[Peetwo]

Will Badgery's be the making of Turnbull. -

Reference AP Senate thread:

The other Aunty asks questions of the MacBank Sydney airports deal -

 Via the abc online:

Badgerys Creek Airport: Questions raised about Sydney Airport Group
By Danuta Kozaki
Updated about 2 hours agoTue 20 Dec 2016, 4:00pm


Photo: The Sydney Airport Group is accused of making high profits but not investing enough into the airport. (AAP: Dean Lewins)

The Sydney Airport Group, which currently owns Sydney's Kingsford Smith Airport, is now looking at whether to exercise its option to develop and operate the new Badgerys Creek Airport.

Some questions are being raised by business, community and regulatory groups about the organisation's current practices and how they could affect future users if it does become the new operator.

No limit to what they can charge: ACCC Chairman

The Australian Competition and Consumer Commission chairman Rod Sims said Sydney Airport was sold in 2002 without any restrictions on what it could charge users of the airport.

The Howard government received $5.6 billion for that sale.

Mr Sims said the conditions of sale back then had amounted to carte blanche for the company over what it charges users.

"Sydney Airport has turned out to be a bumper investment.

"It has the highest profit margins on aeronautical services, very high profit margins on car parking.

"But on the other hand it has not invested as much as other airports, and it has consistently had the lowest ratings on the quality of service." Mr Sims said.

"I think the taking off of any regulation on the airport charges was an attempt by the then government to maximise the proceeds from sale, with I think insufficient regard to what the company buying the airport would then do."

Macquarie Bank is now the majority owner of Sydney Airport Group and its former Macquarie Bank CEO, Allan Moss, said at the time he believed it was a good purchase.

Congestion and inflated carpark fees major concerns

The consumer public transport group, Action for Public Transport said it is worried about what it calls Sydney Airport's high charging culture, particularly affecting car parking, taxis and public transport options at Sydney's existing airport.



Photo: Consumers could be slugged with higher transport fees at the new airport. (AAP: Dean Lewins)

Spokesman Jim Donovan said the company has made it hard for travellers on all levels.
"They make a massive amount of money out of the Kingsford Smith carpark.

"I understand it has the right to ask the RMS (Road Maritime Services) to widen the airport to get even more cars in there."

Sydney Airport has also had issues in the past with its taxi ranks and problems with heavy traffic in the area.

The New South Wales Taxi Council said it has a good relationship with Sydney Airport with the $4 plus access fee for taxis being passed onto passengers for curb side management.

Mr Donovan said it looks like the new Western Sydney Airport will be relying on the road network, including carparks.

"You need a rail link at Badgerys Creek that will also service surrounding suburbs, otherwise there will be a major impact on roads out there."

Last week, the Federal Government said rail options were still being considered and it was working with the New South Wales Government to map out road and rail linkages to the site, with no concrete plan for a direct rail link.

Transport for NSW said a final report on the rail needs for the whole of western Sydney is due next year.

Aircraft noise likely to remain an issue with residents

Aircraft noise has been a major electoral issue for successive governments with aircraft movements from Sydney's Kingsford Smith.


Photo: There are calls for the Federal Government to impose more regulations around airport noise. ( (Newtown Graffiti - Flickr))

The Sydney Airport Community Forum (SACF) was established in July 1996 to address the noise impacts from Sydney Airport in consultation with affected residents.

The Western Sydney Regional Organisation of Councils president Stephen Bali said the same or similar issues exist for Badgerys Creek.

"In the end, as Badgerys Creek is slated to be a 24/7 airport, we are relying on a corporation to take in the needs of local residents in western Sydney, particularly regarding noise and so forth.

We need the Federal Government to impose regulations to safeguard the community."

When you realise how dodgy the original Sydney airport truly was with a substantial and quick financial gain for the Federal government that did not fully regard the long term implications of creating a virtual monopoly in the greater Sydney basin.

Also when you consider who it was that negotiated and signed off on our behalf that original deal and the virtual negative income the government extracts from the SAG, you begin to see why it is that the business and stakeholder groups are cautious about the SAG holding the monopoly on both Sydney airports.  

 Perhaps Minister Fletcher should also be fully cognisant of the evidence given by Mr Allan Kessing, when considering the future implications of having MacBank control both primary airports in the Sydney basin: 

21 Mr Allan Kessing (PDF 102 KB)

    
Then yesterday Binger, in the Oz, wrote a late article summarising the Allan Kessing submission and evidence given in the inquiry:

Airport screening a ‘facade’
1:56pmMitchell Bingemann

Whistleblower Allan Kessing says passenger screening is a “useless facade”, and intelligence gathering needs resources.

