ARTC & INLAND RAIL - Home - ASEW17asew.com.au/.../11/Inland-Rail-Project-Management-Benefits-Risks.pdf · 2 AUSTRALIA’S LARGEST RAIL FREIGHT NETWORK OPERATOR •ARTC is a company

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ARTC & INLAND RAIL14 NOVEMBER 2017

SIMON THOMAS, PROGRAMME DIRECTOR ARTC INLAND RAIL

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AUSTRALIA’S LARGEST

RAIL FREIGHT NETWORK OPERATOR

• ARTC is a company under the Corporations Act owned by the Commonwealth

• Independent Board

• Nearly 20 years of experience in operating, maintaining and building rail

infrastructure

• Operating on sound commercial principles

• Growing the volume of freight on rail

• Improving rail infrastructure through better asset management and a

programme of commercial and grant funded investment

• Promoting operational efficiency and uniformity of the network

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$6.5B

UPGRADE

ACROSS FIVE

STATES

SINCE 2004

PROJECTS FUNDED FROM ARTC BALANCE SHEET &

GOVERNMENT• Partnerships with the private sector

• Strong working relationships with customers, industry, adjoining network

owners, multiple levels of government, regulators and community

• Complex design & construct contracts, governmental agreements,

across State and Council borders

• Multiple financing & delivery models

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THE RIGHT SOLUTION FOR

AUSTRALIA’S FREIGHT TASK

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MEETING AUSTRALIA’S FREIGHT CHALLENGE

• Significant growth expected in freight volumes by 2030 (as much as double)

• Australia’s East coast population is expected to grow by 60% over the next 40 years, placing significant pressure on existing infrastructure and increasing road congestion in our capital cities

• Cost of congestion forecast to be $20b pa by 2020

• Strong growth in passenger transport demand is eroding surplus capacity on urban rail and road networks, increasing competition between passenger and freight services

• Without additional investment in infrastructure capacity, the repercussions will be felt at state and national levels

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INLAND RAIL – ECONOMIC BENEFITS

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INLAND RAIL OVERVIEW

• Inland Rail is a project of national

significance - a new 1700km freight rail

line via regional VIC, NSW and QLD

• Road-competitive rail service based on transit

time, reliability and cost (<24 hours Melb-Bris)

• Double-stack capability with initial 1800m

train length and future proofing for 3600m

• Performance and operating cost

advantages unachievable by the existing

coastal route

• Utilises more than 1200km of the existing

network – reducing community impacts and

land costs

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FIVE KEY FINDINGS OF THE BUSINESS CASE

ECONOMIC BENEFITS

Source: PwC 2015

Distribution of Inland Rail benefits as a proportion of total benefits

(discounted at 4%) excluding the residual value. Analysed over a 50

year appraisal period to 2073-74

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BUILDING WHAT INDUSTRY WANTS

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TRAIN & TRACK

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WE ARE ALREADY

DELIVERING INLAND RAIL

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THE COMMONWEALTH COMMITTMENT

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Reference Design and EISs for 2 NSW priority projects

• EIS publicly exhibited for Parkes to Narromine

• Construction of P2N commencing mid-2018

• EIS for Narrabri to North Star exhibited later this year

Concept Design is complete for the other 11 projects

• Contracts for Reference Design and EIS studies being

progressively let from Q4 2017

WHAT’S BEEN DELIVERED TO DATE

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7 projects

• Albury to Illabo

• Illabo to Stockinbingal

• Stockinbingal to Parkes

• Parkes to Narromine

• Narromine to Narrabri

• Narrabri to North Star

• North Star to Qld Border

INLAND RAIL IN NEW SOUTH WALES

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• Over 40% of the total project cost will be invested in NSW – that’s over $4 billion of the cost of Inland Rail

• Inland Rail will boost the NSW Gross State Product by $2.6 billion – benefiting residents of NSW living in our cities and in our regions

• Northern NSW ($908M), the Central West ($480M), the North West ($427M) and the Murrumbidgee region ($199M) will all significantly benefit from Inland Rail

• Around 1000 jobs will be created in NSW during the construction period of Inland Rail – concentrated in Northern and North West NSW.

• NSW Producers will benefit from Inland Rail, opening up new options to both domestic and export markets.

• In 2050, up to 70 services per week (in each direction) will be diverted from the Sydney Metro Area by Inland Rail – relieving pressure on the Sydney Metro network.

BENEFITS IN NEW SOUTH WALES

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• Economic development and investment

in regional NSW will be boosted by

Inland Rail

• It is estimated that Inland Rail will

involve over $4 billion of capital

investment (estimated construction cost

including contingency and escalation)

in regional NSW over the next 10 years

• Hundreds of jobs will be created in

regional NSW over the construction

period and the ongoing operation of

Inland Rail

REGIONAL BENEFITS IN NEW SOUTH WALES

Source: PwC 2015

Economic impacts by region – Inland Rail construction and operations (GROSS

REGIONAL PRODUCT, 2014-15, dollars, $ million, 4% discount rate)

ECONOMIC IMPACTS OF INLAND RAIL BY REGION

DELIVERING THROUGH PPP

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The 126km section from Toowoomba to Kagaru, including large scale tunneling,

will be delivered through a Public Private Partnership (PPP)

INVOLVING THE PRIVATE SECTOR VIA PPP

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Rationale for the PPP:

• effective risk management

• harness innovative design solutions

• opportunities for more efficient construction

methodologies

• provides innovative financing and funding solution

• drives greater value for taxpayers

WHY A PUBLIC PRIVATE PARTNERSHIP

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• A dedicated PPP project team is being established within ARTC

• Currently developing a detailed Implementation Plan for PPP transaction

• Legal, Commercial and Financial, Probity and Technical Advisors to be engaged by

early 2018

• Envisage a staged procurement process: Expression of Interest then an RFP

• EOI anticipated to be called in Q2 2018

ESTABLISHING THE PPP

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MAJOR OPPORTUNITY FOR INVOLVEMENT

• $7+ billion across the non-PPP

elements of the programme

• Major design and construction

opportunities, predominantly in

‘bread and butter’ railway

construction activities – design and

track & civil construction (including

regional contractors)

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LOOK AHEAD

12-18 MONTHS

• Commencement of construction on Parkes to Narromine

and potentially Narrabri to North Star projects

• Reference design and EISs across the rest of the

programme

• EOI and RFP process for the Gowrie-Kagaru PPP

LONGER TERM

• Procurement for construction of remaining projects

• First train currently scheduled for 2024/25

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QUESTIONS?