Developers warn water charges for Mamre Road precinct will send jobs interstate

Industry groups are calling for the state government to intervene after a pricing regulator proposed stormwater charge that, they say, could cripple a major industrial precinct.

Massive stormwater charges imposed on developers could turn a major industrial precinct near the Western Sydney Airport into a “no grow zone,” costing thousands of jobs and sending more than a billion dollars of investment interstate.

It comes after the pricing regulator suggested developers could pay $850,000 per hectare in “infrastructure contributions” to fund a rolled-gold stormwater system to meet strict environmental standards.

The figure, proposed by the Independent Pricing and Regulatory Tribunal (IPART) in its draft report on what developers should pay, is more than three times higher than initially forecast by the state government ($266,000/ha).

Sydney Water initially wanted developers to pay a whopping $1.3 million/ha to fund a stormwater system in the Mamre Road precinct.

Industry groups have now called for the state government to step in and “close the gap” between “feasible” charges and that being proposed.

The Mamre Road precinct in the Aerotropolis is under threat of becoming a “no grow zone,” developers warn. Photographer: Adam Yip

The Urban Development Institute of Australia (UDIA) and the Property Council (PCA) called for charges to be capped at $500,000/ha to keep developments viable.

Across the 850 hectare Mamre Road precinct, that would cost some $297 million.

The proposed charges are significantly higher than the cost in surrounding areas, due to “stricter” stormwater targets that “cost significantly more to meet,” IPART said.

NSW Premier Chris Minns and Roads Minister John Graham at an announcement at the Mamre Road precinct at Western Sydney Aerotropolis. Photo: Lachlan Leeming

The stricter targets were imposed because Mamre Road will be used as industrial land, increasing pollution.

In submissions to the IPART, they argued that charging any more would prevent developments stacking up economically, sending industrial investment to Victoria or Queensland.

Comparable charges in Melbourne range from just $100,000/ha to $300,000/ha.

The Mamre Road precinct is worth some $1.5 billion in direct construction investment. The site could generate $554 million in annual gross value, supporting around 6,600 jobs.

“Industry is deeply concerned about the prohibitive development costs of activating the area, which threaten to drive businesses out of Western Sydney and NSW,” UDIA NSW CEO Stuart Ayres said.

PCA NSW boss Katie Stevenson said that charging developers $850,000/ha for stormwater would put “hundreds of jobs, and Western Sydney’s economic growth, on the line”.

“These plans risk making a vital Aerotropolis precinct a No Grow Zone,” she said.

“We started the year with an Aerotropolis at-risk and a chronic shortage of land – now is the time for the NSW Government to double-down on their turnaround efforts by stepping in to bring these charges down to an affordable level.”

The Aerotropolis has been criticised as being plagued with problems. Photo: Nearmaps / Supplied

In its draft report, IPART argued that setting stormwater rates at $850,000/ha would still be viable, and that the $266,000/ha charge initially forecast “did not adequately incorporate the costs to address stormwater management of the waterway and to protect the catchment from continuous degradation”.

In a statement, Water Minister Rose Jackson said the government wants to “strike the right balance” with the storm water charges.

She said the government is “reviewing” IPART’s report.

“We are working hard to ensure new stormwater infrastructure and waterways around the Mamre Road industrial precinct are responsibly developed and managed to reflect the sensitivity of the local environment, while balancing the need for economic progress,” she said.

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