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Need to solve inland rail's 'missing link' says Port of Brisbane
The amount of coal being exported through the Port of Brisbane is well short of the numbers used in the business case to prop up the Morrison government's $10 billion Melbourne-to-Brisbane inland railway.
With doubts about the long-term financial viability of the 1700-kilometre project, it can be revealed the amount of coal exported through New Hope Group's Queensland Bulk Handling terminal at the Port of Brisbane last year was only 7.2 million tonnes.
The Melbourne-to-Brisbane inland rail will allow freight to be moved between the capital cities in 24 hours. Supplied
The multi-user facility has a capacity of 10 million tonnes, but the 2015 business case for the inland rail project by former deputy prime minister John Anderson estimated there would need to be 12.9 million tonnes of coal exported through the port by 2024-25, increasing to 19.5 million tonnes a year in 2029-30 and continuing at that level until 2069-70.
If the optimistic coal export numbers are not met, it could undermine the whole business case for the inland rail project, which is being funded by a $9.3 billion equity injection from the Commonwealth.
The Anderson report into inland rail estimated there would be 24.283 million tonnes moved to and from the Port of Brisbane in 2024-25, increasing to 50.13 million tonnes in 2069-70.
More than half of this amount (12,900) is from coal, with the remainder agricultural products (6.7 million tonnes) and intermodal freight (4.6 million tonnes).
The Anderson business case, which was submitted to Infrastructure Australia, gave the inland railway the green light, but said the Commonwealth would have to fund most, if not all, of the rail link because the private sector would not go near it.
It found the new freight route would deliver a net economic benefit of $13.9 billion, including lower costs to consumers because of cheaper freight costs to move goods interstate.
A CSIRO report released last week found the project would deliver transport cost savings of between $64 to $94 a tonne, or $70 million a year, if freight was moved off the road onto the nation-building infrastructure project.
But the equity injection to the ARTC could cause a fiscal headache for future governments because it will have to be brought back on-budget if the project does not deliver the promised returns.
A Senate estimates hearing in 2017 heard the private sector would expect a rate of return of between 11 per cent and 13 per cent for a greenfields project, while the Australian Rail Track Corporation – which is receiving the government funding – only expected a return of 5 per cent to 5.5 per cent for the inland rail project.
This article first appeared on www.afr.com
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