Critics, eat crow: South Australia's star continues to rise
* HOTSPOTTING: Terry Ryder
* From: The Australian
* December 09, 2010 12:00AM
I'M LOSING the ability to be stunned by big numbers attached to resources and infrastructure developments in the two big resources states.
Another multi-billion-dollar iron ore project in Western Australia? Another consortium spending megabillions to extract gas and pipe it halfway across the continent to process it on the coast of Queensland? Ho hum.
I am, however, still capable of being amazed by the emergence of South Australia as a serious player on the national economic stage. After a career of bit parts and cameo roles, SA is now becoming a major talent.
A recent NAB report ranked SA's economy as the nation's second-best performer in the 2010 financial year -- and its star continues to rise.
I've been reading the SA Major Developments Directory for fiscal 2011, listing projects under way or committed, which total $80 billion. Premier Mike Rann says: "One of the key reasons for our economic resilience has been the size and scale of projects on the horizon and the diversity of the industries they involve."
The key word is diversity.
Many among Australia's gaggle of computer-screen economists have made the mistake of marking down SA as a performer of note because traditional industries such as manufacturing have waned.
They have overlooked the emergence of new elements in the SA repertoire, including defence, resources and education.
Rann recently opened SA's 12th operating mine, the Cairn Hill operation near Coober Pedy, and its 13th, OneSteel's Iron Chieftain mine near Whyalla.
At Whyalla, the regional city I discussed in Primespace last week, Rann says 30 more mines are in various stages of planning.
Unlike WA and Queensland, where most of the resources action is a long way from major population centres, much of SA's mining action is within striking distance of coastal regional centres such as Port Lincoln, Whyalla, Port Augusta, Ceduna and Port Pirie, as well as the capital, Adelaide.
It suggests we can expect direct impact on real estate markets in those locations.
Projects include a $3.5bn coal-to-liquids plant and power station near Coober Pedy, the $3bn Clinton coal-to-liquids plant near Adelaide, the $2.5bn FuturGas project near Kingston in the southeast, Arafura Resources' $1bn rare earths complex at Whyalla, the $800 million Torrens Island power station expansion and the $750m Cherokee power station near Murray Bridge.
Also drawing nearer to construction is BHP Billiton's expansion of Olympic Dam, which has some of the world's largest deposits of copper, gold and uranium.
The project cost is likely to be at least $15bn, with direct impacts on Adelaide and Whyalla, as well as Roxby Downs.
The dark horse of the SA resources story is the plan to open up the Woomera defence precinct to mining, given that it is considered to contain most of the nation's copper and uranium, with resources worth more than $35bn.
SA's minerals and energy industry goes beyond mining, with growing importance in alternative energy generation.
"The best scientific evidence suggests our state's below-ground resources include vast amounts of the hot rocks that offer potential for generating geothermal energy, adding to our wind power generation capacity which is more than 50 per cent of the national capacity," Rann says.
On the list of upcoming projects, the Barn Hill, Lincoln Gap, Mt Bryan, Snowtown, Waterloo, The Bluff and Elliston wind farms involve investment totalling $2.4bn.
Rann can justifiably claim that SA has established itself as "Australia's defence state" with the $8bn Air Warfare Destroyer contract and the $1bn Orion aircraft maintenance contract, as well as the multi-billion-dollar support contract for Collins-class submarines.
There is also the $500m relocation of a major defence unit from interstate to the Edinburgh facility in Adelaide, with 1200 troops to arrive next year.
It's curious that Adelaide seems to have more infrastructure development happening than does Sydney. I'm not sure whether that's a credit to the SA government or an indictment of its NSW counterpart.
Adelaide has a tendency to actually deliver its infrastructure projects, whereas in Sydney they make grand announcements, later scrap the billion-dollar proposal and then change premier.
In Adelaide, the newly-opened Northern Expressway ($565m) is soon to be joined by the upgrade of the Southern Expressway ($450m) and the South Road Superway ($850m).
The Rail Revitalisation project, which includes electrification of existing lines, is costing about $1.2bn. The Seaford Rail Line project is an extra $300m.
There's also the Adelaide Desalination Plant ($1.8bn), the Adelaide Oval redevelopment ($535m), the Riverbank Precinct Development ($400m), further stages of the Lyell McEwin Hospital upgrade ($200m), stage two of the Queen Elizabeth Hospital upgrade ($130m) and the new Royal Adelaide Hospital ($1.7bn).
While the Australian real estate industry is echoing with developer cries of under-supply, there's no shortage of development land around Adelaide.
Residential developments include the Bowden Urban Village ($750m), the Buckland Park master-planned community ($2bn), the Lightsview project ($375m), the Playford Alive urban renewal project ($1bn), the Seaford Heights and Seaford Meadows master-planned communities ($1bn), Delfin Lend Lease's 400ha community at Gawler East and the Waterview master-planned suburb in the city's north ($4bn).
Terry Ryder is the founder of hotspotting.com.au
[email protected]
twitter.com/hotspotting
