Business

Mar 20, 2018

Inland rail’s dirty secret

The inland rail project is based on a sizeable subsidy to coal exporters just to get someone to use what its backers even admit is a white elephant.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

As the federal government pushes forward with Barnaby Joyce's white elephant political legacy of a $10 billion inland rail line, overlooked is the extent to which subsidised coal exports will play a key role in the finances of the project.

Despite using optimistic demand scenarios, the government has been unable to conjure a business case for the inland rail line, which will ostensibly connect Melbourne and Brisbane via central New South Wales, albeit stopping at Acacia Ridge in outer Brisbane, with a connection to the Port of Brisbane not slated until the 2040s. According to the business case prepared in 2015 by rail infrastructure owner Australian Rail Track Corporation for a committee headed by former Nationals leader John Anderson, the inland rail project as a whole will wipe out $6.5 billion in taxpayer funding over its life, with total revenues less than half of the cost of building and operating the line, and assuming there are no blowouts and delays to construction.

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23 comments

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23 thoughts on “Inland rail’s dirty secret

  1. EG

    Good to see John Anderson still in there helping regional development for the betterment of Australia.
    Anything he and Barnaby Joyce have been involved in using public money should be subject to very careful scrutiny.

  2. bref

    Its difficult to see how, with a dwindling coal market, these expenditures can be justified. I’m also mystified why in the light of the expected decline in use of coal over the next 20 years, the coal industry isn’t spending whatever necessary to develop real clean coal energy instead of the current sham ‘clean’ coal power plants.

    1. Woopwoop

      Presumably because “clean coal” doesn’t exist.

  3. Nudiefish

    Country Party Boondoggles will never end.

    The day that the bush pays it’s own way, huh? Yet these same ‘salt of the earth’ types always puts the boot into ‘welfare cheats’.

  4. AR

    There should be a stipulation that the Melb-Bris Inland rail line truly open up the NSW Western Division – all of which is Crown Lease – and not pass within 50 kms of population centre.
    This would be an incentive for each locality to construct their own branch line with all the concomitant development.

    1. old greybearded one

      Unfortunately apparently unbeknownst to urban clowns, the rail junctions are in population centres. It would also help if yourself and Mr Keane would gain some knowledge of the transport infrastructure needs outside of Sydney and Melbourne. Let us choose Parkes. No decent road link to the coast, no decent rail link to anywhere except WA, ie something that could carry a serious train with double container stacks. All N/S rail freight goes through a bottleneck in Sydney, all east west comes through tunnels in the Blue Mountains. In proper countries like Canada they take trains through the Rockies at 23 000 tonnes. We are lucky to get 3500. I am sick of living in a transport wasteland. The present route would require significant infrastructure to get Gunnedah Basin coal aboard, as the main mines are closer to the Hunter valley rail. Nevertheless if we are going to have the big Australia that Bernard bleats about, this sort of stuff has to happen. Pity none of the respondents have a clue about transport needs.

  5. Jimbo

    Q “In order to avoid the embarrassment of moving this huge loss onto the budget,”
    ‘Move onto the budget’ is fancy speak for letting the hapless taxpayer see that they just lost $6.5 Billion. (Yep that’s the one with a B)
    All this from the ones who claim to be the best managers of the economy.
    Bernard, Can you check out the economics of the Snowey 2 and the LNP Fraudband?

  6. Bob the builder

    Oh yeah, Keane, and how much do the revenue-free roads “cost”?
    If it wasn’t due to the punishing damage of goods transport, we’d be paying a hell of a lot less for roads, which, with the exception of some urban freeways, are provided for free and not expected to provide “revenue” to justify their existence.

    1. bref

      As much as I want to agree with you Bob, and goodness knows some of the roads up here in far north NSW are pretty atrocious, the newly opened sections of the Pac H’way have made my bi monthly trips to Sydney damn near idyllic. In a couple of years the last bit will be finished between Grafton and Ballina and I won’t care if there are double the amount of trucks on the road, if you can pass them there’s just no problem! Imagine 4 to 6 lanes all the way from Brisbane to Canberra.
      Now I know this isn’t all about the ‘coasties’, so all we have to do now is persuade those pampered pollies that rather than a ‘fast’ train we’d like just a normal 120km/hr inland train to add to the crap 60km/hr Bris/Syd train. Mind you, this is Australia so it’ll take at least 50 years to plan and build it.

      1. Bob the builder

        Yeah, imagine ten lanes, wouldn’t that be great!
        I remember on a push bike trip from Brissie to Sydney a few years ago, there were four perfectly good lanes, but just over the way they were building a yet wider section. I turned off to take a back way off the highway (there hasn’t been any thought to bicycle transport along the coast) and crossed the single, yes SINGLE, lane of railway linking Sydney and Brissie, barely touched since the 1920s.
        If we had decent rail infrastructure your bi-monthly trip to Sydney could be an idyllic trip on a comfortable train, with frequent and flexible connections. Maybe you could even quickly and easily load your car on, if you really needed it at the other end (I don’t think anyone’s stupid enough to think Sydney will ever get its public transport act together).
        People keep saying we don’t have the population density for train travel, yet mysteriously we seem to have it for motor vehicle travel. You might think you’ve got some bad roads down there in NSW, but they’d compare very favourably to most countries. The railway, however, is a disgrace.

