Below Rail Infrastructure, Engineering, Freight Rail

Review of rail freight project targets governance, planning for improvement

The Victorian Auditor-General has delivered a withering critique of the governance and delivery of the stalled Murray Basin Rail Project (MBRP) and the Freight-Passenger Rail Separation Project (FPRSP).

The MBRP, which promised to upgrade over 1,000km of rail track in regional Victoria to standard gauge, has been left unfinished as funds ran out and disputes between V/Line and the contractor, a McConnell Dowell and Martinus Rail joint venture, caused the project to spiral beyond its original budget.

The Victorian Auditor-General brought in V/Line and the Department of Transport for criticism, nothing that both projects “have not met scope, time, cost or quality expectations”.

Particularly concerning for the Auditor General was the way that the project had been handled.

“From a project and program management perspective we identified deficient project planning, cost estimation and scoping by the Department of Transport’s (DoT) predecessor agencies. V/Line Corporation’s (V/Line) inadequate contract and project management has also contributed to project delays and cost overruns for the MBRP Stage 2 works,” wrote the Auditor-General.

Rail industry figures have encouraged both the Victorian and federal governments to continue with the project, with the many benefits flowing to hard hit areas, said Pacific National CEO, Dean Dalla Valle.

“Governments of all political persuasions must be acutely aware how vital regional exports are to the overall health of the nation’s economy. With the current coronavirus outbreak, domestic and international trade are facing significant headwinds, now is not the time to neglect key transport supply chains in Australia,” he said.

Rail Futures Institute president, John Hearsch, echoed these statements.

“Until the project can be brought to a successful conclusion the rail industry and its operators are being disadvantaged in terms of service and cost and that impacts their competitiveness.”

The current works have left the network with extensive speed restrictions and roundabout routings, with the objective of improving axle loads not met. Rectifying this would see significant benefit for regional communities said Dalla Valle.

“Upgraded rail lines result in operators like Pacific National being able to run heavier freight trains at increased speeds. Upgraded lines also enhance safety across the network. This means safer, more cost-efficient and reliable rail haulage services to port; hence regional producers and exporters benefit. By extension a significant workforce in regional Australia benefits, including train crews, primary producers, farm workers – the list is long.”

The Rail Freight Alliance (RFA), a grouping of regional councils in Victoria, said that it is essential that the project is completed.

“With Victoria’s freight task estimated to treble by 2051 the Andrews government owes it to industry and Victorians to fix and complete the Murray Basin Rail Project to its original scope, as promised, and now is the time to do it.” RFA chair councillor Anita Rank said.

Currently, the Victorian government is finalising an updated business case for the remainder of the project, said Minister for Transport Infrastructure, Jacinta Allan. Once completed, the revised business case will be submitted to the federal government for consideration, which had contributed funding to the initial stages.

“We’ve been disappointed with the performance of the previous contractor and the management of the project previously by V/Line and that’s why some time ago the project has moved across to be delivered by Rail Projects Victoria,” said Allan.

According to the DoT, the MBRP remains a “priority project”.

“The Murray Basin Rail Project has already delivered benefits for the freight industry, but we know that there is more work to be done. That’s why the Victorian Government is working with the Commonwealth government to progress the business case,” said a DoT spokesperson.

In its report, the Auditor-General issued a number of recommendations, including recommending that V/Line expedite finalisation of all unfinished works in Stage 2 of the MBRP, improve its contract management of major infrastructure projects, and expedite assessment of the reason for temporary speed restrictions on the re-opened standard gauge line from Yelta to Ararat.

The Auditor-General also recommended that V/Line and the DoT both develop a sustainable funding approach for regional rail freight lines and improve network reliability and performance standards. The report also highlighted the need to identify regional rail freight needs, and ensure compliance with project risk management processes for all major capital projects.

Both the DoT and V/Line accepted all the recommendations, and in an action plan the Department of Transport noted that it would review the original MBRP business case by engaging with industry, and complete detailed modelling of the Murray Basin rail network. The Department pointed to the recently formed Rail Freight Working group as a method by which government and industry will work together on rail freight infrastructure projects.

Work completed on the rail network to date includes updating the Mildura and Murrayville to Ouyen lines to standard gauge, as well as the Maryborough to Ararat line. A junction near Ararat station will have its signalling upgraded in the coming months.

Dalla Valle highlighted that work to build a staging area for standard-gauge freight trains at Maryborough could act as a “pressure valve” for the network.

“The Murray Basin is the economic lifeblood of northwest Victoria, with regional rail veins pumping exports worth hundreds of millions into the state’s ports. Thousands of country and city jobs are supported by this freight and logistics ecosystem,” he said.

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