DRAFT

RE: Reasonable Apprehension of Bias? - Wollongong Airport and HARS

In response to the Land and Environment Court case concerning Gwandalan and Catherine Hill Bay

There are also concerns regarding Shellharbour Council's objectivity to make decisions regarding Wollongong Airport, and HARS and the failed Qantaslink service in particular. This concern needs to be genuinely addressed before the State sector and Shellharbour Council continue to finance an 'Airport Capability Study'. Concerns are based in part on further attachments dealing with the Airport Committee and Independent Auditor as well as on the following information.

1. Council's Stratagic Plan and Management Plans promote increasing utilisation and development the airport

To begin, both council’s Strategic and Management Plans, relating to the annual budget, promote increasing utilisation and development at Wollongong Airport, including the encouragement of airline operators. The majority of the community would be unaware of this due to inadequate notification of this detail.

The latest Strategic Plan notes Shellharbour Councils intention to

  • 'continue to work towards the development of Illawarra Regional Airport'...and
  • 'Carry out improvements to encourage increasing utilisation of the airport by aircraft owners/operators and to encourage new businesses to the airport'
  • 'Promote the airport'....
  • 'Encourage airline operators to establish additional regular public transport services'
  • 'Progress rezoning at the airport to permit expansion of airport business development'
  • 'Prepare a new airport Master Plan and Revise Business Plan' (pg. 11)

The latest Draft Management Plan also states that council will 'Identify/provide new infrastructure to enhance safety and to encourage increase in airport utilisation and business growth' (pg.65).

Councils Draft Management Plan as far back as 2006-2009 provides for Airport Facility and Infrastructure Enhancement'. It is stated that Council is 'To enhance infrastructure and scope of airport operations consistent with Council's Management Plan'. It is further stated that:

'By developing airport infrastructure to attract airline operators to establish commuter services to the airport.

1. Identify infrastructure/improvements necessary to comply with regulatory standards and consider funding.

2. Survey airline operators to establish constraints to new services and respond to requests where possible.

3. To meet with airport operators and community representatives to review operational procedures, developments and community feedback.' (pg. 20)

What is written in the Management Plan is important since council noted its Management Plan in a business paper to support for Regular Public Transport prior to Qantaslink being voted on. The business paper for item 9.9 dated 27 April 2004 stated:

  • Council’s objective as part of its management plan for the airport terminal building is to provide for a suitable facility for the operation of Regular Public Transport (RPT) services and to provide support services for the RPT operator and passengers. While there is no RPT operator at the airport at the present time, Council staff are continuing to promote the airport to encourage a suitable operator.

Upon bearing in mind that that council is the land owner and consent authority the report by the Airport Manager (Arthur Webster, Operations & Services Division at Shellharbour Council) utilised the Management Plan to support the introduction of Qantaslink (08 March 2005) in agenda item 4.2 as follows:

  • Council officers have been communicating with several airlines to encourage the establishment of services. Council has also negotiated with the State Ministry of Transport, for the Ministry to call expressions of interest from suitable airlines to provide services on intrastate routes to and from the Illawarra Regional Airport.
  • Council has adopted the Airport Management Plan which includes an objective of attracting regular passenger services to the Illawarra Regional Airport.

Again it should be born in mind that the encouragement of airline operators is being prompted by a council that is the land owner and consent authority. It is noted that the proposal did not have an Environmental Impact Statement and was rushed through council without a genuine opportunity for the community to participate in the decision making process. This will be cited further in this report. Councillors were not even advised of proposed flightpaths. Although Shellharbour Council’s own DA 837/01 ‘Construction of Aircraft Taxiways and Runway Maintenance’ dated 18 January 2002 was independently assessed by the real estate business that council typically employs it is unclear at this stage whether they also assessed due process for the runway upgrade in 2005.

