Senate Rural and Regional Affairs and Transport Legislation Committee, , 3:34:49 to 4:05:04
The committee examines the business case for the Sydney to Newcastle high-speed rail and the federal contribution to the Victorian Suburban Rail Loop.
Topics: Infrastructure, Government spending, Procurement
Speakers: Matthew Canavan, Jim Betts, Andrew Bourne, Hon James McGrath, Speaker 25, Bill Brummitt, Hon Matthew Canavan, Jessica Hall, Lachlan Wood, Senator Matthew Canavan, Speaker 20, Speaker 24, Susan McDonald
>> but but things can change as we've seen as well. Of course I think when we first announced this intention was to seal it all. So uh obviously yeah costs have gone up a lot. Uh okay. All right. Um I might move on from that. Um had some questions about highspeed rail. Is that in this section the outcome? Um, I just wanted to understand the status of the business case of the Sydney to Newcastle
>> Senator James Savage, assistant secretary, highspeed rail and infrastructure advisory. Uh, the business case was provided to the government in December 2024. Uh, Infrastructure Australia completed its evaluation. uh which was published in November 2025 and governments to make an announcement about their expectations and next steps.
>> Okay. So, Infrastructure Australia have assessed it and they've they've published something. What did they sorry I haven't looked it myself. So, what did
they find? Uh so they have assessed the business case among the many components that it includes uh and noted that there is uh a development phase proposed in the business case for further planning design uh market soundings and planning and environmental approvals to be undertaken and infrastructure Australia supports that approach.
>> Okay. Did did they publish a benefit cost ratio for the project?
>> Uh published uh ratios. Yes.
>> Okay. What did they come out at?
>> Just one second. >> Uh so across various discount rates um the benefit cost ratio for at a 4% discount rate including land use benefits wider uh economic benefits kind of ranged between 0.8 and 1.2. to >> sorry let me change
>> so as you know infrastructure Australia is giving evidence later on today as is the highspeed rail authority so questions of detail probably left best left to them and I wouldn't want us to inadvertently misrepresent any aspect of IIA's assessment of that project
>> okay so what's the next steps now
>> uh well government will make an announcement regarding their assessment and consideration of the business case
>> okay Is this being uh considered jointly with the New South Wales government or is it something the federal government's taking on board on themselves?
>> It's a commonwealth initiative at this stage.
>> Just a commonalth initiative.
>> Initiative, but obviously we are talking to our New South Wales
>> colleagues. Okay. All right. Did the did the um report calculate how much it's
>> Uh the capital cost was um not included in the Infrastructure Australia evaluation.
But how did they come to a benefit cost ratio if they didn't have a
>> That's a good question to ask infrastructure.
>> Okay. Okay. Well, do you know how much it's going to cost? I presumably you're you're looking at this.
>> That's in a business case which is before government for consideration.
>> So the business case is not released.
>> Correct.
>> Okay. So they've just released a summary and I think drip feed us information even though we pay for it. Okay. Um uh All right. Um, okay. Yeah, we might ask them a few more questions. Is there um uh is there some there's some authority as well, isn't there? There's a highspeed rail authority. Are they Have they got a role here?
>> Yeah, they they will be here this
>> Yeah. Are they are they covering this project as well?
>> That that is this that is
>> that's what their whole their whole setup to do cuz they're based in Newcastle, right?
>> Uh they're based in Sydney. Oh, they're bas
>> They're on at 10:00 tonight on our
>> Yeah.
>> All right. Uh how much did the business case cost?
>> Uh so $70 million was allocated 70 >> 70. Yes.
>> Is that what's been spent?
>> Uh yes. Uh there was the actual business case.
>> That will be a question I think authority.
>> But don't you you'd be across it though, wouldn't you? You'd be given.
>> You've invited them to give evidence. about their own expenditure.
>> It's in your outcome, right? >> You you you'll there's got to be some oversight from the department, hasn't there, of what's agencies are spending.
>> It's not a secret. It's $70 million was allocated, as Mr. Savage has explained, if you want more detail on how that money has been spent and the extent to which that money's been spent there.
