InfrastructureChris ThomsonTue 05 May 26
Shunted: Funding for $45bn Inland Rail Megaproject Axed
Like a slow train to Central during a transport strike, Australia’s much-anticipated inland rail project will not make it to Brisbane from Melbourne anytime soon.
Ahead of next week’s Federal Budget, the Commonwealth has sidetracked funding for the Inland Rail, saying the nation-building megaproject could now cost more than $45 billion to complete.
Stretching 1600km, the north-south rail corridor had promised to deliver faster freight, safer roads and fewer emissions from Beveridge just north of Melbourne to Kagaru just south of Brisbane.
But funding for the project will now only cover new works to the regional NSW town of Parkes, 1000km short of the Queensland capital.
Federal infrastructure, transport and regional development minister Catherine King dubbed the major infrastructure development’s derailment a ‘consolidation’.
“The government has [made] the decision to consolidate the inland rail project by completing construction between Beveridge in Victoria and Parkes ... by the end of 2027,” she said.
“This will enable double-stacked freight trains to travel between Melbourne and Perth, via Parkes.
“This follows independent cost assurance work completed by ACIL Allen, which has confirmed the cost estimate now exceeds $45 billion to deliver the full inland rail project from Melbourne to Brisbane.”
King said an independent review in 2023 by former Sydney Water supremo Kerry Schott had found major deficiencies in the governance and delivery of the project by the Federal Coalition government that was replaced by Anthony Albanese’s Labor government in May, 2022.
Inland Rail original route
On Wednesday, opposition infrastructure, transport and regional development minister Bridget McKenzie said that past governments had continued to deliver infrastructure begun by their predecessors.
“This decision means no long-term project is safe, undermining sovereign risk for Australia’s national $120 billion infrastructure pipeline,” she said.
She said the government's decision was “a devastating blow to regional Australia for a project that has been 100 years in the making”.
“By derailing the inland rail, the government is ending a nationally significant, productivity enhancing project, which would have taken 200,000 trucks movements off the road and slashed freight sector carbon emissions by 750,000 tonnes per year by 2050,” McKenzie said.
McKenzie said regional NSW , Queensland and Victoria would be harmed because businesses had made plans and invested to capitalise on the promise of rail taking produce and goods efficiently to ports in Brisbane and Melbourne.
To the end of 2025, Inland Rail had spent $406 million with 543 NSW businesses and $93 million with 313 Victorian suppliers.
Also on Wednesday, King announced a new chair and chief executive of Inland Rail Pty Ltd to steer the project through to Parkes. Interim chair since November 2025, Collette Burke will become permanent while former Auckland city rail link boss Sean Sweeney is due to begin as chief executive on July 1.
