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Airport Tripartite Deeds

Post–implementation Review – Department of Infrastructure and Regional Development

A tripartite deed (TD) is an agreement between the Commonwealth (as Lessor), an airport lessee company (ALC) and its secured financiers to address concerns of financiers about the termination clauses in airport leases and facilitate access by ALCs to domestic and international financial markets. TDs were initially offered to larger airports for a 20 year term. Following the Global Financial Crisis, airport lessee companies faced difficulty in sourcing funds for refinancing and new investment. Those with existing TDs asked the Commonwealth to extend their tripartite deeds from 20 to 50 years, to align with the length of their airport leases. Smaller ALCs not offered TDs at the time of privatisation also sought TDs. On 8 March 2011 the then Acting Prime Minster agreed (via letter) to extend airport tripartite deed arrangements to nine federally leased airports for the remainder of their current airport leases. The Government subsequently extended the tripartite deed arrangements for a further 12 privatised airports from 20 to 50 years. A Regulation Impact Statement (RIS) was required but not prepared before these decisions were taken. Consequently, a Post-Implementation Review (PIR) was required. The PIR found that extending the terms of the tripartite deeds has facilitated access to domestic and international finance for airport lessee companies. Airport lessees believe the decision to extend the availability of TDs has provided access to more diverse financial markets on more favourable terms than would have been available in the absence of extended or new TDs. Financiers indicated that the TDs make financing ALCs comparable to other corporate property transactions, and a majority of investors see TDs as a critical element in their security package. The PIR was assessed as compliant by the Office of Best Practice Regulation. The PIR estimates the regulatory cost of the measure at $14,500 per annum.