Passenger Rail, Rail Supply, Research & Development

‘Issues’ with Cross River Rail business case, says Turnbull

Queensland premier Annastacia Palaszczuk has called the federal government’s lack of funding commitment to the Cross River Rail project “extremely disappointing”, after a meeting with prime minister Malcolm Turnbull in Brisbane on Thursday.

The premier indicated that the prime minister had requested more work be done to iron-out several issues with the business case for the project before federal funds would be released.

“The prime minister has conveyed to me that Infrastructure Australia has a couple of issues [on which] they would like some more work done and I have said that I will progress that work as quickly as possible,” Palaszczuk said.

Indeed, while speaking at a later press conference, Turnbull said that Infrastructure Australia has raised issues of the integration of the Cross River Rail with other transport systems as well as land use opportunities.

“The submission or the proposal is inadequate in a number of respects; this is Infrastructure Australia’s view,” Turnbull said.

“It needs more work. I am not making a criticism of it, I am just stating a fact.”

While the premier stated that the meeting with the prime minister was “constructive”, she emphasised the state government’s disappointment with Canberra’s reticence in providing the required funds.

“The failure to make any specific funding for Cross River Rail in the federal budget was extremely disappointing. Despite receiving the business case and signing an MoU on the project last year, the federal government continues to refuse to contribute the funding needed,” she said.

“My government has committed $850 million for the project. Of all the projects nominated for the National Rail Program in the budget last week, only Cross River Rail has a completed business case.”

State transport minister Jackie Trad has also indicated that further issues were the concern of the federal government, telling The Courier-Mail that Canberra had requested financing plans to maximise value capture that would mean higher taxes for Queenslanders.

“[W]e don’t want unfair taxes imposed on Queensland that no other state has to pay,” she was quoted as saying.

It remains unclear how long the issues with the business case will take to resolve, and Trad was quoted in the Australian Financial Review saying that the project could be significantly delayed.

“The reality is that, under the Turnbull government’s overhyped $10 billion rail package, there will be no contribution for at least another two years,” she said.

The Transport and Infrastructure Council meeting will come together on Friday, during which Trad and other transport ministers will have the opportunity to put state government grievances over budget funding to their federal counterparts Darren Chester and Paul Fletcher.

4 Comments

  1. ” issues of the integration of the Cross River Rail with other transport systems”.

    There is something passing strange about that comment from the PM. Let’s look at this for each proposed new station from south to north:

    1. Boggo Road: interchange with Cleveland line and current “surface” routes to Beenleigh and Gold Coast. Interchange with busway to University of QLD. Access to P.A. Hospital and major new high density developments.
    2. Woolloongabba. Interchange with busway system. Access to Woolloongabba stadium. Access to major new high density developments.
    3. Albert St. Short walk to Queen St busway station, surface bus routes. Services giant new Queen’s Wharf entertainment/casino complex which is under construction. Provides direct rail to poorly served southern part of CBD all of which is currently a 10 to 15 minute walk from rail.
    4. Roma St. Interchange with all other Brisbane suburban/interurban lines, busway system, long distance trains, long distance coaches.
    5. Exhibition. Least interchange opportunity of any of the new/upgraded stations, but close to Royal Brisbane Hospital, services exhibition ground and major new high density residential developments in an area of the inner city presently poorly served.

    Far from having “issues with integration”, this project is the thread that ties together the SEQ public transport system, providing opportunities for interchange and high quality public transport access to new developments in areas not currently well served.

    I call “bollocks” on the PM’s comments.

  2. As a bit of a counter to that, consider that the current Qld Govt “has committed $850 million” for $5.4 billion project and the Federal Treasurer has just announced (May 9th) that major infrastructure projects will no longer get straight out Govt grants (the Feds “no longer acting as an ATM”). They will instead take equity or provide loans, but only where the business case stacks up. [And who would expect them to fund $4.5bn of a State project anyway?].

    Which brings us to the Business Case that was so poor relative to that put up by Victoria for the Melbourne Metro, a project twice as costly. Qld used a 30 year evaluation period and a 7% real discount rate for a 100 year economic life asset. The BCR shown was 1.21. This really understates the inherent value of the project.

    By way of contrast Victoria used a 50 year horizon with some discussion of residual value assessment approaches (and put forward a case for lower discount rates), which gave a 2.4 BCR at 4% real and they also gave information on data which if adopted could make that higher still.

    Conclusion: Qld does actually need to get its act together better to compete with other States.

  3. Strange!! The commonwealth moved several central services to rural NSW with ‘no business case’!!
    Business case is as good as the assumptions they make.
    When some document (call this as business case) was submitted to the commonwealth last year, they have no business to keep it so long with no decision. This is bad humiliation to the states and democracy. Please do not tell “oh, yes – labor did that too…”!!
    Only some select projects were asked to ‘compete’ for an empty pot that may be filled only after 2019. Some WA projects were directly funded – so it is internal pressure from heavy weights in WA – QLD missed out – no powerful cabinet minister from QLD – that is the problem; rest is eye wash!!

  4. Manicka
    My knowledge is that the Commonwealth (via the PM, his Cities Minister Angus Taylor, his Transport and Infrastructure Ministers Darren Chester and especially Paul Fletcher) have been working for some time on developing new policies and Canberra structural arrangements (which Scott Morrison finally announced) to move away from the Tony Abbott approach to infrastructure and start investing seriously in rail.

    It has taken a while but, unless Abbott forces somehow get back in, this is a new agenda and these urban rail business cases will be all important and will have to be done to satisfy the new approach. That is what the $10 Bn urban rail fund is for, and also the $20M starting pot of money for faster rail business cases. They won’t just hand out grants and it seems that Qld Labor perhaps doesn’t yet realise how much they need to change their approach.

    It is not like the old days when the Feds would provide 80% grant funding for a section of national highway. Things will be different.