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Rural and Regional Affairs and Transport Legislation Committee
23/05/2012
Estimates
INFRASTRUCTURE AND TRANSPORT PORTFOLIO
Department of Infrastructure and Transport

Department of Infrastructure and Transport

CHAIR: I welcome officers from Nation Building—Infrastructure Investment.

Senator IAN MACDONALD: My colleagues and I have a number of questions. I will try and be brief and run through a few of them. Mr Mrdak, could we have an update on where we are with the Yeppen Crossing, near Rockhampton?

Mr Mrdak : Certainly. I will get my officer to take you through where that is at.

Mr Jaggers : I understand we have received the study, the report, from the Queensland government. That is being considered by government at the moment.

Senator IAN MACDONALD: When did you get that report?

Mr Pittar : We received that report in February, I believe.

Senator IAN MACDONALD: It is still under consideration?

Mr Pittar : It is currently being considered.

Senator IAN MACDONALD: By the department, by the minister or both? Have you assessed it and made a recommendation to the minister or made a brief to the minister? I am not asking you, of course, what is in the brief.

Mr Pittar : I believe we have prepared a brief to the minister.

Senator IAN MACDONALD: So you are waiting for some response from the minister. I do not want to put any pressure on anyone in the very temporary absence of the minister. Is it appropriate to ask when you sent the brief to the minister?

Mr Mrdak : I will take that on notice and get you an answer.

Senator IAN MACDONALD: Mr Mrdak, perhaps on notice as well, could you let me know when there might be a response to the Yeppen flood plain study. Can anyone tell me the extent of the consultation in relation to that study?

Mr Pittar : In broad terms, my understanding is that the consultants that were engaged to undertake that study did have as part of their process at least a couple of occasions where they were able to or did engage in consultations with the community. I do not have any more detail than that. There certainly was a level of consultation with the community.

Senator IAN MACDONALD: I do have some other questions but they tend to get a little bit small 'p' political. I might come back to that, if I could. Is the Curra to Sarina Bruce Highway flood study part of the Yeppen flood plain study, or is the Yeppen flood plain study part of that? Is there other work being done in that area in relation to flooding issues on the Bruce Highway, besides the Yeppen area?

Mr Pittar : There was another study; that was north of Sarina. The Yeppen flood plain study was the primary one in between Curra and Sarina. There were some further studies to the north of Sarina.

Senator IAN MACDONALD: With the Queensland road recovery program, following the cyclone and the floods, can you tell me how much has been spent to date and what projects have been approved or conducted as joint ventures with the state government?

Mr Pittar : The responsibility for expenditure in relation to the flood recovery is with the department of regional Australia. My understanding is that the Australian government has made a capped contribution to that of $5.1 billion. My understanding is that approved applications overall—and that is approved by the Queensland Reconstruction Authority—are in the order of $2.8 billion.

Senator IAN MACDONALD: Are you saying that the funding for that is through the department of regional Australia—the $5.1 billion? Who has responsibility for that?

Mr Pittar : The department of regional Australia is responsible. It has within it a flood reconstruction task force that has been responsible for managing the Australian government's response and contribution to the reconstruction effort.

Senator IAN MACDONALD: This is a question that might be better addressed to Treasury. Did your department receive any of the flood levy moneys in this budget?

Mr Mrdak : No.

Senator IAN MACDONALD: I asked you on notice about the Hann Highway, question 63. Thank you for the answer. In the answer you said that the minister had met with the Hann Highway Action Group. The Hann Highway goes from Mount Garnet through to Hughenden. The answer said that the minister met with them in December 2009. I asked whether the department had had any submission from either the Flinders Shire Council that is based in Hughenden or the Tablelands Regional Council based in the Atherton Tablelands, seeking funding towards the Hann Highway. Your answer was that you had no record of that to date. I am not quite sure how old your answer is. Has there been any submission received by your department?

Mr Pittar : That information in the response is still up to date.

Senator IAN MACDONALD: You do not think you have received anything?

Mr Pittar : We do not believe so, no.

Ms O'Connell : There might have been a submission to Infrastructure Australia as part of their process, but we are not directly aware of that.

Senator IAN MACDONALD: Perhaps it has gone to the department of regional Australia. Also, last time I asked you about the Outback Way. In question No. 62 you said that some money had gone to remote roads in Northern Australia—$52 million for the upgrading of Northern Territory roads and $30 million for the upgrading in Cape York and north-west Queensland, in a fifty-fifty partnership. I am not quite sure when that answer came in, but can you tell me what is happening with both of those allocations of money?

Mr Pittar : They form part of the current Nation Building Program. With the community, beef and mining roads in the Northern Territory, the Australian government is making progress payments to the Northern Territory government on the basis of work completed on those roads, and that is the same situation with the remote community access roads on Cape York in Queensland.

Senator IAN MACDONALD: I see that was for the program from 2008-09 through to 2013-14. Can you give me on notice a schematic or a dot point update on how much of the $52 million and $30 million respectively has been spent, where it has been spent and how far from completion are the works for which those allocations were made?

Mr Jaggers : We can take that on notice.

Senator IAN MACDONALD: Is that easy enough to get?

Mr Jaggers : I believe we can provide that, yes.

Mr Pittar : I can provide a little bit of an update on that now. I might start with the Northern Territory community, beef and mining roads package. The expenditure on that program in 2011-12 is expected to be around $37 million. Expenditure for 2012-13, the forthcoming financial year, is yet to be finalised. The department is currently considering a number of proposals from the Northern Territory government for funding for particular projects under that overall funding envelope. We would expect those to be processed shortly. Perhaps at the next estimates we will be able to give you a firmer figure for the expected expenditure in 2012-13.

Senator IAN MACDONALD: How much is left in that fund of the $52 million? You say there is $37 million in the current financial year and some for next year.

Mr Pittar : I should also mention that in the budget this year some additional funding was provided for roads in the Northern Territory. The figure of $37 million includes some of the funding from that $50 million. The figure has actually increased to take account of additional funding in this year's budget.

Senator IAN MACDONALD: The $37 million to be spent in 2011-12 would not have been in this year's budget, would it? That would be spent next year?

Mr Pittar : We expect this financial year to expend that additional funding that was announced in the budget.

Senator IAN MACDONALD: Okay, so there will not be any expenditure next year.

Mr Pittar : We anticipate expenditure next year. We have projects in front of us that will draw down further on that funding.

Senator IAN MACDONALD: There was $52 million that I suspect came out in the 2008-09 budget. Is that where the $52 million initially came from—$52 million over the forward years?

Mr Pittar : That would be correct, with additional funding, as I say, having been provided in this federal budget.

Senator IAN MACDONALD: On notice, can you give me details of how much of the $52 million has been spent to date, when and where? Then I am interested in what the additional was in this year's budget.

Mr Pittar : For the Northern Territory as a whole it was $50 million. The precise carve-up of where that funding will go is currently being considered.

Senator IAN MACDONALD: It was mentioned in this year's budget that it is to be spent before 30 June 2012?

Mr Pittar : Correct.

Senator IAN MACDONALD: I would be interested in details of the additional $50 million that is going to be spent between 8 May and 30 June this year.

Mr Pittar : We can take that on notice.

Senator IAN MACDONALD: I would be very interested in that detail. Similarly, with the $30 million towards the upgrade of the remote community access roads in Cape York, can you tell me anything about that now?

Mr Pittar : I do not think I have sufficient detail with me on that.

Senator IAN MACDONALD: I would be very happy for you to provide that on notice. Yours is one of the departments that gets back more quickly with answers. I look forward to receiving that before 30 June, if it is not too precious of me to ask for that.

The minister is with us, so I might return to some of the questions I started asking on the Yeppen study. We have asked when the advice was given by the department to the minister. That has been taken on notice. I think we asked for some sort of advice on the consultation process. Is that correct? I am trying to recapitulate for the minister's benefit.

Mr Mrdak : That is correct.

Senator IAN MACDONALD: When would you anticipate that the minister might be dealing with that report?

Mr Mrdak : I cannot give you a time frame at this stage. The new Queensland government has indicated its intention to look at a number of projects in light of coming to office. We have to give it an opportunity to look at whether it wishes to provide a revised approach. The best I can do is to take it on notice. I know the minister generally turns these things around relatively quickly, but I will endeavour to find out as soon as possible when he is able to deal with it.

