02/07/2008 - 22:00

Infrastructure plan just the start

02/07/2008 - 22:00

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Premier Alan Carpenter and Liberal leader Troy Buswell both made bold announcements on major infrastructure projects last weekend.

Premier Alan Carpenter and Liberal leader Troy Buswell both made bold announcements on major infrastructure projects last weekend.

If the next state government could draw selectively from each of them, Western Australia might get the infrastructure policies the state needs.

Mr Carpenter told the Labor Party's annual conference that his government was developing a 20-year blueprint for public transport in Perth.

He said the role of government was to plan for the long term, a comment that will strike a chord with many business people.

WA Business News has been told repeatedly that the state needs clearly articulated long-term strategies, to give confidence about where we are headed.

Drawing up a long list of potential public transport projects is a step in the right direction, but that's all it is.

Like the state infrastructure strategy, which was handed to Deputy Premier Eric Ripper last month, it provides a start.

The larger and more complex task is to prioritise the projects and clearly determine how they can be delivered.

Mr Buswell has advocated increased use of public private partnerships (PPPs) as a means of delivering infrastructure projects.

Specifically, he has committed a future Liberal government to developing a new Princess Margaret Hospital using a PPP, at an estimated cost of $640 million.

Judging by comments Mr Carpenter made last month, you might think he sees eye to eye with his political foes on this matter.

Speaking at the official opening of Perth's $190 million District Court building, which was developed as a PPP, Mr Carpenter was full of praise.

"This innovative partnership has resulted in an impressive District Court building delivered on budget and on time," Mr Carpenter said in a statement.

That outcome was a pleasing change from the cost blowouts and delays that have afflicted many infrastructure projects - and, it must be added, private sector construction projects - across the state.

The state government professes to support PPPs, but apart from the District Court project - developed by the Western Liberty consortium, led by banking group ABN Amro and Brookfield Multiplex - it has shown little interest.

One unstated reason is that powerful unions, especially the Liquor Hospitality and Miscellaneous Union, which traditionally covers support staff in hospitals, wants to keep its members in the public sector.

Labor governments in other states have embraced the potential benefits of PPPs, using them to develop hospitals, schools, Tafe colleges, social housing and toll roads, to name a just a few examples.

Victoria has had particular success with hospitals. The latest example is that state's new children's hospital, being developed at a cost of $900 million by a consortium led by Babcock & Brown, Bovis Lend Lease, and Spotless Group.

A key feature of PPPs is that the private consortiums have a powerful incentive to optimise the design and construction of the assets, because the same consortiums have to operate the assets long term.

Western Liberty, for instance, will manage the District Court building and provide support services until 2032.

The next WA government should stay open to this opportunity, without being ideologically committed for or against.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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