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Rural and Regional Affairs and Transport Legislation Committee
INFRASTRUCTURE AND TRANSPORT PORTFOLIO
- Committee Name
Rural and Regional Affairs and Transport Legislation Committee
Joyce, Sen Barnaby
Nash, Sen Fiona
Heffernan, Sen Bill
Whish-Wilson, Sen Peter
Rhiannon, Sen Lee
Back, Sen Chris
Macdonald, Sen Ian
Edwards, Sen Sean
Williams, Sen John
Gallacher, Sen Alex
Colbeck, Sen Richard
Thorp, Sen Lin
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Rural and Regional Affairs and Transport Legislation Committee
(Senate-Tuesday, 12 February 2013)
INFRASTRUCTURE AND TRANSPORT PORTFOLIO
Australian Rail Track Corporation
Senator IAN MACDONALD
Senator IAN MACDONALD
Australian Maritime Safety Authority
Bureau of Infrastructure, Transport and Regional Economics
Senator IAN MACDONALD
Office of Transport Security
Civil Aviation Safety Authority
Mr J McCormick
Australian Transport Safety Bureau
- Australian Rail Track Corporation
REGIONAL AUSTRALIA, LOCAL GOVERNMENT, ARTS AND SPORT
Office for the Arts
Office for Sport
ACTING CHAIRMAN (Senator Gallacher)
- Office for the Arts
- INFRASTRUCTURE AND TRANSPORT PORTFOLIO
Content WindowRural and Regional Affairs and Transport Legislation Committee - 12/02/2013 - Estimates - INFRASTRUCTURE AND TRANSPORT PORTFOLIO - Infrastructure Australia
CHAIR: We will go to Infrastructure Australia and Nation Building—Infrastructure Investment. Welcome, Mr Deegan and Mr Jaggers.
Senator JOYCE: I understand the department has taken over the national freight strategy from Infrastructure Australia. Is that correct?
Mr Mrdak : Yes, we are now working with the states in implementation arrangements for the national ports and national freights work.
Senator JOYCE: When was this decision made and by who?
Mr Mrdak : The standing committee on transport and infrastructure, which is the ministerial council. I think that was taken around—
Ms O'Connell : Last November, I think, was the effective transition.
Senator JOYCE: What was the logic behind the decision?
Mr Mrdak : Infrastructure Australia has provided its advice and its analysis. Jurisdictions have now largely agreed with the direction of that work and now it needs to be implemented. So the role of department, along with the state and territory administrations, is to set an implementation plan with milestones and work with the industry to put in place the concepts and proposals of the strategies into operating practice. There is some work that Infrastructure Australia continues to work on, such as work on pricing trials on the Hume Highway, but predominantly the other implementation work now rests with jurisdictions.
Ms O'Connell : And that has been done collaboratively with involvement of Infrastructure Australia.
Senator JOYCE: So that would be the next step—the implementation of the national freight strategy—would it?
Mr Mrdak : The pricing work?
Senator JOYCE: Yes.
Mr Mrdak : There are two streams of work. Firstly there is an overarching piece of work for COAG on heavy vehicle pricing arrangements in the future. There is a specific piece of work which Infrastructure Australia and Mr Deegan may wish to comment on in relation to particular trials in terms of access to the Hume Highway and Chullora, I think.
Senator JOYCE: Are you looking at a national port strategy or has that been handed over to the department?
Mr Mrdak : That it is with the department and the jurisdictions now. That has been adopted by the jurisdictions and now we are at the implementation stage of that work.
Senator JOYCE: Further to questions on notice—answer 55 from the previous Senate estimates hearing in relation to the cost of the Toowoomba Range crossing. I understand that the Queensland government has estimated the cost between $1.6 billion and $2 billion but I understand that you have previously expressed some doubts about this final figure. Can you please throw some more light on what you think that Toowoomba Range crossing is going to cost?
Mr Mrdak : Mr Deegan wishes to start and we are then happy to go from there.
Mr Deegan : At the moment the Queensland government is working with us on its business case on the detail of the costings. As you know from the meeting on Friday in Toowoomba, there is some discussion about the extent of what that will end up costing and some of the history. So we are working with the Queensland government on that final detail.
Senator JOYCE: Has the federal government put any money towards the construction of the Toowoomba Range crossing?
Mr Deegan : The department may be better placed to advise on that.
Mr Mrdak : No, there has been no commitment.
Senator JOYCE: No commitment whatsoever? Obviously with the mineral provinces to the west it is becoming a vital link and it is quite absurd what is happening now in James Street in Toowoomba with coal trucks driving down the main street. Has there been any assessment on traffic usage?
Mr Deegan : As I indicated, we are working with the Queensland government on the detail of the business case. Currently, as we saw on Friday, there is a fly-through—a 41 kilometre stretch of road, two lanes in each direction, with a number of tunnels—so there is a considerable amount of work in refining those costs. In 2008 a submission was given to us. This current submission is about 20 per cent cheaper and we are just working through the detail of that.
Senator JOYCE: So what do you think it will cost? About 20 per cent cheaper than the—
Mr Deegan : That is the current proposal from the Queensland government. On the presentation we saw the other day I would be surprised if it came in as low as $1.6 billion but that is the detail we need to work through. I am aware that there are some alternative proposals that may be cheaper and we will be opening that discussion up with the Queensland government.
Senator JOYCE: If we have all of the capital equipment there for the construction of the road bypass, and ultimately you are going to need a new rail link to connect the mineral province up, and people want to collect the royalties that are going to come out of the coal and everything else out of that area, wouldn't it make sense for the federal government and the state government to sit down and say, 'Let's kill two birds with one stone and get this piece of infrastructure out of the way because it is actually going to earn us money if we get it built'?
Mr Deegan : Certainly, Senator, again at the forum held Toowoomba on Friday there was considerable discussion about the opportunities around rail through to Toowoomba down potentially to Brisbane, the improvement in the current track and indeed potentially another track. Those are the sorts of discussions that we are actively engaged in, so rather than either/or, how do we best solve the long-term problem for that province and indeed other areas. Part of the rigour of our approach is also ensuring that there is value for money for the taxpayers in that discussion.
Senator JOYCE: Value for money is exceptional at the moment because the federal government has put no money towards it.
Mr Deegan : Senator, there are there are thousands of projects that we are considering at the moment. Toowoomba is one of those projects we are considering very seriously.
Senator JOYCE: On the basis of that, the Queensland government submission—you have given due consideration to it and that has been progressed?
Mr Deegan : Yes, we are working actively with Queensland on it and the event on Friday was the next stage in that process.
Senator JOYCE: It would make sense that if we do not get this done soon sooner or later the rail line from Gladstone will start connecting up with the provinces there and it will start directing freight away from the port of Brisbane to Gladstone.
Mr Deegan : There are two parts to it. I think the North Surat Basin will link into Gladstone. The South Surat Basin—there is a lot of sense in that connecting down into Brisbane. But there are a range of issues to be considered as part of that process.
Senator JOYCE: In the best timeframe, when would you envisage that program of the Toowoomba Range crossing being started and when would be it completed? How many years would it take to complete?
Mr Deegan : That is detail we are working on with the Queensland government at the moment. These are large projects and you want to make sure that in getting the value for money proposition we get it right.
Senator JOYCE: In connection to the Warrego Highway that runs to the west of it, has there been any discussion about the expansion of the Warrego Highway? It is completely and utterly at capacity—it is absurd. You have bumper-to-bumper trucks, literally. Once you leave Dalby you can forget about going any faster than the slowest truck because nobody is passing anybody.
Mr Deegan : While I have not travelled that road as often as you, Senator, I have travelled it a number of times and I am aware of the detail. Certainly part of the discussion at the forum about the Toowoomba bypass was a detailed discussion about also making sure that the Warrego Highway is part of that proper consideration.
Senator JOYCE: I will just quickly go to Nation Building. I refer to question on notice 93 from the last Senate estimates hearing, which was a detailed question on the Nation Building 2 program and projects from Nation Building 2 which are presently in the contingency reserve fund, and other matters. I received a three-sentence answer which did not address the specific details in the question. Again I refer to the Nation Building 2 program due to commence from 1 July 2014. Can you please provide a list of those projects committed to by the government under the Nation Building 2 program. You might want to take that on notice—or do you have them there?
Mr Mrdak : We are happy to give you that now, Senator, if you like. There is a range of projects which the government has committed to for Nation Building 2. I can just—
Senator JOYCE: I need the funding profile where applicable too, please.
Mr Mrdak : The funding profile is being settled for many of these projects. Nation Building 2 is currently being considered in the current budget, so the funding profiles—hence the reference to the contingency reserve, because while there are notional amounts in the forward estimates the settling of the program is yet to take place and will take place in this budget process. We can certainly provide you on notice a list of the commitments that have been made to this point. Details of the program, as I say, are now under budget consideration.
Senator JOYCE: If we provide them on notice, if they are at your disposal and at your fingertips how soon on notice can we get them rather than you dictating them all?
Mr Jaggers : All of the projects where the government has made commitments in the Nation Building 2 period are detailed on the website.
Senator JOYCE: So if I went through these and asked for a year by year funding profile, would that be available on the website? I will tell you the projects and you can tell me whether I can get a financial year by year funding profile for these. Inland rail pre-construction?
Mr Mrdak : I can give you that now if you like. The inland rail project is currently $30 million for 2014-15—
Senator NASH: Is that phased?
Mr Mrdak : Currently phased, sorry. The $300 million at this stage for inland rail is $30 million in 2014-15, 30 million in 2015-16 and then $120 million—
Ms O'Connell : That is the forward estimates.
Mr Mrdak : That is the forward estimates.
Senator NASH: Can you just take on notice for us exactly what those funding amounts are for in those forward estimates—those figures of $30 million?
Mr Mrdak : We can certainly do that for some of them. Some of them have yet to be finalised but we certainly will provide—
Senator NASH: Where it is not finalised, can you indicate that?
Mr Mrdak : Some of those will be finalised in this year's budget process.
Senator JOYCE: Parramatta to Epping rail link?
Mr Mrdak : We do not have a definitive forward split on that at this point. The total commitment is $2.08 billion.
Senator JOYCE: Moreton Bay rail link?
Mr Mrdak : The total commitment is $609 million and we have some—
Ms O'Connell : That is in Nation Building 2, Senator; there is some money for Moreton Bay rail link in Nation Building 1 as well.
Senator JOYCE: Richmond Bridge?
Ms O'Connell : That is a total commitment of $18 million.
Senator JOYCE: And the timeframe of that?
Ms O'Connell : It is 2014-15.
Senator JOYCE: Princes Highway West?
Mr Jaggers : There is $257.5 million allocated to that project, starting in 2014-15 with $77.5 and in 2015-16 $120 million.
Senator JOYCE: Tasman Highway?
Mr Jaggers : That is a $13 million project. The 2014-15 estimate is $13 million.
Senator JOYCE: Legacy Way—
Senator HEFFERNAN: Is that in today's dollars or in those years' dollars?
CHAIR: Senator Heffernan, you are an integral part of this committee but we are tight for time. Senator Joyce has until 10.30.
Senator JOYCE: Legacy Way Northern Tunnel link?
Mr Jaggers : In the Nation Building 2 period there is $400 million allocated, and that is in 2014-15.
Senator JOYCE: F3 Sydney orbital?
Mr Jaggers : $150 million and the profile estimate is 2015-16.
Senator JOYCE: 'The government has not has not finalised detailed funding for the Nation Building 2 program' is one of the quotes from the minister. The following nine projects—I just want to clarify if these are in the contingency reserve or if they are not. Inland rail pre-construction?
Mr Mrdak : I believe that is already profiled in the forward estimates.
Senator JOYCE: Parramatta-Epping rail link?
Mr Mrdak : I think that remains in contingency.
Ms O'Connell : I think we will have to take on notice the separation between those that are in contingency and those that are not.
Senator JOYCE: I need to know whether these programs are in the contingency reserve or not.
Ms O'Connell : Okay, and we will come back.
Senator JOYCE: Inland rail, Parramatta to Epping rail link, Moreton Bay rail link, Richmond Bridge, Princes Highway West, Great Eastern Highway, Tasman Highway, Legacy Way Northern Tunnel link and F3 Sydney orbital.
Ms O'Connell : We will come back to you on that.
Senator JOYCE: I also need to know the current status of negotiations with state and territory governments in relation to these programs. You might be able to tell me that now.
Mr Mrdak : Certainly, Senator. The states and territories have provided submissions to Infrastructure Australia and to the government in relation to these projects. We are in the process of discussions at this stage. As I said, a number of these decisions will be in this year's budget process.
Senator JOYCE: How much in the contingency reserve fund is earmarked for Nation Building 2?
Mr Mrdak : At this stage Budget Paper No. 2 does contain some estimates of forward funding for Nation Building. I would be happy to provide that to you on notice.
Senator JOYCE: So if we are uncertain of the size of the program—there have been discussions about cuts in that program. How are we going to cut money from a program we do not actually know the size of?
Mr Mrdak : As I say, there are budget decisions yet to be taken in relation to the overall size of the Nation Building 2 program. At the moment as set out in the budget papers there are forward estimates in relation to commitments to date, and we can certainly provide those. But obviously the government is yet to take critical decisions around the overall shape and size of the program.