Senator IAN MACDONALD: Was there any commitment made by the federal government towards anything beyond the study?

Mr Pittar : Not in terms of construction after the study. There is other work occurring in that Yeppen area: the connection of the Capricorn and Bruce highways. There is construction commencing there. As you would understand, that work is considered as part of the study, but in terms of commitments beyond what we currently have in the Nation Building Program for the Bruce and Capricorn intersection, which uses that Yeppen roundabout, there is no further funding commitment that has been given to construct outcomes from that Yeppen flood plain study.

Senator IAN MACDONALD: The Commonwealth funded that study, as I understand it.

Mr Pittar : That is correct.

Senator IAN MACDONALD: Did the Queensland government put anything into that?

Mr Pittar : I think it was fully Australian government funded to the tune of $5 million.

Senator IAN MACDONALD: Apart from the study there has been no money allocated to the Yeppen crossing, if I could call it that, at this stage?

Mr Pittar : Not at this stage. As I mentioned earlier, there is funding commitment to an $85 million project that uses that Yeppen roundabout and the bridges from the Yeppen roundabout into Rockhampton itself.

Senator IAN MACDONALD: That is an $85 million project that is currently underway?

Mr Pittar : Correct. It is just starting.

Senator IAN MACDONALD: That $85 million has been committed?

Mr Pittar : Correct.

Senator IAN MACDONALD: There is a work program out for that?

Mr Pittar : That is correct. The Australian government's contribution to that is $68 million.

Senator IAN MACDONALD: And the rest is by the state government?

Mr Pittar : The rest is by the Queensland government.

Senator IAN MACDONALD: Is there a schedule of works—a schedule of when things are to commence and to be completed?

Mr Pittar : The work is basically in the process of starting now. Construction is expected to end in early 2014.

Senator IAN MACDONALD: Again, is there a timetable of works for that that you could get me on notice?

Mr Pittar : I would expect so. I imagine it would also be on the Queensland Department of Transport and Main Roads website. They have information on projects as well. We can get the information on notice.

Senator IAN MACDONALD: If you would not mind ascertaining that. If it is on a website, if you could give me the reference then that would be sufficient. Was I waiting for the minister to come back for this? No. You said the Queensland recovery program is being spent through the department of regional Australia. Finally from me, is there any specific funding for what is referred to as the Outback Way, the road from Winton in Queensland through to Laverton in Western Australia across the centre? You indicated there has been money made available to the Northern Territory and, as part of that $52 million, you told me last time that $8 million went for works on the Plenty Highway, which is part of the Outback Way. Is there any specific funding in this year's budget for the Outback Way as such?

Mr Jaggers : There is funding in this financial year's budget—a final $580,000 expenditure this financial year—but there is no funding in the 2012-13 budget.

Senator IAN MACDONALD: That $580,000 is the end of the $10 million allocated in the time of the previous government, as I recall—prior to 30 June 2007. Is that correct?

Mr Jaggers : Yes. That is the completion of the current program of work.

Senator IAN MACDONALD: There is no new funding for the Outback Way as such in the current budget?

Mr Jaggers : That is correct.

Senator IAN MACDONALD: Some of that additional money which you have told me is going to the Northern Territory to be spent by 30 June this year may well include some of the roads that form part of the Outback Way within the Northern Territory?

Mr Pittar : I cannot recall that detail.

Senator IAN MACDONALD: You are going to get me that on notice?

Mr Pittar : Yes.

Senator IAN MACDONALD: That is all I have.

Senator NASH: I want to go back to the Moorebank intermodal. Mr Mrdak, I think I might have stopped you half-stream before but I was conscious of other colleagues. Is there something you wanted to finish off?

Mr Mrdak : No, I think I largely covered it. I was outlining the objective which this portfolio has, which was to try and get a site. As Mr Deegan indicated—and it has been on the public record—Moorebank is probably the last opportunity for Sydney to have a well-located, large intermodal facility. Hence what we have been looking at for several years is a site that is large enough to accommodate both port shuttle and interstate trains in the long run, as well as providing a site large enough to be able to accommodate warehousing and intermodal freight transfer facilities. For that reason, the Moorebank School of Military Engineering site provides the ability through that 220 hectare site to do that.

The private sector proposal by Qube Logistics is only for a port shuttle servicing the port of Botany and then for distribution throughout the Sydney region. It is not designed, nor is it intended to be able, to cater for larger interstate trains or a larger freight break-up and build-up facility.

Senator NASH: I was of the understanding—and correct me if I am wrong—that in stage 1 of their private sector proposal they said they were happy to provide space for the interstate. That seems to be directly contradictory to what you are saying.

Mr Mrdak : Their first stage is looking at a 10-hectare small portion to commence operations, recognising that it will take Defence some time to vacate the full site, if Defence exercises its option on the lease. But I think from our discussion—

Senator NASH: Defence have not exercised their option on the lease to extend, have they?

Mr Mrdak : They have advised their intention to exercise. My understanding is that they are yet to exercise.

Ms O'Connell : My understanding is that they do not need to officially exercise until 2013. Some time in 2013 is when they will—

Senator NASH: So they have not.

Mr Mrdak : All I was saying is that the Qube proposal is for a port shuttle. It would have some limited capacity to do interstate trains, but I think the largest operation would be about a 900-metre train on the site, which is not the optimum, from the advice we have from the rail industry.

Senator NASH: But it would work?

Mr Mrdak : Not for an interstate build-up and breakdown. It is relatively small. Even if the whole 80 hectares came into operation, it would be a relatively small site in terms of its ability to handle larger train sets.

Senator NASH: What is the minimum hectare amount, in your view, that you would need to handle an interstate train?

Mr Mrdak : Optimally you would like to have the capacity to have a 1,500 metre train.

Senator NASH: That is optimum, but what is manageable?

Mr Mrdak : Certainly, if you were going to have a facility you would like to be able to do that. One of the drawbacks of Chullora and Enfield is its inability to build up and break down large train sets. You could cope with a 900 metre train but it is less than optimal.

Senator NASH: It is quite complex; I am trying to get my head around this. What is the time frame by which there is going to be capacity needed for interstate? There has obviously been some work done on that?

Mr Mrdak : The business case that was prepared for the Moorebank project office indicates that by the mid to late 2020s the business case is certainly there for a large interstate facility. The consideration that the Australian government has had is that the opportunity is there now to bring the Moorebank site into the market for development. While the business case may not yet support a large interstate facility, I suppose the opportunity did not want to be lost at this stage to be able to bring a facility which can do both—

Senator NASH: Which could potentially—

Mr Mrdak : So that it is available when it required. There is no doubt that Enfield and Chullora are capping out. With the ability to do the interstate freight business, as you know, one of the great issues in the next decade in rail freight in the east coast is terminals. There is work underway in Melbourne. Moorebank is the critical part of the Sydney network and the next stage is to develop sufficiently large intermodal rail facilities in Brisbane which will enable the east coast freight network to operate.

Senator NASH: Obviously, with respect to the priorities, and with all the things that Mr Deegan was running through before, the local intrastate type things, this is something that, as you said from the study—I am trying to get my head around this—will be needed by the late 2020s, but you are looking at it in terms of being able to utilise that capacity down the track with the decisions that you are making now?

Mr Mrdak : The decision to bring the School of Military Engineering site into the market means we have that space available and it is protected. Ultimately, from our portfolio's perspective, we would like to see that total precinct—both the Qube area and the Moorebank School of Military Engineering—become available and protected and planned for a future intermodal freight zone.

Senator NASH: It is obviously not the priority.

Mr Mrdak : The threshold decision, which has not been well canvassed publicly, is that, until a decision is taken on the School of Military Engineering's future on that site, that has implications for both sides of Moorebank Avenue. Obviously, while you have an operating defence training facility there, that does impede the ability of development on both sides of the road. The crucial decision taken by the government and announced in the budget is that the School of Military Engineering will be relocated, which will make available that precinct for other development.

Senator NASH: With that relocation—and, as I understand it, the funding is $559 million, give or take, over the four years for the relocation of the Department of Defence—Defence is going to contribute $330-odd million towards the redevelopment of Holsworthy Barracks?

Mr Mrdak : That is correct.

Senator NASH: That is actually a redirection of funding—and correct me if I am wrong, as I am trying to get my head around all of this—of around $580 million from the Nation Building Program. Is that right?

