Senate Rural and Regional Affairs and Transport Legislation Committee [Part 2], , 2:58:38 to 3:29:10
Discussion on Inland Rail office closures and property maintenance, followed by project approvals and housing finance at the Northern Australia Infrastructure Facility.
Topics: Infrastructure, Land management
Speakers: Senator Susan McDonald, Neil MacDonald, Senator Glenn Sterle, Senator Bridget McKenzie, Speaker 28, Interjection, Rob Sharp, Speaker 27, Speaker 31, Speaker 7, Stephen Lane
>> Thanks, Senator. >> Okay, thank you very much, CASA, and we now call IITC and Inland Rail. And if the office of the National Rail Safety Regulator are around, if you could I did actually say earlier if they were around, could they be waiting in the back of the room?
>> Yes.
Okay, so if we've got the other agencies ready to go straight after, that would be great. Thank you. And we'll kick off with ARTC and Inland Rail, and I hate to say this, but would you like to make a very brief opening statement, either?
>> Senator Sterle.
>> You're not?
>> I was going to, but I in the interest of time, I can table it.
>> Well, you Look, we appreciate that. Thanks very much. Senator McKenzie.
>> Thank you. >> [clears throat] >> On the 26th of May, Inland Rail advised that regional offices north of Parks remained operation in Narrabri, Toowoomba, and Goondiwindi. Can the department do all three still remain
Just want to check the uh So, um >> this year we closed Aubrey Parks and Goondiwindi. Narromine, Narromine, and Toowoomba will be closing on the 6th of November.
>> 6th of November. What will happen to the staff at these
>> They'll leave.
>> They'll leave the organization altogether? >> Are they aware of these plans?
>> I believe so, but I'd have to confirm
>> Okay. Thank you. Uh just on corridor maintenance, will Inland Rail Can these are on behalf of Jamie Chaffey, the uh local member. Will Inland Rail continue to maintain properties already acquired, including fencing, weeds, pests, fire management, and access for as long as the corridor is pre- preserved?
>> My understanding is that we have an allowance to continue to maintain the
>> So, that's a yes. You will continue to maintain the properties? Um has any decision been made about whether acquired properties that are not re- acquired properties that are not required uh for corridor preservation will be retained or divested?
>> That decision hasn't been made yet.
>> Uh has a brief gone to the minister or >> Um when will that decision be made?
>> Uh I don't know yet, Senator.
>> Thank you. That's all the questions I have.
>> Thank you to um ARTC.
>> That's it.
>> No no that Thank gentlemen. Sorry, I had no idea there was Okay. >> All right, thank you very much. Um Office of National Rail Safety Now, I'm going to be cheeky. Have you been to estimates before? Have you? I must have missed it in all
Oh, okay. Right.
Okay. Now, would you like to make a brief opening statement?
>> I was going to, but um
>> For the purposes of time
>> Okay. I'll table it. That's fine.
>> Well, that's great. Thank you very much.
>> Um Dr. Cullen, since your appointment as chief executive in November 23, on how many occasions have you taken personal leave in conjunction with official travel?
>> Personal leave in conjunction with official travel. Um I think just once.
>> Just once?
>> I have to check Can you let me check it, but I think it's just once.
>> Um can you just take us through the your most recent trip covering InnoTrans in Berlin and the IRSE in Lisbon in September and October?
>> Yes. So, um I left Australia on the 19th of September and went arrived in Berlin for InnoTrans, which goes for a week.
>> Yep.
>> Um so, I was there for that. And then from the Saturday for um 10 or 11 days, I took leave. Uh so that I could um then go to the International Rail Safety Conference, which is which was in Lisbon and that was also for 5 days. Um and then I flew to London um where I had some meetings for 2 days. Um and then I flew to Singapore on the way back to Australia. And I stopped to because I was invited to speak at the um international investigators conference that was held in Singapore and then I arrived back in Australia on Saturday.
