Liverpool: the Gateway to Sydney’s Aerotropolis Liverpool City Council November 2017

www.pwc.com.au

Contents

Foreword 3

Executive summary 4

1 Introduction 8

2 The Badgerys Creek aerotropolis 10

3 Key opportunities 16

4 What needs to happen 26

Appendix A Abbreviations 41

Appendix B Examples of successful overseas aerotropolises 42

ii | Liverpool: the Gateway to Sydney’s Aerotropolis

Foreword

Unique is an overused word. But, That is why we commissioned PwC creation of an aerotropolis. Many will with an international airport being to prepare this report on the be entirely new players in our region; built entirely in our backyard, we can Badgerys Creek Aerotropolis. The others, such as defence and market say with some confidence that no Aerotropolis is where the full value of gardening, come with decades and other council in Australia faces the the airport will be realised. Land-use more of experience and history in same opportunities that lie ahead of planning and investment will Liverpool. We can build a great Liverpool in coming years. facilitate the creation of a new urban future on the legacies of the past. environment built around the airport For just the building and construction to speedily connect time-sensitive But that future is yet to be written. alone many councils might be suppliers, manufacturers, Initiatives yet to bear fruit will tempted to pat themselves on the distributors, and business people to become the businesses of tomorrow. back for a job well done. After all, distant customers, clients, and 11,000 construction jobs on a $5.3 marketplaces. At Liverpool City Council we stand billion build will be a major shot in ready to embrace them. the arm for the Liverpool economy. Much of that will be built on land in Throw in associated roadworks and the Liverpool Local Government related infrastructure and there is Area and we stand ready to work even more reason to feel confident with Federal and State governments about the future. as a willing partner to help capitalise on the opportunities – for the benefit But at Liverpool City Council our of Liverpool but also for Western view has always been that the Sydney generally. airport is just the start. This PwC report builds on A Western If we are to settle for an airport and Sydney Aerotropolis, a study written nothing more, then 40 years of by the renowned aviation and talking and studies, of reports and aerotropolis expert John Kasarda. meetings, of lobbying and community engagement will have This report shines a light on some of been in vain. the specific industries which most Wendy Waller readily stand to benefit from the Liverpool City Council Mayor

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Executive summary

Western Sydney Airport (WSA) is a hubs through the successful (now the third largest in Australia), once-in-many-generations implementation of this strategy, Sydney’s overall position as opportunity for Western Sydney. demonstrating the mutually Australia’s most populous city and reinforcing benefits generated by an largest international trade hub, and Rather than simply being a place airport and the development of its increasing capacity constraints at that planes land, it is reasonable for surrounding areas (see Appendix B). Kingsford Smith Airport (KSA). WSA to be the centrepiece of a holistic development at the airport It is expected that slots at KSA will and in its surrounds, to maximise One of Australia’s be fully allocated by around 2030. the economic and social benefits that The WSA site on the other hand will the airport can provide. most significant have the flexibility for further airports expansion in response to passenger With the right planning and demand over time. Within 50 years investment, there is the potential for Success begins with the airport itself. it is expected to accommodate 82 an ‘aerotropolis’ to form around WSA is positioned to become far million passenger movements per WSA: a metropolitan sub-region more than an ‘overflow’ airport that year; double the number that KSA whose infrastructure, land use and only services the low-cost leisure does today and more than Heathrow market. Its 24-hour operations will: economy are centred on an airport.’1 Airport in London. ensure that WSA quickly becomes a nationally significant airfreight hub; A new, greenfield international A number of international airports and attract full-service airlines have realised the compounding airport in a developed city is rare. looking to capitalise on the need of WSA has the enviable opportunity to benefits of creating developments to business travellers for more house aviation-enabled businesses leap-frog efforts of its peers to convenient overnight connections to improve the sustainability of such as logistics and distribution, Asia and beyond. manufacturing, hotels, conference operations and develop a smart venues in one discrete area. Incheon aerotropolis that is consistent with Over time, the airport will become Airport in Seoul and Dallas 21st century practice. one of Australia’s most significant Fortworth International Airport in airports, driven by Western Sydney’s Texas have become major economic population and growing economy

1 John Kasarda 2015, A Western Sydney Aerotropolis: Maximising the benefits of Badgerys Creek, p.9

4 | Liverpool: the Gateway to Sydney’s Aerotropolis

Executive summary

Key opportunities One of WSA’s most significant advantages is that it will be curfew-free. The possibility for 24-hour connectivity to domestic and international markets opens up the opportunity to attract a number of sectors to locate around WSA. The most promising sectors identified in this report are not only those that will be enhanced by proximity to WSA but are those already poised for growth.

Logistics and Food manufacturing Medical distribution and export technologies  Creating a logistics hub around  Overseas demand for  An emerging health and WSA would support Australia’s Australian perishable foods is education precinct in Liverpool growing airfreight task – the greatest driver of outbound has ambitions to become a hub expected to double by 2030 – airfreight. Creating a food hub for the development of health- and enable greater productivity near the airport to cluster related technology. The and competitiveness within the advanced food-manufacturing, precincts core advantages, such logistics sector itself. value-add processing, cold- as the presence of Liverpool’s storage and packing, offers leading health and education both better connectivity into institutions, will be further premium markets and closer enhanced by the additional proximity to other parts of connectivity to domestic and what can be a sensitive supply overseas suppliers and markets chain. provided by WSA and the rail and road network being developed to support it.

Defence and Tourism aerospace  The NSW Department of  WSA is expected to provide a Industry is looking to establish significant boost to Western a defence and aerospace hub at Sydney’s visitor economy. New WSA to support the growth of attractions and a focus on industry; an objective of both developing Western Sydney’s the NSW and Commonwealth supply and quality of Governments. The NSW accommodation will help to Government has secured the ensure that flows of passengers commitment of its first anchor through WSA translate into tenant: the global defence greater overnight stays. company Northrup Grumman.

PwC | 5 Executive summary

Liverpool’s role as the leading edge city

The surrounding ‘edge cities’ of Leveraging these advantages,  residential development around Liverpool, Penrith, Fairfield, Liverpool has the opportunity to be WSA does not compromise and Campbelltown and Camden have key the: constrain WSA’s ongoing capacity roles to play in helping to support to be a 24-hour airport.  CBD or the main ‘edge city’ of the the growth of the aerotropolis as Conversely, the Liverpool City aerotropolis, where airport- they offer centres of economic Council will need to have a say in related businesses set up their activity not in existence around the how the airport operates as a Western Sydney (or even Sydney) airport site. ‘good neighbour’, to ensure its offices/headquarters. That WSA residents are sufficiently The land in and around Badgerys Co has already done this provides protected from any adverse Creek is primarily of rural- confidence for others to follow impacts of WSA’s operations and residential use. While industrial industrial activity around it development is expected to form  place to stay for incoming tourists and business people. While there around the airport early on, it is  businesses are given the may be a number of transit hotels likely that for some time this won’t confidence, and incentivised that set up near (or at WSA), be supported by other commercial where appropriate, to locate to Badgerys Creek is sufficiently activity characteristic of a fully- the aerotropolis early on. To remote that travellers will be fledged aerotropolis, such as assist this, the Council should: professional and administrative more inclined to stay somewhere services, retail and accommodation. like Liverpool that’s closer to – advocate and support the This provides a vacuum that the edge other amenities. development of targeted government incentives, such cities can and should fill – none Liverpool City Council has an as a ‘virtual investment more so than Liverpool. important role in supporting WSA attraction mechanism’ to and the aerotropolis. Given that the The importance of Liverpool is attract to the aerotropolis new airport site and a large portion of the evident in the following features of investment in targeted Western Sydney Airport Priority the city (see Figure 1) — it: industries Growth Area (WSA-PGA) falls within  offers the largest commercial hub its Local Government Area (LGA), – establish a business forum to of the edge cities around WSA. It the Council will influence the nature provide a bond between has a defined central business of development around the airport as Council and aerotropolis district (CBD), with great a regulator of land use and as the businesses, and to provide potential to add to its existing State Government’s and WSA Co’s greater confidence for stock of commercial and office key council partner. potential investors spaces To ensure the success of the  the Liverpool CBD and George’s  is well-situated roughly midway aerotropolis and that Liverpool can River precincts are enhanced to between WSA and the Sydney unlock the opportunities WSA ensure that Liverpool is perceived CBD, offering an obvious hub provides, Liverpool City Council as great place to live, visit, work from which business and people needs to ensure that: and play. Sustainability principles can access the city and the airport should be an embedded  it advocates for good rail and characteristic in this and all  is also situated at roughly the road connectivity between the development midpoint between WSA and the airport and Liverpool, and existing KSA, potentially offering between Liverpool and the  residents are skilled for the jobs a convenient base from which Sydney CBD. New rail of the future that will accompany companies can maintain freight connections are a priority, the development of the operations across the two airports although stations on the lines can aerotropolis. be developed over time as  already has a diverse mix of needed, rather than as an initial If implemented, these actions will strong industries including investment increase the likelihood that WSA is manufacturing, health, education itself a success and that the broader and public administration (see  the land around WSA is protected potential benefits of an aerotropolis Figure 17), and a young, well- and developed to promote the are also realised. educated, ethnically diverse- new industries setting up around population. it

6 | Liverpool: the Gateway to Sydney’s Aerotropolis Executive summary

Figure 1 Liverpool’s position in the aerotropolis

Source: PwC, based on 2016 LGA boundaries published by the Australian Bureau of Statistics (ABS). Darker-shaded areas correspond to higher total economic output.

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1 Introduction

commence in 2018, with Stage 1 connectivity of Australian industry to A second airport completed by 2026. global markets. for Sydney WSA will become one of Australia’s On opening in 2026, WSA will have After decades of deliberations over most significant pieces of a single runway around 3.7 the need and potential location of a infrastructure. More than just kilometres in length. This is long second Sydney airport, a decision meeting Sydney’s growing passenger enough to handle the full range of was made in April 2014 to locate demand, WSA will improve access to aircraft expected to operate from the WSA at Badgerys Creek. aviation services for Western airport, including the Airbus A380. Construction is expected to Sydney’s population and improve Figure 2 sets out WSA’s forecasted passenger numbers over time.

