Speech to the NSW Division of Property Council Luncheon

Speech

PFS014/2017

03 November 2017

Westin Hotel Sydney

The Turnbull Government’s work to deliver Western Sydney Airport is significant for many reasons—and one of the most important is the impact it will have on the urban development of Western Sydney.

Collectively we have an extraordinary opportunity to shape a greenfields area into a major urban centre—and a vibrant hub of economic activity to support surrounding commercial development.

This of course is a subject of great interest to members of the Property Council, so I am pleased to have the chance to speak at this important event today.

I want to first review the progress we are making on the airport itself.

Next I want to speak about the areas surrounding the airport—and the potential and importance of urban development in this area.

Finally I want to touch on the way that the Commonwealth, NSW and local governments are working together to capture this opportunity.

Progress on the Airport

Let me turn first then to the progress we are making on the airport.

Since the 2014 announcement by the Coalition Government that the airport would be built at Badgerys Creek, we have covered a lot of ground.

We have prepared and issued draft and final Environmental Impact Statements.

We have prepared and issued draft and final Airport Plans.

The final Airport Plan provides the formal regulatory approval to build the airport at Badgerys Creek.

We have completed consultations with Sydney Airport Group under its right of first refusal to build and operate a second airport in the Sydney basin.

Following Sydney Airport Group’s decision that it would not take up the opportunity, we established a government owned company, WSA Co, to build and own the airport.

We announced in the May budget that the Turnbull Government would inject up to $5.3 billion of equity into WSA Co to fund construction.

The first four directors of the company have been appointed.

The chairman is prominent businessman Paul O'Sullivan, the current Chair and former Chief Executive of Optus, and the other directors are Fiona Balfour, former Chief Information Officer at Qantas; Tim Eddy, former Managing Partner at EY and Christine Spring, a civil engineer and aviation infrastructure expert.

Collectively the Board of directors brings a wide range of commercial and aviation expertise—and a proven track record of delivery in the private sector.

The Government has established a community consultation mechanism, the Forum On Western Sydney Airport (FOWSA), chaired by Professor Peter Shergold AC, Chancellor of Western Sydney University.

We have announced that WSA Co will establish its offices on Scott Street in Liverpool; staff will locate there before the end of this year.

All of the tenants who formerly occupied the 1800 hectare airport site at Badgerys Creek have now left, and the site is being readied for construction.

A key activity is the relocation of a high-voltage powerline and towers that currently runs across the site.

Today it has been announced that WSA Co and the Commonwealth have signed an agreement with TransGrid, the manager and operator of the NSW transmission network, for the undergrounding of a 3.2 kilometre section of this powerline, with work expected to commence later this year.

WSA Co’s procurement processes are ramping up.  It has already gone to market for geotechnical works and land survey services on the site, and later this year will be in the market for further work including initial bulk earthworks, with this work to commence on the site before the end of 2018.

Beyond these early works procurement activities, WSA Co has today announced its procurement strategy for the major work on the construction of Western Sydney Airport.

The company intends to go to market in three primary packages of work, with the first and largest encompassing first stage earthworks, drainage, and utilities, together with airside pavements.

Expressions of Interest for this first package will be released in February 2018. The second major package will be the terminal building and associated airside and landside interface works, and the third the landside roads, carparks and associated works.

Together, these three primary packages of work comprise the Main Works program.

I am advised that the Company weighed up various strategies and concluded that the three packages strategy will achieve the best value for money.

Of course WSA Co is led by a Board of directors with deep commercial experience; this is exactly the kind of decision where that experience is of great value.

So I welcome this announcement from the WSA Co today—which demonstrates how the company is getting on with the job of delivering Western Sydney Airport.

The Areas Surrounding the Airport

I have spoken about the airport; but what about the land surrounding the airport?

Recently the New South Wales Government’s Greater Sydney Commission has released drafts of a new Greater Sydney Region Plan and a new Western Sydney District Plan. They conceive of Western Sydney Airport as the core of Sydney’s third ‘Western Parkland’ city.

