An intricate network of drains and creeks around Newcastle Airport has delayed planning for the multi-million dollar Williamtown Special Activation precinct.
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The low-lying area has a long history of drainage and flooding issues.
In recent years it has also formed part of the Williamtown Red Zone due to PFAS contamination from the nearby RAAF base.
A draft masterplan for the project, which the State Government estimates could create up to 4300 jobs, was expected to be released earlier this year.
A Department of Regional NSW spokeswoman confirmed last week that complex hydrology issues meant the timeline had been pushed back to later this year or early next year.
"The investigation phase is taking longer than anticipated to ensure that potential development does not have an adverse effect on flooding and drainage or compromise the amenity of the surrounding area, which has required additional assessment and analysis," the spokeswoman said.
The precinct's focus will be the creation of a national and international defence, aerospace and advanced manufacturing hub, which, in-turn, will generate future investment and employment opportunities in the region.
The Department of Regional NSW, which is charged with developing the project, also said the precinct's final boundary will be smaller than the 10,000 hectare area initially earmarked for investigation..
"As the boundary of the Williamtown precinct is confirmed as part of the draft master planning process, the scale and scope of potential acquisitions will also be refined within that final boundary," the spokeswoman said.
The Newcastle Herald understands the investigations are now centred on land between Cabbage Tree Road and the southern edge of the airport.
The area adjoins land earmarked for the $11.79 million defence, aviation and technology commercial precinct (Astra Aerolab) adjacent to the airport.
The Herald understands that another factor delaying progress has been unresolved PFAS contamination compensation negotiations between the Department of Defence and landowners who were not part of last year's $212 million class action class action settlement.
While formal land acquisition negotiations for the special activation precinct are yet to commence, some land holders have previously expressed concern about how their property values could be impacted by PFAS contamination.
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Deputy Premier John Barilaro told the Newcastle Herald last year that it was important that people whose land was needed for the project received a fair deal.
The Department of Regional NSW later confirmed this.
"Any land acquisitions related to Special Activation Precincts will be done in accordance with the Just Terms Act and other relevant legal frameworks, under which both the acquiring authority and the landowner will seek an independent valuation," a spokeswoman said.
This year's state budget included $75 million for Special Activation Precincts pre-delivery works to be shared across precincts in Williamtown, Moree and the Snowy Mountains.
The government will streamline planning approvals and tailor infrastructure investment in areas such rail, roads and drainage to support the precincts' establishment.
Billions of dollars worth of related infrastructure projects, such as a rail link from Hexham to the airport and the extension of the airport's existing runway to accommodate international planes and the Newcastle freight bypass are also likely to eventually flow from the precinct's establishment.
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