Opinion: Inland railway – politics of disaster

Everald Compton

Back in the days of his prime, Barnaby Joyce announced that the Coalition Government had allocated 9.5 billion dollars for the construction of the Inland Railway.
He had demanded this from Malcolm Turnbull as the price for National Party cooperation at the time of Turnbull’s coup to topple Abbott.
Turnbull reluctantly agreed, but insisted that it had to be funded ‘off balance sheet’, ie, not taken from general taxpayer revenue in the next Budget, but funded by loans to be taken out by the Federal Government’s own railway company, ARTC (Australian Rail Track Corporation) against its balance sheet. Future revenue would pay back the loans.
This was mentioned only in the fine print of the public announcement. Most voters think it is being funded by regular government grants.
In other words, Barnaby Joyce proceeded with the project without allocating one cent of government funds to it. This means that his in-depth commitment to it has been Nil. It was simply a vote getting stunt.
It still is a very shallow commitment by those who have followed him and it will cause future governments huge pain when, inevitably. they are forced to pick up the large tab.

Based on current planning, it will take a full decade or more to build the railway from Melbourne to Brisbane via Parkes and Toowoomba.
Interest on the ever increasing ARTC loans will rapidly multiply over those years.
Then, it will take another ten years for freight traffic on the railway to generate enough revenue to start repaying the loans, while, in the meantime, huge operating losses will add onto those loans.
The venture will bankrupt ARTC.
The facts are that the Inland Railway can only ever attain viability if it is funded totally without debt and this was known to both Turnbull and Joyce when the deal was done.
Their actions represent one of the most irresponsible decisions in Australian political history and could easily have been avoided.
It has always been possible to run freight trains from Melbourne to North Star, which is north of Moree. All that is needed is to build a 300k standard gauge railway on from there to Toowoomba which can act as a freight hub for the whole of South East Queensland without the track going any further. It can also send airfreight from Toowoomba’s International Airport.
All that is needed is three billion dollars in tax payer funding. This would make it possible for revenue generating freight trains to run from Melbourne to Toowoomba and return, many years ahead of the current plans.
All of the creation of short cuts and upgrading in NSW could then be progressively implemented in the years ahead with small but regular doses of taxpayer funding annually.
The proposed highly expensive track from Toowoomba to Brisbane will never be needed as it is a better strategy to build the Inland Railway on to Gladstone and open up a huge regional development opportunity on the Darling Downs, Maranoa and Central Queensland.
But negotiations between the Morrison and Palaszczuk Governments have broken down over the cancellation of promised federal funding for Brisbane’s Cross River Rail by Abbott six years ago. It would have been built and operating by now if Abbott had not done this.
So, Palaszczuk now makes a fair comment to Morrison: “You restore the Cross River Rail money and we will let the Inland Railway into Queensland.”
Who can blame her? But I am sure that Albo will fix it when he becomes Infrastructure Minister in May.
In the meantime, the current Infrastructure Minister, McCormack, is spending 300 million dollars unnecessarily upgrading the rail track from Parkes to Narromine which is in his own electorate. He had earlier announced, at a sod turning ceremony beside a rail track that has been there for 150 years, that it would cost 160 million.
It will not cause even one more freight train to appear on the line to North Star and so it is an utter waste of public funds that will send that massive overdraft soaring higher.
In addition, farmers between Narromine and Narrabri are in uproar over the proposed short cut rail track which is next on McCormack’s list for the Inland Railway. Negotiations for resumption of their land have been brutal, so 300 of them abused him mightily at a recent public meeting and there is some evidence that Barnaby, who wants his old job back, helped organise the protest.
There is a similar uproar among the farmers around Millmerran in Queensland. The public relations skills of ARTC are totally missing.
The best that can be said today is that the creation of the Inland Railway, a great national development project, is in the hands of gross political and bureaucratic incompetents who have turned it into an unbelievable farce at huge cost to the nation.
It must not be destroyed by irresponsible vandalism.
Everald Compton was a founding director of ATEC Rail Group in 1996 and served as chairman for 18 years. He now serves as a consultant to the company.

Exclusive mandate for Queensland freight link

Australian Transport and Energy Corridor Ltd (ATEC), the infrastructure company founded by inland railway specialist Everald Compton, over a decade ago, has today submitted a business case to the Queensland and New South Governments for the building of the Border Railway linking Moree and Toowoomba.

