Archive for the ‘Feasibility’ Category


The rules of attraction

A regional city needs to have a lot going for it to grow in an economically and socially sustainable manner.

Communities populated entirely by miners, for example, are not going to be attractive for a whole lot of other people.

So how do you attract different professionals, particularly those in knowledge intensive industries, to a regional city?

It’s not simply a matter of having the jobs. It requires an understanding of the relationship between economic and population growth and areas such as social amenity planning, land use and spatial planning, transport and utility infrastructure, and environmental sustainability.

A professional earning $100,000-plus a year will be looking for a certain quality of life before considering a move to a regional city. For the city’s planners forging ahead, this requires a big picture approach:

  • What’s the community going to look like?
  • How well is it going to be serviced by infrastructure (not just utilities)?
  • What level of social infrastructure is there?
  • What is the level of cultural planning and infrastructure? 
  • What educational opportunities are there? Will prospective residents need to send the kids away to Perth based schools? Is there a university campus there and, if not, can one be established?

Regional centres such as Karratha have battled severe growing pains because the necessary planning for a certain quality of life for a residential population was not considered at the front end. 

In Broome, the prospect of a gas hub located at James Price Point for the Browse Basin development will, if it proceeds, trigger billion dollars worth of infrastructure investment which will significantly change the nature of that town whether people like it or not.

How will they plan quality of life and amenity issues around a project of such magnitude? What are the transport needs? Can major changes be made in a sustainable fashion? What is the employment profile going to be – fly in/fly out or residential? If it’s the latter, how can changes be made to attract various professions? 

There is an emerging acceptance of the importance of demography, an approach that says: “This is what we want to do and our community will ultimately look very different because we are shifting from a business as usual, incremental population growth model to one of facilitated development.”  It is a model that incorporates:

  • Infrastructure planning
  • Social amenity planning
  • Land use and spatial planning
  • Cultural policy planning
  • Environmental sustainability planning

And it can be applied to any regional city anywhere in Australia. The fundamentals don’t change – graduating from  a large town to a city has to be done in a facilitated way.


Getting the mix right

It is not enough to mandate an area “mixed use” and hope that the market will follow. A successful mixed use urban development requires more active planning and consideration than simple re-zoning.

Traditionally, it was quite common for people to have a business downstairs and live above the shopfront, but with the rapid industrialisation of the 20th Century and the proliferation of private vehicles came low density living and an increasing segregation of uses.

Now, with the growing concern about the width and breadth of urban sprawl, and the associated problems with transport and sustainability, there has been renewed interest in mixed use developments.

But while “mixed use” is a planning buzz term, there needs to be greater appreciation of what is required to prevent lost opportunities and ensure a development’s success. 

There would be little benefit, for example, of zoning an area “mixed use” in a suburb such as Woodvale and expecting commercial and residential markets to follow. There is no train station within walkable distance, very little nightlife, few restaurants… what is there to persuade people to give up a quarter acre block elsewhere to come to live in a much smaller apartment in the area? And why would commercial operators move in without the critical mass of residents?

We have seen with the likes of the development of Clarkson train station that there needs to be better planning. It was intended that the area around the precinct would be mixed use. But because the development was still in the early stages it wasn’t viable for commercial operators to locate there. They needed the population to support the activity and this required time. Ultimately the developer wanted to sell the land to maximise return and it reverted to the old model of single-use residential. 

There are certain prerequisites for a successful mixed use urban development:

  • Proximity to reliable, efficient, public transport. When mixed use works, one of the big benefits is the reduction in travel demands, bringing the commuter’s origin and destination closer together -  one of the key features of a sustainable urban development;
  • Proximity to employment, retail and commercial activity;
  • An awareness of what the key clientele wants;
  • A mix of uses that will complement and support each other, so they reinforce the development. Retail is a good example of a land use that is highly compatible with residential activity; light industrial, on the other hand, causes a number of negative externallities such as pollution and noise and is unlikely to complement or support residential activity;
  • The general amenity of the area needs to appeal to residents because they are ultimately sacrificing their private space. There needs to be trade-offs such as cafes, restaurants, public open spaces and parks to make it worthwhile surrendering the quarter acre block;
  • Provide the right context for commercial activity – ie the provide a critical mass of residential population to support viable trade or in the short term provide incentives from business to locate in the area

If the mixed use development is not well planned and implemented short-term goals will invariably take precedence over long-term strategies, as was the case with Clarkson. Rather than helping combat the problems of urban sprawl, the result is the reverse and all we end up with is yet another dormitory suburb.


