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Janet questions the Infrastructure Investment Division

Estimates & Committees
Janet Rice 23 Oct 2017

Senator RICE: I want to ask about some rail projects and business case related things—Melbourne Airport rail first up. The government committed $30 million for the development of a business case for Melbourne Airport rail in the budget. I want an update as to what has happened with that project since then.

Ms Hall: To date, the Australian and Victorian governments have been in negotiations with regard to the scope of that project. We're anticipating that, probably over the next month or so, there will be more information coming out to the public.

Senator RICE: In terms of the scope and the detail, do you expect to have that completed in that month—in a month's time?

Ms Hall: We're establishing a joint committee, as we do with a lot of our major projects, which will have Dr Kennedy sitting on the committee, with the head of the Victorian department. From that, they will oversee any works going forward. We're just trying to negotiate all of the terms of reference and everything in regard to that at the moment. Then, from there, they will actually outline what the program of works is over the next 12 months.

Senator RICE: So you expect to have the terms of reference announced in a month's time, basically, and then we'll move forward from there?

Ms Hall: I would say that we would probably have something before the end of the year.

Senator RICE: What is your expectation, then, as to what the timing of the business case being developed is likely to be?

Ms Hall: We'd have a preliminary business case, we're hoping, within the next 12 months.

Senator RICE: While that business case is being developed, have there been any other discussions about contributions or financing of projects that are going to come out of the project once we get to the completion of the business case?

Ms Hall: Not at this stage, no.

Senator RICE: So they're going to be done sequentially, so we'll have a business case in 12 months time, hopefully.

Ms Hall: That's what we're intending.

Senator RICE: And then the discussions will begin?

Ms Hall: That's what we're intending.

Senator RICE: So nothing preliminary? Okay.

Moving on to the faster rail connections project, is that a different project to the national rail project that we were discussing before?

Ms Hall: Yes. The National Rail Program is the $10 billion funding allocation. The Faster rail prospectus is the opportunity to look at connections between regional and capital cities to see if we can actually get faster connections between where people live and where the employment bases are.

Senator RICE: There's $20 million of funding for business cases there as well?

Ms Hall: That's correct.

Senator RICE: What's the process in terms of selection of which projects will be funded to help develop business cases?

Ms Hall: The government released a Faster rail prospectus in September. That sets out the process, and we're happy to provide you with a copy of that. Basically, we're going through a three-stage process at the moment, and the criteria are all outlined in that prospectus. The first stage closed on 13 October, and we're hoping to have everything finalised—

Senator RICE: What was the first stage?

Ms Hall: The first stage basically outlined the corridors that people were to be interested in, and provided information on the—

Senator RICE: So you're—?

Ms Hall: They're coming forward with the corridors, not us. We set out in the prospectus potential corridors, but they could come forward with their project that highlighted the exact corridors that they were interested in. Then there was information on the companies, for example; what type of project they were talking about—whether, for example, it was new technology or rolling stock, whether it was a new line, et cetera. From there we'll go to a second stage, which will have to provide far more detail about the project, information about funding and things like that. Then we'll go through to a business case.

Ms Zielke: There's a short-listing process based on those initial proposals. Those short-listed applicants will then proceed to provide the fuller business cases that Ms Hall mentioned. Then from those they will then receive a decision in relation to who will be funded for those business cases.

Senator RICE: Your announcement on 13 October—that release of the information about all of the projects that have been put before you—that long list of everything you had received—

Ms Hall: We haven't released anything at this stage. As you can imagine, there is a whole range of issues in regard to commercial in confidence, and there's a range of issues in regard to companies competing for similar lines or similar corridors. So at this stage we haven't released anything.

Senator RICE: What was released on 13 October?

Ms Hall: Stage 1 closed on 13 October. The prospectus was released in September.

Senator RICE: Can you tell me how many different proposals have been put forward to the department?

Mr Hyles: We've received 26.

Senator RICE: How many different lines or alignments are being looked at?

Mr Hyles: They vary. Some of them are more than one potential project. We're still going through the process of assessing those.

