Lendlease wins $644m Western Sydney airport project
Construction giant Lendlease has landed the federal government’s $644 million major earthworks contract for the development of the Western Sydney airport at Badgerys Creek.
The announcement was made by the Prime Minister Scott Morrison on Sunday, who called the planned Western Sydney International Nancy-Bird Walton Airport a “game changer” for the area.
Mr Morrison said the contract was awarded to Lendlease Engineering and its joint venture partner CPB Contractors after a rigorous competitive tender process to undertake one of Australia’s largest ever infrastructure earthworks projects.
Work under the contract would move about 25 million cubic metres of earth on the site to support construction of the major elements of the airport, including the runway and terminal.
“With the ink now signed on the contracts, this huge construction work is due to begin in early 2020, and it’ll mean hundreds of new jobs on the airport site,” Mr Morrison said.
“This is a game changer for Western Sydney and things are starting to take shape.”
The win comes as Lendlease is in the throes of selling its engineering business after three major projects were delayed last year, causing the group to take a hit on the profit and put the business into the non-core category.
At the final results briefing on August 19, Lendlease chief executive Steve McCann said there were a “number of interested parties undertaking due diligence on the engineering business”.
Matthew Moore, vice president of research firm Moody’s, said at the results, growth in the Lendlease development backlog and funds under management should provide a solid base for future earnings.
“However, the engineering and services business will continue to act as a drag on Lendlease’s credit profile until the sale process is concluded,” Mr Moore said.
Lendlease recently pulled out of the construction of the former Allianz Stadium at Moore Park in Sydney’s east and withdrew from the bidding process for the $344 million expansion of the Art Gallery of NSW.
The airport is being developed in stages by the Federal Government-owned Western Sydney Airport in response to passenger demand. Stage 1 will see a single runway airport constructed with capacity for up to 10 million passengers a year.
Dale Connor, the chief executive of Lendlease Building and Engineering, said as Western Sydney’s future aerotropolis, the work on Western Sydney International will be a major contributor to the economic and social development of the region.
“This project gives Lendlease the ability to provide further skills, training and employment opportunities across Western Sydney, with up to 500 people expected to work on this significant stage in the delivery of the airport,” Mr Connor said.
Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said it was “an important first step in the construction of a once-in-a-lifetime infrastructure project”.
“The construction of a major airport comes around once in a generation and this infrastructure project will not only provide job opportunities west of Sydney during the construction phase but also beyond 2026 when it opens,” he said.
Finance Minister Mathias Cormann added that in reaching this next milestone the project was entering an exciting new phase.
“Since early earthworks started in September 2018, more than 1.5 million cubic metres of earth has been moved,” he said.
“But construction activity has so far only concentrated on a small portion of the 1780-hectare site.”
Mr Cormann said the contract will now ramp up work significantly.