Regional cities: Growing up wiser

If regional cities want to be viable centres in the future, they need to take a good look at themselves and determine the answers to two fundamental questions:

What do I want to be when I grow up? And what do I need to do to get there?

Historically, this is not territory many have had to navigate. Regional centres have sprung up around driver industries such as agriculture or resources and, to a degree, population has followed.

But in order to ensure a city that is sustainable in every sense of the word, there needs to be a much better understanding of the nature and role of key economic drivers in regional development.

People need a reason to move into a regional area - and for population growth to occur on a large scale, that reason is invariably employment.

Economic growth generally involves a relatively high percentage of export oriented driver industries, such as big infrastructure or resource projects that are significant generators of employment.

However, sustainable economic growth requires careful planning to ensure that a city develops knowledge intensive producer services around those key drivers and does not put all its eggs in one basket. 

Typically there will be a high rate of wholesale and retail employment in regional towns and there will also be service sectors such as education and health. 

But those things are in response to population growth, not the other way around. A retail led economy or a community driven by government services is not the answer to long-term viability. That requires a diversified economy.

This is something the City of Geraldton understands very well. With a population of 33,000, it wants to be a city of 80,000 to 100,000 residents in 20 years’ time. So the city’s custodians want to know, how do we get there in a sustainable way?

The City is relying on a number of big, strategic projects, such as the development of a port and associated rail infrastructure at Oakajee, 22km north, and the Square Kilometre Array telescope bid. 

To a large extent what happens with these is out of their hands, but what the city’s planners can do is determine how best to leverage off the projects if they go ahead. 

Rather than be subject to the cyclical nature of commodity markets, which we have seen to devastating effect in recent times, they want to know how to build a vibrant regional city with a sustainable, diversifed economy.

If you have a big employment driver such as the port and rail infrastructure proposed for Oakajee, what else can the city do to make the most of it?

There’s a vacant industrial park adjacent to the Oakajee site. What can that be used for? What you don’t want to do is fill it with population-driven services such as spray painters and airconditioning companies and the like. This is not sustainable.

Planners must determine how to build a high value chain. If the park, for example, were to be used for extraction and processing for commodities brought from elsewhere in the Mid-West, what components would be required? What technical specialists would be needed? What technology? What infrastructure would you have to put in place to attract those higher end users?

The basis of sustainable regional cities is understanding how employment generation works. There is not necessarily a linear connection, but a web of factors that need to be brought together.

Fundamentally, if something is not economically sustainable it is not sustainable in any sense because there simply won’t be people living there.


May we live in interesting times…

The boom is over. And so, too, it seems is the pervading optimism that goes hand in hand with prosperous times. But, paradoxically, did this optimism allow us to rest on our laurels and limit our willingness to be visionary and take risks? 

As pessimism creeps into the private and public sectors with every piece of economic doom and gloom, are we, like fearful snails, heading back into our shells?  Is this the right thing to do?

Recent research by the Kauffman Foundation, a US based economic development think tank, has found that business start-ups that are launched during an economic downturn have a greater chance of long-term survival than those launched during the good times.  

Paul S. Kedrosky, a senior fellow at the foundation, suggests that such start-ups are based on lean, efficient business principles, and a greater determination by founders to succeed. 

I believe such findings are relevant to public sector investment as well.  Much talk in Western Australia revolves around how we “squandered the boom”.  

Well, here’s our chance to develop lean, targeted initiatives that stimulate the economy in the short term, and set the state up to hit the ground running for the long term when we re-emerge.  

We don’t have the luxury of enormous surpluses, so we had better get it right.

Initiatives that support innovation, broaden our ability to solve major world problems, and compete in international markets across a wider range of sectors are essential.  

Reactive policy targeted at interest groups will just mean we squandered the “bust” as well.


On the outer: The real cost of fringe dwelling

It’s time to challenge the notion of what constitutes affordable housing.

We need to look beyond the quick fix, short term solution of releasing more land further out on the urban fringe, to the long term implications of such a myopic development strategy.

It may seem cheaper to build on greenfield sites on the outskirts of the city than in the inner suburbs, but it is simply a false economy.

When you consider, for example, that 75 percent of people who live in Perth’s sprawling North-West corridor have to commute to work outside of the corridor – their weekly fuel bill soon casts a greater shadow than their mortgage. How is this affordable?

There are also big social ramifications. With longer commutes, there is less time for family or for building a sense of community; with rising transport costs, there is little disposable income to go around. People in outer suburbs become increasingly marginalised.

In a recent address to councils, planners and transport experts in Melbourne, Curtin University’s Professor Peter Newman argued that governments needed to look at the real costs of building on the fringes, including the burden of commuting and associated emissions of greenhouse gases.

