Sky News Live, PVO Newsday with Peter Onselen

Interview

PFI006/2017

26 April 2017

Topics: Western Sydney Airport, WestConnex.

Peter Van Onselen: I'm about to speak to our Urban Infrastructure Minister Paul Fletcher. He joins me live in the studio, thanks for your company.

Paul Fletcher: Pleasure, Peter.

Peter Van Onselen: Let's hope no one's going off to watch all these other opportunities. Okay, I want to get to Labor and what they're proposing in terms of this connecting of the Western Sydney Airport, but before we do can you give me an update on where we're actually at in the process of the airport? I know it's all been announced but there's a number of hurdles to jump yet.

Paul Fletcher: Look, it's an important question because it's a very big project with a lot of stages. So, we announced the commitment to build Western Sydney Airport at Badgerys Creek in 2014. Since that time, an environmental impact statement, draft and final, has been issued. The Airport Plan was issued in December last year, which now creates the regulatory approval to build an airport there, and then we also issued what was called the notice of intention to Sydney Airport Corporation, the owners- or Sydney Airport Group, the owners of Kingsford Smith Airport. They have a right of first refusal to build Sydney's second airport, which goes back to the privatisation of Kingsford Smith in 2002. So that notice of intention, it's about a thousand pages of legal documentation. That sets out the terms on which they would build if they chose to accept it, so it's a requirement …

Peter Van Onselen: [Interrupts] When do we have to find out their answer to that by?

Paul Fletcher: And we will know that by 8 May, so that's the deadline for them to respond to the notice of intention. And so, as I was saying, 3700 metre runway, a terminal capable of 10 million passengers a year, airport to be operational in 2026, and of course then the need to commit the capital to achieve all that.

Peter Van Onselen: Is the expectation that they will say yes, or are you not in a position to say that?

Paul Fletcher: Look, I have not commented on that issue. What I have said repeatedly is that the Turnbull Government absolutely respects Sydney Airport Group's legal rights under the right of first refusal. We also fully understand that they need to make a decision in the interests of their investors, indeed board and management have a fiduciary duty to do that. And so, they'll have had about four months, a bit over four months to consider the terms of the notice of intention. That's the process that's set out in the right of first refusal documentation.

Peter Van Onselen: Is there- can I ask on this, is there a disadvantage potentially for taxpayers, for the Government, if they say no, then trying to find another party that's interested? I mean, is this is a risk, if you like?

Paul Fletcher: We've been doing a lot of contingency planning so that we are well prepared for whichever scenario eventuates. If Sydney Airport Group accepts the notice of intention, then obviously we'll move forward with them. If Sydney Airport Group does not accept the notice of intention, the Government's options are to build and operate Western Sydney Airport itself, or to go to the market to find another private sector player.

Peter Van Onselen: You wouldn't want to do it yourself, would you, surely? I mean, particularly a party like the Liberal Party that believes in the concept of privatisation philosophically, you wouldn't want bigger government running a second airport in Sydney?

Paul Fletcher: Well, again, I've made the point that we have these two options, we've done a lot of contingency work. I gave a speech on this last Friday in which I said that once Sydney Airport Group announces its decision, if it announces that it's accepting the notice of intention, then we'll go forward working closely with them. If it accepts that it's rejecting, then we will, reasonably soon after that, be laying out what the path forward is.

Peter Van Onselen: But you're building it no matter what, even if there's no interest from a second party and if Sydney Airport aren't interest?

Paul Fletcher: Western Sydney Airport will be built and will be operational by 2026. That is a clear commitment. All paths lead to that outcome.

Peter Van Onselen: And there's no risk to that timeframe of 2026 with this particular outcome? Because presumably it truncates the process if they say no?

Paul Fletcher: Well, that's why we've been doing all of this contingency planning but the other thing I'd say is that notice of intention, that thousand pages of legal documentation, that remains a very important document whether Sydney Airport Group accepts the notice of intention or whether another party, be it the Government itself or somebody else, is the party which builds and operates. And indeed, we are required to offer terms to other parties including ourselves which are not materially more advantageous. So, all of the provisions in that notice of intention will substantively regulate the arrangements regardless of who it is who builds and operates and so that's why we've developed it very carefully, recognising it needs to accommodate those different scenarios.

Peter Van Onselen: Labor have announced all sorts of, if you like, infrastructure plans around Sydney's second airport and linking it to other parts of the city, particularly the west, what do you make of it?

Paul Fletcher: Well, what we've seen today is a reheated story in which Labor are saying they'd commit $400 million for a rail link. We saw this during the March 2015 New South Wales state election.

Peter Van Onselen: So, it's the same policy?

Paul Fletcher: It appears to be, and at the time then-New South Wales Transport Minister Gladys Berejiklian pointed out that the South West Rail Link to Leppington, 11.4 kilometres, had cost $1.8 billion, it had just been completed at that point. Labor's suggesting $400 million and they're talking about a link from Leppington to the Airport which is 15 kilometres, or a link from Leppington to the airport and the Western Line at St Marys, which is 24 kilometres, but apparently …

Peter Van Onselen: [Interrupts] So, you think they're kidding themselves on the numbers?

