Land deals sealed for $200bn high-speed east-coast rail link

Land deals have been struck for a $200bn plan for high-speed rail ­offering two-hour trips between Melbourne, Sydney.

High-speed rail could offer trips between Sydney and Melbourne in just two hours.

Land deals have been struck for an ambitious $200 billion private sector plan for high-speed rail ­offering two-hour trips between Melbourne and Sydney, which is being “aggressively” pursued and presented to state and federal governments for support.

Work on the 40-year nation-building infrastructure project, which would create eight new ­regional cities, could begin within five years if it wins support from three tiers of government and ­affected communities. The private company behind the ambitious plan, Consolidated Land and Rail Australia (CLARA), has met Malcolm Turnbull and the Victorian and NSW governments to seek support for the project, which it claims will not require any capital investment from taxpayers.

If the world’s fastest trains were used for the rail line, the travel time for the 915km route would be as little as 110 minutes.

FAST TRACK: new plans for high-speed rail

The multi-billion-dollar project is being heralded as one of the world’s largest ever high-speed rail infrastructure projects, with the potential to ease pressure on ­Sydney and Melbourne as their populations grow over coming decades.

CLARA co-founder and chairman Nick Cleary said the project could be funded through the “value capture” of land that would be transformed from mostly ­farming land to new city ­developments.

Under the value-capture model, land bought for $1000 a lot could be sold for housing for up to $150,000, allowing the profit margin to developers to fund the rail and civil infrastructure needed.

“We are a decentralisation program,” Mr Cleary said ahead of the project’s official launch in Melbourne today.

“The train allows for the cities to be viable, and the cities make the train viable — they are ­symbiotic.

“We don’t anticipate asking any level of government for a ­direct financial injection; what we really need is the assistance to plan out these communities to secure the corridors of the rail which state governments have to do.

“We are under no illusions as to how difficult it is, and we are buoyed by the fact that both commonwealth and state government are open to enter into co-­ordinated discussions.”

GRAPHIC — A grand plan on track

The new city sites will be greenfield developments that are at most 15km away from existing ­regional towns, with land at each of the eight target sites already ­secured.

The company has been negotiating with property owners for the past 12 months, and has ­secured legal rights over 40 per cent of the land needed for the ­development, more than 16,000 hectares, through option agreements signed with about 70 land owners.

“They are contracts to purchase on condition that we pass the regulatory milestones that we need, which is basically having a mandate from the state government in return for us to provide the rail and civil infrastructure,” Mr Cleary said.

“They (the new cities) will be stand-alone, sustainable, smart and designed from the internet up.”

The company also intends to fund the acquisition of the rail ­corridor, estimated at $1.2bn, but the legal apparatus to do so rests with the states and could be done through compulsory acquisition.

The project has established a high-profile advisory board that includes former NSW premier Barry O’Farrell and former Victorian premier Steve Bracks, along with recently retired federal trade minister Andrew Robb.

American board members are also involved in guiding the project, including former US diplomat Niels Marquardt, former US ­secretary of transportation Ray LaHood, former White House ­fellow and City of Chicago chief ­financial officer Lois Scott, and former Clinton advisers David Wilhelm and Mark Doyle.

Mr Bracks said that while there was public scepticism about the project, given previous failed ­attempts at a high-speed rail link between the nation’s two largest cities, he believed the funding model being promoted by CLARA was a key difference that made the project viable.

“I understand the scepticism, but this is a different proposal,” the former premier said.

“It is as much about regional development, and if you like, uplift in land value capture as part of that. It is a regional development project as much as it is a rail project. I think it deserves consideration because the public benefit would be enormous.”

Mr O’Farrell said that past proposals had failed because of unrealistic demands on the public purse.

“What excites me is rather than it being a thought bubble from federal or state governments it is coming directly from the private sector, and the bald fact is that only the private sector can deliver and pay for a project of this size,” the former NSW premier said.

“And secondly they are being upfront about how it will be paid for which essentially is about the development of regional cities.”

Phase one of the project would be focused on the greater Shepparton area, north of Melbourne, with high-speed rail connecting the two to be operational in about a decade at a cost of about $13bn.

The company is confident that if the plan is supported through the regulatory period by government at all levels, it could be “turning dirt” by 2021.

A linked line from Sydney through to Melbourne could be operational by the 2040s, with the new cities being developed and populated through the 2020s and 2030s. But Mr Cleary said the government needed to help push the project before urban sprawl threatened to make the acquisition of the rail corridor too ­difficult.

“One of the reasons we are ­acting now is so that the corridor doesn’t get lost to further urban sprawl,’’ he said.

“Now is a very, very defined window of opportunity to get this off the ground. If we leave it now and come back in 10 years the ­opportunity could be lost.”

The consortium met the Prime Minister in March, who is understood to be encouraging of the proposal.

It also met Victorian Treasurer Tim Pallas and NSW Premier Mike Baird in April.

“We have been invited to provide more details and there has been an openness to carry on further discussions,” Mr Cleary said.

“There are challenges; we don’t want to give the impression that we thought this was going to be easy. This is a big project and everybody needs to be hands on.

“This is a national discussion, it is a national decision about the next 50 years of our nation and we can’t allow sectional specific interest to play too large a role in any of this. There has to be balance reached, there has got to be compromise and we come to it with an open mind and good intentions.”