Sydney Airport announced on 2 May 2017 that it has declined the offer in the government’s Notice of Intention (NOI, announced on 20 December 2016) to develop and operate the Western Sydney Airport (WSA)
Sydney Airport’s decision was due to the terms of the WSA NOI not meeting its investment criteria, stating that “despite the opportunities that WSA will present, the risks associated with the development and operation of WSA are considerable and endure for many decades without commensurate returns for our investors.”
Sydney Airport has up to three months, according to the Right of First Refusal, to review the material terms upon which the government elects to develop and operate WSA itself or offers the opportunity to another party. If the terms are more favourable, Sydney Airport would have the option to develop and operate the airport on those terms.
However, the government has advised that it will provide Sydney Airport with terms today and that those terms will mirror the NOI received in December 2016, meaning no new option will arise.
On 2 May 2017, S&P said Sydney Airport’s rating is not immediately affected by the company’s decision not to exercise its right of first refusal to develop the WSA.
A link to the announcement is available here.