Liverpool: the Gateway to Sydney's Aerotropolis - Liverpool City Council November 2017
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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
PwC | 3
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 airport can provide.
most significant The WSA site on the other hand will
have the flexibility for further
With the right planning and
airports expansion in response to passenger
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: Airport in London.
economy are centred on an airport.’1
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 21st century practice.
Airport in Seoul and Dallas
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.
the growth of the aerotropolis as CBD or the main ‘edge city’ of the
Conversely, the Liverpool City
they offer centres of economic aerotropolis, where airport-
Council will need to have a say in
activity not in existence around the related businesses set up their
how the airport operates as a
airport site. Western Sydney (or even Sydney)
‘good neighbour’, to ensure its
offices/headquarters. That WSA
The land in and around Badgerys residents are sufficiently
Co has already done this provides
Creek is primarily of rural- protected from any adverse
confidence for others to follow
residential use. While industrial impacts of WSA’s operations and
development is expected to form place to stay for incoming tourists industrial activity around it
around the airport early on, it is and business people. While there
businesses are given the
likely that for some time this won’t may be a number of transit hotels
confidence, and incentivised
be supported by other commercial that set up near (or at WSA),
where appropriate, to locate to
activity characteristic of a fully- Badgerys Creek is sufficiently
the aerotropolis early on. To
fledged aerotropolis, such as remote that travellers will be
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
cities can and should fill – none government incentives, such
Liverpool City Council has an
more so than Liverpool. as a ‘virtual investment
important role in supporting WSA
attraction mechanism’ to
The importance of Liverpool is and the aerotropolis. Given that the
attract to the aerotropolis new
evident in the following features of airport site and a large portion of the
investment in targeted
the city (see Figure 1) — it: Western Sydney Airport Priority
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.
PwC | 7
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
aerotropolis around the airport. In Chapter 5 — the role of Liverpool
the aerotropolis concept and the
doing so, we have looked at the City Council in influencing 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.
PwC | 9
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
reflecting traditional approaches to marketplaces’.5 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 AerotropolisThe 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 | 11The 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 AerotropolisThe 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 | 13The 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 opportunities, goods and services.
6 million by 2060.17
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 AerotropolisThe 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.
potentially offering a convenient together to forge a health and
Liverpool has a young, well-
base for companies to maintain education precinct in Liverpool
educated and ethnically diverse
freight operations across the two (see Figure 6). These institutions
population. A significant
airports. will support the skills
proportion of the population is
development of the region’s local
Liverpool already has a diverse under 30 and there are more
workforce, as well as providing
mix of strong industries including families with children compared
R&D capacity to support the
manufacturing, health, education to the rest of Sydney.
development of new sectors such
and public administration. as food manufacturing, medical
Figure 6: Liverpool health and education precinct
PwC | 153 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
equipment and suppliers. region.18 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
been developed for some of the Commonwealth Government has
and freight forwarders
world’s largest logistics suggested that it will house
As a 24-hour airport that can substantial office-based employment
support Australia’s growing companies.
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
operators is underlined by the
3.1.2 Advanced food
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 AerotropolisKey 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’ comprising the bulk of the
Growing populations and rising
brand that is increasingly sought freight load.
incomes in emerging Asian
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 | 17Key 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 20 40 60 80
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 Packing Overseas
Farmer
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 AerotropolisKey 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 advancements in UHT technology to
production at the factory will focus
sectors to Badgerys Creek, and also create fresh products that also have a
on infant formula, to be followed by
renew manufacturing in Western longer shelf-life.
development of fresh and UHT milk
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 | 19Key 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
they are analysing the future needs skilled local labour markets in
collaboration amongst its leading
of the business, including whether it manufacturing and health
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
South Western Sydney Local freight precinct as well as the
this current investigation results in
Health District road and rail network.
the relocation of the existing
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 provide more efficient distribution to
export business University of Wollongong
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 AerotropolisKey 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
capabilities of any state or territory. enhancing potential for
Today it employs around 26,500 collaboration on innovation and that's being developed, it
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 would be a foundation
facilitating the maintenance of
positively impacts a wide range of
other industries and has a strong
operational aircraft tenant at that location.” 27
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 | 21Key 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).
The VFR market comprises 45 per 4%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%
Business 8%
may also increase the share of
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
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