Amazon pulls out of major western Sydney warehouse plans due to aerotropolis go-slow

Global delivery giant Amazon has withdrawn plans for a major factory in Badgerys Creek due to the lack of progress in the industrial area around the airport.

Global delivery giant Amazon has dramatically pulled out of launching a major new stock warehouse on the outskirts of the western Sydney airport, with fears more companies will take their business elsewhere amid the “embarrassing” reams of red tape hobbling construction.

The Daily Telegraph understands retail giants Amazon were in discussions to lease a yet-to-be built warehouse at the Mamre Road Precinct within the western Sydney aerotropolis but dumped the move last year amid concerns over when construction would be completed.

The aerotropolis is the 11,200 hectare zone surrounding the airport earmarked for hundreds of new businesses and thousands of accompanying jobs.

Amazon had been close to signing a tenancy agreement in the precinct to launch a new fulfilment centre – a hi-tech facility handling online orders similar to one launched at Kemps Creek in 2022 – but pulled out, with the company instead focusing on other sites in western Sydney.

Then-premier Gladys Berejiklian giving a Covid handshake to Amazon country manager Matt Furlong at Kemps Creek when they announced the delivery giant would build a new warehouse. Amazon’s plans to build another warehouse, this time in the aerotropolis precinct, fell over last year. Picture: Adam Yip

It comes amid fears the go-slow striking the aerotropolis could result in companies taking their business interstate.

Urban Taskforce CEO Tom Forrest said Sydney would lose out to other state capitals if more industrial land wasn’t hurriedly made available.

“Our members are advising that all the initial excitement, MOU signings and ribbon cutting with politicians led businesses to believe the land was ready to develop and move into,” he said.

“When businesses find out that usable logistics facilities are years away – and given the shortage of industrial land in greater Sydney – many are choosing cheaper options with higher vacancy in Brisbane or Melbourne.”

Premier Chris Minns blamed the previous government for a lack of progress. Picture: Gaye Gerard

CEO of the NSW Urban Taskforce Tom Forrest said the red tape would see Sydney lose more business. Picture: David Swift

Highlighting this is the Mamre Road Precinct, which was rezoned in 2020 in an announcement championed by then-Premier Gladys Berejiklian, who said it would bring 850 hectares of industrial land into use around the aerotropolis while creating 5,200 construction jobs and 17,000 ongoing jobs when finished.

Nearly four years later, however, swathes of the site are untouched, with a protracted battle over how much developers would have to pay Sydney Water for water infrastructure only settled late last year.

NSW shadow planning spokesman Scott Farlow said the current rate of development at the aerotropolis risked the promised jobs-hub being “an embarrassment” to NSW.

“It’s important we move ahead as quickly as possible with giving certainty to businesses looking to make the aerotropolis home,” Mr Farlow said.

“It would be an embarrassment for NSW on the international stage if we weren’t able to fulfil the promise of the aerotropolis due to slow planning decisions.”

Western Sydney International Airport, pictured taking shape in November, is due to open in 2026. Picture: Jonathan Ng

Urban Development Institute of Australia NSW acting CEO Gavin Melvin said the industry was still worried about when work would start at the site.

“Industry and Government are working to resolve the issues related to the new stormwater scheme, but we remain concerned the final scheme cost, coupled with no viable interim solution, will make development uneconomical, and see NSW lose industrial tenants to markets like Melbourne,” he said.

A NSW Government spokeswoman said take up in the Mamre Road precinct has been “much faster than anticipated”, with 58 per cent of the site subject to state significant development applications.

“This indicates strong demand in the market for the sites proposed for development,” she said.

She added late last year water Minister Rose Jackson had intervened to cap stormwater management charges at $800,000 a hectare, down from the $1.3m proposed by Sydney Water.

A Sydney water spokeswoman said the organisation was “working with developers and landholders to ensure appropriate interim servicing arrangements are in place until permanent infrastructure is delivered over the next five years”.

Amazon is walking away from a new facility within the aerotropolis. The company already has a centre at Kemps Creek. Picture: Adam Yip

Premier Chris Minns on Wednesday slapped down concerns over the progress of new infrastructure at the aerotropolis.

“I want to acknowledge that the previous government hasn’t (done) enough, particularly in relation to road infrastructure into that precinct … the NSW Government is looking closely about adding investment to that community but to say there’s nothing happening at all is not right,” he said.

Inquiries to Prime Minister Anthony Albanese were forwarded on to Infrastructure Minister Catherine King, with a spokeswoman for her saying: “The Albanese Government is confident about the future for Western Sydney and the prospects for jobs and the economy”.

She said the airport and the Western Sydney Airport Metro was already “our biggest infrastructure investment in the country with combined funding of more than $10 billion”.