[+] Terminal Problems: Getting Inland Rail Rolling Again

A scathing review of the 1700km Inland Rail project has revealed massive cost blowouts, lengthy delays and a management team without the necessary skills for the job. The document says the cost of the federally funded project—which will build a continuous freight line from Queensland to Victoria—has almost doubled in the past two years, and now tallies $31.4 billion. However, the report by Australia’s former Energy Security Board chairperson Dr Kerry Schott says those costs may escalate further given its exact route is still not confirmed. Dr Schott found the project had begun without clear end dates and budgets. “Somewhat surprisingly the project has commenced delivery without knowing where it will start or finish,” she said in the report. The review found only 16 per cent of the track has been completed thus far, and questioned whether the board managing the project had adequate skills for the job. There were, for example, no suitable members on the previous board who had expertise in logistics, freight or rail and infrastructure. And, the report says, there had not been a “substantive” chief executive in nearly two years. When the former Coalition government was told of the lack of skills, Dr Schott said, the advice was “not heeded”. ▲ The Federal government says it is committed to the inland rail project. Despite the criticisms, the Albanese government remains committed to the project. “We will act sensibly and responsibly to ensure this important project is put back on track,” finance minister Senator Katy Gallagher said in a joint statement with infrastructure minister Catherine King. King’s department has been given 19 recommendations to get the project back on track, including enhancing governance arrangements, further assessing the scope and cost of the project, maximising regional opportunities along the rail line and developing intermodal terminals in Melbourne and Brisbane. Ebeneezer, a locality with a population of about 300 in the City of Ipswich and about 48km south-west of Brisbane, is a likely end-terminal in Queensland, but is still to be confirmed. In Victoria, the report makes clear, two freight terminals are long overdue on the capital’s periphery. A Victorian government spokesperson was equally clear, telling The Urban Developer that Truganina, about 20km west of Melbourne, and Beveridge, 35km north, were both needed “to deliver better outcomes for Victorian businesses and the community”. The Victorian government included $6.1 million in its 2022-23 budget for planning of the Western Interstate Freight Terminal (WIFT) as the priority location. That western site in Truganina will move the bulk of the state’s interstate rail freight activity away from the existing Dynon precinct to the outer west, removing thousands of daily truck movements from Melbourne’s western residential communities. Truganina would also provide closer access to the hundreds of warehousing and logistics businesses in Melbourne’s outer west, at a time when zoned industrial land in the state is in critical short supply. ▲ The inland rail is one of the most significant infrastructure projects in Australia’s recent history. “Our preference is that the WIFT be built first—but ultimately, this report exposes the incompetence of the Morrison government yet again,” the spokesperson said. “We’re pleased to now have a partner in Canberra that we can work with to deliver critical projects in Victoria.” Australia’s freight and supply chain networks currently transport about four billion tonnes of goods across the country each year. That is expected to grow by 26 per cent by 2050, but freight along the eastern seaboard will grow by twice that. And nearly 75 per cent of inter-capital freight between Melbourne and Brisbane is currently carried by road. Typically, says the Australian government, an 1800-metre-long double-stacked inland rail train will have 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), a government-owned entity whose main business was to maintain freight railway lines. The current chair of Water NSW Peter Duncan and the inaugural Victorian chief engineer Collette Burke were appointed as the new chair and non-executive director of the ARTC in January this year. The federal government will also appoint a new chief executive for Inland Rail. ▲ An 1800-metre-long double-stacked inland rail train will have the capacity to carry the same volume of freight as 110 B-double trucks, the government says. In brief comments after the release of Schott’s report, Duncan said the ARTC was committed to working closely with the Australian government to implement those recommendations. “We understand there is a high level of interest from staff, customers, contracting partners and community to understand the recommendations in more detail and we will work hard to provide more information in coming days,” he says. Economist and town planner Angus Witherby is an unashamed inland rail supporter. “I do think it’s got some issues, but I also think it’s a nation-building project.” Witherby lives in Moree, a town of about 7000 in the heart of New South Wales’ rich, black soil plains. The region boasts relatively high seasonal rainfall and some of the country’s highest soil fertility, which in turn makes for some of the highest diversity of crop production, including wheat, barley, sorghum and maize. Witherby spent seven years as director of planning at Moree Plains Shire Council, whose boundaries include three sections of the inland rail. “One of the things that is overlooked is that for most of us, we don't care about Melbourne to Brisbane…it's just not relevant to us,” says Witherby, now director of Wakefield Planning. ▲ For economist and town planner Angus Witherby, more sections of the inland rail project can't be laid soon enough (Image: Australian Rail Track Corporation) “What is relevant to us is getting our agricultural product to ports cheaply. “And in the case of Moree, one of the very first sections completed was the Narrabri to Moree line, and as a result we are now running 1400-m trains instead of 600-m trains. “That's immediately, radically improved cost efficiency of shipping grain by rail.” Joe Langley, a consultant with Harbinger Partners, said the intermodal facilities along the freight line’s length will be good for regional communities. “Any place that you've got an intermodal facility, you’re taking that agricultural land and converting that to a use that will justify infrastructure,” says Langley, who advises government on value capture funding. “You are going to have, if nothing else, stormwater drainage, roads, water and other types of utilities for the intermodal facility. “These value capture methods allow you to take some of that uplift. “It’s not going to pay for all of it, but it can be substantial to help fund the intermodal facility and that’s a great thing for those communities out there because they don't have the other resources through rates, unless they get government grants to build those facilities.” ▲ Rushed decisions in the planning of the Inland Rail project are having far-reaching repercussions, say critics. Nick Cleary is chairman of Consolidated Land and Rail Australia (CLARA), set up with other investors in 2011 to—among other things— lobby for high-speed rail . “We 100 per cent support the idea of inland rail because we think it takes the burden of freight off the existing routes which provides more opportunity to improve suburban rail, which is always a good thing for our communities,” Cleary said. “But before starting any rail project, you need to ensure that the corridor is secured and that any plan is well thought out and ironed out before you start taking on those challenges.” The news is not all bad. Work that has already begun north of Parkes in New South Wales’ Central West region, will continue while the federal government implements Schott’s recommendations. Parkes, about 355km west of Sydney, is a key point along the track. Earlier this year, one of Australia’s biggest freight operators, Pacific National, opened the $35-million first stage of its intermodal hub in the town. The facility sits on the junction of what will be the intersection of the east-west transcontinental rail corridor—which ends about 3000km away in Perth—with a section of the inland rail project, estimated for completion in 2027. There is more certainty with this part of the line than there is with the entire project, according to Dr Schott, who says current estimates put the latter's completion for 2030-31. For Witherby, fresh track can’t be laid fast enough. “The prediction is in about 20 to 30 years, the majority of our agricultural products will be boxed not bulk, so inland rail really begins to work for us then, particularly once the port of Newcastle gets its containers facility together.” Containerisation, he says, is the answer. “What we will see is the ability to provide products for an international market that are verified, and where the digital logistics chain matches the physical. “And you will be able to tell your pasta producer in Italy exactly which paddock the durum wheat came from, how it was treated along the way, and how we can guarantee that it's uncontaminated and of good quality,” he says. “That can only happen if we've got the infrastructure, physical infrastructure, to ship in a box. “And that means inland rail.” You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

[+] Terminal Problems: Getting Inland Rail Rolling Again

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