The State Government is demanding answers from Perth Airport on a range of issues including plans and the timeline for a third runway and its commitment to an integrated international and domestic terminal.
In a frank letter, Treasurer and Transport Minister Troy Buswell also questions the way commercial leases for warehouses are structured and if they will limit the airport's ability to fund critical airfield infrastructure, such as another runway.
The letter, obtained by _The West Australian _, asks for a meeting with Perth Airport Pty Ltd's chief executive Brad Geatches and its chairman David Crawford.
The company has held a 49-year lease on the Commonwealth airport land since 1997, when the airport was privatised.
Mr Buswell warned last month that if the airport did not build a third runway to handle demand "it would be an impediment to the State's development".
Mining giants also question the quoted cost of the runway of $580 million given they build suitable runways for $50 million in the Pilbara where costs are higher.
Perth Airport is experiencing extraordinary growth, with a 40 per cent lift over the past five years and the growth is accelerating.
The letter opens with Mr Buswell reminding the airport "that both the State and Federal governments are committed to investing approximately $1 billion to upgrade the road network that services the airport".
"Given this commitment and the importance of the airport to the State's continued economic growth, I am seeking assurances that the planning and investment commitment of the State Government is adequately supported by Perth Airport," he said.
Mr Buswell says he wants details of the timeline for building the third runway and its anticipated capital cost supported by detailed financial and other information used to arrive at the estimate.
He also wants answers about the "practice of structuring commercial leases for airport land with large upfront payments and relatively low ongoing annual payments and its impact on the airport's ability to fund ongoing works".
Mr Geatches responded, saying "leases with upfront payments represented 2.6 per cent of Perth Airport's total revenue over the past five years" and claims "there are no sub-leases entered into by Perth Airport that would compromise timely construction of a third runway, or its design or operation".
Mr Geatches said Perth Airport's credit rating was upgraded this year by both Moody's and Standard & Poor's.
"The company has excellent support from shareholders and lenders to continue our major investments and Perth Airport has both the capacity and preparedness to bring forward the third runway, if airlines require it," he said.
Last month Qantas said it wanted a third runway.
Mr Buswell also wants a firm timeline on the development of the new consolidated international and domestic terminal.'Perth Airport has both the capacity and preparedness to bring forward the third runway.'"Perth Airport's *Brad Geatches *