Sydney Airport sale decision likely by April

Singapore
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Sydney Airport could be back on the auction block possibly before April as the Australian finance minister is now looking at resuming the privatisation that was halted last September.

“The minister is actively considering a resumption of the sale and a decision is expected in the next few weeks,” says a spokeswoman for finance minister Nick Minchin.

For the Government to have any chance of selling the airport by its self-imposed 30 June deadline, a decision needs to be made soon. Australian media reports say the finance minister is keen to get on with the sale and top up the treasury’s coffers with the proceeds.

There appear to be few obstacles to complicate the sale now that failed second national carrier Ansett has entered effective liquidation. Uncertainty hung over the airport’s outlook while Tesna, the bidder for Ansett, negotiated to use the former Ansett terminal. Tesna withdrew its bid for Ansett, sealing the airline’s fate, on 27 February.

Australian media reports saying runway modifications to handle Airbus A380s will cost A$2 billion ($1 billion) were dismissed as completely erroneous by an airport source. Rules for the A380 are still being hammered out by regulatory authorities worldwide, airlines, airports and Airbus.

Apart from modifying some gates to accommodate passengers boarding two decks simultaneously, only minor adjustments are likely to be needed, such as those necessary to maintain wing clearances between taxiways and runways at the airport, says the source.

The Government scrapped the airport’s sale last September, blaming the terrorist attacks on the USA earlier that month for killing prospects of privatising the airport at a good price. With an election looming at the time, the Government could not afford to risk selling at a poor price.

Even so, doubts among bidders may have been building before the attacks. Of the three consortia bidding then, the Connect Group that included ABN Amro, French group CDC and Australian banks, confirmed its airport partners Fraport and Schiphol Group had withdrawn.

The two other consortia were known as Sydney Gateway and Southern Cross. The former included AMP Henderson and Deutsche Bank, while the latter comprised Australian banks as well as German construction group Hochtief.

It is not clear if these consortia will re-bid or retain the same members.