Cross River Rail cost may outweigh benefit: warning
The multibillion-dollar cost of Brisbane’s Cross River Rail might outweigh the benefits if pandemic-hit public transport use doesn’t bounce back.
QLD Politics
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The cost of the state government’s flagship multibillion-dollar Cross River Rail project may outweigh its benefits if public transport patronage doesn’t jump, the auditor-general has found.
A new report into the state’s major infrastructure projects includes an examination of the Cross River Rail project, which commenced in 2019 and is due for completion in 2025.
Auditor-General Brendan Worrall examined the three business cases that led to the government proceeding with the project and found the government decided to go ahead based on the forecast benefits being greater than costs – what is known as a benefit-cost ratio.
“These ratios are based on complex calculations containing significant assumptions and estimation techniques regarding a project’s forecast benefits and costs,” he said.
Mr Worrall found the key business case projected the daily rail passenger usage in South East Queensland with the operation of Cross River Rail would increase by 103 per cent over the period from 2015 to 2026 – or an average increase of 6.65 per cent each year.
But the auditor-general also noted the increase in passenger trips for the four years pre-Covid, from 2015 to 2019, was only 6.6 per cent or an average of 1.6 per cent per annum.
“Rail passenger numbers reduced by 25.3 per cent in 2020–21 due to the Covid-19 pandemic,” the report says.
“In recent months, rail passenger numbers have started to slowly improve.
“There will need to be a significant increase in passenger trips over time for the forecast benefits of the project to be achieved.
“The expected benefits of the Cross River Rail project should continue to be monitored, and appropriate transport and other strategies implemented, to maximise rail patronage and road user benefits over the medium and long term.”
Mr Worrall said $4.6bn had been spent on the project so far of the $6.9bn total budget – including $5.4bn from the government – but that figure was about $452m less than forecast for this period due to “market forces and schedule adjustments”.
Transport Minister Mark Bailey seized on those figures, saying they indicated the Opposition had lied about a potential $2.6bn blowout on the project.
“The independent auditor-general’s report states ‘as of June 30 2022, the contingency for the CRR project remained within budget’,” he said.
“The report thoroughly explains the cost of the project, and identifies the other work the delivery authority is doing to improve the broader rail network on behalf of other agencies.”
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