>> Well, I'm just asking the secretary, do hope you'd be across the spending of
uh so 70 million was allocated for the I would have to check the figure, Senator, but I believe the was um around 55 million was spent on the initial business case.
>> Has any funding been given to uh the highspeed rail authority to particularly to look after this project beyond?
>> Oh, that was all that's departmental resourcing allocated to the highspeed rail authority for 70 million.
>> Are they I I don't not familiar with them. Are they a independent statutory agency or
>> they're a corporate com entity?
>> Okay. But are they housed within the department then or?
>> No.
>> No, they're separate.
>> They're separate.
>> Okay. Okay. But they're not independently they're not not um >> not created under statutory act or anything like that. >> They are. Okay. Okay. So, they are independent statutory agency. Okay. >> Okay. All right. Okay. Well, we'll come back to it tonight. Um uh just staying on rail though. Uh also had some questions about the uh Twitter to Brisbane passenger rail business case. So he did ask answer a question here on notice. Uh I believe so this business case has not been released. Is that
>> No it hasn't senator but um we should know that we don't either successive governments we don't release business cases. Um we release summaries of business cases. That's been standard practice for a considerable amount of time. usually because of the commercial and confidence issues. So um on any business case for any government
>> and that was released summary of that one was released in September 2024.
>> Yeah,
>> the summary was released in 2024. >> Yeah. uh uh how much did that cost? I think you've got here 2.33 million. Is that
>> Uh David assistant equity. Yes, that's
correct. The final cost were 2.33
million. Apparently, it says in the question that 15 million was allocated. How come only that much was spent?
>> Uh, Senator, so that tour of Brisbane passenger rail business case went through the first two stages of Queensland's assessment, which is the strategic assessment of um uh requirements and the preliminary evaluation and at the end of the preliminary evaluation, it was decided not to proceed to a detailed business
>> Right. Okay. So, I only made that preliminary stage. Okay. So, that's finished now. There's no more work going on with that.
>> That's correct. That's closed and the uh unspent funds have been returned to the
>> All right. Okay. Thank you. Um, moving on to just had some questions from uh the midyear financial midyear sorry fiscal economic and fiscal outlook uh uh particularly the um uh new programs in this outcome. Uh there's a line in my info about building a better future through considered infrastructure investment. can I just confirm are some of these are these some of these are existing projects and some of them are new. Is that right?
>> That's correct. Senator
>> are all of them election commitments or is there
>> uh the new projects are yes
>> the new projects are election commitments.
>> So there were six there was six new projects which were election commitments and there were and there were 20 >> additional 20 existing projects that got
funding and there's one two three four I know there might be more there's some there's five or so dot points here six dot points but some have multiple projects uh in this is in my info page 269 so maybe uh could we notice get a list of those 20 >> maybe not the figures because I presume you've probably done the significant ones in my info but
>> I can run you off each project if you like
>> give us a list of the projects yeah
>> Give me a moment.
>> I've already got here kumra connector peninsula development roadity.
>> You just happy for me to run with?
>> Yeah, go for Okay.
>> So there was I'll start with New South Wales, the Hume Highway, Governor Mcquaryy Drive, Tobin Road intersection upgrade, Liverpool Council, Medlo Bath upgrade, Mount Uzley interchange, Pacific Highway, Wang Town Center, Peak Hill Road upgrade part two, River Road safety upgrades and Swan Hill Bridge in Northern Territory, Carparia Highway strengthening and widening in Queensland. Conclar Djara Road upgrades at Melbourne River and you mentioned Kumra Connector uh Peninsula Development Road, Yapun Road upgrade, South Australia Crossroad, Fullerton Road intersection, uh high productivity vehicle network stage one, Metro intersection upgrade program, Glenn Osman Road, Fullerton Road intersection upgrade in Vic. Um, sorry those three I just mentioned was South Australia if I didn't mention that. Um, Victoria has Balon Road intersection upgrade, Windham Vale and Dair Supply Chain Road upgrades and WA is Tonkan Highway interchanges 2J road upgrade and Warner Road, Dunson Road to Rome Romeo road duplication.
>> Okay, thank you. Just on the um the the largest of these seems to be the Kumra connector. Uh the 237 million I've got here for additional cost for that. Why have those why have you needed extra funds for that?
