There are some little discussed details that need to be kept in mind with today’s staged hoop la about the final approvals of a plan to develop a second Sydney airport at a site at Badgerys Creek.
The owners of the existing Sydney Airport now have about $7.6 billion dollars worth of public spending pledged for building and accessing a 2nd Sydney Airport at Badgerys Creek to incentivise them into spending around $1 billion on a terminal.
These details put an entirely different complexion on what was originally touted as a project based on the risks and rewards being taken up by private enterprise. It has segued into a massive potential benefit to Sydney Airport Holdings, the ASX listed owner of most of the existing Kingsford Smith airport, that also holds first right of refusal to own and develop a second airport in the Sydney basin.
When Sydney Airport was privatised in 2002 that option over building a potential competitor airport was a clincher in the Howard Government extracting $5.6 billion from a consortium led by the Macquarie Bank.
But there was no reference to Sydney Airport only having first right of refusal over the new airport’s terminal building. The political case made 14 years ago was that private investment would contribute in a major way to the whole airport, and the necessary additional surface transport infrastructure.
Sydney Airport makes massive margins on retail agreements for those terminals it owns at the existing airport, as well as the associated car parking facilities. In its early months the Turnbull Government was talking about an investment in infrastructure by the private owners of the new airport of around $3 billion.
The details of today’s agreement, as leaked so far, include a Government spend of $4 billion in a first stage single runway and taxiways, and other essential infrastructure within the site, as well as a separate $3.6 billion package for new roads and in due course, rail access.
The access infrastructure package, launched by the Abbott government, sought to leverage much needed spending on western Sydney roads on the merits of the immediate construction and longer term downstream economic benefits that an airport would bring. Is allowing a private owner to get away with just building a lucrative terminal at Badgerys Creek instead of assuming the risks and rewards of most of the airport, as envisaged in the conditions of the original privatisation of Sydney Airport, something that passes any pub test?
There is little room to doubt that Sydney needs this airport. The existing airport is a disaster for travellers, and in recent weeks has almost come to a standstill because of congestion on the approach roads, in the terminals, and in the carparks. The two underground rail stations at its International and Domestic sides are so expensive to use that two or more people sharing a taxi or Uber will pay less for door to terminal carriage than they would using public transport.
But these stations also funnel passengers onto suburban train services where the few places available for the disabled, elderly or pram pushing commuters who can’t use the upper and lower levels of each carriage are often taken by airport users toting oversized suitcases.
It is a very ugly very Sydney spectacle. Many of these passengers are starting or finishing their air travels from western Sydney, home to around 2.2 million out of more than 4.5 million residents, who struggle to otherwise drive to the airport close to the main CBD in much less than two hours.
It’s airportageddon, and the earliest a second airport at Badgerys Creek would bring relief is 2025, meaning a further nine years of hell.