The Western Parkland City is proposed by the Greater Sydney Commission to be focused on trade, logistics, advanced manufacturing, health, education and science economy, supported by excellent transport networks.  It sees Western Sydney Airport as anchoring and catalysing a Western Economic Corridor, joined by twin north-south spines of public transport and South Creek open space.[1]

To take one example of the kind of economic activity to be catalysed by the airport, as the draft Greater Sydney Region Plan outlines:

The NSW Government, in partnership with the Australian Government, is leading the development of a world-class aerospace and defence industries precinct, adjacent to the Western Sydney Airport. The Precinct aims to create approximately 7,500 jobs and over $15 billion of gross value add over the next 30 years.[2]

There are more details to come when the NSW Government releases a draft Structure Plan, which will indicate potential land uses for the Western Sydney Airport Priority Growth Area.

Let me emphasise that the Commonwealth Government very much shares this vision of Western Sydney Airport’s potential to catalyse economic activity and to be the core of a vibrant new urban region in Western Sydney.

Around the world, there is ample evidence that, with good planning, airports can become economic hubs that drive the growth of a region.

Last year I visited Incheon Airport in Korea; Premier Berejiklian was also there a couple of months ago. 

Industries located near Incheon include logistics, financial services, international business centres, and manufacturing facilities such as pharmaceuticals. In the new town of Song-do, just across the bay, there are a number of international and local universities.

At Schiphol Airport in the Netherlands, there is extensive surrounding development including business parks, corporate headquarters and a number of high-tech industrial parks.

In July, I visited Dallas Fort Worth Airport in the US. It opened as the region’s second airport in 1974 and now has 65 million passengers a year. A recent report found the airport generates $37 billion a year in total expenditure and supports 228,000 jobs, mostly in the north central Texas area.[3]

Today the area around Dallas Fort Worth Airport is occupied by a wide range of businesses. There are defence and aerospace businesses like Lockheed-Martin, Northrup Grumman and Bell Helicopter.

Major logistics players abound. Amazon has three fulfilment centres near Dallas Fort Worth and is currently building a fourth, with a total of four million square feet.

The big German medical equipment company Fresenius has its main US facility near the airport, and distributes across the US. Its facility also hosts training sessions attended by medical professionals from across America.

The principle is clear: land use planning around the airport can help to attract the kind of businesses that gain value from the connectivity that a 24-hour airport offers. 

Already there is strong business appetite to locate near Western Sydney Airport or in the surrounding region.

In the tourism sector, there are plans for a new 275-room luxury hotel in Luddenham at Twin Creeks Golf Club, and a new MGallery by Sofitel hotel at the Inglis Riverside Stables in Warwick Farm. As Margy Osmond, CEO of the TTF, recently stated:

The benefit of the Western Sydney Airport to the region’s visitor economy cannot be overstated—it will be a massive economic engine that will drive investment and jobs growth through the roof. [4]

In defence and aerospace, the giant US company Northrop Grumman recently announced plans to build a $50 million centre of excellence near the airport, which will see its Australian employment numbers double from 500 to 1000.

Business attraction and the employment it generates is very important.  But what is also important is the opportunity to create a sense of place in the metropolitan area that will grow up around Western Sydney Airport.

There are some very good examples of urban placemaking in Australia in recent years, including Central Park in Sydney, Federation Square in Melbourne or South Bank in Brisbane.

Good placemaking means drawing on the unique attributes of the area. At Barangaroo, Lend Lease are leveraging a unique harbour location and access to the financial services sector.

I saw a similar up-front commitment to high quality place making on a recent visit to two large US projects—Downtown Waterfront South in Portland, Oregon, and Hudson Yards in New York City.

Waterfront South covers a large expanse of formerly industrial land along the Willamette River which runs through the centre of Portland.

It is now being regenerated into a vibrant mixed use area including apartments, commercial buildings, shops and restaurants, and the campus of the Oregon Health Sciences University.

