AUSTRALIA: The government has announced A$1.75bn of funding for rail freight, but has stopped development of the northern section of the 1 600 km Inland Rail project. This would have allowed the journey time for container trains between Melbourne and Brisbane to be reduced from 33 h to less than 24 h.
On May 6 the government said it had decided to ‘consolidate’ the Inland Rail project after independent cost assurance work by ACIL Allen had put the cost at more than A$45bn, over three times the current budget allocation, and found that the project could not be delivered until at least 2036.
The overall project involved 600 km of new and 1 000 km of upgraded railway which would support 1 800 m long double-stack container trains running at speeds up to 115 km/h.
The government now aims to complete construction of the section between Beveridge near Melbourne in Victoria and Parkes in New South Wales by the end of 2027. This includes 617 km of existing line, 2 km of upgraded line and 37 km of new route, and would enable double-stack trains to travel between Melbourne and Perth.
The route north of Parkes would require significant greenfield construction, and efforts will now focus on protecting the corridor as well as sites for future intermodal terminals in Queensland.
Freight funding
The A$1.75bn of funding for freight announced on May 6 builds on an existing $1.04bn commitment to upgrade the Australian Rail Track Corp’s network. The government said this would ‘enable more freight to move via rail, with important upgrades to be delivered where they are needed most’.
The works will involve upgrades to improve the efficiency of the East Coast network, including track renewals, passing loop extensions, improved signalling and removing speed restrictions to reduce transit times, enable larger trains and enhance reliability and safety.
There will be resilience upgrades in flood-prone areas, particularly along the east–west corridor which has suffered from multi-week closures over the last decade following downpours in central Australia.
The government is also establishing a A$55m programme to incentivise more freight to travel by rail or ship. The Transport Resilience & Capacity Kickstart pilot programme will support more fuel-efficient freight movements, which the government said is especially relevant while conflict in the Middle East continues to affect global fuel supply.
A co-ordinator will be established within the ARTC to identify and implement improvements in conjunction with other rail infrastructure managers.
Responses
Responding to the announcement, ARTC’s project promoter Inland Rail said it had been focusing construction activities on the Beveridge to Parkes section of the project since a staged approach to delivery was recommended by an independent review in April 2023. It is now ‘working through the details’ of the government’s plans.
Andrew Harding, Managing Director & CEO of freight operator Aurizon, said the Freight on Rail Group had advocated for additional funding and ‘we appreciate the government listening and acting on industry concerns.’ He said increased extreme weather events and the long-term deterioration of track infrastructure ‘has resulted in more freight shifting from rail to road and this makes absolutely no sense given rail is more efficient, safer, reduces congestion on our roads and produces far less carbon emissions.’
Article continues below image
He said pausing work on Inland Rail was a ’prudent and fiscally responsible’ decision. ‘Prioritising improving the existing network makes sense and will deliver more immediate benefits to the national economy’, he said. ‘Of course, we would like to see Inland Rail completed at some stage’.
The Mayor of Parkes, Neil Westcott, said it was ‘a shock and profoundly disappointing for our community and for the nation’ and ‘to see such a strategically vital project abandoned at the stroke of a political pen sends a chilling message: that Australia has become a nation where major infrastructure start and stop at political whim.’
The Australasian Railway Association reaffirmed its support for the Inland Rail project, with CEO Caroline Wilkie saying full completion must remain on the agenda.
‘Whilst the rail industry still strongly supports the completion of the Inland Rail project, we recognise that the escalating project costs need to be balanced against broader infrastructure priorities’, she said. ‘We welcome the continued preservation of the rail corridor and intermodal sites to ensure we can get this project back on track in the future.’
‘We hope to see government revisit the remaining sections of Inland Rail in the future to realise its vision to unlock economic opportunity along the full Melbourne – Brisbane route.’
To guide the refocused direction of the Inland Rail project, the government has appointed Dr Collette Burke as Chair of the Inland Rail board, and Dr Sean Sweeney as CEO. Burke has served as the interim Chair since November 2025, and is also the Deputy Chair of ARTC. Sweeney will join as CEO from July 1. His most recent roles were as Programme Director at MetroLink in Dublin and CEO of City Rail Link Ltd in Auckland.