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Janet asks questions about the Melbourne Airport Rail business case

Estimates & Committees
Janet Rice 21 May 2018

Senator RICE: I will start with questions about the Melbourne Airport rail, starting with the allocation from last year's budget of $30 million towards the development of the Melbourne Airport rail business case. I want to know, basically, what is happening with that $30 million at the moment, where it is sitting, how much of it has been spent, what it has been spent on et cetera.

Mr Yeaman: I will ask my colleague Mr Hyles to step in here. In broad terms, the preliminary business case is well underway, and we expect that to be completed around September-October this year.

Senator RICE: The what?

Mr Yeaman: The preliminary business case. Mr Hyles can talk about how much of that funding has so far been drawn on by Victoria.

Mr Hyles: Victoria estimate that they will spend around $3 million before the end of the financial year, and then, obviously, further money after the financial year to complete this preliminary business case.

Senator RICE: Is the money still sitting with the Commonwealth?

Mr Hyles: That's correct. We're still waiting on Victoria to provide their project proposal report. That would allow us to provide the funding to Victoria, but they are accruing the—

Senator RICE: So, as you understand it, the work is being done by Victoria?

Mr Hyles: That's correct.

Senator RICE: So it's Victorian officials that are undertaking the work, but they haven't yet called upon any money?

Mr Hyles: That's correct.

Senator RICE: And they'll call upon $3 million by the end of the financial year. Are they expecting to require the full $30 million?

Mr Hyles: Given the Australian government's commitment to up to $5 billion, I think the $30 million will feed into the process to do the detailed business case as well.

Senator RICE: What is expected to be produced after that $30 million has been spent? Is that not a detailed business case?

Mr Hyles: It won't get you to the detailed engineering assessments, for example—the detail around the specific engineering of geotechnical requirements and those sorts of things. That will need to be further assessed.

Senator RICE: Is it just one particular model of airport rail that's being looked at in this business case?

Mr Hyles: By model—as in?

Senator RICE: There are a whole range of different ways of providing airport rail to Melbourne airport.

Mr Yeaman: The preliminary business case that's being conducted now is looking at a range of options for how to essentially deliver the best solution for access to the airport through rail in Melbourne. That includes a number of different routes and options that could be considered. We will essentially do an options analysis at this first stage. Once that's completed, governments will take a decision on a preferred route or routes that they want to see further developed in a much more detailed sense, through, as Mr Hyles said, the geotechnical work and the market testing. That will then go into the detailed business case. We essentially narrow the options down at the first stage and assess those and then move through to a more detailed business case.

Senator RICE: It's actually not a business case then? It's a bit of a different definition of a business case compared with what you usually talk about with a business case, which is for a particular project.

Mr Yeaman: Infrastructure Australia has a model essentially where you work towards the business case through an options analysis and strategic assessment and move forward. The preliminary business case is going part way to the full business case and then it'll be completed once we have the final route.

Senator RICE: In my understanding, you're essentially spending this $30 million on that options analysis rather than a business case for a particular project.

Mr Yeaman: It's supporting that analysis, but it's feeding into the full business case as well. The work that's being done now forms the starting point and the beginning of the business case, essentially.

Senator RICE: But it's being done for more than one project?

Mr Yeaman: It's one solution, one transport solution—but a range of options that could be considered. I'm not trying to be tricky!

Senator RICE: It's one problem or one issue—but there are any number of ways. How many different options are being looked at in this business case?

Mr Yeaman: A range of options are being looked at. There were I think three key routes that were identified as part of the announcement that have emerged from previous studies which were identified in the past as the most likely solutions. That's clearly where the work is being focused. But essentially all options are on the table at that early stage.

Senator RICE: Can you articulate what whose three are, please?

Mr Yeaman: Yes. There is what's called the East Albion route. There is essentially a route which comes down through Maribyrnong and there's also one route which goes from the airport further out to the east and then comes down through Broadmeadows, Pascoe Vale and comes—

Senator RICE: I know it quite well—and then connecting up with the Craigieburn line—

Mr Yeaman: Through Essendon, Ascot Vale—yes.

Senator RICE: from Broadmeadows.

Mr Yeaman: There are variances of the routes, but in broad terms those three are the primary focus.

Senator RICE: In terms of the route that goes through Maribyrnong, are there two versions of that being assessed? There's one version that would pick up a number of locations—for example, the Highpoint Shopping Centre and the Maribyrnong defence site. I understand there's another option of basically having a direct tunnel pretty much straight to the airport.