Senator JOYCE: I am going to go through some specific items to get some details on them. Maranoa Bridge over the Mitchell River—the minister put out a media release on 17 January 2013 announcing an additional $8 million in funding, $4 million from the federal government and $4 million from the Queensland government. It will be spent on replacing a flood damaged bridge on the Warrego Highway at Maranoa just near Mitchell. How is this progressing?
Mr Mrdak : I will get the relevant officer to the table.
Mr Jaggers : While Mr Pittar comes to the table I have some information for you. Y ou asked about state and territory and Commonwealth splits for those projects that you mentioned. Those details are actually on the departmental website, where it contains the total project cost and then the Australian government contribution to that total cost.
Senator JOYCE: And the timeframes?
Mr Jaggers : It provides the funding timeframe with the amounts in Nation Building 1 period and Nation Building 2 period.
Senator JOYCE: Let us go to the Maranoa River bridge. Where are we up to with that?
Mr Pittar : Senator, as you indicated, the minister recently announced additional funding for the upgrade of the Maranoa Bridge. That is to increase its height following flood events in 2012.
Senator JOYCE: Up by a metre and a half—is that correct?
Mr Pittar : Something in that order. Construction on that bridge commenced in 2012 and is currently ongoing. I do not have the detail as to when that will be completed.
Senator JOYCE: And that will allow B-doubles and everything across it? People had to drop their B-doubles off before.
Mr Pittar : The bridge was originally going to be upgraded in order to carry B-doubles—
Senator JOYCE: Because that is the main road to Darwin.
Mr Pittar : Correct—and then coming back the other way as well, as you know, for cattle moving to Roma and the like. It has been designed to accommodate that.
Senator JOYCE: What about the Yeppen Floodplain—where are we up to with that? Is that $5 million in funding from the current Nation Building program—or is that now in Nation Building 2?
Mr Pittar : The Yeppen Floodplain—there was $5 million provided for a study looking at future options to cross the Yeppen Floodplain and to potentially bypass Rockhampton. The minister released that study— I think it was on 8 January, so last month. As part of that announcement he also announced a contribution of $5 million toward further more detailed design.
Senator JOYCE: Was that redirected funding from somewhere else?
Mr Pittar : The $5 million for the original study was part of Nation Building 1. The additional $5 million was as a result of savings elsewhere in the program in Queensland.
Senator JOYCE: Whereabouts?
Mr Pittar : We have a number of projects that were coming in under budget and were used for that particular project. We are also looking at potential other projects where there may be a—
Senator JOYCE: I understand what that answer means. Where do the savings come from? Just a whole range of other projects?
Mr Pittar : A range of other projects in Queensland.
Senator JOYCE: When will that funding be available?
Mr Pittar : The funding is available from this financial year.
Senator HEFFERNAN: You cannot recall the projects?
Mr Pittar : Not off the top of my head, Senator.
Senator HEFFERNAN: That is what Eddie Obeid keeps saying. Will you take it on notice and provide the detail?
Mr Pittar : Yes, we can do that.
Senator JOYCE: The WestConnex—the $25 million—is that the same funding that was foreshadowed in the 2012 publication Nation Building—Driving Australia's Productivity?
Ms O'Connell : O'Connell Yes it was, Senator.
Senator JOYCE: How is that progressing? Is this money being used to establish a special-purpose vehicle or—
Mr Mrdak : It will be, Senator. It is initially funding work as agreed with New South Wales. Minister Gay in New South Wales put forward a project steering committee proposal which will develop the business case which will ultimately lead to the special-purpose vehicle. The Commonwealth's $25 million contribution is designed to fund a lot of that business case work.
Mr Jaggers : We are still awaiting the project proposal report from New South Wales to detail exactly how that $25 million will be broken up against the project.
Senator JOYCE: Is there any funding for the construction of the Yeppen Floodplain in the forward estimates?
Mr Pittar : No, there is not.
Senator JOYCE: Is there any funding for the construction of the Maranoa Bridge in the forward estimates?
Mr Pittar : The Maranoa Bridge I think will be completed in the current Nation Building 1 program, so by 2013-14.
Senator JOYCE: So if there is no money for the Yeppen—so basically for the government at this point in time it is an aspirational thing, the Yeppen thing: there is no money for it?
Mr Mrdak : The government is funding the next stage of the planning and design, Senator, and then future decisions will be taken in relation to construction off the back of that.
Senator JOYCE: What about WestConnex? Do we have money for that in the forward estimates?
Mr Mrdak : The $25 million is provided in the current program.
Ms O'Connell : It is at the stage of the business case.
Senator JOYCE: What about the Scone level crossing study? Where are we up to with that?
Mr Jaggers : The study is ongoing. I understand it is nearing completion but it has not been completed yet.
Senator JOYCE: So is there any money in the forward estimates for the construction of the Scone level crossing?
Mr Jaggers : The Australian government's contribution to that is being paid to that study.
Senator JOYCE: Mackay ring road?
Mr Jaggers : Again I understand the study is ongoing.
Senator JOYCE: The study is ongoing. It was a $10 million study. How much of that study have we completed.
Mr Mrdak : We can get you that information, Senator.
Senator JOYCE: And is any of that money in the forward estimates—the Mackay ring road.
Mr Mrdak : It has been provided under the regional infrastructure fund commitment and, yes, it is in the forward estimates.
Senator JOYCE: How much is in the forward estimates?
Mr Mrdak : I think the Mackay ring road study is $10 million.
Mr Jaggers : Yes, that is correct.
Senator JOYCE: But none of the construction of the Mackay ring road is—the study is there but the construction—
Mr Mrdak : Future decisions will need to be taken on completion of the study.
Senator JOYCE: So to actually build the road, there is no money there for that in the forward estimates. There is no money for the construction of the Yeppen Floodplain project in the forward estimates. The Scone level crossing there is. That money has already been handed across—
Mr Mrdak : The Scone is for the study stage only.
Senator JOYCE: Only the study but not the construction?
Mr Mrdak : Not for construction.
Senator JOYCE: So that is not in the forward estimates. How about the North Queensland resource supply chain project?
Mr Mrdak : That, again, is funding that is being provided, I think this financial year, for that planning work to be undertaken.
Senator JOYCE: Planning work—there is no money beyond planning work?
Mr Mrdak : No, there is an initial allocation. I will just check what that amount was.
Mr Jaggers : The $1.66 million for that North Queensland supply chain study has been provided.
Senator JOYCE: What about the Bruce Highway? In question 92 from the last Senate estimates hearing we asked for a list of projects on the Bruce Highway and where the construction from the federal government was greater than 50 per cent. I note the department's answer that information detailing funding levels for Nation Building is available on the website. The department has previously provided a project by project list for the Pacific Highway. Can you provide a similar list for the Bruce Highway?
Mr Mrdak : We will take that on notice and provide that.
Senator JOYCE: Take it on notice that you can provide a list or take it on notice and provide a list?
Mr Mrdak : Take it on notice and provide a list. I do not think we have the full list with us today but we can provide that for you.
Senator JOYCE: Can you provide a list of projects since 2004 when Auslink was introduced, not just from the Nation Building program? So when you provide that on notice can we go from 2004?
Mr Mrdak : Certainly. So all Commonwealth funded works on the Bruce since that time?
Senator JOYCE: Can you outline how projects on the Bruce Highway are selected?
Mr Mrdak : We have an ongoing process with the Queensland government in relation to identification of works. Some have been projects which the Commonwealth has been—
Senator JOYCE: Is there an application process?
Mr Mrdak : There is certainly a process with Queensland now for Nation Building 2 in terms of projects they have brought forward. But there are also long-term commitments. For instance the Queensland and Australian governments announced before Christmas their commitment to Cooroy-Curra A, which is the next stage of the duplication in that area. That is a $790 million commitment which is being funded 50-50 between the Australian and Queensland governments. That project came out of ongoing discussions with Queensland, following detailed design work which the Commonwealth funded.
Senator JOYCE: What eligibility requirements are there projects if they want to be eligible for funding?
Mr Mrdak : Certainly there is a variety of categories. If they are on the national network, such as the Bruce Highway, then jurisdictions can bring forward projects. We have priorities, and for instance in to Nation Building 2 the Commonwealth government set out priorities in terms of productivity and safety which are the sorts of criteria against which we judge proposals that come forward. Obviously Infrastructure Australia looks at detailed proposals on large projects over $100 million to ensure that they, as Mr Deegan, has indicated provide value for money and fit national priorities.
Senator JOYCE: Give me an example. Let us go Cooroy to Curra. Was there $395 million or something in that project?
Mr Mrdak : It is $395 million by each government for the next stage of Cooroy-Curra.
Senator JOYCE: Is any of that in the forward estimates?
Mr Mrdak : It is provided for Nation Building 1.
Ms O'Connell : And in Nation Building 2.
Senator JOYCE: The actual construction is in the forward estimates?
Ms O'Connell : Yes.
Mr Mrdak : Yes, the construction is in the forward estimates.
Senator JOYCE: And is it redirected from another—
CHAIR: We will have to wind you up and ask you to put further questions on notice.
Mr Mrdak : The Commonwealth contribution is being funded from savings within the Queensland program in Nation Building 1 and there will be further commitments in Nation Building 2.
Senator JOYCE: I need to know on notice where these savings are coming from because we seem to be having an awful lot of savings in an awful lot of projects. I am fascinated as to where these savings come from.
Mr Mrdak : We will come back on notice but essentially they are coming from savings on Cooroy-Curra section B and also savings that were made on the Ipswich motorway project.
Senator JOYCE: Okay, so you do not need to take it on notice.
Senator HEFFERNAN: Can I just seek clarification before we go to Senator Rhiannon. We talked about $2 billion in the forward estimates for the north-west corridor or something in Sydney, et cetera. We are talking five and six years out for some of this stuff. Can you tell me whether it is in constant dollars or whether it is in today's dollars, which might be half the value by the time you get to it?
Mr Mrdak : The figures that we are quoting today are predominantly in 2013 dollars.
Senator HEFFERNAN: It is a con job.
Senator WHISH-WILSON: Just a quick question. In terms of Infrastructure Australia, when you are dealing with the states for their proposals do you have ongoing discussions with the states prior to them putting in their proposals? Do they come to you for advice?
Mr Mrdak : We have very regular discussions. We work with them quite closely on project delivery and for instance all of my Nation Building team are very heavily engaged with all of the jurisdictions in relation to both their current projects and their forward plans for investment.
Senator WHISH-WILSON: Okay so they go through a consultation process with you and then put in a final project for funding—
Mr Mrdak : We have certainly sought in the last six months detailed proposals for Nation Building 2, which is the next five-year Commonwealth investment program. Some of those projects are well known to us; other projects probably we know less about which have been brought forward by jurisdictions.
Senator WHISH-WILSON: In that respect, have you had any discussions with the Tasmanian government about the light rail project or the proposal for Hobart?
Mr Mrdak : I certainly know of the project. I will just check. Infrastructure Australia may wish to comment.
Senator WHISH-WILSON: It is not listed in their August submission but I was just wondering what discussions have been taking place.
Mr Deegan : In terms of Infrastructure Australia's approach we have detailed regular meetings with each of the jurisdictions about current and potential future projects. Light rail project in Hobart is one of those that we are in heavy discussions with. We are trying to work through some of the detail. It is a similar discussion again around the country.
Senator RHIANNON: In the October estimates, we were informed that the national public transport strategy is well under way. Can you let us know where it is up to and have you considered your investments in road projects compared to public transport, and if you have can we expect any shift in the proportion of IA funding towards public transport projects?
Mr Deegan : The Infrastructure Australia council considered a draft public transport strategy late last year and have decided that they would prefer to see it as an urban transit strategy to take in both road and rail and indeed other forms of public transport, so a comprehensive overview. That work is well progressed and there will be a further draft for the Infrastructure Australia council to consider shortly.
Senator RHIANNON: When will it be publicly released?
Mr Deegan : We are working on that. We are certainly hoping this calendar year. There is some potential for this financial year but there is a host of consultations that we are undertaking.
Senator RHIANNON: Could you take on notice who those consultations are with, please.
Mr Deegan : I can tell you. We are dealing with a series of people out of industry, community, academia—there is a whole host of players we are dealing with on this, and of course state and local governments.
Senator RHIANNON: Liveable Cities Program—is that you?
Mr Mrdak : No, that is with us.
Senator RHIANNON: I found the information on your website, which is very useful but, while each project detail is there, to get a sense of the proportion of funding is very difficult. So what proportion of overall funding is the $6 million awarded to the three projects in New South Wales? And do you have an overall spreadsheet where people who visit this site are able to get an assessment of the proportionality that you apply in dividing up this funding?
Mr Mrdak : Generally the project funding is matched by state and local government. Mr Pittar may be able to give you a better indication of individual projects in New South Wales.
Senator RHIANNON: I was just after that proportion. What is the $6 million a proportion off?
Mr Pittar : The total program as funded by the Australian government was a $20 million program. As Mr Mrdak said, the criteria around that program sought to and did achieve matching funding from the particular proponents.
Senator RHIANNON: Would it be possible to put the spreadsheet up so that as well as getting each individual project, which is the way it is at the moment, present that data so you just have them all there in a spreadsheet and people can work it out?
Mr Mrdak : We can take that on notice.
