Inland Rail to Brisbane axed after cost estimate exceeds $45 billion

The Federal Government has axed plans for Inland Rail to extend to Brisbane after an independent assessment found the cost estimate now exceeds $45 billion.

Economic advisory firm ACIL Allen also said the project could not be completed until at least 2036.

The government announced today that it will end the new freight corridor at Parkes in New South Wales.

Construction will be completed between Beveridge in Victoria and Parkes by the end of 2027, using $1.75 billion in previously announced “off-budget” funding.

This will allow double-stacked freight trains to travel between Melbourne and Perth via Parkes.

Stretching 1600 kilometres, Inland Rail was intended to be Australia’s biggest rail project in a century, enabling high-capacity freight services from Melbourne to Brisbane in less than 24 hours.

In 2023, Dr Kerry Schott independent review of Inland Rail found that the estimated cost of delivering the total project had increased from $16.4 billion in 2020 to at least $31.4 billion in 2022, with little certainty on the actual cost to deliver the project, primarily due to delays and insufficient clarify around the scope.

Dr Schott recommended the appointment of an independent value engineer to further assess the cost estimate.

The government said Inland Rail works north of Parkes will now focus on “preservation of the rail corridor”, as well as protecting sites for future Inland Rail intermodal terminals in Queensland.

It also said it will prioritise investments that deliver “resilience, reliability and productivity” to the Australian Rail Track Corporation (ARTC) existing rail freight network.

Catherine King, Federal Minister for Infrastructure, Transport, Regional Development and Local Government said: “The 2023 independent review found major deficiencies in the governance and delivery of Inland Rail.

“We are taking sensible decisions to realign the future of Inland Rail and build a safe, efficient and reliable network for the future.”

In response to today’s announcement, the Australasian Railway Association (ARA) has reaffirmed its support for Inland Rail.

ARA Chief Executive Officer Caroline Wilkie said it is essential that the completion of the route remains in focus.

“When completed, Inland Rail will deliver a faster, more reliable and higher-capacity rail corridor between Melbourne and Brisbane, improving efficiency for freight operators and reducing pressure on congested road networks,” she said. “This is needed to meet future rail freight requirements in this century.”

She recognised the impact of cost escalations of the project, but said the full completion of the route must stay on the agenda.

“We welcome the continued preservation of the rail corridor and intermodal sites to ensure we can get this project back on track in the future,” she said.

“Inland Rail remains an essential project for Australia’s freight network and the industry is committed to completing its delivery to Parkes.”

The ARA will now engage with the government to identify what additional investment is required on the ARTC east coast network to address the impact of Inland Rail not being completed to Brisbane.

“We need to ensure that the ARTC network is resilient and fit for purpose, to meet the needs of the rail freight sector over the coming decade.

“We hope to see government revisit the remaining sections of Inland Rail in the future to realise its vision to unlock economic opportunity along the full Melbourne-Brisbane route.”