        1. bref

          I would love to take the train, but the last time, in the early 90s, from Casino to Sydney, it took 12 hours and I had a choice of pies, crap sandwiches and crap coffee. I swore never again. I’m sure the food’s better these days, but it still takes a hell of a long time, its expensive, theres no wifi and I don’t have a car at the other end. All this could have been addressed at relatively low cost, but no one has bothered, so I won’t either.

          1. Bob the builder

            What has that got to do with how rail COULD be??
            If the Pacific highway hadn’t been upgraded since the 1920s and the railway had got even half the investment the roads have, I doubt you’d be driving.

          2. bref

            I agree Bob. But the train isn’t going to be an 8 hour trip in my lifetime and I’ll still be stuck in Sydney without a car. I also agree we need an inland railway.
            There could also be a mighty disrupter on the horizon in the shape of super zeppelins 🙂 Who knows? Maybe trains are passé.

    2. Howard

      Revenue free roads are public and available to all. How many people would have access to an inland rail and what sort of access would this be? Australia’s coastal highway has the high population density to sustain it and unlike other countries we simply don’t have the tax dollars and population to sustain the same inland infrastructure. Just why should we be even considering subsisdising a dying industry (coal) to this extent, that will mainly benefit coal exporters, at our expense. Any benefits don’t justify the costs.

      1. Bob the builder

        Roads are not available to all. They’re available to those who buy or hire a motor vehicle and fill it with fuel. As available to all as a train ticket – which works out a lot cheaper than buying and maintaining a car. Public roads, public transport, they’re both available to all (at a cost).

        1. Marcus Hicks

          Never heard of buses? I don’t own a car…..& never have. Yet I use our roads on a daily basis. You don’t seem very bright, Bobby. Are you a Nationals voter, by any chance?

          1. Bob the builder

            Well in this case we were talking about long distance roads. Last year I tried to buy a bus ticket from Iluka to Brisbane and the fastest connection was eight hours. We ended up getting off the second bus (two hours in, 80km traveled) and hitched to the southern end of the Brisbane rail network and did it in four hours.
            My main point was about public transport, where buses have their place, but rail transport, especially over longer distances is far more rational and far quicker.

          2. bref

            I don’t know where you live Marcus, but you wouldn’t get far in my neck of the woods if you had to rely on busses.

        2. Howard

          Yes Bob, but as I suggested it’s more about economics and what a large country with a relative small population (especially inland) like ours can sustain. I’m all for public transport and a more efficient and higher speed rail network. Also, what I meant in my previous post is that our coastal highways are easily accessible to very substantial more Australians than any inland rail would be (purely because of the high population density of the coastal route, as a posed to the sparsely populated inland region).

          If someone came up with an inland rail system that was relatively efficient (I recognise that some routes will always require public subsidies) and is mainly for the benefit of the public, rather than blood sucking corporations like the mining industry, I’d be all for it.

          I don’t know if the Ghan is profitable or not, but I believe it plays an important role in our national infrastructure network and is a definite tourist attraction. Maybe an East Coast inland rail network that ticked all the right boxes would be more palatable to the average Aussie. I’m just concerned that major schemes like this can easily turn into expensive white elephants like our NBN is proving to be.

          My main mode of transport is by motorbike and I sometimes commute between Brisbane, Sydney and Canberra. If we had a decent rapid train system like they do in Europe, Japan and China I would be commuting by public transport more often.

          On the subject of the budget, now if country and regional Australians had supported former PM Gillard’s mining tax when we were experiencing the biggest resources boom in our history, the funding would now be there for this project without further public funding.

  7. Marcus Hicks

    Isn’t there still the matter of the land Joyce owns, which just happens to be adjacent to the route of this rail project? The blatant corruption of this government is *sickening*!!!!

  8. Lee Tinson

    The big (well maybe hopefully not any more) proponent of this is, of course, Barnaby Goose. I understand he has bought land from which he is hoping to make a motza by having it compulsorily acquired by the government for this inland rail project. So he set the whole thing up for his own personal enrichment. As he so often reportedly does.

    New England, this is your representative. His peccadilloes with his staff, unprofessional and downright stupid as they might be, are nothing to this sort of behaviour which, if it’s true, are actually criminal.

    Please, for the sake of the nation, try to do better.

  9. 3 Policy Options

    Do the calculation of adding up the subsidy going to road vehicles in diesel, the cost of dead and injured road users being hit on a daily basis, the constant road repairs on the Pacific Highway (Ballina to Coffs Harbour current upgrade $6 billion) and the fear that most local and tourist road users have as a B-Double cuts them off – then maybe a train isn’t such a bad idea.

    1. Howard

      Yes, and if based on the maths, the most economical and sustainable option is to upgrade the existing rail network to a fast train system, add extra stations and rail sidings to allow for all station trains as well as express trains, and provide incentives for road freight transport to transfer to rail.

      This is something affordable and if managed properly should get more long distance travellers out of their cars, as well as large trucks off the road, meaning reduced maintenance and upgrade costs. A duplicate rail system just doesn’t stack up.

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