Final stages shelved indefinitely amid cost blowout fears

The final stages of the failed Inland Rail freight link from Parkes in NSW to near Brisbane have been shelved indefinitely following warnings that the cost of the entire 1700km line would rise to well over $45 billion and would take until at least 2036 to complete.

The latest estimated cost of building the entire line from Melbourne to south of Brisbane is three times the $14.5 billion budget allocated for the project. The $45 billion price tag is also more than five times the cost estimate made by the Turnbull government almost a decade ago.

One reason why the Albanian government has shelved the proposed northern sections is that there are serious doubts about whether the entire line will be delivered for $45 billion and fears that the final bill will be much higher.

The cost of completing the entire Inland Rail project is currently estimated to be more than $45 billion.

In a bid to get Inland Rail back on track, train project veteran Sean Sweeney has been appointed as new CEO, while interim chairman Collette Burke has also been made permanent in the role.

Sweeney, who will replace Nick Miller, most recently led commuter rail projects in Dublin and Auckland.

Ahead of next Tuesday’s federal budget, a $45 billion forecast to complete the entire Inland Rail line has the government focused on completing the section between Beveridge on Melbourne’s northern outskirts and Parkes in central west NSW by the end of next year.

The latest estimates from consultants at ACIL Allen come three years after a scathing review by energy and infrastructure expert Kerry Schott, who found the project would cost at least $31.4 billion but was so far off the rails that It was not possible to speculate on the completion date, final cost or whether it would provide a return.

While sections north of Parkes are on ice and left to future governments, bureaucrats will consider preserving the rail corridor to Queensland as well as intermodal terminal sites near Ipswich.

Some of the $14.5 billion earmarked for Inland Rail will now be directed towards targeted improvements to the country’s existing freight rail network. This will mean an extra $1.75 billion will be spent on works including renewing runways and widening passing loops, on top of the existing $1 billion funding commitment.

Federal Transport and Infrastructure Minister Catherine King said the government was making “sensible decisions” to realign the future of the Inland Rail project.

“The 2023 independent review found major deficiencies in the management and delivery of the Inland Rail by the Liberals and Nationals,” he said.

Energy and infrastructure expert Kerry Schott has completed a review of Inland Rail in 2023.Peter Rae

Schott’s review in 2023 blamed the “staggering estimated cost overrun” directly on fundamental failures in planning and project delivery by the government’s Australian Railway Track Company, which runs the Inland Rail.

When it was announced by the Turnbull government in 2017, Inland Rail was expected to cost $8.4 billion and was scheduled to be completed in 2025. However, because the federal government considered this an investment that would pay for itself, it was not counted towards the lower end of the budget.

Implemented as a nation-building project, the Inland Rail was designed to provide a 24-hour link between Melbourne and Brisbane, allowing double-stacked freight wagons to cross central Victoria and inland NSW from north to south.

It was a pet project of former Nationals leader Barnaby Joyce, who secured $5 billion in funding to extend the Nationals from Toowoomba to the central Queensland port of Gladstone in exchange for supporting the Nationals’ commitment to net zero greenhouse gas emissions by 2050.

Completion of the Inland Rail section from Beveridge to Parkes will pave the way for double-stack freight trains to run between Melbourne and Perth via Parkes.

In a separate move, a new $55 million program will also be created to encourage more freight to be moved off-road on trains or ships.

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