>> Thank you. Um just on notice, can you provide the documentation showing that each part of the trip was for official purposes? and just wondering how ONSR satisfies itself that official travel I'll put that on notice. Who approves the chief executive's travel and leave?
>> Um the chief executive's leave is uh approved by one of the non-executive members. So, I don't know if you know how ONSR is constituted, but we have uh three members. I'm the chair of technically ONSR.
>> Yep.
>> And then we have two non-executive members and we're a not-for-profit uh organization. So, we're not a government agency.
>> Yep.
>> So, uh because we're not a government agency, um I'm not required to have ministers approve travel. Uh so, it's discussed with um the at the the non-executive [clears throat] members and we have our own reasons for why we travel, other sorts of things. I adhere to all the policies that we have.
>> Mm. Okay. So, one when you said one of the nine executive
>> No, sorry. One of the non-executive
members. >> sorry. >> Okay. Um so, that also does a non-executive member also approve not just the leave, but your travel arrangements?
>> No, they don't have to approve the travel, but we do discuss it cuz obviously you need some level of governance around these things. So, we discuss the the purpose and the merits of the of the travel. For the International Rail Safety Conference, we're actually hosting that next year in Sydney jointly with the Australian Rail Industry Standards uh organization. So, obviously it was important to go to that not only for the content of the of the conference, but also because we're hosting next year. There's a handover and we learn from them about how we do things.
>> Uh thank you very much. There'll be other questions on notice.
>> Okay. Thank you. >> very much.
>> Thank you, Dr. Cullen. I might get a briefing off you one day later. Just I
>> More than happy to provide a briefing.
>> be great.
>> Okay.
>> Just to see what you do actually do.
>> Partly it's in the statement, but happy to give you a fuller briefing.
>> Thank you. Thanks very much. All right. Now, let's get to Now, we're going to go to Northern Australia Infrastructure Facility who are appearing by video conference. Who should be appearing by video conference?
>> Should we suspend for a little bit until we get them?
>> I think we shall suspend for a little opening statement before we go to questions to the Senator McDonald. Gentlemen, can you hear? You can Does anyone want to make I'm not giving you I wasn't giving you that. I was just trying to say you're mute mute mute. Does anyone want to make a brief opening No, I'm not registered Hello, Glenn to National What is it? Northern Australia Facility. Copy, do you come in? >> Over. Roger that. Okay. >> 10-4, good buddy.
>> I think they're on. They're on the
>> All right. >> We've tabled our opening state- statement, Senator.
public link, which has a delay.
>> Oh. >> Oh, okay. You're on the Sorry, you might be on the public link. We're getting feedback.
>> We'll suspend.
>> Sorry, we'll just sus- I hate this technology. Hang on, we'll just see if Sorry, guys, just hang five.
>> We tabled our opening [clears throat] statement, Senator, in the interest of time.
>> Wonderful. Thank you so much. Questions, Senator McDonald.
>> Uh terrific. Thank you very much, and isn't this exciting to not only be seeing you to this evening, but seeing you early. So, it's a red-letter day for Northern Australia Infrastructure Facility. Uh Mr. McDonald, I want to start by asking you about the recent report tabled by the Joint Standing Committee on Northern Australia. Um I'm going to assume that you have read that.
>> Uh, that that that's right. It it came in last week.
it talks uh about lack of coordination between the Commonwealth, state, and territory governments and local councils as a barrier to development across northern Australia. Uh, does NAIF has NAIF seen evidence of the report's findings that a lack of coordination between the Commonwealth, state, and territory government, and local council is a barrier to development across northern Australia?
>> Uh, thank thank you, Senator, for the question. Look, we engage uh regularly at Commonwealth and at state and and um at levels. Um, so we have a regular dialogue um with the jurisdictions. Uh, we speak regularly with the Commonwealth um and we engage um with them to to try and make sure that we can deliver infrastructure outcomes for northern Australia. So, uh we see very positive dialogue. Um, there's uh you know, we would welcome the opportunity to do more um and engage more at both a state and um council
>> So, you're telling me that approvals are fast and predictable, that projects are screaming out the door uh because it's all working seamlessly.
