Ord, Oakajee top infrastructure priorities

WHAT a difference 12 months can make in shaping the future of a state.

Just over a year ago Labor premier Alan Carpenter was being touted as 'Carps the builder' following a string of announcements related to significant infrastructure projects around Western Australia, made possible thanks to strong commodity prices and buoyant markets worldwide.

In February 2008, stage one of the Perth Waterfront plan and the new sports stadium in Subiaco were announced at a cost of $300 million and $1.1 billion respectively.

These massive projects were in addition to the then state government's $25 billion capital works program, which included the Fiona Stanley Hospital, the Albany Entertainment Centre, the Perry Lakes redevelopment, Perth Arena, a new WA Museum, and the Northbridge Performing Arts Centre.

However, the economic cris has led to a realigning of infrastructure priorities by the state government, which says it simply can't afford to spend money on all of these projects.

Plans for a new WA Museum at the old East Perth Power Station site have been scrapped, the proposed sports stadium in Subiaco has been moved off the agenda for at least two years, and the extravagant Perth Waterfront development will be reduced to a "more modest redevelopment", whatever that means.

But whom will history look more favourably upon - Carps the builder or Barnett the budgeter?

Mr Barnett plans to spend $7.7 billion on capital works this year, up on the previous year, despite purse strings being pulled much tighter.

"What we did was a restructuring of our capital works program," Mr Barnett told WA Business News.

"So it's a reordering of projects and we're still looking at that."

But it's clear what Mr Barnett's priorities for the state are.

"Ord first, Oakajee second and Northbridge Link third," Mr Barnett said in reference to the planned expansion of the Ord River irrigation area, the new Oakajee port and the sinking of the Northbridge rail line.

"That would be my view."

These three projects, along with construction of housing and essential services in the Pilbara (estimated at $1 billion) and the upgrading of road transport links around Perth Airport at a cost of $525 million, were identified in the government's submission to the Prime Minister's National Infrastructure Audit undertaken by Infrastructure Australia.

Last week, the government signed a development agreement with Oakajee deepwater port and rail proponent, Oakajee Port and Rail, for the construction of the $4 billion bulk commodity supply chain.

Mr Barnett said the state government would wholly fund the common-use infrastructure at the port, to the tune of $678 million, if the Commonwealth didn't come to the party.

"I'm confident the Commonwealth will come in to Oakajee; it's a little bit early and I made it very clear to the prime minister it's not the time yet for Commonwealth money to be put into Oakajee," Mr Barnett said.

"Maybe this time next year both the Commonwealth and state government will be putting some hard cash into the project."

Mr Barnett was pleased to conduct the formal signing ceremony with OPR, a jointly owned venture between Murchison Metals and Japanese giant Mitsubishi, reaffirming a pro-development approach by the government to drive the state through this difficult economic time.

"The state is somewhat in a paradoxical situation; the world economy is down but a lot is about to happen in WA and we're going to have to find a way through that," Mr Barnett said.

"I do believe WA can be counter-cyclical and I'm not saying that parts of our economy won't be adversely affected.

"Already the Ord River project is under way, we have signed the agreement for the development of the Oakajee deepwater port and rail infrastructure, probably the most important project in this nation today, and we are in intense negotiations over LNG projects, of which there are several."

With stage two of the Ord Irrigation Scheme, costing $391 million, and the development of Oakajee Port effectively locked in, it would be expected attention would now turn to the premier's next priority, the Northbridge Link.

However, it seems funding for that project may not fall under the Infrastructure Australia project banner, meaning it would instead it may be included in city development projects.

"I don't mind which pot, or which bucket the money comes from, as long as it comes," Mr Barnett said.

But he could not guarantee the state would fill the funding gap should the Commonwealth decide against supporting the project.

"I would certainly hope that we can, perhaps we'd have to look at financing it, but for the moment the plan is 50 per cent Commonwealth 50 per cent state, sink the rail line and get on with it," Mr Barnett said.

One major project nearing completion is the Perth Bunbury Highway, with costs recently tipping over $700 million. Others set to proceed include the $1.76 billion Fiona Stanley Hospital and the Southern Desalination Plant at just under $1 billion.

There are also significant infrastructure developments in the private sector.

CITIC Pacific Mining's Sino Iron project at Cape Preston, south of Karratha, involves an investment of $3.5 billion, with much of this devoted to infrastructure such as a new power plant, desalination plant and port.

Similarly, iron ore expansion projects by BHP Billiton and Rio Tinto involve multi-billion dollar investments in railways and ports, which dwarf the spending on actual mining operations.

"There is more happening in Western Australia than is happening in the rest of Australia put together," Mr Barnett said.