Western Sydney Airport: Government paid for land at 10 times market value

Taxpayers forked out $20 million for Western Sydney Airport land even though its market value was $2 million, a scathing report reveals.

The Federal Government has been criticised for buying a piece of western Sydney land for the city’s second airport at 10 times its market value.

A report by the Australian National Report Office said the Commonwealth paid $29.8 million for the 12-hectare pocket of land at Bringelly in 2018 for the future expansion of the Western Sydney Airport.

A year later, the land was valued at $3.06 million — roughly a tenth of the price paid by taxpayers.

The land, known as the Leppington Triangle, sits at the end of what will become the airport’s second runway when it is built in around 30 years.

It was sold by the billionaire owners of the Leppington Pastoral Company, one of the largest family-owned dairy companies in Australia.

Sydney's second airport at Badgerys Creek Creek under construction. Picture: Toby Zerna

A report by the Australian National Audit Office (ANAO), released yesterday, found the Federal Government had failed to exercise proper due diligence in the purchase of the dairy farm land, which was advised by the Department of Infrastructure, and noted it had paid “more than was proper”.

“Appropriate consideration was not given to costs and benefits when deciding to acquire the land early,” the report said.

“The benefits identified by the department in its advice are questionable and there was no documented consideration of costs.

New roads at the site to ease congestion when the airport is completed. Picture: Toby Zerna

“The department did not demonstrate that the benefits of acquiring, and paying for, the land some decades in advance of need outweighed the cost to the Australian Government.”

The report said the Department of Infrastructure only sought a “single valuation” of the land using a supplier that was suggested by Leppington Pastoral Company, and “no valuation of other types of compensation that may be payable under a compulsory acquisition was obtained”.

Auditors said when the department was questioned about its approach it “did not provide the ANAO with accurate answers … which was not ethical behaviour”.

The report also noted the Commonwealth paid 22 times more per hectare than what the NSW Government paid for 1.36 hectares in the same area for a development of the Northern Road.

A spokesperson for Urban Infrastructure Minister Alan Tudge told the ABC the department would comply with recommendations outlined in the auditors’ report.

An engineer watches as earthmovers carve out the runway at Western Sydney Airport. Picture: John Appleyard

“The department has made a lengthy statement to the ANAO about its handling of the transaction and will comply with the recommendations of the report: noting, that their strategy was developed in consultation with the Department of Finance and the Australian Government Solicitor and was designed to mitigate the risk of costly and lengthy legal challenges,” the spokesperson said.

“The Department is also investigating matters of staff conduct identified by the ANAO.

“There is no question of Ministerial involvement. It goes to the administrative actions of the department, more than two years ago.”