>> Um, I I I think that that there's certainly challenges for projects um in the north as there are challenges with projects everywhere. Um, we see a lot of opportunity and we are very keen to play um a key role in helping facilitate
has NAIF seen any projects in its pipeline that have been delayed uh or have their costs increased or even had uh projects not proceed because of poor coordination between different levels of government?
>> Um, we've we've had projects that haven't proceeded. I wouldn't say that's because of poor coordination. Um as I said, you know, we in our engagement at at both a and state and sort of council level, we have good engagement and and we spend a lot of time and working with with different stakeholders to to give our projects the best chance of success.
>> No, no, it's not the engagement. It's whether or not the projects are being approved in a timely manner to go ahead and be successful.
>> Yes, but but I think your question, Senator, was specifically whether that was due to a lack of coordination. So, there's there are definitely projects that have not proceeded as fast as we or the proponents may have liked, but I I haven't seen evidence that that's due to a lack of coordination.
>> What about approvals? Project approvals.
>> Yes, there's so so there are some um projects where um approvals um well approvals on all take time. We have seen somewhere those have taken longer than we would um we would like. Um but um we continue to work with proponents and talk to the jurisdictions to um ensure that those approvals are are provided um as soon as possible.
>> I guess this is what I'm seeking to understand is that you've provided finance. The proponent is burning money. And and I I'm I'm trying to get clarity around um the sense of whether or not we are getting projects through the valley of death through the approvals process, through finance approvals, through um uh you know, first cash flow, first first project milestones in a way that allows them to be successful. Uh and and you're telling me though that approvals are not a problem, that there's no problems in northern Australia, and that um I've got it completely wrong.
>> It's not. May I clarify uh my comments, Senator? What I was saying is um that there are projects that are taking time to get approvals. That doesn't, from what I've seen, appear to be due to a lack of coordination. So, I think your your observation is that there are um we would definitely like more projects to be advanced. That's what NAIF is here for. We see our key role as being as funding economic infrastructure in northern Australia. It's something we're very passionate about. Um but um um we do see that some projects are delayed, and there are there are some challenges to some projects proceeding. But your question was whether that was due to a lack of coordination. And what I was saying is it's it's not due to a lack of coordination. And in in our experience, it's due to the fact that these projects are complex, they take time. Um and um so that the approval process can be um at times quite quite long.
>> So, the Minister for northern Australia has secured additional funding for the NAIF, additional $2 billion. Uh, your mandate is to get money out the door to projects to get them completed, but you have another agency that's not completing approvals in a an economically >> efficient way. And uh what else would you call that apart from a lack of coordination?
>> I think that the the um the projects that we support um uh are um subject to a number of of approvals. Sometimes that's um Commonwealth level, say for example EPBC approvals. At times that's state levels such as development approvals. So, there's a range of approvals um on projects um and um so the approvals process is is very thorough and therefore sometimes takes time.
>> I I understand this, but this is the point, isn't it, that the Northern Australia agenda we've got an agency that's given the money um other agencies that are um slow in their the way they do approvals cross-jurisdictional. So, you might have the state doing approval and the feds and um and and meanwhile the money that you've loaned them is you know, their cash flow uh is is being depleted on salaries and people and redoing approvals and whatever else rather than starting to commence the project, which is potentially going to threaten the project viability. I think it's a lack of urgency from all agencies that means that these projects are we're spending money on things that we shouldn't have to spend money on and who misses out? Well, it's the people of Northern Australia who don't get a project built in a timely manner, jobs on the ground whatever the product is that you're
>> I yes, and I I understand Senator Scarr. Look, I um I can certainly assure you that NAIF as an organization is very committed um to um timely um approvals and making sure that we can um deploy our capital as fast as possible because we do understand that it's the deployment of capital that helps to support economic growth, jobs um and and indigenous outcomes, which is the reason that we exist.
