Referral
1.1
On 17 September 2019, the Senate moved that the following matter be referred to the Senate Rural and Regional Affairs and Transport References Committee (the committee) for inquiry and report by 30 September 2020:
The management of the Inland Rail project by the Australian Rail Track Corporation and the Commonwealth Government, with particular reference to:
(a)
financial arrangements of the project;
(b)
route planning and selection processes;
(c)
connections with other freight infrastructure, including ports and intermodal hubs;
(d)
engagement on route alignment, procurement and employment;
(e)
urban and regional economic development opportunities;
(f)
collaboration between governments;
(g)
interaction with National Freight and Supply Chain Strategy; and
(h)
any other related matters.
Conduct of the inquiry
1.2
The inquiry was advertised on the committee's webpage, and the committee wrote to the relevant Australian and state government departments and agencies seeking submissions. The committee also wrote to transport and rail organisations, business groups, freight and logistics groups, lobby groups, academic and research institutions and stakeholder groups inviting submissions. Details regarding the inquiry, and associated documents are available on the committee's webpage.
1.3
The committee received 212 submissions. A list of submissions is included at Appendix 1, and public submissions have also been published on the committee's webpage.
1.4
The committee held seven public hearings and two site visits in relation to its inquiry. The committee undertook a site visit and hearing in Millmerran on 29 January 2020. Further hearings were held in Brisbane on 30 January 2020 and in Canberra on 13 August 2020. On 19 November 2020, the committee conducted a virtual hearing for residents and stakeholders based in NSW. The committee had previously intended to hold public hearings in Gilgandra and Cootamundra, but due to the COVID-19 pandemic these hearings were cancelled. Further hearings were held in Brisbane on 27 January 2021 and Melbourne on 22 April 2021, followed by the committee’s final hearing in Gladstone on 8 June 2021. A list of the witnesses who appeared at hearings is included at Appendix 2.
1.5
The Senate agreed to four extensions of time to report. The first was on 12 June 2020 with an extension granted to 11 November 2020, followed by a second on 29 September 2020 with an extension to 11 February 2021. The final two extensions occurred on 5 February 2021 and 13 May 2021, with the final reporting date on 11 August 2021.
Acknowledgements
1.6
The committee would like to thank those organisations and individuals who provided written submissions to the inquiry. The committee would also like to acknowledge those who helped with the organisation, or accompanied the committee on its site visits and those who provided evidence at public hearings. Your efforts greatly assisted the committee during the inquiry and in its deliberations.
1.7
The committee also gives thanks to all stakeholders for their patience and understanding for any delays caused by the COVID-19 pandemic.
Structure of the report
1.8
The chapter provides background and context to the committee's inquiry, along with a brief overview of Australia’s freight and supply chain, and key aspects of the planning and underlying rationale of the Inland Rail project, including a summary of the Inland Rail 2015 Business Case (business case) and bilateral agreements. This chapter concludes with a summary of the Inland Rail project and its status as of April 2021.
1.9
Chapter 2 discusses the financial arrangements and the basis for the Inland Rail project. Specifically, this chapter considers in more detail the business case, the economic benefits and overall cost of the project. In addition, this chapter considers the demand for, and impact of, the 24-hour journey time service parameter of Inland Rail, its competitiveness with other modes of transport and the broader regulatory framework of the freight transport sector.
1.10
Chapter 3 details the connectivity of Inland Rail with the seaports of Brisbane and Melbourne, and the intermodal facilities at Acacia Ridge, Bromelton and Melbourne. This chapter also considers arguments for and against Inland Rail connecting to the Port of Gladstone and concludes with commentary on the Inland Rail Interface Program.
1.11
Chapter 4 considers the ARTC’s consultation and engagement measures, and the concerns of local communities, landholders, local governments and industry about the lack of meaningful engagement.
1.12
Finally, chapters 5 and 6 feature specific projects of Inland Rail across Queensland, NSW and Victoria. The projects considered in more detail are sections of Inland Rail that have been heavily criticised throughout the course of this inquiry, particularly those greenfield sections that traverse floodplains and/or travel through densely populated areas.
Freight and supply chain
1.13
Transporting goods as efficiently as possible across significant distances is of critical importance to Australia's economy. Australia's producers and manufacturers are reliant on rapid, efficient and cost-competitive freight and supply chains. The concept of an inland rail line that connects Queensland and Victoria is something that has been considered by various governments for more than 100 years. Proposals for a Melbourne-Queensland-Darwin railway line first presented shortly after Federation, and since 2010, the growing demand for inter-capital freight movement has led Australian governments to fund studies and undertake pre-construction activities, with a view to delivering a freight rail solution.
