Category: Air Transport
Sydney Airport Group yet to confirm if it will build, operate Badgerys Creek
Tuesday, 20 Dec 2016 10:09:00 | Lucy McNally
The Federal Government could be in a bind if the operator decides not to fund the project. (Flickr: Michael Coghlan)
The Federal Government has given the Sydney Airport Group, which is majority owned by Macquarie Bank, until mid-May next year to decide whether it will come up with $5 billion to build Sydney's second airport at Badgerys Creek.
The first right of refusal goes to the Sydney Airport Group as part of the contract they have over the Kingsford-Smith Airport which was negotiated in 2002.
If they refuse, the same contract can be put to other private enterprises and includes a 99-year lease of the site.
But the airport has responded saying it needs more time to consider whether the investment in the infrastructure is wise, and noted the financial and political risks associated with the project as a concern.
In a statement, chief executive Kerrie Mather said "Sydney Airport believes it is entitled to a nine-month consideration period and is continuing to discuss this with the Commonwealth."
It puts the Federal Government in a difficult position because if no private enterprise wants to invest in the project the Federal Government will have to come up with money, Infrastructure Minister Paul Fletcher said.
Government has 'contingency planning' to fund second airport
The Federal Government signed off on the Badgerys Creek plan last week, after decades of debate about where the airport should be built.
The mid-year economic and fiscal outlook, released yesterday, outlined a $10 billion increase to the deficit over the forward estimates and the minister refused to disclose where the government would find the money to fund the much-needed second airport if the private sector will not fund it.
In a press conference Mr Fletcher said "we have contingency planning in place and we certainly have the capacity to fund it".
Sydney Airport Group and Mr Fletcher both said the project would not be delayed and the current airport would reach full capacity within a decade.
Mr Fletcher told reporters in Sydney: "It's now a matter for Sydney Airport Group as to whether they accept the notice of intention and the contractual terms embodied in it.
"If they do accept the notice of intention, then a contract is formed which is legally binding on the Commonwealth and on Sydney Airport Group."
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