Sydney's Airport Line operator seeks greater share of revenue pie
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Sydney's Airport Line operator seeks greater share of revenue pie

The private operator of stations on Sydney's Airport Line is proposing to make a payment likely to run into the hundreds of millions of dollars to the state government in return for a greater share of revenue over the next decade from the fast-growing rail line.

Under an unsolicited proposal to the NSW government, the sole shareholder of Airport Link – a British pension fund – has offered to make the upfront payment in exchange for a larger percentage of the revenue share from the service fees passengers pay.

The station access fee is $14.30 for adults and $12.80 for concession card holders.

The station access fee is $14.30 for adults and $12.80 for concession card holders.Credit:Dean Sewell

It does not disclose the amount that would be made in any payment to the state, nor the share of the total revenue the owner of Airport Link Company will gain in return.

However, the amount the government indirectly collects from the station access fee is set to top $100 million this year based on patronage growth. The fee – which is on top of the train fare – is $14.30 for an adult and $12.40 for holders of concession cards who pass though station gates.

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It means the amount that the owner of Airport Link is willing to pay upfront for a greater share of the revenue until 2030 is likely to run into the hundreds of millions of dollars. The private operator would assume a greater share of the patronage risk.

Patronage has soared on the Airport Line over the past six years.

Patronage has soared on the Airport Line over the past six years.Credit:Dean Sewell

The “potential public benefits” touted in the proposal include the state using the upfront payment to fund infrastructure development or services.

The government has decided the unsolicited proposal is of “sufficient interest to warrant further development and progression to a more defined project”.

A committee comprising bureaucrats from Treasury and the state's main transport agency has been set up to assess the proposal.

But Labor's transport spokeswoman, Jodi McKay, said the government should remove or reduce the station access fees instead of entering into a deal that continued to discourage people from taking the train to the airport.

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“Their deals are never about what’s best for commuters. It’s always about their privatisation agenda and secret deals to lock in contracts that prevent an incoming Labor government from easing the financial pressure on NSW residents,” she said.

Under the present contract, the government is entitled to 85 per cent of the sales revenue – almost all of which comes from the station access fees – from the private operator. Last year, the Airport Link Company paid the state almost $87 million.

The amount the government collects is offset by the state having to “compensate” the company for passengers using Green Square and Mascot stations on the Airport Line. In 2016, the compensation was estimated at $22 million.

In 2011, the Keneally Labor government decided to subsidise the access fees at Mascot and Green Square, leading to a surge in patronage.

Almost a quarter of people taking ground transport to and from Sydney Airport opt for the train.

Planning documents released this week show more than 33,000 passengers pass through the station gates at the domestic and international terminals on a busy day, a 42 per cent increase on 2012.

And the airport, which has been lobbying for a reduction in the station access fee, is forecasting the total number of passengers flying in and out of Kingsford Smith to surge by 51 per cent to almost 66 million over the next two decades.

Transport Minister Andrew Constance said more people were using the train to get to the airport because it was an affordable and reliable method of travel.

“For Labor to claim people are discouraged from catching the train is absolute nonsense,” he said.

Airport Link Company's rights to operate the four privately -run stations on the line – Green Square, Mascot, and the two at the airport – ends in 2030, when their ownership will revert to the state.

The Department of Premier in Cabinet, which handles unsolicited proposals, would say only that the proposal was of “sufficient interest and merit to warrant further consideration”.

The Airport Link Company declined to comment.

Matt O'Sullivan is the Transport Reporter for The Sydney Morning Herald.

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