1.14
To ensure maximum efficiency, Australia's freight network of roads, rail, air and sea need to work together as an integrated whole. To this end, the then Council of Australian Government’s Transport and Infrastructure Council agreed to the National Freight and Supply Chain Strategy in August 2019 that ‘sets an agenda for coordination and well-planned government and industry actions across all freight modes for the next 20 years and beyond’. The Strategy supports the development of targeted infrastructure investment, improved supply chain efficiency, better planning, coordination and regulation and improved freight location and performance data.
1.15
The rationale behind this strategy is to prepare for Australia’s rapidly increasing population, particularly along the east coast, with two of the fastest growing regions being Melbourne and south east Queensland. Australia's freight and supply chain networks deliver approximately four billion tonnes of freight across the country every year, and it has been predicted that the domestic demand for freight will increase by approximately 35 per cent between 2018 and 2040. It is vital that Australia’s freight and logistics sector is prepared for this future, of which, Inland Rail will play a key part.
The Inland Rail Business Case
1.16
In 2015, the ARTC developed the Inland Rail Business Case 2015 (business case), the purpose of which was to:
identify the issues and the vision for the east coast corridor;
confirm the scope, opportunities and costs;
outline a 10-year delivery schedule;
provide an estimate of demand for the service;
analyse economic and financial implications; and
identify governance arrangements to support the delivery of Inland Rail.
1.17
The ARTC's 2015 business case described Inland Rail as a nationally significant transport initiative, and one that 'provides a strategic opportunity to make a decisive step change in the capacity and capability of the national freight rail system'. The business case, which provided an assessment of the need for the project, summarised its economic, social and environmental benefits as follows:
a strong benefit cost ratio of 2.62;
an increase to Australia’s GDP by $16 billion during its construction and the first 50 years of operation;
the expected delivery of 16,000 new jobs at the peak of its construction, and an average of 700 additional jobs per year over the entire construction period;
improved connections within the national freight network by creating rail linkages between Parkes in NSW and Brisbane, and providing connection between Queensland and the southern and western states;
improved regional market access to national and international markets, with two million tonnes of agricultural freight moving from road to rail and a total of 8.9 million dollar tonnes of agricultural freight more efficiently diverted to Inland Rail;
reduced costs for the market, with rail costs for inter-capital freight travelling between Melbourne to Brisbane to be reduced by $10 per tonne;
improved transit time and reliability, with a 24-hour journey time between Melbourne and Brisbane, and a reliability of 98 per cent, matching current road reliability levels;
increased capacity of the broader transport network due to a reduction in congestion from the busy coastal route and allowing for growth in passenger services – particularly in the Sydney region;
a reduction of the rail distance between Melbourne and Brisbane by 200km and the distance between Brisbane and Perth/Adelaide by 500km;
improved road safety of up to 15 fewer serious crashes each year;
a reduction of 750,000 tonnes in carbon emissions, truck volumes and road congestion across 20 regional towns and major highways (such as the Ipswich Motorway, and the Hume, Newell and Warrego Highways);
decreased the vulnerability of the national freight rail network by providing an alternative to the north-south freight link; and
promotion of complementary private sector supply chain investments, such as fleet upgrades, new metropolitan and regional terminals and integrated freight precincts.
1.18
In May 2016, Infrastructure Australia evaluated the business case developed by the ARTC. Inland Rail was rated as a priority project, based on the determination that Inland Rail could prove to be of long-term benefit to its potential users, to users of alternative infrastructure and to the broader economy.
1.19
The transport route between Melbourne and Brisbane is one of Australia's busiest, so the task of finding ways to move increasing volumes of freight between these two capitals has become more important. Having produce and goods available where and when they are needed, supports Australia's producers and manufacturers to remain competitive – both domestically and internationally.
1.20
Given that currently, approximately 74 per cent of freight between Melbourne and Brisbane is transported by road, it is predicted that without an alternative to long-haul road freight transportation, there will be a considerable increase in the number of long-haul trucks travelling between the capitals.
1.21
One of the predictions made in the Inland Rail business case is that transferring the ever-increasing freight volumes from road to Inland Rail would reduce B-Double truck movements by 200,000 per annum from 2050.
Bilateral agreements
1.22
In order to proceed with the Inland Rail project the Australian Government negotiated bilateral agreements with the Victorian, NSW and Queensland governments. Victoria was the first state to sign a bilateral agreement with the Australian Government in March 2018. The agreement included a commitment to negotiate a new long term lease with the ARTC and an extension of the North East Rail Line alignment corridor to support Inland Rail. The alignment will remain a mixed use line for both passenger and freight services.
1.23
In May 2018, a bilateral agreement was signed between the Australian and the NSW governments. As part of the agreement, Transport for NSW and the ARTC entered into an Inland Rail Acquisition Protocol Deed that requires the ARTC to comply with NSW legislation and follow NSW land acquisition policies and procedures. Land acquired by the ARTC would be leased from the NSW Government.
