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Who profits from Inland Rail’s half billion dollar property purchases?

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The Australian Rail Track Corporation is projected to spend $494 million dollars on acquiring property for the proposed Inland Rail route. Despite rumors of certain people buying land on the route prior to the purchases, the government refuses to release who they are acquiring the properties from with nearly half a billion dollars of taxpayer money.

Transcript

Happens when you don’t think it through. Thank you, Senator Roberts over to you.

Thank you, Chair. And thank you all for appearing tonight. What is the current budget for property purchases for the Inland Rail project?

It’s $494 million.

494 million, thank you. In the last estimates, I asked Infrastructure Australia a simple question. Who owns the land being purchased by Inland Rail? And I received this response on notice. Quote, the full cost of the property acquired for the Inland Rail project will not be known until all 13 sections of the project are completed. The cost will eventually come out. That’s the end of the quote. Cost will eventually come out, but apparently ownership will not. Firstly, when is Inland Rail scheduled for completion?

Current schedule of completion in late 2026.

[Malcolm] 20.

2026.

2026, thank you. My office is aware of reports as to who bought land prior to the announcement of the Inland Rail alignment, which we of course pay no heed to. So is it the position of the Minister that the public will never be told who owned the land the Australian taxpayers just spent 494, or will spend $494 million buying, and that we’ll have to wait until 2026 or later to find out how much we paid for it?

Yeah, I think per that previous answer, it would not be our intent to disclose the information about individual landowners.

So the taxpayers are paying for something but won’t receive any any accountability for it until another four years, if it’s finished on time? So we can’t find out as representatives of the taxpayers. Okay, let’s move on. In 2010, the ARTC stated Inland Rail would not be cost effective if completed in 2021, but may provide a positive net value by 2035 against a projected cost of $9 billion if rail freight demand increased. In the 2015 business case briefing paper two, the ARTC found $16 billion in GDP increase over the first 50 years. The project tonight I understand we were told is now stated to have a total cost of $14.5 billion, with solid third party, independent assessments, at over $20 billion, some well over $20 billion. When was the last time the cost benefit of Inland Rail was calculated in terms of net present value? And specifically, what was the total financial benefit to the taxpayers over the payback period? And what is the payback period, and what project cost did you do the sums on?

Do you want to give business case?

Do you want me to take?

Yeah.

Yeah, okay. So since back in 2020 when the increased equity was provided, there was an update to the economic benefits. So there was a revised assessment that came out with a net $18 billion economic benefit over that same period, 50 years, that you mentioned. And in that sort of same timeframe, the Commonwealth Government also did some further studies that looked at some of the economic benefits that would be capitalised, not just from that $18 billion which is really associated with efficiency improvements in the supply chain, but then a further $13.3 billion that was found to be catalysed by the stimulation of further regional economic industry and development. So that was probably the the latest updates in that regard that were undertaken.

And perhaps I can just add the comment that we haven’t seen the full business case. Much of it has been redacted from memory. And the assumptions, in particular, just slight changes in the assumptions can dramatically affect the business case and all the claimed economic benefits. And we’re kept in the dark about some of the assumptions. So I’ll go on to the next question. The Inland Rail business case relies on a series of calculations about transit times, intermodal delays, train speed, track wear, projected freight volumes and revenue, route reliability, amongst many others. By way of example, the share of freight Inland Rail will attract supposedly on the Melbourne to Brisbane route will go from 26% currently to 62% by 2050. And that’s one of the massive assumptions. And these assumptions, models, and calculations are said to be commercially sensitive. So, as I’ve said a minute ago, they’ve not been made public and will not be made public. Is that a correct statement?

It’s exclusive.

Look Senator, the business case for Inland Rail was produced in 2015, which was the last one. Simon, do you want to make?

Yeah, it was certainly public. And I’m not sure exactly what assumption you’re looking at, Senator. It’s not-

Well, I’ll read them again. The transit times, intermodal delays, train speed, track wear, projected freight volumes and revenue, route reliability, amongst other things. And some of the reports that were submitted or made by some of the big four accounting firms or management consulting firms, they’re not available. And we understand that two reports contradict each other.

So Senator, the information that you went through is available. We can certainly, we could talk through it tonight or we could certainly come back to you outside of the session with that information.

We’d appreciate you coming back, that would be great.

Yeah, absolutely. I’m only aware of one. Sorry, I’m aware of one macroeconomic report to do with the assumptions around the GDP and also the market share figures, which was undertaken by the PWC Deloitte. EY undertook a more specific reasonable analysis. We’re not aware that they contradict. They were looking at quite different elements of the benefit streams of the programme.

Well, perhaps we could show you what we mean by that with the reports and with some documents, and you could at the same time as you can come back with your assessment. And we’re happy to arrange that with our office.

