Let’s have a private word

JOSH WILSON is the Federal Labor member for Fremantle. He says private/public projects could go a long way to tackling transport issues, as well as some planning problems.

IN Fremantle and metropolitan areas around Australia we face some common challenges.

Urban sprawl has meant that people seeking new and affordable housing are often pushed to the edge of our cities, and are therefore dislocated from jobs and services. They also bear the heaviest travel burden in both time and cost.

Our challenge is to avoid further unnecessary sprawl and to provide much better public transport – and to do so at a time when capital funding for infrastructure is tight.

In that sense, it’s a familiar problem and we’ve wrestled with it for some time.


So how do we support urban infill; how do we create innovative and diverse housing; and how do we deliver increased density on the basis of high-quality design, better transport options, and more liveable neighbourhoods?

One emerging solution is an infrastructure-funding model called ‘value capture’ or ‘value creation’ which seeks to draft in private sector investment to help create urban rail projects.

As the representative of a community that is affected by congestion, and needs careful urban development based around public transport, I’m interested in the potential of this mechanism to deliver on those needs.

The idea of value capture is essentially to use the land value increase that inevitably comes with new public transport to fund that infrastructure.

In that sense, it is not only a smart way to fund new transport projects – it is also inherently fairer.  Why should government and taxpayers bear the cost of light rail, for example, if the immediate effect of such a project is to dramatically improve the value of private assets?

Once upon a time we expanded our cities around public transport, with trams and trains coming first, and land development following in due course.

Unfortunately this changed when cars and buses took over as the dominant transport mode in the post-war period.

And whatever freedoms we may experience as private vehicle users, the dominance of the car has led to sprawling cities, congestion, pollution, and vast amounts of hard-scaping.  Reversing this trend gains importance in the face of dangerous climate change.

The Fremantle electorate is well served by hard rail through both the Perth-to-Fremantle line and the Perth-to-Mandurah line, but the east-west links are poor and there is a need to support the proper pursuit of infill development with a more comprehensive public transport network.

As always, the task is to plan and to pay for it – and government should lead that process in order to examine and then apply new solutions.

In essence, ‘value capture’ allows government to guide the urban development project as a whole, with infrastructure funding perhaps delivered through a bond that could be sustained by appropriately calibrated land taxes which increase as the land value increases.

Alternatively, government can shape the project through a public-private partnership that is founded on private investment underwriting the delivery of the transport infrastructure in return for the higher development yield.  This is the model that might better be described as ‘value creation’.

Internationally, this land-based, private sector approach is how they build railways in Japan and Hong Kong; it has been used to help underwrite a number of rail projects in the US; and it was applied to help fund the Cross Rail Project in London, which is the biggest infrastructure project in Europe.

While it is clearly on the agenda in Australia, we haven’t yet seen it put to practical use.  Hopefully that is about to change, and we already have a framework for that change in the form of WA Labor’s Metronet.

There are two clear rail corridors with redevelopment potential that could attract a value capture or value creation approach.  The first runs south from Fremantle along the Cockburn Coast, through Spearwood, and then turns east out to Cockburn Central, where this line would meet the existing Southern Railway.

The second corridor runs east-west along South Street from the Fremantle CBD through a major redevelopment area being planned in my old stomping ground of Beaconsfield, and connecting the sub-centres at Hilton and Kardinya to the Murdoch Activity Centre, which already comprises Murdoch University and Fiona Stanley Hospital.

In making an argument for ‘value creation’ as a means to delivering more urban rail I must acknowledge the critical work and advocacy of professor Peter Newman. There are very few people who have made such a considerable contribution to understanding and implementing the principles of good urban design, both in Australia and around the world.

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