Senator RHIANNON: Thank you. Do you know how the half million dollars to the Maitland city council aims to make their area more liveable, particularly in terms of the health impacts of coal dust from the coal trains that is being taken up by the community so strongly?
Mr Pittar : The half a million—
Senator RHIANNON: $500,000.
Mr Pittar : The $500,000 to the Hunter area—that work is currently ongoing. I cannot comment on the specifics.
Senator RHIANNON: Can you take on notice what they present that shows that it is liveable and whether there is any component around the health impacts of the coal industry.
Mr Pittar : Yes.
Senator RHIANNON: Thank you. This is either for IA or Nation Building. This is about WestConnex. In October it was indicated that no assessment of Sydney's WestConnex project had been carried out. So has there since been an assessment?
Mr Mrdak : As I mentioned earlier, we sit on the steering committee for the formation of the special-purpose vehicle and the project development but we await further advice. I think the New South Wales government is only in the early stages now of commissioning the business case and detailed planning. We certainly have not done any other assessment beyond that.
Senator RHIANNON: In January the Sydney Morning Herald reported that the absence of a link road between WestConnex and Port Botany was cruelling the chances of this project gaining support from IA. In the earlier response to my questions you said that you were in talks with the New South Wales government about the road links from Port Botany to WestConnex. Where are these talks up to and does federal government funding for the project or whatever level of involvement depend on agreement about that motorway link between WestConnex, M5 or whatever of those motorways that come down into Sydney getting out to Port Botany? Is that what it is all hanging off?
Mr Mrdak : I will ask Mr Deegan to comment from Infrastructure Australia's perspective on the first part of your question and then I will come back to where we are at with the project planning.
Mr Deegan : Certainly what Infrastructure New South Wales and the New South Wales government is trying to deal with is, as you know, a considerable problem about moving containers to and from Port Botany as well as car movements. Current capacity of Port Botany is approximately two million 20-foot equivalent unit containers. The development of a third terminal will shift that capacity to eight million containers over the next 15 or 20 years. So there is a lot of thought going into how those containers will be moved by road and rail and the capacity issues that will confront Sydney as a consequence. Trying to put the pieces of the jigsaw together, the development of the Moorebank facility will be important in this discussion. The sorts of things going on both at Enfield and Chullora are small parts in that jigsaw, and trying to develop a long-term solution to moving goods and services from Port Botany. Clearly with the proposal from WestConnex both Infrastructure Australia and the Commonwealth are interested in how the wicked problem of moving freight to and from Port Botany will be best solved, and it is certainly part of the discussions we are having with the New South Wales government both collectively and individually. There is also then further discussion about the connections potentially to and from the city. I think in the current proposal WestConnex finishes about Camperdown, and there are some issues then of what connections to and from the city might be made. So it is all part of a much broader discussion around road and rail issues particularly associated with freight, but clearly there are lots of car issues as well for Sydney.
Senator RHIANNON: So in essence, to repeat the question, does your support for the project hinge off finding that link from the current motorways out to Port Botany?
Mr Deegan : Certainly the model that Infrastructure Australia brings to this discussion is to have a clear understanding of what the problem is before we go to the solution. Part of the problem is moving people and cars to and from the airport. A big part of the problem is moving freight to and from the port. So we get a clear definition of what the problem is and then work through what the potential solutions may be. There may be any range of those. That is where we are up to in the discussions with New South Wales—will their solution resolve the problem. That is what we are working through with them.
Senator RHIANNON: Does the motorway link have to be part of those solutions or is it either rail or motorway for you at the moment?
Mr Deegan : We are interested in options that will resolve the problem rather than just specifying a particular answer. That is what we are working through with the New South Wales government.
CHAIR: Senator Rhiannon, I am going to have to move on, so can you please put the rest of your questions on notice. Actually you can have one more minute.
Senator RHIANNON: Thank you. In 2011, Sydney Ports advised IA that it was essential that any proposal to extend the M5 East should ensure the additional capacity is provided directly to Port Botany. Are you in talks with Sydney Ports about this, and where is that aspect of the jigsaw up to?
Mr Mrdak : I think that, as you discussed with Mr Fullerton a little bit earlier, the Commonwealth's assumption of the responsibility for the metropolitan freight network is an important part of improving rail freight access to the port. The ARTC has completed considerable work on the first stage of their investment in the Port Botany rail line both within the port precinct and in the line. We are now considering further investments on the metropolitan freight network as part of Nation Building 2. We certainly think that that is a priority area of investment for the ARTC.
Senator RHIANNON: When you say priority investment, you are talking about the extent and extension of the M5 East?
Mr Mrdak : No, I was talking about the rail line.
CHAIR: Senator Rhiannon, I must move on.
Senator BACK: Can I just take you to the Regional Infrastructure Fund, worth $6 billion over 10 years to 2021, with $5.6 billion of that subject to the passage of the minerals resource rent tax. Obviously we have learned from the Treasurer over the weekend that it is falling significantly short of predicted revenues. Can you tell me what impact that now is going to have on the regional infrastructure funding given the three objectives under the program?
Mr Mrdak : The government has made commitments, as you are aware, of $915 million under stream 1 of the regional infrastructure program and also recently announced funding of some $5 million for planning projects under stream two. Future decisions are matters for the Commonwealth budget.
Senator BACK: So at this moment you have not been asked to do any readjustment of your estimates based on the declining or significantly reduced revenue from this particular tax?
Mr Mrdak : No, Senator.
Senator BACK: Mr Deegan, you will recall—we have had the discussion before—an inquiry conducted by the Senate committee last year into engineering skills shortages in Australia. Evidence was presented by Engineers Australia that we are losing about $6 billion a year through tendering processes and their sequels not being undertaken correctly. Industry advised me subsequently that they believe the cost of litigation between the parties is also around about $6 billion a year. You and I have had some discussions about how that could be improved. Are you able to advise the committee of any progress you may have made in terms of models that would reduce or eliminate those losses?
Mr Deegan : Certainly as part of our assessments of projects that are put before Infrastructure Australia we spent considerable time on the deliverability issues to try and pick up those important issues that you have raised. We have a small team working on this and I hope to get an update this Friday, so I do not have it today but it is close at hand.
Senator BACK: Thank you. Those two figures of $6 billion and $6 billion—in fact, if I refer back to the Regional Infrastructure Fund, that itself was worth $6 billion over 10 years. So if we could make significant inroads into those figures, if they are real—and certainly Engineers Australia and industry believe them to be real—
Mr Deegan : Indeed, Senator, as you know, Engineers Australia is considering both the public sector and the private sector. Some of the cost overruns we have seen on major projects in WA are also cause for concern.
Senator BACK: That is right. Reflecting for the moment on Gorgon, Chevron's project, I was in the United States over Christmas talking to people in the oil industry in Texas and Louisiana and they were absolutely shocked to think of a cost overrun on a $43 billion project of something around $17 billion—it sent absolute shock waves. I was amazed at just how accurately they knew those figures in the industry in those two states.
Mr Deegan : And certainly as a productivity measure, whether public or private sector, that is a significant issue for all of us associated with infrastructure development.
Senator BACK: It is. Unfortunately it is going to pay out against Australia, I think, in the longer term. Just being a bit parochial for a moment, if I may, Mr Mrdak, the Roads to Recovery budget for WA between 2009-10 and 2013-14 is $256 million; this financial year it is $51.2 million. Are you able to tell me how much has been expended and whether the full allocation will be made this financial year?
Mr Mrdak : I think the full allocation will be made. I will just check on expenditure to date. I do not think we have that with this. Can I take that on notice and come back to you?
Senator BACK: Yes, certainly. I am going to try to speed up for the chairman and make more time for other people. Can I ask about the Gateway project in Perth—the $480 million from the federal government. Obviously it is well under way. Have you got any idea for us long-suffering citizens when the proposed completion date will be for that project?
Mr Jaggers : The Australian government investment in the Gateway project is $686 million. That is a component of the Regional Infrastructure Fund but also a component in the Nation Building project program.
Senator BACK: $686 million?
Mr Jaggers : Yes. Minister Albanese turned the first sod on the Gateway construction project a week and a half ago.
CHAIR: I enjoyed every minute of it.
Senator BACK: Are you wasting time here, Chair?
Mr Jaggers : We are expecting a project to complete in 2017.
Senator BACK: I must say that, despite the inconvenience it is causing, I think they are doing a great way to minimise that. I also then wanted to ask you about, under Nation Building 2, the Great Eastern Highway project. When is it flagged to commence and what will it actually achieve?
Mr Jaggers : The Great Eastern Highway project is a project currently under construction and nearing completion. We are expecting completion in the next few months.
Senator BACK: What is it? What is the scope of the works?
Mr Jaggers : The scope of the works is to expand the Great Eastern Highway by four to six lanes, to create bus priority lanes. It has actually changed the alignment of the Great Eastern Highway to improve traffic flow to the airport.
Senator BACK: Finally, on the Great Northern Highway, Minister Albanese and Minister Buswell from the state announced $40 million on 19 December to straighten out what are very dangerous bends at a town called Bindi Bindi. Can you tell me when that project is due to commence?
Mr Jaggers : April 2013.
Senator BACK: That is when it will commence?
Mr Jaggers : That is correct.
Senator BACK: Thank you.
Senator NASH: When does your lease on the building that you are currently in finish? When does that run out?
Mr Jaggers : The department would have that information.
Mr Mrdak : 2015.
Senator NASH: Can I ask you, if it has not been asked already, about the freight import strategy.
Mr Deegan : There was a question earlier.
Senator NASH: I am terribly sorry—I must have overlooked that one. We did touch on the Bruce Highway before, Mr Mrdak, but I specifically wanted to ask about the Bruce Highway safety package. Can you just briefly outline for me how the projects are selected. Is there an application process? I will put more of these on notice as well.
Mr Mrdak : I will ask Mr Pittar to give you an overview of the safety program, which is well advanced.
Mr Pittar : The Queensland government is responsible for identifying priorities for expenditure on the Bruce Highway safety package of works. We are reliant on their processes. They obviously consult as part of that exercise in order to put to us the priorities based on the consultation they undertake.
Senator NASH: What is the total funding under the package?
Mr Pittar : The total funding under the Bruce Highway black spots program during the current Nation Building program is $250 million.
Senator NASH: How much of that has been expended?
Mr Pittar : I can come back to you on that.
Senator NASH: Perhaps someone can have a look. All the projects under the package—are they solely federally funded?
Mr Pittar : That is correct.
Senator NASH: how much of the package's funding is yet to be committed?
Mr Pittar : I will come back to you on that. I will take it on notice if I can.
Senator NASH: For the Frederickton to Eungai stretch of the Pacific Highway, was this funding part of the 2012 budget announcement?
Mr Mrdak : I will get the relevant officers to the table if I can, Senator.
Mr Jaggers : Senator, just to clarify your question, you are asking—
Senator NASH: Sorry—is the funding part of the 2012 budget announcement?
Mr Jaggers : That is correct.
Senator NASH: The project is due to commence construction in the middle of this year—is that still on track?
Mr Mrdak : I will ask Mr Foulds, if I may.
Mr Foulds : Yes, it is still on track to commence. I will try to get you the precise date.
Mr Jaggers : The date we have is that it will commence in mid-2013.
Mr Foulds : And all of the acquisitions are expected to be completed in May.
Senator NASH: When is it due to be completed?
Mr Foulds : It is due to complete at the end of 2016, weather permitting.
Senator NASH: Can you give me the year on year projection over the forward estimates on that funding, how that is allocated?
Mr Foulds : Yes, I can. In 2013-14, $260 million is predicted. I will come back to you on the others.
Senator NASH: Perhaps we could have those during the course of the morning if it is something that—
Mr Mrdak : Just to be clear, you are asking for the profile of Commonwealth expenditure over the agreed program?
Senator NASH: Yes. Sorry if I was not clear on that. Can I move to the Pacific Highway again. Is it correct that there is currently no agreement between the Commonwealth and New South Wales for the full funding of the Pacific Highway upgrade?
Mr Mrdak : There is agreement that has been reached between the two governments for the funding that has been matched to date by New South Wales, so there has been agreement for that. There is still a shortfall to complete the Pacific Highway. The shortfall, in the absence of further agreement, is around $4.6 billion to complete the work. The Commonwealth has committed its 50 per cent of that funding, and that remains quarantined in the budget process pending New South Wales matching.
Senator NASH: So how does that compare with, say, the Ballina bypass and the Banora Point upgrade in terms of the federal funding component of each of those things? What was the federal funding component for the Ballina bypass and also the Banora Point upgrade?
Mr Mrdak : I will check Banora Point. Ballina bypass was certainly a fiscal stimulus injection from the Building Australia fund, from memory, but I will just check.
Senator NASH: I am fine with whatever bucket it is from; I am just trying to get an understanding of what percentage of the total cost came from the federal government budget in some way, shape or form.
Ms O'Connell : Senator, it varies over time for different segments. For example, the Kempsey bypass recently opened was 100 per cent Australian government funded and that was a stimulus project specifically.
Senator NASH: Insofar as you can have a look and perhaps answer it at some stage this morning, could you take that on notice.
Mr Mrdak : We can give you the answer now.
Mr Jaggers : With the Ballina bypass the Australian government contributed approximately 70 per cent and the Banora Point upgrade approximately 97 per cent.