[Simon] And we’d been more than happy to do that, Senator.

Thank you very much. Minister, why is this project proceeding when the taxpayers are most likely to lose tens of billions of dollars if the taxpayers are not benefiting qui bono? So who is?

Well, I think based on the answers you’ve received and some of those things that’ll be taken on notice and subject to further conversations between you and the officers from ARTC, I think some of the assumptions underlying your questions may still be in contention. But obviously, the principle is that it’s a project worth backing and the government remains willing to do that for the good of the country. But obviously, further detail required to satisfy the questions you’ve asked so far. And hopefully the officers will give you the answers you’re after.

Okay, Chair, I’d just like to ask two questions, following up on what you asked. Thank you. The preferred alignment from the ARTC 2010 Melbourne-Brisbane alignment study became the final alignment in the 2015 programme business case. Is there any significant change between those two alignments? Because on a map they look the same.

The short answer is yes, that there were some minor adjustments. Off the top of my head, I’m probably couldn’t navigate through all of those. But the Inland Rail, route history document, does detail those and gives a lot of further detail. We can come back with some more if you need.

That’s on the website.

Yeah, that’s on the Inland Rail, the ARTC website, yep.

Okay, thank you. Last question to you. And this may be touching on something that Senator Van asked about. In the last estimates, I asked Major Transport and Infrastructure Projects about Inland Rail environmental impact assessments. And Ms. Hall, the First Assistant Secretary replied, the route has actually been set. This is a quote. The route has actually been set. The purpose of the environmental assessment processes are to give confidence to the communities that the environment is protected. So environmental impact assessments are still underway, and yet the route is set. Is it a statement of fact that the final Inland Rail route was decided before the environmental assessment of that route had even been started? So are you backfilling the project? Backfilling the EIS’s?

Senator, I think you’re referring to me. The route has been set. The purpose, as we’ve just discussed before, Minister, Mr. Helena has said is that an EIS process is designed to give assurance to the community, give assurance to the regulatory requirements. A coordinator general, for example, in regards to Queensland will set the conditions by which that piece of infrastructure needs to be built. So that is the purpose of an EIS process.

[Malcolm] Okay, thank you. Thank you, Chair.

Thank you very much.

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Inland rail

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The assumptions about the business case for Inland Rail are difficult to get a hold of. All of the Government Departments I talk to duck and weave and point the finger at other departments who then point the finger at someone else. We just want transparency about the true cost and assumptions that one of Australia’s largest infrastructure investments is being built on.

Transcript

Inland rail. In August, I contacted the RRAT chair Senator Stirl and asked for the big four accounting firms. Ernst & Young, KPMG, PricewaterhouseCoopers and Deloitte to attend a hearing of the RRAT committee to explain their data that underpins the entire inland rail project. The 24 hour turnaround time. So I just want to get this straight Minister. Inland rail is Australia’s largest infrastructure project since the snowy mountain scheme. Is it correct to say that you are refusing to show the committee or the Senate, the data that justified the spending on $25 billion in taxpayers’ money?

Is that question to me Senator Roberts?

Yes.

I’m afraid I can’t answer that question because I represent urban infrastructure and inland rail is not an urban infrastructure project.

Is there anyone that can answer the question?

Senator, I just clarify that it’s a $15 billion project.

Still the largest since snowy.

I think there’s one bigger right now.

Well exactly. You’re right.

It depends on how you measure it. Ms. Hall Dewey, there was a series of business cases undertaken for the inland rail project. Now I’m not aware of when was the last one.

The last- Sorry, Senator. Jessica Hall, first assistant secretary, Major transport and Infrastructure projects. The business case was released in 2015. And that’s the last business case that was made available. In regards to additional information that has been provided, my understanding is that ARTC releases anything that isn’t commercial and confidence. So, it would just be a question of the fact whether that information was commercial and confidence or not.

Well, Ms. Hall, thank you. My understanding is that the business case was released but the fundamental assumptions in which the business case is built were not released. And that’s what we want to see with the material from the four consulting companies. Because without that basic assumptions, we can’t tell whether it’s feasible or not.

Well, the business case did go to infrastructure Australia and infrastructure Australia, I think put it on the infrastructure priority list.

Are we able to get a look at the assumptions there? They’re fundamental to understanding whether or not inland rail is viable?

Well, I think the information around inland rail has been made viable because BCR has been made public.

BCR?

The Benefit Cost Ratio.

But without the assumptions, how can we assess that ourselves?

Well, I think that’s the role of infrastructure Australia. The infrastructure Australia has assessed that and said that it’s a viable project.

When’s the infrastructure Australia

They’re on this evening at 9:45.

Okay, thank you. So, that’d be able to tell me the details about the 24 hour turnaround time?

