In case the de-coders amongst us were wondering
where “K” extracted that Hansard passage and what audit recommendation DF was referring to here you go
…ANAO recommendation first (2007):
Management of Airport Leases: Follow up
ANAO recommends that DOTARS improve its management of the Airport Leases by developing and implementing reliable systems for the scheduling and conducting of annual lease review meetings, and reporting on its performance in conducting these reviews.
ANAO recommends that DOTARS enhance its conduct of lease review meetings by, at the conclusion of each review:
(a) documenting review outcomes, including the Department’s assessment of the degree to which the lessee complies with the sale documentation requirements; and
(b) providing a written response to the lessee specifying outstanding issues that are to be addressed.
An audit would examine the Department of Infrastructure and Transport's administration of the airport planning requirements, including the extent to which the Commonwealth's interests have been protected.
The Hansard passage was from the last Estimates in May, to put it in context here are the bits that “K” left out
:
Senator FAWCETT: Mr Mrdak, can I take you back to the ANAO audit that looked at airport leases. One of the recommendations was that your department should develop a comprehensive framework and procedures to monitor and ensure lessee compliance with leases. Subsequently, in a review, you advised that the department recognised said findings and had established a comprehensive framework to discharge its obligations. In a subsequent committee report the committee commented that it is important to acknowledge the Commonwealth has a significant residual interest in federal airports now leased to private companies and consortiums and the government, through DOTARS, must ensure that these leases are managed properly and in accordance with the lease agreements. They made that comment in relation to concerns that had emerged post your comment that a system was in place.
With that background, I draw your attention to a number of recent media articles around the Brisbane Airport highlighting the issue of the parallel runway and the fact that back as far as 1998 the airport corporation said that the runway was only eight to 10 years away and then in 1999 they were warning that we would hit capacity by 2007. In 2003, targeting 2012 for the runway, et cetera. It rolled on through a number of master plans that the Commonwealth had signed off on, yet no action has actually occurred.
The terms of the lease say in section 12.1, 'Throughout the term of the lease, the lessee must develop the airport site at its own cost and expense consistent with a major international airport, having regard to the actual anticipated future growth and pattern of traffic demand for the airport site, quality standards reasonably expected of such an airport and good business practice.' The committee members have received a great deal of feedback by people who are concerned that the Commonwealth is in fact not enforcing its duty as the owner of the airport by making sure that the leaseholder does in fact make those investments in a timely manner. Would you care to make some general comments around that before I ask a few more specific questions?
Mr Mrdak: Certainly, I am very happy to. I would come back to the fact that, yes, the department has put in place lease monitoring arrangements, including annual lease reviews and a system of ensuring that specific terms of both the leases and the act are being complied with.
In relation to the Brisbane runway, I would differ from your assessment that nothing has happened; quite the reverse. Over the last few years, the major development plan for the project has been lodged and approved, the various environmental assessment processes completed and works are actually underway on the development. The issue that is attracting attention is the funding mechanism by which the Brisbane Airport Corporation seeks to recover the cost of work and the surety that they are seeking from their customers in relation to the prefunding of the work.
It is a unique project, as you know, because of the dredging and settlement requirements for the work. But the pre works and all of the clearing of the site have been done. So, over the last few years all of the stages that are set out in the MDP, major development plan, approval process have been met to the satisfaction of the Commonwealth and on my understanding the next trigger threshold point, which is the letting of the dredging contracts, is being scheduled by the airport and will be in place by later this year to enable the runway project to proceed in accordance with the environmental approvals.
So, in relation to that project, while there remains a source of difference between the airlines and the airports on the funding, the work is proceeding and I think the Brisbane Airport Corporation has made that very clear. In relation to that specific example, I would disagree with your comment that nothing has happened. In fact, there has been work undertaken and will continue to do that to meet the current timetable for the runway.
In relation to the overall monitoring of the leases, we do oversight and manage those relationships to ensure that growth is being met and the airports are recognising that commercial decisions have to be made.
Kind of allows the thread to drift back to topic (minus Albo
), then if we use links to recent articles on the subjects of YBBN and YSSY from Planetalking…
Failed ex PM Rudd switches tack to destroy Brisbane Airport
Richmond option for new Sydney Airport ruled out
Lobby group makes 1st Sydney Airport more important than 2nd
Second Sydney Airport delivers integrity lesson to TTF lobby
Note: Interestingly enough, on the matter of audits, it looks like Kingcrat & co will be getting a knock on the door very soon from the ANAO…hmm will be interesting to see how he obfuscates the auditors this time??
:
Administration of Airport Planning Requirements for the Leased Federal Airports
All leased federal airports (except for Tennant Creek and Mount Isa) are subject to a planning framework outlined in the Airports Act 1996. As part of the planning framework, those airports are required to prepare: a 20-year strategic vision for the airport site which is renewed every five years (referred to as the airport master plan); a plan for major airport developments on the airport site; and a strategy to manage environmental issues. Following amendments to the Airports Act 1996, new arrangements in relation to planning requirements have recently been implemented, with airports to progressively submit their master plans incorporating the new arrangements.
“Yes Minister, according to current government policy, the books (including the floating trough fund) are all in order!”