Figure 2: WSA forecasted annual passenger use

2026 Around 2031 By 2050 By 2064

Five million passengers – 10 million passengers 37 million passengers 82 million passengers a about the number that annually, triggering the year, making it as large as use Gold Coast airport need for a second parallel Heathrow Airport and Los each year runway Angeles International Airport today.2 Source: Commonwealth of Australia, Western Sydney Airport: Airport Plan

The airport is expected initially to WSA is expected to provide infrastructure and business cater predominantly for the low-cost significant economic benefits, with investment will in turn open up leisure market, with some full- 11,000 direct jobs generated by its further commercial and residential service domestic and international construction, 28,000 direct and development opportunities in the carriers operating there. This profile indirect jobs created by the early areas around the airport. will shift over time with increasing 2030s and nearly 120,000 in the demand for different aviation long term. 3 With the right combination of services from Western Sydney’s investment and planning outcomes growing population and as Sydney It will also be the cornerstone for there is the potential for an Airport becomes increasingly further investment in transport ‘aerotropolis’ to form: a metropolitan capacity constrained. Airfreight is infrastructure to enable accessibility sub-region whose infrastructure, expected to be a key part of the to the airport from within the region land use and economy are centred on airport’s operations. and the rest of Sydney. The an airport.’4 confluence of additional transport

2 Heathrow Airport’s current annual passenger numbers are approximately 75 million. Los Angeles International Airport’s are approximately 81 million. 3 Commonwealth of Australia 2017, Jobs for Western Sydney: Building Western Sydney Airport, p.2 4 John Kasarda 2015, A Western Sydney Aerotropolis: Maximising the benefits of Badgerys Creek, p.9

8 | Liverpool: the Gateway to Sydney’s Aerotropolis Executive summary

About this report

The objective of this report is to and how these can be maximised.  Chapter 4 — the key factors on explore what is required to unlock The report is structured as follows: which the success of the the economic potential of WSA and aerotropolis depends. drive the development of an  Chapter 2 — a brief description of  Chapter 5 — the role of Liverpool aerotropolis around the airport. In the aerotropolis concept and the City Council in influencing the doing so, we have looked at the vision for one in Western Sydney. existing advantages of the region success of an aerotropolis and surrounding the airport, with a focus  Chapter 3 — the key maximising the benefits of the on the Liverpool LGA where opportunities that may arise from airport for its residents. relevant, as well as the additional the airport and the development opportunities created by the airport of an aerotropolis and what is needed to seize them.

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2 The Badgerys Creek aerotropolis

There are great hopes for what the The aerotropolis concept, or ‘airport NSW Premier, Gladys Berejiklian, new airport will achieve for Western city’, is defined by John Kasarda as: has stated that: Sydney; it is often referred to as a ‘an urban form whereby cities are ‘once-in-a-generation opportunity’ to built around airports, speedily transform the region. connecting time-sensitive suppliers, We want Western Sydney manufacturers, distributors and Airport to be about much Many airports around the world business people to distant more than just building an exist on the periphery of cities, customers, clients and airport – we want it to be 5 reflecting traditional approaches to marketplaces’. Kasarda also defines a fully integrated airport planning and development. the aerotropolis more generally as ‘a And while these traditional airports metropolitan subregion whose economic precinct that stimulate economic productivity at a infrastructure, land use and will deliver jobs and state and national level, there is no economy are centred on an airport’.6 opportunities for the guarantee of more localised benefit. people of Western Sydney The aerotropolis concept hinges on and across NSW.” Distance from existing economic the idea that mutually reinforcing centres can mean airports operate in benefits can be generated by a Similarly, the Greater Sydney isolation without fostering a great successful airport and the Commission envisages a third deal of additional activity around development of the areas Western city (after Eastern Sydney them. Opportunities are therefore surrounding it. To be viable, airports and Parramatta) with the airport limited for local residents who may must be close to a strong regional being a key driver of development. already be in a disadvantaged economy whose population will use position with a clustering of low-cost the airport. Equally, the airport also To help unlock the economic housing in areas exposed to high provides new opportunities to grow potential of the airport, the State levels of noise, such as those near that economy through airport- Government is building significant airports. related employment, support transport infrastructure and is industries and opening doors to aiming to facilitate additional This is a second-best outcome that other sectors that benefit from investment in industrial and we should all plan to avoid. The aim enhanced connectivity to other residential development in the areas is to maximise the economic benefits domestic and international markets. surrounding WSA. The forthcoming in Western Sydney, and the local City Deal and designation of the areas around the airport in There is a common ambition across Western and South West priority particular, by fostering an all levels of government for the new growth areas lay the planning policy ‘aerotropolis’. airport to drive the development of framework to coordinate and an aerotropolis. For example, the optimise this investment.

5 John Kasarda 2017, Aerotropolis, available at 6 John Kasarda 2016, A Western Sydney http://www.aerotropolis.com/ Aerotropolis: Maximising the benefits of Badgerys Creek, p.9

10 | Liverpool: the Gateway to Sydney’s Aerotropolis

The Badgerys Creek aerotropolis

Vision and viability for the aerotropolis Figure 3 depicts our vision for the aerotropolis to encompass the geographic radius generally north, east and south of the airport. This area is made up of different components, beginning with WSA itself, expanding out to the ‘inner aerotropolis’, and expanding further to the ‘greater aerotropolis’. It is named the ‘Badgerys Creek aerotropolis’ in reference to its origination.

Figure 3: The Badgerys Creek aerotropolis imagined

PwC | 11 The Badgerys Creek aerotropolis

The airport near the airport. Employment Our proposed distancing of The successful development of a opportunities arising from the residential areas at least 5kms from Badgerys Creek aerotropolis depends airport and the businesses the airport is imprecise but aligns first and foremost on the airport establishing around it should attract roughly with other Australian itself. Many ‘supplementary’ airports new residents who want to live near airports enjoying curfew-free thrive on capturing overflow demand work. Growing population density operations – see Figure 16. Perth from a city’s main airport as will in turn open up other Airport still operates without a populations grow. London, for opportunities for businesses that curfew despite being less than 2kms example, has five airports servicing need to locate where people live. from residential areas. Proposed re- different market segments. Others, zonings near the airport have at such as Mirabel Airport in Montreal, We envisage the ‘inner aerotropolis’ times raised concerns about the Canada and the Ciudad Real Airport forming within the area potential impact on the airport’s in Madrid, Spain have failed and approximately 10kms north, east and ability to operate without a curfew been abandoned. south of the airport site (i.e. that and Brisbane’s curfew-free status is roughly aligning with the WSA- regularly reviewed. Provided WSA has good connections PGA). Within this area, the first with Western Sydney and eventually 5kms around the airport ought to be The encroachment of residential the Sydney CBD, 24-hour operations reserved for industrial or areas towards WSA is a scenario that will position WSA well to attract a environmental use. A key factor in government needs to prevent. good share of passengers, airlines encouraging industry agglomeration and dedicated freight carriers (see around the airport, and therefore There are countless examples of Box 1). maximising the economic potential airports that have been suffocated by of the airport, will be the availability the encroachment of residential of land very close to the airport that communities around them. For The ‘inner aerotropolis’ is suitable for industrial use. Zoning example, both Heathrow and Los Provided the right land use strategies this area for industrial use also acts Angeles are inhibited by residential are put in place, the enhanced as a physical buffer between the development. connectivity and efficiency offered by airport and residential areas, helping a 24-hour airport also opens up the to protect its 24-hour operations, opportunity to attract time-sensitive, being one of its key competitive aviation-enabled industries to locate advantages.

12 | Liverpool: the Gateway to Sydney’s Aerotropolis The Badgerys Creek aerotropolis

Box 1: WSA’s advantage as a connected 24-hour airport

There is a clear business case for WSA to capture ‘overflow’ from KSA as growing demand outstrips KSA’s capacity. WSA Co’s expectations are that during early operations much of passenger demand will come from Western Sydney’s growing population and will be served largely by low-cost carriers. Qantas’ CEO, Alan Joyce, has indicated the Qantas group its intention to use WSA as a new base for Jetstar. Full-service and international carriers are expected to move to the airport over time as KSA reaches capacity, which the Federal Government expects to occur between 2042 and 2048.7 Full-service international airlines could be part of the picture earlier on owing to the airport’s proposed curfew-free status and greater slot availability. KSA’s curfew and slot constraints significantly restrict the offering of international airlines, particularly those that are Asia-oriented.8 Singapore Airlines for example, one of the largest international carriers operating out of Sydney, offers five flights daily from Sydney to Singapore within a 10-hour window of 8am to 6pm. A later flight closer to the curfew would arrive in Singapore in the early hours of the morning, with very few connections available. A midnight flight from WSA which arrived in Singapore at 6am would, on the other hand, be ideal for business travellers, who help fill the front of the plane. A useful comparison is curfew-free Melbourne Airport. Although it serves a smaller market and has around two-thirds the amount of international passenger movements of KSA, Singapore Airlines offers flights to Singapore four to five times daily including a midnight flight which arrives in Singapore at 6am. Indeed, there are over 30 flights taking off and landing in Melbourne overnight to and from Asia, the Middle East, the US and Europe.9 Melbourne Airport’s curfew-free status is extremely valuable to the airport, allowing for the movement of an extra two million passengers a year and adding $590 million to the Victorian economy through visitor spending.10 In the 10 years to 2015-16, the number of international passengers through Melbourne Airport doubled, growing far more strongly than KSA which has achieved growth of around 45%. Options for a rail link are now being explored and the airport is seeking approval to build a third runway. More passengers bring additional capacity for airfreight. Approximately 80% of air freight in NSW is carried in the cargo holds of domestic and international passenger flights.11 The remainder is carried in dedicated freight aircraft, most of which are operated by major passenger airlines.12 KSA is Australia's international air freight hub, with around half of Australia’s airfreight being loaded or discharged there.13 The curfew at KSA, which limits take-off and landing to a small number of aircraft types overnight, significantly limits the efficiency and convenience of airfreight services. The curfew has received significant focus in submissions to the Australian Government’s Inquiry into National Freight and Supply Chain Priorities.14 Submissions note the inefficiency the curfew has created in the domestic airfreight network, where a Boeing 737 is able to operate overnight freight flights to other airports, but not to Sydney – meaning unloading and reloading to a different aircraft to reach Sydney. Despite Sydney being a national airfreight hub, Melbourne’s 24-hour operations mean it can now claim it is the top export market with 36% market share.15 With Amazon setting up their first Australian fulfilment centre in suburban Melbourne, there’s likely to be even more domestic and international freight routed through the city. Lyell Strambi, Melbourne Airport CEO, attributes the airport’s success to its 24-hour operations: ‘If we're being frank that is one of the elements of our success story in recent years.’ Twenty-four hour operations would provide WSA with the opportunity to seize a large share of the airfreight market, which is increasing strongly thanks to growing demand for fast-delivered online shopping and increasingly global supply chains.

