SYDNEY - Australia has approved a $2.4 billion project to build a long-awaited second airport for Sydney, likely boosting near-term investment and jobs in a bet that the city's air travel demand will grow enough to justify a surge in terminal capacity.
Prime Minister Tony Abbott announced the plan on Tuesday, saying he expects work at the Badgerys Creek site in Western Sydney, 60 kilometres from the city centre, to begin in 2016. The A$2.5 billion ($2.4 billion) project will be funded mostly by the private sector, he said, with first flights expected in the mid-2020s.
A second airport for Sydney was first proposed over 50 years ago, but became mired in political debate before Abbott promised to build one in last year's victorious election campaign. He was voted in on a ticket pledging he would be an "infrastructure prime minister", targeting infrastructure projects to revive economic growth that sagged as Australia's mining investment boom faded since 2012. "It is essentially going to be an infrastructure package for Western Sydney, a long overdue infrastructure package for Western Sydney, that does also involve an airport," Abbott told reporters in Canberra.
While the project is designed to bring a straightforward injection of investment and jobs to the area in the near term, implementing it and making efficient use of the extra capacity it brings in the longer term may be more complex.
Sydney's current sole airport is Kingsford Smith, operated by Sydney Airport Holdings Ltd in the Mascot suburb, 10 kilometres southeast of the city centre. Under rules governing its privatisation in 2002, Sydney Airport has the right of first refusal to develop and operate a second airport in the city. "Basically it's the first right to develop and operate a second airport, but it's something that would be subject to lengthy discussions," Sydney Airport's spokeswoman Laura Stevens told Reuters.
Talks between the government and the airport operator may be complicated by the fact that Sydney Airport already has an existing 20-year plan to upgrade Kingsford Smith. That plan was devised to meet forecast demand of 74 million passengers in 2033, nearly double 2013's 38 million passengers.
The time frame for consultations will be "a minimum of a year and a maximum of two years", Infrastructure Minister Warren Truss told reporters in Canberra. "If they (Sydney Airport) choose not to do so, then that opportunity will be offered to others," he said.