Getting to the start line of Sydney’s new airport
Australia’s most significant infrastructure project in recent history has the potential to become a “job engine for Western Sydney” and deliver a construction boom.
In December, the federal government announced approval of the Airport Plan for a new Western Sydney airport, paving the way for construction to begin in 2018.
The independent assessment by Infrastructure Australia found the project has a benefit cost ratio of more than 1.8, meaning it will deliver net long-term benefits to the economy.
Sydney Airport Group has the right of first refusal to develop and operate the new airport and is currently considering the federal government’s contractual proposal. A response is expected in May.
The contract requires the listed airport operator to build a 3.7 kilometre runway and a terminal capable of handling 10 million passengers each year. The costs of building and operating the airport must be met by Sydney Airport in return for the economic benefits for 99 years.
Sydney Airport has said the project would need “material support from the Commonwealth to make it commercially viable”.
The federal minister for urban infrastructure Paul Fletcher has put the cost of the airport at around $5-6 billion, and promises it will be open by 2026, regardless of whether Sydney Airport exercises its right to operate the facility.
David Borger, from the Western Sydney Airport Alliance, which is a coalition of business, union and community groups in support of a Western Sydney airport, says there are “arguments for and against whether there should be a separate operator for the new airport – and that’s something for the government to resolve. But it’s certainly looking challenging for Sydney Airport to take up the offer.”
If Sydney Airport declines the opportunity, the “government will either offer the same set of terms and conditions to the market or undertake construction itself,” he says.
Borger says the airport “has the potential to become a job engine for Western Sydney” at a time when “smart jobs” are centralising in our city CBDs.
More than two million Sydneysiders already live west of Parramatta, and that number is expected to rise to three million by 2030. Currently, nearly a third of workers who live in Western Sydney leave the area for work every day.
Airports are one of the few types of infrastructure that create more jobs after they are built than during construction. Thousands of jobs created directly to support an airport’s operations, and attract new investment, business and industry development to the surrounding region.
Seoul’s Incheon International Airport is the largest airport in South Korea. Commercial development in neighbouring precincts have taken advantage of the airport’s proximity, and the area has become a magnet for logistics, financial services, international business centres and even university campuses.
Similarly, Schiphol Airport in the Netherlands has encouraged economic growth with business parks, corporate headquarters and high-tech industrial hubs springing up nearby.
Typically, the majority of people who work at an airport live nearby. At Kingsford Smith Airport, around 80 per cent of workers live within a 30-minute distance. And 84 per cent of those employed at London’s Gatwick Airport live within its ‘core employment zone’ surrounding the airport.
By the early 2030s, there are expected to be nearly 9,000 direct jobs at the Western Sydney Airport site, with a further 11,000 at on-site business parks in the surrounding area. The employment generated will grow as the airport does, with more than 100,000 direct and indirect jobs expected by the early 2060s.
The proposed airport has found favour with locals. An opinion poll commissioned by the Department of Infrastructure and Regional Development in February found 81 per cent of voters in Western Sydney were either positive or neutral.
But operation by 2026 is still nearly nine years away. Can the people of Western Sydney wait this long?
“We’d like to see it happen sooner rather than later. Airports take a long time to construct – what we are looking at is the biggest excavation site in Australia,” Borger says.
The opportunities for the construction industry are obvious. The Department of Infrastructure and Regional Development says that “detailed design and construction work” will be contracted out to the private sector, including the design of the airport site layout, design and construction of the bulk earthworks, airport buildings and utilities.
Borger says the biggest concern he has is that that private sector investment in the airport city is already underway, and “some of those investments are at risk of being delayed because we haven’t got the planning right”.
The overlapping governance and planning controls surrounding the Badgerys Creek site, and the challenge of coordinating various government agencies and utilities are key impediments to the precinct’s economic development, Borger says.
“We need an authority that brings all the relevant agencies together. We are pleading with government to establish an authority so that we don’t delay projects.”
However, the future of Australia’s next aerotropolis – or airport city – looks promising, Borger says, because both sides of politics “are on a great bipartisan unity ticket for the airport”.
“Both Paul Fletcher and Anthony Albanese are aligned and that’s exactly what we want to see on all major infrastructure projects.”