>> So can you give me a a specific example of a project where delayed approvals has uh delayed the project or affected its viability?
>> Yes, I can give you one example, Senator. Um the Townsville Affordable Living um project, which was something that we um uh made an investment decision on um in the last financial year, 2025-2026. Um that's a project that we were very keen to support because it's social and affordable housing. Um it didn't receive the development approval um that it needed. Um and so at this stage, that project is not proceeding.
>> So, on that, I note there are two housing projects, the student accommodation in Darwin, the social housing project in Townsville. do you think that given that we have a housing fund that that this is still within the remit of what NAIF was established for for Northern Australia?
thank you, Senator. So, uh um as you're aware, NAIF was set up to fund economic infrastructure in Northern Australia that delivers growth, jobs, and Indigenous outcomes. Um housing has emerged as a key constraint on economic growth in the north um in terms of being able to house essential workers um and to be able to to build communities. And um so, we are um supporting housing projects wherever we can, particularly in the social and affordable housing space, um to best support the development of Northern Australia.
so, social housing is to provide workforce for people uh for projects that would otherwise not be paying enough that they're able to finance their own home.
>> I would I was was using social and affordable housing as as an area that we are and very focused on. I think housing more broadly and is a challenge in northern Australia as it is in in other regions as well. And in the north we need housing to support and workers and communities and so that that that is something that we are helping to support.
>> Okay, so given that the Commonwealth has a housing infrastructure fund just not certain that this is a remit for the northern Australia infrastructure facility.
>> Yeah, and certainly we do work very closely with Housing Australia and the projects that we've been involved in. we work very closely with them on the on these housing projects.
>> So what about the Cairns Seniors Community Housing Project? originally what assessment did NAIF undertake to determine that this project would not proceed without its financial
>> And yes, so I've got my my two colleagues here and Stephen Land is our chief investment officer whose team was involved in and putting the deal together. And I've also got Ravin Rethran who is our chief risk officer. So I might hand over to them and in a moment. Um but um it the that that that is a project and that we are happy involved in. We're very proud of our involvement. And Ravin who'll speak in a moment um, and recently visited the the So, I might hand over to Stephen first, maybe, um, to answer your first question, then Ravina can, uh,
>> Thank thank you, Stephen. It's Stephen Lane, Kumul Housing and Development. Um, in in terms of the the Cairns housing project, um, it was it's is a challenging project as you're as you're aware that, you know, the market in northern Australia is materially different to southern Australia. Um, we spoke with Housing Australia initially about the project in order to get the project built to a budget that was acceptable, um, in order to access the, um, both the the Queensland Government operating support, but also the Housing Australia subsidy. Um, it was actually identified that it would need to be, um, produced on a, um, prefabricated basis. And that was something that the, um, Housing Australia, um, investment team weren't comfortable with. So, we actually took that project forward on with a with a prefabricated model. It's, um, it's being delivered in, uh, a a phased approach. So, the structure is that we're working with a commercial bank around the, uh, to delivery of the actual project on a construction basis, and then Housing Australia would join the project post completion, um, once that risk around the prefabrication piece has been, um, mitigated through the through the construction. So, it it's very much a case of, uh, you know, fit for purpose for northern Australia. Um, so, there was close collaboration with Housing Australia, but, you know, we have a different mandate. You know, our mandate is very much around delivering, you know, higher risk projects in northern Australia, recognizing that, you know, construction costs, delivery timelines, et cetera, are challenged versus, um, I guess the broader experience in southern Australia.
>> I just to tease that out. So, Housing Australia wouldn't do prefab construction, Is that right?
