By Clara Cutajar, PwC Infrastructure & Urban Renewal Leader. This article appeared in The Australian - 12 May 2017
A new, greenfield international airport in a major developed city is rare, and the decision to progress the Greater Western Sydney airport will deliver a legacy for generations to come. It will be the most visionary infrastructure investment in Sydney since 1923 when we started to build the Sydney Harbour Bridge.
But to leverage this multi-billion dollar investment of taxpayers’ money, and for the airport to become the halo for Western Sydney that spurs economic growth and delivers community benefits, we need a plan that includes the world’s best delivery, coordination across all three levels of government, and a razor sharp focus on connection.
Failing to plan and protect corridors for long term infrastructure development has been a longstanding criticism of both state and federal governments. But the decision to keep the parcel of land at the Badgerys Creek site aside for the future is a credit to both sides of politics. Taking the politics out of infrastructure decision making is something we all long for, and this is a great example.
True, it has taken the Turnbull government to get things moving on delivery, but it has been the foresight of governments - right back to 1986 - that have purchased and protected the site. And they’ve all held firm on this position against some strong community and business opposition. Indeed it was this long term vision that ensured Sydney didn’t have to follow the examples of other major cities such as Tokyo and Hong Kong in building their second airports on man-made islands.
So with the land and funding locked in, we now must prioritise the world’s best delivery and there are a number of ‘gold star’ examples around the world we can look too, namely Seoul’s Incheon Airport. Incheon has been ranked the best airport in the world by passengers for seven years running as well as in the top five for the world’s busiest freight airports which is a rare combination
The reason Incheon is ahead of the pack is because it has become an economic hub of its own. It has generated more than 90,000 direct jobs and delivers around $10 billion a year extra value to the South Korean economy. All of that with only twenty per cent more passengers than our own Sydney Airport.
We need to study examples like Incheon and other airports like Amsterdam to understand how they maximised the economic and community benefits. There are lessons to be learned about how we can bolster our own competitive advantage which is largely due to the fact Badgerys Creek is ideally located for direct connections between Melbourne, Brisbane and Sydney’s port at Botany. It’s this factor that makes it naturally appealing to major global retailers who will be looking for hubs that provide the most seamless freight and logistics options.
The new airport will also be the centre of a new place to live, work and play for the population of Western Sydney and provide significant access to jobs and new transport connections. Projects of this scale tend to attract the smartest people and we must focus on how we tap into innovation and best practice at every level to create opportunities for precincts that will be in line with the Greater Sydney Commission District plans.
In addition to the terminal itself, the airport’s success will also be judged by the quality of the connections in and out of it. It is critical that the best road and rail services are in place from day one to move passengers and workers, whilst at the same time, minimising the impact on the residents who will live around it.
It is this part of the project planning that will make the difference in terms of the long term value, and all three levels of government need to be talking to each other now and committing to working hand in glove to achieve the best outcome for all.
The signs are positive in this respect with the Federal and State Government investing over $3 billion in road infrastructure. But much more will be required and fast rail should be part of the mix. Further exploration of innovative financing models, including value capture, to optimally fund the project should be explored and can contribute to the capital cost of building new rail corridors.
Finally, with the planning comes the risk profiling and a major infrastructure project of this scale has a number of risks to carefully and patiently manage. It is also an expensive exercise with the financial benefit not likely to be realised within a political term, maybe even a generation.
One way to manage the risks (and the costs) is to share them with the private sector. History shows that the specialised expertise of the private sector almost always delivers major projects faster and more cost effectively. The government must look to see how public private partnerships can be utilised in this project to create get the best outcome for taxpayers and drive value across the whole region from this project.
Every way you look at this decision the potential is unparalleled. It is a catalytic development that will change the centre of growth in our biggest city and extend economic activity from the east to the west, taking jobs, services and opportunities with it. The challenge now is to build an effective plan, execute well and deliver on the potential.
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© 2017 - Tue Dec 12 20:52:31 EST 2017 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. Liability limited by a scheme approved under Professional Standards Legislation.