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Former premier Nick Greiner backs Sydney airport plan

Former NSW State Premier Nick Greiner is "90 per cent" confident that the development of a $2.5 billion airport in western Sydney will proceed as planned, but he is unsure whether it will all be funded by the private sector.

"Whether it is purely private or public and private I don't know, but I'm sure the government and Sydney Airport will work it out over the next 18 months," he said during a panel discussion about the development at the CAPA Australia Pacific Aviation Summit on Friday.

The momentum for a new airport has gathered steam, the federal government this week appointing Ernst & Young as the business adviser on the project to develop a business case, patronage forecasting, airport operating and design concepts, costing, market sounding and examination of funding and financing models.

The government has also held preliminary talks with Sydney Airport, which has a first right of refusal over the development. However, four months after the project was first announced, it is understood the government has yet to issue a formal "notice to consult" which would start the clock ticking on a 12 to 18-month process to decide whether the airport operator will proceed with the development.

David Elia, the chief executive of superannuation fund HOSTPLUS, which owns a stake in Melbourne Airport, said any private sector operator would demand an appropriate return and possibly government guarantees on debt or minimum traffic.

"Someone has to underwrite the risk," he said. "Unless we can address some aspects of the investment case, I don't think it will get up."


NRMA chief executive Tony Stuart, who is a previous chief executive of Sydney Airport, said he did not think the airport would be built without government support.

"Airports are public infrastructure'', he said. "I don't think many airports around the world have started with just private sector funding in major cities."

Mr Stuart said the attractiveness to airline customers would depend in part on the fees charged by the airport operator.

Most analysts expect budget carriers would be the likeliest to provide initial services to the airport, which the government has flagged will have only one runway at the start and no curfew.

Mr Greiner said a single runway would be a sufficient size for now, so long as there was room to enlarge the airport in the future.

"Look at Adelaide [Airport] to give you a proximate view of reality," he said. "It will never be Kingsford-Smith."