Art Gallery decision raises larger questions on special rate increase

The Newcastle Art Gallery redevelopment was one of nine projects for which Newcastle Council was granted a Special Rate increase last year by the NSW Independent Pricing and Regulatory Tribunal (IPART).

While much recent discussion about funding for the project has centred around the federal government's $7million commitment and the lack of matching state funding, the council's apparent willingness to ditch the project raises questions about both the integrity of their Special Rate bid, and about the general accountability of councils for complying with IPART conditions.

Ordinarily, councils in NSW are allowed to raise their total rate income only by the amount set by IPART.

This practice (called "rate capping" or "rate pegging") is one of the main reasons why councils around NSW (including Newcastle City Council) are in such dire financial circumstances. It's terrible public policy (NSW is the only state that has it), and it should be abolished - but that's a discussion for another day.

Last year, Newcastle Council asked IPART to be allowed to raise an estimated extra $45.6million between 2012 and 2020/21 to help fund nine significant civic projects that were specified in Appendix A of their application.

IPART approved the council's request on the condition that "The council uses the additional income from the special variation for the purpose of providing funding towards the 9 Civic Projects outlined in the council’s application, and listed in Appendix A."

Note: "the 9 Civic Projects outlined in the council's application". Very precise. Not "at least 8 (or 7, or 6) out of the 9 Civic Projects"; and not "most of the 9 Civic Projects".

In fact, even before its controversial decision to place the Art Gallery redevelopment on indefinite hold, the council had quietly dropped two other Appendix A projects: the expansion of parking metres around the CBD, and repairs to council car parks prior to selling them.

The Art Gallery decision reduced the Appendix A list from 9 to 6.

Questioned by local media representatives about what action they might take to ensure the council's compliance with IPART's conditions for the Special Rate, the NSW Division of Local Government responded that they understood that the development of the regional art gallery had been "deferred not axed".

The Division also stated that:

"As the Council will continue to direct all the income from the special rate variation to the projects identified in the civic project program, albeit over a longer period of time, the Division does not consider that the proposal breaches the conditions of approval."

The Division's language drops the specific reference in the IPART decision to "the 9 Civic Projects", strongly implying that it's okay by them if it's a bit short of nine - though it doesn't say how many short would be okay.  

At the moment, it seems that two out of three is fair enough.

It's hardly an approach that will send a message to councils that they should take IPART conditions seriously, or that will assure Newcastle ratepayers that the money will be spent on what the council promised.

And it will send a shudder down the back of advocates for the other projects associated with the Special Rate, who saw the IPART condition as some kind of security for these projects.

P.S. Newcastle council also recently voted (7 Liberal/McCloy Independents v 6 Labor and Greens) against even hearing a proposal for a briefing from independent experts (including Tony Richards, who has featured in some of these columns) on the potential dangers of ammonium nitrate stockpiles in the Newcastle area.

Sandgate development proposal - world's largest ammonium nitrate stockpile?

In this column in December last year I reported the concerns of local explosives expert Tony Richards about the potential catastrophic danger posed by large stockpiles of ammonium nitrate (AN) in the Newcastle area.

"No matter what people say about how safe it is, I can tell you - as someone with my experience - that it frightens the daylights out of me to have that sort of tonnage sitting on the front door of Newcastle," Mr Richards said.

These words resonated, tragically and dramatically, as news came in of the fertilizer factory explosion that recently devastated the small town of West, in Texas.

According to reports, that blast killed at least 14 people and injured 200, and destroyed 50 homes over an area of at least four blocks. Reports say that the explosion registered as a small earthquake and that the impact was felt many miles away.

The precise cause of the disaster is still being investigated, but media reports indicate that it was almost certainly started by a fire and subsequent explosion involving ammonium nitrate.

The West fertilizer plant apparently stored 270 tonnes of AN, and questions have been raised about its compliance with US regulatory requirements.

Newcastle's stockpiles of AN (used as both a fertilizer and explosive) are significantly larger than this. Orica's Kooragang Island plant stockpiles up to 10,000 tonnes. Incitec has applied to store up to 12,500 tonnes at their Kooragang Island facility.

