What can NSW take away from Sydney's cancelled data centre project?

0:00Now a proposed $1.2 billion data center in Sydney's Lower North Shore has been cancelled after its developer, the Goodman Group, abandoned the project this week. The company says it's shelved project Mars, as it's been called, after hearing from the local community. It also cited regulation changes. Lane Cove, Deputy Mayor, Rochelle Flood says while the community has had a major win this week, the battle isn't over yet. But at the end of the day, it shouldn't fall to the community to fight every individual proposal on an ad hoc basis. We need strong planning laws to make sure that proposals that are completely out of line like the project Mars development are never considered in the first place. Joining me now is Paul Scully, who is the New South Wales Minister for Planning and Public Spaces. Paul Scully, welcome to Radio National Breakfast. Thanks. Melissa, thanks for your interest. What do you make of the Goodman Group's reasons for withdrawing from this project? Oh, look, proponents withdraw projects out of the planning system

1:04on a regular basis now from what the letter that Goodman has sent through has said that it had reflected on the policy and regulatory environment for large data centers as well as the view of the community. And look, I think all proponents should be having a mind to what not only community views out, but also the guidelines, the new guidelines, particularly that the New South Wales government has put in place with respect to data centers. This project in particular has drawn a lot of attention. Liberal Senators Sarah Henderson repeatedly urged the Goodman Group to withdraw this project, including during Senate hearings, she was describing project Mars as wholly unreasonable. How much do you think this kind of messaging from high political levels influenced the company's decision? It's impossible for me to say. I'm not part of the Goodman Group. I'm not part of the decision making. What my job is to do is to administer a planning system in New South Wales that is legally required to assess everything that comes before it, the good, the bad, and the

2:10the less good if you like. It's not for the planning system to choose what it is, but the New South Wales government has some established some very specific performance measures with respect to to data centers through its new New South Wales data center guidelines that we released mid-August, which sets the standard, if you like, or sets the expectation of the New South Wales government and we'll continue to apply those. The reality is we've got to balance up a couple of things here. Data centers are part of the backbone of modern economies. We have a number of them coming through the planning system. We have many around a 90 that are already in operation in New South Wales. We've got to weigh up that element, the potential productivity gains out of the the fact that it's hard to operate in modern life without touching on a data center at some multiple points during your day versus some of the other elements of it that communities are

3:11rightly asking the question about where the suitable locations are and what the suitable framework is so that they are not bearing additional energy or water costs as a result of their construction. You mentioned that you get a lot of proposals, not all of them proceed. Have those guidelines, the fast track process and the guidelines that you have put down to try and incentivise data center builders to comply with forthcoming regulations? Has that helped filter out some perhaps less developed plans or has that led to any kind of narrowing of the proposals coming your way? It's impossible to say. People may have had ideas that they were working on that may not come to fruition and may not see the light of day following the New South Wales Government's release of its guidelines. So that's a bit of a question of how long is a piece of stream? But the reality is we've got more than 60 data centers operating in New South Wales since 2019. 23 of those have been approved. There's a further 18 data centers in the pipeline in the

4:19project in the assessment pipeline as state significant development. So we've got to set up some clear rules and expectations so that proponents and so that communities and so that investors have some certainty in the New South Wales market. Obviously when it comes to this particular project Mars, the community pushback was very strong. But presumably another development proposal could come along should should lane cove residents expect that they might have to go through this process again if another developer looks to put in a proposal for a similar mechanism. How do communities avoid fighting one battle and the prospect that there may be more to come in their place? Well, look, I get the part of the role of the New South Wales Planning Minister is to get pushback on a whole range of things. I get pushback on housing projects. I get pushback on industrial projects. I've got pushback on renewable energy projects, but there's also support out there.

5:22And the role of the planning system is to assess projects within the planning rules to see that they meet those to see and to amend or condition those planning at any proposals should they be unable to be mitigated. But I think what we've seen in this circumstance and I guess what the lesson, if you like, to the industry might be is that the social license of anything, whether it's a housing project, renewable energy project or mining project, shouldn't be assumed it needs to be earned. And I think what you're saying, I don't think there are terribly many in similar sorts of circumstances to the one that's proposed here. But the any proponent should have a mind to where they're thinking about establishing any sort of thing, whether it be a large housing project, a small housing project or a renewable energy project. We've seen the Victorian Government

6:27announced that data centres won't be permitted to be built within a certain proximity of schools and childcare centres. Is that something that your government would be willing to look at adopting, to give a bit more certainty to communities who do live near schools and childcare centres? Well, we haven't got any and there's very few situations where that is likely to be the case across much of New South Wales. Now I'm not saying that it's universally not the case, but at this stage we haven't seen a need to adopt something like that. What we have done is adopt the guidelines and said that we'll review those guidelines annually to keep pace with any changes either in technology or in community expectations. So it's a watching brief. This is an emerging area of technology, emerging area of industrial use of land. And so we've got to have a mind not to think that we can have tablets handed down from the mouth. It's tizzled in stone. These are the

7:30guidelines that will last forever more. We've got to have a mind to be flexible, adaptable and and nimble when it comes to making sure that not only are we getting the benefits for community, whether that's through community schemes, whether it's through enhancing local infrastructure amenity, whether it's through training and skills for job support, but it's also through whether or not we need to have a mind to any locational decisions. I have no doubt we'll be coming back to talk to you again as this continues to evolve, but Paul Scully, thanks for joining me this morning. Thank you so much. You're too much. I appreciate it. All right. That's Paul Scully, the New South Wales Minister for Planning and Public Spaces.