Inland Rail review reveals cost blow-out to 'astonishing' $31b amid claims of unheeded advice

National Reporting Team's Jane Norman and Nathan Morris  -  ABCNews - Thurs,  6 April 2023

·         ABC Rural    Topic:   Rail Transport Industry

Trains are already operating along the Parkes to Narromine section of the Inland Rail route.

The cost of delivering the 1,700-kilometre Inland Rail project in the eastern states has blown out to $31.4 billion, according to a damning new report, which warns the price tag may climb even higher because it is still unclear where the line "will start or finish".

Key points:

·         Estimated costs have blown out from $16.4 billion two years ago to more than $31 billion

·         It said the former federal government ignored advice, and board appointments lacked the skills to build a major rail project

·         The cost of the project could increase further because of ongoing uncertainty around the scope of the project

Australia's former Energy Security Board chairperson Dr Kerry Schott led the review, finding the board managing the project did "not have adequate skills" and there had not been a "substantive" chief executive in nearly two years.

When advice was given to the former Coalition government to improve the skills mix on the board, Dr Schott said it was "not heeded".

"The cost of the project has increased by an astonishing amount when compared to 2020," she said in her review.

"Two years ago the estimate was $16.4 billion, and now it is about $31 billion."

"We all know infrastructure costs are going up but not like that."

Brisbane to Melbourne Inland Rail alignment map as of April 2021.

A pet project of former Nationals leader Barnaby Joyce, the Inland Rail project was in what Dr Schott described as a "regrettable situation".

As well as governance issues, Dr Schott noted the route itself had yet to be finalised despite the fact construction began in 2018 and was slated to end in 2027.

This had created "insufficient certainty" about the final cost and completion date, according to her report.

"Somewhat surprisingly, the project has commenced delivery without knowing where it will start or finish,"

  Dr Schott said.

"I remain deeply worried about the level of scope-maturity across the project as a whole and, as a result, the future impact on project-cost and completion-time estimates remains difficult to ascertain."

'Managed really badly'

Inland Rail facts:

• The 1,700km-long railway will connect Melbourne to Brisbane via central Victoria, western New South Wales and southern Queensland
• The project will upgrade 1,100km of existing rail line and build 600km of new track to connect existing rail corridors
• Each week, it will enable dozens of trains up to 1.8km long to travel at more than 110kph across three states carrying food, hardware, white goods, steel, paper and coal
• Each train has the capacity to carry the same volume of freight as 110 B-double trucks

Construction of the Inland Rail began in 2018 by the Australian Rail Track Corporation (ARTC), but almost all the work to date had been to upgrade the existing railway line.

The ARTC is a Government-owned corporate. whose main business until now has been maintaining freight railway lines.

But the review found that ARTC board appointments "did not reflect the skills required to govern either freight rail operations or a major infrastructure project".

"What they've never done before is a project of this size and they really didn't have the in-house capabilities to do it," Dr Schott said.

"ARTC has assured me that its desired skill mix was made known to the shareholder ministers of the former government who were responsible for the latest round of board appointments." 

She said that advice was "not heeded" by the shareholder ministers and cabinet. 

"It's not a bad project, but it's just been managed really badly,"

  she said.

Thousands of new jobs are being created in regional Australia as work on the 1,700 kilometre Inland Rail continues.

An 'indictment' of the Coalition

Federal Infrastructure Minister Catherine King was equally blunt in her response to the findings.

"This report is an indictment of the Liberal and National parties' approach to government," she said.

"To leave a project without a start or end point, with a significant budget blow-out, and a board without the skills it required, is shameful.

The politics and opportunity of Inland Rail

Photo shows Heavy machinery moving sleepers along the inland rail route.

A damning Senate report, ongoing community tension, and a looming government review hang over the Inland Rail, but is this vital infrastructure project really running off track?

"They have let down communities and businesses, which have already invested time, effort and money in the prospect of Inland Rail."

One of the report's key recommendations was to review governance and skills on the ARTC board, and to reassess costs and design solutions.

Last year former ARTC director Cameron Simpkins claimed the planning of the huge rail project "had been done in a rush".

"It certainly appeared like two guys in a Commodore listening to KC and the Sunshine Band roaring up the road beside the railway going, 'Yeah, it's OK, it's OK, it's OK'," Mr Simpkins said at the time.

"I think they just looked on Google Maps and went, 'No problems here, keep going'."

Heavy machinery operated by Queensland Rail has been bogged on the border of southern Queensland farmer Bud Kelly's property for many months.

The Inland Rail project continues to create thousands of jobs in regional communities along the proposed route like at Narromine, Narrabri and Moree.

But in southern Queensland near Millmerran, farmers there are worried a large railway embankment across flood plains will put property and businesses at risk.

Moving paperwork, not dirt

An inland rail line has been discussed for decades but the substantial funding of $8.4 billion for the project was only secured in 2017 by Mr Joyce, the Nationals leader at the time, through the Coalition agreement he signed with then-prime minister Malcolm Turnbull.

"Mr Turnbull wanted Western Sydney Airport. Well, I wanted the Inland Rail, and now we've got the money," Mr Joyce told the ABC last year.

Former National Party leader Barnaby Joyce secured $8.4 billion for Inland Rail in the 2017/18 budget.

Responding to the review on ABC local radio this morning, Mr Joyce said he was proud to have secured the initial funding for the big project.

"One of the reasons this is blown out is because instead of moving dirt, they're moving paperwork," he said

"We have, for instance on one section of line in Queensland, 110 kilometres  — 13,000 pages in the review, two reviewers … they weren't happy with that, so they reviewed two reviewers.

"These things get bogged down in bureaucracy, environmental laws, indigenous law, and all these things and the only people who ever make money are bureaucrats living miles away from where the project is."