>> Um I I couldn't comment. It's It's an internal policy. I believe they're they're reconsidering that given the um the need to deliver prefabricated um housing in order to meet the the targets that the government has set. Um but at the time they weren't prepared to take that risk on modular housing.
>> So, did you say that once the construction is complete, the Housing Australia is going to take over the
>> Uh they'll they'll take over the the P So, we'll we will um they'll refinance the construction piece that's currently being taken by an Australian commercial bank. Um so, their long-term debt will be provided by both NAIF and Housing Australia for the concession period.
>> What proportion of the debt after they take over the commercial funding will be NAIF and what percentage will be Housing Australia?
>> Uh I haven't got that at my fingertips, Senator. Um I might throw to my colleague Ravin if he's got that. Otherwise, we'll need to take that on
>> I said that Ravin 330 Chief Risk Officer I don't have that percentage. Um with with us, I think I'll take that one on notice. I will answer the the um the construction activity. Sorry, we've got a bit of an echo here.
>> If both the other gentlemen would put their computers on mute and turn down the volume, that'd be good.
So, we'll we'll come back to your notice for the question around the composition, if that's okay. Um I'm happy to answer the question that uh Neil proposed around the activity on the site. If If you'd prefer If you'd like an update.
Yeah, that'd be terrific. Thank you.
>> The project activity is is solid. I visited the site um last week. There was 120 contractors on site or individuals on site. The the roof issue that that occurred um last year, late last year, has been addressed and and the and so the corresponding weather impacts as we approach the weather season commencing are addressed. And um there has been no additional no additional ask from NAIF in terms of additional funding as a result of the um those weather issues from the prior
>> Uh I was surprised that the prefab houses were sourced from somebody outside of northern Australia given our particular weather issues. Um I guess we'd call that a learning moment, would we? >> They came from Perth, I understand.
>> Victoria, I believe.
>> Oh, Victoria. There you go. Well, both your reputation remains. Uh well, I mean that that I thought was a a surprising decision given the rainfall and other issues and it turned out to be the case. How does NAIF ensure that funding housing projects does not divert its funds or its fund financing capacity from other critical economic infrastructure projects across northern Australia?
>> Yeah, thank you, Senator. So, we assess each project on its merits and we look specifically at what is the the impact of the project on northern Australia in terms of growth, jobs, and other public benefits. So, I think the way we make sure that we're allocating funding to the right sectors and to the right projects is to really look at the impact that those projects are having And with each assessment on its merits.
>> Okay, because I am aware of other projects that have said they weren't able to progress and they were sort of economic driver projects with jobs and further investment and particularly in the Cairns region where I might talk to you offline about those projects and why you would spend money in housing when we do have a housing fund and we've got other projects. How much was the money that went into this project, the seniors community housing project?
>> 140 million dollars.
>> 140 million dollars. All right, we'll do a compare and contrast with the other projects that have come to me about why they weren't funded. Um
>> And and and Senator we would be very happy if you think there's projects that are at merit and that haven't been funded, we'd be very happy to to engage on that. We are very keen to do as many projects in Northern Australia as we can.
>> Terrific. All right, on notice, could you please provide me with your current FTEs and where they're located because you know I'm always looking to make sure everybody's located in Northern Australia. and also where you are up to on your pipeline of project funding for funding.
>> Okay, I have [clears throat] that information available now. Would you would you like that now or would you like that on notice?
>> If you wouldn't mind provided on notice because I've got 15 seconds to go and the chair would be very happy to have us finish on time.
>> Okay, fully understand.
>> Thank you, Senator McDonald.
>> Thank you.
>> All good. Gentlemen, thank you very much. Appreciate that. >> Sorry. I'd like to now just thank the secretariats. Well done again, Patrick you and your team. Hand sudden broadcasting as always, thank you so much. To my fellow committee members, what [clears throat] a great day it's been. We can't wait to do it all again tomorrow in agriculture. The committee now stands adjourned. Thank you.