In addition to Strategic and Management Plans predating a vote on development proposals money for developments can also predate a vote of a proposed development. The General Manager (Brian Weir) of Shellharbour Council, for instance stated that the 2004/2005 budget prepared in May 2004 allocated substantial funds of $750,000 listed towards the upgrade of the runway, prior to it being voted on in 2005: letter from the General Manager to the Lake Times editor 23 March 2005.

Most recently the Airport Manager (28 September 2009 email from Arthur Webster of Shellharbour Council to Ms Mckay) also utilised quotes from the Management Plan in the 2009/2010 budget when questioned about the future objective to have low cost carriers operate at Wollongong Airport. He stated...

I draw your attention to those sections of Council's Management Plan that were adopted at the 2009/10 budget meeting and which state Council's intention regarding the development of its airport:

Illawarra Regional Airport - Aviation Industries

By attracting other aircraft related industries to the airport to enhance the economic development of the airport and the region.

Illawarra Regional Airport - Airport Facilities

1. Maintain airport infrastructure to meet CASA and Department of Infrastructure's compliance requirements.

2. Identify/provide new infrastructure to enhance safety and to encourage increase in airport utilisation and business growth

Illawarra Regional Airport - Economic Development

To provide and enhance a self-sufficient airport facility to encourage employment, tourism and RPT flights, consistent with CASA requirements.

These Council directions to its managers are consistent to those of previous years and have been through the required annual public exhibition process. My comments to the media are consistent with those objectives and the study will identify aircraft types able to operate at the airport and provide the basis for the masterplan.

The use of budget documents is insufficient to claim genuine community consultation on airport upgrades, particularly the introduction of low cost carriers. This needs to be seriously looked into, particularly in light of continued failures with airlines at Wollongong Airport, despite the instigation of reports such as the Illawarra Regional Airport Economic Study in March 2001. This report stated that ‘An airline service is viable but positive action is required by Council to market and facilitate a new service’: pg. 4. Regardless of such reports airline companies such as Qantaslink did not remain.

In addition to the lack of genuine consultation regarding Budgets it is also noted that it was the Airport Manager (Arthur Webster) that indicated to one of the airport committees that changes were occurring in the airline industry with significant investment occurring in larger capacity and faster aircraft(item 17.1, ordinary council meeting 28 Feb 2008). This led to a committee recommendation to preserve the option of upgrading the runway from code 2C to code 3C (item 17.1, ordinary council meeting 28 Feb 2008).

To conclude this section, it was also a concern that Council’s specific development objectives noted until recently on their prior airport website were:

  • 'To maximise the airport’s long-term sustainable revenue from its resources while meeting the overall strategies of the Council – including construction of a Light Aeronautics Industry Cluster, lease of land to the Historic Aircraft Restoration Society, commencement of regular passenger transport (RPT) services, and the upgrade of the runway;
  • To work with regional stakeholders (business and government) to ensure the airport becomes an ‘
  • integral part of the infrastructure and economy of the Illawarra Region;
  • To manage the development of the employment lands within the area of the airport to ensure they are compatible with the long-term objectives for the airport.' (

To understand the level of concern regarding Shellharbour Council’s lack of objectivity over the airport and how this may continue to transpire to affect development applications particularly relating to further airport upgrades previous decisions have been included in this report as examples.

2. There are also specific Concerns regarding council's objectivity over HARS due in part to the following:

There are specific concerns regarding council’s objectivity over the HARS proposal at Wollongong Airport for the following reasons.

The Airport Manager (Arthur Webster, Shellharbour Council) noted in a letter in the Airport Committee Minutes that he met with AVIEX and Mr Huntly from HARS on the 15th January 2001 to commence negotiations on the proposal: 23 February 2001. This was prior to the proposal coming before council in 2002, and indicated Arthur Webster’s belief that there were significant benefits for the Illawarra and in particular for council. Documents also indicate that Arthur Webster worked hard to attract HARS, (Memo from Tim Mcleod, Economic Development Project Officer, to the General Manager dated 30 Nov 2001) while a newspaper article noted that negotiations were undertaken with them 2 years prior to the proposal being voted on (DAVID ILIFFE, ILLAWARRA MERCURY, 5 DEC 2001, pg. 5). In addition to this council have claimed they facilitated the successful relocation of HARS to Wollongong Airport (2 Nov 05 item 12.4, pg. 1). This information ties in with the March 2001 Illawarra Regional Airport Economic Study which identifies HARS.

