Project: Karuah Bypass

1.0 Synopsis

The Karuah Bypass is a 9.8 kilometer upgrade to the New South Wales (NSW) Pacific Highway in Australia. Constructed in 2002 and opened in September 2004, this AUS$123 million project was jointly funded by the NSW and Federal Governments and is part of the larger AUS$2.2 billion Pacific Highway Upgrading Program. Although the bypass was constructed primarily to reduce congestion and delay, it was also intended to improve traffic safety along the corridor and remove high traffic volume in the town center. One year after the construction, surveys show at least six businesses had closed completely and others had lost significant revenue. Karuah's small population left it vulnerable to such a major shift in traffic. Additionally, because Karuah is in a relatively remote location with a high level of dependency on passing traffic, the bypass negatively affected revenue and employment in the years following the upgrade.

2.0 Background

2.1 Location & Transportation Connections

Karuah is situated in Port Stephens on the banks of the Karuah River. The town is a suburb of both Port Stephens and Great Lakes Councils in the Hunter Region of New South Wales, Australia. Karuah lies about 200 kilometers north of Sydney, 50 kilometers north of Newcastle and 700 kilometers south of Brisbane along the coast. Karuah can be accessed from Sydney by bus, train, or car. Depending on the mode taken, the trip from Sydney is about 2.5-3 hours on average along the Pacific Highway.

For the last 50 years, Karuah has marketed itself as a highway town ? a stop-over destination for travelers. Since construction of the bypass, Karuah has been interested in re-characterizing itself as a tourist destination. The pristine wilderness of the river and surrounding wetlands provides an attraction for potential tourists.

2.2 Community Character & Project Context

In the early 1900's, Karuah was comprised of cedar logging and oyster farming communities. Today, Karuah has continued its oyster farming roots but has also slowly developed into a tourist town for those taking day trips from Sydney. Although the town only occupies 0.7 square kilometers, the suburban area is 75 square kilometers and lies within the Port Stephens Local Government Area (LGA). Karuah has the largest Aboriginal community in the Port Stephens LGA. The percentage of those with Aboriginal and Torres Strait Islander backgrounds is approximately 14.2% which is significant compared to a state-wide average of 0.12%. The majority of the local indigenous population in Karuah is concentrated to the west of the highway, an area that was previously used as a mission. According to the Australian Bureau of Census, the population of Karuah was just over 1,000 residents 2001. Unemployment was 12.9% in 2001, which was nearly double the national average.

The main sources of revenue in Karuah came from oyster farming and the servicing of passing motorists. In addition, two sawmills on the outskirts of town still provide employment opportunities, and several small-scale job placement programs are active in the local aboriginal community funded by grants are concentrated around arts, crafts and boat building. Because Karuah has such a small population and plays a role as a highway service center, there became a shortage of basic community and retail facilities. The town center is dominated by businesses catering to passing motorists rather than the local community. In fact interviews revealed that most local residents shop in regional centers such as Raymond Terrace, located 30 miles southwest of Karuah.

3.0 Project Description & Motives

The Karuah bypass is a 9.8 kilometer AUS$123 million section of a 10-year AUS$2.2 billion Pacific Highway Upgrading Program in New South Wales. This bypass was constructed for several reasons. First, there were increasing problems with traffic bottlenecks during holiday periods, with lines extending throughout the town center. Additionally, a local school and playground were located nearby along the original Pacific Highway, creating noise and air pollution concerns. With traffic volumes projected to double in the next 20 years, the Roads and Traffic Authority (RTA) was eager to find a solution to bypass the school and downtown area. A secondary motivation was to shift Karuah's business focus from stop-by food and gas services to tourism, including local fishing and sightseeing, motel accommodation, and restaurants.

RTA was required to have mitigation measures in place to address the vulnerability of the Karuah community affected by economic effects of the bypass development. Thus, the RTA provided AUS$200,000 for the Karuah Community and Economic Redevelopment Committee to create a Community and Economic Redevelopment Plan to address the negative economic and social impacts. Part of the funding was used to hire an expert to help develop the Redevelopment Plan for Karuah, and the remainder was used to acquire and maintain the new community center. Currently the RTA continues to work with community groups and the Local Aboriginal Land Council to address and resolve negative economic impacts to the community.

4.0 Project Impacts

4.1 Transportation Impacts

4.2 Demographic, Economic & Land Use Impacts

The Karuah to Bulahdelah Bypass Environmental Impact Statement (EIS) in 1999 projected that 12 businesses would close due to the bypass, and another nine businesses would be severely impacted with declining business sales. The EIS projected that 131 employees (which was 57% of total employment in Karuah) would be affected. The one-year post-bypass study, as well as interviews conducted in May 2009 for this study showed that the impacts were not as negative as anticipated. In fact, the one-year study reported that six businesses closed due to the opening of the bypass, with a corresponding 48 jobs lost.

