11/06/2009 - 00:00

Pilbara City appears to be on the radar

11/06/2009 - 00:00


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The idea of a big urban development in the north-west appears to be gaining traction.

Pilbara City appears to be on the radar

THE long-talked-about concept known as Pilbara City is much more than just a plan to improve the region's exiting towns, preparing them for moderate, natural growth.

It has been mentioned in this publication a couple of times, mainly because of the efforts of Brandrill chief Ken Perry, who put together a discussion paper on the subject.

Mr Perry believes it's in the state's and the nation's best interests to have a big city - about 1 million people - to service the vital northern expanse of Western Australia and make it more attractive to the type of people needed to develop and service the Pilbara.

Having published a big piece on the subject in early April, WA Business News was pleased to hear it got an airing last week at the John Curtin Institute of Public Policy when Nationals WA leader Brendon Grylls was asked a question relating to the issue after a speech on Royalties for Regions.

"With regard to the Pilbara City, we have already had our first meeting with the Commonwealth about that," Mr Grylls said.

For some reason, when I pursued the matter further, his office was a little less forthcoming and vague about this project. Perhaps, in answering the question without notice, Mr Grylls had let slip on something that the rest of his team didn't know about.

Fortunately, at the same event, when answering a different question, Mr Grylls returned to the subject.

"You don't just decide today well we'll build a Pilbara City," he said.

"That is probably 10 years of planning to allow that to happen.

"I don't know that has started yet.

"There are funds under the Royalties for Regions for that detailed planning work to be done.

"The Pilbara revitalisation plan we announced in the budget was off the back of very solid, well-prepared town plans for Karratha, Port Hedland, Newman and Tom Price.

"(We'd need) an overarching Pilbara plan financed by the federal government which actually gave us some planning parameters to invest in those communities.

"Without that we would be criticised for investing in areas that are not ready for investment and we have not got that planning right."

Watch this space.

GESB sell-off

I'VE been following the debacle around GESB for more than a year now, initially raising questions about how the deal to mutualise the Government Employees Superannuation Board was structured, followed by regular reports on what hasn't happened since that process was abruptly stopped.

One thing I've always wondered about was the move to mutualise in the first place. What was the benefit in moving GESB out of state control and giving ownership to its members?

It is only a matter of semantics that this process isn't called a privatisation because that is what it is. Perhaps the distinction between this privatisation and others is that this move was going to cost the state, rather than raise money from a sale. The cost has already been in the millions in terms of administrative time at GESB, Treasury and their advisers.

What is the point of this; to create a stand-alone WA-based fund manager? There is little advantage to WA in this. Most of the investments are outside WA and the staffing is small.

While I always like to see organisations based here, this is one area where I struggle to believe that such a move would greatly affect the local business community.

To me it seems like this was just one, big, promised give-away by the Labor state government. Imagine if the state decided to give away the Water Corporation to all water users, allowing us to become members of giant aqua-cooperative? What would be the advantage of that?

Lately, I've been thinking that a government looking for cash ought to change the plan. Why not follow Queensland Premier Anna Bligh's example and sell GESB?

I'm sure that one of the many insurance groups, banks or other financial services players would be interested in picking up almost $8 billion in funds under management in WA.

These transactions do occur. In the press this week was the possibility of UK bank Barclays selling off its £1.05 trillion fund management operation for about £8.1 billion pounds. As a rule of thumb that is a value of about 0.78 per cent of funds under management.

Presuming the WA government could get a similar rate, that would value GESB at about $60 million for around $8 billion in funds under management.

That's not a bad little kitty for building some new classrooms or paying some policemen a bit extra. And it allows the restart of the privatisation process, which stalled under Labor and has remained in limbo under the Liberals this year.


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