The federal government has confirmed that enhancements to the Inland Rail project will be funded through a $5.5 billion equity injection into the Australian Rail Track Corporation (ARTC).
The 2020 budget papers included an equity injection of an undisclosed figure into the ARTC to fund the project and today’s announcement clarifies the figure and what it will be spent on.
The additional funding will go towards 4,500 extra culverts, nine viaducts, 6.8km of bridges, 10 extra grade separations, 450km of fencing and the removal of 139 level crossings.
The $5.5bn in funding represents a roughly 50 per cent cost increase for the project, which was originally budgeted to cost $9.9bn and had $9bn in equity committed to the project as of the 2017 budget.
Grattan Institute Transport and Cities program director Marion Terrill said that the cost increase was “huge”.
“The current route for Inland Rail was first specified in 2010 by the ARTC and at that time they estimated that the cost would be $4.4bn. Then in 2015 they did a full business case and they thought it was going to be $9.9bn. Now this is another $5.5bn injection from the Commonwealth government. It is an enormous increase off the initial cost estimate.”
Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development
Michael McCormack said the additional money would flow through to local communities.
“These enhancements will provide for greater local investment, mean Inland Rail will now support more than 21,500 jobs at the peak of construction and deliver an extra economic boost of $2 billion,” he said.
“These enhancements to the Inland Rail network will deliver more contracts for local businesses and more work for Australians at a time when we need them most.”
While the media release does not specify the sections of track which have had designs revised, Minister for Finance Simon Birmingham said that investment was in response to the needs of those along the alignment.
“This is about being responsive to the needs of the farmers, businesses and communities who will rely on Inland Rail,” he said.
“We’re making improvements to the design to deliver a more efficient network while at the same time supporting even more jobs and more economic activity.”
Based on the previous cost estimate of $9.9bn, Infrastructure Australia estimated that the cost benefit ratio would be 1.1:1, meaning for every dollar spent, $1.10 would be returned to the economy.
With work complete on the Parkes to Narromine section, construction kicked off on the Narrabri to North Star section in November. ARTC and the NSW government are working towards responding to submissions made on the North Star to Queensland border section Environmental Impact Statement (EIS) and the EIS for Narromine to Narrabri is currently open for public feedback.