14/10/2010 - 00:00

B-grade not good enough for WA

14/10/2010 - 00:00

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A likely ministerial reshuffle later this year would enable the state government to lift its focus on infrastructure.

In a classic episode of British television comedy Yes Minister, the bumbling Jim Hacker was elated to learn that he might be appointed transport supremo for the UK.

His wily department head Sir Humphrey Appleby set him straight, explaining that the role would be a poisoned chalice; earlier attempts to coordinate disparate transport infrastructure had proved intractable and led to the political demise of

previous ministers.

I’m sure Premier Colin Barnett isn’t so Machiavellian, but he might consider appointing an infrastructure supremo when he proceeds with an expected cabinet reshuffle later this year.

Mr Barnett has been shouldering an enormous workload this year, after adding the treasury portfolio to his day job of premier, and since then his most capable minister Troy Buswell has been underemployed to the point of distraction.

The premier might repay the favour, so to speak, by giving the energetic Mr Buswell the challenge of leading infrastructure strategy.

The need for greater focus on infrastructure was highlighted this week by an Engineers’ Australia report card, which found that most infrastructure categories in WA were rated either B-grade (needing minor changes) or C-grade (needing major changes).

Notably, the report found that just one area (wastewater) had improved over the past five years while three areas (roads, airports and telecommunications) had deteriorated.

That outcome has occurred despite record state government capital works spending. In 2009-10, infrastructure investment reached an all-time high of $6.8 billion, up $1 billion on the previous record.

The pressure on Western Australia’s infrastructure will only get more acute as the state continues to enjoy rapid economic growth.

Much of that growth is underpinned by large resources projects, which can only proceed if the supporting infrastructure is put in place first.

The prime example is the Mid West, which needs the Oakajee port, an associated rail network and major investments in energy generation and transmission before planned iron ore mines can proceed.

Similarly, the James Price Point processing hub and the Derby supply base are critical to planned gas projects off the Kimberley coast.

In the Pilbara, private mining companies have spent tens of billions of dollars building their own port and rail infrastructure; as John Phaceas reports on page 3, that has throws up awkward policy challenges for the state, but nonetheless the projects have proceeded in a timely manner.

Therein, surely, lies part of the solution to the pressing infrastructure issues facing the state – encouraging more private sector participation.

The Barnett government has been unusually reticent about allowing private money into ‘public’ infrastructure. In fact, it has even attracted the ire of Len Buckeridge, who is backing a private consortium that wants to build a private port at Cockburn Sound.

The James Point consortium was blocked by Labor governments for eight years but is now struggling to gain traction under a Liberal

government.

Mr Buswell started to bring the private sector into the fold when he was treasurer, promoting public private partnerships across prisons, water and hospitals.

Some of those projects are proceeding, though usually not as fully fledged PPPs, since government is still providing the funding.

Last week, for instance, Health Minister Kim Hames officially sought expressions of interest from private hospital operators to design, build and operate the $360 million Midland Health Campus.

A similar contracting model is planned for the new children’s hospital after the state changed its mind and used its iron ore royalties windfall to cover the funding.

Like any project, the procurement model for infrastructure needs to be rigorously tested. The beauty of working with the private sector is that new options emerge.

The innovative deal struck this week for redevelopment of the Old Treasury Building in the city is a case in point.

The state government must be commended for signing up to a highly innovative deal.

Underpinned by its agreement to pay above-market rentals for an office lease, the project will include a new office tower, a much-needed new hotel, the demolition of the Law Chambers eyesore and the preservation and active use of one of Perth’s prime heritage buildings.

A great outcome; let’s have more of it.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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