Wollongong City Council should cut the proposed costs of infrastructure in West Dapto by nearly $300 million to make development in the area more affordable, the state’s pricing watchdog says.
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The Independent Pricing and Regulatory Tribunal (IPART) on Tuesday released its assessment of the council’s draft development contributions plan for the housing growth area, making 40 different recommendations aimed at reducing the cost of infrastructure.
Overall, it advised the council to cut $291.9 million – or 24 per cent – of its proposed $1.23 billion worth of roads, bridges, drains and recreational space which would be used by the 56,500 future residents of the area.
Despite IPART’s advice that the proposed costs should be cut, Wollongong Lord Mayor Gordon Bradbery said the review was “a breakthrough” as it acknowledged the true cost of West Dapto infrastructure was well above the amount the council was allowed to collect from developers.
“This is a great breakthrough, because despite the recommendation that we should cut nearly $300 million IPART still recognises that the council needs approximately $1 billion to build the infrastructure,” he said.
“Now that there’s this evidence from IPART, the council will be able to put the case for extra funds to the state government.”
IPART was called in to assess the council’s draft development contributions plan – known as a Section 94 plan – as the council was seeking to raise the amount developers contributed towards each housing lot above the NSW Government’s cap.
Since 2010, Section 94 contributions have been capped at $30,000 per dwelling for ‘greenfield’ areas like West Dapto. However, the council said this would only raise $596 million, and the true cost of infrastructure ($1.23 billion) would require up to $68,499 per dwelling.
With IPART’s advised savings, there would still be a shortfall of about $350 million, however the council said the true shortfall was more likely to be about $500 million.
The bulk of IPART’s proposed savings would be made by cutting the costs of roads and bridges by $205 million.
Additionally, IPART’s recommendations mean the cost of stormwater management would be cut by $47 million, recreational space would be reduced by $19.2 million and community facilities would be cut by $21.3 million.
IPART chair Dr Peter Boxall said most of the infrastructure proposed by the council was “reasonable in terms of need and cost”.
“[However] we have recommended removing some items from the plan as they are not considered to be essential works, or the council has yet to demonstrate how the need for those items is related to the new development,” he said.
The council said the NSW Government has agreed to fund the difference in costs “in all previous situations” where IPART has endorsed Section 94 plans with costs that exceed $30,000 per dwelling.
Kate McIlwain
For more than a decade, I've helped the Illawarra Mercury set the news agenda across the region. Currently I'm the paper's health reporter - covering the stories of Illawarra workers and residents in the wake of a global pandemic and at a time where our health systems are stretched to the limit.
For more than a decade, I've helped the Illawarra Mercury set the news agenda across the region. Currently I'm the paper's health reporter - covering the stories of Illawarra workers and residents in the wake of a global pandemic and at a time where our health systems are stretched to the limit.