Mr Mrdak : It is of that order. I will get the exact figures for you. It involves money that had been committed to the Moorebank—

Senator NASH: I will come back to that. I am trying to take this one step at a time, if that is okay. So that is that part of it, and also deferring $158 million for the Western Highway in Victoria from 2012-13, 2013-14 and 2014-15. Is that correct?

Mr Mrdak : At the request of the Victorian government, yes.

Senator NASH: Why did the Victorian government request the delay in the funding?

Mr Mrdak : It reflects that the milestone has been reached on the project.

Senator NASH: They are not at the right spot yet to actually utilise the funding you were going to give them so they asked you to push it out?

Mr Mrdak : That is right

Senator NASH: Does that happen very often?

Mr Mrdak : Yes.

Mr Jaggers : There have been delays in that project. There have been a number of delays in the delivery of the project, primarily due to the environmental clearances that are required, and that causes a delay. The Victorian government have requested the money to be pushed back.

Senator NASH: Sorry, I should not be flippant about that. The $587 million-odd was from the Nation Building Program. I think some of that was also out of the contingency reserve; is that correct? Again, correct me if I am wrong. I am just trying to piece this all together.

Mr Jaggers : That is correct. It is from within the Nation Building Program—a contingency for nation building.

Senator NASH: It is about $587 million. How much of that was from the contingency reserve and how much was not?

Mr Jaggers : I do not know that I have that figure in front of me. I might have to come back to you on that.

Senator NASH: Maybe someone somewhere down the back has got it. Otherwise, if you can provide it.

Senator IAN MACDONALD: Senator, are you finished?

Senator NASH: Not really. I can, if you want me to.

Senator IAN MACDONALD: I am just about to go. Mr Mrdak, I understand I verballed you before when I praised you for getting your answers to questions on notice back better than anyone else. I understand the contrary is the case.

Mr Mrdak : That is a bit unfair.

Senator IAN MACDONALD: I just wanted to correct the record and take my congratulations back.

Mr Mrdak : I was glowing in your praise.

Senator NASH: Mr Mrdak was thinking everyone else had fallen off the pace.

Mr Mrdak : I did.

Senator IAN MACDONALD: Fortunately that came up in the first session today and apparently we missed it. Take back my congratulations and instead take a black mark. And do not do it again!

Senator Kim Carr: A lot of the questions are back, are they not?

Senator IAN MACDONALD: They are back but only just a couple of days ago.

Senator NASH: We forever live in hope that this department will improve their boomerang turn-around.

Mr Mrdak : Again, it is an area where the department is efficient.

Senator NASH: Yes, point taken.

Senator IAN MACDONALD: I do not want to take away from the pleasantness of this exchange, but I am aware that when there are delays in answers coming to the committee it is not always within the department's jurisdiction. Do not let it happen again! Thank you, Senator Nash. I wanted to correct the record.

Senator NASH: I am very glad you did; thank you. So is the department going to take on notice for me the break-up of those figures?

Mr Mrdak : We can give those to you today.

Ms O'Connell : There was some $230 million already allocated to Moorebank; $158 million from the changed profile for the Western Highway; and the remaining figure was from the Nation Building contingency reserve, which is $221 million.

Senator NASH: The current Nation Building Program, how much of that is still in the contingency reserve?

Mr Mrdak : The government is yet to announce the funding envelope for Nation Building 2. That is why the rest of it is in the contingency reserve.

Senator NASH: The money that is going to the Moorebank site itself, the sum total of all of those figures we have been discussing, what exactly is the money going to be used for and how much for each purpose? How much is going to the relocation of the Defence facilities? How much is going to the establishment of the GBE you were talking about before, and where is any of the other funding being allocated?

Mr Mrdak : Of that total of $559 million, $332 million will be used for the relocation of Defence, which involves both the removal from the Moorebank School of Military Engineering site and the construction of new facilities at Holsworthy. It will also involve essentially the site preparation and clean-up of the Moorebank site to enable it to be redeveloped.

Senator NASH: Where is the department in terms of costing for the building? This is actually all for the preparation, that funding, nearly a billion dollars just for the preparation?

Mr Mrdak : That is right.

Senator NASH: Where are we at with determining how much this thing is actually going to cost once we spend nearly a billion dollars cleaning up the site?

Mr Mrdak : That is what the GBE will undertake as part of market testing and essentially taking the land out to the market. This is another part of the story that has been missed by some of the commentary. This is not precluding private investment. In fact this is opening the way for private investment into that precinct. The intention is that the GBE will effectively take that site into the market and over the next year or so will essentially go to an open tender process looking for private developers who will basically develop that larger site into an intermodal freight facility. Then the GBE will be the landlord of that private development.

Senator NASH: This is the bit I am struggling with. It looks awfully pink battish or something. I get what you are saying about this whole process. Eventually you are going to privatise it. Across the road there is a block of land where a private entity wants to do that anyway; yet we are going to go through this whole process of clearing up the site that the government wants to clear up, which is going to cost nearly a billion dollars, go through the whole process of the GBE, then obviously ascertain at that point how much it is going to cost to build an intermodal on this site and then we are going to privatise it, when there is a corporate entity across the road who wants to privatise the other side of the road and build the intermodal. The only thing I can see that is in the way of any of this is the interstate capacity for the trains. That just seems crazy.

Mr Mrdak : It is not as simple as that. Remember that the Qube Logistics site is a much smaller site and has a much more limited capacity than would be available on the SME site, the School of Military Engineering site. Also access to that Qube site is very much dependent upon getting access through Defence land. As I said, the critical part of this decision is what happens to the SME, the School of Military Engineering, on that site.

The advantage of bringing the larger parcel in is that we get a much longer term facility which caters for a variety of users and a variety of tasks, which has a much greater capacity into the future. So it is a much more strategic long-term investment. Removing the School of Military Engineering removes a lot of the impediments of rail and road access to both sides of Moorebank Avenue. Moorebank Avenue is not a public road, it is owned by the Department of Defence. And similarly rail access to the Qube Logistics site would have to go across Defence land. So the threshold decision around now opening up the precinct, as I said earlier, has been a critical one.

You are right, it is a relatively expensive process to remove and relocate Defence. Having said that, the business case is such that it would provide a long-term intermodal facility which would not be available if we only had Qube, which is one player in the logistics market, opening their site.

Senator NASH: You have not convinced me. Sorry.

Senator WILLIAMS: Can I have a turn? You have a government building one here and the public sector looking at one there. Have there been any discussions of a joint venture?

Mr Mrdak : Yes. The threshold decision in the budget to move Defence enables us to now start two processes. One is the strategic planning. Ideally we would like to bring the whole precinct into the freight market and make that available. As we discussed earlier, Sydney does not have too many other opportunities to build longer term intermodal freight facilities. There is a process for planning for the whole precinct. Secondly, how do you integrate the two sites to make sure we maximise? We are not going to build two rail lines into that precinct. We want to make sure that the development of that area enables all of the development. It could be the private sector develops both sides of the road.

Senator NASH: Sorry, Senator Williams, are you still going?

Senator WILLIAMS: No, I am finished.

Senator NASH: What you were just saying then is that you will now look to see whether there is any opportunity to do this in partnership with the existing—

Mr Mrdak : We want to look at the whole precinct and where there are opportunities. The Qube Logistics land is one parcel of land in that whole precinct. What we see, working with New South Wales, is that whole precinct being developed for intermodal freight facilities. The threshold issue has always been, for the Qube Logistics area, what is the future of the military base? The government has now clarified that and will provide for the relocation of that military base.

Senator NASH: You might have mentioned this earlier. What is the estimated date for the government proposal to be up and running and have you any understanding of an estimated date for the private sector proposal to be up and running?

Mr Mrdak : Based on the current advice from the Department of Defence, we are looking to have Defence relocated from the 220-hectare SME site by the end of 2014, which would enable private sector investment to have their facility, the intermodal facility, available in 2017. At this stage Defence intends to exercise its option on the lease of the warehouse land, which would mean that it would not be vacated before 2014 and most likely 2018 when they exercise their next five-year option.

Senator NASH: What is the advice that you have been given that said they are going to exercise the option to extend it?

Mr Mrdak : That is the advice Defence has provided to government and to the Qube Logistics people.

