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Tuesday, 28 May 2002
Page: 2530


Mr Murphy asked the Minister representing the Minister for Finance and Administration, upon notice, on 30 August 2001:

(1) Has his attention been drawn to an Australian Financial Review article, dated 25-26 August 2001 titled “Airport gears for $5bn take-off”.'

(2) Is he able to say whether groups bidding for the purchase of the lease of Sydney Airport include (a) the AMP and Hastings' Gateway Group, (b) Macquarie Bank and (c) ABN Amro, either alone or as part of the Connect Consortium consisting of ABN Amro, Egis Group, Schiphol Group and Fraport.

(3) Is he able to say whether (a) any of the bidders referred to in part (2) are no longer bidders, (b) any other bidders have now submitted their bids and (c) he knows of any other bids likely to be submitted before the closing date of bids.

(4) What criteria will be used in assessing who will be the successful bidder.

(5) Will the decision be based upon (a) price alone, (b) conformance with ecological/environmental and economic constraints or (c) ecological/environmental factors alone and the bidder who seeks to assist in the fulfilment of the Government's declared economic and social goals of a fully implemented Long Term Operating Plan (LTOP) and commence construction of Sydney West Airport immediately.

(6) If the decision will be based on conformance with ecological/environmental and economic constraints, will the successful bidder be one who (a) agrees to abide by the fully implemented LTOP and commence construction of Sydney West Airport at Badgerys Creek immediately and (b) declares that they will honour the promises made to the public that Sydney Airport would not be sold until a genuine environmental impact statement (EIS) was completed for a second airport at Sydney.

(7) Has any bidder expressly or impliedly declared in their bid their intention whether or not to construct Sydney West Airport; if so, who is that bidder and what is their declared intention.

(8) Will he announce if any bidder for the lease of Sydney Airport declares an intention to not construct Sydney West Airport within an acceptable prescribed time, or at all, based on the Pareto constraints indicated in the 1995 EIS by PPK Environment and Infrastructure, for the Second Sydney Airport Proposal, namely when passenger movements reach or exceed 20 million per year.

(9) Is he able to say whether in 1999-2000, Sydney Airport had 23 million passenger movements, and has thus exceeded its Pareto optimum ecologically sustainable limit; if not, why not.

(10) What ethic is driving the tender and sale process of Sydney Airport, including the primary decision to sell Sydney Airport.

(11) Upon what ethical basis and what moral reasoning are Bankstown, Hoxton Park and Camden Airports being sold separately from Sydney Airport.

(12) Upon what ethical basis and what moral reasoning is Sydney Airport being sold with first right of refusal in the hands of the successful bidder to construct Sydney West Airport.

(13) Is Sydney Airport being sold with first right of refusal by the successful bidder to not construct Sydney West Airport in order to maximise the sale price of Sydney Airport by not encumbering the sale to the successful bidder in locking that bidder into an expensive contractual obligation to construct Sydney West Airport.

(14) Is Sydney Airport being sold separately from Bankstown, Hoxton Park and Camden Airports to sterilise the sale of Sydney Airport by emphasising it as the jewel in the crown of Australia's international gateway airports and maximise the sale price alone.

(15) Is the sole or substantial ethic directing the decisions made by the Government utilitarian in that it seeks to maximise utility of the greatest number of successful bidders' shareholders whilst denying both the Government's declared promises to the general public not to sell Sydney Airport until (a) Sydney Airport's aircraft noise problems have been solved and (b) a genuine environmental impact statement for the Second Sydney Airport has been undertaken.

(16) How are environmental and public interest factors included in the tender process.

(17) Will bidders be expected to fulfil the Government's declared social and economic goals, including (a) full implementation of the LTOP, (b) immediate commencement of construction of Sydney West Airport and (c) maintenance of Commonwealth statute law proscribing monopolistic control of global and strategic assets, including Australia's international and regional airports.

(18) Is the Government's policy on this sale process driven by the principles of globalisation.

(19) What policy rationale, other than maximising profit, governs the sale process of Sydney Airport to these banks, foreign consortia and globalised superannuation funds.

(20) Has the tender process erred in failing to adequately protect the public interest and public morality of the sale process.

(21) What will be the financial implications in terms of rent and other overheads upon the Australian taxpayer in light of the permanent loss of strategic assets such as Australia's international airports.

(22) Is he familiar with the principles of the Multilateral Agreement on Investment (MAI) and the term `anarcho-capitalism'.

(23) Will the right of first refusal to construct Sydney West Airport in the hands of the successful bidder effectively waive any hope for Sydney Airport aircraft noise-affected residents seeking relief from aircraft noise during the lease period of up to 50 years.

(24) If not, how will Sydney Airport aircraft noise-affected residents have aircraft noise managed in line with the Coalition Government's declared 1996 aviation policy.

(25) Is the granting of first right of refusal to the successful bidder of Sydney Airport an anarcho-capitalist policy of non-regulation by denying this and successive Commonwealth Governments the legal power to construct Sydney West Airport because the Government is contractually and legally bound to the terms of the lease and hence faces potential litigation by the successful bidder should a successive Commonwealth Government attempt to construct Sydney West Airport.

