The Town of Port Hedland council voted last night to privatise the regional airport through a long-term leasing deal with AMP Capital and Infrastructure Capital Group, which will run the regional airport for 50 years.
The Town of Port Hedland council voted last night to privatise the regional airport through a long-term leasing deal with AMP Capital and Infrastructure Capital Group, which will run the regional airport for 50 years.
Mayor Kelly Howlett said the new operator would bring expertise, experience and economic opportunities.
“Tonight was the start of a new era for our community as council resolved to appoint new custodians of Port Hedland International Airport,” Mayor Howlett said in a statement.
The vote needed an absolute majority, meaning at least six of the eight councillors needed to vote in favour.
The 50-year lease is for a total transaction value of $205 million, comprising $165 million up-front and a $40 million capital spending commitment over five years.
Business News reported on Monday that the AMP-ICG consortium was set to win the deal after it emerged as the only group to submit a compliant bid in the specified time.
Mayor Howlett said the consortium was committed to working with the community to rebuild the airport, deliver a high-quality asset, and provide the best level of customer service possible.
“Ensuring local employment, commencing dialogue on airfare reduction, driving future economic growth and improving international flight connectivity are also priorities for the new consortium,” she said.
AMP Capital Head of Australian and New Zealand Funds Michael Cummings said the group was an experienced long-term investor in airports.
“We are pleased to include this airport in our global portfolio, which already includes Melbourne and Launceston airports in Australia and Newcastle airport in the UK," Mr Cummings said.
“We and our investors like the fact Port Hedland International Airport is a strategically-located asset servicing one of the world’s largest commodity export ports, it has stable cash flows from both the airport’s aeronautical and non-aeronautical businesses, and there is significant scope for the consortium to add value through investment in the terminal and improving the airport’s retail offering.”
“We look forward to working with Town of Port Hedland and the local community going forward.”
ICG Managing Director Tom Laidlaw said Port Hedland International Airport was a unique asset.
“It is a critical piece of infrastructure for Port Hedland and the local resources industry and, as such, has characteristics that make it a great fit for our investors such as stable cash flows and the fact the nearest airport is some 250 kilometres away," Mr Laidlaw said.
“We are very excited at the prospect of developing and implementing a new master plan for Port Hedland International Airport, which once completed, will enhance the passenger experience at the airport.”
Mayor Howlett said the upfront $165 million payment would enable Council to consider the creation of a future fund to provide significant investment into the community and for future generations.
“We’ve got a once-in-a-generation opportunity to fund a whole range of benefits for our community – anything from new cultural centres, facilities, roads and footpaths, parks and gardens, community services,” she said.
“The final choices of where to invest will be driven by our community and it really is in your hands as to what is possible – we will now commence a significant engagement program to determine the best model and investment structure for our community.”