Senator NASH: What is the process? Given we have run through all of this, what is the process now for any potential collaboration? As you just said, your preference is to do this as a holistic approach. What happens now in terms of that? The government proposal, the private proposal, what is the process for actually trying to—

Mr Mrdak : The Moorebank Project Office and the department of finance will now start market soundings and market testing—I think they start as early as next week—talking to people in the freight logistics and investment communities about private sector investment. Also at the same time the GBE will be established, which will take over that process once it is up and running. All of that process is now starting, to start the market testing. The GBE will run a market tender process for parties who wish to develop the site.

Senator NASH: You talk about Defence exercising their option or whatever. Is not Defence part of the government? You are talking like Defence are making their own decision. Does not government actually make the decision about what Defence are going to do, what they are going to extend and what options they are going to take?

Mr Mrdak : Those decisions are obviously on the advice of Defence and what are Defence's operation requirements. Defence's advice to this point is that they have an operational need for the logistics centre, which they currently lease on the Qube Logistics' site.

Senator NASH: Just to be clear—that confused me a little—it is actually a government decision at the end of the day to exercise the option, not Defence's. Defence might provide advice saying, 'We need X, Y, Z,' but—

Mr Mrdak : It is a decision by the Department of Defence in terms of their logistic needs. I am not sure where that decision would be taken, but within the Department of Defence they have a budget allocation and a logistics process. They are trying to consolidate logistics facilities across Australia. They will take their decision as to whether they can vacate that site any earlier.

Senator NASH: Absolutely. I understand all that. Of course, at the end of the day the government is the one that has the proposal for this site and it is the government that runs the defence department. Realistically both of those decisions are going to sit with government at the end of the day.

Mr Mrdak : Clearly in terms of the government objectives I have outlined earlier, the SME site provides longer term advantages in terms of its size and its capacity to undertake a range of tasks and its ability to provide for multi users, which we see at this stage preferable to one party developing a smaller site.

Senator NASH: What understanding do you have of the costs involved in the private proposals for them to obviously clear that side of the road to the point where something could be built there?

Mr Mrdak : I do not have a detailed understanding in relation to that. There are costs obviously. Defence would have to construct new logistics warehousing facilities, which they do not have at the moment. If they proceed with their logistics consolidation process they would need to construct new facilities to be able to move off that site and terminate that lease. Additionally there would be costs in relation to the public use infrastructure—rail, road connections and the like—to the site.

Senator NASH: I would imagine the cost of doing that obviously would fall to the private consortium. In terms of clearing the land, just again to get my head around all of this, and getting it prepared for what you want to do with the intermodal, it is going to be $750,000 or $800,000, nearly a billion dollars, for the taxpayers to clear the site you want. Yet I would expect, unless there is advice to the contrary, the cost of clearing that across-the-road private sector land would fall to them?

Mr Mrdak : Except Defence have to have an alternative facility to move to.

Ms O'Connell : The cost for relocating the Defence stores on the other side of the road is a cost to Defence, it is not off budget.

Senator NASH: My understanding, though, was that the private sector proposal actually said they would pay for the roads and the warehouses for Defence.

Mr Mrdak : My understanding is that they have indicated they will be willing to provide funding to clear an initial portion of it—

Ms O'Connell : A small portion.

Mr Mrdak : The first 10 hectares. The full construction of all of the replacement logistic facilities would be a matter for Defence.

Ms O'Connell : That is correct. To remove from the full 80-odd hectare site would be a cost to Defence. For an initial 10-hectare slice, my understanding is that for the private sector proposal the Qube consortia have said they would do that at their cost. But that is not for the full site.

Senator NASH: If it is not for the full site as you understand it, what then would be the rough ballpark figure for the clearing of the rest of that site?

Mr Mrdak : I would need to get that on notice from Defence in terms of that. I do not have those figures with us.

Senator NASH: Given that you understand this completely, obviously, for this side of the road, I thought you might have a ballpark figure for the other side.

Mr Mrdak : Simply, we have looked at it. In terms of the advice to government—Defence has got a logistics consolidation process which has been going on for some time—Defence will reach some decisions shortly on whether they proceed with that. That will obviously need to be funded by Defence.

Ms O'Connell : The government's decision was also subject to an independent review by Greenhill Caliburn, who did consult with the Qube consortia who have the private sector site. They made a recommendation in a report to government to proceed with the School of Military Engineering site, on the basis of all of the information available.

Senator NASH: In terms of the GBE, what is the process for that? How does that get set up? Who runs it, who pulls all that together and who makes the decisions around who runs that and how it is all set up?

Mr Mrdak : It will be handled by the department of finance and the Moorebank Project Office. It will be a government business enterprise established by the department of finance.

Senator NASH: Sorry, you may have answered this before. The cost relating to the GBE, did you say you were going to take that on notice, or was there a cost you put to that?

Mr Mrdak : I do not think at this stage that the costs to the GBE have been identified. There has been some funding provided to the Moorebank Project Office for the ongoing work of market testing, establishing the GBE. The full cost of the GBE has not yet been established.

Senator NASH: If you do not know how much it is going to cost, how do you budget for it?

Ms O'Connell : The purpose of the GBE is to maximise private sector investment. So they will go to market with a view to—

Senator NASH: No, I am talking about the running costs. This thing has to run. It obviously has some costs attached to actually do its job. Sorry, Mr Mrdak, again correct me if I am wrong, you said you were not sure how much that was going to be yet. How do you budget for it if you do not know what it is going to cost to run and set up?

Mr Mrdak : There has been some internal work but the government is yet to finalise its consideration of the costs of the GBE.

Senator NASH: Is that just not in the budget or where does it sit?

Mr Mrdak : It is one that you would have to talk to the department of finance about where it has got to.

Senator NASH: Nice flick. No idea at all about how the funding arrangements for that have been arrived at?

Mr Mrdak : There has been some funding provided to the department of finance for their ongoing role in the Moorebank Project Office. As part of that, they will determine the ultimate costs of the GBE.

Senator NASH: I have others, but I will pass to colleagues and if we have time we can come back.

CHAIR: To give an indication, I have about 15 minutes from Senator Ludlam, 15 minutes from Senator Edwards. Senator Williams, how long do you need?

Senator WILLIAMS: Ten or 15 minutes.

CHAIR: Let us go to Senator Williams.

Senator WILLIAMS: Senator Joyce raised this earlier today. You said the budget provides $140 million over seven years for rest areas and technology for the transport industry, for the truckies. Of that, $10 million will be spent next year and then $30 million, averaging out at $20 million. With over $140 million in the budget, how much of that will be quarantined for rest stops only? Have you any idea?

Ms O'Connell : It is a full heavy vehicle safety and productivity package. It is a combination of rest stops, safety and productivity measures.

Mr Mrdak : We have not identified exactly how much. That will depend on some proposals brought forward. As Mr Jaggers said this morning, we will have a round of consultation with the heavy vehicle industry and the states and territories about what they bring forward. I do not know that we have a split of how much went out of the last $70 million into rest stops specifically. We can certainly—

Senator WILLIAMS: About $17 million a year, I think.

Mr Mrdak : We can find out for you exactly what the splits were.

Senator WILLIAMS: Is that money evenly distributed throughout the states and territories?

Mr Mrdak : It very much depends on the projects that are brought forward by jurisdictions. I will ask Mr Foulds to give you an outline of how it has operated in the past.

Mr Foulds : If you want to go through the contributions for the round one projects, I can say that in all jurisdictions there were 19 new rest areas, upgrading of 44 existing rest areas, 10 parking and decoupling bays, upgrading of 27 existing parking and decoupling bays and some strengthening works, which is about h/L bridge strengthening, to allow heavy vehicles. That was in round one. In round two, there were 11 new rest areas, upgrade of 17 existing rest areas, one new parking decoupling bay, that was the large one in Victoria; upgrading of seven existing parking and decoupling bays and nine bridge strengthening works. This is across all jurisdictions.

Senator WILLIAMS: Given the increase in the road user charge for our transport industry—I think it is 6c a litre over the last four years—with the eight billion litres the truckies use, that is $480 million extra. We were getting about $17 million for truck stops. I do not think we are getting much more. I know they are desperately short of truck stops in many areas. One of the common complaints of the truckies is the stringent work diaries to abide by. If they cannot pull over anywhere, then they are in trouble.

