Australia Halts Inland Rail at Parkes as Costs Soar Past $45 Billion

The Australian federal government has announced that funding for the Inland Rail project will not continue beyond the regional town of Parkes, New South Wales. The decision was based on an independent assessment that estimated the total cost of the full Melbourne-to-Brisbane route at over A$45 billion—more than three times the initial budget.

Project Scope and Funding

The project was originally intended to create a 1,700-kilometer freight rail corridor from Melbourne, Victoria, to a port near Brisbane, Queensland.

Under the revised plan, construction will be completed between Beveridge, Victoria, and Parkes, New South Wales—approximately half the original distance. This will enable double-stacked freight trains to operate between Melbourne and Perth via Parkes.

The government will reallocate A$1.75 billion in off-budget funding to complete the Beveridge-to-Parkes section by the end of next year. An additional A$55 million has been provided to incentivize the shift of freight from road to rail or ships. The remaining funds originally allocated for the northern section will be redirected to other national rail upgrades.

Cost and Timeline

An independent assessment by ACIL Allen estimated the full project cost at over A$45 billion. This figure represents a significant increase from previous estimates:

The ACIL Allen assessment indicates the earliest possible completion date for the full route is now 2036.

Dr. Schott’s 2023 review cited “immature preliminary designs” and prolonged approval processes as contributing factors to cost overruns.

Governance Changes

Dr. Collette Burke has been appointed as the new chair of Inland Rail, and Dr. Sean Sweeney as its chief executive.

Minister for Infrastructure, Transport, Regional Development and Local Government Catherine King stated the appointments reflect a commitment to “strong governance and clear accountability,” following criticism from the Schott review regarding the board’s skills.

Background

The Inland Rail project was initially pledged with A$300 million by both the Labor Party and the Coalition in the 2013 federal election. Funding was later provided by the Abbott government, and in 2017 the Morrison government allocated A$8.4 billion to the ARTC. The project was promoted as the largest federal rail project in a century.

Minister King stated that the ARTC had experienced “decades of underinvestment” under the former Coalition government.

Reactions

Everald Compton, a retired corporate fundraiser and long-time advocate of the project, had previously stated the line would never reach Brisbane, calling the full route unrealistic. He has suggested private capital could revive a link between Gladstone, Queensland, and Parkes.

Supporters of the full route, including some business leaders, opposition politicians, and regional mayors, expressed disappointment, describing the decision as damaging to regional economies and supply chain resilience.

Opponents of the full route, including some local residents and the local federal member of parliament, welcomed the decision, citing concerns over noise, environmental impact, and lack of community benefit.

• Goondiwindi Mayor Lawrence Springborg criticized the project’s management.
• Euroa resident John Simpson questioned the demolition of a historic goods shed and felling of trees given the project’s truncation.

The government did not provide figures on potential job losses resulting from the decision.