This is Australia's nation building infrastructure project

By 2024-45, the Inland Rail, a 1700km line worth more than $9b that ships freight from Melbourne to Brisbane through NSW, will be up and running.

The 1700km inland railway that will connect Melbourne and Brisbane involves many engineering challenges.

For the rail line to come down from Toowoomba to Brisbane, for instance, it will need to pass through the Great Dividing Range via a tunnel twice as long and twice as wide as the Sydney Harbour tunnel. The tunnel then links with a 1400m bridge, twice the length of Brisbane’s Story Bridge.

“That’s no mean engineering feat,” says Inland Rail CEO Richard Wankmuller. “The bigger challenge, beyond engineering and construction, is the community engagement — bringing everybody along and making sure that they understand the true economic benefits and how it’s going to make a difference to the country,” says Wankmuller. “Many people will be heavily impacted if they’re going to have a freight train running through their property.”

The economic rationale for the long dreamed of regional project — which involves both upgrading existing infrastructure and building new track —is based on providing a reliable, inter-capital rail freight link of less than 24 hours as a viable alternative to road freight. When complete, the line will have capacity for 1800m-long trains (the ultimate goal is 3600m), double-stacked with containers, each train with the equivalent freight volume capacity of 110 B Double trucks.

Inland Rail says it will better connect our farms, mines, cities and ports to domestic and international markets, with estimated economic benefits including a $16b boost to Australia’s GDP during construction and the first 50 years of operation, inclusively. The project also promises to make manufacturing more attractive to regional centres with easier access to markets, plus provide employment in intermodal centres such as Toowoomba in Queensland and Parkes in NSW, which will sit at the intersection of the Melbourne–Brisbane and Sydney–Perth lines.

“I know ‘nation building’ is a bit overused these days, but this is truly a piece of infrastructure that links the nation in a way not possible in the past,” says Warren Truss, a former deputy prime minister and now chair of the Australian Rail Track Corporation (ARTC), which is building the project. Inland Rail operates as a business unit within ARTC.

In its business case evaluation of the project, Infrastructure Australia identifies the environmental and safety benefits of taking trucks off the road, as well as reduced lifecycle costs for roads. It claims the project will provide net positive benefits to the Australian economy as it grows, noting a forecast 80 per cent increase in the domestic land freight task from 2011 to 2031, and that the volume of freight travelling along the eastern seaboard is expected to double to eight billion tonnes by 2030. However, it also notes that the assessment undertaken by proponents of the project “did not robustly consider the value for money and deliverability of the full range of options”.

This is of concern to Marion Terrill, transport program director at the Grattan Institute. Terrill says that the benefit to cost ratio of the project is only 1.1 to 1 — meaning each dollar spent on the project will return $1.10 in benefits. Such a low ratio relies on everything going well with the project to be worthwhile.

“This is a gigantic project and cost overruns are more likely, and when they occur they are larger on average for big projects,” says Terrill, previously a federal public servant who authored parts of the 2010 Henry Tax Review. “If you have a bigger project, there’s a lot of interdependencies, and one thing going wrong can cascade in a number of ways.”

Truss counters that the benefit to cost ratio is actually 2.6 to 1, and notes the massive stimulus to local manufacturing and jobs, such as using Whyalla steel, that the Inland Rail will deliver.

Community concerns

There are many stakeholders to deal with — and this is a key risk to the project’s timeframe. The rail line is funded by the federal government, passes through three states, 20 regional centres and impacts some 50 local council areas and thousands of farms. It has already been dealing with concerns with farmers and local communities over the choice of route, the need to cut through farms, noise and safety issues, land access agreements and owner liability in the event of accidents — issues taken up by the NSW Farmers Association. Inland Rail says it is trying to be more innovative in the way it seeks planning approvals and works with the various agencies across the different states.

“Dealing with the community relationships is a high priority for me because I know we need a social licence as well as the legal and planning approvals,” says Truss.

Wankmuller, an American with 35 years of senior management experience in private and public infrastructure sectors was appointed in April 2018. “We’re trying to identify imperfections early in the process by getting people involved earlier,” he says. “That is going to put us in good stead because when we flesh out problems early we can get them addressed.”

Nonetheless, there will inevitably be delays and sometimes problems can’t be mitigated. In these instances, Inland Rail will try to accelerate construction in another part of the project to make up for the lost time.

Inland Rail has broken the project up into numerous sections and is using a range of delivery mechanisms depending on the complexity of each part of the project, which ranges from upgrading existing rail tracks to building completely new lines. In places, Inland Rail will do its own design and construction, in others it will contract all or part of the work out, and for the 130km stretch from Gowrie to Kagaru in Queensland it will use a public-private partnership. Where the project is relatively simple, it says it will try to open the way for local contractors to bid for the work. But where the project has bespoke requirements, such as transiting a floodplain, the contract package is more tailored for specialist contractors.

Ensuring that Inland Rail projects are attractive to contractors has become more important and major Sydney and Melbourne transport projects have got underway and intensified competition for resources.

One strategy is taking some of the risk out of projects, for instance, by breaking projects up into parts that fit a contractor’s area of expertise and don’t require them to do work in which they have no experience, and by using Inland Rail’s purchasing power and quality to control to buy materials and equipment.

While the board is apprised of all aspects of the program — and receives detailed reports on metrics including community engagement, approvals, design, construction and people — Wankmuller says a key focus is culture.

“What’s the tone we’re setting at the top in terms of delivery performance? How are our customers integrating? Are we truly addressing their concerns? They’re staying ahead. They’re identifying some of those key success factors before we ever get to the point of having to deal with problems.”