7 Department of Infrastructure and Regional Development, Environmental Impact Statement 2016, p.79 8 KSA has cap of 80 aircraft movements per hour. 9 Melbourne Airport, Flight information, available at: http://melbourneairport.com.au/flight-passenger-info/flight-information/schedule-search.html 10 Melbourne Airport, Community & partners, available at: http://melbourneairport.com.au/about-melbourne-airport/melbourne-airport-partners/about-cacg/faqs- 1389.html 11 Transport for NSW, NSW air network, available at: https://www.transport.nsw.gov.au/operations/logistics-network/nsw-air-network 12 Sydney Airport 2017, Re: Inquiry into National Freight and Supply Chain Priorities, available at: https://infrastructure.gov.au/transport/freight/frieght-supply- chain-submissions/Sydney_Airport.pdf. Only one of the top five freight routes is operated by a dedicated freighter. 13 NSW Department of Industry, Air logistics and air movements, available at: https://www.industry.nsw.gov.au/invest-in-nsw/about-nsw/economic- growth/developed-infrastructure/airport-logistics-and-air-movement 14 Commonwealth of Australia 2017, Inquiry into National Freight and Supply Chain Priorities: Discussion Paper – May 2017 15 Australian Pacific Airports Corporation, Annual Report 2015/16

PwC | 13 The Badgerys Creek aerotropolis

The ‘greater aerotropolis’ million, is expected to grow by is now Australia’s third-largest The vision described for the inner another one million people over economy. As shown in Figure 5, aerotropolis is theoretical, albeit the next 20 years, including the LGAs around the airport are based on other successful almost 500,000 in the West and performing well, led by the international aerotropolises (see South West Districts.16 These Liverpool LGA. A strong regional Appendix B). As illustrated in projections indicate the potential economy provides the building Figure 1, economic activity in this for strong and growing aviation blocks for an aerotropolis, area at present is low given it demand in the future from local offering capacity and capability currently comprises mainly rural- areas alone. WSA Co reports that from existing industry and a residential uses. at present Western Sydney’s skilled workforce. Businesses population accounts for a quarter have an incentive to locate in The ‘greater aerotropolis’ offers the of all air passengers. This share is areas with access to the largest economic foundation for the expected to grow in line with the numbers of potential employees aerotropolis by providing: population. It is estimated that and customers. Likewise, people local demand alone could have incentives to settle where contribute an additional 3.4 they can access the greatest  A growing population – Western million trips at WSA by 2035 and number of employment Sydney is the fastest growing 6 million by 2060.17 opportunities, goods and services. region in Greater Sydney. A good In the early operations of the share of growth in recent years  Strong economic performance – airport, the far greater share of has been driven by the LGAs near in addition to population growth, these factors will exist in the the airport site (see Figure 4). the economic output of Western greater aerotropolis. The current population of two Sydney is growing strongly and it Figure 4: Population density in FY 2016 and growth (2011-2016) in greater Sydney

Source: PwC, based on 2016 LGA boundaries published by the Australian Bureau of Statistics (ABS).

The cities of Liverpool, Penrith, are indeed of greatest importance to populations with the services and Fairfield, Camden and its formation given they offer the labour they provide. Campbelltown will become ‘edge closest concentrations of existing cities’ to the airport as they lie infrastructure, industries and Liverpool has the opportunity to beyond the inner aerotropolis but position itself as the key edge city or

16 Department of the Prime Minister and Cabinet at https://cities.dpmc.gov.au/western-sydney- 17 John Kasarda 2015, A Western Sydney 2017, The Western Sydney City Deal, available city-deal Aerotropolis: Maximising the benefits of Badgerys Creek, p.29

14 | Liverpool: the Gateway to Sydney’s Aerotropolis The Badgerys Creek aerotropolis

the ‘CBD’ of the aerotropolis, where Figure 5: Economic output in FY 2015 for the LGAs proximal to airport-related businesses set up Badgerys Creek ($billion) their Western Sydney (or even Sydney) offices/headquarters and 9 where incoming tourists and business people come to stay. That 8 WSA Co has already set up in Liverpool City should provide the 7 confidence for other businesses to follow. 6

The importance of Liverpool is 5 evident in the city’s following existing features: 4

 Liverpool City offers the largest 3 commercial hub of the edge cities proximal to WSA. It has a defined 2 CBD, with good potential to add to its existing stock of commercial and office spaces. 1

 It is well-situated midway 0 between WSA and the Sydney Liverpool Penrith Fairfield Campbelltown Camden central business district (CBD), offering an obvious hub from Source: PwC, based on 2016 LGA boundaries published by the Australian Bureau of which business and people can Statistics (ABS). access both the city and the airport.  It is also situated at roughly the  It is home to leading-edge anchor technologies, defence and midpoint between WSA and KSA, institutions who are working aerospace. together to forge a health and potentially offering a convenient  Liverpool has a young, well- education precinct in Liverpool base for companies to maintain educated and ethnically diverse (see Figure 6). These institutions freight operations across the two population. A significant will support the skills airports. proportion of the population is development of the region’s local under 30 and there are more  Liverpool already has a diverse workforce, as well as providing families with children compared mix of strong industries including R&D capacity to support the to the rest of Sydney. manufacturing, health, education development of new sectors such and public administration. as food manufacturing, medical

Figure 6: Liverpool health and education precinct

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3 Key opportunities

3.1 Key sectoral  Incheon Airport continues to airfreight at WSA, generate expand its logistics centres, to significant employment opportunities secure its position as the world’s opportunities and would facilitate This section explores the key sectoral second-biggest cargo hub. improvements in productivity and opportunities for the aerotropolis. competitiveness within the logistics These include those that are most  Dallas Fort Worth Airport also sector itself. As an example of the likely to benefit from close proximity has significant logistics facilities, potential employment opportunities, to a 24-hour airport, as well as those enabling its position as the Melbourne Airport and the site sectors whose operations aren’t as leading cargo airport in Texas. Its around it is now one of the biggest closely linked to aviation but are International Commerce Park employment clusters outside of well-positioned to build on existing provides over 3.000 jobs and is Melbourne’s CBD. It is estimated or proposed investments in the estimated to generate economic that of the 14,300 jobs directly region and will also benefit from contributions of approximately generated by the airport precinct, more timely receipt of airfreighted $329 million to the DFW around one-quarter are related to 18 equipment and suppliers. region. non-aviation activities such as  Melbourne Airport’s Business logistics and distribution. These are sectors that, regardless of Park, south west of the airport, WSA, are poised for growth in NSW. was created with the aim to WSA plans include a business park, become a world-class logistics although details of its composition 3.1.1 Logistics, distribution hub. To date, 77 hectares have are yet to be defined. The and freight forwarders been developed for some of the Commonwealth Government has suggested that it will house As a 24-hour airport that can world’s largest logistics companies. substantial office-based employment support Australia’s growing across a range of industries such as airfreight, WSA is primed to attract Despite KSA being Australia’s wholesale trade, IT and media complementary logistics and international airfreight hub, a lack of services, retail, financial services, distributions businesses to locate appropriate and affordable land education and training, as well as the around it. Indeed, there should be options around the airport has manufacturing industry. This government support to create a resulted in major logistics companies suggests that an additional dedicated major logistics hub adjacent to WSA. being scattered across the city facility should be planned for without any concentration in a logistics operators either on the The economic importance of creating particular area. Distance from KSA airport site or adjacent to it. synergies between airside freight and increasing congestion around it, handling and local logistics is increasing industry costs and 3.1.2 Advanced food operators is underlined by the inefficiency. One of KSA’s strategic establishment of major logistics hubs priorities is to work with the manufacturing and at several airports around the world. Government to find road transport exportation These include two of the best known solutions to help alleviate the issue. Amongst the general air freight and aerotropolis airports, Incheon and complementary logistics activities DFW, as well as Melbourne Airport. With Australia’s airfreight task expected to flow to WSA, growth in By creating adjoining logistics expected to more than double by the transport of food presents a centres, the following airports have 2030 and a significant share of particularly promising opportunity been able to support and grow cargo airfreight movements expected to that should be seized. operations, and significantly occur out of WSA (see Box 1), enhance the logistics sectors in their attracting the logistics sector to WSA respective cities: should be a priority.19 Creating a logistics hub around the airport would support the further growth of

18 DFW Airport 2017, International Commerce https://www.dfwairport.com/landhere/commer 19 Department of Infrastructure and Regional Park, available at cepark/index.php Development 2013, Trends: Infrastructure and Transport to 2030

16 | Liverpool: the Gateway to Sydney’s Aerotropolis

Key opportunities

Rising overseas demand for Indonesia, are driving greater items is worth around $20 billion to Australian food, particularly from demand for food (see Figure 8). The the Australian economy, roughly half Asia, is the key driver of Australia’s number of middle-class consumers the value of all food exports.22 growing air freight task. Food in the Asia-Pacific region is forecast represents the largest category of to grow from 525 million in 2009 to Perishable foods need fast and direct exports, in volume, that are air approximately 3,228 million by transport into overseas markets that freighted out of Australia. Food 2030 – an increase of over 500%.20 only airfreight can offer. For comprised almost 60 per cent of air In Indonesia alone it is estimated example, table grapes can be picked, freight volumes exported out of KSA that around five million Indonesians packed and airfreighted to markets in 2016 (see Figure 7). Providing that are entering the ‘consuming class’ in Asia within 48-60 hours or sent by 24-hour operations are assured, each year.21 sea within 16 days.23 As Australian WSA is expected to attract greater air food producers are competing in freight activity by enabling more Australian food producers are premium markets, the higher margin efficient access for food producers to responding to demand with an on these perishable goods is able to overseas markets. Furthermore, as increasing share of national food justify the increased cost involved food supply chains evolve and production going overseas, Asia with airfreighting them. become increasingly consolidated, being our top food export market. A there is potential for clustering and growing preference for healthy, The strength of demand for such aggregation of food manufacturing premium, convenient foods is also products is being demonstrated at and value-add processing to be shifting demand towards high value Toowoomba’s Wellcamp airport. established near the airport. food types like fruit, vegetables, Cathay Pacific began operating meat, dairy and seafood. Asian local dedicated weekly freight flights into Growing demand for food production cannot meet Hong Kong late last year, with goods Australian perishables demand levels and Australia’s food such as chilled beef and dairy comes with a ‘clean, green, safe’ Growing populations and rising comprising the bulk of the brand that is increasingly sought incomes in emerging Asian freight load. after. Export of these perishable food economies, such as China, India and Figure 7: KSA’s outbound airfreight composition

Source: Transport for NSW, NSW Air Network

20 Austrade 2015, Investment opportunities in 21 McKinsey&Company 2016, The Life Journey 22 Austrade 2015, Op cit. Australian agribusiness and food Indonesia 23 Austrade 2015, Op cit.

PwC | 17 Key opportunities

Figure 8: Expected ASEAN Agri-food Consumption, 2007 and 2050 forecast (US$bn)

Vegetables

Fruit

Meats

Cereals

Oilseeds and oilseed products

Dairy products

Sugar 2050 2007

0 20406080

Source: ABARE 2016

Creating a food manufacturing Figure 9: Paddock to plane – Simplified food supply chain in and processing hub at the aerotropolis Badgerys Creek The opportunity for WSA and the aerotropolis more broadly, doesn’t Food just come from the diversion of food processing freight from KSA to WSA, it also comes from attracting high-value food manufacturing and processing to locate near the airport. Perishable foods are often moved long distances along sensitive supply chains to reach international airports just in Overseas Farmer Packing time for loading onto aircraft. location flight Australian food producers are increasingly looking for ways to concentrate supply chains and reduce risks and inefficiencies associated with greater intermediation. Cold A dedicated food precinct near the storage airport could also offer significant efficiencies to companies, firstly by cutting down on expensive cold- chain transportation from final processing locations to the airport, but also by offering proximity to, and collaboration with, other parts of the

18 | Liverpool: the Gateway to Sydney’s Aerotropolis Key opportunities

supply chain such as packing and capabilities. DFW Airport for Australia has a strong history of food cold-storage facilities. Figure 9 example has just added 4,300 square research and development that has represents this potential model. metres of refrigerated storage space. fostered cutting-edge farming The new facility will assist techniques and technologies and a Any improvements to supply-chain distributers and freight forwarders sophisticated use of biotechnology. efficiency will be a vital element in in the transfer of high-value, Australian companies are on the ensuring the long-term temperature- and time-sensitive forefront of research and application competitiveness of Australia’s food products such as pharmaceuticals, in functional foods, nanotechnology exports. flowers and fresh foods through the and new processing technologies.24 airport and on to DFW’s 180 Some of these technologies are being As an example of such investment, markets. employed in state-of-the-art facilities construction is underway on the in Sydney’s South West. Freedom Toowoomba Integrated Milk Project Advanced food manufacturing Foods, for example, recently set up a which is strategically located next to and value-add processing new dairy processing facility in Wellcamp Airport. The first stage of Ingleburn, employing the latest Given the desire to attract high-value production at the factory will focus advancements in UHT technology to sectors to Badgerys Creek, and also on infant formula, to be followed by create fresh products that also have a renew manufacturing in Western development of fresh and UHT milk longer shelf-life. Sydney, advanced food for domestic and international manufacturing and value-add markets. A testament to the strength of processing is an ideal sector to foster Australia’s food manufacturing and attract to the food hub Internationally, other airports are sector is the level of international envisaged. Its activities, which could also trying to unlock growth investment it is attracting (see involve machinery and heavy vehicle opportunities for food exporters by Box 2). movement, are also compatible with improving onsite handling the operations of a 24-hour airport.

