Inland Rail blows out $5.5 billion but Federal Government won’t explain where money is to be spent

The cost of the almost $10 billion project has blown out 50% to $14.5 billion. But if you want to know where the money is being spent, you’ll just have to wait, according to the Federal Government.

The Federal Government will not release a breakdown of where an additional $5.5 billion will be spent along the now $14.5 billion Inland Rail project.

The reasoning, according to Deputy Prime Minister Michael McCormack’s office, is that “the release of Australian Rail Track Corporation’s forecast total cost at this time could aversely impact the company’s ability to negotiate commercial terms as it establishes key contracts”.

The Chronicle asked whether taxpayers were still getting value for money for the project, given the $5.5 billion cost blowout.

When the project was assessed in 2016 by Infrastructure Australia – the nation’s independent infrastructure advisor – the project had a benefit-cost ratio of 1.1.

That is, for every $1 invested by the Federal Government, the taxpayer receives a $1.10 return.

When asked how the increase in the cost of the project would affect the benefit-cost ratio, the DPM’s office said: “The Australian Government expects the nation to earn a real return on its investment in ARTC, inclusive of the additional contributions to deliver Inland Rail.

“The project will boost the Australian economy by more than $18 billion during construction and operation and support more than 21,500 jobs at the peak of construction.

“The project will be cashflow positive from the day trains run the full alignment between Melbourne and Brisbane.”

Labor Senator Glenn Sterle, who is currently chairing a Senate Inquiry into the ARTC’s handling of the Inland Rail project, said the cost blowout “doesn’t surprise me one little bit”.

“That’s just the start of it. There’s going to be a lot more that’s going to have to come.”

He said the Senate Inquiry had been trying to seek answers from the government about the project – something he described as a “very frustrating” experience.

The inquiry is due to report its findings by February 11.