Mr Mrdak : That is what the government has recognised in continuing this program. The first two rounds were very successful. They provided important infrastructure. This is what the continuation of this for the next seven years is designed to do.

Senator WILLIAMS: As I said, it is an extra $480 million a year that the truckies pay now from four or five years ago. When they get hit with that extra $520 million come 1 July 2014 with a carbon tax, that will be an extra $1 billion a year fuel tax basically on the truckies. Do you know whether any of that carbon tax money is going to go into infrastructure or is that all on carbon reduction schemes?

Mr Mrdak : I do not think there is any more detail available on that at this stage, beyond what has been announced to date on the carbon scheme.

CHAIR: I am left speechless, Senator Williams, by your undying support for the Australian transport industry. It is a shame you were not as supportive when we put through the road safety legislation. I will not tell them that you did not vote for it.

Senator WILLIAMS: Can you confirm that there was no new money in the budget for the Muswellbrook bypass in New South Wales?

Mr Foulds : There is no federal money for the Muswellbrook bypass.

Senator WILLIAMS: Do you know where this project is up to? Is there any planning or anything in place?

Mr Foulds : The project has been planned to a certain stage and has been finalised at that point because of a cost escalation. This was some four years ago when it was halted at that time. There has been no decision to proceed with it since that time.

Senator WILLIAMS: There has been a couple of million of dollars spent on planning over time, though, has there not?

Mr Foulds : Over time, but not in the last four years.

Senator WILLIAMS: Did the Commonwealth contribute any of that money, that $2 million for planning, do you know?

Mr Foulds : I would have to take that specific question on notice.

Senator WILLIAMS: That would be good if you could, please. Do you know what the estimated total cost of the construction of the Muswellbrook bypass is? This is something that has been pushed for 30 years.

Mr Foulds : I do not have that detail with me. I would have to—

Senator WILLIAMS: Would you be able to find that out?

Mr Foulds : Yes, I would.

Senator WILLIAMS: That would be good

Mr Foulds : That would be the most recent strategic estimate at the time.

Senator WILLIAMS: I was talking to the Muswellbrook mayor last Thursday. He showed me a map of it and so on and they are very keen on it. There is nothing in the forward estimates for the bypass for Muswellbrook?

Mr Foulds : No, there is not.

Senator WILLIAMS: There is nothing planned for the next four years.

Mr Foulds : There is no current federal funding contribution.

Senator WILLIAMS: There is no time frame for starting, let alone completion. With regard to the Scone level crossing—I have raised this before as far as a railway crossing goes—can you confirm that there was no money in the budget for the Scone level crossing?

Mr Foulds : There was no money in this budget for that. The $1.4 million was paid out to carry out the study and that study is ongoing. There has been an options workshop. That will go to public comment in May-June this year and then there will be further assessment and value management workshops to arrive at a preferred option for the solution, which will include robust cost estimates. That will be expected towards September-October.

Senator WILLIAMS: You would expect a completion of that summary, the $1.4 million study, by the end of this year, would you?

Mr Foulds : Yes.

Senator WILLIAMS: Who was conducting the study?

Mr Foulds : If you give me a moment.

Mr Jaggers : While Mr Foulds looks at that, can I come back to your question about the planning for the Muswellbrook bypass. There was a federal contribution of $1.93 million for that study. That was 100 per cent Australian government funded.

Mr Foulds : The study is being conducted under the aegis of Roads and Maritime Services by AeCom Australia and it was awarded in August 2011.

Senator WILLIAMS: We have no indicated total cost as yet. We will have to watch that one. I take you now to the $3.56 billion committed to complete the duplication of the Pacific Highway. I note that the forward estimates only allocate $2.66 billion to the project. Will the remaining $900 million be allocated beyond the forward estimates?

Mr Jaggers : Should the New South Wales government match the funding, it would be allocated beyond the forward estimates.

Senator WILLIAMS: It will be once it is matched by New South Wales? Is it correct that the entire amount is conditional on the New South Wales government also committing the $3.56 billion to upgrade over the same period?

Mr Jaggers : Yes.

Senator WILLIAMS: So the whole project is conditional on New South Wales coming up with $3.56 million—

Mr Mrdak : The $3.56 additional funding is conditional on New South Wales matching.

Senator WILLIAMS: If the New South Wales government refuses or is unable to match the funding, then it will not be spent on the Pacific Highway; is that correct?

Mr Mrdak : It is a decision for government. At this stage the government's position is that it will only provide funding that is matched by New South Wales.

Ms O'Connell : Where it is matched, the funding will be provided. It is over the period 2013-14 to 2016-17.

Senator WILLIAMS: I note in an answer to a question on notice from the last estimates hearing you advised that not a single project on the Pacific Highway was funded under an 80-20 funding split. I want to refer you to the following projects which were funded at around that level: Urunga duplication, $60 million project, Commonwealth contribution $54 million, a 90-10 split; Bulahdelah bypass, $315 million project, Commonwealth contribution $303 million, 96-4 split; Ballina bypass, $640 million project, Commonwealth contribution $450 million, 70-30 split; Devil's Pulpit upgrade, $77 million project, Commonwealth contribution $62 million, 80-20 split. Given that these projects were funded at around that level, I will ask you to take on notice the funding splits of all of the sections of the Pacific Highway where the Commonwealth contribution for the proposed project exceeded 50 per cent of the total project. If you could you take on notice any funding of the Pacific Highway where the Commonwealth contribution was more than 50 per cent, I would appreciate it.

Senator NASH: Could I ask on that, given the figures that Senator Williams has just used—and I have no reason to doubt they are not correct—why would the answer to the question on notice have come back saying that not a single project on the Pacific Highway was using an 80-20 split?

Ms O'Connell : The figures in terms of the Pacific Highway, the splits, none of them were 80-20. They were not formulated on the basis of an 80-20 split. They were formulated on the basis of dollar contributions by the two governments. Those dollars contributions have a great range in terms of percentage splits.

Senator NASH: That is a bit cute.

Ms O'Connell : None of them are 80-20.

Senator WILLIAMS: Why would the memorandum of understanding signed with the New South Wales government for 2009-2014—where are those figures?—show $4.1 billion from the federal government and $1 billion from the state? That is an 80-20 split under that MOU, is it not? Are you familiar with the MOU?

Mr Mrdak : There has been a longstanding view by Australian governments that funding should be matched 50-50. If you look back to an earlier period, say from 1996 when the Australian government first started investing in the Pacific Highway, there was quite a different proportion of split. To give you an illustration, from 1996 to 2007 the Australian government contributed $1.3 billion, New South Wales $2.5 million. Certainly since 2007 the additional funds are largely about the Australian government seeking to accelerate work on the Pacific Highway.

Senator NASH: Just on that—

Mr Mrdak : Sorry, I was going to say, as Ms O'Connell indicated, there has been no formal agreement to 80 : 20. That has never been part of a formal agreement.

Senator NASH: With regard to this historical 50-50 arrangement that you keep talking about, when you look at things like the Hume Highway duplication in New South Wales under the National Land Transport Network, it was 100 per cent funded by the Australian government, aside from about a four per cent New South Wales contribution at Holbrook. The $1.7 billion for the Hunter Expressway will be 88 per cent funded by the Australian government. The recent widening of the F5 and F3 freeways on the outskirts of Sydney has been at least 80 per cent Australian government funded. Improvements to the Barton Highway, and we all know where that is, have been 100 per cent Australian government funded. This is all in New South Wales, obviously. Funding for the Great Western Highway between Mount Victoria and Lithgow was provisioned on an 80-20 basis. How can you say it is 50-50?

Mr Mrdak : Some of those projects like the Hume Highway reflect the historical basis of contribution to the National Highway pre Auslink. With the Auslink changes, the then government moved to a position of matching funding, and that is going to be continued by the current government.

Senator NASH: When you are saying 50-50 historically, are you talking about just the Pacific Highway?

Mr Mrdak : No, right through. The basis of Auslink was to try to move away from that and to have shared funding. Projects were determined on the basis of matching, and the Pacific Highway was one of those. If you look back at the initial funding that was done under Auslink for the Pacific Highway, it was on the basis of matched funding.

Ms O'Connell : There was a written agreement in 1996 in relation to the Pacific Highway for dollar-for-dollar matching funding.