Senator NASH: With the Pacific Highway program is the priority order—which one is at the bottom of the priority list?
Mr Mrdak : The priorities have been set by the New South Wales government. There are three priorities sections—
Senator NASH: Can I just clarify that. The New South Wales government does all the priorities and you guys just do the funding injection—you do not have any say in the priorities?
Mr Mrdak : The priorities have been set between the two governments but they are initiated by the New South Wales government. Priority 1, which is involving duplication essentially between Sydney and Port Macquarie, Ballina to the Queensland border and north and south of Coffs Harbour—those are priority 1 and they are all under way.
Senator NASH: So does that mean that section from Ballina to Woolgoolga is right down the bottom of the list somewhere?
Mr Mrdak : Ballina to Woolgoolga falls within what we call priority 3.
Senator NASH: Is priority 3 as low as you can go?
Mr Mrdak : Yes. It is the third stage of the completion before duplication. We have some forward works under way, and part of the agreement that has been reached with the New South Wales government is that the funding that is being provided will fund all three construction activities to enable that section to proceed as soon as possible when New South Wales is able to commit their funding.
Senator NASH: Just very briefly on that, going back to the very first question about the Commonwealth and New South Wales fifty-fifty funding—we have had 70 per cent for the Ballina bypass, 97 per cent for the Banora Point upgrade. I take your point about the stimulus funding. What happens then? There is obviously an impasse between the federal government and the New South Wales government in terms of that 50-50. So will it just not be completed if that does not change or the New South Wales government does not kick in more—or what is going to happen?
Mr Mrdak : The Commonwealth's position has been that funding will be released as it is matched by the New South Wales government. We have reached agreement in relation to the funding that has been provided to date by New South Wales. That is enabling essentially completion of a substantial part of the work. At the end of what has been agreed we will have about 80 per cent of the highway fully duplicated by 2016. If there was further matching funding available then we would progress on with the other priority sections.
Senator NASH: Is that consistent with previous funding arrangements for road infrastructure between New South Wales and the federal government?
Mr Mrdak : It has certainly been a consistent approach in relation to the Pacific Highway by successive governments, yes.
Senator NASH: Over how many years?
Mr Mrdak : Going back to the commitments that were first made to duplicate the Pacific Highway in Auslink.
CHAIR: Senator Nash, last question.
Senator NASH: Last one! It is like choosing between your children, which you cannot do. Bruce Highway, Cooroy to Curra—I think you said it was $395 million. How much will be from Nation Building 1 and Nation Building 2? I think you might have mentioned that before but if you could just clarify.
Mr Mrdak : It is $395 million by each government. There is some funding in Nation Building 1. I do not know if we have the split—there is $110 million in Nation Building 1 and the balance of the Commonwealth money in Nation Building 2.
Senator HEFFERNAN: When will it be the end of the spend?
Mr Mrdak : On Cooroy-Curra A? It is 2016.
Senator IAN MACDONALD: The Curra Cooroy thing is finished—I drove on it and it is absolutely fantastic.
Mr Mrdak : Section B is complete.
Senator IAN MACDONALD: Even though it was all for the wrong cause. Mr Pittar, is your sign right: north-west roads?
Mr Pittar : That is correct, Senator.
Senator IAN MACDONALD: So that is north-west of Western Australia?
Mr Pittar : No, it covers Queensland, the Northern Territory, Western Australia and South Australia.
Ms O'Connell : It is north and west of Australia. We have just split into two geographic zones for management.
Senator IAN MACDONALD: So it is north and west?
Ms O'Connell : Yes.
Senator IAN MACDONALD: Is there an arrangement with the states now that for the major highways the funding split is 80-20, or is that only in Queensland?
Mr Mrdak : It varies across jurisdictions across projects in Nation Building 1. The Commonwealth has stated its intention that its funding formula will be 50-50 going forward.
Senator IAN MACDONALD: It is a pity they did not do that when there were Labor governments in the state parliaments—but that is just a comment. Is the flood-proofing of the Bruce Highway something the government has a strategy on or is it just funding whatever Queensland is putting forward?
Mr Pittar : I think there was a question a little earlier in the morning which asked about projects on the Bruce Highway that are going to improve flood immunity.
Senator IAN MACDONALD: I am really asking what the strategy is. How are the priorities determined?
Mr Pittar : Flooding is one of the factors. Other factors that would be taken into account to identify projects such as in Nation Building 1 centred around things such as safety, congestion and a range of those factors.
Senator IAN MACDONALD: The Cooroy to Curra thing is finished - I drove on it and it is absolutely fantastic.
Mr Mrdak : Section B is complete.
Senator IAN MACDONALD: Although it was all for the wrong cause. Mr Pittar, is your sign right—north-west roads?
Mr Pittar : That is correct, Senator.
Senator IAN MACDONALD: So that is north-west of Western Australia?
Mr Pittar : No, it covers Queensland, the Northern Territory, Western Australia and South Australia.
Ms O'Connell : It is north and west of Australia. We have just split into two geographic zones for management.
Senator IAN MACDONALD: So it is north and west?
Ms O'Connell : Yes.
Senator IAN MACDONALD: Is it a fact that is there an arrangement with the states now that for the major highways the funding split is 80:20 or is that only in Queensland?
Mr Mrdak : It varies across jurisdictions across projects in Nation Building 1. Going forward the Commonwealth has stated its intention that its funding formula will be fifty-fifty going forward.
Senator IAN MACDONALD: It is a pity they did not do that when there were Labor governments in the state parliament, but that is a comment. Can I just ask about flood-proofing of the Bruce Highway—is that something the government has a strategy on or is it just funding whatever Queensland is putting forward?
Mr Pittar : I think there was a question a little earlier in the morning which asked about projects on the Bruce Highway that are going to improve flood immunity.
Senator IAN MACDONALD: I am really asking what the strategy is. How are the priorities determined?
Mr Pittar : Flooding is one of the factors. Other factors that would be taken into account to identify projects such as in Nation Building 1 centred around things such as safety and congestion and a range of those factors.
Mr Mrdak : There was a strategy developed some years ago by the Queensland government working with the Australian government on prioritising flood proofing along the Bruce and hence the work that has been done starting really from just south of Cairns down has been following that strategic program over many years.
Senator IAN MACDONALD: I have a letter from the Clarke Creek Community Reference Group, which is a little community out the back of Rockhampton. It is not on the main highway but it is the alternative route when the highway is flooded. They were enquiring whether there it is something the Commonwealth would look at in fixing a bridge and a gravel road that becomes the main highway when the Bruce Highway is flooded. Is that something that the Commonwealth would look at?
Mr Mrdak : I am personally not aware of it, Senator, but I would be happy to have details on it provided to us.
Senator IAN MACDONALD: I will write to you about that. Similarly, I will put on notice if someone can give me an update on Blakey's Crossing at Townsville, the Yeppen roundabout and floodplain at Rockhampton and also the Burdekin bypass. The Mayor of the Burdekin Shire has written to the minister some time ago raising some issues. So far I understand he has not had a reply. Perhaps on notice you can tell me what is happening with that.
Mr Mrdak : Certainly, we will give you advice in relation to all three of those.
Senator IAN MACDONALD: Thank you very much. I think this is probably more to Mr Deegan. You have done a lot of walk on ports assessment. Some foreign body or some United Nations program comes through and then tells Australia that you cannot build ports here, there and everywhere. Mr Deegan, in your assessment of ports and in your very extensive and detailed study of ports, do you take into account environmental issues?
Mr Deegan : Yes, we take in environmental issues as well as obviously the economic potential for the country.
Senator IAN MACDONALD: So a United Nations reference —it is a group made up of I do not know who but certainly no-one from Australia and no-one I think with any particular qualifications—comes through and directs Australia on the way it might do its port developments. Have you seen that or studied that report or direction or whatever it was from the UN body?
Mr Deegan : Yes, we have, and we have been in discussions with a host of industry and environmental groups about a way forward on some of those issues. We are in dialogue both with the Commonwealth ministers and the Queensland government as well as those other players in that discussion, particularly centred around Gladstone.
Senator IAN MACDONALD: I am interested in Abbot Point too—
Mr Deegan : And Abbot Point.
Senator IAN MACDONALD: I know you have spent a lot of money, time and expertise and I know that you have environmental considerations in relation to those things. Why didn't you identify the 'problems' that this United Nations group made up of who knows what—people I think people who live in Paris¬—has identified?
Mr Deegan : I am not going to cast aspersions on the United Nations—
Senator IAN MACDONALD: No, I am not asking you to. That was my commentary.
Mr Deegan : They are generally a body of expertise and they have raised some issues that I think the Australian government is committed to dealing with. I think that is a sensible approach. What we have said is that we need to work with all of the players in making sure that the response is appropriate both for environmental and economic outcomes.
Senator IAN MACDONALD: My question though was what is wrong with your group, which I have a very high regard for, that you did not identify these things before this group of foreign 'experts' comes and tells you that you have missed out on them?
Mr Deegan : The two of us who work on the National Port Strategy in my office have identified the environmental issues as needing to be part of a 50-year planning process around each of our major ports. You have indicated before to this committee that, of the 42 major ports in the country, 20 of those are global in nature. We have worked very closely in particular with the Queensland ports around those environmental issues, both current and into the future, which will affect Australia's national wealth. I think we would prefer to work with the United Nations in a cooperative and collaborative sense in dealing with some serious issues in protecting the Great Barrier Reef. I think that would be a position that most Australians would agree with. We are particularly anxious though at the same time that economic interests are also considered and that we take that process forward properly. Given we are a small organisation there will be a host of players that we will interact with and cross-sector with on these issues and this United Nations report is one of them.
Senator IAN MACDONALD: Thank you for that. I will finish by saying that I am confident that you looked at those issues and quite frankly I do not think you needed that sort of help, but, anyway, I hear what you say. Thank you.
Proceedings suspended from 11.07 to 11.18
CHAIR: Welcome back.
Mr Mrdak : May I just respond to some questions that we found answers to during the break?
Mr Mrdak : Senator Nash asked about expenditure on Freddington to Urunga. I am advised that of the Australian government expenditure of a total of $381 million, which is 50 per cent Commonwealth funded, the expenditure profile is $121 million, which was paid in 2011-12. There was no payment this financial year, but then $260 million is programmed in 2013-14 for the project. In relation to Western Australia, Senator Back asked me about Roads to Recovery in Western Australia. I can advise that the advice is that all the funds are expected to be expanded this year. Payments to date on Roads to recovery in Western Australia are $15.4 million this year of the budget of $52.2. Finally, Senator Joyce asked a question in relation to the high-speed rail project and the amount of expenditure to date on phase 2. I can advise that, to the end of December 2012, the department has paid their consultants ACOM $11,860,000 in relation to project milestones reached on that study.
Senator NASH: Can I just clarify. Which year did you say there was no expenditure?
Mr Mrdak : This year—2012-13—because the money has been frontloaded to New South Wales essentially for the project milestones. So $121 million was paid last year.
Senator NASH: So it has doubled up in the first year.
Senator BACK: Can I seek some clarification on that too?
Senator BACK: Just with regard to the funds expended, you said about $15 million has been expended on Road to Recovery—
Mr Mrdak : That is what has been paid to councils so far as of January this year.
Senator BACK: So the work is done by councils and they are reimbursed in arrears, are they? They are not going to get $28 million worth of work done over the next four months.
Mr Mrdak : They claim it essentially in quarterly payments and so that is what has been paid to this date. We anticipate that the full $52.2 will be drawn down this year by WA councils.
Senator EDWARDS: You would probably expect me, Mr Mrdak, to go to the Gawler rail electrification. I note that as to the previous questions which I have asked in this, I am really not satisfied as to those responses. I quote them for you just to refresh your memory. 'The Australian government is discussing options for timely completion of the project or the return of the unspent funds. Should the South Australian government not complete the electrification of the Gawler line then the department will work with the South Australian Department of Planning, Transport and Infrastructure to facilitate the return of the unspent money.' As you know, I have written to the Auditor-General and you have received a copy of that letter. They are obviously concerned about this. I would take you to a transcript of a radio interview which was conducted on 4 February 2013, which I am quite happy to give you a copy of. But for the benefit of this morning, the discussion was about resumption of train services into the Adelaide railways station, which was renovated over the month of January this year. The journalist talked about the inconvenience in general terms but then the journalist said, 'The northern line is electrified, yes.' and the departmental officer, a fellow by the name of Mr Rod Hook, a very competent public servant in Adelaide, responded, 'No, the northern line has a few poles out there. There is some, but we do not have the funding to electrify the line from Gawler at this stage'. Journalist: 'No, but the infrastructure is along that line'. Hook: 'The work we have been doing is to completely rebuild the tracks. We have done that on the northern line. We have got out of the harbour okay but we are still working on the Blair intersection so now we have some poles as the infrastructure towards electrification'. Journalist: 'How many? Is it half way, three-quarters?' Hook: 'From Mawson Lakes out we have about 300 poles. We have some of the poles but we do not have the wires. We have done the signalling system and we have got the track ready to go'. Journalist: 'How long do you reckon you will let them stand there? Is there any plan?' Hook: 'We are dependent on government funding'. Journalist: 'Okay, so they could just rust away if you left them say for 10 years?' Hook: 'I would hope that we have not been installing poles that will rust away in the next few years. We are certainly working towards the stage where before too long we will be able to complete the electrification of the Gawler line'. Journalist: 'Before too long. We have not got the money'. Hook: 'I cannot answer that. That is up to the government. But notice that at Adelaide railway station we have done all of the gantries across the full width', blah blah blah. The whole point—and you can have a copy of this—is that this fellow says he does not have the money. They have got the money, haven't they?