As I reported in my February column, Crawford Freightlines are asking the state government to approve storage of up to 13,500 tonnes at their Sandgate facility.

The public exhibition of the Sandgate proposal attracted 24 submissions, and is currently in the last stage of consideration by the Department of Planning and Industry.

As the company's response to the submissions observes, "most of the concerns raised on public safety and human health risk focused on the risk of explosion / detonation."

In fact, many of these submissions (including mine) referred to the potential catastrophic impact of accidental detonation of such a large quantity of AN, many times greater than that mentioned in association with the recent Texas disaster.

My submission speculated that - if approved - the Sandgate stockpile might well be the largest stockpile of ammonium nitrate in the world. The company's response has not disputed that speculation.

The company's response to community concerns reiterates that detonation risk was considered in the company's hazard analysis, which complies with current state government guidelines.

The hazard analysis is highly technical, but the explosion scenarios it considers are based on potential incidents involving up to 2,500 tonnes of AN (less than 20% of the 13,500 tonnes that the approval seeks), and don't appear to take into account a potential catastrophic blast that could affect residential suburbs kilometers from the facility.

As Tony Richards says, he's far from convinced that regulation of AN in NSW is world's best practice, especially given that a worst case scenario involving that amount of AN could be similar to an atomic blast, causing hundreds of deaths and thousands of injuries. If evacuation were possible in such a case, it would have to be beyond the Charlestown ridge.

The company rejects calls for an alternative location for the facility, primarily on financial and logistical grounds.

However, The Greens NSW parliamentarian Cate Faehrmann has now called for the relocation of all large stockpiles of ammonium nitrate away from residential areas.

Newcastle Greens Councillor Therese Doyle has requested that Newcastle Council be briefed by Mr Richards and other independent experts on the danger of large ammonium nitrate stockpiles in the council area.

The submissions and other documents related to the Sandgate development proposal are on the DPI website at: http://majorprojects.planning.nsw.gov.au/index.pl?action=view_job&job_id=5119

Local state electoral boundaries set to change

Significant changes are being proposed to the boundaries of the state electorates of Newcastle and Wallsend.

The suggestions have been presented as part of a redistribution of state electoral boundaries across NSW.

The new state electoral boundaries will take effect at the next state election in 2015 - they have no impact on federal or council elections.

The Electoral Boundaries Commissioners who are undertaking the redistribution have to operate under particular rules, including a requirement that the number of registered voters in any electorate must not vary from the state average by more than 10% (the previous limit was plus or minus 3%).

This average is calculated by dividing the total number of registered voters in NSW on the set date (4 February 2013 in this case) by the number of NSW Legislative Assembly electorates (currently 93).

The number of registered voters in NSW on 4 February was 4,800,967, yielding a quotient of 51,623 for each state electorate.

That means that each electorate must have between 46,461 and 56,786 voters.

Four electorates in NSW are currently outside those limits. None of these are in the Hunter, but obviously any boundary change in one electorate has knock-on effects for others.

The redistribution process includes a call for submissions, which closed earlier this month.

A submission from the NSW Liberal Party proposes replacing the electorate of Wallsend (currently held by Labor) with a new electorate of Waratah, which would include the suburbs north of the Newcastle Link Road.

The state seat of Newcastle (currently held by the Liberals) would lose suburbs such as Wickham, Islington, Tighes Hill, Carrington and Stockton to the new seat, and gain areas such as Rankin Park, Cardiff Heights, New Lambton Heights, Lambton and New Lambton.

On the basis of current voting patterns, this would make Waratah a safe Labor seat (like the Wallsend seat it would replace) while Newcastle (currently a marginal Liberal held seat) would gain more conservative voting areas, increasing the chances of the Liberals holding the seat at the 2015 election.

The Labor Party submission proposes transferring parts of the Newcastle Council area that are currently in the Port Stephens electorate (which stretches south into Mayfield), as well as some areas of the Cessnock electorate, to the Wallsend electorate, leaving Newcastle unchanged.