The Inland Rail project is a business unit within the ARTC. The CEO, John Fullerton, says risk management is a fundamental focus of the board. Along with stakeholder risk and construction risk, there is also financial risk to the corporation itself. The ARTC board operates a traffic-light system to oversight risk and anything showing up red is immediately put under scrutiny by the directors. This helps board members quickly identify areas that need their focus.

“I’ve been impressed by the volume of reporting and the detailed effort that goes into making sure we have comparative metrics, that we’re following all the timetables that have been laid down,” says Truss.

Show me the money

ARTC is fully funding the project, mostly with equity from the government, and some debt and cash generated from its ongoing operations. Once operational, ARTC says Inland Rail will be self-sustaining from a cash-flow perspective through users paying access charges to fund operational and maintenance requirements.

The project consists of Australian government funding of $9.3b ($285m in funding for pre-construction activities), mostly granted in the 2016–17 budget and $9b in equity for land acquisition and construction. Additional funds will come from partnership with the private sector and the ARTC’s balance sheet, with a funding package for the public-private partnership yet to be determined. “The risk we have to manage is ensuring — from a financing point of view — that this project stays on budget, on schedule and on scope,” says Fullerton.

There is also demand risk once the rail line starts operations around 2025. Stakeholder management entails working with industry to ensure ARTC converts as much of that current road freight onto the rail network.

While some parts of the route are mapped out, in many greenfield sites there is still a 2km wide corridor, although only 40–60m will ultimately be needed. The result is significant uncertainty for landholders, particularly as some elements of the project won’t get underway for another five years.

Leanne Heywood GAICD is a non-executive director of mining company Orocobre and the Australian Meat Processor Corporation. The line will pass about 15km from Heywood’s sheep and grain property between Dubbo and Parkes. She says any excitement about Inland Rail is largely confined to Parkes. “Nobody really understands how it will impact them, what sort of jobs it’s going to bring to the region,” she says, adding that affected farmers are “up in arms”. Many are unsure if their properties will be cut in half and whether arrangements for moving stock will be put in place, and this is stifling investment.

ARTC has set up community consultative committees. In Queensland, the committees act independently of, but alongside, the program delivery team, while in NSW they are administered by the NSW Department of Planning and Environment. “It’s all about one-on-one communications and providing as much information as we can,” says Fullerton.

Read more on Australia's Infrastructure projects here. 

The project that wouldn’t die

The Very Fast Train has been promising to transport Australians interstate for more than four decades, writes Paul Robinson.

Some infrastructure projects refuse to go away. Badgerys Creek — Sydney’s “second international airport”, first proposed in the 1940s — is one good example of a project around for decades whose time appears to have come.

However, the king of Australian Big Projects That Won’t Die is the Sydney to Canberra Very Fast Train (VFT).

In October 2018, the NSW government declared part of the $4.2b Snowy Hydro Legacy Fund would be used to identify and fund a new corridor for a very fast train between Canberra and Sydney. In December, NSW Premier Gladys Berejiklian committed $4.6m to yet another VFT feasibility study.

The VFT (now defined as electric trains operating on steel rails at maximum speeds of above 250km/h) has been on the table since the 1980s, when the first of several major studies were undertaken, which showed the proposal to be technically and financially feasible.

High-speed rail (HSR)services in France and Japan had garnered considerable publicity and the idea of a 350km/h train service linking Sydney, Canberra and Melbourne engendered much interest in the private sector and among politicians looking for a sexy infrastructure policy.

In 1984, the CSIRO put a proposal to the Hawke government. Those pushing the idea touted such sweeteners as reduced travel time, job creation, economic stimulus, increased tourism, reduced pressures on other transport, rural/regional development and enhanced freight capacity. Those against pointed to the considerable expense of the technology involved compared to conventional rail. The least costly, but slowest VFT technology involved “tilt trains”, while the fastest, “mag-lev” (magnetic levitation) was too expensive. The proposal was eventually rejected as uneconomic.

Over the next three decades, as the rest of the world came around to an HSR way of thinking, successive Australian state and federal governments concocted, debated and eventually rejected proposals for bullet trains with monotonous regularity.

In 1986, a joint venture between TNT, Elders IXL, BHP and Kumagai Gumi proposed a 350km/h, Sydney–Canberra–Melbourne route. The project collapsed when the government refused to grant the project a favourable tax break.

Seven years later, the Speedrail Consortium (a joint venture of Alstrom and Leighton Contractors) pitched a high-speed Sydney–Canberra link at $2.4b (more than $4b today). The Howard government called for tenders, Speedrail won, then the proposal was rejected because it looked like requiring excessive government subsidies.

In 2013, the Gillard Labor government released a $20m study for an east coast bullet train network. But in November that year, the Abbott Liberal government axed the High Speed Rail Advisory Group, thereby putting an end to that idea.

A report released by think tank Beyond Zero Emissions in 2014, noted Australia was the only continent on Earth, except Antarctica, not yet committed to HSR.

In July 2017, federal advisory agency Infrastructure Australia released its Corridor Protection report, saying high-speed trains could be running between Canberra and Sydney within 15 years, and to Melbourne five years later, but governments must act quickly to avoid potential cost blowouts caused by rapid growth on the fringes of Sydney and Melbourne.

Queensland, WA and Victoria currently run 160km/h trains. The federal government now leans towards medium-speed rail (MSR) as used in the US Sweden and Canada.

Still the lure of big-ticket projects endures — as does the commuter, just hoping for a more efficient trip from A to B.