We have published our Final Report on the efficient costs of Sydney Water’s stormwater scheme in the Mamre Road industrial precinct and how those costs should be allocated to developers, taxpayers and others.
Overview of our findings and recommendations
Our findings and recommendations remain largely unchanged from our Draft Report. We have found that the efficient costs of delivering stormwater management services to the Mamre Road precinct are around $860m ($2023-24) over 30 years ($140m less than Sydney Water’s proposed costs). This is based on our comparison of Sydney Water’s conceptual scheme plan to an alternative design with smaller, deeper basins.
While actual cost reductions from reducing basin sizes would depend on the outcomes of geotechnical and other investigations, it is likely that Sydney Water would identify further cost savings as part of its ongoing optioneering.
We have recommended that these efficient costs are recovered from development in the precinct, which would result in an infrastructure contribution charge of around $850,000 per hectare ($2023-24). We found that this charge is necessary and reasonable to manage stormwater runoff caused by large format industrial development and prevent irreversible degradation to the Wianamatta-South Creek. Most developers would still find development feasible, considering holding costs and interim land sterilisation. However, lengthy delays in implementing the scheme have the potential to materially affect developer returns and development.
What has changed between draft and final reports?
In response to feedback from stakeholders and further analysis, we have made additional recommendations for the NSW Government to:
- consider updating its strategic impact assessment under the Risk-Based Framework for Considering Waterway Health Outcomes in Strategic Land Use Planning Decisions, and
- work with the Federal Government and Western Sydney International Airport to ensure that the airport’s stormwater discharge does not undermine developers’ investment and cause irreversible degradation to the Wianamatta-South Creek.
IPART has also undertaken to consider whether stormwater operating costs for high-cost, new developments should be recovered from customers served by the scheme as part of a separate review. In the meantime, Sydney Water should ensure any Negotiated Service Agreements it enters with developers are ringfenced so precinct development costs are not transferred to landowners or customers in other geographic areas.