A group was set up appearing to compose of one Shellharbour Council employee (Arthur Webster), HARS, and sponsors (BHP Building Products, BHP Flat Products, Hatch) in what appears to be Project meetings regarding construction of the HARS building and runway upgrade. It noted that an Australian Historical Flying Museum Ltd would be created...

'as the controlling entity for the Museum. The Board of directors drawn from the various participants currently being confirmed. M Archer (and possibly D Riebolge) will represent BHP Steel on the board'. :

[Project Group meeting write up dated 27 September 2002]

BHP was noted on Airport Updates in 2002 as a major sponsor of the Airport Upgrade project: Shellharbour Council’s Airport Update 2002 for April, May, and June. The second sponsor listed on the back of the Airport Updates is Cleary Bros. The HARS building was also known as the ‘BHP Steel Australian Historical Aviation Museum’: Shellharbour Council’s Airport Update 2002 volume 4, June, pg. 1 and Airport Update 2002, volume 3, May, pg. 1. The June 2002 Airport Update also pictured John Cleary from BHP Steel Coated Products. A John Cleary from BHP Building Products is also noted as a project group contact for the September 2002 Project Group meeting write up. It is also noted that John Cleary became chairman and the project manager for the second HARS proposal for their Museum buildings. A J Cleary was also noted as the applicant for HARS second proposal. As a side issue, Bluescope Steel’s president suggested he would be a regular customer flying to his corporate headquarters: Qantas links Gong to Melbourne, Illawarra Mercury, 1 March 2005, pg. 4.

It was a concern that Shellharbour Council’s General Manager then wrote on 20 Oct 03 to the Deputy Prime Minister (John Anderson at the time) requesting a meeting with him, HARS and council regarding 'OUR' proposal. The correspondence stated that:

o ‘Our situation is becoming critical as the Super Constellation which is now located at out Airport, is damaging the runway pavement and further, the corporate commitments for assistance, with the runway upgrade will be withdrawn unless we progress this project in the near future’.

o ‘I would greatly appreciate your consideration to meeting with a small delegation from Council and the Historial Aircraft Restoration Society to enable us to explain the benefits of our proposal and the level of commitment which council and the regional corporate sector is providing to establish our airport as a major regional transport and tourist facility’.

o ‘I acknowledge your heavy schedule at this time, however we do have a very enthusiastic and committed group of people trying desperately to pull this project together and we would greatly appreciate your input and assistance.’

Instead of undertaking tenders for the airport upgrade work was project managed. In a Lake Times article the following was stated ‘Arthur Webster, said the upgrade project was enormous given its short timeframe, but that Council would project manage the task rather than call for tenders’: Lake Times, Airport upgrade in Progress, 10 March 2005. A newspaper article stated that ‘Mr Webster organised construction, $1 million funding and approval from the Civil Aviation Safety Authority only two weeks after Qantaslink announced plans to operate flights out of the airport’: William Verity, Lift-off for runway reconstruction, Illawarra Mercury: 2005. According to the Department of Local Government the tender process for sealing the runway was also shortened from 21 days to 7. The Department of Local Government stated that ‘The departments view is that extenuating circumstances should not be used to rectify situations where project planning has been deficient.’ (May 2005)

It is unclear from this information how council could be seen as genuinely objective towards development applications at the airport, in particular ones related to HARS.