I think ARTC would be the best organisation for the 24 hour turnaround times. They’re not currently scheduled for today though, Senator.

No. Do you know when they are scheduled?

I don’t believe they’re scheduled for this estimate, Senator Roberts.

Okay. So is there any possibility that the real figure for compensation for loss of property rights along the inland rail route is ever going to be made public before the project is built?

I think we’d have to take that on notice Senator. I’m not quite sure what you mean in regard to loss of property rights. There’s compensation paid to anybody whose property is acquired.

Yeah. We’d like to know who’s getting the money? Who’s being compensated? We’d like to know who owns the land.

We’ll take that on notice, Senator.

Okay. Thank you. So why is it structured? Why is inland rail structured so that the data that could challenge the preferred alignment is locked up in the big accounting firms and can never be brought into debate? It seems like to me that the government is trying to keep this vital data from us.

I don’t think so, Senator. I think any information as I said, that is not commercially sensitive in regards to ARTC entering into contracts is being made publicly available.

The alignments for the route, also subject to environmental impact assessments and studies through state relevant state jurisdictions. So the usual regulatory approach for this and the control of final approvals for alignments lies with states through their environmental approval processes. More appropriately, ARTC can probably answer in detail on this, but of the 13 major project elements of each of those will be subject to an environmental and consultation process that then goes through the relevant jurisdictions approval arrangements which is subject to different state and territory law, depending on which state it’s in it crosses Victoria, New South Wales and Queensland.

So you’re saying it’s not finalised yet. And it’ll ultimately be in the hands of the states that you need environmental approval?

Yes. Environmental approval is in the hands of the state jurisdictions.

And that could affect the route?

It can. Yes We think the route is currently set and the environmental approval processes are underway. The final detail of the route though I think is question best for the ARTC that’ll be to do with engineering solutions around.

The route has been set. So, the route has actually been set. The purpose of the environmental assessment processes are to give confidence to the communities and to the states and to others about what provisions ARTC has to put in place to make sure that the environment is actually protected.

Will we ever know who owned the land that was purchased for the inland rail and what price was paid for it?

I’ll take that on notice, Senator. We should be able to get you something in regards to that.

Thank you very much.

So, just to clarify, because Senator Stirl has made a valid point about questions taken on notice and amount of time and blah, blah, blah. But just to be specific because I’m not entirely sure what that question is that you’ve just taken on notice. So you talking about in Queensland, you talking about the entire route from Victoria. So what you want is the-

The names of the people.

The names of the property owners.

Correct.

And the amount they’re being paid for their acquisition of the inland rail route through their property.

Correct.

And I’ll take long notice to see what information I can provide in regards to that. Because there’ll be a whole lot of issues in regards to personal information being provided.

Yes, so I’d imagine that not everybody wants that too.

It’s quite a complex requested 17,000 kilometres of route traversing a lot of different territories.

In the communities and among our constituents, there are a lot of questions being asked about that. A lot of questions.

Yeah. I understand.

And I appreciate that I guess it’s just been clear about if you can narrow that that would probably be helpful if you want to question and answer back quickly.

Well, I think what you’ve done is helped narrow that process.

All right.

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Inland Rail is off track

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Yesterday I attended a hearing into the Inland Rail project. The massively expensive project will see up to 40 heavy freight trains a day travel through southern Queensland to Acacia Ridge. (20 into Brisbane and 20 out)

Inland Rail uses passenger lines through south west Brisbane that local residents were promised would never be upgraded to heavy freight. That promise, by Labor Premier Beattie has now been broken by Premier Palaszczuk.

It is telling that neither Premier Palaszczuk nor any of her administration had the courage to front the inquiry to respond to the criticism of the route her Government is promoting.

The Mayor of Logan City Darren Power testified that within 20 years more than 50,000 residents would live with 1km of the train line, putting up with noise and vibration from 1.8km long heavy freight trains 24 hours a day.

The current plan is to terminate the line at Acacia Ridge, and not upgrade the rail link to Brisbane Port until 2040. This stupid idea will put hundreds of additional A double heavy freight trucks and related traffic onto local roads that can’t handle the traffic they have now.

Inland Rail’s preferred alignment also goes across the Condamine floodplain near Millmerran. Building a 2m railway embankment across a major floodplain is a really bad idea. The small culverts being built into the embankment will quickly block during heavy rain and flood out thousands of local residents and businesses.

The much better route through Warwick, along mostly existing freight rail lines was not seriously considered by the ARTC, this is a poor decision.

The budget for Inland Rail now stands at $20 billion and will go much higher. At this cost Inland Rail will never pay for itself. Our investigations into this and listening are going to continue. The more I hear, the more concerned I am about this project.

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