>> I'll just have to get my colleague up to
So essentially, Senator, that was uh you reflective of um you um sort of the u challenging construction environment um and uh some specific cost pressures on on that um on in relation to uh to that um um part of the construction project.
>> Okay. What's the total cost of the >> the 237 is the additional funding I presume if I'm
>> Yeah, the total the total cost of that project is about three and a half
billion
>> billion. Right. Okay. Um All right. Um uh when does that start? has it started.
>> Um, so yes, it's it's it's well underway. Early works started in 2022 and the main construction started in March 2023 uh with expected completion of stage one in late 2028. Uh so stage one north which is shipper drive to Helens Road. Um that uh construction is now completed uh with progressively open to traffic since September. Uh the stage one central which was from Helensville Road to Smith Street motorway. Uh the early works contract was awarded in February 2023 and the main construction award in September 24. Um construction started in September 2024. Completion expected in late 2028. And then the final part of stage one, stage one south, which is Smith Street Motorway to Nurang Broad Beach Road. Uh the uh early works contract was awarded in May 24 with construction commencing in July 2024 and the main construction contract was awarded in April 2025 with main construction starting in June with uh June of 2025 with completion set for uh expected to be in late 2028.
>> Okay. Um All right. Just moving to the peninsula development road. What is that for? $37 million there.
>> Sorry, I didn't capture that. Uh the
peninsula development road that's uh from Mariba to Weer.
>> Uh that essentially Senator allowed the completion of sealing on the road.
>> Okay. So that will seal it. >> We're definitely sure it'll seal it cuz
>> the idea is that it will seal what that project was intended to seal. Yes.
>> All right. How much is left unsealed of
>> The the total PDR project.
>> Yeah. The PDR. Yeah. How much is left unsealed? So, is that going to seal all
>> No. >> So, this project will seal um 46 km of the peninsula development road linking Lakeland to Weer,
>> right? And is it still some unsealed is there after that?
>> Yes, Senator.
>> Yeah, it's crazy. We should have a sealed road to Weer. Um All right. Okay. Um, is it going to deal is it doing any bridges? That 37 million doesn't sound >> pretty cheap.
>> The key bridge that was a part of that project was the Archer River Bridge which is complete.
>> Okay, that's com that is that included that that's already covered in the 37. Is it
>> uh it's covered in the in the total project price?
>> Okay.
>> Cost, sorry.
>> How much are we spending on the PDR at
the moment? In this in relation to this project, it is
>> uh the total project cost uh is $351 million with Australian government funding of $258 million.
>> How much has been spent so far?
>> Uh uh $152 million.
>> Okay. All right. Well, at least it's making progress.
>> I think around 66% of that road is sealed too, Senator. Around around 66, my understanding.
>> That's now, is it? But not there'll be more after the project's done.
>> There'll be more after the project's
>> Okay. All right. We'll get there one day. Uh okay. All right. Um just under follow up from another estimates question from last time. Uh my colleague Senator McKenzie asked about I probably won't pronounce this right, but Munda Highway and Killer Road upgrades. She asked when that will commence. The answer was uh on notice that construction commencement was delayed while project design development were finalized. Uh so just seeking an update. Has there is there a a time for
>> You give us a moment please. Senator,
>> Senator, was that the Marunda Highway Cold Stream?
>> Yeah.
>> Uh, I don't know where that is. I've only got Marunda Highway.
>> Yeah, that was the one that if you're referring to that question, I noticed that's the one, Senator.
you come. Sure. Um this the project um the design works have been undertaken by Victoria um and they have looked at a number of options for that because um the current um scope of the works can't be delivered within the existing commitment. um Victoria have looked at whether there's options to value engineer or adjust the scope in order to fit it within that budget. Um but they have not been able to. So it remains a decision of government whether further and when further funding would be provided for that project.
>> So it hasn't been completely taken off the table yet but there's question marks over.
>> It's not off the table but yeah it needs a decision of government in terms of the pathway forward for it.
>> Okay. How much funding was uh uh was allocated?
>> Uh the allocation was $20 million for that project.