Box 2: International investment in Australian food manufacturing

Campbell Soup Company Campbell Arnott’s, a division of the Campbell Soup Company (USA), has invested more than A$400 million in the past decade to upgrade its existing Australian facilities with state-of-the-art manufacturing technologies. One-third of this was spent on a new biscuit production line in Brisbane, Queensland, based on Australian design technology, with additional funds invested in automating existing production.

Longley Farm British dairy company Longley Farm has invested more than A$100 million in a high-tech milk processing facility in Casino, New South Wales, developing a unique export business based on a patented ‘fast-freeze’ technology. Under local subsidiary Richmond Dairies, the company is exporting 10-kilogram blocks of high-quality frozen cream for use by premium ice-cream manufacturers, patisseries and bakeries in the Middle East, South West Asia and Japan. The plant also produces yoghurt concentrate and skim milk powder.

Charoen Pokphand Group (CP Group) CP Group, Thailand’s largest private company, is signalling its confidence in Australia’s premium food brand in Asia by signing a Memorandum of Understanding with Australia’s largest family-owned meat processor, Thomas Foods International. The MoU is the first step ahead of the two companies establishing a joint venture to build a large-scale advanced food processing centre that will produce ready-made beef and lamb meals for export.

New Hope Group In 2015 the Chinese conglomerate New Hope Group entered into a joint venture (JV) with two of Australia’s leading dairy farming groups to establish Australian Fresh Milk Holdings. The JV is focused on expanding its dairy product offering across Australia, as well as into China and South East Asia.

Source: Austrade 2015, Investment Opportunities in Australian Agribusiness and Food

24 Examples of new processing technologies electric field processing – Austrade 2015, include irradiation, high-pressure processing, Investment opportunities in Australian low-energy electron beam processing, pulsed agribusiness and food.

PwC | 19 Key opportunities

As Australia’s agribusiness and food Key MTP sub-sectors identified by robotics and advanced materials industry grows, NSW has the the CSIRO include: including medical devices, opportunity to strengthen its prosthetics and pharmaceuticals. position in the industry. Creating a  smart devices, implants and The precinct is well placed to pursue food hub at Badgerys Creek for bionics this opportunity due to their access growing, manufacturing, processing to: and export preparation offers  accelerated pharmaceutical businesses enhanced connectivity development  technology through university into regional supply chains and the  manufacturing high-value and industry partnerships potential efficiency benefits of pharmaceuticals industry clustering.  development funds with  diagnostics and informatics university and industry joint Such a hub could open up new products and services. projects opportunities for existing businesses Against this backdrop, a health and  the varied population to trial like the Sydney Markets. The education precinct is emerging in developments Markets have publicly stated that Liverpool, through partnership and  skilled local labour markets in they are analysing the future needs collaboration amongst its leading manufacturing and health of the business, including whether it health and education institutions needs to be move to a larger site to including:  proximity to WSA, the accommodate future growth in its Moorebank Intermodal Terminal operations. Regardless of whether freight precinct as well as the this current investigation results in  South Western Sydney Local road and rail network. the relocation of the existing Health District Flemington site, a hub at Badgerys  Liverpool Public Hospital Whilst proximity to WSA isn’t a key Creek could create the opportunity enabler of a thriving medical for the Markets to establish ancillary  South West Sydney Primary technology sector, it provides the operations. Proximity to a 24-hour Health Network additional efficiency benefit of WSA airport could provide the  lngham Institute of Applied reduced ground transport following opportunities to the Medical Research requirements when importing or Markets: exporting equipment or supplies.  Sydney Business Chamber Proximity to the Moorebank  greater efficiency in the way it Intermodal Terminal may also  NSW Health Infrastructure imports certain perishables (like provide greater efficiency for fresh flowers and out-of-season  Liverpool City Council interstate distribution. produce) Improvements to the road and rail  TAFE NSW network within the region will also  expansion of its relatively small  University of Wollongong provide more efficient distribution to export business other health centres in Penrith and  the ability to act as an aggregator  University of New South Wales Campbelltown. in the food airfreight value chain  Western Sydney University.25 (i.e. offering packing services, 3.1.4 Defence and aerospace cold storage etc.). This alliance of organisations is The NSW Department of Industry significant as individually they are wants to develop a defence and 3.1.3 Medical technologies already providing world-class care, aerospace precinct near the airport, The CSIRO has identified the education and research. as part of the State Government’s opportunity and importance of plan to grow the industry in NSW.26 Australia taking a larger share of the The health and education sector as a global Medical Technologies and whole is growing in Liverpool. There At a national level, the Australian Pharmaceuticals (MTP) industry, are more than 15,000 health and Government is focused on increasing which is expected to grow to almost knowledge workers in the Liverpool the home-grown defence industry. $3 trillion globally by 2025. Growing LGA, equating to round 20 per cent The objective of the Government is Australia’s industry would benefit of total workers. This proportion is not just to boost Australia’s own the economy through the more cost- expected to increase to 25 per cent defence capabilities but also to effective provision of health services, by 2036. improve the commercialisation of as well as through the flow-on effects the industry and the export potential of a successful industry such as The objective is for the precinct to of companies in the industry. greater jobs and potential exports. become a hub for development of health-related technology such as

25 See PwC 2017, Reimagining … the Liverpool 26 NSW Government 2017, New South Wales: Government Defence and Industry Strategy Health, Education, Research and Innovation Strong, smart and connected — The NSW 2017 Precinct

20 | Liverpool: the Gateway to Sydney’s Aerotropolis Key opportunities

Private defence companies The WSA defence and aerospace hub electronic warfare equipment and contribute to the production and envisaged by the NSW Government advanced electronics. Northrop maintenance of Australia’s aircraft will seek to attract small, medium Grumman will also aim to forge and equipment, but are primarily and large businesses specialising in relationships with universities to focused on the domestic market with the manufacture and maintenance of train highly-skilled technicians: exports comprising a smaller aircraft, equipment and systems. proportion of sales. Australia ranks Like the medical technology as only the 20th largest exporter of industry, a thriving defence and It really makes sense for defence material. By comparison, the aerospace industry doesn’t us ... we've got this $50 industry relies on a significant necessarily rely on proximity to an million investment in amount of imported defence airport. Nonetheless, clustering of electronics repair material, making Australia the fifth- activities near WSA would support capability we wanted that largest importer. Positioning the industry’s growth objectives by: companies to compete on a global to be in location that made stage has the potential to strengthen  providing companies with links to sense from a supply chain the industry overall, by opening up new export partners and markets point of view, from the new markets, driving innovation and point of view of having ultimately allowing it to grow.  enabling better connections between prime contractors and great workforce The strategy to grow the industry in original equipment availability, university NSW specifically is a logical one. The manufacturers proximity and that new defence industry is already at an  opening up training and skills defence industry precinct, advantage in NSW, with the largest development opportunities the university precinct out number of defence bases and there at Badgerys Creek  enhancing potential for capabilities of any state or territory. that's being developed, it Today it employs around 26,500 collaboration on innovation and people in NSW, including in many research through Liverpool’s just seems perfect for us to regional areas. Its investments and universities and other R&D be able to do that, so we expenditure amounted to institutions stepped up and said we $7.9 billion in 2014-15. Defence also  facilitating the maintenance of would be a foundation positively impacts a wide range of operational aircraft tenant at that location.” 27 other industries and has a strong track record of working with Creating the precinct hinges on universities to develop and getting the right anchor tenants. The Other major defence companies are disseminate technology and develop NSW Department of Industry has needed as tenants and, in some the workforce required by the received the commitment of cases, short- to medium-term industry. Northrop Grunman to build a incentives may be needed to induce $50 million Electronic Sustainment key players to locate to Australia and Centre of Excellence to support the precinct. Such incentives are further discussed in Section 4.3.

27 Amelia McMahon, "Western Sydney and RAAF https://www.defenceconnect.com.au/key- Base Richmond to become key facilities for enablers/901-western-sydney-and-raaf-base- prime", 3 July 2017, available at: richmond-to-become-key-facilities-for-prime

PwC | 21 Key opportunities

3.1.5 Tourism Figure 10: Purpose of visit – visitors to Western Sydney WSA is expected to provide a significant boost to Western Visitors Share 2016 International visitors Sydney’s visitor economy. Currently, the dominant purpose for visiting Western Sydney is to visit family and relatives or ‘VFR’ (see Figure 10). 4% The VFR market comprises 45 per 4% 8% cent of international visitors and almost half of domestic visitors to

Western Sydney, in part a reflection 41% of the region’s diverse and multicultural resident population. Visitors Share 2016 The VFR market will continue to be a Holiday 41% key segment once WSA opens. Visiting friends and relatives 45% However, the opening of the airport 45% may also increase the share of Business 8% international and domestic Education 4% passengers visiting for the purpose Other 4% of ‘Holiday’, particularly given WSA is expected to initially mainly cater for lower-cost leisure travellers. Purpose of Visit – Domestic visitors Whilst many visitors to Sydney come to enjoy sites around the Sydney CBD and the eastern suburbs, the arrival of WSA, coupled with the 6% likely dominance of the VFR market 18% will mean there is a good 29% opportunity for Western Sydney to capture visitors when they arrive or before they leave. Visitors Share 2016 Holiday 29% Growing the overnight visitor Visiting friends and relatives 47% economy Business 18% The NSW Government’s Western 47% Education n.p. Sydney Visitor Economy Strategy Other 6% for 2016/17 – 2020/21 (the ‘Strategy’) sets the strategic priorities for developing tourism in Western n Holiday n Visiting friends and relatives n Business n Education n Other Sydney. A key objective of the strategy as a whole is to increase the Source: Destination NSW 2017, Western Sydney Visitor Economy Strategy 2017/18 – 2020/21 proportion of visitors who stay overnight. Domestic day trips make up around three-quarters of all visits natural attractions such as the Blue While many of these new attractions but only contribute 22 per cent in Mountains and World Heritage exist outside Liverpool’s LGA, it has expenditure. Greater numbers of Areas, as well as visits to the region’s the opportunity to capitalise on domestic and international new recreational offerings. Major growth in visitation by growing its passengers flowing through Western developments include: accommodation sector. There may Sydney have the potential to boost be a number of transit hotels that overnight stays, if visitors can be  the new Wonderland, now eventually set up near or at WSA, encouraged to make Western Sydney ‘Worlds of Wonder’, will open in however Badgerys Creek is part of their plans. International Western Sydney in 2021, with the sufficiently remote that travellers visitors are particularly beneficial, as ambition of becoming one of (particularly the VFR market) will be they tend to stay longer and spend Australia’s top theme parks more inclined to stay somewhere more (see Figure 11). that’s close to other amenities and  Sydney’s newest zoo in Blacktown importantly, close to their friends This reinforces the importance of  a new water park in Prairiewood and relatives. one of the opportunities identified by is set to be open in the summer of Furthermore, while in the short term the strategy, which is to develop 2017 WSA will predominantly cater for touring routes and packages. Such the leisure market, its passenger packages could bundle tours to key profile will shift over time with an