Hudson Yards is a formerly light industrial area on the lower west side of Manhattan, including a large train marshalling yard for the New York subway system.  It is being redeveloped as a complex of large apartment buildings and commercial buildings, some located above a ‘roof’ built over the train yard.

A clear lesson from these domestic and international reference sites is the importance of an overall master planning approach to give confidence that the area will be attractive for people to live and work.  In turn that is important in attracting private developers.

In the land around Western Sydney Airport, we have the opportunity to take a similar approach, and to leverage the increased mobility offered by Western Sydney Airport, as well as its unique parkland setting, as key organising principles in the Western Parkland City.

It is clear from the domestic and international examples I have cited that if we are to have similar success around Western Sydney Airport, the property and development sector has an absolutely critical role to play. 

I am increasingly struck by the way that Western Sydney Airport is stimulating great energy and enthusiasm from so many people and sectors.  Just yesterday, Liverpool Council issued an excellent report about airport-linked opportunities for its community, and the NSW Farmers’ Federation and KPMG put out a paper about opportunities for exporting fresh produce from the airport.

I am also seeing the same kind of creativity and energy from your sector.  You have demonstrated a very clear understanding of, and enthusiasm for, the scale of the opportunity which Western Sydney Airport, and the new city to emerge around it, represents.  The drive, energy and vision of the property sector will be critical if we are to succeed in making this a world class area to live, work and play.

Working Together to Capture this Opportunity

Now for this all to work, the Commonwealth and State Governments need to be working very closely together to deliver the right foundations—for a successful airport, and for a successful city around the airport.

So let me in the final part of my remarks touch briefly on the work of the Turnbull and Berejiklian Governments.

We are working closely together to ensure the new airport will have first­-class ground transport connectivity. This includes the jointly funded $3.6 billion Western Sydney Infrastructure Plan, which is building and upgrading roads to link Western Sydney Airport to Sydney’s road network.

There will be a new M12 Motorway, connecting the airport to the M7 and Sydney’s motorway network.

The Northern Road will be upgraded to at least four lanes along its 35 km length with work already under way, as is work to widen Bringelly Rd.

The two governments are together finalising a Scoping Study into the rail needs of Western Sydney and Western Sydney Airport. This is asking what the right route would be for a rail connection to the airport; when it should be built; how much it will cost; and how it should be paid for?

I have already mentioned the detailed work of the Greater Sydney Commission on planning land use around the airport. 

And the two governments are working together, along with local councils, to agree on our shared priorities through the Western Sydney City Deal.

This is a framework to bring together all three tiers of in the development of the Western Parkland City, with the Western Sydney Airport as the economic focus—but encompassing policies in other areas such as jobs, skills and education, liveability, environment and housing.

Western Sydney Airport is an opportunity to shape the development of Western Sydney for decades to come and all three levels of government are working together to seize this opportunity.

Conclusion

There have been few development opportunities as significant, or as important, as what now arises in Western Sydney.

The Turnbull Government’s commitment to delivering Western Sydney Airport by 2026, coupled with the vision of the Greater Sydney Commission, and the collaboration of the NSW Government and local Government presents a unique opportunity.

I have tried to emphasise today that we have the processes underway to build a great airport, and a highly liveable Western Parkland City. As we get on with building the airport and the city we should not, however, lose sight of the aspiration for the quality of place making, liveability and productivity that we know we can achieve in Western Sydney.

International examples show us what is possible when a shared vision is executed successfully, and the importance of collectively remaining committed to a high quality outcome.

I am confident that collectively—drawing on the expertise and commitment of the property sector along with many others—we can seize this opportunity, and deliver not just Western Sydney Airport, but an entirely new Western Parkland City.

[1] Draft Western City District Plan—Connecting Communities (2017) at p67.

[2] Greater Sydney Region Plan “A Metropolis Of Three Cities—Connecting People” (2017) at p116.