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Barnaby’s baby – boon or boondoggle?

As Scott Morrison announced $8.4 billion is to be spent on an inland freight rail linking Brisbane to Melbourne, Barnaby Joyce went purple with excitement.

But is it a boon or a boondoggle?

The proponent’s stated benefit-cost ratio (BCR) is 1.1.  When wider economic benefits (WEBs) are included, the stated BCR rises marginally, but is still 1.1 when rounded.

Infrastructure Australia has identified a number of risks which could impact on the economic viability of the project. Factors such as a decrease in demand for Australia’s coal exports, weak oil prices, reduced demand for interstate freight, and upgrades to the Newell Highway, could adversely impact the economic case for Inland Rail.

The budget papers concede that, given the marginal nature of the BCR, an increase in project cost could have a significant impact on the final BCR.

“Project costs will not be finalised until procurements, alignment and reference designs are completed. The project is sensitive to increases in project cost and lower revenues from users, and these risks could decrease the returns on the Government’s investment in the project.”

The budget also included funding for a Regional Road Freight Corridor in NSW—New England Highway: $30.3 million, Princes Highway: $52.5 million, Mitchell Highway: $5.6 million, Newell Highway: $78.8 million.  As stated by IA, these road upgrades lessen the projected benefit from inland rail.

The budget states that the inland rail project “will support 16,000 direct and indirect fulltime equivalent jobs at the peak of construction” and 600 jobs when operational.  But have they considered the number of jobs that will be lost in the road freight industry?  Or even those employed in road construction and maintenance as 7.5% of the total benefit comes from “Reduced lifecycle costs for infrastructure owners and operators on the road network as a result of lower freight volumes, with reduced maintenance costs and capital investments able to be deferred.”

All parties seem to be supporting this investment but I suspect that has more to do with not being the one to upset the regional voters than through any actual comparison of the value with alternatives.

High speed rail has a similar BCR but has the advantage of facilitating decentralisation which would help with housing affordability, urban congestion, the high volume of air traffic between Melbourne and Sydney, and regional revitalisation.  It would also, with less private traffic, free up existing rail lines and highways for freight.

This is definitely a win for the National Party but perhaps Barnaby had a more personal reason for his glee.

According to a map published on May 1, there will be a new section of rail built between Narromine and Narrabri.

“Approximately 307km of new track.  This new track will reduce the overall journey time and complete one of the missing links between Melbourne, Adelaide, Perth and Brisbane.”

Serendipitously, this line will go through a little place called Gwabegar where Barnaby Joyce happens to own  two neighbouring properties totalling 2400 acres.

When he bought them, the locals were bemused.  A successful farmer and exporter from a nearby area said of the Joyce’s purchase, ”This is scalded country. It could not support the number of animals that would be needed to make a return on investment.  It is a strange buy, put it that way.”

Perhaps not so strange now.

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34 comments

  1. helvityni

    ( I had to check the meaning of ‘boondoggle’.)

    I’m so excited; I can’t wait for the New Snowy Mountains Hydro Electric Scheme to start, then the Inland Rail, and three times lucky: the Second Sydney Airport…

    Mal was right, it’s never ever been as exciting as NOW, to live in Australia…

    Happy days are here again….

  2. Kaye Lee

    Pity the second airport doesn’t have a rail line going to it.

    Boondoggle is a word that doesn’t get used often enough. The alliteration was too good to resist.

  3. Aortic

    Does the VFT (Very Fast Train) for those who have not been paying attention travel on the same track or is another infrastructure project to be announced? I am also beside myself with excitement and ant anticipation. I would be willing to bet there would be many in Asia who must be agog at the pace of change in sleepy Oz. Think I will have to have another cuppa and a lie down as I am hyperventilating at the very thought of it all.

  4. Kaye Lee

    The high speed rail project would need an entirely different track so I would suggest it is dead in the water now.

  5. Aortic

    Does that mean we are going to have a Very Fast Boat then?

