Sydney Airport Corporation turns down option of building $6b Badgerys Creek days before deadline

UPDATE: The Turnbull government will develop a $6b second airport at Badgerys Creek itself through a NBN Co-like corporation, a move backed by Labor as a ‘massive opportunity’ for Sydney’s west.

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The Turnbull Government has confirmed it will build the $6 billion Western Sydney Airport at Badgerys Creek after Sydney Airport Corporation declined to take on the project.

Details of the WSA plan will be announced by Treasurer Scott Morrison in next week’s federal budget after Sydney Airport Corporation turned down its right to build the airport.

“It is a vitally important project for Western Sydney, for Sydney, and the nation, which is why the government ended decades of indecision by committing to the project in 2014,” Prime Minister Malcolm Turnbull said.

An artist’s impression of the new $6b Badgerys Creek Airport to be built in Western Sydney.

“The airport will be a major catalyst for jobs and economic growth in Western Sydney, injecting more than $1.9bn 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.”

Shadow infrastructure minister Anthony Albanese supported the decision, saying it was a “massive opportunity” for growth in western Sydney.

“People for too long have seen this as Sydney’s second airport, this should be seen as western Sydney’s first airport…it will provide jobs and an economic catalyst for western Sydney,” he said.

PM: Government will build $6b Badgerys Creek.

Support... Shadow infrastructure minister Anthony Albanese

But he said it was essential that the airport be connected to the city via a rail link from its first day of operation, something Labor is promising to build.

“A train line is essential that it be open on day one. Let’s get the infrastructure in place,” he said.

Mr Albanese said Labor had been in discussions with the Turnbull government on the airport development over a period of time and was confident once the airport has been built investors will be lining up to lease the project.

“When the airport is leased I think you might find there are a whole range of bidders. We have approaching $2 trillion in superannuation funds in this country looking for projects to invest in,” he said.

But he stressed that Sydney Airport Corporation’s decision to knock back the construction and operation of the new airport should not discourage taxpayers, who he believes will receive a return on the asset in the future.

Sydney Airport managing director and CEO Kerrie Mather.

“Sydney Airport are making a commercial decision and that’s up to them to explain… The fact is that taxpayers have built every airport around the country…Western Sydney Airport is no different, it will be leased down the track, and will produce a return when that happens to taxpayers.”

Earlier SAC chief executive Kerrie Mather explained the decision not to back the project.

“Sydney Airport’s decision not to accept the WSA (agreement) on the terms provided is in the best interest of our investor who represent millions of Australians through their superannuation funds,” Ms 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.”

Another view of the new Badgerys Creek airport to be built in Western Sydney.

It was a decision widely tipped by market analysts, with Sydney Airport required to invest significant amounts of money with no return for years.

It was a decision also expected by the Turnbull government.

Urban Infrastructure Minister Paul Fletcher has already met with some of the country’s largest construction firms, with two — Lend Lease and CIMIC — likely to be the top choices if the government agrees to oversee the development.

Sydney Airport was surprised in October after the government withdrew an offer of a concessional loan to cover the construction at Badgerys Creek.

The government is insistent the new airport will open by 2026.

The 2002 privatisation of Sydney Airport gave the company first right of refusal on running the city’s second airport.

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Premier Gladys Berejiklian says Sydney Airport’s decision had left the federal government with “some really exciting options” and the state government would continue to invest in the project.

“We are a stakeholder, it’s in our state, we have a huge interest in making sure it happens and we will support in whichever way we can the federal government to make it happen as quickly as possible,” she said in Sydney.

I think the community wants to see the project come to life as opposed to necessarily worrying about who builds or who operates it.”

Sydney Airport’s refusal had been widely expected after the federal government in December ruled out any direct financial support towards the cost of building and operating the proposed $5 billion project at Badgerys Creek.