Inland Rail’s final stages shelved after shock $45 billion price tag revealed

The final stages of the botched Inland Rail freight link from Parkes in NSW to near Brisbane have been shelved indefinitely after warnings that the cost of the entire 1700-kilometre line would blow out to well over $45 billion and take until at least 2036 to complete.

The latest forecast cost to construct the entire line from Melbourne to south of Brisbane is three times the $14.5 billion budgeted for the project. The $45 billion price tag is also more than five times the cost estimate made almost a decade ago by the Turnbull government.

Part of the reason the Albanese government has put the proposed northern sections on ice is due to serious doubts about whether the entire line could even be delivered for $45 billion and fears the final bill would be considerably higher.

In a bid to get Inland Rail back on track, train project veteran Sean Sweeney has been named its incoming chief executive while interim chair Collette Burke has been made permanent in the role.

Sweeney, who will replace Nick Miller, has most recently led suburban train projects in Dublin and Auckland.

Ahead of the federal budget next Tuesday, the $45 billion forecast to complete the entire Inland Rail line has left the government to focus on completing the section between Beveridge, on the northern outskirts of Melbourne, and Parkes in NSW’s central west by the end of next year.

The latest forecasts by consultants at ACIL Allen come three years after a scathing review by energy and infrastructure expert Kerry Schott found the project would cost at least $31.4 billion but had run so far off the rails it was not possible to speculate on an end date, a final cost or whether it would generate a return.

While the sections north of Parkes are on ice, and left to future governments, bureaucrats will consider preserving the rail corridor to Queensland, as well as sites for intermodal terminals near Ipswich.

Part of the $14.5 billion that had been budgeted for Inland Rail will now be redirected to targeted upgrades of the country’s existing freight rail network. It will mean an extra $1.75 billion will be spent on works including renewing tracks and extending passing loops, which comes on top of an existing $1 billion funding commitment.

Federal Transport and Infrastructure Minister Catherine King said the government was taking “sensible decisions” to realign the future of the Inland Rail project.

“The 2023 independent review found major deficiencies in the governance and delivery of Inland Rail by the Liberals and Nationals,” she said.

Schott’s review in 2023 blamed the “astonishing estimated cost increase” on basic failures in planning and project delivery by the government’s Australian Rail Track Corporation, which had been directly managing Inland Rail.

Inland Rail was expected to cost $8.4 billion when announced by the Turnbull government in 2017, and slated for completion in 2025. However, it was not counted against the budget bottom line because the federal government treated it as an investment that would pay for itself.

Spruiked as a nation-building project, Inland Rail was designed to deliver a 24-hour connection between Melbourne and Brisbane, resulting in double-stacked freight cars traversing central Victoria and inland NSW from north to south.

It was a pet project of former Nationals leader Barnaby Joyce, who secured $5 billion in funding for an extension of it from Toowoomba to the central Queensland port of Gladstone in return for the Nationals backing a commitment on net zero greenhouse gas emissions by 2050.

Completing the section of Inland Rail from Beveridge to Parkes will clear the way for double-stacked freight trains to run between Melbourne and Perth via Parkes.

In a separate move, a new $55 million program to encourage more freight off roads and onto trains or ships will also be set up.

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