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The cost of delivering the 1,700-kilometre Inland Rail project in the eastern states has blown out to $31.4 billion, according to a damning new report, which warns the price tag may climb even higher because it is still unclear where the line "will start or finish".
Key points:
- The review said there was "insufficient uncertainty" about when the project would be finished
- It said the former federal government ignored advice, and board appointments lacked the skills to build a major rail project
- Estimated costs have blown out from $16.4 billion two years ago to more than $31 billion
Australia's former Energy Security Board chairperson Dr Kerry Schott led the review, finding the board managing the project did "not have adequate skills" and there had not been a "substantive" chief executive in nearly two years.
When advice was given to the former Coalition government to improve the skills mix on the board, Dr Schott said it was "not heeded".
"The cost of the project has increased by an astonishing amount when compared to 2020," she said in her review.
"Two years ago the estimate was $16.4 billion, and now it is about $31 billion."
"We all know infrastructure costs are going up but not like that."
A pet project of former Nationals leader Barnaby Joyce, the Inland Rail project was in what Dr Schott described as a "regrettable situation".
As well as governance issues, Dr Schott noted the route itself had yet to be finalised despite the fact construction began in 2018 and was slated to end in 2027.
This had created "insufficient certainty" about the final cost and completion date, according to her report.
"Somewhat surprisingly, the project has commenced delivery without knowing where it will start or finish," Dr Schott said.
"I remain deeply worried about the level of scope-maturity across the project as a whole and, as a result, the future impact on project-cost and completion-time estimates remains difficult to ascertain."
'Managed really badly'
Construction of the Inland Rail began in 2018 by the Australian Rail Track Corporation (ARTC), but almost all the work to date had been to upgrade the existing railway line.
The ARTC is a Government-owned corporate. whose main business until now has been maintaining freight railway lines.
But the review found that ARTC board appointments "did not reflect the skills required to govern either freight rail operations or a major infrastructure project".
"What they've never done before is a project of this size and they really didn't have the in-house capabilities to do it," Dr Schott said.
"ARTC has assured me that its desired skill mix was made known to the shareholder ministers of the former government who were responsible for the latest round of board appointments."
She said that advice was "not heeded" by the shareholder ministers and cabinet.
"It's not a bad project, but it's just been managed really badly," she said.
An 'indictment' of the Coalition
Federal Infrastructure Minister Catherine King was equally blunt in her response to the findings.
"This report is an indictment of the Liberal and National parties' approach to government," she said.
"To leave a project without a start or end point, with a significant budget blow-out, and a board without the skills it required, is shameful.
"They have let down communities and businesses, which have already invested time, effort and money in the prospect of Inland Rail."
One of the report's key recommendations was to review governance and skills on the ARTC board, and to reassess costs and design solutions.
Last year former ARTC director Cameron Simpkins claimed the planning of the huge rail project "had been done in a rush".
"It certainly appeared like two guys in a Commodore listening to KC and the Sunshine Band roaring up the road beside the railway going, 'Yeah, it's OK, it's OK, it's OK'," Mr Simpkins said at the time.
"I think they just looked on Google Maps and went, 'No problems here, keep going'."
Jobs getting created
The Inland Rail project continues to create thousands of jobs in regional communities along the proposed route like at Narromine, Narrabri and Moree.
But in southern Queensland near Millmerran, farmers there are worried a large railway embankment across flood plains will put property and businesses at risk.
An inland rail line has been discussed for decades but the substantial funding of $8.4 billion for the project was only secured in 2017 by Mr Joyce, the Nationals leader at the time, through the Coalition agreement he signed with then-prime minister Malcolm Turnbull.
"Mr Turnbull wanted Western Sydney Airport. Well, I wanted the Inland Rail, and now we've got the money," Mr Joyce told the ABC last year.
At the time, Mr Joyce said the Inland Rail had already been thoroughly reviewed and it was time to get on and build it.
"I think there were 71 scientists, experts, engineers, and there were two reviews that have been reviewed by a further two reviews," he said last year.