3. GENERAL CONCERNS WITH PROCESS

It was obvious that the HARS proposal required a runway upgrade. The fact that the DA for the runway upgrade and HARS proposal were consecutive DA’s noted as DA 837/01 and 838/01 may also indicate this, along with the Project Group previously discussed in section 2 of this report that focused both on the HARS building and runway upgrade, Shellharbour Council’s Airport Updates on the airport upgrade project that focused on the HARS building and runway upgrade, and Shellharbour Council’s own 2001 Illawarra Regional Airport Economic Study. Page 39 of the Study noted under Scenario C, that includes HARS that:

‘The significance of the proposed BHP contribution of materials to the runway upgrading is illustrated by the increase in cumulative shortfall to $607,000 in the first four years ($423,000) in the first two years).’

The Airport Advisory Committee minutes, that includes a report known as the Illawarra Regional Airport – Economic Study or the Airport Feasibility Study, also noted that HARS required a strengthened runway in order to operate their heavier aircraft such as the DC 3, Neptune and Super Constellation. This appears to be confirmed in the General Managers letter to the Deputy Prime Minister in which he described the situation as ‘desperate’ due to the HARS heavier aircraft damaging the runway (20 Oct 03). It is a concern that council continued to promote for planning processes ‘runway maintenance’ and ignored or avoided planning processes regarding a ‘runway upgrades’ including an Environmental Impact Statement.

It is noted that there were 2 attempts at a runway upgrade as well as HARS museum proposals. Both HARS proposals were successful. The first unsuccessful attempt at the runway upgrade was originally described in a development application as maintenance despite a 1999 Shellharbour City Council commissioned report, regarding runway pavement upgrade options (Gutteridge Haskin’s & Davey, ‘Illawarra Regional Airport-Pavement Upgrade Options’, 1999 known in sections of this report as GHD), stating that Council advice was that the runway was in good condition having been resealed 2 years prior. It is with greater concern that the runway upgrade was advertised on its first attempt as ‘maintenance of the North South Runway’ when the Airport Advisory Committee minutes noted Arthur Webster as providing an update on a runway upgrade. The minutes to the 28 July 2000 Airport Advisory Committee meeting also clearly states on pg. 3 the following, ‘Proposed Runway Upgrade – Arthur Webster advised that there is a proposal to upgrade runway 16/34 subject to a positive feasibility study and finance’. The Airport Advisory Committee minutes for 6 December 2002 also states the following heading ‘Main Runway Upgrade’. Other references include the Feasibility Study and Shellharbour Council’s airport update for June 2002. It has already been mentioned that the first attempt to upgrade the main runway in 2001 was unsuccessful due to insufficient funds and lack of government support: 8 March 2005 business paper.

The alleged need for runway maintenance continued with the second successful attempt at a runway upgrade (described as various works necessary to support a RPT service) that did not even provide for a formal exhibition/submission period. The General Manager stated that the ‘pavement is approaching 60 years old and is considered to have reached its economic life’: Item 4.1, 8 March 2005, PG. 7. From memory, the issue of HARS requiring a runway upgrade. and the desperate situation that eventuated from HARS damaging the runway, is not evident in the relevant business papers for HARS and the 2005 runway upgrade. This needs to be confirmed. Nor is it mentioned by local councils in 2005 who were approached for financial assistance towards the runway upgrade (See 15 March 2005, http://www.kiama.nsw.gov.au/corporate-services/pdf/Business-Papers/Report-GM-050315.pdf and File No SU21797, 26 April 2005, Council General Business).

The issue of the first attempted runway upgrade being labelled ‘maintenance’ is significant since Ian Rankine from Shellharbour Council noted that if the airport runway works was an upgrade, which it clearly was, then the issue of designated development needed to be looked at: Memo Subject: Designated developments, dated 17 January 2002. A designated development would have required an Environmental Impact Statement (EIS) and allowed for an appeal in the Land and Environment Court on the merits of the case. Schedule 3 of the Environmental Planning and Assessment Act regulations identify the circumstances in which council should deem a development proposal as designated requiring an EIS. It is a personal contention that this proposal would have met those circumstances when it is known that the runway was being significantly upgraded from 7.5T to a proposed 25T strength and the airport adjoins residential properties. The circumstances/definition is: