VISION: Brendon Grylls, who has left the regional development portfolio in cabinet, talked up the merits of developing Pilbara Cities in 2009.

Barnett’s Pilbara cities dream sours

The key Royalties for Regions project threatens to sap the government as it fends off claims of favoured treatment and political donations.


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A Fraser Hobday PO Box 1000 Armadale WA 6992 Dear Editor, I refer to Karratha Pelago development. The primary cause of the state government’s mishandling of this issue is the outrageously high land component Landcorp insists on inflicting on the Pilbara. This in itself warrants the sophistication and additional costs of multistorey development. Laughable when there is empty land for as far as the eye can see. Media reports states that the 13,386 m2 was originally valued by the government at up to $13.6 million. That is over $1015 m2. The reports are critical that it was agreed to supply the land for only $7.04 million. That is $523 per m2. Even at half the government’s initial valuation, the land is significantly overpriced. The only way a private developer can fit in with Landcorp’s ridiculous pricing is to broker a deal with the state government in which round-robin payments and receipts of funds justify the project. The developer pays out to the government’s Landcorp, and receives some funds in return by a guaranteed buyback of units required for state employee housing at an inflated price to justify the excessive land component. Thereby maintaining artificially high pricing for the whole project and local market. The state does not lose in this deal, but the Pilbara community does with ongoing excessive costs of living, reduced services, and loss of small business wishing to invest in the region. If you look at market and Landcorp pricing north and south of the Pilbara, it is a very different story. In some cases Landcorp’s pricing is 3 to 4 times lower in northern towns outside the Pilbara. Additionally we see private developers making a profit selling their developments cheaper after paying for land acquisition, than Landcorp does paying zilch for their land. Yours faithfully, A. Fraser Hobday

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