Mr Yeaman: I think that's a fair characterisation. There's a range options around that, but that's a fair characterisation.

Senator RICE: Are they both under consideration?

Mr Yeaman: At that first stage, yes.

Senator RICE: Is the monorail proposal under consideration as an option also?

Mr Hyles: I think that there's an opportunity for that to be explored. But, as Mr Yeaman has suggested, the Victorian government has previously assessed four routes in the detail he explained. Certainly there's an opportunity through the work that we're doing to update the work that they've done previously to assess those options.

Senator RICE: My understanding is that there hasn't been an assessment done by government of the monorail option?

Mr Hyles: Not to my knowledge.

Senator RICE: Can I clarify—you're saying that that's not being done under this options analysis.

Mr Hyles: It's not that it's not being done. The route options are still being assessed—what will be included. There are a range of different options that potentially could be—

Senator RICE: Hang on—I'm still very confused. We're talking about a range of options that are being looked at and being progressed forward to a certain extent in order to then make an assessment of which is the preferred option. With Mr Yeaman we talked through a number of them. The monorail wasn't included as one of those. Where would the opportunity be for it to be included in the mix?

Mr Yeaman: It's certainly going to be included in the mix now. Before I highlighted the ones that have had the most planning work done to date, and they have emerged from earlier processes, so they're the ones that are drawing the most attention, if you like, through the options analysis. Certainly the intention is to look, through the options analysis, at a wider range. And if there are private proposals, if there are other proposals that are out there, through Victoria and with our cooperation, they will be assessed at a higher level. And if they look prospective then they will be assessed in more detail through this process. The reason I focused on those four is that they're the ones that have been most publicly discussed in the past, and the most work has been done on them. But other options can also be considered through this process.

Senator RICE: So, the timing and the completion of the process? When do you expect to have this—

Mr Yeaman: Later this year. I'd say September or October, but late this year.

Senator RICE: If the monorail was going to be considered as part of that, is there a particular period of time it would be needed? Say it came up and somebody was suggesting looking at including it, and it was August and obviously it might be a bit late.
Mr Yeaman: I'm personally not aware. It may be that the Victorians already have access to that information and are starting to draw on that assessment. I'm just not personally aware of how much that's been considered in the process to date. We can take that on notice and have a look at it. It may already be in discussion and I'm just not aware of it.

Senator RICE: Okay. Take it on notice then. In my question on notice about the business case study, the terms of reference for the study were not supplied to me. I was told that they weren't publicly available. Why is that the case?

Mr Hyles: We sought Victoria's agreement, and they preferred that they not be published.

Senator RICE: So, the Commonwealth would be happy to publish them if the Victorian government agreed to it?

Mr Hyles: Certainly we provided the objectives of the business case to give you some clarity around that.

Senator RICE: Yes. So, if we got the Victorian government to agree, then you would be happy to release the terms of reference?

Mr Hyles: Yes.

Senator RICE: The objectives for the study were pretty broad. Can you give me any more details about what parameters for assessment are going to be used to determine which of these options would proceed through as the preferred option?

Mr Hyles: There's a process that's involved in refining those assessment criteria. That's obviously work that we've done in cooperation with Victoria. We'd need to take that on notice, because I'm not sure whether that's been fully completed at this stage.

Senator RICE: So you haven't yet started assessing the projects against each other, then?

Mr Hyles: Certainly the broad overarching assessment sort of criteria—obviously there are certain chapters of the document that have been written already, such as the underlying data and assumptions and those sorts of things.

Senator RICE: No, but I'm interested in the parameters by which each of the options will be compared against each other—the selection criteria, essentially.

Mr Hyles: Yes. Other than the broad objectives that we've provided in response to the question on notice, we'd have to take that additional one on notice as well.

Mr Yeaman: And while I agree that the points read high-level and broad, essentially these are pretty standard metrics or measures by which we look at these sorts of projects: what are the broader benefits it can bring to the network? Where are the economic opportunities attached to the various options? What does it do for the passenger experience and the service offering that's attached there? These are pretty standard transport metrics which people like the transport body of Victoria and ourselves are well versed in going through. The objectives that you've got in the question on notice really do reflect quite well the measure by which the different options are going to be assessed against each other. And that work, as Mr Hyles said, has started.

Senator RICE: Okay. Moving on—although we're breaking for a tea break at—shall we break now? I was just about to move on to the $5 billion investment in Melbourne airport rail—so, moving onto a slightly different topic.

CHAIR: All right. Let's take a break.

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