The Greens have proposed relatively minor changes to both electorates: transferring a small part of Waratah currently in Wallsend to the Newcastle electorate, and a small part of Mayfield currently in Port Stephens to Newcastle.

The Commissioners are now considering these suggestions and any public comments on them, as well as advice from demographers about expected population changes, and will then draft a proposal for changes, including their explanation for such proposals.

These proposals will then be available for suggestions and objections, and a Public Inquiry on them, before the Commissioners hand down their final decision.

In determining electoral boundaries, the Commissioners are required to consider matters such as:

·         Economic, social and regional communities of interest;

·         Means of communication and travel;

·         Physical features and area of the electoral district; and

·         Natural boundaries (like mountains or rivers).

For more information on the redistribution, and for copies of the suggestions from the various political parties and other organisations and individuals, see http://www.redistribution.nsw.gov.au/

Rail decision right on (mis)cue

"Forgive my skepticism, but don't be surprised if it comes as a silly season curtain-raiser, unleashed for formal public comment in the January festive fog, when the media goes to sleep and attention is on the cricket and the beach, or when many are away or enjoying family time with the kids on holiday."

That was my November prediction in this column about the timing of the State Government's announcement on the future of the Newcastle rail line.

On cue, less than two weeks before Christmas, the NSW Minister for Planning, Brad Hazzard, announced the State Government's intention to cut rail services at Wickham, and released its long-awaited Newcastle Urban Renewal Strategy, which was placed on exhibition from 14 December until 17 March.

Printed copies of the documents weren't made available to the public until mid-January. The dates and venues of promised information workshops on the Strategy still haven't been announced.

Nothing in the strategy's documentation even attempts to explain or justify the decision to remove rail services between Wickham and Newcastle stations.

In fact, the support documents for the strategy were clearly written before the rail decision had been made, and make the point that the strategies they propose are workable with or without the rail line.

Among these are proposals for more crossings across the line, which the community has been advocating for many years.

Community groups are already finding extensive errors and unresolved problems with the strategy.

Among other things, the strategy indicates that passengers who alight at the new Wickham terminus will face a 200metre walk to the nearest bus stop (in Hunter St).

Since the release of the strategy, the state government has refused to rule out suggestions prompted by graphics in the strategy itself that Sydney trains will have to terminate at Broadmeadow.

They've also refused to say what they intend to do about the Beaumont St and Railway St level crossings, which previous state government reports say will have to be cut (for safety reasons) if rail services are cut at Wickham.

It's hard to fathom how they don't have answers to such basic questions when they repeatedly assured the community throughout last year that they were taking so long with the decision on the rail line because they wanted to make sure they had all the details right!

While the community was waiting and wondering about what the strategy would propose, the Hunter Development Corporation (for many years the agency voice of the anti-rail lobby) was being given an inside run on the Project Steering Committee.

Now, the community gets its input through the submission process. Submissions close on 17 March.

The Newcastle Urban Strategy is available at: http://www.planning.nsw.gov.au/revitalisenewcastle

Printed copies (without appendices) are available at the Department of Planning and Infrastructure's Newcastle office, Level 2, 26 Honeysuckle Drive, Newcastle.

Note: Readers interested in the stockpiling of potentially explosive ammonium nitrate in Newcastle (the subject of my December column) might be interested to learn that a new proposal for storing 13,500 tonnes of ammonium nitrate in Sandgate is now being considered by the NSW Department of Planning and Infrastructure. This is comparable to the amounts to which my December column referred.

What's new for New Year 2013?

If the run-up to the 2012-13 Festive Season is any indicator, this year is shaping up as a lively one for local politics.

Newcastle's newly elected Liberal dominated council is now well past its 100 day milestone, and despite some initial media speculation that the new council might be more harmonious than its bitterly divided predecessor, tensions were evident at the very first meeting.

Clr Andrea Rufo, the only successful candidate of the Community 1 group that emerged from the Laman St figs campaign, used his first balance-of-power vote to install a major figs opponent, Liberal councillor Brad Luke, as the new Deputy Lord Mayor, along the way breaking the established Newcastle practice of rotating the Deputy position among all interested councillors.