Video two probably should have the heading 'money talks' when (about 02:30) AK reveals that the reason his 2nd report was also rejected, by the customs airport manager at Sydney airport...

"..We were told, quite simply, that the commercial costs involved in complying with the Customs Act would be onerous..(sic), too onerous for the now privatised airport corporation (i.e. SAC)..."  

Perhaps one of the most underestimated 'quiet achievers' in the Turnbull ministerial ranks is Paul Fletcher, the minister for urban infrastructure and most importantly the minister in charge of pushing the development of the second Sydney Airport.

Given the 30+ year history of getting this Federal infrastructure investment project off the ground, this is a tough unenviable job but a job this particular Minister seems to be up for and revelling in. Via the Oz yesterday:

Mascot owner can’t halt Badgerys
12:00amANDREW WHITE
Sydney Airport Corporation has right of first refusal but cannot injunct the government or other developers.

[img=0x0]http://pixel.tcog.cp1.news.com.au/track/component/author/fece1622e59681eb52e1e5f478f2e4ff/?esi=true&t_product=the-australian&t_template=s3/austemp-article_common/vertical/author/widget&td_bio=false[/img]
Sydney Airport Corporation’s prospects of stalling or thwarting a competing airport at Badgerys Creek in Sydney’s west have been dealt a blow with revelations that it will not be able to use the courts to injunct another party that wants to proceed with the project.
Although there is a right of first refusal to build a second airport under terms agreed in 2002 when Kingsford Smith Airport at Mascot was sold to Macquarie Bank, this does not allow the owner to injunct the government or another developer, The Weekend Australian has learned.

The right of first refusal comes into play next year when Sydney Airport responds to a federal government notice of intention to proceed with the $5 billion-$6bn development.
Sydney Airport wants nine months to respond and has argued the government has significantly changed the terms by withdrawing any financial support for it to develop the site. In talks over the past two years, the government had variously offered to cover $1bn of preparatory siteworks and to ­provide a loan at a concessional rate to Sydney Airport to cover 80 per cent of the development costs.

But the government is now threatening to build the project itself or offer it to another party on the same terms if Sydney Airport decides not to exercise its right, and has demanded a response in four months from the time its notice was served.

Urban Infrastructure Minister Paul Fletcher has demanded the shorter timeframe, arguing Sydney Airport is “substantially familiar’’ with the government’s terms and cannot argue there were material matters on which it was not consulted.

• More: Learning from Howard’s mistake
  

The dispute could be headed for arbitration by an independent expert after Sydney Airport argued the terms represented significant change and made Badgerys Creek a “challenging’’ development and it needs more time ­consider.

The tougher terms for the development reflect a hardening of the government’s position on supporting major infrastructure developments, with several ministers baulking at backing what is expected to be a profitable long-term asset to be built. This week Mr Fletcher said several models had been considered in consultation with Sydney Airport.

“Ultimately the commonwealth didn’t believe there was a case for additional ­financial support,” he said.

Investors and financiers said the decision to push Sydney ­Airport Corporation to fund all direct costs suggested it was increasingly likely the government would have to build Badgerys Creek itself as potential third parties could only be offered the same terms as SAC.

The company’s biggest shareholder, UniSuper, said the terms offered meant the deal was not “doable’’.

Analysts have estimated Sydney Airport would face extra interest costs rising to $100 million a year on the loans to cover eight years of development work before it earned any revenue from Badgerys Creek

Now given Malcolm Turnbull's past history as a Goldman Sachs investment banker, is this his opportunity to place himself as some possible value to the greater good of the Australian GDP?
Again via the Oz:

PM has options on airport
12:00amGlenda Korporaal
Malcolm Turnbull can hang tough in his talks with Sydney Airport, knowing billions of dollars can easily be tapped.


Who you gonna call, Malcolm?
11:52amGlenda Korporaal
The PM knows there are plenty of alternative bidders for a second Sydney airport to tap if he says the word.

Prime Minister Turnbull can hang tough in his talks with Sydney Airport, safe in the knowledge that billions of dollars of infrastructure investment for an alternative bidder for second Sydney airport could be tapped if he said the word.

While Sydney Airport CEO Kerrie Mather and her predecessors have done a great job for their shareholders, the congestion weary, sticker shocked users of Australia’s busiest airport might have a different view.

Any existing airport operator is going to be concerned about cannibalising its current business and maximising value for their shareholders, or minimising the downside from a potential competitor.

But a new consortium would be hungry to make a second airport a winner for Sydney’s west, competing fiercely with the ageing Kingsford Smith.

Much has happened since the Howard Government put Sydney airport up for sale in the early 2000s, and was more than pleased at the $5.4 billion put up at the time by the Macquarie Bank backed consortium in 2002.

