08-20-2020, 07:46 AM
(This post was last modified: 08-20-2020, 08:20 AM by thorn bird.)
AN AIRPORTS TALE
The privatisation of secondary airports in Australia was a whole different ball game than that of the primaries. The primaries were potential cash cows ripe for exploitation, the secondaries were essentially Air Parks, catering for small businesses supporting aviation enthusiasts, charter companies and flying training. When run by the Federal Airports commission (FAC), at the best of times they only returned around thirty Million dollars a year in dividend to the commonwealth. The FAC ran the airports in the interests of its users, modest, affordable rents, long term leases that allowed people to invest in aviation with some security of tenure.
Two particular bureaucrats were tasked with finding buyers for these airports, a difficult task if these airports were to remain airports.
The land these airports occupied real value lay in their potential for non-aviation related industrial development. Inconveniently the Airport Act and the head leases provided protections against this occurring, essentially recognising that to exist, aviation required an airport from which to operate therefore reserving the land for aviation use, in much the same manner as Parks and other open areas were reserved for public use.
A long game needed to be played by any development shark eyeing off usurping green field publicly owned land worth billions as industrial sites but as we know its very hard to stand between a development shark and a dollar, if they cant get it by hook they will by crook.
In the Sydney basin there were three secondary airports serving general aviation, the bureaucrats engineered a deal with a bank to buy all three for about $250,000,000, but the bank pulled out at the last minute so the deal was sweetened by offering Hoxton Park freehold and the deal was then done. Hoxton park was closed, its runway torn up and sold for around what the bank paid for all three airports, a nice little earner, two airports and ultimately their land basically for free.
None of the entities who bought leases for secondary airports did so to run an airport, they did so to develop greenfield land worth potentially billions but first they had to engineer getting rid of as much aviation activity they could.
All the new leaseholders of secondary airports used their monopoly advantage to diminish as much aviation activity as possible. Rental increases of at times thousands of percent drove many businesses from secondary airports or they simply closed their doors. Draconian parking fees caused a mass exodus to private airfields or regional centres far from the city. To further ensure no new aviation activity could establish, very short-term leases were offered to discourage any new businesses from establishing a foothold.
The thing I find strange is the bureaucrats were heavily lobbying responsible ministers to remove clauses from the airport leases they engineered that hindered development. There was even a play for Jandakot to close entirely and the leaseholder would build a whole new airport 30 Km away. The minister declined to approve that proposal.
A subsequent minister was lobbied to alter the leases to give the developers free reign, by producing a document that indicated all stakeholders were consulted and agreed to this. The minister’s adviser at the time was so concerned he brought a copy of this document to the president of the AOPA who vehemently denied he had been consulted. This minister also declined the proposal.
Restrictions were finally lifted by Warren Truss when he became minister, interestingly his permanent head was also involved with the initial sale of the airport leases.
One would have thought that once the sales were done the bureaucrats job was finished. Why would they lobby, heavily, to change the terms of the leaseholds?
Did they make under the table promises during sales negotiations?
Were they or the minister promised “considerations” if they could convince a minister to sign off the impediments?
I guess we will never know the answers to those questions, one thing is for sure the stage was now set for the transformation of secondary airports from being airports to being industrial estates which may or may not have a runway left for aviation use.
If this was the ultimate intention of government the Australian people should feel very aggrieved. If they had just announced all secondary airports would be closed in the first place and sold for industrial development, the land would have sold at a premium, instead of pursuing this facade of preserving airports for aviation use.
The Bankstown experience raises many questions.
Is the land the airport sits on Commonwealth land, or state land owned by the commonwealth. Legal opinion would suggest it is State land, it carries a LOT and Portfolio number. If it was in fact “State Land” were state planning and environmental laws complied with
The notion that it is Commonwealth land has been used to circumvent a lot of state codes.
For example there seems to be no record of Stamp duty being paid on the original leases. That denied State coffers of many millions of dollars.
State environmental requirements were circumvented, a runway closed against safety advice and a flood plain filled with asbestos contaminated fill on top of already heavily contaminated land. The environmental approval for this essentially written by the airport leaseholder, given an air of authority by writing it on Commonwealth Letterhead.
These are just two of the passing strange issues that have occurred at Bankstown.
The lease for Bankstown is currently controlled by The State Government super fund, the airport act says a trust, which is what a super fund is, cannot own an airport lease. State super simply says they don’t, they just own the company that owns the lease.
Safety aspects associated with airport development seem to have been ignored in a frantic flurry of work under cover of the covid pandemic. The massive structures rising on the Southern side of the airport making perfect targets for an Essendon type event. We were very lucky that time that mass casualties did not occur, we may not be so lucky next time.
As many pilots who operate into Canberra will attest, the turbulence created in strong winds by buildings close to runways is a severe hazard, more so at Bankstown considering the small aircraft that operate there.
Bankstown airport is heavily contaminated from war-time activity. The filling of the flood plain with contaminated soil adding to the mix, all being channelled straight into the Georges river. By cutting off the flood plain future floods will more than likely be more severe upstream of the airport, during the recent small flood a lot of houses were damaged that had never seen flood waters before and it was by no means a fifty year flood.
Will that expose the Australian taxpayer to the potential of monstrous compensation claims?
The Southern development is just the start of the eventual destruction of Bankstown as an airport, almost a third of the land taken in one bite. Development of the Northern precinct will take another third, the likely scenario as aviation declines that it will become a single runway in a wind tunnel surrounded by warehouses with little room for any aviation development.
If that was the government’s intention in the first place a far higher premium could have been obtained for the Australian public without all the subterfuge.
The development sharks will make the billions not the public purse and of course who cares about the aviation industry when dollars are to be made.
