12/08/2010 - 00:00

Expect costs to blow-out on the waterfront

12/08/2010 - 00:00

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State governments of both political persuasions have a poor record when it comes to costing major projects, and the Perth Waterfront looks like following the trend.

THE project Richard Court’s last government is probably best remembered for is the Bell Tower on the river in Barrack Street – for two reasons.

Firstly, it’s a prominent decorative edifice on an increasingly overcrowded shoreline.

Secondly, it sparked critical comment, with some even claiming it adversely affected the 2001 election, thereby contributing to Mr Court’s defeat.

Notwithstanding that, the project State Scene most associates with Mr Court isn’t the Bell Tower, but the Northbridge Tunnel – for two reasons.

Firstly, the tunnel whizzes traffic unseen from Perth’s eastern and western sides with no impact upon Northbridge.

That’s significant because town planners, Perth City councillors, and others believed Newcastle and Aberdeen streets were destined to become major one-way thoroughfares.

Thankfully that never happened, so Mr Court deserves considerable commendation for giving the tunnel option the go-ahead.

Another reason it stands out as a major Court achievement is that it’s not merely a decorative structure. Far from it.

It’s a level headed, imaginative and thoroughly utilitarian project that serves Perth motorists well, and will do so for decades.

It was taxpayers’ money well spent, even though like virtually all state government infrastructure projects it had cost overruns, which Labor’s then transport spokesperson, Alannah MacTiernan, gleefully highlighted to journalists.

But when she became a minister it was Ms MacTiernan’s turn to explain the huge cost overruns for the Perth-Mandurah railway.

Probably the worst mistake made during the Northbridge Tunnel’s construction stemmed from its planners underestimating the impact upon nearby housing of around-the-clock dewatering of tunnelling works.

I recall inspecting homes just north of Newcastle Street as a reporter and seeing one- to two-inch wide cracks in bedroom and home corridor walls – from floor to ceiling – since homes were subsiding.

Now we come to the Perth Waterfront Project, which is akin to the Bell Tower in that it’s motivated by urban decorative desires and reminds me of Disney World’s Tomorrowland.

Colin Barnett’s first announcement claimed the excavation of its 3-hectare cove from the shoreline to The Esplanade would help “revitalise the city”.

He said it was intended to “reconnect the city centre to the Swan River … [so Perth could be] similar to … Sydney’s Darling Harbour and Circular Quay, and Melbourne’s Southbank.”

Planning Minister John Day added that having the phony cove would “create a vibrant, new area for the city and finally connect the waterfront to Perth CBD”.

In this they are similar to former Labor premier Alan Carpenter, who also was fixated with digging up the foreshore near William Street for high-rise glass towers around this cove.

A Planning Department position paper says the structures to surround the phony cove will feature “a vibrant mix of cafe, retail, residential, commercial, tourism and civic uses.”

In other words it’s to become a residential and working venue for the wealthy and the inner-city and nearby western suburban set, a process sometime called gentrification.

As if the Perth-Fremantle area needs more coffee strips. And what’s a Liberal government doing building more? If the plan is so necessary, why not outsource it to a developer or consortium of developers and not burden taxpayers?

Another document says the project’s “total value up to completion [will be] in the order of $2.6 billion”, which suggests anywhere between $2.25 billion (unlikely) and about $3 billion.

Presumably ‘total value’ means total cost. If so why not say it?

When contemplating that huge sum remember what State Scene highlighted last week when quoting two auditor-generals reports on the still unfinished Fiona Stanley Hospital and the Perth Arena.

When the former was announced we were told its price tag was $420 million, but latest calculations show it now stands at $1.76 billion, and may be higher.

When Perth Arena was announced we were told its price tag was $160 million, but latest tabulations show it to be at least $483 million.

It one aggregates both projected outlays costs we see taxpayers were told $580 million was needed to pay for them, whereas it’s to be at least $2.24 billion.

Overall cost estimations, therefore, went haywire by a staggering factor of nearly four.

Is it reasonable to expect Perth Waterfront to end up costing four times that presently claimed?

Cross your fingers it doesn’t happen.

It must, however, be stressed that Messrs Barnett and Day are unlikely to be in parliament when the final costings are known.

The reason is that information so far released says the ‘frameworks’ for the project are “envisaged to take 10-15 years, dependent on economic conditions”, commencing during 2012.

Completion is to therefore come somewhere between 2022-27.

That’s a long way off – potentially five governments away – so no bean counter will be able to tabulate how many taxpayers’ dollars are outlaid for another 17 years.

Furthermore, unlike with the Fiona Stanley Hospital and Perth Arena, reports tabulating for Perth Waterfront will be far more difficult.

According to another Department of Planning document: “It is expected that the state government will be responsible for delivery of some key public elements, however will seek early engagement of the private sector to determine the preferred delivery model.”

There’s a lot of faith and hope, and no doubt there’ll also be some charity, embedded in those lines.

True, selling commercial sites will mean revenue flowing to government. But just how much and how long taxpayers will be asked to carry the costs of holding undeveloped sites and associated costs is unknown.

Perth Waterfront inevitably has a great deal of bright blue sky hovering over its financial side.

It therefore appears to be set to follow thinking from the Burke Labor years, when the controversial WA Development Corporation was active in property dealings.

Let’s hope state taxpayers aren’t left holding too many costly cans. Shouldn’t a detailed financial plan firstly be prepared for objective debate in parliament?

Otherwise that projected “in the order of $2.6 billion” will balloon to well over that.

Hopefully not by a factor of four.

Furthermore, the Perth Waterfront faces many more engineering, including possibly considerable major de-watering, and commercial challenges than Fiona Stanley Hospital and Perth Arena.

Let’s further hope its planners and managers are better endowed with acumen and estimating skills than those who oversaw those two projects.

If not, the financial consequences will be even less welcomed than in those cases.

That said, State Scene believes money to be outlaid on the unnecessary and un-needed Perth Waterfront project, which will hinder CBD traffic flow for years, would be better spent constructing, across the entire metro area where most Perthites live, a comprehensive network of arterial road and railway crossing overpasses.

These would help ensure: more efficient, meaning less congested, travel; better fuel consumption for car and haulage vehicle owners, since stopping and starting would be markedly slashed; and fewer road deaths annually.

Unfortunately, Messrs Barnett and Day, like Mr Carpenter before them, are fixated with the exorbitantly expensive phony cove to gentrify the CBD rather than with Perth’s broader and more pressing needs.

 

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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