  6. Keyser Soze

    I have just watched Barnaby on the ABC get a boner over the Budget. He was so excited that the Dog fence is to be improved and that
    the new rail line will take 200,000 trucks off the road which is great for all the future unemployed truckies and transport companies.

    What a great thing for all the people who will live along the line to watch theses trains roll past knowing that they won’t have to travel as far to put their containers on.

    I don’t have the words………..

  7. Ross

    They could always slot in a luxury steam train ( coal fired off course) to carry rich foreign tourists on a ten day outback scenic tour between Melbourne and Brisbane, maybe stop in at Barney’s place for a plate pumpkin scones on the way.

  8. kerri

    I remember that purchase of Barnaby’s! And how questionable it seems. Not that I would ever suggest Barnaby might seek to feather his own nest.

  9. Zathras

    I’ve been interested in Barnaby’s properties since the allegations they were bought on the basis of inside information regarding potential Coal Seam Gas licences.

    What’s more interesting is that when this surfaced he stated he would be selling those properties to avoid the perception of “a conflict of interest”.

    http://www.smh.com.au/federal-politics/federal-election-2013/barnaby-joyce-to-sell-property-to-avoid-csg-conflict-of-interest-20130824-2siel.html

    It’s been almost four years and they still appear on his pecuniary interests submission.

    Can’t find a buyer or still waiting to cash in?

    I await a question from a journalist but won’t be holding my breath.

  10. Kaye Lee

    Zathras,

    Look at the connection to John Anderson.

    In 2005, the year before the Joyce’s first acquisition, Eastern Star revealed it had already spent $50 million exploring the Pilliga, mainly around Narrabri, since 2001.

    At a time when few people had even heard the term ”coal seam gas”, the company had plans for 1100 gas wells dotted across the Pilliga, feeding a $150-million pipeline to the Hunter Valley.

    Joyce’s property at Gwabegar lies inside the ”petroleum exploration licence” (PEL) areas that Eastern Star – before it was sold to Santos – owned the right to explore.

    In October 2007, Eastern Star Gas Limited announced that the former deputy prime minister (but then still-serving MP) John Anderson had been appointed chairman of the company.

    A former Nationals leader, Anderson is a political ally and personal friend of Joyce and was his campaign manager in his bid to win the seat of New England in the 2013 election.

    Despite this close association, Joyce maintains he had ”no knowledge at all” that the Pilliga would be at the eye of the CSG rush when he bought his land.

    and if that didn’t work out….

    In November 2013, Warren Truss announced “To ensure construction (of the inland rail) starts as soon as possible, I will create a high-level Implementation Group to be chaired by former Deputy Prime Minister John Anderson.”

    It’s handy to have a campaign manager who is so well-connected. (Rolls eyes.)

  11. freefall852

    All this talk of very fast trains and inland freight routes and Badgery Creek 2nd airport and affordable housing projects is getting too complex ..I’m going to escape all this LNP budget reality and go relax with a DVD episodes replay of “Utopia”..

  12. diannaart

    @freefall852

    Indeed, there are laughs to be found in “Utopia”, a crying shame our LNP overlords thought the program was a “How to…” documentary.

    Prize for most avaricious MP in LNP stable goes to Barnaby Joyce?

  13. passum2013

    this quite funny as double bs are cheaper than rail setup so why not a brand new freeway instead of spending billions in Sydney and on Adami in Queensland

  14. David Bruce

    what they are not saying is that this project will help relocate the extra 10 million people Australia is expected to accommodate as part of the UN 2030 charter. K Rudd was right when he said Australia should plan for a population of 35 million by 2050. I am sure Blarnaby will have high rise on his 2400 acres to accommodate them all?

  15. diannaart

    @passum2013

    I believe the answer is a circular one; the railway justifies the Adani coal mine and the Adani mine justifies the rail.