Senator NASH: When we look at figures like that, it makes the 50-50 historical figure look very wonky. I am sorry, Senator Williams; I did not mean to cut across you.

Mr Mrdak : Again, that reflects individual projects where, particularly on the Pacific Highway, the Australian government sought to accelerate work to meet the target of 2016. Certainly going forward the Australian government is reiterating the Commonwealth's position of looking for shared funding.

Senator WILLIAMS: I asked you the question in estimates before and the answer was that there is no 80-20 agreement in place between the Commonwealth and the New South Wales governments—but there are a lot of examples where there has been a lot more than 80 per cent put in by the federal government as far as funding goes. I refer you to the following statement by the Minister for Infrastructure and Transport on 15 February 2012 in response to a question without notice from the member for Lyne. The minister states that current funding for 2008-09 to 2014-15 for the Nation Building Program is $1 billion state, $4.1 billion feds. Would you not agree that that is an overall 80-20 split? It is on that figure, isn't it?

Mr Mrdak : It reflects the nature of the projects that have been funded since 2007 and much of which reflect decisions to accelerate works under the fiscal stimulus and other types of projects that were brought forward. I do not think that necessarily reflects any Commonwealth agreement or any expectation that there would be an 80-20 split.

Senator WILLIAMS: In response to a question in writing from the last estimates, question No. 67, the department provided the completion schedule for a number of projects with funding brought forward in the MYEFO. The answer listed the expected completion dates for nine projects for the Pacific Highway just stated. It says that the Australian government has committed to fully duplicate this highway by 2016—as opposed to other projects where it says 'the project is scheduled for completion in—insert date'. Why the difference? They have actually stipulated in that answer on notice that it would be completed by 2016.

Mr Mrdak : That has been the target since 2004 and—

Senator Kim Carr: And that is what Barry O'Farrell himself said that he would do. That is what he actually said he would do.

Senator WILLIAMS: Oh, we have woken him up!

Senator Kim Carr: No, I have just listened to this very patiently and you are trying to spin a line here which is quite contrary to the facts. The Premier said that that is what he would do and that, if he wanted the highway completed by 2016, which is the designated time, he would put the money in. There would be no further argument.

Senator WILLIAMS: The budget delays funding of $158.1 million for the Western Highway in Victoria. What project on the Western Highway was this money allocated to, Mr Jaggers?

Mr Jaggers : The Western Highway has a couple of sections, from Ballarat to Stawell. Funding has been deferred on the duplication of the Ballarat to Stawell section, on the basis of the Victorian government's request to the federal government. So there is a letter from Terry Mulder to our minister of 11 April requesting money to be deferred. Essentially, due to environmental delays in the project, gaining environmental approvals, the project is behind schedule and the Victorian government would not have been able to spend the money in the time that it had originally planned to.

Senator WILLIAMS: Was the Victorian government consulted in this decision?

Ms O'Connell : The Victorian government requested the deferral.

Senator LUDLAM: Were you folk in the room before when I put some questions about the Perth light rail funding or the Perth light rail proposal to Mr Deegan?

Mr Mrdak : Yes.

Ms O'Connell : Yes.

Senator LUDLAM: Can you tell us what the Commonwealth is getting for its $4 million for that very welcome injection of funding into planning for a Perth light rail system?

Ms O'Connell : That is a further study in terms of the route and design of the Perth light rail project.

Senator LUDLAM: The state had some money in the forward estimates in the last state budget, or from a couple of months before that, so this is top-up funding. Will that bring the planning horizon forward, will it make the study more ambitious or what will actually happen now that would not have happened before?

Mr Jaggers : I think it will take the project forward and move it towards a business case as well as that preliminary planning work. So you will get a business case as a result of the work.

Senator LUDLAM: Are there any conditions attached to the Commonwealth funding? Can you outline it for us? I have the statement that came with the budget papers. Perhaps you could explain to us what exactly we are getting?

Ms O'Connell : It forms part of the Nation Building Program and the memorandum of understanding that goes with that. It is a matched contribution in terms of Western Australian funding. The payment is dependent on reaching project milestones, so the delivery of the business case, planning study, the works undertaken. The Australian government contribution is also capped at that amount.

Senator LUDLAM: Could you table for us what those milestones are and what the expectation is for delivery of those?

Ms O'Connell : We are happy to take that on notice.

Mr Mrdak : We will take that on notice and get that for you.

Senator LUDLAM: Is that likely to be in the public domain? Is that likely to be a problem?

Mr Mrdak : I do not think so.

Mr Jaggers : We are still in discussions with the Western Australian government about how the project is going to roll out, so we are in discussions about the detail. Obviously the announcement has only been made fairly recently, so there is still a bit of work to do with WA to make sure that there are key milestones and that we get what we need out of the study.

Senator LUDLAM: So you will not be able to table it yet or even quite take it on notice because that document has not been finalised?

Mr Mrdak : We are planning on moving quickly.

Senator LUDLAM: Can I get a sense of the cause and effect? I understand from what Mr Deegan—or it might have been you, Mr Mrdak, I forget; I am sorry—put to us that it was effectively an offer from the Commonwealth to the state that was then accepted. Do I have that roughly right?

Ms O'Connell : Yes, a business case.

Senator LUDLAM: Has there been any other discussion of what future steps and funding are likely in order to meet Premier Barnett's goal to build light rail in Perth within a decade? A shorter version of that is: where to from here?

Ms O'Connell : I think the prerequisite is the step that has been announced as part of the Australian government contribution in the last budget, and that is around the business case and route design for the light rail study. Subsequent steps would be informed by that work.

Senator LUDLAM: I was a bit disappointed, bemused or puzzled to find that, as that announcement was being made, transport minister Buswell in Perth was announcing that the proposed line out to Curtin University had been cut. So virtually in the same breath as announcing that he has doubled his funding, with an extremely well-timed Commonwealth contribution, the scope of the project has been chopped back. Do you have any insight into why that has happened?

Mr Wood : No. The scope of the project overall is a proposal from the Western Australian government. We have had no discussions on the details of the project. Obviously, we are at the early planning stage through this funding and those issues will be explored through that. But that is a matter for the Western Australian government.

Senator LUDLAM: The planning has been underway for at least two years, give or take a couple of months. I am assuming that you have been privy to some of that long-term preliminary work or you would not have punted $4 million on it?

Mr Jaggers : Yes. We have had discussions with WA over a period of time, over at least the last 12 months, in relation to light rail in Perth.

Senator LUDLAM: So you would be aware that the expectation was that the line was meant to go to Curtin University; in fact, that was one of the purposes of taking it out through the eastern suburbs across the Causeway?

Mr Jaggers : Yes, we are aware of that.

Senator LUDLAM: Were you disappointed or surprised to find that, as you were making your funding announcement, the project was being scaled back?

Mr Jaggers : We are yet to have detailed discussions with WA about the scope of the study and what will or will not be included. So we are obviously in the process of doing that.

Mr Mrdak : And we will seek further advice from Western Australia on their thinking as part of these discussions in the next couple of weeks.

Senator LUDLAM: I would appreciate it if you are able to table anything that would shed some light on that decision, particularly whether Curtin University is being expected to make some kind of contribution, for example—whether that is what the story is.

Does the department support a metro-wide transport planning approach that considers the future expansion of the light rail network in Perth to include growing urban activity centres such as Fremantle, Cockburn and Murdoch, where a lot of serious growth and consolidation are occurring?

Mr Mrdak : As you know, the Commonwealth is very keen to see integrated transport in city planning. Clearly, those types of activities which can provide economic hubs—including, obviously, universities, which are major employment generators—and form key parts of the transport network are obviously important. Overall we are looking for an improved metro-planning approach which does that much better, yes.

Senator LUDLAM: Are you able to comment on the public transport draft plan that was put into the public domain earlier this year which says that rapid transit, or light rail at least, for that southern corridor is post 2031 at the earliest?

Mr Mrdak : Again I do not know the detail of what went into the thinking which went into the strategy at this stage. That is something that we will establish with some further work with Western Australia.

Senator LUDLAM: Do you have any sense of when those discussions will be concluded and when you might be able to table the document that we were referring to earlier, your project milestones and so on?

Mr Mrdak : We would like to get it sorted out in the next few weeks, if we can.

