20/08/2009 - 00:00

Decision time for Pilbara hub

20/08/2009 - 00:00

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Western Australia can’t wait for regional growth to happen organically, according to Rio Tinto’s Sam Walsh.

Decision time for Pilbara hub

SHOULD major population and infrastructure hubs be created through Western Australia?

This was the question asked by Rio Tinto Iron Ore CEO Sam Walsh at a recent Australian Property Institute event in Perth entitled 'Time to Refocus'.

Of course, the question appeared rhetorical.

Mr Walsh was diplomatically laying the groundwork on an issue that is getting airplay among those who look at the macro picture for resources development in WA.

Increasingly the view is that the state has to stop hedging its bets and make a decision on which communities will become the central focus of infrastructure development, not rails and ports, but the public stuff that attracts people.

This is especially the case in the Pilbara, where resources are spread around too many towns.

Once that decision is made, then the process of planning for the huge growth that is about to take place will be made all the easier.

Arguably, in the Pilbara the geology and geography have already made that decision - it is only government that procrastinates.

Currently, the state tries to avoid playing favourites between Karratha and Port Hedland. In doing so it divides its own bureaucracy and ends up failing to make the remote north as efficient as its needs to be, especially when it comes to devoting the resources required to make the Pilbara more attractive as a place to live.

Partly, this is due to the division of the Pilbara between BHP Billiton, which exports out of Port Hedland and Rio Tinto, which exports from two ports near Karratha.

That is likely to change if the proposed merger of the two companies' iron ore operations takes place.

And while Mr Walsh doesn't say it out loud, it's very likely that Karratha would be the place that was chosen if a beauty contest was held.

"In regions, such as the Pilbara and the Kimberley, we need to put our cards on the table and place a long-term bet on the development of major communities," he said.

"By confirming the state's long-term intention for the development of major regional hubs, decisions for surrounding communities will also fall into place."

This concept sounds like a watered-down version of former state bureaucrat and current Brandrill CEO Ken Perry's call for a visionary Pilbara City project, the creation of a regional capital as home to a substantial population, possibly as many as 1 million people.

In his speech, Mr Walsh was not that ambitious.

But he does see much to gain for all industry in achieving some certainty in the north at a time of relative lull for the general resources sector.

"It requires vision and collaboration," he said.

"It is not just a state government decision.

"Major players like Rio Tinto must state their ideas, intentions and preferences for regional development.

"Sectors like property have a key role to play.

"My comments don't just apply to hubs directly linked to the key resource regions like the Pilbara."

Mr Walsh said the rise of fly-in, fly-out operations had removed the need for numerous smaller and unsustainable communities supporting the region's widespread operations.

"Employees now reach our sites from Perth, Broome, Busselton, Albany, Geraldton and Carnarvon," he said.

"No longer does a hub have to be in a resources region to connect to our industry and benefit from the employment and associated business opportunities.

"Fly-in and fly-out is now a regional development opportunity for different communities."

Mr Walsh believes the property sector can lead in regional development by working with the government and the resources sector to provide the social infrastructure that will be needed in the future.

"It is good to see LandCorp's current advertising for developers who want to create new housing types in Karratha," he said.

"No-one in property needs to wait for the next boom to start this work - our long-term issues and needs can be identified right now and the solutions developed."

Mr Walsh adds that one of the region's biggest issues - sustainable water supplies - may also be solved as mining increasingly goes below the watertable, creating vast volumes of potable waste currently disposed down local creeks.

"The more innovative approach might be to see how this water could be used to support the sustainable development of a major regional hub and help to ensure its sustainability," Mr Walsh said.

"There could be an opportunity for a major regional reticulation project in the Pilbara.

"A chance to drought-proof existing communities or underpin the expansion of one community into a regional hub."

 

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