Is the Inland Rail a $24 Billion White Elephant? Australian Rail Track Corporation

The Inland Rail is a huge project. It is riddled with uncertainty and secrecy. The ARTC won’t release the business case for the project, even though we have evidence that many of the assumptions used for it are completely flawed. The Inland Rail started as costing less than $3 Billion, it is now estimated at nearly $24 Billion. While the head of the ARTC is on $1 million+ of taxpayer money a year, all of the detail should be publicly available.

Transcript

[Malcolm Roberts] First question is, can you list Inland Rail Social Media Accounts, and how much we spend on social media including Instagram in the last financial year. Please

[Witness] Sure, we’ll probably have to take it on notice, so we can give you some idea of quickly, but we found social media to be extremely effective and greatly improve, some of our engagements that was asked about earlier, we find that we have interactive dialogues on a real-time basis with people they don’t have to come to us, we don’t have to go to them. We can provide very technical information, including maps. They can post questions on those maps. So the social media interaction has been extremely effective. Do you want to provide any additional detail to back up?

[Witness] No. I mean, I think we’re finding it as a good value for money medium. And, but yes, we have multiple channels, as you would expect. Again, we can confirm those, but all the ones you would expect Facebook and Instagram, LinkedIn, those things are on YouTube, those sorts of things. So, but we can get you the details.

[Malcolm Roberts] Thank you. The business case lists 87 coal trains a week, going into Brisbane every week, all the way through to 2050, I understand that coal reserves that would come down that line run out in 2030. Is that true? And if so, what does that do to your business case?

The first part, we would be speculating on we’d have to take it on notice ’cause we don’t control the coal market.

[Malcolm Roberts] Yes Obviously.

The second part, we have testified previously, that even if coal was to go to zero, and I’m going to ask Mr. Campbell and Mr. Hornsby to correct me if I’m wrong, but even if the coal volumes were to go to zero, that the business case still stacks up and still had a benefit to cost ratio over two

[Malcolm Roberts] Thank you. The Queensland government only allows 10 million tonnes of coal to be sent to Brisbane port, currently the port handles 7 million tonnes, is this limit of 10 still in place? And rather than 87 trains a week, how many will the remaining 3 million tonnes generate? We make it out around about seven trains a week, not 87.

Yeah. Again, we’d have to take that on notice ’cause I’m not sure the limitations at the port of Brisbane.

[Malcolm Roberts] Is it true that the port of Brisbane can only unload trains for 49 hours a week, being 8:30 AM to 5:00 PM, Monday to Friday, ten to two on Saturday and closed all day Sunday? If so, how long does it take to unload a train? The point being, how many trains can the port of Brisbane actually service as against the business case?

So, Senator the business case was primarily a terminal to terminal activity, so from Melbourne to Acacia Ridge. So as far as I’m aware that the business case didn’t really cater or talk to traffic between traffic to and from the port.

[Malcolm Roberts] How then can we assist the viability?

Of

[Malcolm Roberts] Providing the Inland rail if you don’t know the service?

Yeah, so the inland rail is being built as a terminal to terminal, and I think as we heard earlier on there may be more than one terminal in Brisbane, and there is a separate business case analysis looking at that link to the port which is not part of the inland rail project.

[Malcolm Roberts] So if the port of Brisbane is not modelled in that how do we know the impact of the port on the inland rail? The constraint of the port?

I might ask my colleague Simon.

[Simon Orsby] Okay let me introduce myself. Sir I’m Simon Ormsby executive interstate network for ROTC and I’ve joined the bench. It’s okay chair. In broad term, we can come back with the details behind the modelling, when we take that on notice. But in broad terms, the number of trains assumed is broadly similar to the number of trains that are passed through today. But there are longer trains in the business case, inland rail and investments enables longer coal trains, so heavier coal trains to be run than today. So the assumptions aren’t poorly different, in the business case to what happens today, but we can come back to your technical notice and come back to all the data around that.

[Malcolm Roberts] I’m interested in the impact, of the restricted hours at Brisbane port.

Yep, we’ll come back.

[Malcolm Roberts] Is it true that passing loops at Kings Thorpe and Fisherman’s Island can only handle a train, with the length of 670 metres yet your train are 1600 metres, so how do you propose to get your trains in and out of the port?

So Senator it’s not intended at this point, that longer trains than currently operate to the port today will operate to the port in the future. So our 1.8 kilometre trains will terminate at a terminal outside of Brisbane or on the edges of Brisbane or Acacia Ridge. And then there would need to be a different arrangement, than those trains that would take it to the port.

[Malcolm Roberts] Gets quite complex. Isn’t it?

I can’t validate the length of those crossing loops, but what I can say is part of the business case extensive capacity modelling was undertaken, and assume different lengths of trains, because you have a crossing loop or two crossing loops at 600 metres. Doesn’t mean that every train is limited to 600 metres, and there is, there’s quite a bit of double track, so if you’re particularly in running a narrow gauge train, so some of those coal trains may just have a through run without actually utilising the crossing loop.

Can I maybe just help a little bit, what he’s saying is you can give priority to longer trains, so the ones that use the passing loops are the shorter trains. So it doesn’t have to actually match the length of the train that uses the line to be given that priority.

[Malcolm Roberts] Got it.

So that’s one.

[Malcolm Roberts] Thank you. Brisbane trains have a curfew which limits inland rail services to 19 hours a day, which means that the times a train can leave Melbourne needs to adjust to avoid that curfew, there will be a corresponding window in Melbourne, and all along the route, have you modelled how this will affect loads, Once inland rail is fully operational?

So there’s no curfew for trains outside of Acacia Ridge. I’m not, in fact, I’m not aware of a curfew.

[Malcolm Roberts] So you haven’t modelled it?