1.24
The Queensland bilateral agreement was signed in November 2019, which meant that all three eastern states had committed to the delivery of the project. In comments about the bilateral agreement, Queensland's Minister for Transport and Main Roads said that:
… the agreement reached with the Australian Government … would see close to $2 billion in joint-funding fast-tracked for road and rail projects across the state.
This deal will see us work with the Federal Government on business cases for passenger rail services from Salisbury to Beaudesert, Brisbane to Toowoomba and a dedicated rail freight line to the Port of Brisbane.
This includes better understanding the freight demand on the line into the future and identifying opportunities for intermodal terminals at Ebenezer and Bromelton to assist in managing the freight task.
The projects will support the Trade and Enterprise Spine initiative identified under the South East Queensland City Deal Statement of intent.
All parties have also agreed to establish an international panel to advise on the modelling of potential flood impacts and continuing community consultation along the project's chosen route through Queensland.
In addition to the expert hydrologists already engaged by the Australian Rail Track Corporation, an expert panel of international specialists will be established to advise on best practice flood structural integrity and report back to the Queensland and Australian Governments.
Inland Rail Project
1.25
The Inland Rail project spans more than 1,700 kilometres, is proposed to complete the spine of the national freight rail network, and offer a less than 24-hour transit time between Melbourne and Brisbane with 98 per cent reliability.
1.26
The ARTC will manage and maintain the rail network, with train services and intermodal facilities provided by a variety of private operators. The number of trains utilising Inland Rail varies across the alignment. The ARTC reported that the Calvert to Kagaru section of Inland Rail is expected to experience the highest number of train movements (both directions), with 42 daily movements in 2026 and 51 by 2040. Whereas the Narromine to Narrabri section of Inland Rail is expected to experience 10 train movements per day in 2026 and 14 in 2040. These trains will travel at speeds ranging from 80 to 115 kilometres per hour, depending on axle loads and curvature of the track. A breakdown of the anticipated train movements across all Inland Rail projects is found in Table 1.1:
Table 1.1: Train movements per day (both directions combined)
|
|
|
|
|
Tottenham to Albury
|
19
|
20
|
|
Parkes to Narromine
|
9
|
15
|
|
Narromine to Narrabri
|
10
|
14
|
|
Narrabri to North Star
|
12
|
21
|
|
Queensland Inland Rail section – without coal trains
|
|
Border to Gowrie
|
19
|
24
|
|
Gowrie to Helidon
|
25
|
29
|
|
Helidon to Calvert
|
25
|
29
|
|
Calvert to Kagaru
|
26
|
30
|
|
Kagaru to Acacia Ridge & Bromelton
|
30
|
34
|
|
Queensland Inland Rail section — with coal trains
|
|
Border to Gowrie
|
19
|
24
|
|
Gowrie to Helidon
|
40
|
49
|
|
Helidon to Calvert
|
40
|
49
|
|
Calvert to Kagaru
|
42
|
51
|
|
Kagaru to Acacia Ridge & Bromelton
|
46
|
55
|
Source: 2020-2021 Additional Estimates, Infrastructure, Transport, Regional Development and Communications Portfolio, 22 March 2021, question number 126.
1.27
Inland Rail is expected to transport a mix of grains, bulk freight and other general transport trains, with an annual freight tonnage of approximately 10 million tonnes in 2025, increasing to an estimated 17.5 million tonnes in 2040. Domestic freight will make up the majority of the goods transported by Inland Rail, predominately of inter-capital/intermodal freight between Melbourne and Brisbane consisting largely of consumer goods. The business case anticipates by 2049-50 that 66 per cent of the volume of freight (net tonne kilometres) would be inter-capital/intermodal freight, followed by coal (25 per cent), agriculture and other products (nine per cent). Seven per cent of intercapital/intermodal freight will travel between Brisbane and Perth, and six per cent between Brisbane and Adelaide.
1.28
It is anticipated that trains will be double stacked and up to 1,800 metres long, with a future length of 3,600 metres. With long, double-stacked trains significantly increasing the payload of each train, it is argued that Inland Rail will be more efficient, more cost competitive and reduce carbon emissions by up to 750,000 tonnes. The ARTC estimated that over 200,000 trucks will be removed from the road each year, reducing road congestion costs ($738 million) and maintenance ($622 million), road trauma and trucks on country roads.
Selection of Inland Rail’s route alignment
1.29
Two major studies have been undertaken in relation to the route alignment for the Inland Rail project. The first study – the North-South Rail Corridor Study –was completed in 2006 and considered four potential corridors to determine which would deliver the best economic and financial outcome. The study identified the 'far western sub-corridor', through Parkes, as the superior option due to it having the lowest capital cost, fastest transit time and best economic cost-benefit performance.