Senator LUDLAM: The next few weeks; that is brilliant. The Australian Greens, my office, made a submission two years running through Treasury for an annual cycling infrastructure fund—we have spoken of this a couple of times—and for new full-time employees—four, I think—in the active transport unit. Were you aware of that funding submission that we made through Treasury?

Mr Mrdak : Yes.

Senator LUDLAM: Has your department ever asked Treasury for an annualised budget for cycling spending so that you know what is on the table at the moment—because we established before that it was not zero?

Mr Mrdak : As we have discussed at previous hearings, we obviously do provide funding to support cycling infrastructure through our Nation Building Program in relation to individual projects. You and I have discussed previously the former program, which is now completed. But I am not sure of your point about asking for a budget. Have we put in budget proposals for a cycling strategy? They are matters for the government's budget process; I cannot comment on those.

Senator LUDLAM: Am I out of line to ask whether the department put together a funding submission for a cycling fund that was then knocked back?

Mr Mrdak : That is a matter for the budget process and I cannot comment.

Senator LUDLAM: It is good that Senator Carr is here. Last session, in February, I asked how the national cycling strategy proposes to double the number of people cycling by 2016 without any funding appropriation. Senator Carr, you said that issue at the time was under discussion. In the light of no additional funding announced in the budget, can you step me through how that discussion eventually went?

Senator Kim Carr: I will ask the secretary to comment on the budget response.

Mr Mrdak : Last Friday the progress report on the national cycling strategy was presented to Australian transport ministers. I would be happy to provide you with a copy of that.

Senator LUDLAM: Thank you.

Mr Mrdak : That highlighted that there has been a 95 per cent increase in cycling in the past couple of years as a result of the national cycling strategy, including the investments that the Commonwealth has made in relation to bikeways. I would be happy to provide you with a copy of that report, which I think is now available on the Australian Bicycle Council website.

Senator LUDLAM: Is it still government policy—I do not know whether this is through you, Minister, or Mr Mrdak—to double cycling to 2016 and is it still going to be attempted without any additional funding?

Mr Mrdak : The Australian bicycling strategy has been adopted by transport ministers nationally; that is and remains the objective. As you have seen, the Commonwealth has been investing in cycling facilities.

Senator LUDLAM: I do not want to have this fight with you again, Mr Mrdak, because it happens every three or four months.

CHAIR: My money is on Mr Mrdak; sorry, Senator.

Senator LUDLAM: Thank you, Chair, for that intervention. He generally wins because any time it gets interesting the minister shuts me down, or else you do. The national cycling strategy says that you want to double the number of people cycling in Australia by 2016. How are you going to do that without additional funding because—and we can maybe skip over this stage of the usual debate—the one-off injection of funding has long since gone? We even have the ANAO's report into how that went, which was critical of some aspects but basically said that the money was well spent in the end. How are we going to double cycling from here without any additional funding?

Mr Mrdak : All of the jurisdictions have in place investment strategies and other strategies to implement the bicycling strategy. The Commonwealth will continue to invest, as it is, through its various projects, and we have run through in the past various road projects which have incorporated cycling facilities. It is a matter for government in the future as to whether it decides to invest further moneys into cycling. I would note that, as part of this budget, the government has announced the framework for nation building 2, which does set out the various categories and, importantly, in a linkage to the national urban policy, sets up categories of future funding for moving people, which includes our approach on liveable cities. So we anticipate that in the future government may choose to provide funding envelopes around that part of the nation building projects. That will be a decision for future government announcements.

Senator LUDLAM: Hopefully not too far into the future. Coming to what I think you were just alluding to—and we have spoken of this before—the only bike infrastructure at the moment that is provided directly by Commonwealth funds as far as we have been able to identify is attached to other projects, freeway projects, that are funded out of the Nation Building Program, which I think you call positive provision. Am I on the right track so far?

Mr Mrdak : That is correct.

Mr Jaggers : There is also some money that has been made available through our Liveable Cities Program specifically for active travel.

Senator LUDLAM: So that is a little unit within the Major Cities Unit to identify this kind of planning and strategy work?

Mr Mrdak : It is the $20 million Liveable Cities Program which the government recently announced the outcomes of, and that is handled by this division, nation building.

Mr Jaggers : Yes. There are four projects there that involve cycle access or cycle paths.

Senator LUDLAM: I do not know whether I should ask you this or the liveable cities folk later.

Mr Mrdak : Liveable cities is here in nation building.

Senator LUDLAM: Perhaps you could just hit those with a highlighter pen for me so that I know what those four are—if you could take that on notice.

Mr Mrdak : We will certainly do that.

Senator LUDLAM: Setting that aside for the moment and going specifically to the idea that the majority of Commonwealth funding for cycling only happens if you have a freeway attached to it and then the cycle lane gets painted onto one side, are you aware of a chart prepared in 2012 by the bicycle networks in New South Wales showing the bike facilities that are most appropriate in various motor vehicle speed zones and volume environments; that is—and I am happy to table this for you if it would be helpful—they say do not put a cyclist on a painted bike track by the side of the road that is just basically a white line on the tarmac above certain speed thresholds—and their recommendation strongly is 50 kilometres per hour—or above certain traffic density—5,000 vehicle movements per day. Are you aware of those approximate thresholds?

Mr Mrdak : I am certainly aware of that work. As you know, we are currently considering, as part of our work on major cities, a future Commonwealth policy approach on active transport. Just coming back to your earlier question, I now have that information in relation to the liveable cities and I will just give that to you, if that is all right. There were four projects funded under liveable cities which have been announced which have an active transport component. There is the Parramatta city river renewal project, $3.75 million, which included major links along the Parramatta River foreshore and which incorporated cycling and walking links between the University of Western Sydney, housing developments and employment nodes in Parramatta city. There is Albury-Wodonga cycling infrastructure, $300,000 for a partnership between councils that delivers on-street bike paths for Albury-Wodonga. There is the principal pedestrian network, $1.2 million for a network with four locations in Melbourne and Geelong, in relation to increasing the use of active transport. Also there is practical design for resilient outer suburbs: $335,000 for outer suburbs in Australia—four outer suburbs. So all of that has liveable cities and active transport provision.

Senator LUDLAM: That is useful. That is new funding, isn't it? We have not discussed this before.

Mr Mrdak : No. This is the announcement of the projects under the liveable cities fund, which has been announced in the last few weeks by the government.

Senator LUDLAM: Could you table this for us then, as it is getting down to the question I was asking before. What I suspect is that the majority of the bike lanes that are being attached to freeway projects that we have spoken of on a number of occasions are basically just white lines along the shoulders of high-speed and high-volume highways and freeways. Is that true or are we only putting in segregated paths on high-speed roads?

Mr Mrdak : No, I do not think that is right. I think there is a mix of provision. In some cases there are segregated areas and others are—

Senator LUDLAM: I do not expect you to have all of this in front of you because this will be a range of projects, but could you table for us in your own time a breakdown of the type of bike facilities attached to federally funded roads with speeds above 50 kilometres or a traffic density of 5,000 vehicle movements or more? I pinched those numbers out of the New South Wales bike network matrix.

Mr Mrdak : We will see—

Senator LUDLAM: What I am looking for specifically is the proportion of lanes on road versus separated or segregated paths.

Mr Mrdak : We will find that information.

Senator LUDLAM: Moving on, if I may, my reading of the 2011-12 budget was that it committed five times as much new funding to roads as to rail. There was some of the rail funding in there, but the road funding was about five times as much. The COAG Reform Council's report on cities of this April was quite an intelligent confirmation that our cities are buckling under growing road congestion and transport was identified as a top priority to fix by the CRC expert panel chair, Mr Brian Howe. My reading of the 2012-13 budget is that it is not a 5 : 1 ratio anymore; it is a 12 : 1 ratio in new funding. Can you confirm whether that is true or not?

Mr Mrdak : I would need to check the figures. There has certainly, as you say, been an expansion of rail funding. I will take that on notice, if I can, and give you the exact number.

Senator LUDLAM: I am posing to you that the expansion of road funding was much greater. I realise that we are winding back actual funding relative to previous budgets, and that is part of the surplus measures, I suppose. Can you provide for us the funding ratio in the 2012-13 budget of roads to rail, whether that be passenger or freight?

Mr Mrdak : Certainly.

