The Abbott government has a poor record on infrastructure. The “infrastructure Prime Minister” has presided over a marked deterioration in infrastructure investment levels since he was elected, and his main policy effort on the issue has consisted of trying to attack the Victorian Labor government for abandoning the expensive and dubious East West Link project, which would have cost billions of dollars to generate benefits of just 45 cents for every dollar invested.

Now the government is looking to throw more money at another commercially unviable infrastructure project — a rail link for the mooted Carmichael coal mine to move coal to the Abbot Point port terminal on the Queensland coast, to be provided by the Commonwealth and Queensland Labor governments. The nearly 400-kilometre rail link will cost more than $2 billion, according to initial estimates.

The Carmichael coal mine is simply unviable at existing coal prices. There are coal mines in Queensland and NSW with existing transport links that have been shuttered by their owners or put up for sale because they can’t make money at current prices. Coal mine companies are reporting massive losses and facing share price collapses quite separate from current sharemarket turmoil.

The Commonwealth government, which is blinded by its bizarre obsession with coal, and the Queensland government, which seems willing to do anything to avoid the charge of not supporting Queensland jobs, appear bent on pumping as much taxpayer money into the project as is required to restore a semblance of viability.

It will be interesting to see what Infrastructure Australia — which hasn’t listed the rail link on its Priority Projects list — and the Australian National Audit Office think of such profligacy. This project is more boondoggle than infrastructure.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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