Karuah's population amounted to just over 1,000 residents in 2001, according to the Australian Bureau of Statistics. Interviewees mentioned that there were no major changes in population due to the bypass opening. It is clear, however, that Karuah has become an increasing attraction as a retirement community, with retirees from neighboring towns migrating there.

Economically, the biggest impacts have been the business closures and business revenue loss due to the bypass. Previously, there were three gas stations in Karuah, and two of them shut down immediately after the bypass was put in place. Three take-out restaurants also closed along that same corridor, as well as one other specialty retail store on Tarean Street. In total, six stores closed in Karuah after the bypass opened.

After this initial shock of store closures, the town of Karuah has begun to recover. One of the gas stations has converted to a Greek Restaurant, and another has become a two-story tourist-information center/arts-crafts store/office building, called the Karuah Center. Additionally, two new stores that sell antiques have grown alongside the Karuah Center, prompting a successful row of antique stores that attracts out-of-town visitors on a ?Browse and Buy? day, a new advertising campaign initiated by Karuah Working Together, Inc. A new computer shop and a Fish & Chips restaurant have been successful due to the different type of customer that is now coming to Karuah.

Regarding business revenue, the remaining gas station reported a decrease in sales, as did the three motels, and some general retail. Seven businesses lost revenues in the range of 12 to 90% immediately following the opening of the bypass. Forty-eight jobs lost were attributed to the bypass which represents 21% of town employment. The lost jobs were mainly highway dependent uses, including service stations, vehicle repair, and restaurant/caf?/take-out food stores. However, one of the main industries, oyster farming, was unaffected by the bypass. Interviews confirmed that those jobs did not return, but have the potential to be replaced by new opportunities in tourism such as a Yacht Club, antique shops, and restaurants/cafes.

The years following the bypass did not spur significant new construction near the bypass; however, there have been several proposals for some residential development right outside the town of Karuah. One particular development did succeed in obtaining approvals, and comprises 150 lots that are currently for sale. Due to the economic downtown these lots are selling slowly, with only 30 units sold within 3 years.

New development has not occurred in the new bypass area. However, an existing service center, comprised of a gas station, convenience store, and auto-oriented rest stop uses, has been restored and developed to be a much larger service center, with several franchises operating from one location. This service center, located five kilometers from Karuah and right alongside the new bypass, has been very successful.

In terms of property values, Karuah has become a more desirable location for residents because the congestion and noise has now moved away from the town center. Most property values have decreased in NSW due to the economic downturn, but in Karuah, property values have been increasing at 1-2% per annum. Sales have improved for areas adjacent to the previous Pacific Highway segment. Towns like Karuah have properties with views of the Karuah River, a desirable scenic property, and thus have retained their higher home values.

5.0 Non-Transportation Factors

Karuah was especially vulnerable to the economic impacts of the highway bypass because of its pre-existing socio-economic problems. The population is small and dispersed (1,000 people in the town center) there is also a substantial number of Aboriginal and Torres Straight Islanders under a different governance structure. Karuah is also relatively isolated; there are no major linkages to industries outside the locality and employment in neighboring towns such as Newcastle are not likely.

Before the construction of the highway bypass, the town was already at above-average levels of unemployment and had workforce with a high percentage of low-paying jobs. Even at that time, the poor local quality of life had discouraged investment into the community.

Impacts may, however, been attenuated by a strong social positioning from the Roads and Traffic Authority. Due to projected economic impacts, the RTA provided AUS$200,000 to assist in the local community. This money was channeled through Karuah Working Together, Inc, and provided seed money to the local economy to spur economic development. Additionally, interviewees from the oral history account noted that businesses in Karuah anticipated the bypass at least twelve months before the actual construction and diversion of traffic. Some businesses adapted with extra signage, some cafes changed their menus, and several businesses decided to form a chamber of commerce.

Despite the negative impacts, a survey of Karuah residents twelve months after the construction of the bypass indicated that 78% of respondents considered the long term effects of the bypass to be positive. Careful and continuous monitoring in the upcoming years will determine whether the residents of Karuah will continue to adapt to the impacts bypass has had on their community.

6.0 Resources

6.1 Citations

Rowe, Hal and Peter Phibbs. The Karuah Highway Bypass: Economic and Social Impacts, The One Year Report. RTA/Pub.07.104. November 2005.

Roads and Traffic Authority. ?Our Town Now? Oral Histories for Karuah. http://www.rta.nsw.gov.au/environment/heritage/rtaoralhistoryprogram/our_town_now.html

Thiess Pty Ltd. Community Involvement Plan for Karuah Bypass. Design Construction and Maintenance. Contract No. N1011. May 2002.

University of Sydney and the Karuah Community and Economic Redevelopment Committee. Karuah Community & Economic Redevelopment Plan. Options and Opportunities: Karuah after the Bypass. July 2004.

ABC News. ?Bypass prompts call for Karuah planning manager.? September 28, 2004.

6.2 Interviews

Organization

Footnotes