22 | Liverpool: the Gateway to Sydney’s Aerotropolis Key opportunities

increasing share of domestic and Figure 11: Western Sydney visitor economy international business travellers coming through WSA. Western Sydney as a whole is lacking in Visitors expenditure sufficient accommodation stock, variety and quality. Also lacking are its facilities for business conferences and events. 22%

By increasing its supply and diversity 34% of visitor accommodation, as well as developing venues for business events, Liverpool can cement its reputation as the city adjoining the Expenditure 2016 airport, to which it just makes sense to go. International overnight 1,430.55 Domestic overnight 1,808.56 44% Educational tourism Daytrips 923.11 The Strategy also sees international Total 4,162.23 visitation being lifted through short study tours offered by universities. Building on this idea, study tours Visitors nights could be developed that harness the new sectors of the aerotropolis like Medical Technology and Food. And they don’t need to just target students but could be created for business delegations that have an interest in Australian investment 38% opportunities.

The food manufacturing and trade precinct envisaged could be a major 62% focal point for overseas government Expenditure 2016 agencies and businesses looking to International overnight 12,381.44 understand Australian food and Domestic overnight 7,584.96 agriculture opportunities and what is Total 19,966.40 needed to create more enabling trading conditions with Australia. For example, Adelaide University n International overnight n Domestic overnight n Daytrips recently hosted a high-level ministerial and private sector Source: Destination NSW 2017, Western Sydney Visitor Economy Strategy 2017/18 – 2020/21 delegation of 72 officials taking part in a Department of Foreign Affairs and Trade funded short course on equine industry, based around the trainers, breeders and buyers) to Standards and Regulations Australian Turf Club’s racetrack at occasional racegoers. Across NSW, Familiarisation. If the Sydney Warwick Farm and the new Inglis and nationwide, the horse racing Markets were to establish operations Riverside Stables complex being industry is growing, attracting in Liverpool, it could also develop developed after moving from its greater levels of domestic as well as into a destination in its own right, current home at Randwick. The international patronage. showcasing the best of Australian complex is being developed into a Anecdotally, regional racetracks like produce and production to domestic major lifestyle destination. In Warwick Farm are experiencing and international visitors. addition to providing the premier increasing popularity amongst venue for Sydney’s horse sales, the younger racegoers as a result of Sporting facilities and events $140m development will also include efforts to glamourise venues and a hotel, restaurants, bars and a day events, while still offering a more The Strategy also recognises visitor spa. casual environment than major economy growth will be reliant on racetracks like Randwick and attracting new events to the region, The combination of these assets Flemington. The arrival of WSA such as major sporting events. could significantly enhance visitation should open up the potential for to Liverpool, with visitors ranging greater interstate and even One of Liverpool’s existing from domestic and international international visitation. advantages to be leveraged is its industry participants (horse owners,

PwC | 23 Key opportunities

Liverpool’s opportunity could be shoreline emanating from the Another ambitious yet conceivable even further enhanced by precinct. idea could be to create a new multi- establishing other equine-related purpose sporting facility to house a activities near these venues. For There is potential also to create an new A-League football team in example, horse trails could be agribusiness campus in close Liverpool (see Box 3). created along the Georges River proximity.

Box 3: Liverpool – the home of a third A-league team for Sydney? The expansion of the A-league is on the horizon with the Football Federation of Australia (FFA) announcing in early 2017 that it was considering adding another two teams. Whilst there haven’t been any clear announcements regarding the timing of such a decision, it is expected that it will be firmly on the table once the FFA completes its current restructuring process.

With Sydney’s population of six million and the population of Western Sydney expected to grow to three million in the next twenty years, there is a good potential for a third Sydney team. The FFA is likely to be analysing population growth across the country, overlaid with an analysis of visitation trends, which we believe should position Liverpool and the South West more generally, well. The other benefit of Liverpool is its relative connectivity to larger populations in the east and west of Sydney, compared to areas further south of Sydney. This large catchment area offers a large and sustainable supporter base, with a strong sporting culture, allowing a new stadium to viably co-exist with the new Parramatta Stadium without resulting in a dilution of supporters.

A new sporting team would need a home ground in Liverpool.

The NSW Government’s State Infrastructure Strategy includes a commitment to build a new outer Western Sydney sporting venue. The development is a longer-term priority, slated for ten to 15 years’ time, but none-the- less remains a firm commitment of the State Government. We assume the NSW Government will consider areas like Liverpool with a growing population and a strong support base. And while the stadium doesn’t rely on proximity to the airport, the positive trajectory of population growth in the South West, combined with the additional investment that will flow to the area provide a good basis for a Liverpool stadium.

To maximise the benefits of such an investment, it should be developed into a multi-purpose community facility, with adult and children’s sporting and fitness facilities that could be utilised by Liverpool’s nearby universities, schools and community members in general, as well as areas for entertainment, business events and community social activities. The stadium would need to be close the Liverpool CBD in an area readily accessible by rail and bus transport.

3.2 A smart airport for a practice in terms of innovation and improvements, many airports must sustainability. retro-fit existing terminals and smart city implement ongoing initiatives, to The collective planning visions for 3.2.1 Sustainability steadily make headway in improving energy efficiency, or use terminal Western Sydney, as found in the The global aviation industry’s expansions as an opportunity to NSW Government’s Metropolitan response to the threat of climate do so. Plan and the Australian change is becoming increasingly Government’s Smart Cities Plan, ambitious and it is the first industry envisage a smart city that is more to collectively commit to emissions WSA has the rare opportunity to be connected, more innovative and reductions targets. Currently 192 able to cost-effectively incorporate more sustainable. WSA will be a airports, representing almost forty sustainability right from the design nationally significant piece of per cent of global air passenger phase, through to construction and infrastructure and the cornerstone of traffic, are certified at one of the four operations. The WSA plan states that future infrastructure investment in levels of Airport Carbon it will incorporate best practice Western Sydney. And whilst it the Accreditation (a program set up by features such as clean-energy ground airport’s early operations may the Airports Council International). support vehicles, energy-efficient experience moderate patronage and KSA is one of these. Thirty-five heating and cooling plants, fixed activity, in decades to come it will be airports are carbon neutral, with electrical ground power for aircraft a major international airport with twenty-eight in Europe, five in Asia, sitting at gates, and preconditioned more than double the capacity of one in North America and one in KSA. It should reflect the smart city Africa. that government would like Western Sydney to become, incorporating best Whilst technological advancements are enabling environmental

24 | Liverpool: the Gateway to Sydney’s Aerotropolis Key opportunities

air supply to reduce aircraft burning from 2020, enabling its energy costs result in a more economical fuel when stationed at gates.28 retailer to commission new wind method to shuttle visitors around, farms in order to meet the group’s particularly during times of the day We recommend that WSA also look requirements. when the vehicles are not in high use. to procure a large portion of its energy supply from clean sources, 3.2.2 Innovation With WSA’s opening almost decade rather than just aiming to optimise A number of Australian airports, away, it is not difficult to envisage a energy efficiency. This would be a including KSA and Brisbane Airport, scenario in which driverless vehicles prudent measure to help futureproof are implementing electric buses to are used throughout and around the against rising energy needs as the reduce the environmental footprint airport site. Indeed, the NSW airport’s operations grow. It will also of ground transport around the Government will investigate the help to minimise the financial risks airport site. WSA’s Airport Plan also potential for a Connected and associated with changing energy includes plans to roll-out cleaner Autonomous Vehicles (CAVs) zone market dynamics and potentially ground support vehicles. near the aerotropolis, thus enabling stronger government regulation on piloting of CAV technology. A new, greenfield international airport in a the horizon to address climate The next frontier in the developed city is rare. Government change. mainstreaming of modern vehicle should not miss the opportunity to technology will be the adoption of plan for an airport that incorporates In 2016, Adelaide Airport installed a driverless vehicles. Driverless the best features of modern solar PV array on the roof of its vehicles offer good potential for use sustainable design from day one. short-term car park. This year, in airports. They offer greater safety Brisbane has begun installing a six and fuel efficiency and airport megawatt system across six sites, precincts offer a confined zone for consisting of 22,000 panels spanning operation and maintenance.32 29 an area of 36,000 square metres. Driverless vehicles are being trialled The total installation will be the at several airports around the globe largest commercial rooftop solar including Adelaide and further afield, system in the Southern Hemisphere. Heathrow Airport. They are also The system will account for almost already used in many recreational 20 per cent of the airport’s electricity precincts such a Singapore’s Gardens consumption, saving around $1 by the Bay where they offer a unique 30 million in electricity bills each year. visitor experience. Reduced labour Krishan Tangri, the airport’s General Manager Assets, said ‘electricity is Box 4: Dutch airports to be powered by renewable energy from 2018 one of the biggest expenses to running Brisbane Airport with From 2020, all of the power consumed by Royal Schiphol Group’s dozens of large buildings requiring airports will come from new Dutch wind farms run by energy company cooling, lighting and heating 24 Eneco. These include Schiphol, Rotterdam, The Hague Airport, hours a day, 365 days a year’. 31 Eindhoven Airport and Lelystad Airport. From 2018, energy for the airports will come partly from existing renewable energy sources, but It would be a missed opportunity not from 2020 the airports will be powered solely from Eneco’s newly built to calibrate WSA’s power supply to wind farms. feed off a large amount of renewable energy from day one. This could be achieved through on-site generation like in Adelaide and Brisbane or through a power purchase agreement with a large-scale solar farm (perhaps one built near WSA). Royal Schiphol Group in The Netherlands is leading the way internationally in terms of its sourcing of off-site renewable energy. Its five airports are to be entirely powered by wind power

28 Department of Infrastructure and Regional largest-rooftop-solar-system-set-to-slash-bnes- 31 Brisbane Airport Corporation 2017, ‘Australia’s Development 2017, Air quality, available at: energy-needs largest rooftop solar system set to slash BNE’s http://westernsydneyairport.gov.au/environmen energy needs’, available at: 30 Nick Lenaghan, ‘Brisbane Airport to save $1m a t-heritage/environment/air-quality.aspx http://newsroom.bne.com.au/australias-largest- year from massive solar array’, 19 September rooftop-solar-system-set-to-slash-bnes-energy- 29 Brisbane Airport Corporation 2017, ‘Australia’s 2017, available: http://www.afr.com/real- needs largest rooftop solar system set to slash BNE’s estate/brisbane-airport-to-save-1m-a-year-from- energy needs’, available at: massive-solar-array-20170915-gyikfc 32 PwC 2017, Nudging people into autonomous http://newsroom.bne.com.au/australias- vehicles, pp.7-9

PwC | 25

4 What needs to happen

There are a number of opportunities Longer travel time to an airport not In the early to medium-term stages identified in Chapter 3. Here we only reinforces perceptions of of the airport’s operations, a large explore the key requirements to distance and inconvenience but also portion of WSA’s passenger market realise these opportunities, with a adds to a passenger’s travel costs, and workforce is likely to come from particular emphasis on what diminishing an airport’s appeal, as Western Sydney. Hence, a key Liverpool City Council can do to take was evident in the failure of Canada’s priority of the Government must be advantage of them. Mirabel Airport (see Box 5). In to integrate the airport with the considering whether to establish aerotropolis and other regional cities 4.1 Connectivity routes at WSA, airlines will need of Western Sydney. Connectivity confidence in the appeal of the between Sydney’s airports is also 4.1.1 Airport access airport to passengers. Similarly, considered important. In the early The success of WSA as a second businesses considering locating in stages of operations not all airport, and accordingly the the aerotropolis will need confidence international and domestic aerotropolis, depends on efficient in the connectivity of their connections will be available and transport connections to and from operations with suppliers, customers passengers will require easy WSA. and employees. transfers between airports.

