Opinion: Labor digging us into a hole with Cross River Rail

The Cross River rail project, plagued by delays and design flaws, looks set for massive cost blowouts and may well have been privatisation by stealth, writes Des Houghton

Any day now Annastacia Palaszczuk and her lacklustre Transport Minister Mark Bailey will stage a boring press conference at Woolloongabba with Else and Merle.

Else and Merle are the tunnel boring machines named after feminist trailblazers Else Shepherd, an engineering academic, and Merle Thornton – actor Sigrid Thornton’s mother -who famously chained herself to a men’s-only bar at the Regatta Hotel in 1965.

Transport and Main Roads Minister Mark Bailey and Cross River Rail Delivery Authority CEO Graeme Newton with one of the tunnel boring machines. Picture: Attila Csaszar

After her shambolic government was saved by the COVID pandemic, the Premier will attempt to use the cross-river rail project to get it back on track. (That’s the last time I’ll use that pun; promise.)

Else and Merle will soon begin excavating 5.9km of twin tunnels under the Brisbane River as part of the 10.2km cross-river rail project from Dutton Park to Bowen Hills.

The tunnel boring machines will operate 24 hours a day, seven days a week. The machines will churn through 40m of earth a day, and as they go they will line the tunnels with curved concrete segments.

We’re told each machine has its own kitchen, offices and toilets, and a crew of up to 15.

The cross-river rail project is risky business for Palaszczuk. Much can go wrong. The Courier-Mail has already reported that a “design flaw” will cause months of pain for commuters, with noisy freight trains diverted through Toowong and other Brisbane suburbs.

The LNP Opposition said the “bungle” would cause cost blowouts on the $5.4bn project.

And many serious questions are still unanswered, says Graham Young, the executive director of the Australian Institute of Progress. He says there has been little transparency.

Young fears taxpayers are being taken for a ride, with the real cost to eclipse $7bn. He also believes cross-river rail is a form of privatisation by stealth.

Young also points to governance issues detailed in a report commissioned for AIP by Professor Phil Charles of the Transport Futures Institute international rail consultant Phil Sayeg.

Progress on the tunnel boring machines in November last year. Picture: Attila Csaszar)

“The report identifies a number of planning and governance risks and failures which provide lessons for the future,’’ Young said.

“These risk a cost blowout which will crowd-out other much-needed infrastructure.”

The cost may have already ballooned to $7.16bn because of cost overruns.

“The consultants call for an immediate review, which we believe should have the powers of a Commission of Inquiry.”

He had a number of concerns with the public-private partnership arrangements entered into by the Government and Pulse Consortium.

“It appears to be a form of limited privatisation. The Pulse Consortium builds the tunnel and stations, and in return for a $1.5bn payment to the Government gets to charge the Government $2.4bn to allow Queensland Rail to use the tunnel over the next 24 years, at which time the right will be extinguished.

“Queensland Rail pays a further $2.4bn to the consortium to maintain and operate the tunnels over that period as well.’’ Despite the arrangement, 85 per cent of the risk remains with the Government, while interest rates were likely to be around 3 per cent, versus 0.8 per cent for government borrowings.

And because of the potential cost overruns at the Dutton Park station as a result of variations to the contract, construction risk may have shifted back to the government.

“The report identifies a governance risk,’’ Young said.

“While the Cross River Rail Development Authority originally had an independent board, the board members are currently heads of various government departments.”

The project would be challenging because different contractors would be building tunnels, rail lines, bridges, stations, rolling stock, and signalling systems, he said.

Artists impression of the Cross River Rail, Roma Street Precinct. Supplied.

The Cross River Rail Development Authority would report to four different departments: State Development, Transport and Main Roads, TransLink and Queensland Rail.

The land over the stations has been transferred to Queensland Investment Corporation.

“This may herald a surreptitious privatisation of more parts of the project, as occurred when Queensland Motorways was transferred to QIC from the government and then subsequently sold to the private sector,” he said.

“It also puts QIC in a conflicted position as the development of the Woolloongabba station, for example, is predicated on office developments to house public servants currently in the CBD.

This would have a significant impact on values in the CBD in general, where the QIC has a stake, as well as on specific buildings already owned by it.”

He said it was difficult to escape the conclusion that the project has been shaped by political imperatives.

The AIP believes it would be sensible for independent review to include a full technical review, identification of major risks, as well as confirmation of the total direct, indirect, and associated capital costs for the project and the whole-of-life operating costs for the project.

Bailey declined to be interviewed.

A press minder issued a statement in his name saying the project was “on-track for completion in 2024, and on budget”.

The statements said the project was approved by the “independent” Coordinator-General “and Queenslanders can have a high level of confidence that the project’s design and planning is robust”.

Des Houghton is a media consultant and a former editor of The Courier-Mail, the Sunday Mail and the Sunday Sun.