Private Cities in Australia

A private company is proposing to build eight new cities in Australia. The cities would be linked by high speed rail with Sydney, Melbourne, and Canberra. The estimated investment is $150 billion U.S. It will be recouped by the increase in land prices one the necessary infrastructure is in place. Part of the article is excerpted below.

The most novel aspect of the plan, however, is its financing. CLARA proposes to build the line entirely with private funds. A report puts the total price tag at A$200 billion ($150.6 billion U.S.); the company proposes to pay this sum back to its lenders by capturing some of the increase in the value of the land surrounding the rail stations, with revenue from increases in land values above that point returning a profit to the investors, who are currently located in Australia and the United States. CLARA chairman Nick Cleary told that land the company purchased at $A1000 ($750 U.S.) per lot could be sold for as much as A$150,000 ($113,000 U.S.) once the necessary infrastructure is in place.

I have a humble suggestion, ask the Australian government to create a special economic zone for the new cities. I am not terribly familiar with Australian governance, but I am sure there are improvements to be made. Lower taxes, simplified business registration, and expedited construction permits could all cut the cost of building the new city. Perhaps there are regulations on technology which are slowing innovation in Australia, the new cities could ask to opt out of those regulations. The scale of the project makes it reasonable to ask for a certain amount of autonomy. In fact, it would be foolish not to.

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