Albanese government abandons beleaguered inland rail project connecting NSW with Queensland

The Albanese government will drastically scale back the beleaguered inland rail project, abandoning plans to connect country NSW and Queensland by rail, as the price tag blows out to more than $45bn.

Originally envisioned to run 1,700km from Melbourne to a port near Brisbane, the mega infrastructure project will now only connect Beveridge, on the outskirts of Melbourne, to Parkes in central-west New South Wales – about half the distance – with the government reallocating $1.75bn of the funding to other national rail upgrades.

The cost has increased more than 50% in just three years, since Dr Kerry Schott was commissioned by Labor in 2023 to independently review the project.

Schott estimated the project would be completed by 2031 and cost upwards of $31.4bn – a doubling of the previous estimate – which she called “astonishing”, adding she was not confident on the figures.

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Further independent costings, commissioned by Inland Rail, found the project would now take until 2036.

The decision will effectively see the end of the Inland Rail vision, though the government is still seeking environmental and state approvals and preserving areas of land where the project is intended to be built, through northern NSW and south-eastern Queensland.

Delivering the freight link to Parkes will allow double-stacked freight trains to run west to Perth and east to Newcastle from Beveridge. The government now expects construction between Parkes and Beveridge to be completed in late 2027.

The Coalition announced the project in 2017, with an estimated cost of $9.3bn. In 2020, the project’s estimated cost increased to $16.4bn, with a completion date of 2026-27.

Schott’s 2023 review had pointed to “immature preliminary designs and approval requirements”, prolonged approval processes and “recent escalations” as reason for the blow outs.

The government had budgeted just $14.5bn towards the freight link, and by abandoning half of the track while reallocating a portion of the funding will deliver a small improvement to the budget bottom line.