Legal Analysis and Strategy Western Sydney Unit Telephone: 02 6274 6634 Submissions should be made by close of business 9 January 2015. Introduction As part of the Australian Government’s sale of Sydney’s Kingsford-Smith Airport (KSA) in 2002, the purchaser, SCAC, was provided with a right of first refusal to develop and operate any second major airport in the Sydney region within 100 kilometres of the Sydney GPO. By virtue of the Government’s 15 April announcement that the site for Western Sydney’s airport will be Badgerys Creek, this right has been activated. The right of first refusal process includes a consultation process with SCAC which commenced on 1 October 2014. The share sale agreement for KSA provides that if the Government offers SCAC an option to develop and operate WSA and SCAC does not exercise the option, the Australian Government may offer the opportunity to a third party. To enable the possibility of this to occur, amendments are currently being considered that would remove the requirement in section 18 of the Act that KSA and WSA be under common ownership. Although this would enable the airport lessee company for WSA to be in separate to KSA, current airport cross-ownership restrictions in the Act would restrict access of some airport operators and their investors to any market transaction. The Act provides that airport-operator companies are subject to a 15 percent limit on cross-ownership of certain airports (section 50). In relation to WSA (or Sydney West Airport as it is referred to in the Act) the 15 percent limit on cross-ownership is stated to apply to the following pairs of airport-operator companies (section 49): WSA and Brisbane Airport; WSA and Melbourne (Tullamarine) Airport; and WSA and Perth Airport.
Legal Analysis and Strategy Western Sydney Unit Telephone: 02 6274 6634 Submissions should be made by close of business 9 January 2015. Introduction As part of the Australian Government’s sale of Sydney’s Kingsford-Smith Airport (KSA) in 2002, the purchaser, SCAC, was provided with a right of first refusal to develop and operate any second major airport in the Sydney region within 100 kilometres of the Sydney GPO. By virtue of the Government’s 15 April announcement that the site for Western Sydney’s airport will be Badgerys Creek, this right has been activated. The right of first refusal process includes a consultation process with SCAC which commenced on 1 October 2014. The share sale agreement for KSA provides that if the Government offers SCAC an option to develop and operate WSA and SCAC does not exercise the option, the Australian Government may offer the opportunity to a third party. To enable the possibility of this to occur, amendments are currently being considered that would remove the requirement in section 18 of the Act that KSA and WSA be under common ownership. Although this would enable the airport lessee company for WSA to be in separate to KSA, current airport cross-ownership restrictions in the Act would restrict access of some airport operators and their investors to any market transaction. The Act provides that airport-operator companies are subject to a 15 percent limit on cross-ownership of certain airports (section 50). In relation to WSA (or Sydney West Airport as it is referred to in the Act) the 15 percent limit on cross-ownership is stated to apply to the following pairs of airport-operator companies (section 49): WSA and Brisbane Airport; WSA and Melbourne (Tullamarine) Airport; and WSA and Perth Airport.