The machinations of the bureaucrats who engineered this have never been publicly scrutinised.
The privatisation of secondary airports in Australia was a whole different ball game than that of the primaries. The primaries were potential cash cows ripe for exploitation, the secondaries were essentially Air Parks, catering for small businesses supporting aviation enthusiasts, charter companies and flying training. When run by the Federal Airports commission (FAC), at the best of times they only returned around thirty Million dollars a year in dividend to the commonwealth. The FAC ran the airports in the interests of its users, modest, affordable rents, long term leases that allowed people to invest in aviation with some security of tenure.
Two particular bureaucrats were tasked with finding buyers for these airports, a difficult task if these airports were to remain airports.
The land these airports occupied real value lay in their potential for non-aviation related industrial development. Inconveniently the Airport Act and the head leases provided protections against this occurring, essentially recognising that to exist, aviation required an airport from which to operate therefore reserving the land for aviation use, in much the same manner as Parks and other open areas were reserved for public use.
A long game needed to be played by any development shark eyeing off usurping green field publicly owned land worth billions as industrial sites but as we know its very hard to stand between a development shark and a dollar, if they cant get it by hook they will by crook.
In the Sydney basin there were three secondary airports serving general aviation, the bureaucrats engineered a deal with a bank to buy all three for about $250,000,000, but the bank pulled out at the last minute so the deal was sweetened by offering Hoxton Park freehold and the deal was then done. Hoxton park was closed, its runway torn up and sold for around what the bank paid for all three airports, a nice little earner, two airports and ultimately their land basically for free.
None of the entities who bought leases for secondary airports did so to run an airport, they did so to develop greenfield land worth potentially billions but first they had to engineer getting rid of as much aviation activity they could.
All the new leaseholders of secondary airports used their monopoly advantage to diminish as much aviation activity as possible. Rental increases of at times thousands of percent drove many businesses from secondary airports or they simply closed their doors. Draconian parking fees caused a mass exodus to private airfields or regional centres far from the city. To further ensure no new aviation activity could establish, very short-term leases were offered to discourage any new businesses from establishing a foothold.
The thing I find strange is the bureaucrats were heavily lobbying responsible ministers to remove clauses from the airport leases they engineered that hindered development. There was even a play for Jandakot to close entirely and the leaseholder would build a whole new airport 30 Km away. The minister declined to approve that proposal.
A subsequent minister was lobbied to alter the leases to give the developers free reign, by producing a document that indicated all stakeholders were consulted and agreed to this. The minister’s adviser at the time was so concerned he brought a copy of this document to the president of the AOPA who vehemently denied he had been consulted. This minister also declined the proposal.
Restrictions were finally lifted by Warren Truss when he became minister, interestingly his permanent head was also involved with the initial sale of the airport leases.
One would have thought that once the sales were done the bureaucrats job was finished. Why would they lobby, heavily, to change the terms of the leaseholds?
Did they make under the table promises during sales negotiations?
Were they or the minister promised “considerations” if they could convince a minister to sign off the impediments?
I guess we will never know the answers to those questions, one thing is for sure the stage was now set for the transformation of secondary airports from being airports to being industrial estates which may or may not have a runway left for aviation use.
If this was the ultimate intention of government the Australian people should feel very aggrieved. If they had just announced all secondary airports would be closed in the first place and sold for industrial development, the land would have sold at a premium, instead of pursuing this facade of preserving airports for aviation use.
The Bankstown experience raises many questions.
Is the land the airport sits on Commonwealth land, or state land owned by the commonwealth. Legal opinion would suggest it is State land, it carries a LOT and Portfolio number. If it was in fact “State Land” were state planning and environmental laws complied with
The notion that it is Commonwealth land has been used to circumvent a lot of state codes.
For example there seems to be no record of Stamp duty being paid on the original leases. That denied State coffers of many millions of dollars.
State environmental requirements were circumvented, a runway closed against safety advice and a flood plain filled with asbestos contaminated fill on top of already heavily contaminated land. The environmental approval for this essentially written by the airport leaseholder, given an air of authority by writing it on Commonwealth Letterhead.
These are just two of the passing strange issues that have occurred at Bankstown.
The lease for Bankstown is currently controlled by The State Government super fund, the airport act says a trust, which is what a super fund is, cannot own an airport lease. State super simply says they don’t, they just own the company that owns the lease.
Safety aspects associated with airport development seem to have been ignored in a frantic flurry of work under cover of the covid pandemic. The massive structures rising on the Southern side of the airport making perfect targets for an Essendon type event. We were very lucky that time that mass casualties did not occur, we may not be so lucky next time.
As many pilots who operate into Canberra will attest, the turbulence created in strong winds by buildings close to runways is a severe hazard, more so at Bankstown considering the small aircraft that operate there.
Bankstown airport is heavily contaminated from war-time activity. The filling of the flood plain with contaminated soil adding to the mix, all being channelled straight into the Georges river. By cutting off the flood plain future floods will more than likely be more severe upstream of the airport, during the recent small flood a lot of houses were damaged that had never seen flood waters before and it was by no means a fifty year flood.
Will that expose the Australian taxpayer to the potential of monstrous compensation claims?
The Southern development is just the start of the eventual destruction of Bankstown as an airport, almost a third of the land taken in one bite. Development of the Northern precinct will take another third, the likely scenario as aviation declines that it will become a single runway in a wind tunnel surrounded by warehouses with little room for any aviation development.
If that was the government’s intention in the first place a far higher premium could have been obtained for the Australian public without all the subterfuge.
The development sharks will make the billions not the public purse and of course who cares about the aviation industry when dollars are to be made.
The machinations of the bureaucrats who engineered this have never been publicly scrutinised.