1.30
A second study – the 2010 Inland Rail Alignment Study (IRAS) – examined the far western corridor in detail and considered a range of alternatives to determine the optimum alignment for Inland Rail within the far western sub-corridor. The IRAS determined an alignment that minimised construction and operational costs, as well as freight user benefits such as operating cost savings, time savings and reliability. The 2010 study, which effectively established the Inland Rail route, was further progressed by the Australian Government’s $300 million investment in 2011 to 2013 for Inland Rail pre-construction activities spanning the 2014-15 and 2018-19 period.
1.31
In 2013, the Australian Government announced the formation of the Inland Rail Implementation Group (IRIG) tasked with preparing a ten-year delivery strategy and business case for the Inland Rail project. The IRIG consisted of senior representatives from federal and state infrastructure departments and the ARTC CEO. In August 2015, the IRIG's final report further endorsed this alignment.
1.32
The alignment identified in the 2010 study is one which has the potential to deliver a journey time of less than 24 hours from Melbourne to Brisbane, which is a saving of approximately 10 hours on the existing coastal route via Sydney. Approximately 1,100 km of existing rail infrastructure (including rail lines and corridors) will be used to complete the 1,700 km Inland Rail project. It is argued that using existing rail infrastructure makes the most of previous investments in the national rail freight network and minimises the environmental and community impacts associated with creating new rail corridors. As demonstrated in Chapter 2, the 24-hour turnaround was a contested element of the Inland Rail project.
1.33
Inland Rail was subsequently divided into 13 distinct projects: one in Victoria, seven in NSW and five in Queensland. The longest project is Narromine to Narrabri (307 km long) and the shortest is Gowrie to Helidon (26 km long). Part of the Gowrie to Helidon project involves construction of a new, 6.38 km tunnel through the steep terrain of the Toowoomba Range, making it the largest diameter diesel freight tunnel in the Southern Hemisphere.
1.34
In the 2017–18 Budget, the Australian Government originally committed $9.3 billion for the ARTC to develop and build Inland Rail – which is the largest freight rail infrastructure project in Australia. Partnership(s) with the private sector would provide additional funds, through the form of Private-Public Partnership. This figure has progressively increased, with the Australian Government allocating an addition $5.5 billion in December 2020. As of March 2021, the Inland Rail project is anticipated to cost over $14 billion.
1.35
Construction of the 103 km Parkes to Narromine project was completed in September 2020. Works on the 188 km Narrabri to North Star (N2NS) project commenced in September 2020, with the upgrading of 171km of existing track in the detailed design phase, and Phase 2 (upgrading 15km of track and building 2.3km of new track) in the reference design phase. The status of all Inland Rail project as of April 2021 is detailed in the table below:
Table 1.2: Inland Rail project status, anticipated commencement and completion
|
|
|
|
|
|
Tottenham to Albury
|
In progress (late 2021)
|
Late 2021 (north of Beveridge)
|
Early 2025 (north of Beveridge)
|
|
Albury to Illabo
|
EIS in development (late 2023)
|
Mid 2023
|
Late 2024
|
|
Illabo to Stockinbingal
|
EIS in development (late 2022)
|
Mid 2023
|
Late 2025
|
|
Stockinbingal to Parkes
|
Under assessment (late 2021)
|
Late 2022
|
Late 2023
|
|
Parkes to Narromine
|
Approved 31 August 2018
|
NA
|
Completed September 2020
|
|
Narromine to Narrabri
|
EIS under assessment (late 2021)
|
Mid 2022
|
Late 2026
|
|
Narrabri to North Star
|
Stage 1 approved 1 October 2020; Stage 2 EIS in development (mid 2022)
|
S1: December 2020
S2: Early 2023
|
S1: Early 2025
S2: Late 2025
|
|
North Star to Border
|
EIS under assessment (late 2021)
|
Mid 2022
|
Late 2025
|
|
Border to Gowrie
|
EIS on public exhibition (early 2022)
|
Early 2023
|
Late 2026
|
|
Gowrie to Helidon (PPP)
|
EIS in public exhibition (late 2022)
|
Late 2023
|
Mid 2027
|
|
Helidon to Calvert (PPP)
|
EIS in public exhibition (early 2022)
|
Late 2023
|
Mid 2027
|
|
Calvert to Kagaru (PPP)
|
EIS under assessment (early 2022)
|
Mid 2023
|
Mid 2027
|
|
Kagaru to Acacia Ridge and Bromelton
|
Approval pathway under discussion (mid 2022, subject to discussions)
|
Early 2023
|
Early 2025
|
Source: ARTC, answers to written questions on notice, 1 April 2021 (20 April 2021), pp. 15-16