The federal government has finalised the funding agreement allowing the Bendigo Airport upgrade to go ahead.
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After fears the project would be delayed, Victorian Senator Sarah Henderson confirmed the news on Monday afternoon.
"I am delighted that the federal government has finalised its funding agreement with the City of Greater Bendigo to deliver $4.5 million to Bendigo Airport," she said.
"This funding for the Bendigo Airport redevelopment, as announced in January, will help fund an upgraded terminal building and infrastructure for the airport's new business park.
"I congratulate council on its vision for Bendigo Airport."
The City of Greater Bendigo also confirmed contracts had been signed for the funding needed to progress the airports terman expansion and business park.
Council chief executive Craig Niemann said he expected construction to start soon.
"The City recently called for construction tenders and is in the process of evaluating the submissions. We look forward to announcing the successful tenderer and progressing this project," Mr Niemann said.
"We thank the Australian and Victorian governments and all politicians we have met with over the years who have helped advocate for the airport and deliver these funds."
The Liberal-Nationals coalition announced they would fund the $4.5 million airport expansion in January, thanks to a Community Development Grant.
The council had been lobbying the federal government for three years for the funding and were pleased with their success earlier this year.
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The airport upgrade will include new departure and waiting lounges, expanded car parking facilities, a security screening area, a baggage claim, an expanded café and restroom facilities.
Along with the airport upgrades, the business park development will include 21 lots connected to drainage, sewer and water services, roadworks and new car park. Lighting and landscaping will also be improved at the site.
The expansion of the airport will also include $4.5 million of state government funding and a $985,000 commitment from council.
The $9.985 million project will trigger almost $23 million in local economic activity and support 49 jobs during the construction period alone, boosting Bendigo's recovery from the COVID-19 pandemic and delivering a new wave of opportunities including for more daily flights.
Previously, the Coalition Government has provided $5 million to construct a new runway to suit larger aircraft and $300,000 to build a helicopter stand and a fuel truck parking area for emergency services.
It also set aside $465,000 last June to extend the airport's runway and allow planes of different sizes to be separated.
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