“The old economy based around cars and extending further out has been a proven failure,” he said, maintaining that governments could save up to $85,000 per new housing lot over 50 years if they instead built in existing suburbs close to public transport.

We need a paradigm shift in our attitude to housing. Governments need to start articulating the benefits of higher density living – lower transport costs, access to better amenities, proximity to knowledge generating employment, greater sense of community – at the same time as generating the means by which all socio-economic groups can access it.

Some people choose to live further out because they want a certain kind of lifestyle, but many are simply forced out into the boondocks because they see it as the only way they can enter the housing market.

We need to give people options and this means making high density attractive and affordable. It means creating good public space that meets the demands of all members of society. In a sense, we need to give them the same sense of security that comes with a backyard – a safe, clean space to walk their dog, go for a run or take the kids to the park.

The redevelopment in Stirling is a great example of forward thinking in urban regeneration. It’s based around urban density and a train station and Stirling itself is becoming a fairly major employment zone.

However, given the way the area has evolved, with industrial and higher density concentrations, it has significant advantages over other inner ring centres. It will take a fair amount of political willpower to enable similar developments in the western suburbs where ratepayers have a vested interest in preventing high density.

High density is not going to please everyone. There will always be a demand for land, for a backyard, for a place to park the boat. It’s part of who we are. But there needs to be a strong understanding by the powers that be that if they continue to release land on the outskirts of town it is only a  part of the overall equation.

Any development must also factor in the other key driving factors of any economy – labour, capital and enterprise. This means transport networks, as well as investment in significant infrastructure that encourages strategic industries and generates knowledge intensive employment.

The onus is on our leaders to drive the market and to provide attractive, affordable options. The majority of the population may still be thinking short term, but we need the political will to make decisions that are sustainable for the long term.


Regional infrastructure: Dynamic model drives further

Developments in remote and rural areas present their own challenges. A new mine, for example, brings more people into the area. More people means more houses. More houses means better infrastructure.  Better infrastructure means greater start-up costs.

Infrastructure development is particularly expensive in regional and remote areas, and the standard model of “business as usual” with infrastructure expansion is not always the best option.

BHP Billiton and Landcorp were faced with exactly this situation when planning for the Ravensthorpe Nickel Operations project, in the south-west of Western Australia.

Favouring a residential workforce over the “fly in fly out” model, the small coastal community of Hopetoun emerged as the logical location to house many of the workers.

Working with leading environmental engineers Syrinx Environmental, Pracsys has produced a new approach to regional infrastructure demand modelling that proves the technical and cost advantages of sustainable alternatives.

It is also entirely transportable. This means it can be applied to regional and remote infrastructure development anywhere in the world.

Together with Syrinx, Pracsys compared bundles of technology options for key infrastructure – power, water and waste; all needed to support the influx of workers that would come to Hopetoun with the new mine. The evaluation took into account technical viability, capital and operating costs, net present values and the economic impacts of externalities.

Using a centralised system as the base case, we considered a range of alternative solutions to infrastructure expansion challenges.

We determined the performance of the alternatives against these criteria and asked whether or not they would be better from an economically sustainable standpoint. The process examined issues such as:

  • The impact of demand management strategies on water consumption using household based rainwater tanks and water reuse systems;
  • The use of decentralised modular wastewater treatment plants servicing groups of houses rather than the whole town;
  • The provision of household based sustainable power technologies, such as photovoltaic cells, wind turbines and solar boilers;
  • The need for, and timing of, larger centralised infrastructure such as diesel generators and large wind turbines as a result of power demand management at the household level.

The results consistently came down in favour of a more flexible and sustainable approach to infrastructure.

Apart from the demonstrable environmental and technical benefits, the sustainable model indicated a saving of more than $20 million over the standard centralised model. In addition, there was a $74 milllion advantage in net present values over 20 years.

What we have been able to demonstrate is that a sustainable model can be superior not only from a technical point of view, but from an economic standpoint.

And it’s not just us saying so. The peer review process for the model involved an Australia-wide panel, which included another national  economic firm, as well as leading sustainability and technical experts and academics. After careful consideration of this approach, it was generally agreed that the depth of analysis and the level of rigour were a first for Australia.

The real value of our approach lies in the fact that because it is so flexible can be applied to any remote or regional community anywhere.

This is dynamic modelling, not a “black box” solution. We equip our clients with the tools to fully exercise the model’s capability and then drive it on to the next project.

Landcorp is now looking to apply the costing and economic model we have developed to other similar developments throughout Western Australia.


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