(26) Is the granting of first right of refusal to the successful bidder of Sydney Airport an MAI-like philosophy of ensuring the free flow of capital across sovereign borders whilst placing no weight on pre-existing prescribed Commonwealth Government social and economic goals, including the full implementation of the LTOP, construction and completion of Sydney West Airport and fulfilment of declared Coalition aviation policy.


Mr Costello (Treasurer) —The Minister for Finance and Administration has provided the following answer to the honourable member's question:

(1) Yes.

(2) & (3) No. The Commonwealth does not comment on bidders as it may be disadvantageous to the Commonwealth's interests.

(4) The Commonwealth will assess conforming bids against the objectives for the sale of Sydney (Kingsford-Smith) Airport, which are as follows:

· Optimise sale proceeds within the context of the broader Government sales and policy objectives.

· Minimise the Commonwealth's exposure to residual risks and liabilities.

· Ensure that the airport lessees have the necessary financial and managerial capabilities to operate and provide timely investment in environmentally appropriate aviation infrastructure at Sydney (Kingsford-Smith) Airport.

· Ensure the sale outcome is consistent with relevant airport legislative, regulatory and policy requirements, including environmental, foreign investment, competition, access and pricing policies.

· Ensure fair and equitable treatment of employees of Sydney Airports Corporation including the preservation of accrued entitlements.

· Ensure the airport lessees demonstrate a commitment to the effective development of airport services, consistent with Australia's international obligations.

(5) The decision will be based on assessments made against the sale objectives outlined above.

(6) See answer to Question 5.

(7) The Commonwealth does not comment on bids.

However Mr Murphy should note that due to the September 2001 deferral of the sale process no bids have been received, and the deadline for bid submission under the recommenced Sale Process has not yet been determined.

(8) The successful purchaser will be offered a first right of refusal by the Commonwealth to build and operate any second major airport within 100 kilometres of the Sydney CBD. The Government will review Sydney's airspace needs in 2005.

(9) There were more than 23 million passenger movements at Sydney Airport in 1999-2000. The Government has concluded that Sydney Airport will be able to cope air traffic demand until the end of the decade.

(10) Experience from the earlier airport divestment programs clearly demonstrates that privatising Australia's airports has increased their efficiency by improving the way in which they are managed, fostering a more commercial culture and encouraging their interaction with local stakeholders. The sale of Sydney Airport will allow Australia's largest airport to similarly benefit from privatisation.

(11) The Government's decision to privatise Bankstown, Hoxton Park and Camden Airport separately from Sydney Airport is intended to encourage competition between Bankstown Airport and Sydney Airport.

(12) Giving the new owner of Sydney Airport the first right of refusal by the Commonwealth to build and operate any second major airport within 100 kilometres of the Sydney Central Business District is intended to provide an appropriate degree of commercial certainty to the new owner in regard to the possible future development of new airport capacity in the Sydney region. It will also facilitate future compliance with the provisions in the Airports Act 1996 dealing with the issue of common ownership of Sydney Airport and Sydney West Airport.

(13) The new owner will have a first right of refusal to build and operate a second major airport in the Sydney basin. The Government has concluded that it would be premature to build a second major airport and that Sydney Airport will be able to cope with increasing air traffic until the end of the decade.

(14) No.

(15) No.

(16) Bids will be evaluated against the sale objectives detailed in (4) above, which includes ensuring the sale outcome is consistent with relevant airport legislative, regulatory and policy requirements, including environmental, foreign investment, competition, access and pricing policies.

(17) (a) Air Services Australia is responsible for the implementing LTOP. The transfer of airport ownership does not alter compliance requirements.

(b) The Government has concluded that, at this time, it is premature to build a second major airport for Sydney.

(c) The Airports Act has relevant ownership provisions to address cross ownership issues. Additionally the Trade Practices Act and the Prices Surveillance Act provide the means of regulating leased federal airports with respect to access and price regulation.

(18) No.

(19) See (10) above.

(20) No.

(21) Sydney Airport will be sold by way of a 100% trade sale, with the successful Bidder acquiring all the shares in Sydney Airports Corporation Limited (SACL), the company that holds the Airport Lease for Sydney Airport. The proceeds of the sale will be used to reduce Commonwealth debt, resulting in substantial savings in Public Debt Interest Payments annually. These savings are offset to some extent as a result of the Commonwealth no longer receiving the benefit of dividend payments from SACL. Also see response to question 10.

(22) Yes.

(23) No. The Long Term Operating Plan (LTOP) which together with the jet curfew which prevents jet aircraft from arriving or departing between 11pm and 6am, and the movement cap that limits total take-off and landings at KSA to 80 per hour, enable aircraft noise to be fairly shared across Sydney. All these safeguards will remain in place following the sale of KSA.

(24) The Government has addressed the aircraft noise issue by providing for a substantially more equitable sharing of noise compared with the arrangements in place prior to March 1996 and by implementing the aircraft noise insulation program.

(25) The sale arrangements for Sydney Airport will not prevent the development of a second major airport for Sydney if a future Federal Government decided that such development should proceed.

(26) No.