The town of Port Hedland Council in Australia has signed a $205m agreement with the consortium of AMP Capital and the Infrastructure Capital Group (ICG) to lease the Port Hedland International Airport for the next 50 years.
The lease plan also aims to support community redevelopment for the next 50 years in Port Hedland.
As per the agreement, the consortium of AMP Capital and ICG will make an outright payment of $165m to the town council and will invest $40m for the redevelopment of the Port Hedland airport in the next five years.
Town of Port Hedland Council Mayor Kelly Howlett said: "Based on the illustrative model of investing $160 million into the fund and earning a conservative/balanced 5% interest rate, there would be $388.5 million available for our community.
"Every five years we are proposing $10 million is taken out for development projects and this figure, in accordance with the model, can increase by $1 million every five years.
"This will give us 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 - and the final choices of where to invest will be driven by our community.
"The Town would also receive a recurrent return to replace the current income streams from the airport and associated leases (currently $8.2 million) noting that this would deplete as the Town continues to drive further efficiencies across its business."
According to the mayor, the deal would bring indirect advantages including elimination of financial obligation in association with temporary worker accommodation leases, removal of risks associated with construction, operation and commodity from the Town of Port Hedland.
AMP Capital's Infrastructure Equity Fund will take a 44% stake in the asset, while its Core Infrastructure Fund will hold a 6% stake. The remaining 50% stake will be held by ICG's Diversified Infrastructure Fund.
Located on the Pilbara coast in Western Australia, Port Hedland International Airport accommodates an estimated 500,000 passengers every year and operates 70 flights a week.
The airport has daily flights to Perth and direct weekly flights to Brisbane, Melbourne and Bali.
Image: The main entrance to the Port Hedland airport terminal. Photo: Courtesy of Bahnfrend.