Sorry,

[Malcolm Roberts] You haven’t modelled it.

No, we’ve assumed there’s no curfew, could say unlimited access between Melbourne, the Melbourne terminals and the Brisbane terminals?

[Malcolm Roberts] Thank you. The new tunnel ARTC will have to build down from Toowoomba has a grade end of one to 64. The train would need to do 30 kilometres an hour down the tunnel. Once the train exits the tunnel, that limit is 80 kilometres per hour, all the way to the port. Can you demonstrate that this has been factored into the 24 hour transit time?

Yes, and we can give you the train modelling.

[Malcolm Roberts] If we could please, Thank you. The project cost of 14.8 billion does not include anything to do with the tunnel, through the great dividing range outside of Toowoomba. Is that correct?

No.

[Malcolm Roberts] What is the cost?

Of the tunnel?

[Malcolm Roberts] Yes.

So projects as we’ve testified a few times now, for commercial and confidence we’re under procurement right now. So we’re not disclosing project budgets, but the total cost of inland rail, does include the cost of the tunnel down the Toowoomba range.

[Malcolm Roberts] Okay. Australian Economic Consultants and Peer reviewed by professor Rolf has put the cost of the tunnel at $5 billion plus $3 billion for new rail line between Acacia Ridge, the port of Brisbane, and $1 billion of other work. This puts the current cost of inland rail at 24 billion. How can it possibly recoup these expenses?

Sorry, Senator Roberts, I’d have to expand on those comments. That’s I believe cost of the tunnel to go to the port, and the improvements to get to the port, which is subject to that separate business case, it wouldn’t be additive to the cost of inland rail. It’s a separate project with a separate business case.

[Malcolm Roberts] How can it still stack up? That’s a heck. That’s a matter for government and the business case.

Sir the port connection, isn’t part of the inland rail project

[Malcolm Roberts] Sorry.

The port connection work isn’t part of the inland rail project, and hasn’t been committed to, by any government, then to do the study.

[Malcolm Roberts] It’s additional costs.

Well we were doing a study on what’s viable and what would work with, the Queensland government. And whether or not there is a port connection built will be a matter for future government decision-making.

[Malcolm Roberts] Let’s move on then. In the original discussions around what was then called the north south rail corridor, there was a route that came over the border into Queensland. where it does now near Goondiwindi and then heads north to Mooney before crossing the mountain range at a lower elevation through Mamadoer onto Dalby, and then down to Toowoomba. This allows for a junction at Dalby with coal and bulk grains, going to Gladstone and the freight hub for Brisbane located at Toowoomba. The rest of the trip would be by road using the new $1.6 billion second range crossing which is actually built. Do you have any information on that alignment via Mooney?

Yes. That was looked at some time ago and found not to be economically feasible as an alternative to meet the business case requirements. So maybe I can address the broader question there, which is Gladstone truncating in Toowoomba. The biggest thing about inland rail we have to remember, is the actual business case and the business case was developed over a long period of time between the Commonwealth, the states and ARTC and they all agreed that the way to meet the business case, which was a terminal to terminal to meet the growth demands in Southeast Queensland and Victoria for domestic goods was the broadly the alignment we’re on today. It was not meant to get to port okay. If it was a different business case, it was about getting to the most efficient port, or it was about coal then maybe Gladstone would make a lot more sense. The terminal to terminal is very important, particularly when we look at some of the growth rates in Queensland, if you look at what’s been released in the last month or so out of Southeast Queensland two and a half million people growing to 5 million people, they’re gonna have a lot of needs, and a lot of products and goods and services. And so that is what the supply chain is all about. That’s what inland rail is all about, is getting them the furniture, the food that they need, the beer that they need, the toilet paper that they need. So, sorry,

I said here, here.

Thank you. So trying to divert now and go to Gladstone, it can be an end, but you doesn’t make sense. We have to be true to the business case and deliver on that business case. And that’s what we’re doing.

[Malcolm Roberts] A lot of complexities. In a major project we learn as we start the project, and as we implement the project, there seem to be more and more questions that are coming up.

Yes. And, but that is, you’re exactly right. That’s a major project, and so what you have to do is respond to the learnings, and improve as you go, and have a process that allows you to account for it

[Malcolm Roberts] Could it be that the original business case was not done in sufficient depth quality?

I think it’s one of the better business cases I’ve seen and certainly had a very good benefit to cost ratio compared to other projects. So it’s pretty high quality.

[Malcolm Roberts] Based on early assumptions.

Yes.

[Malcolm Roberts] What’s the benefits to cost ratio?

2.6 originally

[Malcolm Roberts] The AEC found that a route that terminated in Toowoomba and sent coal and grain to Gladstone, including the cost of the extra leg to Gladstone would cost $12 billion total on a return of 1.58 as against the current route, including tunnels and links, which is now at 24 billion on a return of investment at 1.01, will you refer the AEC Gladstone alignment with Toowoomba termination, to the rural and regional affairs and transport committee inland rail inquiry for a full review?

Yeah. So I have to correct the statement, that inland rail not 24 billion. We talked about that earlier today, two different business cases. And the second thing about being cheaper to go to Gladstone, if it doesn’t accomplish the business case, it doesn’t really matter whether it’s cheaper. You know, I had this discussion with my family all the time when they buy something on sale that they don’t need, it doesn’t do us any good. So,

If it’s more productive.

[Malcolm Roberts] Thank you very much. Isn’t it that the issue really about value?

It is about value, but you have to accomplish. One of the great things is, and I’ve mentioned this a few times one of the great things about Australia, as opposed to other countries, I’ve dealt with large infrastructure, large infrastructure projects are justified based on the business case. We have to be true and honest to that business case, it’s disingenuous to deliver something different other than that business case, without going back and changing it.