Mr Mrdak : They certainly have a commitment by the Australian government for our share of the money. What I think is not available to Mr Hook is the South Australian government's commitment to the project. The Australian government funding is available—
Senator EDWARDS: You are very committed to it. You have $41 million over there in their bank account for the electrification. Is that right?
Mr Mrdak : That is correct. Arrangements have been made—as we discussed at previous estimates, once the South Australian government took the decision to defer their expenditure on the project, we advised them to cease all expenditure of our funds until there can be an agreed timeframe for the completion of it. We have taken steps—the Commonwealth has paid $258.3 million, of which $10 million has been recently been recovered. Yesterday I received advice from Mr Hook that South Australia will repay the balance of the funds that have been paid to date and obviously the additional Commonwealth funds will not be paid until such time as a new timetable is set for the project.
Senator EDWARDS: When?
Mr Mrdak : Sorry, when will it be deferred to?
Senator EDWARDS: No, when are they going to repay the money that they have had free?
Mr Mrdak : I anticipate that will happen over the coming weeks. We have to complete an audit process, but the letter that I received from Mr Hook yesterday indicates to me that they have agreed to remit the funds to the Commonwealth and we will do that in the coming weeks.
Senator EDWARDS: The Auditor-General was very interested in it as well, wasn't he.
Mr Mrdak : Yes, from your reference to him the Auditor-General looked at it and I think is awaiting further advice from us and South Australia about where we have reached in our discussions with the South Australian government.
Senator EDWARDS: I will just go on. In this radio interview, which I will give you, the journalist said, 'How much money was sunk into that to get it where you are at where you cannot use it?' Hook said, 'We had $290 million of Commonwealth money to do the work on the Gawler line, which included the rebuilding of the tracks including relocating services, so having 300 poles out there is a much smaller proportion of that and we still have some money that we have not been able to allocate to it for the reason I have explained. But there's probably still about $70 million of Commonwealth money that we have not spent'. Have they earmarked it for something else?
Mr Mrdak : No, I think what he is referring to is the money that has already been paid to date and not progressed, which we are making arrangements for the return to the Commonwealth of. Also, there was an additional payment or final payment of $35 million which was to be paid which until such time as the project is rescheduled will not be paid by the Commonwealth. I think he is referring to the two quantums— both what had already been paid and not expended of Commonwealth money and the funds which are due to be paid on final completion.
Senator EDWARDS: Did they canvas with you utilising those funds for another project?
Mr Mrdak : No. We certainly discussed with Mr Hook and his officers options to essentially reschedule the Gawler works in a way that will keep the project moving, but I am not aware that we have discussed utilising for any other funds in South Australia.
Ms O'Connell : No. The commitment I think he is talking about there is the South Australian government commitment to the project, for which he does not have the budget allocation at this point.
Senator EDWARDS: Let us pursue the rescheduling of the electrification of the Gawler line. When is it being rescheduled to?
Ms O'Connell : That is a matter for the South Australian government and for them to make a budget commitment about that.
Senator EDWARDS: So you are all collectively breathing a sigh of relief that you have a quarter of your money back and now you are waiting for the other three-quarters to come back into your account rather than in the South Australian government's account.
Ms O'Connell : And we have a commitment that that will happen.
Senator EDWARDS: In three weeks?
Mr Mrdak : We anticipate it happening in the next two weeks.
Senator EDWARDS: So $30 million odd Australian—
Ms O'Connell : $31 million will be returned. There is a commitment to do that.
Senator EDWARDS: You can do no more than that.
Mr Mrdak : No, and we again wait for further advice from South Australia as to which point they look to recommence that project.
Senator EDWARDS: Will you be a bit hesitant next time you hand them over some money without the project being completed or will you wait for a receipt for the work done next time?
Mr Mrdak : We pay on project milestones. In essence, we had not and I think to be fair to Mr Hook he had not anticipated the South Australian budget position—
Senator EDWARDS: I am sure he did not anticipate having the rug pulled on him, for sure.
Mr Mrdak : And we certainly did not in terms of the South Australian budget decision to not proceed with the completion of the electrification.
Senator EDWARDS: Thank you very much.
Senator WILLIAMS: Can you give me an update on the Scone level crossing? Last time you were here I think there were five options to be put to the public. Which of the options were favoured by the public?
Mr Mrdak : I will just ask my colleague Mr Foulds. I think there have been workshops held within the community and the like. I will just get an update for you.
Mr Foulds : Yes, the Scone level crossing workshops were held in December last year and there were five options that were canvassed there, as was explained at the last estimates. As a result of the community feedback and the value management workshop, there are two options that have come out of that for further consideration. Option 1, the New England bypass, was considered and a modified option 4, which is a road over rail bridge at Kelly Street rail crossing. Those two are currently within RMS procedures and I expect the preferred route to be announced this month by New South Wales.
Senator WILLIAMS: So it will be either a bridge over the railway line or a complete bypass around Scone?
Mr Foulds : Which will include a crossing of the rail line.
Senator WILLIAMS: Any idea of costings?
Mr Foulds : The costs that were announced in the community update were, for option 1, $95 million; and, for option 4, of the order of $70 million. Those are not P90 costs yet.
Senator WILLIAMS: So the bypass is not a lot more expensive than the bridge over Kelly Street?
Mr Foulds : Close to 40 per cent difference.
Senator WILLIAMS: Of course, Mr Mrdak said back in October that this would require a fifty-fifty split of funding from state and federal?
Mr Foulds : That is what Mr Mrdak said.
Senator WILLIAMS: I want to move on to the Heavy Vehicle Safety and Productivity Program. Have projects been announced for round 3?
Ms O'Connell : No, not fully, Senator. Western Australia's projects have been announced and the ACT's projects have been announced for round 3.
Senator WILLIAMS: Do you know how many applications were received and how many will be allocated?
Ms O'Connell : I can tell you how many projects have been received. But until the full announcements have been made I will not be able to tell you how many have been decided upon or granted.
Senator WILLIAMS: I think $10 million was set aside for livestock—to improve the safety of trucking operations in relation to livestock, saleyards and holding facilities. Have you had any applications for that $10 million fund?
Ms O'Connell : The round 3 program is $40 million over this year and next year and then a separate $10 million for livestock projects.
Senator WILLIAMS: Have you had any applications for the livestock projects?
Ms O'Connell : Yes, we have, Senator, and we can tell you how many.
Mr Jaggers : We have had 120 projects for assessment. A number of those were livestock projects. I might just see if Mr Foulds has the detail on the number.
Mr Foulds : There were 60 livestock projects that were put up for assessment.
Senator WILLIAMS: Just out of curiosity, were there any from the New England area of New South Wales, do you know?
Mr Jaggers : We have not announced the details of the applications that have been received and the decisions have not been announced either.
Mr Jaggers : We are happy to take that on notice and come back to you after the announcement.
Mr Mrdak : I will see if we have the details of the applicants here. If we do not, we can provide that to you.
Mr Foulds : I will have to provide it to you later, Senator.
Senator WILLIAMS: That will be fine. When will the projects be announced?
Mr Mrdak : The minister is currently working through the various project proposals and the advice from the department. As Ms O'Connell has indicated, he has announced two jurisdictions. We anticipate as we negotiate funding splits with the jurisdictions that will happen over the coming weeks.
Senator WILLIAMS: I will move on to the National Heavy Vehicle Regulator. That has commenced operations based in Brisbane. Have all states and territories passed the necessary legislation yet or is there still much work to be done?
Mr Mrdak : The crucial first step is that Queensland parliament is due to pass the second tranche of bills. My understanding is that they are being introduced this morning in the Queensland parliament. We are hoping that they will pass through the Queensland parliament this week or next week. That will then provide the opportunity for jurisdictions to pass their enabling legislation. But the first step is for Queensland to pass tranche 2 of the bill. I think states have now scheduled to do that, but we do not have any other jurisdictions doing it because they are waiting for Queensland.
Ms O'Connell : The expectation is that they will have passed their enabling legislation within the jurisdictions to allow commencement from 1 July.
Senator WILLIAMS: We know that in Queensland it will not be held up in the upper house, anyway.
Mr Mrdak : They were factors we took into account in selecting Queensland as the host jurisdiction, Senator.
Senator WILLIAMS: Is it 1 July when we are actually supposed to have the national regulations in place this year?
Mr Mrdak : That is with the revised timeframe. Unfortunately, the legislation was delayed with the change of government in Queensland in terms of timetable, but the National Heavy Vehicle Regulator as of today is processing administrative approvals for productivity based standards and the like. From 1 July they will effectively go live subject to the jurisdictions passing their enabling legislation.
Senator WILLIAMS: With the negotiations with the other states, once Queensland has its legislation in place is the general feedback that the other states are ready and rearing to go?
Mr Mrdak : Certainly. The only state at this stage that has yet to agree to the national regulator is Western Australia.
Senator WILLIAMS: They are talking about running in parallel, anyway, aren't they?
Mr Mrdak : They are talking about doing mirror legislation, but it is not clear at this stage what their timetable is or how that will come into effect. It is not clear at this stage as to whether that will fully replicate the national law or continue some Western Australian modifications.
Senator WILLIAMS: Is there any reason that they have gone down that road, do you know?
Mr Mrdak : I think it is a decision of the state government. Western Australia has a longstanding position in regard to mirror legislation as opposed to adopting national law. But I think in these circumstances also the Western Australian government has reached a view that they wish to maintain a somewhat different regime in certain areas to the rest of the nation. That is a position that we are trying to dissuade them from, but I think that remains their position at this stage.
Senator WILLIAMS: What is the cost to set up a national regulator, do you know?
Mr Mrdak : The Commonwealth this year is funding the establishment costs as part of the cost-sharing agreement with the jurisdictions. I think this year we are due to provide $15.3 million to establish the regulator and we have provided money in the past. I will just get you a definitive figure if I may.
Ms Wieland : The establishment cost still to be paid in 2012-13 to Queensland is $13.9 million. We are currently working with the Queensland government on the project agreement to enable us to make that payment in the next couple of months.
Senator WILLIAMS: Where can I get a simplified form of the proposals for Queensland in relation to axle weights, driving hours, volume loading for livestock, et cetera, height, length and width? In New South Wales Minister Duncan Gay has widened it to 2.7 metres for hay and wool because you set them up on a combing rail. Prior to that, every load of hay and wool was illegal as far as width goes. Where can we get a breakdown just in a basic form? Has the Queensland government minister for transport or whatever got it on their website, do you know? Where can I go looking for that basic set of rules that hopefully will be adopted as standard national rules right throughout Australia? I ask this because I have been concerned that, if Queensland sets a very tight set of rules and does away with volume loading for livestock and 2.5 metres for hay and wool and perhaps very stringent driver hours, we could actually see a loss of production around Australia and productivity.
Mr Mrdak : There are draft regulations which are now out for final consultation. That will contain much of the detail you are seeking. These are the regulations which will actually set a lot of the mass and width dimensions as well as loading requirements. I think at this stage the regulations are out for comment by both industry and jurisdictions. We are hoping that ministers will vote on those regulations by the end of this month, which will enable them to come into effect. I can certainly take it on notice. I do not see any reason why we could not provide you with a set of the draft regulations as they currently stand. They are out with jurisdictions for comment and are due to be finalised. I will just check with my colleagues. But I do not think there will be an issue in providing you with the draft regulations as they stand.
Ms O'Connell : No—that would be fine. Can I also just make the point that they are not Queensland regulations. It is law through the Queensland parliament, but it is as a result of all of the transport ministers agreeing. They are national laws, but they are just through the Queensland parliament. They are nationally agreed.
Senator WILLIAMS: I suppose I could talk to bodies such as NatRoads and ATA. They have obviously been very involved in all of this.
Ms O'Connell : They are all very involved and very aware of it. They have been on the project board.
Mr Mrdak : David Simon, the chairman of ATA, sits on the industry reference group and has actually been involved in the drafting of the regulations.
Ms O'Connell : As does ALTRA—Australian Livestock and Rural Transporter Association.
Senator WILLIAMS: Has the Transport Workers Union also been involved in negotiations?
Mr Mrdak : They have been consulted.
Senator WILLIAMS: So hopefully, come 1 July, we may see, excluding Western Australia, the national road rules in place for heavy transport?
Mr Mrdak : That is our hope, Senator. Subject to the legislation passing and then the enabling legislation we anticipate having this single set of regulations nationally from 1 July.
Ms O'Connell : With the exception of Western Australia.
Senator WILLIAMS: It would have to be a big win, wouldn't it?
Mr Mrdak : Certainly, it is. Just looking at how much progress we have made. As I said before, when our team sat down with the jurisdictions and worked through with industry their various differences I think at one stage we identified something in the order of 600 to 800 variations from the national law across the country. To actually get that back into a single national law—the process is still difficult. There are still jurisdictions that will want to apply some modifications. We are trying to minimise those, to be honest. But we have made huge strides. If we can get the national law and the national regulations as drafted in place on 1 July, as you know better than all of us, Senator, the ability for a heavy vehicle operator to traverse orders with one single fatigue regime and one mass regime is a huge benefit.
