Australia: Reckoning Time For Railway Redevelopment On The East Coast Of Australia?

Last Updated: 13 January 2016
Article by Carine Cruse

The Melbourne-Brisbane Inland Rail project

The Australian Government has committed to building the Melbourne - Brisbane Inland Rail, which has been described as a "game-changer" by Warren Truss, Deputy Prime Minister and Minister for Infrastructure and Regional Development.  Implementation of the project began in July 2015 when GHD was awarded the tender to provide environmental and engineering consultancy services for the first stages of the project.

Why is it needed?

The new route for the Inland Rail will provide primary producers and mining industries in Victoria, New South Wales and southern Queensland with greater access to domestic and foreign markets by increasing the capacity of Australia's rail freight network.

Around AUD 155 billion per year - equating to 12% of Australian GDP - originates from agriculture.  Accordingly, the Federal Government has prioritised agriculture as one of the five pillars of the economy (along with manufacturing innovation, advanced services, education and research, and mining exports), which require support in order to keep Australia competitive.  The Inland Rail project is necessary to connect regional farmers in Victoria, New South Wales and Queensland with international markets via efficient and economical transport.

The proposed route

Inland Rail will run on a direct route between Melbourne and Brisbane via central-west New South Wales – a distance of approximately 1,730km. It will by-pass Sydney, enabling additional rail capacity to be freed up on the coastal route.  This will benefit Sydney and the North Coast passenger and freight network, where passenger and freight services share the tracks.   Rail freight will be able to compete with road freight, given that transit times between Melbourne and Brisbane are expected to be less than 21 hours (28 hours at present).

Historically, Australia has had to overcome major challenges in track configuration for interstate railways. The use of the standard gauge (New South Wales), broad gauge (Victoria) and narrow gauge (Queensland) has led to incompatibilities whenever the rail network has expanded across state borders or regions.  The Inland Rail will provide a standard-gauge link between Melbourne and Brisbane.

Design and construction

In its construction, the Inland Rail will utilise a mixture of existing interstate railway track, track upgrades and new track.  By upgrading areas of existing track and constructing new sections of track, the railway will be future-proofed in line with modern rail standards.

Design considerations have included alignment to cater for trains of up to 3,600 metres, heavier axle loads, speeds of 115km per hour, double stacking of containers, and the use of the latest technology.  All of these factors should contribute to a major increase in the productivity of the network.

The Federal Government has committed AUD 300 million to pre-construction activities including detailed corridor planning, environmental assessments and community consultation.  This commenced earlier this year as part of a 10 year delivery plan, implemented by the Australian Rail Track Corporation.  Opportunities are currently being explored for private sector funding and financing of the project, with an estimated cost of around AUD 5 billion overall.

Whilst the Government has recognised the benefits of upgrading the current rail freight network across the East Coast of Australia and linking Melbourne and Brisbane directly, the wheels are also slowly being set in motion for a high speed rail network for passengers between Melbourne and Brisbane (HSR).

High Speed Rail

Originating in Japan in the 1960s, high speed rail systems operate in 14 countries worldwide. In the UK, the Government has recently given the go-ahead for the UK's second high speed rail network known as HS2 from London to Manchester and Leeds respectively via Birmingham.  HS2 is forecast to reduce journeys between London to Birmingham to 49 minutes and London to Manchester to 68 minutes.  Other notable high speed rail projects currently under construction include the railway connecting Hong-Kong and mainland China and the first high speed rail system in the United States, which anticipates journey times of under three hours between San Francisco and Los Angeles (a distance of around 650km). In addition, a HSR is being planned for the 350km route linking Kuala Lumpur, Malaysia to Singapore with an estimated travel time of two hours.

Progress for the Melbourne to Brisbane HSR is not as advanced as for the Inland Rail project; however a Feasibility Study Phase 2 Report was produced in April 2013.  It concluded that demographic and economic trends support a steadily improving economic and social case for HSR in Australia. The High Speed Rail Planning Authority Bill 2015 is currently being considered by Federal Parliament, which would establish an 11-person authority dedicated to planning and securing the rail corridor. Supporters are hopeful that Prime Minister Malcolm Turnbull, who is a "self-confessed public transport and rail enthusiast", will have great interest in the bill.

Competing with air travel

The HSR network would comprise approximately 1,748km of track between Melbourne and Brisbane via Canberra and Sydney. Typical express journey times would be under three hours for both the Sydney-Melbourne and Sydney-Brisbane sectors.

Currently, the Sydney-Melbourne corridor is the fifth busiest passenger airline route in the world, with Sydney-Brisbane not far behind as the 12th busiest route.  The flight times are only around an hour for these destinations, however the additional time involved in transiting through, to and from the relevant airports means that the total travel time will be closely matched by the proposed two-and-a-half to three hour train trip from city centre to city centre (Sydney/Brisbane and Sydney/Melbourne).

The HSR has been forecast to transport 83.6 million passengers per year at speeds of at least 250km per hour. Sydney's population is slated to grow to 8 million in the next 50 years.  Travel on the East Coast of Australia is forecast to more than double from 152 million trips in 2009 to 355 million trips by 2065, and passenger travel between Melbourne and Brisbane is likely to get busier as well.  Accordingly, the demand for such trips is likely to be high.  Providing tickets are well-priced and services are frequent, HSR is likely to offer an attractive alternative to flying.

The Feasibility Study considers that the HSR has the potential to attract more than 50% of the air travel market if rail fares were competitively priced.

Construction horizon

The HSR project is likely to require fifteen years for feasibility studies, planning, preconstruction and procurement activities.  The main construction work would not start before 2022.  It is envisaged the HSR would be fully operational from 2065 (albeit the program could be accelerated to make parts operational beforehand).

Funding

The construction cost has been estimated at AUD 114 billion.  If it went ahead, it would be one of the largest infrastructure projects ever undertaken in Australia.  As with other HSR projects globally, funding will be an issue.  The HSR is expected to produce only a small positive financial return on investment. Accordingly, the potential to attract private finance or to negotiate a PPP arrangement for the construction (as opposed to the operation or supply of rolling stock) is limited.  The Federal, State and Territory Governments would be required to fund the majority of the upfront capital costs.  Inevitably, these projects are constructed with the future in mind, and do not immediately pay dividends.

Conclusion

Both Inland Rail and the HSR offer viable solutions to meet demands of domestic and international commodities markets, and social and economic expansion across the Eastern States of Australia.

Whilst progress for the HSR is significantly behind that of Inland Rail, both rail networks, once operational, could allow the Australian economy to take greater advantage of this Asian Century and provide greater economic rewards to Australia as a whole.

With the packages of work being put out to tender for the Inland Rail project, it is likely that many consultancy firms, construction contractors and suppliers will reap the benefit of this extensive and significant infrastructure project.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Authors
Carine Cruse
 
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