ARTC & INLAND RAIL 14 NOVEMBER 2017 SIMON THOMAS, PROGRAMME DIRECTOR ARTC INLAND RAIL 1
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 2
$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 3
THE RIGHT SOLUTION FOR AUSTRALIA S FREIGHT TASK 4
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 5
INLAND RAIL ECONOMIC BENEFITS 6
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 7
ECONOMIC BENEFITS FIVE KEY FINDINGS OF THE BUSINESS CASE 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 8
BUILDING WHAT INDUSTRY WANTS 9
TRAIN & TRACK 10
WE ARE ALREADY DELIVERING INLAND RAIL 11
THE COMMONWEALTH COMMITTMENT 12
WHAT S BEEN DELIVERED TO DATE 2 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 11 Concept Design is complete for the other 11 projects Contracts for Reference Design and EIS studies being progressively let from Q4 2017 13
INLAND RAIL IN NEW SOUTH WALES 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 14
BENEFITS IN NEW SOUTH WALES 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. 15
REGIONAL BENEFITS IN NEW SOUTH WALES 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 ECONOMIC IMPACTS OF INLAND RAIL BY REGION Source: PwC 2015 Economic impacts by region Inland Rail construction and operations (GROSS REGIONAL PRODUCT, 2014-15, dollars, $ million, 4% discount rate) 16
DELIVERING THROUGH PPP
INVOLVING THE PRIVATE SECTOR VIA PPP The 126km section from Toowoomba to Kagaru, including large scale tunneling, will be delivered through a Public Private Partnership (PPP) 18
WHY A PUBLIC PRIVATE PARTNERSHIP 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 19
ESTABLISHING THE PPP 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 20
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) 21
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 22
QUESTIONS? 23