Box 5: Mirabel Airport, Montreal Canada

The now-abandoned Mirabel Airport is 60km from the city centre of Montreal, Canada. Though forecast to accommodate up to 40 million passengers by 2025, demand did not meet expectations and the airport which opened in 1975, was closed to air traffic in 2004. The appeal of the airport quickly diminished as passengers has to expend large taxi fares to travel to and from the airport. While having better facilities than the older Dorval Airport, it lacked convenient highway and transit links to the city, making it a hassle for passengers to commute from Mirabel to the heart of Mirabel Airport abandoned in Montreal Canada Montreal. Initially, the Canadian government forced international airlines to use the Mirabel airport, and kept the first airport, Dorval airport, for domestic flights. As a result, passengers on international airlines did not have ease of access to domestic transfers. Passengers preferred to go to the first airport, closely located 20 minutes from the city, and airlines followed steadily removing flights and diverting them to Dorval airport.

Source: Richard de Neufville 2005, ‘The Future of Secondary Airports: Nodes of a parallel air transport network’, Massachusetts Institute of Technology, Cambridge

So far the Australian and NSW governments have committed to funding a $3.6 billion roads package – the Western Sydney Infrastructure Plan – to support the integration of WSA with the region (see Figure 12). The package includes the construction of the new M12 Motorway, upgrade of the Northern Road and Bringelly Road to a minimum of four lanes each.33

33 Department of Infrastructure and Regional Development 2017, Western Sydney Infrastructure Plan

26 | Liverpool: the Gateway to Sydney’s Aerotropolis

What needs to happen

Figure 12: Western Sydney Infrastructure Plan

Source: Department of Infrastructure and Regional Development 2017, Western Sydney Infrastructure Plan

Six rail route options that would link investigate these six options has business case development, to WSA to different parts of Western been reaffirmed in the NSW support rail service needs arising Sydney are being investigated Government’s transport strategy - within the next 10 years (i.e. in line through an Australian and NSW Future Transport 2056 - released in with the opening of WSA). Government Joint Scoping Study on October 2017.34 The strategy the Rail Needs for Western Sydney recognises that one or more of the (see Figure 13). The need to rail links will be required, subject to

34 See NSW Government 2017, Draft Greater Sydney Services and Infrastructure Plan – October 2017

PwC | 27 What needs to happen

Figure 13: Route options being considered as part of the Western Sydney rail scoping study

Source: Department of Infrastructure and Regional Development 2017, Western Sydney Rail Needs Study: Route Options

The options that would best support Option 1 is a 10km link to North of the T1 Western Line and development of the aerotropolis, and Leppington, which also forms part of South to the T2 South Line. that of Liverpool, are ‘Option 1’ and a separate proposal being considered Additional stations would be added ‘Option 3’. to extend the South West Rail Link at Rossmore, Bringelly, North (see Figure 14). The South West Rail Bringelly, Oran Park and Narellan. Link would connect the airport to

28 | Liverpool: the Gateway to Sydney’s Aerotropolis What needs to happen

Figure 14: Proposed corridor and core stations for the South West Rail Link Extension Corridor

Source: Transport for NSW 2017, South West Rail Link Extension Corridor. NB: The superseded South West Growth Centre and Western Sydney Employment Area boundaries are shown in the image.

The combination of the roads multi-modal solution to help ease and to Sydney as a whole — it package and extension of the South congestion of traffic flowing to the provides: West Rail Link, if approved, would airport. provide good airport accessibility to  a simple rail connection from the major population centres in Penrith Connecting the airport to airport through the South West to the North and Campbelltown and Leppington, via Bringelly, offers a Growth Centre, where a large Camden to the South. The number of advantages to the proportion of the airport’s combination also provides a good Liverpool LGA, to Western Sydney

PwC | 29 What needs to happen

workforce and users are expected consider which ones will service the The combination of these options to live greatest users, relative to the cost of would provide the following construction. On the one hand, the advantages:  an easy link from the airport to populations of Leppington and Liverpool, which currently offers Narellan, and the Liverpool LGA  fast journey times between the closest business hub, as well more broadly, are expected to grow Liverpool and the CBD as being on its way to developing significantly as a result of WSA. On the premier health and education the other hand, it is conceivable that  connections between the airport precinct in Western Sydney. the Government ultimately favours and the Sydney CBD in a simple Linking the airport to Liverpool links from WSA to areas with the manner that leverages the also offers the best potential for a greatest existing population density existing network more direct connection from the (i.e. Parramatta). airport to the Sydney CBD and  the easiest link between WSA and KSA Sydney Airport, which would be If this is the case, Liverpool City further enhanced by pursuing  good scope for a more immediate Council will need to allow for this ‘Option B’ to create a metro-style connection between Liverpool scenario by considering the service linking the South West to and KSA. In this respect, it may alternative modes of transport for KSA and onto the CBD. be an appropriate initial workers and residents in the short- response, with a direct term such as shuttle bus services to In the medium- to longer-term, the connection (Option 3) a and from the airport and the following additional options would complementary subsequent Liverpool CBD. Transport Future further secure Liverpool’s position as response. 2056 notes that infrastructure to the key gateway city between the support rapid bus connections airport and the rest of Sydney: Even the construction of the between the aerotropolis and Leppington connection can be Penrith, Liverpool, Blacktown and  providing more direct links from phased to ensure that development Campbelltown-Macarthur will also Liverpool to Parramatta and along the rail corridor is undertaken be considered investigated. other regional cities to better in an orderly manner. For example, improve connectivity between while station sites can be identified Western Sydney’s major centres and the core station infrastructure 4.1.2 Connectivity to the rest of the city and broaden the airport’s built, it may be appropriate to open immediate catchment area the intermediate stations (e.g. North In the medium to long-term Bringelly, Bringelly and Rossmore — connectivity to the Sydney CBD will  creating a high-speed rail service see) as the land around the stations become increasingly important to connecting Liverpool to the CBD are developed. This approach also WSA’s ability to capture demand via the East Hills line, which has the benefit of reducing the unmet by Sydney airport and to could reduce the journey time to upfront costs of construction. attract a growing number of around 30 minutes. businesses and workers to Liverpool. It may also be appropriate in the In the medium term, a direct link Businesses considering locating to longer term to consider a fast rail from the airport to Liverpool City Liverpool will need efficient access to link between WSA and the Sydney (see Option 3 in Figure 13) would suppliers and customers beyond the CBD as WSA migrates from a further enhance the attractiveness of region, and need confidence that the predominantly low cost operator the city to businesses looking to area will be desirable for the workers airport to full service carriers with a locate near the airport. It would offer they will need to attract. focus on business passengers. a faster link between the airport and Liverpool and therefore, the airport The average rail journey between and the Sydney CBD. Liverpool and the CBD is 60 4.2 Coordinated planning minutes. These long commute times The success of the WSA aerotropolis Liverpool City Council should limit opportunities for Liverpool’s requires coordinated planning: advocate for these short-and residents and if they persist will medium-term options on the basis constrain its potential as the major  around the airport, in order to that they are relatively simple edge city of the aerotropolis. enable large-scale industrial options which ensure connectivity precincts to develop around the for WSA to the aerotropolis and the Route options that link Western airport major edge city (i.e. Liverpool), but Sydney to the Sydney CBD are also in a phased manner that allows being considered by the Western  beyond the airport, in order to: expansion (e.g. building out the Sydney rail scoping study. Liverpool – pursue good urban design to intermediate stations on the Council should advocate for ‘Option attract other businesses and Leppington extension and then later C’ to link Liverpool City to workers to Liverpool constructing a direct Liverpool-WSA Bankstown, which would build on link). the connectivity provided by an – realise tourism opportunities airport to Leppington and/or airport by enhancing Liverpool’s The formal business case process to to Liverpool link. assess the six route options will

30 | Liverpool: the Gateway to Sydney’s Aerotropolis What needs to happen

existing assets and developing indirect employment generated by airport. The majority of this land is new attractions. the airport. currently used for agricultural, recreational and low-density These coordinated planning needs This requires prioritising the right residential uses (see Figure 15). are discussed in turn. mix of industrial and commercial Planning for the surrounding land development around the airport that uses is ongoing but a number of 4.2.1 Around the airport not only attracts high value Federal and State Government Careful zoning, planning and industries, but those whose longer- policies have begun to formalise the investment coordination is required term viability is significantly vision for land use in the areas to encourage industrial enhanced by proximity to the around the airport, setting the stage agglomeration around the airport. airport, to ensure ‘stickier’ tenancy. for future development in Situating these activities around the infrastructure, industrial and airport is not only compatible with a A large supply of land suitable for commercial activity and homes. 24-hour airport but maximises development exists around the Figure 15: Current land use around the airport site

Source: PwC, based on data from the Australian Bureau of Statistics.

