The federal government has ruled out any funding to Sydney Airport for developing a second airport in Sydney's west, even as the operator evaluates returns on the proposed $5 billion project.
Federal minister for urban infrastructure Paul Fletcher said on Tuesday no direct financial support would be forthcoming from the Commonwealth towards the cost of building and operating Western Sydney Airport.
Sydney Airport said earlier on Tuesday it was seeking a longer period of time to consider whether it intends to develop and operate the proposed Western Sydney Airport.
The operator of Sydney's main Kingsford Smith airport holds a right of first refusal to develop and operate the second major airport planned for Badgerys Creek, 60km west of the Sydney CBD.
Sydney Airport on Tuesday asked for nine months to consider a Notice of Intention - which sets out terms for the development - it has received instead of the four month period proposed by the government.
"Given the significant challenges the project will face, Sydney Airport has consistently stated that the project would require material support from the Commonwealth to make it commercially viable," the company said in a statement to the ASX.
"Sydney Airport believes it is entitled to a nine-month consideration period and is continuing to discuss this with the Commonwealth," it added.
However, the government has shot down the requests.
"Sydney Airport Group will have until around mid-May to accept the Notice of Intention, should they decide to do so," Mr Fletcher said.
"There is no financial support, no direct financial support, from the Commonwealth provided towards the cost of building and operating Western Sydney Airport under the contract.
"What Sydney Airport Group would be getting is the valuable opportunity to operate an airport at Badgerys Creek, and to receive all of the revenue from that airport over the 99 year period that the lease will extend for."
Sydney Airport shares closed 14 cents, or 2.1 per cent lower, at $6.40.