The business of private infrastructure and airport investing around the world has taken off, with a large global pool now of privately owned airport operators as well as sophisticated, big ticket infrastructure investors.

There is now a significant pool of capital both within Australia and overseas which would be all too willing to be part of a new consortium to build a second Sydney airport.

Potential investors are sensibly keeping their head down while Turnbull, a Sydney airport frequent flyer himself, faces down the current monopolist.

It may well be that they do thrash out a deal for Sydney Airport to take up its option.
But should they fail to reach a deal, Turnbull only has to fire the starting gun and savvy infrastructure investors will be putting together deals.

The list is long, but they could start with the $125 billion Future Fund which has stakes in airports in Melbourne, Perth, Launceston and Gatwick.

Then there is the $500 billion industry super fund sector which is perpetually hungry for new infrastructure investments.

The $70 billion IFM investment group is now an experienced investor in airports including those in Adelaide, Perth, Melbourne, Brisbane, the Northern Territory, Vienna and the Manchester Airport Group.

Throw in the Queensland Investment Corporation and the array of Canadian pension funds who love nothing better than a visit to sunny Australia.

Then there is the $40 billion New York based Global Infrastructure Partners fund which works with the Future Fund and owns Gatwick and Edinburgh Airport and was involved in recent bids for the Port of Melbourne and Australian freight rail operator, Pacific National. It sent a representative to the Future Fund’s 10th anniversary dinner in Melbourne recently which Turnbull attended.

Then there is Spanish infrastructure company Ferrovial which owns four airports in the UK — Heathrow, Glasgow, Aberdeen and Southampton.

The company has spent the past few years getting a new foothold in Australia, bidding for the company formerly known as Transfield, which changed its name to Broadspectrum. It hung in there and the $800 million deal was finalised midyear.

Then there are any number of European airport owning groups, such as the Vinci group in France, as well as cash rich Chinese investors keen for more offshore infrastructure.
A new airport in a major city in developed country is a rare bird indeed.

In Britain a few years ago, competition regulators a few years ago broke up the British Airport Authority’s hold on the UK airport market, paving the way for new investors including the Australian funds.

The global investor hunger for good quality infrastructure assets in Australia has been evident in the good deals struck for the sale of assets in NSW and the Port of Melbourne.
Only a few months ago, NSW Premier Mike Baird found himself in an embarrassing situation when Federal Treasurer Scott Morrison knocked back two Chinese bidders for a part interest in NSW electricity company Ausgrid.

Other investors, including the industry fund sector had kept out of the deal, knowing they could not put up quite as much money as the two Chinese backed groups. (More accurately one Chinese backed and another backed by Hong Kong’s Li Ka-shing who has been a long time investor in Australia.)

Baird’s advisers did a quick trip to North America to talk to a new round of potential investors who began looking at the deal but then he got nervous that the Foreign Investment Review Board might nix any deal with a majority foreign investment.
So who was he gonna call?

Within weeks, the Melbourne based $100 billion Australian Super and IFM got together with a $16 billion “unsolicited proposal” which was quickly signed, sealed and delivered.
Mike Baird’s banking background has helped in doing infrastructure deals for his state.
But Turnbull clocked up far more impressive investment banking credentials before entering parliament.

As a young investment banker, Turnbull famously jumped on a plane and signed an agreement with the John Fairfax media groups’ US junk bond holders when the company was up for sale in 1991. His stunning deal swinging the auction in favour of the Conrad Black and Kerry Packer backed Tourang syndicate.

If he wanted to start with a fresh sheet of paper and a new consortium, Turnbull could call up the guest list of local and global fund managers at the celebration of the 10th anniversary of the Future Fund in Melbourne recently.

Sydney is one of the main gateways to Australia and the second airport has the potential to create a major new business centre in the city’s west which is already its centre of population.

Its future interest- and potential- needs to be considered broadly beyond those of Sydney Airport shareholders.

It’s not a case of Sydney Airport versus local western Sydney investors. For the former investment banker and deal doer, there is an important opportunity here.

So, Malcolm, who ya gonna call?

 
Whether Malcolm call's anyone or does the usual and fumbles the ball, time will tell but at least he has a doer Minister up for the challenge of facing down McBank and not allowing them to dictate/obfuscate/politicise the issue. I say bring on the infrastructure investors and tell SAC (McBank) to sod off...

MTF...P2

Ps Malcolm is there any chance the IOS could borrow your Minister Fletcher for a wee while, reckon he could sort out the 'three stooges' in short order. Gotta be better than Barnbaby's 'photogenic filter' any day of the week...