03/12/2009 - 00:00

Push to get private sector on board as the Pilbara takes off

03/12/2009 - 00:00


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The state needs friends for the tough task of making the Pilbara liveable.

Push to get private sector on board as the Pilbara takes off

IT may have appeared as a good news trip.

After promising to splash out $300 million to revitalise the key population centres in the Pilbara, Premier Colin Barnet led a high-profile expedition to the north to show business leaders how this could be done.

Together with Regional Development and Lands Minister Brendon Grylls, Mr Barnett revealed to a planeload of Western Australia’s business hierarchy the government’s plans to spruce up the north-west and ready it for the hordes required to develop the region and provide much-needed services.

“What was done in the 1960s was extraordinary, but a lot of that has aged,” Mr Barnett said.

“The expectations of the workforce of the 21st century are different.”

Among the opportunities in the plan dubbed ‘Pilbara Cities’ are marinas, high-rise coastal developments, medium density housing, cosmopolitan town centres and accelerated land releases in new suburbs.

While Mr Barnett played down thoughts of developing a major capital, a Dubai of the north-west, he pointed to Darwin as a far more achievable example of what can be achieved in the harsh northern climate.

“(Darwin) has led the way in a harsh tropical environment,” he said.

However, all this is easier said than done.

This is not just as simple as a government laying out a vision, overcoming major hurdles such as native title and then spending the money to make it happen. Acknowledging it can’t do this on its own, the state has pitched its vision to the Commonwealth, seeking $471 million in federal funds to support the cause.

But even that will not suffice.

Hence the significant presence of the property sector leadership on the one-day whistlestop tour of Port Hedland, Karratha and Dampier.

Both Mr Barnett and Mr Grylls appealed to the private sector developers, admitting they were needed to make the Pilbara’s transition to a people-friendly destination of choice possible, trying to steer away from some of the mistakes such as South Hedland, a suburban dystopia based on an urban design model from Europe.

They even optimistically joked about the deals being done in the back of the aircraft as it returned to Perth, which is all part of getting the momentum going for what is a key element of their longer term goal of holding on to power.

“The government could spend every dollar in the budget and it would not lead to a revitalisation of the Pilbara,” Mr Grylls said.

“It needs private investment.”

The north-west is an area the Nationals did well in at last year’s election, a big part of the party’s surprise resurgence as the regional political power, which allowed it to deliver government to the conservatives.

It is a region the Nationals believe they can improve in, though they will face a fight from Labor, which has traditionally dominated the area.

Key Nationals understand that the hundreds of millions of dollars promised to the Pilbara under its Royalties for Regions policy will not win it any kudos if that spending doesn’t translate into real and noticeable improvement, rather than just band-aid patch ups.

Mr Grylls and Mr Barnett have three years left to show that they can deliver.

That is why last week’s tour was so important to them. They need the numerous signs dotting roadsides promising development to come to actually happen. People in the north want to see artists’ impressions turned into real cafe strips.

Otherwise, as more than one astute observer on the trip noted, the Pilbara Cities plan will look like the Swan River foreshore – yet another extravagant political vision that was not anchored in reality.

There are very real impediments to the government’s vision, notwithstanding the will among all stakeholders to improve the Pilbara and leave a lasting legacy from the resources boom.

The biggest issue is that the need for housing and improved amenity, which caused so many problems during the last boom, tends to loom largest when the resources sector is at full throttle.

That means developers and builders will be competing not just for the labour needed to make Pilbara Cities happen, but for the accommodation for their workers.

With something like 18,000 construction workers needed on north-west projects over the next few years, that is a big battle for people.

Property player Nigel Satterley says building costs in the Pilbara are already 60 per cent above those in Perth, a city where costs are already high.

Other property sector players agree that the high cost and competition for labour is a key issue. That is especially the case with regard to the sexier end of the government’s hopes. Building high-rise apartment blocks pits the residential builders directly against the Woodside Petroleum, Chevron and others building huge LNG plants.

By comparison, property sources say, far more achievable are the accelerated suburban developments which require skills sets less complementary to gas plant construction and where much of the work can be done offsite in places such as Perth. You can prefabricate a house, they say, but you can’t do the same with a high-rise development.

Some of this is already happening.

Among the initiatives Mr Grylls launched was a service workers village to deliver affordable rent for private sector workers in Karratha. National Lifestyle Villages was selected to construct and manage a 100 service worker units, valued at $30.4 million.

And, in contrast to the mood of some builders, SGC Securities, a company that has entrepreneur Tony Sage on its board, has its Regional Property Development Fund raising money to do a mixed-use development, including a six-storey apartment block, on the site of Karratha’s Tambrey Centre.

The group plans up to 150 units as part of the development, which will continue to have a tavern operating on site.

Whether that is an isolated case or the beginning of the type of investment the state wants to see only time will tell.



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