June 01, 2017

Australian federal government commits $A 20bn to rail projects

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THE Australian federal government published its 2017-18 budget on May 9, committing up to $A 20bn ($US 14.7bn) in current and forward investment in rail projects that it says will cut congestion in cities, provide growth in regional areas and create new employment opportunities.

The long-term investment programme represents the largest ever commitment to rail by an Australian federal government. It is also a major turnaround for the ruling Liberal Party, which in the past has been reluctant to provide federal funding for urban rail projects.

Half of the funding will go towards a $A 10bn National Rail Programme for new and planned urban rail projects in Australia’s major cities, as well as providing for better connections between cities and regional centres.

double stacks AustraliaThis investment advances the government’s ‘Smart Cities’ agenda, recognising that urban rail projects have the capacity to provide opportunities for urban regeneration and create better integration between land use and transport planning.

Projects eligible for funding include Cross-River Rail in Brisbane; AdeLink extensions to the Adelaide tram network; a potential rail link to Melbourne Airport and the proposed Western Sydney Airport; and Perth’s Metronet rail project.

Federal funding for these projects will be linked to a tailored package of funding and financing measures to ensure that the appropriate balance of Commonwealth, state and private funding and financing.

Additional funds are being provided for Perth Metronet ($A 792m) and development of a business case for the Melbourne Airport Rail Link ($A 30m). The transport corridor between Melbourne city centre and Melbourne Airport has been identified by Infrastructure Australia as one of the most heavily congested in Melbourne.

The government says its initial focus on better regional connections will be improving the network in Victoria, with an additional $A 500m in the 2017-18 budget for improvements to the North-East, Gippsland and Geelong lines.

Shadow infrastructure minister Mr Anthony Albanese criticised the announcement by saying that despite promised funding, no money had been set aside until the 2019-20 financial year. “The third Budget paper shows a $A 200m commitment to the National Rail Programme in 2019-20 and $A 400m in 2020-21, with no further projections offered at this stage,” Albanese says.

Inland Rail

National infrastructure manager Australian Rail Track Corporation (ARTC) will receive $A 8.4bn in equity funding for the Melbourne - Brisbane Inland Rail project, a dedicated high-productivity rail freight corridor that has been many years in the planning. The size of the commitment has surprised many in the industry who had expected only a fraction of this investment at this stage.

ARTC will be responsible for managing the construction of the 1700km inland freight route, which has been in the planning stages for over a decade. So far around $A 1bn in funding being provided for planning, route evaluation and alignment safeguarding, but this is the first clear sign of intent by the government to fund the entire project.

The exception will be the crossing of the Toowoomba Range in Queensland. This 126km section, which includes large-scale tunnelling, will be delivered through a public-private partnership. A private concessionaire will be appointed to design, build, finance and maintain this segment over a long-term concession.

While the government has not yet announced a timeline for the handover of funds to ARTC, it says construction will commence in 2018.

Mr Danny Broad, CEO of the Australasian Railway Association, welcomed the announcement saying the government’s financial commitment to Inland Rail is critical in ensuring delivery of this key national freight project.

“Inland Rail is fundamental in boosting rail freight efficiency in Australia, and given Australia’s freight task will grow 26% by 2026, its delivery is important to all Australians,” Broad says. “The funding announced by the government provides renewed confidence to all parts of the rail industry that this project will be delivered, but the fact remains that significant work needs to occur to ensure the Inland Rail project comes to fruition. This includes maximising its benefits by delivering efficient linkages to the ports of Melbourne and Brisbane.”

Managing director and CEO of major Australian rail freight operator Aurizon Mr Andrew Harding says rail freight companies need to be able to compete on an equal footing with other transport modes to allow rail to do more of the heavy-lifting in Australia’s freight transport task.

“The announcement is a big step in the right direction, and should be used as the basis for a major modal shift from road to rail along the east coast of Australia, while delivering substantial economic, community and environmental benefits along the way,” Harding says.

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