Deputy Prime Minister Michael McCormack has defended the government’s decision to purchase land next to Western Sydney Airport for 10 times as much as its actual value.
Speaking to 2GB Radio on Monday, Deputy PM McCormack said the sale would eventually be seen as a “bargain”.
Last week, it was revealed the Commonwealth bought the 12.26 hectares at Bringelly off Leppington Pastoral Company for almost $30 million in July 2018, which is eventually planned to be used for the airport’s second runway.
However, less than a year later, the federal Department of Infrastructure’s accounts showed it actually valued the land at $3.065 million, or a tenth of the price.
“I appreciate that, yes, it was very much over the odds, I appreciate there’s a review going on into how that actually happened,” Deputy PM McCormack said. “But eventually when there is a need [for] more runways and more infrastructure to be built at Western Sydney Airport, they’ll look back and say, probably, ‘What a bargain that was’.”
However, he did concede that “there should have been better processes around it” even though it will in time be seen as a “very good investment”.
His comments come despite Federal Auditor-General Grant Hehir arguing the department didn’t exercise proper due diligence on its purchase, adding that the agency’s operations “fell short” of ethical standards.
It also subsequently transpired NSW had paid 22 times less per hectare for a 1.36-hectare slice of the so-called ‘Leppington triangle’.
The purchase was needed for a realignment of a road, which was a key link between Narellan and the M4 motorway.
Earlier this month, Western Sydney Airport confirmed construction of its new passenger terminal will begin at the end of next year, with the winning contractor picked in mid-2021.
The business also said the project is still on course to welcome up to 10 million passengers in 2026. It’s hoped more than 80 million people will travel through each year in the 2060s.
The news comes three months after the airport confirmed that construction of a new rail link to St Marys station would begin soon, and a $2.6 billion industrial precinct will open next year.
Since initial earthworks marked the start of work to build Western Sydney International in September 2018, around 1 million worker hours have been racked up on the project and 1.8 million cubic metres of earth moved around the site.