Senator WILLIAMS: Of course, and one width and one length. I spoke to a transport company in Grafton recently that carries electricity poles for Central Energy. When they go to Queensland and as they drive up through New South Wales they are not allowed to have this particular sign on their truck. But when they get to the Queensland border the sign must be on their truck. So they carry the sign and when they get to the border they have to put it on, because it is illegal in Queensland to not have it on but it is illegal in New South Wales to have it on. Those are some of the crazy things.
Mr Mrdak : It is. It will not surprise you that it has been an exhaustive process to get people to agree to that very issue. It will not surprise you that there are some jurisdictions that are still insisting on some variations like that.
CHAIR: That is a shock, Mr Mrdak.
Mr Mrdak : The work of the federation is endless, Senator, as you know.
Ms O'Connell : The estimated productivity benefit is up to $30 billion over 20 years from the national regulators.
Senator WILLIAMS: Which is a lot of money.
Ms O'Connell : It is very significant. I think too that once the national heavy vehicle law commences on 1 July there will be other things that need to be done. It will not all be done on that first day. There will be significant productivity improvements, but there will be other things to look at taking a more sensible national approach to.
Senator WILLIAMS: Hopefully we have learned our lesson from railway line gauges back in the early days.
Ms O'Connell : The National Rail Regulator commenced in January as well.
Senator WILLIAMS: Thank you.
Senator IAN MACDONALD: Can I ask whether you are giving him more than his time just because it is a trucking matter?
CHAIR: Senator Macdonald, you should be asking why Senator Gallacher is so quiet. That is what you should be asking. It is a matter of extreme importance to our federation and that is why our Western Australians are leaving the rest of you are dead, because we have it all worked out.
Senator GALLACHER: Mr Mrdak, can you give us a couple of updates on outlining the work that has been undertaken on the Midland Highway through the current Nation Building Program?
Mr Jaggers : There is another project on the Midland Highway in the current Nation Building Program including the Brighton bypass, which is a $186.2 million commitment from the Australian government. There is $14 million that has been allocated the refurbishment of the Bridgewater Bridge and an upgrade of the junction of the Midland Highway. There is $6.2 million for planning on the Baghdad bypass and also for the new Bridgewater Bridge as well. There is $4.5 million towards safety upgrades on the Midland Highway including improvements at Constitution Hill. There are actually some other small projects as well, but they are the key ones.
Senator GALLACHER: Have you done an estimate of the cost to fully duplicate the Midland Highway?
Mr Mrdak : We have not specifically, Senator. I am aware that the Tasmanian government I think in the past has costed it at around $2.7 billion.
Senator GALLACHER: Moving to Victoria, are you aware of the Main Road level crossing at St Albans? Can you please outline the safety problems at that level crossing?
Mr Mrdak : We are aware of that crossing. It is a significant safety and productivity issue. That is a crossing that has a very troublesome safety record and also is a very significant impediment to traffic flow. The Australian government has recently made an offer to the Victorian government to fund the upgrade and replacement of that level crossing interface and the Australian government has recently made an offer to Victoria to fund up to $90 million for the replacement of that level crossing. We are now awaiting advice from the Victorian government in relation to that matter.
Senator GALLACHER: So you have been proactive in relation to the concerns, and approached the Victorian government with a monetary proposal?
Mr Mrdak : Certainly, we have been aware of that for some time, through federal and local representatives. The minister recently visited the location and met with, I understand, some residents and the local federal member and discussed the issues at the intersection. It has also had discussions with the Victorian transport minister in relation to that level crossing.
Senator GALLACHER: Just returning to the Tasmanian Midland Highway, $2.7 billion is the Tasmanian government's estimate of cost of duplication?
Ms O'Connell : That is what we understand.
Senator GALLACHER: So a commitment of $400 million would be nowhere in the ballpark to duplicate that?
Mr Mrdak : No, I think some of the projects that Mr Jaggers talked about in terms of planning may provide some funding towards a number of those, but it would certainly not provide for a duplication of the full highway.
Senator GALLACHER: Can I go to Mr Deegan just to revisit some of the questioning from Senator Joyce in relation to the Toowoomba bypass. The $1.6 billion which was the estimated cost—did you support that or did you have a qualification on that?
Mr Deegan : The presentation that was given to the forum in Toowoomba last Friday included a video flyover presentation. It is some 41 kilometres of dual road through some difficult terrain with a range of geotechnical issues and tunnelling. I would be surprised if it came in at $1.6 billion. I think it would be considerably more than that.
Senator GALLACHER: Given that statement, what do you think of the project as value for money? Does it stack up?
Mr Deegan : What we have asked the Queensland government is to give us a breakdown of the traffic volumes, the number of trucks in particular using that route and the sorts of issues that you would consider in doing a profit cost benefit analysis on the project. I think there is still more work to be done. I think I mentioned earlier to Senator Joyce that there may be some cheaper alternatives that may do much of the work that is required. There are two parts to it. As those of you who have travelled up to Toowoomba might know, firstly it is tight geometry for trucks. It is a reasonably steep gradient and there are significant delays if there are any crashes. There is also a significant amenity issue for the people of Toowoomba. So there are two problems. What we are seeking to engage with the Queensland government on is what other options might be available to provide value for money in the discussion.
Senator GALLACHER: So in the current business case is tolling the road a proposal?
Mr Deegan : The Queensland government has indicated that they are prepared to put a toll on the proposal.
Senator GALLACHER: Has anyone assessed what that toll is likely to be?
Mr Deegan : There is a range of figures that they are working on in their business case. There was some discussion of tolls up to $50 a time on Friday. I do not think the Queensland government are in that position. But certainly it is a significant cost to the local community.
CHAIR: Do you reckon anyone will pay it? I remember the drama in Sydney when they opened the new one and it was $2.50. I said to the Comcar driver, 'What the hell is the drama? You have a beautiful road and nobody is on it. You don't want to pay $2.50.'
Senator IAN MACDONALD: You would save it in petrol.
Mr Deegan : There was some discussion again at the forum from the chair of the Australian Transport Association, who was present. He said there is not a lot of savings going down the hill with braking costs, but there are savings in fuel and time coming back up to Toowoomba. But he did not think that $50 would be an appropriate amount.
Senator GALLACHER: Thank you. Just to revisit the line of questioning from Senator Rhiannon in relation to West Connect, what is the estimated cost of this project?
Mr Deegan : I do not have that with me.
Mr Mrdak : It varies, but it is of the order of about $10 billion and the cost may well be as high as $13 billion based on very preliminary cost estimates.
Senator GALLACHER: Will the proposed route take people from western Sydney into the city?
Mr Mrdak : That is one of the areas where we need New South Wales to give us further advice on and do further work on. At this stage my understanding is, as I think Mr Deegan outlined, it does not provide a full transit from the M4 into the CBD.
Senator GALLACHER: What about the freight movements that were mentioned in the earlier discussion? Will it link Port Botany?
Mr Mrdak : Not at this point. It provides a linkage down through the inner west suburbs down to join the M5 East with a tunnel connection. It does not at this stage as far as we are aware provide a direct connection into Port Botany. They are both areas that we are seeking further advice from New South Wales on.
Senator GALLACHER: Do you have any idea what the underlying business case is for this project of $10-$13 billion, which will not do anything for Port Botany or ease people's travel into the city?
Mr Mrdak : Certainly part of the work that is now being undertaken by New South Wales is to determine the full business case and what the benefit cost of the project actually is.
Senator GALLACHER: Mr Deegan, last year the leader of the opposition, the Hon. Tony Abbott, made a number of infrastructure announcements and said that they had been approved by Infrastructure Australia. At the last estimates you stated that you had had no discussions with the Hon. Mr Tony Abbott. However, you undertook to determine whether council members had had any discussions and in what capacity. Can you update the committee on the outcome of your enquiries?
Mr Deegan : There was a question on notice that I presume has had an answer; I am not sure. But certainly the majority of council members indicated they had not had such discussions. Our chairman has indicated that he has had a range of informal discussions with a host of players including Mr Abbott about a range of infrastructure issues, as you would expect of someone of his stature. One or two other council members may have also had similar discussions given the sorts of linkages that they have in the business community, but on an informal basis. As you are aware, Infrastructure Australia is transparent in its advice. The formal advice to government is published each June and is made available to state and local governments, the community, the media and the like.
Senator GALLACHER: So your enquiries would lead the committee to believe that Mr Abbott was incorrect in stating that he was referring to approved projects by Infrastructure Australia?
Mr Deegan : Infrastructure Australia is still undertaking its assessment of a range of those projects. It has not provided formal advice at this stage on some of those projects.
Senator GALLACHER: Thank you.
CHAIR: I have to reiterate. The media is all over us like a cheap suit accusing us of all sorts of lies and all sorts stuff like this, but the Leader of the Opposition can get out there and say that he has had commitments from Infrastructure Australia when he darn well has not. That is what you are saying, Mr Deegan?
Mr Deegan : It is not appropriate for me to comment, Senator.
CHAIR: I will comment. I think it is absolutely disgraceful. What about the $400 million announcement for the Midland Highway? That is not the truth either. That will not rebuild the Midland Highway in Tasmania. Is that correct? You just said, Mr Mrdak, that $2.1 billion I think is the quote from the Tasmanian government, isn't it?
Mr Mrdak : Certainly, that is the advice we have for full duplication of the highway.
CHAIR: So it is not the case in political Australia that, living in glasshouses, we should not throw stones. Fantastic. Thank you. I have had my dummy spit on that now.
Senator GALLACHER: That is all of my questions, thank you.
Senator RHIANNON: Mr Mrdak, are you a member of the West Connect steering committee?
Mr Mrdak : Yes. Ms O'Connell and Mr Jaggers generally represent me at those steering committee meetings.
Senator RHIANNON: Does that imply federal government support for that project?
Mr Deegan : It certainly reflects the $25 million that has been committed by the Australian government to the next stage of the project. Our engagement is in shaping the planning and business case to enable future government decisions on funding.
Senator RHIANNON: So it sounds like you are backing the project; it is just that you are on the committee to help to ensure that the project works for what you are committed to? Is that a fair description?
Mr Deegan : I think it is fair to say that the Australian government at this stage is awaiting further advice. It has made a commitment of $25 million to enable the planning and business case to be developed. The Australian government has to take future decision as to whether it provides a financial contribution beyond that.
Senator RHIANNON: Since the steering committee was set up, you or one of your representatives has been to all of those meetings?
Mr Mrdak : Yes.
Senator RHIANNON: Who have you been briefed by? You can take that on notice if it is lengthy.
Ms O'Connell : We can take it on notice and provide you with the members of the steering committee if that is useful to you.
Senator RHIANNON: Yes, if you could take that on notice, please.
Ms O'Connell : It is largely officials from the New South Wales government from the Roads and Maritime Service, Infrastructure New South Wales, Treasury and Finance in New South Wales and their planning department.
Senator RHIANNON: Are there any community organisations that work on public transport issues?
Ms O'Connell : Not at this point, Senator.
Senator RHIANNON: Thank you. Mr Mrdak, is there a conflict of interest here considering that so much of your work around freight has very strong emphasis on freight and rail? You have spoken about that today. Clearly the West Connect project is all about road. We have such massive congestion in Sydney, particularly around this Port Botany area. Is there a conflict for you there considering that, by going on the board, you are putting your eggs in the basket of a motorway solution?
Mr Mrdak : I do not think so at all. We are represented in planning working, in cross-jurisdictions, on both road and rail. The West Connect project I would not characterise as solely a road project. It also involves quite a bit of urban renewal. It provides a lot of opportunity if the project develops as envisaged for revitalisation of that whole Parramatta Road strip and that inner west. So it has a number of aspects where the Commonwealth has a strong interest on productivity but also liveability of cities. I do not think it is a conflict of interest. We are participating to make sure, as you quite rightly point out, that the project business case is robust and the government is fully informed on the various issues involved in taking the next steps.
Senator RHIANNON: When you just disagreed with me that it is not just a motorway solution, do you mean that West Connect could actually incorporate a freight on rail public transport aspect to it as well?
Mr Mrdak : I think the West Connect project as it is currently proposed is largely around motor vehicle operations. Certainly you would envisage that, as it is progressed in planning, it would provide for public transport access through buses but also cycleways and the like. It also provides a great deal of urban renewal opportunities through various parts of the city. If you look at the current traffic operations at Parramatta Road, you would have to say that there is a huge opportunity for revitalisation of the inner west by redesigning traffic flows through Parramatta Road and what that then does to your commercial and redevelopment opportunities in that area.
Senator RHIANNON: Isn't there a contradiction here, though, considering the amount of emphasis that your department and the minister regularly give to the importance of freight on rail and to easing congestion, where you are introducing motorways into the most congested city in Australia and there is a whole science around induced traffic flows when motorways are built. Have those issues been explored?
Mr Mrdak : Certainly, I would not say there is a contradiction in the sense that the West Connect project is about trying to remove the congestion which is already there. It is operating suboptimally on a road network that is not designed or capable of taking the volumes that are available. As to your point on the science of induced traffic, I would not label it as a science per se. I think there are a whole range of theories around it. It is the subject of ongoing work. I think it is fair to say that West Connect offers in our view significant opportunities to address some of the traffic congestion in the inner west and also, as I said, urban renewal opportunities. The detail of that has to be worked through and that is really the stage we are at. I think if you look at the work by Infrastructure New South Wales and the work they have provided, I think they do identify significant opportunities for Sydney through that project.