  16. Mark Needham

    That Rail versus Road, Rail has a 6:1 Tonne/km cost benefit over Road, never enters the argument.
    Shouldn’t some truth enter the argument somewhere. The biggest shame is, that the rail wasn’t built years ago.
    Steaming,
    Mark Needham

  17. Kaye Lee

    Mark could you provide a link for that please. It certainly isn’t mentioned in the business case from Infrastructure Australia.

    I also found a small bone thrown to high speed rail.

    “The government has allocated $20 million in 2017-18 to develop business cases for projects which would deliver faster rail connections.

    “Under the measure, the Government will provide up to 50 per cent of the funding for the development of up to three business cases by proponents selected following assessment of the submissions by Infrastructure Australia.

    “The Government will consider further project funding following completion of the business cases.”

    Yet another taxpayer-funded business case study is a great way to waste money without actually having to do anything.

  18. Kaye Lee

    Actually Mark, your figures are hugely out. If you are calling for truth then shouldn’t you actually make sure what you are saying is vaguely true?

    “Figures published by the federal government’s Bureau of Infrastructure, Transport and Regional Economics (BITRE) show that the cost of moving 1 tonne of freight by road over a distance of 1 kilometre (known as cost per tonne kilometre) is 7.5 cents for road, more than double the 3.5 cents for rail.”

  19. Zathras

    Kaye Lee.

    I knew all about those matters at the time but I’ve always wondered why they weren’t being widely reported.
    If it was a Labor member there would have been hell to pay plus endless accusations of corruption and calls for a Royal Commission.

    If Joyce can attend the wedding of an Indian billionaire’s granddaughter along with a local mining magnate and then claim an “overseas study allowance” to pay for his return flight home or write-off a government 4WD by recklessly driving through floodwaters or claim to believe in Global Warming whilst escorting a well-known skeptic around his electorate to address crowds and get away with it all, I don’t wonder about it any more.

    Perhaps the media see him as a harmless entertaining clown but he’s the Deputy Prime Minister and it’s a very serious matter indeed.

  20. Kronomex

    Sometimes I look Berkabee, sorry, Barnaby, and keep waiting for his head to explode à la Cronenberg’s Scanners. But, sad to say, I am always let down. Sigh.

  21. king1394

    I am one who thinks that sooner or later transport by trucks along road networks will fail due to the costliness and waste of building and maintaining roads and fossil fuel burning vehicles, There may be driverless, electric powered B-Triples in the future but I am happy to see a little step towards more rail in the country. Many country towns have lost their railway systems and therefore their alternatives to having to run a private car to get about. There is no reason not to have passenger rail as well as freight on this proposed rail line.

    I admit is unusual to have the Liberal/Nationals putting forward such a project and I understand the suspicion many feel about this. They have history as breakers rather than builders. I hope they don’t muck it up the way they did the NBN

  22. Michelle

    Someone here is a f*cking comedian. I’m sure of it. This whole thing has got to be a joke right? :-/

  23. Kaye Lee

    “Inland Rail will boost Australia’s GDP by $16 billion over the next 50 years”

    An Infrastructure Australia report put the cost of congestion on all urban roads in Australia at $13.74 billion in 2011. It warns congestion threatens economic growth and living standards and could cost Australia $53 billion by 2031.

    I agree rail is better than trucks but I cannot see how an inland rail will get that many trucks off the roads – they may have shorter trips but someone has to get the stuff from the line to the urban distribution points or air and sea ports. The rail goes nowhere near Newcastle, Sydney or Canberra.

    https://infrastructure.gov.au/rail/inland/files/inland-rail-alignment.pdf

  24. L Power

    They will realise in few years they should have put rail link through MIA the hub of growing instead of going around and cheaper route. Our member for Farrer couldn’t wait for it to be passed as it goes through her home town and not concerned with rest of her area. 😡

  25. Mark Needham

    Kaye Lee. Mate I’m on it. I’ll pull the Studies from somewhere.
    Breathing Rapidly,
    Mark Needham

