Billions set to be injected into inland rail project

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The scale of the Federal Government’s nation building ambitions are becoming clearer, with indications that as much as $8 billion will be committed to building an inland freight rail line from Melbourne to Brisbane.

The ABC understands the huge spend will be unveiled in today’s budget, which will delight industry players who were excited about the possibility of significantly less money being announced.

It would fit with the Turnbull Government’s plan to invest heavily in infrastructure projects branded as “investments”, such as building a second Sydney airport at Badgerys Creek.

The Coalition and Labor have already allocated almost $1.8 billion to inland rail, but today’s budget boost would help cover most of the estimated total cost of $10.7 billion.

Tempering the excitement will be questions that linger over whether inland rail will deliver a return on the significant investment.

A 2015 economic analysis cautioned that “the expected operating revenue over 50 years will not cover the initial capital investment”, meaning taxpayers would subsidise the venture.

The company tasked with delivering inland rail is the government-owned Australian Rail Track Corporation (ARTC).

It currently manages and maintains an 8,500 kilometre rail network across five states and has already mapped out a proposed inland rail route.

Industry players and economists will be keen to see how the Government would justify such a major commitment.

Given that the ARTC is government owned, it could frame the spend as an investment that would eventually deliver returns to its coffers.

Alternatively, the Government might plan to fatten up the corporation with a view to selling it down the track.

Capacity of inland rail

For years, the so-called “steel Mississippi” has been the National Party’s pet project.

Once built, it would steam through the party’s heartland at speeds up to 115 kilometres per hour, carrying the equivalent of 110 B-double truckloads of freight.

A big announcement in today’s budget would be a big win politically for the Coalition, given that a 2015 economic analysis found the project would create 16,000 jobs during construction.

That same report, written by former Nationals leader John Anderson indicated the track could provide a $16 billion boost to NSW, Queensland and Victoria over the next 60 years.

But the same report found that the expected returns over half a century would not cover the construction costs, which explains why the private sector has not expressed any desire to build it without government support.

In recent weeks Deputy Prime Minister Barnaby Joyce has taken every opportunity to spruik inland rail; his enthusiasm comes amid speculation he has his eye on the infrastructure portfolio.

The inland rail line would connect Melbourne to Brisbane via the NSW city of Parkes, where it would intersect with the Perth-Sydney line.

The infrastructure would allow freight companies and farmers to transport goods from north to south in less than 24 hours.

Users of the existing lines complain they are fragmented, slow and outdated.



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