Ms O'Connell : Also, in relation to freight on rail, there are already very significant investments already in train and underway in freight on rail. The southern Sydney freight line was opened last month or during last month. Port Botany connections on rail and Moorebank intermodal and all of those are very significant.
Senator RHIANNON: But just on the Port Botany rail connections, I understand that the freight component had been cut down by the New South Wales government considerably. That is why I am trying to explore this. Rail freight going into Port Botany I understand is decreasing and it appears that you are giving enormous emphasis to a motorway solution in such a congested area.
Mr Mrdak : Certainly rail freight access to Port Botany has not been cut down, as far as I am aware, significantly. There has been a decline and fall in rail usage on that line simply because of the capacity of the line to actually meet demand, hence the investments that Ms O'Connell mentioned that the ARTC has done. We are now looking at the next stage of investment in that Port Botany freight line to actually get that capacity lifted, removing some of the restrictions such as the level crossing at General Holmes Drive and some of those areas. At the same time, as Mr Fullerton mentioned, there is a very big program of investment in some of the terminals, particularly Moorebank. The rail line is going to be totally dependent on the capacity to create the terminal capacity to do the intermodal changeover. That sort of stuff is coming together. The overall picture then is that Moorebank will give you the capacity, southern Sydney frail freight line and Port Botany rail upgrades will actually facilitate the growth of rail freight. At the same time there will also continue to be growth of heavy vehicle transport in that precinct.
CHAIR: Senator Rhiannon, I am listening intently, but I just do not understand why the Greens would be opposed to an intermodal depot at Moorebank.
Senator RHIANNON: We are not opposed to it. That is Mr Albanese’s misinformation. We are not opposed to it. It's how you do it.
CHAIR: Not the way I have been listening to it.
Senator RHIANNON: That is absolutely not true, Chair.
CHAIR: Senator Rhiannon, I do get confused very easily, but the Greens transport policies absolutely baffle me half the time.
Senator NASH: Can I just ask you about the Moorebank intermodal. I do not think this was asked earlier but correct me if I am wrong. It is about the company board appointments.
Ms O'Connell : Yes, that was asked, and we answered it.
Senator NASH: All right. The other question goes back to the Pacific Highway again—the Nambucca to Urunga upgrade. It is a lovely part of the world, Chair—you should get up there.
Mr Mrdak : That is in our program for completion as part of priority 2. That will be done over the next few years.
Senator NASH: If I’d had a chance I would have asked if you could give me a timeline, but you are way ahead of me.
Mr Mrdak : As you can see, we are practically enthusiastic about this project.
Mr Foulds : The D and C preferred tenderer was announced in December last year. That will lead to a preferred tenderer later this year and then construction.
Senator NASH: That will lead to a preferred tenderer later?
Mr Foulds : Yes.
Senator NASH: I thought you said that was already done.
Mr Foulds : No, the D and C preferred tenderer has been announced and now they go into negotiations to actually come up with a contract.
Senator NASH: I am with you. Did you D and C?
Mr Foulds : Design and construction.
Senator NASH: Thank you. Is there any indication of expected completion? I understand it is early days, but is there any estimation of when the project might be complete?
Mr Foulds : Nambucca to Urunga would be mid to late 2016.
Senator NASH: Okay. Does that fit in one, two or three in terms of the priorities?
Mr Foulds : Priority 2.
Senator NASH: Do we have any kind of estimated ballpark figure on funding for that or does that all happen as part of the tender process over there?
Mr Foulds : That will happen as part of the tender process.
Senator NASH: So that will be concluded at the end of the year, I think you said, Mr Foulds.
Mr Foulds : Yes, later this year.
Senator NASH: Why does it take so long? Why does it take nine or 10 months to get it sorted?
Mr Foulds : When the preferred tenderer is announced they then go into contract negotiations. That involves a number of RMS processes.
Senator NASH: Enough of the letters.
Mr Foulds : Roads and Maritime Services do their procurement analysis and work with that preferred tenderer and sometimes that is an iterative process, where they accept or do not accept costs, and they will do an independent cost assessment through their normal processes until they come to the point where they do reach an agreement. Then they come up with a contract price. It does take that length of time.
Senator NASH: Is that an average length of time? Can it happen speedily or is that just how long it takes?
Mr Foulds : That might be that bit, but then there are the other statutory matters like property acquisition. They have timeframes in which they occur. Planning approvals need to be gotten and then sometimes those require controlled actions from the Commonwealth. So there are a whole range of variables.
Ms O'Connell : It can also depend on the method of construction—an alliance contract versus design and construct versus other methods.
Senator NASH: I appreciate that would be a very—
Mr Foulds : A lot of it is descoping risk. When a tenderer is discussing a contract, they will be seeking to derisk their involvement. If you are doing just a construct only, we take the risk, or Roads and Maritime Services does. If it is design and construct, you are asking them to do more, so it takes longer to get to that point.
Senator NASH: What happens in this sort of process if there is not agreement? I note that as a preferred tenderer one fell over in another department entirely recently—there had been a preferred tenderer for two years and then it all fell over and the government pulled out. What happens? Do we go back to square one?
Mr Foulds : That would be a New South Wales government Roads and Maritime Services process. They have their methodology to deal with that. In my experience it has not happened. It has not happened in my experience on the Pacific Highway or any other road project.
Senator NASH: Okay, so where there has been a preferred tenderer you have been able to come to an arrangement for the contract and the build has gone ahead?
Mr Foulds : Yes, we usually come to an arrangement.
Senator NASH: But if it did get to a point where there was no agreement, what would be the process? Do you start all over again? I am not assuming it is going to happen; I am just interested.
Mr Foulds : I am not that familiar with their process. I would have to take that on notice and ask them to reply to that.
Mr Mrdak : In general terms they would go back to some of the other tenderers and rerun a process. It would set back the timing.
Senator NASH: It would set back the timing?
Mr Foulds : It would certainly do that.
Senator NASH: We will assume it is going to go ahead and we will come to a fantastic arrangement.
Mr Mrdak : Generally these things are settled around risk pricing and price becomes a key determinant once you have settled the design concept.
Senator NASH: Finally, just back to Frederickton to Urunga that was in priority 3, why is that in priority 3?
Mr Foulds : It is not; it is in priority 2.
Senator NASH: Which one were we talking about earlier that was in priority 3?
Mr Foulds : Woolgoolga to Ballina.
Senator NASH: Why is that in priority 3?
Mr Mrdak : It is generally driven by a relative traffic volumes and safety conditions of the road.
Senator NASH: Do you have some sort of matrix that works that out in terms of traffic condition and safety to assess priorities?
Mr Mrdak : There has been a lot of work over the last few years by New South Wales.
Senator NASH: Or is it depending on where the minister might think he might like the money to go?
Mr Mrdak : No, I think it is fair to say that ministers would like it all done at once and budget constraint is such that the prioritisation has been done on the basis of traffic and safety record. The volumes of traffic tend to be south of Coffs Harbour and north of Ballina and that is really what has driven the program.
Senator NASH: Is that from Coffs traffic down to Sydney and Ballina north to Brisbane? Is that why it is leaving that gap in the middle?
Mr Mrdak : Predominantly it is driven by that and also the size of the regional centres in that area tend to drive a lot of the interregional traffic. But the traffic south of Grafton tends to be lower-level traffic than other parts of the highway.
Senator NASH: How do you assess through traffic as compared to, say, Coffs to Sydney return or Ballina to Brisbane return? How does the department actually identify that?
Mr Mrdak : Survey data has been used in the past. There are estimations made of through traffic and also traffic counts are done and the like. There are various methodologies which are done to determine what is likely to be the through traffic driving the length of the Pacific as opposed to doing regional sections of it.
Senator NASH: Can I ask you to take notice for me then, and it may well be somewhere on the website, which I am happy for you to direct me to if that assists, the list of priority rounds 1, 2 and 3 and the projects that fit in those priority rounds 1, 2 and 3 and, insofar as you can, provide the information of that type of matrix that you have used for each of those projects to fit into those separate priority rounds?
Mr Mrdak : Certainly.
Senator NASH: Thank you.
Senator COLBECK: I think this probably goes more towards Infrastructure Australia. It relates to a submission from the Tasmanian government in relation to irrigation projects. I am just interested to know at what stage in the cycle that particular submission is that.
Mr Deegan : Tasmania gave us their submissions in late August and early September. Irrigation is a key part of their submission. We are still working with them on that. We think there is a lot of prospect for the proposals around irrigation, particularly up in the north, but the other proposals are of considerable interest as well. The value add that is proposed and creating real value for, as you know, fruit and vegetables and other goods is something that we have a great interest in. The dairy capacity, moving from beef to dairy, we think has significant promise and we are still working with the Tasmanian government and the relevant body on those proposals.
Senator COLBECK: So when you are working with them, what is the context of that at the end of the day?
Mr Deegan : What we are looking for is details around the costs and benefits of the proposals, who pays, how that is managed and what timeframe these things might be undertaken in and then priorities around which ones you would start doing first and how you would run that through. They are the sorts of discussions we are having with Tasmania.
Senator COLBECK: So you have had relatively detailed conversations, I would have thought, with the Tassie Irrigation Board, which developed the proposals and managed the dozen or so initial projects that are already being developed?
Mr Deegan : That is right. We have a very good relationship with that group.
Senator COLBECK: I think they are a good organisation and they are doing a good job in rolling out that infrastructure. But what place in the cycle are they at?
Mr Deegan : We are finalising our advice to the Commonwealth government and, as indicated earlier, we publish our advice each June. We are on track to do that work.
Senator IAN MACDONALD: Can I ask Mr Deegan or the department whether either is doing any work on the Cairns harbour in relation to the proposed dredging of that harbour?
Mr Mrdak : We are not, Senator. We are not aware of any proposal. The Queensland government in my understanding is managing that project.
Senator IAN MACDONALD: They are. I was wondering if there was any Commonwealth involvement, if not in a supportive way then in an environmental way, that may hold up the work.
Mr Mrdak : I am not aware of any issues, Senator.
Senator IAN MACDONALD: Mr Mrdak, there were some announcements made about roads in the north of Queensland. What is the current status with any suggestion of funding for the Hahn Highway, which is out the back of Townsville between Cairns and Hughenden?
Mr Jaggers : There is no current commitment.
Senator IAN MACDONALD: There have been quite a number of approaches made to support work on that highway in particular. Is the department aware of any approaches? Perhaps that might be better to be taken on notice.
Mr Mrdak : Can I take that offline and come back to you? There have certainly been approaches in relation to the Kennedy Highway and the Hahn I think. There have certainly been lots of approaches in relation to it. We have been having a look at those issues. I will just take on notice if I may just where that is at.
Senator IAN MACDONALD: I have a feeling—I do not have the details, unfortunately—that there was some announcement made on it. Anyhow, if you could do that it would be great. This question might come into the next session and if so I can cross over the boundary. Does the Commonwealth have any involvement with the Gold Coast light rail project?
Mr Mrdak : Yes, the Commonwealth has contributed—
Ms O'Connell : $336 million as part of the 2009 budget into the Gold Coast light rail project.
Senator IAN MACDONALD: Apart from providing some money, do you have any other involvement?
Mr Jaggers : Yes we are involved in steering committee meetings on a regular basis on the projects. The Australian government funding has been provided for the project, but we are still heavily engaged on the day-to-day delivery.
Ms O'Connell : Can I correct something—the federal government investment is $365 million in the Gold Coast light rail. I said a slightly different figure.
Senator IAN MACDONALD: Of a total of—
Mr Jaggers : Of 949.
Senator IAN MACDONALD: Okay. And the other contributors are, I assume, the state government—
Ms O'Connell : The Queensland government and the council.
Senator IAN MACDONALD: What is the extent of your involvement in that steering committee? What value can the Commonwealth have apart from handing over the dollars?
Mr Jaggers : We have senior officers attend meetings to provide input on decisions that have been made by the project opponents, to ensure that the project stays on track and to ensure that the government’s invest is protected in terms of the scope of the project; that there are not rescoping changes that may affect the Commonwealth’s investment. So we have a vigilant approach to the project to make sure it is delivering what the Commonwealth government invested in.
Senator IAN MACDONALD: And it is due for completion—
Mr Jaggers : In late 2014.
Senator IAN MACDONALD: They seem to be moving very quickly on it.
Ms O'Connell : They are. It is well under way.
Senator IAN MACDONALD: It is going to be a fantastic piece of infrastructure when it is completed, I would think. There will not be a lot of problems that other similar cities around the world have in getting traffic through.
Ms O'Connell : Particularly as they host the games in 2016.
Senator IAN MACDONALD: Ms Buckley, are you going to elaborate on something in the 30 seconds that we have left?
Ms Buckley : If there is a relevant question.
Senator IAN MACDONALD: You are the person on the steering committee, are you?
Ms Buckley : I am, yes.
Senator IAN MACDONALD: Okay. Are they having any problems at all or difficulties with street closures or traffic going around the construction?
