17 March 2014
Announced four years ago, the plan was to make Karratha and Port Hedland not only economically successful, but livable cities of 50,000 people by 2035.
By the end of 2017-18, Royalties for Regions will have committed more than $1.7 billion directly to Pilbara Cities projects.
The latest State Government progress report details $650 million in commitments. It includes Karratha city centre infrastructure works ($65 million) and the relocation of the Port Hedland wastewater treatment plant ($42 million), and community projects such as the South Hedland Aquatic Centre upgrade ($3.6 million) and Newman Sporting Complex ($4.8 million).
The money has helped revitalise the look of the towns through main road upgrades — complete with traffic lights — landscaped parks, recreation facilities and new homes.
But as the once-in-a-generation resources construction boom slows, can the vision be delivered? Pilbara Cities was the brainchild of former WA Nationals leader Brendon Grylls.
“There has been underinvestment in regional development almost forever so it becomes a self-creating story that if there is no infrastructure and no service delivery, then people will say ‘no one wants to live here’,” he told The Sunday Times.
“That just didn’t seem right and what we set about doing was trying to make up for the years of underinvestment by substantial investment to catch-up. To define main streets and town centres, get the power and sewerage operational.”
Over the 10 years to June 2012, the population of the Pilbara increased at an average of 4.5 per cent per year, the highest growth rate of anywhere in WA.
While there was money to be made, the direct consequence of the resources boom was unaffordable housing, infrastructure that couldn’t keep pace with growth and small businesses struggling with living costs.
Mr Grylls, the Pilbara MP, said while the region remained more expensive than Perth — a basket of goods costs 18 per cent more than in the metro area — the market was “more normalised”.
The Regional Price Index shows in 2013 the cost of housing was down 30 per cent, food dropped 10 per cent and clothing fell 8 per cent.
Central to achieving the ambitious population growth targets is convincing more fly-in, fly-out (FIFO) mining workers to live in the towns.
Local businesses say they see little benefit from FIFO workers, who are often shuttled from their camps to the mine sites and spend little time, or money, in the towns.
Mr Grylls put his family first this summer when he stepped down as party leader, quit the cabinet and relocated to Karratha with his wife and three young children.
While the motivation for the move was family-related, he hopes it might be an example for others and his next project is to convince grandparents to make the move too.
“I do understand it resonates with people, being a high-profile person that said this can be done. It’s early days for my family, but we’re enjoying it,” he said.
“I would hope that if some people say ‘well if Grylls can do it maybe we can’ then that’s maybe a good thing. It’s not for everyone, but it’s certainly much more livable.”
He doesn’t pretend Karratha is the western suburbs of Perth, but praises the region’s outdoor, recreational lifestyle.
“I picked up my young fella from school and took him fishing — that’s a pretty special time for a family,” Mr Grylls said.
He said the proof that they’ve changed the psychology of the Pilbara as a place to live rather than a place to work will happen over a number of years, but feedback he was getting on the street was positive.
Terry Redman, who succeeded Mr Grylls as the WA Nationals leader, recently returned from his first visit to the Pilbara as the Minister for Regional Development.
He said Karratha had “truly transformed” in recent years and was “very confident” the population target was achievable.
“Sitting in the coffee shop under the Pelago building, I could have been sitting in Claremont, Nedlands or St George’s Terrace,” he said.
“There were five young ladies and their babies all having a catch up. It gave you the sense that this isn’t just a men’s work camp.
“If I was 20 years younger, I would be really happy to go up there to live and do business.
“It’s a can-do part of Australia and from where we’ve come from in the past to where it is now, it’s matured. It’s a place people want to be a part of.”
Mr Redman said while the “boom was coming off”, the region remained “economically positive” as the industry moves into production.
“In my view there will be a long period of sustained growth,” he said.
He committed to engaging with the sector about getting greater “buy-in” to the Pilbara Cities vision, saying some companies were doing better than others.
He stopped short of naming individual miners, but wants to see bonuses paid to FIFO workers used to incentivise a residential workforce.
In Port Hedland, mayor Kelly Howlett said work to improve amenities was paying dividends with major chain stores such as Bunnings, hotel operators and fast-food outlets wanting a presence.
“With any change it needs to be worked through. It’s not going to happen instantly. Sometimes in there’s a transition time, but you can see that vision and you are heading there,” she said.
Pilbara Cities by the Numbers
- At the 2011 census, Karratha had a population of 16,475 with a median age of 32.
- Port Hedland had a population of 13,772 with a median age of 30
- Over 10 years to June 2012, the population of the Pilbara increased at an average of 4.5 per cent per year — the highest growth rate in WA
- If the growth rate continues, the Pilbara Cities targets of 50,000 people in Karratha and Port Hedland and 15,000 people in Newman by 2035 are likely to be met.
- There is no reliable statistical information on the size of the fly-in, fly out workforce living at mining camps.
- By the end of 2017-18, Royalties for Regions will have committed more than $1.7 billion directly to Pilbara Cities projects.
- In 2013, Pilbara recorded a decrease of 13.5 per cent in the cost of goods and services.
- The cost of housing dropped 30 per cent, food 10 per cent and clothing 8 per cent.
(Source: Department of Regional Development)
Beth Corps opened Soul Cafe at Karratha’s Pelago development a year ago after she spotted a gap in the market for an independent coffee shop.
High rent, staff wages and overhead costs meant that until recently, the former special education teacher was forced to charge $7 for a large mug of coffee.