The newly elected Lord Mayor, Clr Jeff McCloy, attracted immediate controversy, proposing that the council employ his election campaign manager as his chief Lord Mayoral advisor.

He withdrew the proposal after a public outcry, but was moved enough by questions asked about the matter by Newcastle Ward 4 councillor Jason Dunn to leave him a voice mail message telling Clr Dunn he would "get what you deserve" if he kept it up.

Clr McCloy also drew the ire of the union, which referred his proposal and comments he made about council staff to the Industrial Relations Commission.

One legacy of the previous council - the proposed disposal of council-owned childcare facilities - was postponed to consider other options.

However, the new conservative council quickly followed the lead of the previous council in axing Newcastle's Show Holiday, and making noises about cutting or privatising council services.

As the year closed, the thought-bubble politics that so plagued the previous council returned with a rushed but short-lived decision for two hour free parking in the Newcastle CBD over the Christmas period.

The council will be reviewing its parking strategy this year.

As I predicted in my November column, just as we were all settling back to enjoy the cricket, the beach and too much good food and festal cheer, the local news that dominated the close of the year was the state government's long-rumoured announcement that it intends to cut the Newcastle rail line at Wickham.

At the same time, they were announcing new rail lines and services for Sydney.

The previous proposal to cut the rail line and build a new terminus at Wickham under the former Labor government was estimated to cost more than $300million - and that was without any alternative replacement system.

Without providing detailed costings of their proposed alternative, the O'Farrell government has announced that it will allocate $120million, and will seek a similar amount from the Federal government.

NSW Planning Minister, Brad Hazzard, said that the entire package may be considerably more than the initial outlay, but would not reveal further estimates because the private sector would be involved in some of the work.

The proposal is presented as part of the state government's Newcastle Urban Renewal Strategy 2012, which is now on public exhibition for comment until 17 March.

Newcastle councillors are as divided on this issue as the local community.

It's sure to dominate local politics for much of this year, and is likely to be a key local issue in the election for the federal seat of Newcastle, given that the Coalition state government wants the Federal government to chip in to help cover the costs of cutting the line.

The Department of Planning website says that community information forums will be held during the exhibition period, at dates and venues to be announced.

See the website for more information, at: http://www.planning.nsw.gov.au/HousingDelivery/UrbanRenewal/RevitalisingNewcastle/tabid/613/language/en-AU/Default.aspx

Newcastle stockpile blast could have force of Hiroshima bomb, says explosives expert

Tony Richards is an expert in ammonium nitrate as an explosive.

He says that having thousands of tonnes of potentially explosive ammonium nitrate stockpiled on Newcastle's doorstep "frightens the daylights" out of him.

For more than two decades Mr Richards managed and designed blasting operations for large mining companies such as BHP, Goldsworthy Mining, Thiess Bros and MIM Holdings. He has also managed the explosives plant at BHP's Olympic Dam mine in South Australia for Orica.

At times, he says, he held the record for managing the biggest open-cut and underground mining blasts in Australia.

Mr Richards has outlined his concerns about Newcastle's ammonium nitrate stockpiles in a recent submission objecting to Incitec's proposed Kooragang Island ammonium nitrate manufacturing plant.

He says he's concerned not so much with the manufacturing, but with the storage of huge quantities (10,000 to 12,000 tonnes) of ammonium nitrate so close to urban areas and other industries.

Orica already stores a similar amount next to the proposed Incitec plant.

Mr Richards' submission on the Incitec proposal says that "a worst case scenario of a 12,000 tonne blast at the front door of Newcastle is the destruction of the city and suburbs with countless deaths and injuries".

He cites the 1947 Texas City Disaster - still considered the United States' worst industrial accident - in which 2,300 tonnes of ammonium nitrate detonated, causing an explosive chain reaction that killed more than 500 people and injured thousands more, and destroyed Texas port and its Monsanto and Union Carbide industrial complex.

