By Alice Heathcote
In a recent class, it was noted that for all of our case studies on ‘new cities’ the developments were inevitably funded with a mixture of both public and private capital. The discussion seemed to conclude that you aren’t ever able to build new cities with the government or private sector alone.
I can think of an example which runs counter to that trend. In the western Pilbara desert of Australia, about 100km from anything that resembles civilization, there are the beginnings of construction for what will be one of the largest mining projects in the world, the Roy Hill Iron Ore mine. At an estimated value of $10 to 15billion, it’s worth more than the GDP of about 60 countries in the world. The mining project is majority owned by Australia’s Hancock Prospecting, with minority stakes held by a number of Asian industrials, including Marubeni Corporation and China Steel Corp.
To get all the construction completed for this mine, almost 10,000 workers are needed. This is a serious challenge. To give some perspective, for the iron ore to be even get to port, it has to be transported a train journey longer than the trip from London to Paris, or Boston to New York. The difference is that on this trip, the chances of you seeing another human being are almost zero. There’s certainly no nearby community from which you can source your employees.
So how is this relevant for our course? Basically because for this mining project (and for many others), a new ‘mini’ city is needed to be built almost from scratch, literally in the middle of nowhere. And it’s all done with private money and limited government oversight. The settlement may be on a scale considerably smaller than the cases we’ve looked up in class, but there are still some interesting lessons to learn.
Firstly, the ‘mini town’ for the initial construction workers was constructed in about two months. Admittedly this first site was for approximately 1,000 workers, but that includes civil works, water works, sewerage systems, and communications and entertainment facilities, in the middle of nowhere. Moreover, an array of innovative solutions, from water delivery to waste management, was developed to deal with the complete absence of traditional government infrastructure. The entire project, which includes a major private port and a 220mile railroad is expected to be completed in under three years. When you remove government funding approval processes from the equation, it’s clear that much needed projects can move very quickly indeed.
I believe it strengthens the case for the controversial ‘infrastructure bank’ proposal here in the US. If the government approval process wasn’t required for every lending or funding decision (and instead, left to a more business-like organization), critical infrastructure decisions would likely proceed more rapidly. Everyone seems to agree that the US needs more innovative ways to creatively use public and private funds to fund infrastructure, yet every time a public work with government money is proposed, a variety of special interest groups seems to get in its way. A centralized body, which comes up with a more coordinated plan, and with the powers to invest without continually requiring separate approvals, could go a long way for setting the US up today, for the growth it needs tomorrow.