Ms Buckley : It is a PPP delivered project so I think there are some complexities associated with delivery but altogether the program is on track for delivery in late 2014 as per the original schedule.
Senator IAN MACDONALD: There is no suggestion that it might be open before that?
Ms Buckley : Not at this stage, Senator.
Senator IAN MACDONALD: It goes from Southport to Broadbeach—is that correct?
Ms Buckley : It goes from the university down to Broadbeach via Southport.
Senator IAN MACDONALD: Thank you.
Mr Mrdak : Chair, if I may, I just wish to clarify an answer to Senator MacDonald. We are getting the finer details, but there is a commitment to $10½ million to the Kennedy Highway and I am just getting the project details and the timing of that payment for you. I am not sure if that is the same project we are talking about on the Hahn. But in that part of the world there is often confusion about those two and where they connect. So there is a commitment of $10½ million. I will get you some details.
Senator IAN MACDONALD: The Kennedy Highway comes down from the same area, but it goes to Charters Towers. The Hahn Highway goes parallel.
Mr Mrdak : The media reporting may have been about that commitment. But I will get those details for you.
CHAIR: We will move to Surface Transport Policy.
Senator NASH: On seatbelts on regional school buses, in an answer to one of the questions on notice, in year 2012-13 there was no funding allocated to retrofit buses. Is that because there were no applications to do so or the applications were rejected?
Ms Zielke : There are no funds, did you say, in 1213?
Senator NASH: Yes.
Ms Zielke : There are funds for the program in 1213 and we are currently assessing a round of applications in relation to the program.
Senator NASH: Can I get you to go back and check the answer to question 117, but not now. How much funding is available?
Ms Zielke : There is $1 million in this financial year for programs.
Senator NASH: Have there been any applications for that million dollars at this point?
Ms Zielke : We have received applications for the round that is currently under assessment. We received around 50 applications in the current round.
Senator NASH: Fantastic.
Mr Mrdak : I think our answer was probably that we have not yet concluded any payments this year, not that there is no money this year.
Senator NASH: Thanks for the clarification. When is that process going to be finalised? When will all of those—
Ms Zielke : We would expect the applications assessment process to be finalised in late March or early April.
Senator NASH: Would you mind providing on notice for me just a list of the applications for that funding and where they are from? Is that possible?
Ms Zielke : Once the round is finalised then those that are successful are actually announced. We can provide you with that list once—
Senator NASH: So it is not public information until it is finalised?
Ms Zielke : Not in the lead-up, no.
Senator NASH: Did you say March or April?
Ms Zielke : Yes.
Senator NASH: In terms of the guidelines, are there any key things that we should be aware of that would result in the rejection of an application?
Ms Zielke : Generally the eligibility criteria are outlined in the guidelines.
Senator NASH: I will go and have a look, but just the key things I have asked you—
Ms Zielke : There is nothing there but generally they are quite clear—they are black-and-white answers to be responded to and eligibility is quite clear under the program. Are you looking for key points of the eligibility?
Senator NASH: No, I am looking for key reasons why you might reject one.
Ms Zielke : For example, if they come forward with information without their state recommendation attached to their application form or something like that it might mean they are ineligible. But generally they are black-and-white answers, so companies will not actually apply unless they are quite clear beforehand.
Senator NASH: That they are going to get it. All right. Just finally I think I asked this last time and I will just follow up. Is there funding in place for companies that want to retrofit a bus but there might be a significant cost involved in getting it to the place of retrofit? A lot of these regional towns will not actually have somewhere that can do it. Is that a consideration for the department? Also, are there preferred providers of the retrofitting, if you like, or can they go anywhere?
Mr James : They can put a case as part of their application if they have an issue. But it hasn't—
Senator NASH: So they can come to you if there is a funding issue for them? They might at least be able to come to you—
Mr James : It has not come up to date in the program. Your second question—
Senator NASH: About providers.
Mr James : They just have to be someone that is approved to do that sort of work.
Senator NASH: Approved by whom—the department or by the body or whatever it is?
Mr James : I would have to check, but I think that it is at the state level.
Senator NASH: Could you take that on notice for me?
Mr James : Yes.
Senator COLBECK: At a previous estimates we had a discussion about the department doing some costings around Tasmanian freight equalisation scheme and doing some costings to extend the scheme to all freight except for bulk goods. Can you tell me where that work is that, please?
Mr James : I am not aware of that particular piece of work. At this stage we are not actually doing specific costings on that at the moment.
Mr Mrdak : Can I be clear. We had a discussion around extension of the scheme to a broader range of categories or there had been suggestions around —
Senator COLBECK: There was discussion around exports and we put that to bed. The department was doing no costings around extending the scheme to include exports. The conversation went further than that and it was that there were some costings being done to extend the scheme to all goods except for bulk freight, which is a conversation that is being had more broadly in Tasmania around the scheme and the scope of the scheme at this point in time. It was either during the hearing or in response to a question on notice and I cannot recall which. Unfortunately I do not have the documents with me, but I am certain that there was discussion around doing some calculations about the cost of extending the scheme to include all goods. I am not making any allegations about consideration of doing it, but the clear understanding that I had is that there were some costings being done around what it would cost if that were to occur.
Mr Mrdak : Yes, that is right. We had done some preliminary work in relation to looking at the categories—if there was an expansion of categories. I do not have that with me. Can I come back to you on that if that is all right?
Senator COLBECK: I am happy to take that on notice, but I am interested in the outcomes of that process.
Mr Mrdak : It was very preliminary in-house work, but I will come back to you with the details of that, Senator.
Senator COLBECK: I would appreciate that. We have also had some conversations about where the rate for the TEFS sits in respect of a parameter review and how it relates to the actual cost of moving cargo backwards and forwards across Bass Strait. Probably at the hearing before last the indication was that, if there were to be another parameter review done, there is a possibility that the rate that is being paid could come down because we are getting paid over the rate. Can you get us an assessment of where we are in comparison with the actual costs of what the scheme is designed to do versus what is being paid? Is there any current information on that?
Mr Mrdak : We can certainly give you what the current expenditure is as per what is in the forward estimates.
Senator COLBECK: I am not interested in the expectation of the scheme. I am talking about the individual rate that might have paid versus what the actual cost of what it is looking to support is.
Ms O'Connell : The bureau is about to commence another program review and I think that would then set that as a new basis for that comparison.
Mr Mrdak : But your understanding is correct in the sense that previous parameter reviews have demonstrated that if they were applied there would be a potential reduction in the payments and successive governments have decided to retain levels where they are.
Mr James : The last parameter review was published in October 2011.
Senator COLBECK: Okay, so if I went to that documentation it would give me all that information?
Mr James : Correct.
Senator COLBECK: That is great. It is a great place to look for that. Is the government currently considering any proposals for the support of an export shipping service, particularly out of Bell Bay?
Mr Mrdak : There are proposals that have been discussed publicly. I think it is fair to say that we are aware of them and the government is looking at them generally. Beyond that I really could not give you much more of an indication. Certainly discussion is taking place I think is probably the best way I could put it.
Senator COLBECK: So there are no specific proposals on front of government at the moment?
Mr Mrdak : Not that I am aware of.
Senator GALLACHER: Mr Mrdak, can you for my education just briefly explain the Tasmanian freight equalisation scheme? The second question is have there been any cuts to that scheme?
Mr Mrdak : It is one of the more complex programs you will strike, I suppose, but essentially what it provides is based on the relative cost of shipping containers and also a land transport component. It is essentially a reimbursement of the proportion of shipping costs available and essentially provides a mechanism to effectively reduce the cost of shipping certain goods across Bass Strait.
Senator GALLACHER: You get invoices, do you? People will bill you?
Mr Mrdak : People make a claim. It is handled by the Department of Human Services—Centrelink—on our behalf. It has been established for some time. There has certainly been no reduction in resourcing though. It is a demand-driven scheme and the volume of goods moving across the strait determines the expenditure. There has certainly been no reduction in the forward estimates of the program.
Senator GALLACHER: So once something is shipped an invoice is sent to you basically?
Mr Mrdak : There is a claim made.
Senator THORP: Is it equally lucrative, if you like, for people who are doing their shipping in both southbound and northbound freight?
Mr Mrdak : The guidelines provide certain categories that are eligible for assistance. It varies depending on the product and also the journey, whether it is north or south. So there are variations and I would be happy to give you a copy of the guidelines to give you an illustration of how that operates.
Senator THORP: It is just that it has been put to me that the way the freight equalisation scheme works does not really help exporters as much it could because of the northbound issue.
Ms Zielke : The issue there is that we do not pay for exports. We pay for goods being moved to the mainland. That is what the equalisation scheme is there for.
Senator GALLACHER: So claims by the leader of the opposition that there has been a cut are unequivocally wrong?
Mr Mrdak : There has been no reduction in the estimates for that program at all.
Senator WHISH-WILSON: Can I get on notice a list of the historical expenditures that the government has put into the freight equalisation scheme since it started?
Ms Zielke : I can provide you with that now.
Mr Mrdak : We can give you some years. It goes back to the mid-70s, but we can give you some details now.
Senator WHISH-WILSON: Thank you.
Ms Zielke : Just quickly, 2008-09, $109.4 million; 2009-10, $98.3 million; 2010-11, $98.54 million; 2011-12, $93.23 million.
Senator WHISH-WILSON: If I could get the other time series since it started that would be fantastic as well. There was an eclectic bunch of characters here last week doing some lobbying that call themselves the National Sea Highway Coalition. I do not know if they met the Minister. They have been coming in one form or another for 20 years. Are you familiar with the concept of what they are proposing?
Mr Mrdak : Yes, although some of the detail of what they are seeking is very unclear. I met with them last year and I think Mr James met with them last week when they were here in Canberra for a very detailed discussion. We are aware of their position, I suppose. The issue I think is one of fiscal capacity to actually increase the support and also the effectiveness of what they are seeking. I suppose we do query whether an expansion of the scheme in the way they are suggesting would actually bring the benefit to Tasmania that they are suggesting. But in the absence of further detail I think it is fair to say that we are unable to do much more qualitative testing of their proposal because it is a little clear unclear what they are seeking.
Mr James : That is correct.
Senator WHISH-WILSON: If they put up something more substantial that could be costed, that could be then taken into consideration?
Mr Mrdak : That is right. It has been difficult for some time to understand the concept—and we have had long discussions with them. I suppose it has been difficult for us to cost a firm proposal.
Mr James : I certainly confirmed in a discussion with Mr Brohier yesterday that somewhat more detail would be useful. I got the impression that they were having a look at that.
CHAIR: I have one very quick question on the light rail—the project that has been discussed in Tasmania. Has the department had any correspondence or consultation with the Tasmanian government over time on this project?
Mr Mrdak : Not that we are aware of. It has not been put forward by the Tasmanian government as one of their Nation Building 2 projects. So while we are aware of the studies that have been done, it has not at this point been brought forward as a Tasmanian government project.
CHAIR: Okay, because Infrastructure Australia earlier said that it is in the mix for future funding.
Mr Mrdak : It is certainly part of the discussions, but it has not been put forward as a firm funding proposal.
CHAIR: Have you had a briefing from the Tasmanian government at all on the project?
Mr Mrdak : No, I think Infrastructure Australia is handling that.
CHAIR: That would have gone to Infrastructure Australia. Okay.
Mr Mrdak : Subject to those discussions, it may well come forward as a more firm proposal.
Senator RHIANNON: I am interested in how you advise the department about investing in public transport considering that investment favours road projects over rail.
Mr Mrdak : I think that is one for myself in Nation Building rather than the Surface Transport area of the department. In essence I think as you commented earlier we have seen a significant lift in investment in public transport by the federal government over the last few years. We do that principally through looking at benefit cost analysis in terms of projects. I would not necessarily say that favours road over rail.
Senator RHIANNON: But wouldn't you agree that your figures show that, when you actually add them up, there is still an imbalance? I think it is running at about four to one.
Mr Mrdak : There has certainly been a significant lift in public sector expenditure on urban passenger transport and particularly rail. When the government announced Nation Building 2 last year in the budget you would have seen the category that has been created for funding around movement of passengers. There is a much stronger focus in that area and I would suggest that as the government develops its Nation Building 2 program you will see even further investments in heavy and light rail.
Senator RHIANNON: Can you take it on notice whether that figure is correct between road and rail projects? Maybe take this on notice too because the chair wants to move us on: which divisions of the department look after developing public transport and sustainable transport work and how many staff work on this task? Can you take that on notice?
Mr Mrdak : It covers a range of divisions—our major cities unit, our Nation Building unit and aspects particularly of our policy and research area. It works across our divisions. I will take that on notice.
Senator RHIANNON: I am after that comparison between public transport and roads.
Senator IAN MACDONALD: I will put my question on notice except for the first part of it. In response to a question at the last estimates, we were told that there are currently 11,150 Australian-flagged vessels. Is that correct?
Ms Zielke : No, that is not correct. It is not Australian flagged vessels; it is a figure related to another question. Can I come back to you on that and check that for you?
Senator IAN MACDONALD: I have a series of questions that follow on from that, although it did not seem to be correct to me.
Mr Mrdak : It may be a figure for vessels operating commercially in Australia rather than Australian flagged as such.
Senator IAN MACDONALD: Anyway, we can clarify that confusion. There are some other questions but I will put them on notice in view of the time.