>> And what does it come back at? Do you have a what's the estimate for how much it's going to cost?
that I don't have it was substantially more, but I don't have that number here.
>> Okay. Well, maybe if you could take that on notice. Thanks. That'd be great. Thank you. Um I might I think Senator McGrath has some questions.
>> They might be the next outcome. I don't know. I've got some questions around um the Western Sydney airport and associated infrastructure around that. So, we'll give it a go. So, I think the airport is opening officially in in July. Is that correct?
>> It's on schedule to open in July at this stage. Yes.
>> Do we have a do we have a a date like precise date so we can put in our
diaries? I I would ask WSI this evening.
>> Okay. Right. >> Yes. >> Um so we're all very excited about that. >> So um you keep >> Um so in terms of what infrastructure projects around the West Sydney um international airport are underway, delayed or or yet to commence.
>> Okay. We can take you through those. So the principle one is the M12
>> which is just about to open.
>> Yeah. So I guess just to go back a step
infrastructure projects that were committed um previously to support
access around the airport. So there was the Brelli road upgrade which was finished in 2020. There was an upgrade to the northern road um as part of the access arrangements to the airport which were finished in 2021. And then the M12 motorway is very close to being finished now. Um so expecting that to be open to traffic shortly which will be a direct
>> in I don't want to interrupt um cuz the chair will get cranky at me but um close >> lunch I'm not standing between you and lunch chair um when you say shortly is there you know you're speaking a politician shortly could be a day or it could be a couple of years.
the the time frame that I've got.
>> Well, that that that is exciting. Um in terms of pass in terms of workers and passengers um traveling between the CBD and the airport is a review on how long that will will take now once this infrastructure the M12 and so forth once
I don't have estimates from the CBD. Uh I guess in terms of um access to the St. Mary's uh railway station and the airport. Uh and the New South Wales
to the airport. So um they're things that the the New South Wales government are are providing in terms of bus access to the airport for a safety. Is is the Commonworth government satisfied that the transport links? Yeah. To to and from the airport on par with other similar airports overseas.
>> Yes. the the amount of traffic that will be there on day one. Absolutely.
>> So, so you're you're satisfied with
that. >> The M12 will be an excellent um road um when it is open plus the works that have been done on the Northern and Benjali. Um it uh they will be fabulous. The buses that New South Wales have offered to be put on will be great. And I think where you're going is what's happening with the um the metro and the delays to the metro. um given um that we anticipate that that will um uh open um in the foreseeable future having a rail connection to an airport that is um brand new, but is the you know will be it's not going to be a KSA on day one. It is going to be a much smaller airport comparable to a Newcastle airport. To have a rail connection of that size to an airport like that is going to be absolutely brilliant.
So there's a lot of opinions in that, but um I think they're right. Um Western Sydney Airport giving some evidence tonight, so you should ask them about their level of satisfaction. We meet with them. We have met with them on a regular basis all the way through this project. They have been very assiduous in holding both the New South Wales and Commonwealth government to account for surface transport infrastructure to be in place as early as possible and to a very high standard. And without wishing to speak for them, I think they're pretty satisfied with where we're at. But they continue to hold us to account.
>> Yeah. >> It's called leading the witness from the witness box, Mr. Secretary. So, but I'm sure they'll probably back up your evidence.
>> We'll see.
>> Um I I do look at this time. I do have some further questions, but I'll put them on notice in relation to um uh infrastructure around around the airport. >> I'll go back to you. >> Thank you, Senator. What I will do, Mr. Officers, there's an agreement between the committee. There's probably about another 10 minutes in this area roughly. So we'll keep working through to lunch then we can let your officers go and not
come back. All right. So thank you Senator McDonald. government's election commitment to return the port of Darwin to Australian
>> Uh that's under outcome three. Um but uh my department has um accountability for um the execution of that election
>> So do you have a time frame for that uh execution?
>> No. So this is obviously a matter of considerable sensitivity. Considerable sensitivity in terms of um the commercial negotiations being underway. Um, and also obviously it's a matter of diplomatic sensitivity. So, um, we're very limited in our ability to answer any questions, but I'm happy to take any questions you ask on notice. Senator,
>> thank you. Um, so is this agency taking the lead on the initiative as opposed to home affairs, defense, foreign affairs?