But after securing a rent reduction from landlord Finbar, the 33-year-old was quick to pass on the discount to customers by dropping the price to $5.
“It’s nice to be in comparison with Perth prices, it’s where we always wanted to be, but with staff costs and overheads we just couldn’t do it,” she said.
“I’ve definitely seen a huge difference in the town. Two years ago people would come up here and they really didn’t want to be here, it was a matter of being here for the money.
“People now, especially with these new facilities, are coming through the doors and saying ‘we’re new here, we love it and we’re going to stay’.” Julie Vanduuren has lived in Port Hedland for eight years and runs Silver Star Cafe in a converted 1930s train carriage in the town’s cultural precinct.
The 42-year-old, originally from Sydney, said her business was still “booming” and life was more livable thanks to the Royalties for Regions investment.
“People come into the town and see the ugliness, but they’re normally people who are here just for a few days and leave. They see the red dirt, the big machinery and guys walking around in orange shirts, but when you know the town it’s a really nice spot to live,” she said.
However, the cost of living, and in particular housing and commercial rents, remains a barrier for small business owners.
Hedland Harbour Cafe owner Ray Sampson said while he remains busy, trade dropped 8 per cent in 2013, a fall of $300,000.
The 62-year-old was paying $1300 to rent a three-bedroom house but managed to recently negotiate it down to $800.
But he has lost “many good staff” as a result of the cost of living and relies on his family and backpackers to keep the cafe running.
Does he believe Port Hedland will ever be the city the State Government hopes for? Not until the miners stop building FIFO camps, was his reply.
“They’ve got to flood the market with houses and give people an incentive to live here. At the moment they are just building more and more camps,” he said.
“Royalties for Regions has been a waste of money, a lot of it. They build all these parks, who is going to maintain them? The few ratepayers that are left here.”
Last year Pilbara Glass was turning over as much as $1 million a month — last month that figure dropped to $170,000.
Boss Ivan Traeger, 59, said construction in Karratha had slowed to a “dead-stop” as mining firms completed their contracts.
As a result, he has seen trade fall 45 per cent and his workforce shrink from 16 to 10. He’s also had to put two of his properties up for sale as the rental income no longer meets his mortgage repayments.
In his 19 years in the town he has seen the economy go up and down and doubts it will ever grow into the city envisaged by the State Government.
“They’re never going to achieve it for the simple reason that big corporates do fly-in, fly-out. While you do that you are never going to create a populous for the town,” Mr Traeger said. “Instead of building a city you are only building a haven for these multiple dwelling units.”
Tim Fleischer, of Timik Developments, has lived in Karratha for 15 years and said business “went up and down” with mining.
Trade was down 50 per cent last year and he’s struggling to keep-on all his staff and contractors with few new clients coming through the door.
“If the town got to 50,000 people they’d put the services in to meet that, which is fantastic, but it’s hard to say where the population will come from if there is no mining injections,” he said.
Two years ago Karratha-based Eaton Building constructed 43 homes, but this year the firm is signed up to build just one.
Owner Paul Eaton has let go four staff and said a couple more would leave over the next few weeks.
“It’s very, very difficult at the moment. Why spend all this money and still have all these (FIFO) camps? They are just everywhere,” he said. “They only need to put 600 workers back into the town and that would make a massive difference.”
Pilbara Real Estate CEO Rob Sleater said property and rental prices had dropped 25 per cent since the end of 2011, with a comfortable home now costing $1000 a week.
“The whole buyer demographic has been turned upside down over the last three years. Instead of 70 per cent investors, it’s now 70 per cent owner-occupiers,” he said.
As the owner of two of Karratha’s sporting goods and fishing tackle stores, Adam Ambroziak has a captive market.
But trade at his Adventure Sport shops is down almost 30 per cent, a direct result, he said, of major mining contracts coming to an end.
“The population has dropped. Everyone I speak to says they’re down and the landlords want to increase the rent,” he said. “Everyone is suffering, but no-one cares unless they keep getting their rent money. “They’ve got to stop FIFO. If they want to build the population up the first thing they’ve got to do is restrict FIFO.”
Mr Ambroziak said the town “looks beautiful” and has a world-class leisure centre to be proud of thanks to the injection of Pilbara Cities cash.
But he added: “It’s not practical. We need a multi-storey car park. They want this town to carry 50,000 people and the first thing they did in Sharp Avenue was take away 30 car park spots.”
Liquor store owner Brent Rudler, a former mayor of Port Hedland, said the release of land for development created the chance to grow the town into a vibrant city.
“You have got to say well done to Brendon Grylls because Royalties for Regions has got the town to a stage where people can put their roots down,” he said. “To get 50,000 people here as a permanent population, can it be done? Yes it can, but you need the housing stock to go with it.”
Casey Pearce, 29, moved to Karratha in 2006 with her husband, Luke, and works at the baby shop Belly Fruit and Beyond.
The town’s young population means business is thriving and the royalties money has made Karratha more livable for young mums, she said.
“People are coming to stay, which is great for the town. I’ve worked on the mines and FIFO isn’t all that it’s cracked up to be,” she said.
But Ms Pearce said if the town wants to become a city then its health services, and in particular the hospital, need to improve first.
Earlier this month she was forced to fly to Perth with her one-year-old son, Max, for a scan at Princess Margaret Hospital and has to return next week to collect the results.
Courtesy of Perth Now