Airport is vital infrastructure

If, as expected, Sydney Airport Corporation passes up its right to build the $6 billion Western Sydney Airport at Badgerys Creek, the Turnbull government should waste no time proceeding with the project in tandem with another private investor or as a government business enterprise. The airport, first proposed in 1969, will be a vital piece of productive infrastructure for the travelling public around the nation, as well as for 2.5 million people in western Sydney where cab fares to Kingsford Smith Airport often cost more than discount flights interstate. The project would create at least 9000 building and operational jobs, with many more to follow. Inevitably, employers would transfer their enterprises to the Badgerys Creek area to take advantage of new road and rail connections and proximity to the airport.

A second gateway to our largest city is essential for the expansion of business travel and tourism. For airlines, cheaper landing fees would increase competition and assist low-cost carriers. As a 24-hour operation, free of the 11pm to 6am curfew at KSA, the airport would facilitate interstate and international trade and freight movements. In a cynical move in the lead-up to last year’s election, Bill Shorten promised to restrict night-time flights at Badgerys Creek. Such inflexibility would cripple the new venture and must be ruled out.

Ultra-modern fast train links capable of transferring passengers from the new airport to the Sydney CBD in about 30 minutes, mooted in a federal transport proposal last year, could be valuable in contributing to the project’s success. Such infrastructure also would enhance daily services for western Sydney commuters. A 15-minute direct rail link from Parramatta to the airport has also been proposed.

As Simon Benson reports today, the government is being proactive in preparing contingency plans ahead of Sydney Airport Corporation’s announcement, which is due on May 8, the day before the federal budget is handed down. The privatisation of Sydney Airport in 2002 gave the company first right of refusal for running the city’s second airport. In anticipation of the corporation not proceeding and no major institutional investors emerging willing to take on the project, the government has modelled options to proceed with the project. One option would be based on the Snowy Mountains hydro scheme in which the government would be the principal shareholder in a company established to operate the airport. Another would involve a National Broadband Network style investment under which the airport would be a government asset, built and run “off budget”, without adding to the deficit.

According to a report by analysts Standard & Poor’s released in January, the project would require more than $5bn investment for a relatively small airport, to be opened in 2026. S&P said the project would be “extremely challenging” for private investors as it would be unlikely to earn an adequate return for at least a decade. Longer term, however, the airport is projected to expand to the point where it would require a second runway by 2050. As passenger numbers grew, taxpayers would reap good returns on the investment when it was eventually leased out to a private operator.

Speed of construction will be a key issue in creating jobs. In southeast Queensland the Brisbane West Wellcamp Airport, near Toowoomba, 120km west of Brisbane, took the Wagner family 19 months to build. They showed what could be done. While the western Sydney project is much larger, it warrants fast-tracking after 47 years of delays. Sensibly, the government envisages it should begin operations in 2026 with at least one 3.7km runway, capable of landing A380 aircraft, and a terminal to handle 10 million passenger movements a year. To meet such a timetable, earthmoving works should be under way by next year. The airport is vital not only to western Sydney’s development but to boosting Australia’s transport network. The national economy needs such projects if it is to continue to grow.