The key policy initiative is that of the decision to proceed with locating the expected that the WSPGA will Western Sydney Airport Priority airport at the Badgerys Creek site. embrace the commercial Growth Area (WSA-PGA), The stated objective of the WSA-PGA opportunities from the airport and, if enveloping the entire North, East is to ‘provide local people with better successfully implemented, will shift and Southern sides of the airport access to jobs within and around the the rural residential character of the site. The WSPGA was established in airport, as well as infrastructure and area towards a more urban form April 2014 in light of the final services for local residents’.35 It is compatible with employment-

35 NSW Department of Planning & Environment 2017, Western Sydney Priority Growth Area

PwC | 31 What needs to happen

generating land use. However, no zoning right, the NSW Government currently seen in parts of Western zoning or planning details are and the Liverpool City Council will Sydney and only serves to create available as yet. The NSW also need to work with institutional further distance from transportation Department of Planning and developers who have the capacity to and other social infrastructure. Environment is working with local develop land into specialised sector- councils to develop the Land Use specific precincts and bring the right Furthermore, as economic activity and Infrastructure Strategy.As a tenants to them. increases, there will be increased large share of the WSPGA falls demand from businesses who will within the Liverpool LGA, the The strategy must also set out a want to locate there, creating further Council will be able to work with sufficient physical buffer between employment opportunities. The State Government on ensuring an the airport and the surrounding Council needs to ensure that this optimal strategy is developed. It residential areas (at least 5km from isn’t stymied by inconsistent must also set out a sufficient physical the airport) to safeguard WSA’s planning and that the strategy for buffer between the airport and the curfew-free status. Where further the WSA-PGA provides sufficient surrounding residential areas (i.e. at supply of housing is needed, higher land for commercial and mixed-use least 5km from the airport) to density options need to be development. safeguard WSA’s curfew-free status considered to avoid the sprawling – see Figure 16. Beyond getting form of urban development that is Figure 16 Distance of runways from nearest suburban residences

Major Australian Airports: Distance of Runway from Nearest Suburban Residences

START POINT OF End Point Of MEASUREMNT Measuremnt

Proposed 10.5KM Western Sydney

6.7KM Brisbane

4.4KM Melbourne

1.4KM Perth

0.6KM Sydney (Kings Ford Smith Opertional 0.5KM Restrictions and Adelaide Curfews Apply

0.5KM Gold Coast

Source: Department for Infrastructure and Regional Development 2016, An airport for Western Sydney: Building Western Sydney’s future, p.4

32 | Liverpool: the Gateway to Sydney’s Aerotropolis What needs to happen

4.2.2 Beyond the airport – Liverpool’s place potential

The Liverpool city centre has a The Council is working on  the development of a medium- unique opportunity to position itself revitalising its city centre, which term strategy to attract additional as the CBD of the aerotropolis. It is includes a proposal to alter zoning in hotels and conference facilities to located in a strategic position, at the the city centre to permit increased Liverpool (see Section 3.1.5) most easterly point of what we have mixed-use development. Beyond the generally outlined as the aerotropolis areas immediately surrounding the  the implementation of the boundary in Chapter 2, at roughly airport, mixed use retail, office and George’s River Master Plan with the mid-point between the airport residential development should be visitors in mind (i.e. not just site and the Sydney CBD. This is a prioritised. Mixed uses are known to residents) great advantage considering activate more vibrant communities  capitalising on the co-location of businesses who may want to with different lifestyle options. the Warwick Farm race course establish offices close to the airport and the new Inglis Riverside but still be located within a major Liverpool Council is also seeking to Stables to develop further commercial and retail centre. This leverage the amenity provided by its enterprises related to the equine was recently demonstrated by WSA proximity to the Georges River and industry Co’s decision to establish their has exhibited a draft Master Plan, operations in Liverpool. which proposes a long-term vision  the establishment of Sydney’s for the potential urban renewal of third A-League team in a new A key component of Liverpool’s the precinct. The plan envisages a multi-purpose sporting facility current strategy to attract businesses connected and walkable precinct (see Box 3). Proximity to WSA and people is to improve the city’s which provides generous public should, over time, provide direct amenity and liveability. The access to the river front, a vibrant and relatively convenient Australia Government’s Smart Cities mix of uses, and improved connections for the Liverpool Plan recognises the centrality of connections across the Georges team and its competitors in these factors to a city’s success, River. Australia and Asia. noting that: Liverpool needs to continue to To succeed in the 21st progress its revitalisation strategy for the city centre to ensure that it is Century economy our seen as the natural commercial hub cities need to be adjoining the WSA. productive and accessible, but they also need to be While tourism is a potential liveable with a clear focus beneficiary from the development of WSA, many of the existing and on serving their citizens. proposed Western Sydney tourist Great cities attract, retain facilities sit outside Liverpool (e.g. and develop increasingly World of Wonders, the Blacktown mobile talent and zoo etc.). Nevertheless, Liverpool can organisations, benefit by becoming the leading edge city and the natural Western Sydney encouraging them to locus if it can truly be seen to be an innovate, create jobs and attractive and engaged environment support growth.” 36 with the appropriate facilities. To do this, a range of issues need to be addressed, including:

 activation of the Liverpool CBD as a vibrant, green, engaged and walkable precinct37 (see Box 6)

36 Department of Prime Minister and Cabinet 37 See PwC 2017, Reimagining … the Liverpool 2016, Smart Cities Plan Health, Education, Research and Innovation Precinct

PwC | 33 What needs to happen

Box 6: Future Liverpool urban principles

PwC’s recent report prepared for The Liverpool Health, Education, Research and Innovation Precinct Committee, assessed Liverpool’s place-making needs based on nine key urban planning principles. The table below outlines key recommendations to guide proactive decisions on new development. Urban Principle Liverpool Now

Create distinct focus Align the zones within the precinct with their primary use zones that are easy to Focal Zones eg health and research/civic and food/retail and Identify education/green zone to create identity and attachment.

Develop the in-between Build on the small-scale personal interaction opportunities spaces into social Catalysers that already exist in Liverpool and provide more to heighten catalysers the sense of community connection.

Mandate cross Retain Liverpool’s original grid block sizes and increase connections that Permeability arcades or interconnecting walkways to provide a greater increase intersections number of intersections and options for paths of travel.

Encourage connections Consolidate development in the core CBD to retain the close across Reach and Limits reach of the city limits and increase connections across the bounding elements river, rail and highways to surrounding areas.

Consider encouraging cars to stay out of the CBD core by Focus on CBD soft increasing hyper local services, walkability, bike share & transport options and Transport Options bike lanes. Push for increased metro and airport reducing cars connection.

Support mixed use and Encourage the blending of activities in new mixed use Mix of Uses shared use developments and focus on shared facilities for developments collaboration.

Develop consistent Expand on the design identity being developed around the materiality for identity Urban fabric mall and Macquarie street and develop urban fabric in each zone language that distinguishes each focal zone.

Provide housing that Foster design excellence and create a reputation for meets needs across the Housing Diversity supporting quality in design of new developments. Promote spectrum housing affordability across sectors and types.

Activate day and night, Activate interfaces along primary walking routes, have repurpose and multi-use Activation multiple modes of function to ensure facilities are in use spaces day and night, promote mixed use & adaptive reuse.

Source: PwC 2017, Reimagining … the Liverpool Health, Education, Research and Innovation Precinct

4.3 Attracting investment

Whilst there is good potential for area (e.g. those identified in as has occurred at many new sectors and businesses to thrive Chapter 3). international airports, including in the Badgerys Creek aerotropolis, a Incheon, Dubai and Changi.38 Such challenge will be kick-starting 4.3.1 Kick-starting investment zones are areas where goods may be investment and getting enough Incentive mechanisms to attract landed, handled, manufactured, and businesses to take a leap of faith businesses to the aerotropolis need re-exported with simplified or early on in the life of the to do the job of luring existing streamlined intervention of customs aerotropolis. Greater business enterprises to relocate to the area, as and other border authorities. engagement is required to build the well as stimulating investment in Customs procedures are still understanding of the area’s future new and advanced sectors. required where goods are moved out investment potential. Targeted of the zone and into ‘the domestic incentives may also be needed to A traditional way to attract attract specific sectors which present investment has been through the the greatest opportunities for the establishment of a free trade zones,

38 There are over 3500 FTZs in 135 different countries.

34 | Liverpool: the Gateway to Sydney’s Aerotropolis What needs to happen

market’ but are otherwise then such an incentive mechanism could be suitable candidates for liberalised.39 could provide a significant economic incentives. However, like Incheon benefit and, by helping to kick-start (see Box 7), incentives could be Rather than the traditional business investment in the aerotropolis, tiered, reflecting varying levels of park model of a free trade zone as would provide a needed boost to desirability and ease of attraction. previously employed, what could be Australia’s trade facilitation For example, logistics companies are considered is a ‘virtual investment performance. In turn it would more likely to locate close to WSA attraction mechanism’. facilitate innovation, productivity and domestic investment and FDI in growth, increased production, Australian food and agri-business is This could be structured to apply to domestic employment and growing strongly. Only moderate companies: international competitiveness of incentives should be offered to domestically produced goods. provide enough inducement for  that wish to undertake companies to actually move their demonstrably new investment in A key objective should be to operations to the Badgerys Creek Australia encourage investment in sectors that aerotropolis. The defence industry governments are actively trying to on the other hand is one that the  in selected priority industries (see promote, that are aviation-oriented NSW is actively seeking to grow and Box 7) and may benefit from proximity to which may require higher incentives WSA. The following objectives to attract world-class investment of a  with the incentives time-limited. provide further guidance as to the sufficient scale. Such criteria would ensure that kinds of sectors and activities to incentives would only be available which any incentives could be Liverpool City Council should for investment that would otherwise directed: actively support the development of be unlikely to occur. targeted and time-limited incentives  encourage robust and diversified for new investors in the Liverpool The key to achieving these benefits is industries – by attracting LGA to target new FDI in key growth to incentivise new businesses, particular types of investment, sectors. leading to investment in facilities, governments have the technology, innovation and people. opportunity to diversify These incentives could include, for industries and exports example:  develop domestic markets – by  the reduction or elimination of offering greater flexibility in the customs duties and GST transfer of intellectual property and intangible goods,  reduced taxation obligations governments have the opportunity to attract companies  better taxation incentives dedicated to research and  employee hiring incentives development, and in turn foster successful intelligence hubs for  lighter touch compliance regimes educational, scientific and technological institutes  the opportunity to work with the Liverpool City Council in public  stimulate manufacturing private partnerships (PPPs) to innovation and renewal – in an accelerate development. effort to drive Australian-based Importantly, there would be no innovation and development, diminution of occupational health or some taxes could be lowered on employment standards. profits derived from wholly Australian-developed intellectual What would separate this approach property. This could greatly from most traditional trade zones is contribute to growth in the that eligible companies would need research and development sector to operate on agreed secure sites, but through leveraging existing would not have to operate with other Australian resources against firms in a single zone. increased financial incentives. With these objectives in mind, we If eligible firms are strategically believe that the sectoral located around and next to WSA opportunities identified in Chapter 2

39 The Australian Government previously including lack of proximity to other major attempted to introduce a FTZ in Darwin in 1985. economic areas It was unsuccessful for a number of reasons,

PwC | 35 What needs to happen

Box 7: Incheon Free Economic Zone

The Incheon Airport Free Economic Zone provides various customised incentives for attracting airlines, logistics companies and manufacturing companies. The airport provides tax reductions and exemptions from National Tax (Corporate tax and income tax) and local taxes based on industry type and investment amount, with a focus on manufacturing companies, logistics investment and R&D. Taxation Investment amount (USD) Exemption National Tax Manufacturing : $30 million or more 100% for 5 years (Corporate tax, Income Logistics : $10 million or more 50% for next 2 years tax) R&D : $2 million or more Manufacturing: $10 million or more 100% for 3 years Logistics: $5 million or more 50% for next 2 years R&D: $1 million or more Local Tax Manufacturing: $10 million or more Acquisition tax, Registration tax: Logistics: $5 million or more 100% for 15 years Property tax: R&D: $1 million or more 100% for 10 years 50% for 3 years

Source: Incheon Airport 2017, Our Business: Incentives, available at http://www.airport.kr/co/en/3/2/7/index.jsp

