The state government is hoping its significant infrastructure spend will arrest the slowdown in business investment as the resources boom wanes.
The state government is hoping its significant infrastructure spend will arrest the slowdown in business investment as the resources boom wanes.
In his address to a Business News Success & Leadership breakfast in March, Treasurer Mike Nahan identified the state government’s substantial capital works program as a potential circuit breaker to counter falling business investment.
A large part of that works program, which Dr Nahan says will create 82,000 jobs, will be devoted to transport, with the additional benefit of eliminating bottlenecks for the state’s exporters and consumers.
As resources construction eases, costs for capital projects are also falling, making now an opportune time for an infrastructure build, Dr Nahan said, with the state government saving up to 20 per cent of the cost on some projects.
In the metropolitan area, Business News has identified around $8 billion of planned infrastructure activities to be rolled out in the coming years, including road and railway developments.
Main Roads is the biggest player, with an asset investment program budgeted for more than $3.3 billion over the forward estimates.
It will roll out three major projects along the state’s new key freight corridor: Northlink, worth more than $1 billion; Gateway WA, also worth $1 billion and already well under way; and the new Perth Freight Link, known as Roe 8, worth around $1.6 billion.
Combined, the corridor is hoped to be a free-flowing 85-kilometre freight route from Muchea to Fremantle port, with minimal traffic light disruptions.
The extension to Roe Highway is expected to save freight users $8.15 per trip in time, fuel and related costs, but will be funded by a controversial heavy vehicle haulage charge.
If implemented, it would be the state’s first user-pays road.
Regional areas, which will make good use of the new freight corridor, are also receiving road project funding.
The biggest package is for a planned upgrade for the Great Northern Highway between Wubin and Muchea, worth more than $380 million, while further up the coast, work has almost been completed on the highway near Port Hedland.
The private sector is also pitching in to the build, with a development of up to $1 billion at Perth Airport.
Perth Airport executive general manager Fiona Lander said the international arrivals expansion, costing $80 million, would be opening in the near future, while upgrades to the international departures hall of around $145 million would be unveiled later in the year.
“The T1 domestic pier (development) is $200 million, and then there’s all of the road works, taxi expansions and other infrastructure,” she said.
“If you actually join it together with the $1 billion of Gateway WA, there’s $2 billion of infrastructure investment out here at the airport.”
And more is planned, with the government engaged in procurement for the $2 billion airport and Forrestfield rail line.
“We’re working closely with the PTA on the alignment and access (of the rail project),” Ms Lander told Business News.
She said the airport would be pushing ahead with developments, despite the softening passenger numbers.
“Infrastructure takes a long time to build so you’ve got to try and keep ahead of the demand curve,” Ms Lander said.
“We have been playing catch-up for a number of years.
“For the first time in a decade we’ve had that growth come off a little bit … but we’re not going to take our eye off the game.
“We’ve got to keep going with our plans, or when demand does increase again we’ll be playing catch-up again.”
Although a decline in fly-in, fly-out workers for the resources sector would affect traffic, Ms Lander said the airport expected numbers to double in 20 years.
“By 2034, we think we’ll have 28 million passengers passing through the terminals,” she said.
“Today we’ve got just more than 14 million.”
MAXed out
One major project has been delayed, however, with the state government forced to choose between its two big public transport initiatives.
The MAX light rail line to Mirrabooka was wiped from the forward estimates last year, with a revised opening target of 2022.
In the interim, the government is considering the option of a rapid bus transit network, a proposal that has come under plenty of criticism, not least from the Committee for Perth.
In a research report published last month, the committee said that despite the lower cost associated with such systems, bus rapid transit would usually transport fewer passengers in a given time period.
In the near term, however, the government has invested heavily in newer buses for established routes, according to Public Transport Authority manager of corporate communications David Hynes.
“About half a billion dollars was also allocated over the forward estimates to Transperth’s ongoing bus replacement program,” Mr Hynes said. “The project is well advanced and involves on average about 100 Transperth buses being replaced each year.”
Additionally, the government is purchasing a new Euro 6 articulated bus fleet, worth around $58.5 million.