Compton and ATEC have asked Anna Bligh and Morris Iemma to jointly grant to ATEC an unconditional exclusive mandate for the 350 kilometre track between Moree and Toowoomba, which would be built by 2014 as a standard gauge, open access track at a cost of $ 900 million.

Its construction will mean that there ultimately will be a standard gauge inland railway from the Port of Melbourne to the Port of Gladstone with a link to the Port of Newcastle.

ATEC has a successful history with unsolicited private/public mandates. ATEC controls a twenty per cent shareholding in Surat Basin Rail Pty Ltd, and was instrumental in achieving the 2006 landmark unsolicited and unconditional exclusive mandate from the Queensland Government to complete the Toowoomba to Gladstone Railway through the Surat Coal Basin. This was the first-ever unsolicited public/private partnership mandate awarded by the Queensland Government.

Everald Compton is chairman of Surat Basin Rail, which includes ATEC’s joint venture partners Xstrata Coal, Anglo Coal, Industry Funds Management and QR. The project is currently on schedule to be completed in 2013, one year ahead of the projected completion schedule for the Border Railway.

The Border Railway will be built as a greenfields project from Moree to North Star and Yetman, crossing the border at Yelarbon and going on to Inglewood, Millmerran and Pittsworth to Toowoomba where ATEC has purchased 155 hectares of land to establish a major state-of-the art intermodal freight centre at Charlton, just west of the city at the junction of the Border and Surat Basin Railways.

The business case for the Border Railway outlines the manner in which ATEC will establish and lead a consortium to carry out the mandate for construction. This will be completed and lodged by 31 May, 2008, and those companies seeking membership of the consortium will be subject to the approval of both the NSW and QLD Governments. ATEC’s consortium partners are likely to be a rail and an infrastructure company as well as a superannuation fund and ATEC says negotiations are already well advanced with parties in those fields who have already expressed genuine interest in the substantial project.

Compton has also just delivered the business case to the federal government, as the construction of the Border Railway will create a need to upgrade existing rail tracks south of Moree and undertake the construction of the Murrurundi Tunnel to give better access to the Port of Newcastle. This work is likely to become the responsibility of the Federally owned Australian Rail Track Corporation.

Compton’s business case submission to the NSW and QLD Governments complements infrastructure minister Anthony Albanese’s announcement last week of a $15m scoping study on a standard-gauge railway linking Melbourne and Brisbane.

Compton also announced two significant and strategic freight centres that will be fundamental to the success of the Border Railway: one in Charlton in Queensland and one near Parkes in NSW.

Last month, the ATEC Freight Terminals Trust received development approval for its Charlton Freight Terminal site, which will be a major storage and distribution centre for all of south eastern Queensland delivering freight directly to and from customers in Brisbane, Gold Coast, Sunshine Coast and Ipswich without double-handling and within a time span considerably shorter than that can be achieved on the coastal railway.

In anticipation of NSW rail upgrades being completed, the ATEC Freight Terminals Trust has also secured a strategically located and well-suited large area of land (in excess of 200 ha) for the creation of an intermodal freight terminal near Parkes in central NSW, where the inland railway will cross the Perth to Sydney railway. The ATEC Parkes freight terminal is set to be the largest freight terminal in Australia and is expected to be completed by 2014.

Everald Compton said: “The Border Railway should have been built a century ago. The failure to do so represents a classic example of the dreadful impact of non-planning, as the lack of a cross-border inland railway has seriously impeded the development of large inland cities and allowed the overdevelopment of cities such as Sydney and Brisbane to the detriment of the nation.

“The fact that the building of the Border Railway will allow freight trains to run between Melbourne, Gladstone and Newcastle will mean the development of new industries in inland Australia and bring populations from capital cities to service them. Albury, Wagga Wagga, Parkes, Dubbo, Moree, Toowoomba, Dalby and Biloela will become major inland cities.

“This project will take 1,000 trucks a day off the Newell Highway, saving millions of dollars in road maintenance and greatly improving the environment and efficiency in the logistics of large-scale freight movement,” continued Compton. “It will remove freight trains from the overcrowded suburbs of Sydney and foster the further expansion of the Port of Newcastle, further slowing Sydney’s abnormal growth,” he said.

 

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