  26. Mark Needham

    Something to nibble on…
    https://www.aar.org/BackgroundPapers/Environmental%20Benefits%20of%20Moving%20Freight%20by%20Rail.pdf

    I am a rail o phile,(sic) from way back, but been a while since I’ve dabbled in the economics.
    Dragged the 6:1 from me bum, but the fact that there are varying numbers out there is not in question.
    Rail has to be the go.
    Road freight will never stop., and is the perfect solution to the “Rail Head to Customer” problem.
    Kaye Lee, fair enough, short term, I shall relinquish the high ground on my nominated figure of 6:1. But I shall never say that Road Freight is the answer to Australia’s freight delivery system. Rail, here in Australia, where long distances are involved, is the obvious choice. By virtue of the fact, that I could go out to-morrow, borrow a Million Dollars, buy a truck, start flogging me guts out…I would become a Road over Rail man.
    To be a rail provider takes considerably more nous, clout to do the job, at all or even properly.

    The argument/comment for and against, is long and arduous. The efficacy of investment of well planned ….(“Well Planned” any sort of investment) development is/has to be to the benefit of Australia. ( So long as, after its development, it ‘aint sold to private Skimmers and Scammers)
    Honestly caught with me pants down, teeth in the glass, here.

    A quivering mess,
    Mark Needham

  27. Mark Needham

    Further to the Freight Development, isn’t it sad that it has taken a private enterprise person to establish an International Airport at Toowoomba.
    Bloody disgusted,
    Mark Needham
    PS. Doesn’t it annoy you when a yank tells me that I have spelt Toowoomba wrong., and spelt also. Bugger and damn.

  28. Mark Needham

    Thanks Kaye. Got to knock off, been a bad boy, had a few beers, ‘n Margies up me for the rent. ( As she should) Had a quick glance, read some more tomorrow.
    Night,
    Yawn,
    Mark Needham

  29. Möbius Ecko

    I can’t find it at the moment, but one of the ABC radio shows, LNL I think, did a piece with guests on how the trucking industry deliberately destroyed freight rail. In the early days Fox and other big trucking companies were the instigators in successfully lobbying governments to defund rail.

    A contemporary example is Jeff Kennett in Victoria closing country rail services. Jeff Kennett is a friend of Lindsay Fox.

    I don’t know if the cost per kilometre for trucks takes into account the environmental damage they do, especially in wildlife kills, or the damage they do to a road. Again, I can’t find the source but I once read that a truck tyre does eight times the damage to a road than an average sedan tyre. It’s one of the reasons truck registration costs are so high, but I don’t think they cover the cost of the damage the trucks do.

    Something to read: https://www.themonthly.com.au/issue/2014/december/1417352400/paul-cleary/roads-nowhere

  30. freefall852

    “…rail link through MIA the hub…” …Jim : “Hub…Hub-b..nice word that..H-U-B……Precinct!..that’s a good word too…precinct!…”

  31. freefall852

    Mobius…I live in the SA Mallee on a B-Double route to Melb’…the road-kill is a shocker..wombats, roos and of course bird-life..It is sometimes a real charnel house of horrors…of course, those big trucks going flat-chat have no possible option but to just plough straight through..It’s the market..doncha know?

  32. freefall852

    Ahh!..No tree as slender-limbed as a mallee tree..

    Adagio Dancers of the Mallee.

    The Mallee trees hold rock solid,
    Like a pair of adagio dancers,
    Feet fixed on stage, last step’d,
    Posed, poised and arms svelte-twist’d to the applause:
    Of the rasping cry of cockatoos in delight,
    Sillouhettes against the striking light..
    Silvered limbs naked sheen,
    The dancers twirl under evergreen
    Rustle of sequin’d leaves.
    A glimpse of heaven in between.
    The adagio dancer can never seem,
    As slender-limbed , as argent-sheened,
    As the Mallee trees I have seen.

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