Senator RICE: Have some of them come from private companies? How many have come from private companies and how many from the state governments?

Mr Hyles: They have come from a range of proponents—state governments and consortiums as well as individuals.

Senator RICE: At what stage do you plan to release publicly any information about what projects have been put forward to you?

Mr Hyles: Following the completion of the assessment of stage 2, the government will obviously make an announcement about which proponents will go forward for the business case assessment.

Senator RICE: And you will announce that at that stage? Once you have a short list then you will announce what's public? You will announce that publicly?

Mr Hyles: Yes.

Senator RICE: So you have the short list. Do you have an expectation of how many business cases will be funded under the $20 million funding?

Ms Hall: At the moment the government is committed to three.

Senator RICE: What's your expectation of how long the short list is going to be then?

Ms Hall: At this stage we wouldn't be able to comment. We're only just going through them at the moment.

Senator RICE: You wouldn't expect that all the projects on the short list will end up being funded?

Ms Hall: No.

Senator RICE: That's your short list. Once you have three, am I correct in thinking that any business case developed under this package would then be put forward to Infrastructure Australia for evaluation and potential future Commonwealth contributions?

Ms Hall: That's exactly right, yes; depending on the amount of money they're seeking.

Senator RICE: So it could be a private sector consortium that could be asking for Commonwealth contributions towards their project?

Ms Hall: That would be correct. Saying that, I think they will actually have to work with a state government as well, given that the state governments obviously own the land and the track and all of those sorts of things.

Senator RICE: I understand that Consolidated Land and Rail Australia have put in a submission to you. They have announced publicly that they've put in a submission. It seems to be highly unusual for a private company to be able to access this money and then, even further, to be potentially accessing Commonwealth funding for their private project.

Ms Hall: I think at this stage the funding that the government's put on the table is for the business case development, Senator.

Senator RICE: Maybe I should have asked this of Infrastructure Australia earlier, but have there previously been any business cases submitted by private entities to Infrastructure Australia for assessment?

Ms Hall: That is a question for Infrastructure Australia, but I believe they have had some. They have assessed, for example, the Eyre Peninsula infrastructure project. It is one of the projects that they have assessed out of their 20—so yes.

Senator RICE: So there's been one example previously.

Ms Hall: Yes.

Senator RICE: Thank you for that. I have a couple of questions on the Melbourne port-rail shuttle project. What's the status of that, from the Commonwealth's perspective?

Ms Leeming: It will just take me a minute to find that one, Senator—just to confuse you, Mr Hyles does some rail projects and I do some others. On the port-rail project: you probably would have seen there was an expression of interest recently put out by the Victorian government. That document went out on 11 September 2017, released by Transport for Victoria, and that EOI closes on 31 October 2017. This is a competitive process, so they have invited bids from whoever is interested in delivering this project. You will be aware, Senator, that the Australian government allocated 58 million to it—sorry; both governments allocated 58 million, and 38 was from the Commonwealth. Because there's an EOI at the moment, we're a bit restricted with what we can say with what sorts of bids have come in. I'm just not aware of that, and it's a competitive process that hasn't yet closed.

Senator RICE: What's your expectation—after the closure of the EOI process—of what the timing of the development and undertaking of the project is going to be?

Ms Leeming: I think a lot will depend on what sorts of bids they get. The Victorian government and the Commonwealth government will sit together on a steering committee for this project, so we'll get the chance to discuss timings, look at the sorts of bids that are being provided, and work together to deliver the project. I don't have any more specific timings than that.

Senator RICE: But I presume—given that the Victorian government has been so tardy in getting this project underway—the Commonwealth is keen to see it happen as quickly as possible. Is that correct?

Ms Leeming: We're keen to be involved in the project; absolutely.

Senator RICE: So will the steering committee continue through the EOI process and then through the implementation of the project?

Ms Leeming: We haven't got to the stage of discussing that yet, but we do know they are keen to have us partner on this project, and we are too. We can provide you with an update on that next time we're before the committee; that is probably better timing. I think it's probably a little bit too early to say.

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