Home' Asian Aviation : AAV June 2017 Contents 44 AsianAviation | June 2017
Western Sydney Airport gets funding
The Australian government has committed funds for the new Western Sydney Airport
after Sydney Airport Group decided not to go ahead with the project.
Contributor Emma Kelly reports on the move.
THE LONG-RUNNING SAGA that surrounds a second airport for
Sydney is finally coming to a close, with the Australian government
committing up to A$5.3 billion (US$3.9 billion) for the initial devel-
opment of Western Sydney Airport (WSA). The decision marks pro-
gress for a project that was first suggested in the 1940s. As well as
the initial funding, the government will establish this year a company,
WSA Co, with an independent board with extensive private sector
experience to develop and build the new airport.
Construction of WSA, which will be located on government-owned
land (1,780 hectares — almost twice the size of Sydney ’s Kingsford
Smith Airport) at Badgerys Creek, 51km west of Sydney ’s central
business district (CBD), will start with earth-moving by late 2018
and the airport is set to open in 2026 with a 3.7km runway and an
initial passenger capacity of 10 million, according to the government.
The government’s move, revealed in the country ’s latest budget
released in May, followed the latest setback in the project with Sydney
Airport Group, owner of Kingsford Smith Airport, declining its right of
first refusal to build and operate the new airport. Based on feedback
from a market engagement process and investors and its own eval-
uation, Sydney Airport Group concluded that the WSA project does
not meet its investment criteria. Sydney Airport Group had a right
of first refusal to develop and operate a second major airport within
100km of Sydney ’s CBD under the terms of its 2002 sale agreement.
Sydney Airport decided not to proceed with involvement in WSA,
having long recognised the significant challenges the project will
face. Sydney Airport Group had consistently said that the WSA
project would require material support from the Commonwealth
to make it commercially viable, which the government ’s notice of
intention to develop the airport did not include.
“Despite the opportunities that WSA will present, the risks associ-
ated with the development and operation of WSA are considerable
and endure for many decades without commensurate returns for our
investors,” explained Kerrie Mather, Sydney Airport Group managing
director and chief executive officer.
The need for a second Sydney airport is widely acknowledged.
Last year, Sydney Kingsford Smith Airport handled 41.9 million
passengers. Demand for aviation services in the Sydney region is
expected to double over the next 20 years and Kingsford Smith will
be unable to cope alone, even if its current operational restrictions
were lifted. Studies have predicted by around 2027, new services
could not be accommodated at Sydney Airport unless other services
were cancelled. By 2035, there would be limited scope for any further
growth of regular passenger services.
WSA will be a full-service airport, supporting domestic and in-
ternational passenger as well as freight services. Under the gov-
ernment’s plans, WSA will be developed in stages. Stage One
will feature a single northeast-southwest runway of around 3.7km
capable of handling the Airbus A380 — and terminal facilities
to support up to 10 million passengers per annum. On opening,
the airport is initially expected to handle 5 million passengers per
annum, growing to 10 million after five years.
In the longer term, the government envisages the need for a sec-
ond parallel runway once demand approaches 37 million passengers
per annum, which it estimates could occur around 2050. By 2063,
the airport is expected to accommodate approximately 82 million
Infrastructure Australia, which is tasked with prioritising and pro-
gressing nationally significant infrastructure, estimates Stage One
infrastructure work will cost around A$5 billion, with expansion in
the longer term expected to cost more than A$38 billion.
The federal and New South Wales governments have also com-
mitted A$3.6 billion to the Western Sydney Infrastructure Plan
for road and transportation links in the area and are studying rail
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