Contaminated Site Remediation Costs

Contaminated site remediation costs are generally quite large but vary according to the severity of the contamination, the nature of the site and the site's intended future use. Some examples of recent site assessment and remediation costs that the Western Australian government has met are shown in Table 1.


Contaminated Site

Source of Contamination
Year (i)
Estimated costs (ii)
East Perth
Gasworks(iii)		 Former gasworks site remediated as part of the
East Perth redevelopment.
1994
$17.5 m
Minim Cove,
Mosman Park(iii)		 Former fertiliser manufacturing plant site redeveloped for residential use.
1997
$16m
Albany
Gasworks		 Residential redevelopment near the Albany foreshore halted when tarry wastes discovered – it was subsequently found the site had once been a gasworks.
2000
$9m
Waste Control
Pty Ltd, Bellevue.		 Site clean-up following a hazardous chemical fire at a
collection/recycling facility for industrial waste.
2002
$8m
Omex, Bellevue Residential blocks contaminated by waste from a past
lubricating oil refiner, which had been disposed of in a disused clay pit.
1997
$7m
Port Catherine,
Coogee(iii)		 Proposed redevelopment of former industrial land to
residential, commercial and public use, including a marina.
2002
$6m
Vela Luka Park,
Spearwood		 Tarry wastes found in gardens and open spaces
following residential redevelopment of an old gasworks site.
2000
$1m
CALM,
Dwellingup		 Buried drums in State forest suspected and found to
contain hazardous chemicals.
2002
$0.5m

Table 1: Contaminated sites assessment and remediation costs.

Contaminated sites are costly to remediate. The presence of land contamination can therefore significantly
reduce affected land values.

Notes:
i Year in which investigation or remediation commenced.
ii Estimated site assessment and remediation costs. Some sites may incur additional future costs.
iii Site remediation was planned as part of the site's redevelopment.

Source: Agency and DEP estimates

Contaminated site remediation costs can therefore significantly reduce affected land values. For example, the former Causeway Bus Depot adjoining the Perth central business district was revalued from $11.6 million in the financial year 1999-2000 to $6.5 million in 2000-01 because of the presence of land contamination. The Department for Planning and Infrastructure has recently agreed to transfer this site to the East Perth Redevelopment Authority (EPRA) for a negotiated price of $2.8 million.17

As well as affecting land values, the cost of remediating land contamination can also affect land redevelopment options. For example, WAGR sold the Midland railway workshops site to the Midland Redevelopment Authority (MRA) in 1999 for the price of a 'peppercorn' ($1), recognising that the cost of remediating land contamination likely exceeded the site's market value. After undertaking detailed site assessment for land contamination, MRA prepared a site proposal with less opportunity for residential redevelopment but with reduced site remediation costs.18 This reflects a trade-off between:

  • accepting reduced options for land uses, resulting in reduced revenue for the developer but with lower remediation costs; and
  • seeking greater options for more sensitive land uses19, resulting in additional revenue for the developer but with higher (sometimes much higher) remediation costs.