Since opening nine months ago, $1.5 billion M7 urban road project appears to have delivered the promised cost savings to manufacturing and logistics fleets, according Jones Lang LaSalle’s industrial director Jeff Pond.
According to Pond, the project has more than halved the travel time and has eliminated a multitude of stops between Seven Hills and Prestons. However, he believes further infrastructure projects remain vital in order to drive economic growth in New South Wales.
Pond added that when the project was first announced 18 months ago, the NSW Government stated that the benefits of the project would be reduced travel time from Prestons to Eastern Creek of 21 minutes. Not only has the project been delivered well ahead of schedule, the project has also delivered on its aims.
According to the Jones Lang LaSalle Manufacturing: Achieving Business Efficiencies through Real Estate Strategy study, proximity to infrastructure, raw materials and low real estate costs are the three most highest ranking reasons behind the location choice of manufacturing operations.
“Passenger car drive tests conducted midmorning this month following “the old route” between Seven Hills and Prestons reveals an average length of 30 kms and time taken of 47 minutes,” Pond said. “On the M7 motorway, the trip from Prestons to Seven Hills takes an average of 21 minutes over 36 kilometres.
“So even though the trip is 20% longer by distance, the time taken has been more than halved. We averaged a total of 14 stops per trip at traffic lights or intersections via ‘the old route’ with all these stoppages eliminated on the M7.
“Given that two of the greatest cost centres for fleet managers are wear and tear and travel time, the savings to a fleet vehicle per trip would more than offset the cost of the M7 toll,” he added.
Pond said JLL industrial advisors are continually asked ‘where are the next growth areas?’.
He added that the answer is simple.
“It is subject to the formal announcement of infrastructure that will drive the market, employment and economic growth in our state.
“NSW gross state product grew by just 1.1% in 04/05, compared to the national average of 2.3%. Tasmania and Qld lead the charge by growing by 4%,” he said.
“Infrastructure remains a crucial factor of our ongoing growth. In the last Engineers Australia Infrastructure Report Card in 2003, NSW received an average rating of C minus – the equal worst rated state for the level of infrastructure provision. Also disturbing was the rating for rail and stormwater services: D.” Pond said “Infrastructure and economic growth are closely linked, so it remains imperative to foster suitable infrastructure projects. Currently the NSW government has identified approximately $18.5 billion worth of “Top 10” infrastructure projects in NSW to be funded through both Government and private partnerships.”
According to JLL, the top three infrastructure projects in NSW over the next 10 years address some of the concerns about rail infrastructure. They are the Sydney Port Intermodal Freight Network at an approximate costs of $1.7 billion, North West Rail Link ($2.5 billion) and the Southern Sydney Freight Line ($250 million).
“These three projects would all create continued growth in the NSW industrial sector, particularly either directly through better freight networks or by providing greater employment capabilities. However, there remains a need for NSW to continue to capitalize on the momentum provided by the M7 freeway.
“The NSW Government particularly needs to maintain scrutiny on the bottlenecks created where the M7 motorway joins the M5, M4 and M2, which are still seeing continued delays at peak periods,” Pond concluded.
By Kathryn O’Meara