4.3.2 Building broader ideas and possible collaboration. In to address this divide but also business confidence this regard, we suggest that the generates a larger share of quality Liverpool City Council should jobs for Western Sydney residents. The forthcoming City Deal, establish a regular business forum to As at 2011 (to update for 2016), jobs designation of the priority growth provide a bond between Council and help by Liverpool’s residents fell into areas around the airport and the aerotropolis businesses, and to three main occupation groups: announcement of potential provide greater confidence for investment incentives will go some potential investors as to other  Clerical and Administrative way to providing the right signals to organisations’ plans Workers (approximately business of governments’ intentions 18 per cent) for the region. 4.3.3 Training and skills  Technicians and Trades Workers However, a much clearer picture is requirements (approximately 16 per cent) needed of the development and Around 60 per cent of Liverpool City investment potential, and an idea of resident workers travel outside of the  Professionals (approximately what other businesses will be area to work. There are different 15 per cent). locating near the airport. A number reasons for this such as WSA will be a major driver of of large organisations are already misalignment of available employment opportunities in the making plans that will determine the opportunities and skills and region, but it is only part of the story. location of their business operations transport limitations. A key driver of Reflecting national trends, and at around the time of WSA’s this people movement is that the driven by a significant increase in opening. If the airport and Western number of jobs available in Liverpool Liverpool’s population, healthcare Sydney is to be part of their thinking, is three-quarters the number of and social assistance, and education more certainty about the future employed residents. and training are expected to lead profile of the area is required. jobs growth within the City of The airport is expected to support Liverpool, as is reflected in the An aerotropolis investor summit will almost 28,000 direct and indirect changing industrial composition be held in 2018, however a more jobs by 2031, five years after the trends (see Figure 17). regular forum for business airport opens. The hope is that the engagement is required to generate airport generates not just more jobs

36 | Liverpool: the Gateway to Sydney’s Aerotropolis What needs to happen

Figure 17: Liverpool LGA’s changing industrial composition, 2001-15, for select industries

Central Liverpool’s changing industrial composition*, 2001-15, for select industry groupings

100

90 Health, education and public services

80 Wholesale and retail trade 70 Utilities and logistics 60

Accommodation, food 50 and recreation services

40 Professional services and mdeia/telecomms 30 Manufacturing and construction 20

10

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: PwC, based on data from the Australian Bureau of Statistics.

Liverpool’s educational institutions agri-business, medical science, collaboration to bring awareness to may need to augment their digital technology, professional education providers and students on education and training offerings to services, logistics and the future aerotropolis economy and align to the skills requirements of administration, and others. its skill requirements. As the region’s Western Sydney’s future economy, population grows, and skills and factoring in both the likely Liverpool benefits from several high development requirements increase, continuation of current industry quality educational and training the market may grow to a sufficient trends, as well potential shifts that institutions including Liverpool size to accommodate an additional may be brought about by WSA. As Hospital, the Liverpool TAFE, university in Liverpool. explored earlier in Chapter 3, the key Western Sydney University and sectors that need to be fostered to University of Wollongong. There The airport itself could be the maximise the economic potential of exists opportunities to foster location for a TAFE ‘skills exchange the airport include: collaboration between these program’, which allows workers to organisations to respond to current be taught skills on the job. Such  freight, logistics and distribution and emerging trends in skills programs are already being rolled requirements through the: out across projects such as the  advanced food-manufacturing Western Sydney Stadium and export  Liverpool Health and Education construction, Parramatta Square and  health and research (biotech, Precinct Committee40 Northern Road upgrade. These robotics, medical devices and programs are showcasing how new  Moorebank Intermodal Terminal pharma) infrastructure programs can Workforce Advisory Group (see mobilise talent efficiently and  defence and aerospace. Box 8). provide good test cases for the roll- These sectors create both low and Liverpool Council needs to leverage out of similar programs for WSA’s high-skilled jobs across engineering, this potentially enhanced level of construction and ongoing operations.

40 See PwC 2017, Reimagining … the Liverpool Health, Education, Research and Innovation Precinct

PwC | 37 What needs to happen

Box 8: Moorebank Intermodal Terminal Workforce Advisory Group (MITWAG)

MIC has established the MITWAG. The main focus of the advisory group is to identify and address skill shortages and education and training needs that will enable local people to be job-ready for the significant job opportunities generated by the development and operation of Moorebank Logistics Park. Membership of the group includes representatives from:  State government – NSW Department of Industry  Local councils – Liverpool City Council and Campbelltown City Council  Chamber of Commerce – Liverpool Chamber of Commerce and Industry  Tertiary educational institutions – TAFE NSW, University of New South Wales, University of

Wollongong and Western Sydney University Moorebank Intermodal construction progress at  SIMTA and MIC August 2017

Source: Moorebank Intermodal Company 2017, Construction progress, available at http://www.micl.com.au/construction-progress/

PwC | 38 What needs to happen

4.4 Liverpool City Council’s role in maximising the value of the aerotropolis

Drawing on the opportunities commercial and entertainment – actively support the identified in Chapter 2 and the needs hub adjoining the WSA. development of a ‘virtual identified earlier in this chapter, we investment attraction suggest that the Liverpool City  transport infrastructure – the mechanism’ in the Liverpool Council has clear tasks to undertake Council should: area to target new foreign to maximise the value of the – continue to advocate for the direct investment (FDI) in key aerotropolis, with respect to: rail options proposed in this growth sectors such as such as report. The priority options, logistics, food, aviation and  land use planning and urban including linking WSA to defence. design – the Council should: Leppington and linking Furthermore, they should ensure that Liverpool to Bankstown, would – continue to work with the Liverpool is seen as: provide simple connections State Government on the Land that maximise Liverpool’s role Use and Infrastructure  the Premier Edge City of the as the leading edge city in Strategy for the WSA-PGA to aerotropolis propelling the development of ensure that the Strategy goes the aerotropolis. beyond just setting out zoning  the CBD of the greater aerotropolis, where airport- for the area to provide the  private sector and institutional related businesses set up their beginning of a master plan that engagement – the Council should: defines sites that could be Western Sydney (or even Sydney) developed for sector-specific – establish a regular business offices/headquarters. That WSA purposes, such as logistics, forum to provide a bond Co has already done this provides food, aviation and defence. between Council and actual confidence for others to follow and potential aerotropolis – resist the temptation to view businesses. The aim should be  the place to stay for incoming residential development as the to provide greater confidence tourists and business people. highest and best use for for potential investors and to While there may be a number of development. Care particularly cement Liverpool as the transit hotels that set up near (or needs to be taken to ensure premier edge city. at WSA), Badgerys Creek is that residential developments sufficiently remote that travellers do not impinge on the long- – leverage enhanced will be more inclined to stay term sustainability of the collaboration through somewhere that’s close to other airport as a 24-hour facility. Liverpool’s ‘innovation amenities. Liverpool needs to be precinct’ to bring awareness to seen as the town adjoining the – continue to work with State education providers and airport to which it just makes Government on specific land students on the future sense to go. release opportunities, liaising aerotropolis economy and its with institutional developers skill requirements. If implemented, these actions will that have the capacity to increase the likelihood that WSA is develop high quality industrial – work with the NSW itself a success (i.e. enduring good and commercial sites. Government and Western connectivity and the maintenance of Sydney Business Chamber to WSA as a 24-hour airport) and that – continue to progress the understand what the Council the broader potential benefits of an revitalisation strategy for can do to support the tourism aerotropolis are also realised (i.e. Liverpool’s central business strategy, noting that the future new investment delivered and district (CBD) and the Georges River precinct could opportunities for employment George’s River to ensure that be a destination for high maximised). Liverpool is seen as the natural quality accommodation and entertainment.

PwC | 39

Appendices

Appendix A Abbreviations 41

Appendix B Examples of successful overseas aerotropolises 42

40 | Liverpool: the Gateway to Sydney’s Aerotropolis

Appendix A Abbreviations

CBD central business district DFW Dallas Fort Worth International Airport FFA Football Federation of Australia FDI foreign direct investment FTZ free trade zone GST goods and services tax KSA Kingsford Smith Airport LGA Local Government Area MITWAG Moorebank Intermodal Terminal Workforce Advisory Group MTP Medical Technologies and Pharmaceuticals NSW New South Wales PPP public private partnership R&D research and development VFR visiting family or friends WSA Western Sydney Airport WSA-PGA Western Sydney Airport Priority Growth Area

PwC | 41

Appendix B Examples of successful overseas aerotropolises

The most commonly cited example will be the expansion of the additional investment and of successful examples of the aerotropolis by connecting the development opportunities aerotropolis concept are: two neighbouring islands (man- stimulated by the airport. Urban made Songdo and Cheongra) to areas connected to an airport, but  Incheon Airport – sitting on Yeongjong where the airport is not in the airport’s immediate 6,000 hectares, the Incheon located. The three islands will be geographical radius, are Airport site has developed into a included in the extended Incheon sometimes referred to as ‘edge metropolitan centre. At present Free Enterprise Zone, with the cities’ or as making up the activity is largely concentrated in objective of transforming the area ‘greater aerotropolis’. into a central business city of the International Service Zone, at Las Colinas, 12km east of the Northeast Asia.42 the southern end of the airport DFW Airport, is one such edge site, which is home to  Dallas-Fort Worth International city in a broader aerotropolis. Las international hotels like the Airport (DFW) – Opening in Colinas is a 5,000 ‘mega’ real- Grand Hyatt and Best Western 1974, (DFW) airport was estate development in the and the offices of companies like strategically located at the centre suburban city of Irving. It is Samsung and Daewoo of the cities of Dallas, Fort Worth connected to DFW airport by Construction, as well as a golfing and Denton. It is the largest dedicated light rail and its growth range and a medical centre (see airport in Texas and the second is considered to be closely linked Figure 18).41 largest in United States of by the airport.43 The area The site is further evolving America. The airport and balances commercial, residential, through its ‘Airport City’ surrounding area has successfully community and recreational development project. This 15-year attracted dozens of aviation- development with over two master plan (see Figure 19) will enabled businesses. Beyond the million square metres of office see further commercial and immediate areas around an space, one million square metres residential development of the airport, benefits can flow further of light industry, 121,000 metre site including the construction of out to surrounding communities square of retail space, over an additional international through the creation of greater 14,000 single- and multi-family business centre, large scale employment opportunities, as residences, dozens of luxury and shopping centres, convention well as improved social business class hotels and centres, an entertainment resort infrastructure, amenity and restaurants and four and a water park. The final stage housing brought about by the championship golf courses.44

41 Incheon Airport 2017, Our Business: https://www.ifez.go.kr/eng/en/m6/greeting/sc 44 John Kasarda 2015, A Western Sydney International Service Zone, available at reen.do Aerotropolis: Maximising the benefits of http://www.airport.kr/co/en/3/3/index.jsp# Badgerys Creek 43 John Kasarda 2015, A Western Sydney 42 Incheon Free Economic Zone, About us, Aerotropolis: Maximising the benefits of available at Badgerys Creek

42 | Liverpool: the Gateway to Sydney’s Aerotropolis

Examples of successful overseas aerotropolises

Figure 18: Layout of Incheon Airport’s existing International Service Zone

Source: Incheon Airport 2017, International Service Zone, available at http://www.airport.kr/co/en/3/3/index.jsp

Figure 19: Artist impression of the new Songdo

Source: Gale International 2014, Songdo International Business District

PwC | 43

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