The blast knocked people to the ground 16 kilometers away, shattered windows 60 kilometers away, and was felt 160 kilometers away. A two tonne anchor thrown by the blast was later found in a 3 meter crater 2.6 kilometers away.

50,000 people live within five kilometers of the Incitec and Orica sites on Kooragang Island.

Mr Richards' submission refers to many other accidents involving ammonium nitrate, not one of them involving any deliberately mixed explosive.

"No matter what people say about how safe it is, I can tell you - as someone with my experience - that it frightens the daylights out of me to have that sort of tonnage sitting on the front door of Newcastle," he told me.

"If the stockpile goes up, the force could be similar to the Hiroshima atomic blast."

If an accident allowed time for evacuation, people would have to be moved west of Charlestown, Mr Richards said.

He lists lightning strikes, an earthquake, or an act of terrorism as potential triggers.

Mr Richards has conveyed his concerns to representatives of the major political parties, including Newcastle' s local state and federal members, Tim Owen and Sharon Grierson, and at recent public forums in Stockton and Islington.

"I'm talking to anyone who will listen," he said.

"People think it's too difficult.

"It's my hope to make enough people aware that someone is elected who is prepared to say, 'no, I'm not going to renew these licences'".

The ammonium nitrate stockpiles should be located west of Broken Hill, he said.

Torturing facts to toe the anti-rail line

Rumours of an imminent announcement from the NSW Coalition government about the future of the Newcastle rail line are rife around town - again.
Forgive my skepticism, but don't be surprised if it comes as a silly season curtain-raiser, unleashed for formal public comment in the January festive fog, when the media goes to sleep and attention is on the cricket and the beach, or when many are away or enjoying family time with the kids on holiday.
On cue for this scenario, the former NSW Premier and current head of Infrastructure NSW, Nick Greiner, made local news in a recent speech to the Hunter Business Chamber, saying that the Newcastle rail line should be cut.
But there was nothing new in anything that Mr Greiner had to say about the Newcastle rail line
In 1990, Mr Greiner's government was the first to announce an intention to cut the rail line, despite a comprehensive expert report it had jointly commissioned with Newcastle Council (the Travers-Morgan Newcastle CBD Transport and Development Study) comparing the various options for the future of the rail line that rated keeping it as superior to the other alternatives on four out of five criteria.
That wasn't what the government,or the vested interests lobbying to cut the line, wanted to hear, so the study's release was accompanied by a brief announcement from the government and council-appointed steering committee recommending that the rail line be cut.
Since then, deliberately or unwittingly, advocates for cutting the rail line have repeatedly misrepresented the steering committee recommendation as though it was from the study report itself.
Unfortunately, this established a disturbing pattern of misrepresentation in a range of influential government reports and studies into the rail line's future over the next two decades.
A series of reports prepared under the Iemma Labor government during 2003 and 2004 by the Lower Hunter Transport Working Group, initiated by the then Minister for the Hunter, Michael Costa, culminated in advising that the line should be cut at Broadmeadow.
However, when Professor Graham Currie, from the Institute of Transport Studies of the Department of Civil Engineering at Monash University, reviewed these reports in 2005 he was highly critical of their methodology, data and analysis, and concluded that they provided "biased, flawed and misrepresented advice".
The most recent example in this lamentable tradition is the Hunter Development Corporation's Newcastle City Centre Renewal Report, released in March 2009, which supported cutting the line west of Stewart Avenue.
This recommendation turned out to be based on the (incorrectly) assumed view of Newcastle University that a university CBD campus would not be viable with the rail line in place, resulting in a $640million anti-rail error in the cost-benefit calculations on which the study and its recommendation relied.
It's clear that the option of keeping the rail line would easily win a corrected cost-benefit analysis, but the report's discredited recommendation is still widely quoted by anti-rail advocates, including the recently elected Lord Mayor, Jeff McCloy, and the Hunter Business Chamber.  Neither the HDC nor the current Coalition government has moved to set the record straight.
The strategy of the anti-rail campaign over the past two decades seems to be that if the facts don't fit, just distort or ignore them, and keep repeating the mantra that the rail line must go until people are eventually bludgeoned into accepting it.