The Albanese government will prioritise delivering half of the Inland Rail freight megaproject after an independent review found serious governance failures, delays and “astonishing” cost blowouts in the project, labelled “1,700km of Liberal National incompetence”.
In the hours after the release of Dr Kerry Schott’s review, which found the project’s price tag had ballooned from $16.4bn to $31.4bn in the space of two years, the government announced it would accept all 19 of Schott’s recommendations “in full or in principle” as it seeks “to rescue Inland Rail from the shameful state it was left in by the Coalition”.
Envisioned as a freight rail link capable of running double-stacked freight trains between Melbourne and Brisbane in 24 hours, the Inland Rail project has attracted criticism from experts and regional communities over the planned track alignment in light of flood risk and other environmental concerns.
When the Coalition committed to delivering the project in 2017, the estimated cost was $9.3bn. In 2020, the project’s cost was estimated at $16.4bn with a completion date of 2026-27; however, this has now grown to a projected $31.4bn with an expected completion date of 2030-31.
Schott also warned she was not confident her review was able to capture the full extent of cost blowouts or an accurate delivery timeline.
“It’s not a bad project, but it’s just been managed really badly,” Schott said at a press conference in Canberra on Thursday.
The infrastructure, transport and regional development minister, Catherine King, was scathing of the former Coalition government’s handling of the project, but said Inland Rail was an important project to follow through, given its potential to shift 200,000 trucks off roads and on to rail each year.
“Inland Rail is 1,700km of Liberal-National party incompetence,” King said. “Inland Rail does remain an important project to meet Australia’s growing freight task, improve road safety and to help decarbonise our economy.
“We have been left with one almighty mess,” King said.
King said the government would follow Schott’s recommendation to prioritise delivering the stretch of the line from outside Melbourne to Parkes in New South Wales by 2027, where trains could link up with the east-west coast corridor and Inland Rail could begin delivering revenue for the Australian Rail Track Corporation that is overseeing the project.
However the government talked about the Parkes to Brisbane stretch with far less certainty.
Asked if she was leaving open the possibility of shortening the track, King said “not at this stage”, and said that while she wanted to see the track built to Ebenezer outside Brisbane, a fresh business case and environmental approvals needed to be done to provide certainty to begin building that stretch.
“We’ve got a lot of work to actually get that but we determined the construction to Parkes will happen.
“The effort and concentration we need to do now – and that’s what the cabinet has agreed – is to get it to Parkes, we think that is where we can get a return on investment.”
King also lashed the governance of the project under the previous shareholder ministers from the Coalition, after Schott’s review criticised 18 months of inaction on appointing a CEO to the project and board appointments to the ARTC that lacked the skills requested by the board.
Responding to King’s comments, the Australasian Railway Association called for clarity on whether the government will commit to delivering the full line all the way to Brisbane.
“It is critical that there is certainty around the route beyond Parkes and we look forward to seeing approvals and more detailed costings being determined as soon as possible,” said Caroline Wilkie, the association’s CEO.
“We must move more freight on rail to meet growing demand and respond to the climate crisis. It is absolutely critical that Inland Rail is delivered as quickly and efficiently as possible. Failure to do so would see more trucks on the road and undermine the rail industry’s efforts to support a more sustainable national freight network.”
Other recommendations the government will be implementing include the appointment of an independent cost estimator, after Schott’s review concluded there was little confidence in the project’s current estimates.
Four key intermodal terminals will also be built – two outside Melbourne, one in Ebenezer outside Brisbane, and one in Parkes – as well as a raft of changes to the governance structure of the project that will see the formation of a separate subsidiary entity under the ARTC to oversee the project’s delivery.
On Thursday, Schott said the lack of project separation at the ARTC – which is responsible for management of freight tracks and other railways including the Sydney-Melbourne line – “led to a tremendous lack of focus”.
Skills and leadership shortages within the ARTC board will also be addressed. The government has announced it will appoint a chief executive of Inland Rail as soon as possible.
In her review, Schott noted that state governments and rail freight companies were yet to settle on the end points of the Inland Rail route, but that despite this, construction had already begun. “Somewhat surprisingly the project has commenced delivery without knowing where it will start or finish.”
A statement released on the Inland Rail’s Instagram account on Thursday afternoon said: “The review was a great opportunity to highlight some of the significant milestones we’ve achieved and to recognise what lies ahead of us. We’ll now work with the Australian government, project partners, the community, and others to address the recommendations.”
In a statement, ARTC chair Peter Duncan said the corporation “notes the findings of the independent review and the government’s response and is committed to working closely with the Australian government to implement those recommendations”.