>> Correct. Obviously, um, our department talks to, um, other parts of government, but yeah.
>> Okay. uh do you have a team identified to work on this and if so how many ASL are involved in that?
>> Uh I to be honest I' I'd rather if I may I'll take that on notice. >> it's being led out of our regional area within the department which is um
>> But okay, would you rather that I wait and I'll I'll
>> to be honest I'm not going to be able to give you much more information regardless of who's at the table. This is a highly sensitive matter and not one in which we are proposing to comment um publicly.
>> Okay. I I guess given that the prime minister made a you know a surprise announcement on it um he dialed into a radio station to announce it. Um is the prime minister being regularly briefed on the matter?
all the uh key players within government that you'd expect to be briefed are being briefed. Yeah.
So that's the prime minister, the minister for infrastructure. Um could you provide the dates that he's been briefed that the the both the minister and the prime minister have been briefed, please?
>> I'll take that on notice.
>> Thank you. Has the minister met with any prospective buyers or consortia of buyers?
>> I'm not going to comment on that. I'll take it on notice.
>> Okay. And has the minister made any public statements since the election supporting the need to return it to Australian ownership?
>> Only that the Australian government is committed to returning the port of
>> Thank you, Chair.
>> Thanks Donald.
>> Thanks. I did want to raise an article in the Australian uh on the 16th of January this year titled gender studies pop plants and desks SRL chiefs taxpayer fund. So this is suburban rail loop and I believe this is a Victorian government body but we are providing a lot of funding from the federal government to the suburban rail loop project. Um in that article uh there is reports that the SRL authority has uh engaged a $196,000 contract for indoor plant hire and maintenance. we went through earlier that there has been some increased costs here, but admittedly your department's paying just $50,000 for a very large organization. This seems like a lot of money for just a SRL authority. There's a $100,000 contract for the provision of gender impact assessments.
>> We don't we don't fund the SRL.
>> I get this. I get this, but I'll let me let me get to my question. Uh there has been um uh $1,500 was charged on a tax base on a credit card for 10pin bowling and arcade game nights that had to be repaid. Uh $8,000 has been spent um at two coffee shops um on corporate credit cards and another $1,000 bill was racked up for a team building exercise at a Melbourne bar where patrons can drink and eat while playing arcade, computer games, and board games. Now, I realize that's what you're going to say. This is not a federal government authority, but the federal government is providing $2 billion towards the suburban rail loop authority. Have you asked any questions of the Victorian government about this seemingly excessive use of taxpayer money uh for the to the from the authority overseeing a major project?
>> So, the current um Commonwealth contribution to that project is $2.2 billion, but that is tied to specific um construction and property acquisition activities. Um, we have made an initial payment of $800 million, but as is standard practice under federal funding agreements, it is tied to particular defined milestones and we require evidence from the Victorian government that those milestones have been acquitted so that we are um we can talk you through the detail of what we've paid for, but we do not pay for the running costs of the strategic um rail link authority, sorry, suburban rail link authority um or any of the expenses that you've just mentioned.
Okay, but going back to my question, uh have have you made any inquiries of the Victorian government about this conduct and whether or not there's some kind of review or oversight because well, have you done that? That's all I want to know.
>> Uh no, because we have it's none of our business. We are focused on um the delivery of the actual construction project and that's where our money is
going. Well, I think yeah, with respect, I think it is our business because they are in charge of running uh the project and I realize you do your best uh to uh accredit and audit milestone payments. But uh if a culture of an organization is going as rotten as that and having to repay repay uh um taxpayer funded 10pin bowling nights, uh perhaps there should be a little bit more oversight over what the hell is going on in the Victorian government.
>> That is a matter for the Victorian government. We pay for the construction of the suburban rail before stop.
>> All right. Uh look, thank you for that chair. Thanks for indulgence. Um that's
it for outcome one then. Okay. We will now take an hour break and we will come back with officers from outcome two and I'll go to Senator Moll. >> Sorry. No, Senator. Okay. Senator