Paul Fletcher: It doesn't stack up at all when you compare to the most recent project, big rail project, in that area completed. We put out a discussion paper last year as part of the very thorough planning process that the New South Wales Government and the Commonwealth Government, the Berejiklian and Turnbull governments are working through together in relation to the rail needs of Western Sydney and Western Sydney Airport. And so that scoping study's looking at the question of what's the right route for a rail connection, when should it be built, how much will it cost, how should it be funded. Now, that scoping study- under that scoping study, there was a discussion paper issued last year which set out a whole range of possible routes—north-south routes, potentially from Campbelltown, the Macarthur Area up to St Marys and then on to potentially connect to the North West Metro that's presently being built, and east-west link, the Leppington connection, or a range of other possibilities—and so one of the things that scoping study is designed to do, or that discussion paper in particular, is to get community feedback about which is the preferred route.

It's important to recognise that Western Sydney Airport will, at least in its early years, principally be serving people in Western Sydney. There'll be 2 million people who are closer to Western Sydney Airport than Kingsford Smith Airport. So, one of the considerations is where do you expect most of the traffic to come from. One of the other considerations is, how much of the traffic on the rail will come from the airport? If it's just the airport traffic alone, it will start with 3 million to 5 million passengers a year. Now a good metric, is about 20 per cent of airport passengers using the rail. Kingsford Smith has just reached 20 per cent on the rail line there, bear in mind that's been operating for 17 years and it's jumped quite a lot in the last few years. So, the point there is if you're only looking at the passenger volumes from the airport, you couldn't justify rail on the basis of that, but that's precisely why we called the scoping study Study into the Rail Needs of Western Sydney and Western Sydney Airportbecause I think it's common ground amongst most people that if you are to build rail, the traffic needs to come from the development that will be stimulated by the airport.

My point is this: there's a lot of detailed planning work underway, none of that has been worked through by Labor. It's the announcement of … 400 million, which is a drop in the ocean, but they've also- they seem to have made assumptions about what the route should be without doing the proper planning.

Peter Van Onselen: Well, on that, I mean, this is a separate issue and it's a state government issue primarily, but in the time that we've got left before we have to go to Paul Keating's speech, what about WestConnex? I'm sure you've seen the story about residents being concerned about road widenings and how much it's buttressing up against large apartment blocks, some of which are newly built—you wonder how this doesn't get better managed between developments and widening of roads—have you got concerns on that front, where residents are expressing really serious concerns?

Paul Fletcher: Look, WestConnex is a transformational project. $16.8 billion, it's going to make it much easier for people in South Western Sydney and Western Sydney to travel into other parts of Sydney …

Peter Van Onselen: [Interrupts] Sure, sure, but all at the expense, it looks like, of what is going to be some bad outcomes in terms of widening of roads that leave roads buttressing up too close to- my point here is really new developments, developments that with better planning never should have been approved in the first place.

Paul Fletcher: Look I'd make the point that in any major infrastructure project, there are always issues that need to be worked through in terms of consulting with the community. There's a lot that's been done on that in relation to WestConnex, but this is a project that is going to transform the way people move around our city. And this is really making up for, amongst other things, the 15 years plus of Bob Carr and other Labor Governments in New South Wales which did none of this. So this is vitally needed infrastructure which is going to make our city function much better, and it's also as we've seen with recent announcements from the New South Wales Government, its been planned with future connections and future capacity in mind. So this is really very, very important, and it's a great shame that during much of the nineties and the first half- the first decade of this millennium we had Labor in power in New South Wales not really making the infrastructure decisions. I mean they announced 11 rail lines, cancelled a lot of them before they even got started. Half of one was delivered: Chatswood to Epping. So it's a very poor record of infrastructure by Labor and New South Wales. The Berejiklian Government, before that the Baird and O'Farrell Governments, have been doing a terrific job, and the Turnbull Government working very closely with them, including in relation to Western Sydney airport and the Grand Transport Connections road—a $3.6b package including the new M12 to connect with the M7—but also this rail scoping study.

Peter Van Onselen: Alright, let me- before we run out of time we're going to have to go to Paul Keating's speech. Politics of the day, Cory Bernardi's new party, it's linked- joined hands if you like with Family First. Is this a good thing in your view? I mean I think it's a good thing, because it's a party less extreme than One Nation to therefore perhaps push One Nation out of the space on the right of centre?

Paul Fletcher: Look what I'd say is it's a thing. I mean we have to deal in the Senate with the crossbenchers. Cory Bernardi is a crossbencher; we'll deal with him respectfully and professionally.

Peter Van Onselen: Paul Fletcher, always appreciate you joining us on the program. Thanks once again.

Paul Fletcher: Thank you.