ensure that a future government will not hand over the completed terminal, paid through tax payer funds, to the owners of SYD at non-arm's length terms?
  4. What sort of half-arsed logic is there behind building an airport for the 21st century with only 1 runway? Is this supposed to be Sydney's Geelong airport?

Qantas - Qantas Frequent Flyer

08 Nov 2011

Total posts 121

Master plan clearly indicates a second parallel runway. 

Qantas - Qantas Frequent Flyer

29 Nov 2013

Total posts 475

Good questions TRB and point #3 is one that needs to be clearly and unequivocally addressed by the Government...

The long play here is how BC will allow travellers to bypass the long trek from the Hills district, Parra, and South Western Sydney to Botany - If you've ever had to endure the pain that is getting from Hills to SYD you'll know what I mean. 

I can't fault the logic in starting with one runway - crikey, look how long Brisbane operated with one runway...

What the Fed Govt needs to do is ensure public transport is integrated into the BC master plan so as it starts to operate and grow it is properly linked into the road and rail network. 

I must go now - there are pigs flying past my window and someone's at the door offering me a sweet deal on a hardly used bridge in Sydney! 

05 May 2016

Total posts 619

If it will be international not just Domestic it should also be built with a better connection between Domestic and International terminals than Sydney. Learn from what's bad about SYD's design for modern needs and try to give it a competitive edge in some areas.

Easy to point out some flaws in SYD's design with the benefit of hindsight.


16 Nov 2011

Total posts 595

Or better still not seperate terminals. International and domestic under one roof. 

10 Aug 2015

Total posts 113

Yes the public transport is paramount. It should be similar to the plans for the Sydney Olympics (which were planned more than 20 years ago) to be accessible by most by railway. But then again if the people at Sydney airport says it can't make any money perhaps that is a warning this will become a white elephant (kangaroo?). Better to build up Canberra and Newcastle and get the fast train happening.

Qantas - Qantas Frequent Flyer

21 Mar 2011

Total posts 270

I wonder how much the train fare will be from the city to Badgerys Creek.
If its going to cost the same as tickets (gate fee) as the current Sydney Airport, and no 400 suburban bus option, this will put me off transitting in Sydney, much better to use Melbourne and its 901 bus.


11 Jul 2014

Total posts 972

They need to follow other countries and have a high speed train line from the airport

12 Feb 2014

Total posts 229

It will be a LCC facility plus freight. I doubt any of us will have need to use it. The benefit though is that it should free up capacity at SYD. 

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