Nahan to create $5 billion fund through port and other leases as road maintenance reaches tipping point
Though Western Australia treasurer Mike Nahan’s Budget speech highlighted the extra 627 km added to the state’s road network in eight years, there was no space for the deepening deficit nor the extra spending needed for road network maintenance.
To help make up the estimated $3.9 million shortfall and boost infrastructure spending in the face of a growing freight task, the WA government plans to sell long-term port leases to go with other divestments.
“Mr Speaker, as Members are aware, the Government recently completed the successful sale of the Perth Market Authority, and is continuing to progress the divestment, via long term lease, of the Utah Point bulk handling facility at Port Hedland and Fremantle Port,” Nahan tells parliament in his Budget speech.
The total effort aims to raise $16 billion, $5 billion of which will seed a state infrastructure fund to fund transport and social assets.
For roads, $1.2 billion is to be spent on projects including:
- $192.6 million on the Swan Valley Bypass Section of the $1.1 billion NorthLink WA project
- $172.4 million on local government roads via the State Roads Funds to Local Government Agreement, as well as $28 million in 2016-17 to replace the Old Mandurah Bridge
- $95 million on the $261 million Mitchell Freeway Extension Project, which will continue from Burns Beach Road to Hester Avenue providing improved access to new developments and reduced travel time
- $93 million on the Great Northern Highway – Muchea to Wubin Stage 2 upgrade, for reconstructing and widening sections of the highway
- $20 million for the construction of a dual carriageway on Armadale Road between Anstey Road and Tapper Road.
But as the road network grows, so does the weight of increasing freight ageing roads and related infrastructure.
“Regional freight movements are forecast to increase from current levels by 100% and the metropolitan freight task is expected to grow by 3.8 billion tonne kilometres per annum by 2031,” the Budget papers state.
“As the population and economy grows, freight efficiency and accessibility to ports will continue to be an issue in both metropolitan and rural areas.
It adds: “Road pavements and bridges are increasingly exceeding the cost effectiveness of maintenance works whereby extensive asset rehabilitation or replacement is required.
“Considerable post-war construction activity around 60 to 70 years ago means that, inevitably, many road assets are reaching the end of their design lives.”
Road network maintenance spending was $124 million in 2014-15, was budgeted last financial year at $313 million and is estimated to have actually been $345 million.
This year, it is put at $343 million, rising to $464.7 million in 2019-20 forward estimates.
State road funds to local government will rise from $172.4 million to an estimated $261.2 million 2019-20 forward estimates but the current agreement that covers this is due to expire at the end of June, so that figure is indicative.
The percentage target of the road network open to the various heavy-duty trucks is to remain at 2015-16 levels, despite being estimated at 1-2 per cent last year.
So the target for 25.7m B-doubles and double road trains is 96 per cent after an estimated 98 per cent; 36.5 double road trains 96 per cent after 97 per cent; 53.5 triple road tr4ains 44 per cent after 45 per cent.
Bridge strength and width targets will be up 1 per cent to 90 per cent and 96 per cent respectively.
Road system management, which included heavy vehicle operations, is to fall $5 million from $163.6 million.
The government is expecting savings of $275 million due to less Gateway WA work and delays to the Great Northern Highway and Perth Freight Link.
Over Size over Mass Unit spending is to rise from $1.01 million to $1.14 million in 2019-20 forward estimates.
The Government has announced the planned divestment of two port assets, Fremantle Port and the Utah Point Bulk Handling Facility at Port Hedland. Both assets will be divested through long-term leases as part of the Government’s structured program of asset sales. Appropriate access and pricing regimes for the regulation of monopoly services are being developed for both divestments.
The Government will also consider the future need to develop container and general cargo facilities in the Outer Harbour, Cockburn Sound, and the efficiency of transport linkages to Fremantle Port.
After spending $284,000 of its $634,000 trucks replacement allocation, the Fremantle Waterfront Implementation Plan will have the remainder available but no more, while the $107.7 million Inner Harbour sage 1 deepening, which is nearly complete, will continue.
Outer Harbour spending, including for the Kwinana Bulk Terminal and rail and road links, will also continue, though there will be a year’s delay on starting the truck loading facility and storage shed Lot 13 works.
The government aim is to have 15.5 per cent of containerised freight transported by rail in relation to total metropolitan container movement to and from Fremantle Port.
It was 13.2 per cent in 2014-15.
The 2015-16 Budget aim was 15 per cent and it is estimated this actually came in at 14.7 per cent.
Grants to the Fremantle Port Rail Service will rise from $2.96 million to $3.14 million before slowly slipping back to $2.25 in 2019-20 forward estimates.
Outside Perth, the Southern Ports Authority is a winners with $9.3 million for road upgrades at the Port of Esperance; $8.8 million across three ports for the replacement of plant and equipment, improvements to Port infrastructure and other civil works; $3.6 million for the purchase of land; $1 million for road upgrades at the Port of Bunbury.