Ms O'Connell : I think some of that reflects where the various projects are up to. There was significant rail investment in the past and much of those projects is being delivered now and paid for in the current Nation Building Program. In this year's budget there were some key rail announcements. The Goodwood-Torrens is a significant project announcement. Most of these projects go through a process of firstly being proposed, assessed and then coming to fruition in the budget, as well as projects such as the Perth light rail that we have touched on already, which are at the business case stage, so they are not yet ready for consideration for significant construction funding.

Senator LUDLAM: That stuff is all positive. The Gold Coast light rail is a positive one. What I am talking about is orders of magnitude. Nation building programs in Perth at the moment—$3.7 billion in WA and $2.4 billion over 2012-13 to 2015-16, all massive urban freeway projects plus a very welcome little $4 million speck in the bucket for light rail. We are trying to track this sort of expenditure from year to year. I was a bit freaked out last year that it was five to one; this year it is 12 to one. Can you confirm for us if that is true or not?

Mr Mrdak : We will get you those numbers. Again I would look at this in the context of which of those road projects would you not wish to have proceeding. They all meet a critical need.

Senator LUDLAM: For wider roads and more traffic?

Mr Mrdak : It comes back to this debate we have. You can try to categorise this as road versus rail, and I do not think that is the case. The government is investing where the growth is, and in the needs of those cities.

Senator LUDLAM: Have you come across the concept of induced traffic before? I appreciate that we have had this discussion as well.

Mr Mrdak : I know it well, but I suppose I say to you: which of those road projects in the current forward program would you not proceed with?

Senator LUDLAM: Why, for example, are we widening the Great Eastern Highway and the Roe Highway interchange without putting rails down that corridor?

Mr Mrdak : It is meeting the needs of those communities.

Senator LUDLAM: But a dollar spent on an urban freeway is a dollar not spent on public transport.

Mr Mrdak : I do not agree with that. I think there is a balance. There is a program and the Australian government has made a commitment to both road and rail investment. I do not even characterise this as either/or.

Senator LUDLAM: Maybe I should have put this to IA, but tell me if I am still in the ballpark: is the state government required to provide projections of traffic-modelling data in its submissions for these sorts of projects—if we want to throw another two lanes on the Great Eastern Highway, for example?

Mr Mrdak : They certainly do provide traffic projections and they provide us with information in relation to matters such as benefit-cost ratios and the like of the projects.

Senator LUDLAM: To you folk, the IA or both?

Mr Mrdak : No. They provide advice—initially they are bidding through IA submissions but also in project proposal reports to the department, which enables us to finalise funding commitments.

Ms O'Connell : Traffic forecasts and freight forecasts are fundamental to the BCR calculations.

Senator LUDLAM: I would have thought so. Do they tell you how many years on average it will take for these widened roads simply to fill up with more traffic, so that we have roads that are just as congested, only several lanes wider?

Mr Mrdak : Certainly the forward projections look at the whole transport picture.

Senator LUDLAM: For that Great Eastern Highway corridor, for example, how many years before that is simply a wider 10-kilometre traffic jam? How long will it be before that corridor is just as paralysed as it is today?

Mr Mrdak : I think that is a long-term investment in that corridor—

Senator LUDLAM: A long-term investment in future traffic congestion. If they are providing these projections for IA and for you guys, at what point do their models that the state government put to you show that traffic paralysis re-establishes itself along the Great Eastern Highway?

Ms O'Connell : The idea of congestion and traffic paralysis is not limited to roads. There is the same thing in terms of freight rail bottlenecks and passenger rail meeting its demand.

Senator LUDLAM: Yes, but we are not spending billions and billions of dollars on these things in Perth, unfortunately, so let us just leave it to traffic. If you were funding a massive investment in light rail or heavy rail in Perth, I would be delighted to put those questions to you about patronage and so on, but we are not; we are putting in more freeways. In the instance of the Great Eastern Highway, those roadworks are the biggest cloverleafs that we will have in Perth—along Tonkin Highway and Roe Highway extensions and so on. Let us just keep it to that Great Eastern Highway corridor around towards the airport. When do those projections tell you that that traffic will simply be seized up and that there will need to be presumably another widening, according to this logic?

Mr Mrdak : I would need to have a look at the numbers and come back to you in relation to that.

Senator LUDLAM: Yes, if you could.

Mr Mrdak : Certainly these enhancements will provide for the medium-term growth of traffic into that region.

Senator LUDLAM: They will. Then in a couple of years the state is going to come back and ask for another couple of billion dollars to throw another couple of lanes on and we will just repeat the cycle. Anyway, you have taken it on notice, so that is fine and I will move on.

CHAIR: Are you suggesting that we should pedal it? You cannot be serious, Senator. $3.7 million has been spent on infrastructure in Western Australia, mate.

Senator LUDLAM: Have you seen how slow the Great Eastern Highway is at the moment? It is going to be wider and just as slow, and I am interested to know when.

CHAIR: With the greatest respect, we can have the attitude of the state government and put our fingers in our ears and do nothing for the next 50 years. But our transport task is going to double by 2020.

Senator LUDLAM: Where are we going to put it all?

CHAIR: I think it is a wonderful concept if we can put it on balloons and float it around the suburbs of Western Australia, Senator Ludlam, but you know that is not reasonable. I do take a bit of offence. We are putting a lot of money into roadworks in Western Australian because no-one else did.

Senator LUDLAM: Maybe you have missed my line of questioning: why are we not putting that into an investment in freight rail? Why are we not double stacking on the freight network in Perth?

CHAIR: Senator Ludlam, do you suggest that we tie our butter and our toilet rolls on balloons and float them to the suburbs?

Senator LUDLAM: No. Chair; that is not actually what I am proposing.

CHAIR: It is off in gaga land. Senator Ludlam, you have the call. I am not shutting you down. There you go.

Senator LUDLAM: Chair, you are not shutting me down.

CHAIR: I am encouraging you to keep asking questions—the more West Aussies that hear it, the better for us.

Senator LUDLAM: That was a random interjection from the chair. I am not sure who I appeal to when the interjection is coming from the chair.

CHAIR: I am passionate about road transport and I am passionate about passenger transport, but I am also a realist, Senator Ludlam. I am not going to get on a pushbike and cart it all around the state.

Senator LUDLAM: Minister, could you call the chair to order?

Senator Kim Carr: This committee is quite interesting. It has been a long day at the table.

Senator LUDLAM: It has been an awfully long day.

Senator Kim Carr: Which is winding up on time.

CHAIR: I am trying, Senator Carr, but I am not getting a lot of goodwill at the moment.

Senator LUDLAM: Liveable Cities Program: 25 projects received funding, including three and a bit million for the City of Sydney Green Square town centre trigeneration project and half a million dollars for the Sunshine Coast light rail feasibility study. How would you gauge the quality of applications for this program?

Mr Mrdak : I think the quality is very strong. We had a large number of projects oversubscribed for the funds available and certainly I think we got a very good mix of projects.

Mr Jaggers : There were 170 applications and we thought there were a lot of very strong applications.

Senator LUDLAM: We spent in the end $20 million on best practice—I guess you have just picked the cream out of those 170, if the program was that far oversubscribed?

Mr Mrdak : The department did an evaluation against the program criteria and provided advice to the government.

Senator LUDLAM: Can you tell us how many in total came from WA? I notice that suburban centres immediately south of Perth got funding for four projects that looked to me as though they were of a pretty high standard. How many applications in total came from WA?

Mr Mrdak : I will see whether we have that information with us.

Mr Jaggers : We do not have it here.

Mr Mrdak : I am sorry; we do not have that with us but we will get that on notice for you.

Senator LUDLAM: All right. I will leave it there.

Senator EDWARDS: I asked a question earlier, and we have brought it into this section, in relation to planned South Australian nation building projects—the Goodwood and Torrens junctions, as it is called.

Ms O'Connell : Yes, the Goodwood-Torrens project.

Senator EDWARDS: When does this project go from the status of being in planning to the next level? It is being budgeted for in 2015 but the current status of it is that it is in planning. When does it actually become real?

Mr Jaggers : The South Australian government will need to determine the construction schedule for the project. It will depend on the money that is made available from the South Australian government. We know they have got a budget coming up. I would expect funding to be available through that budget process for it to move it into the construction phases.

Senator EDWARDS: So you are looking for the $210,900,000 that you have identified they need to put in to actually ensure that this project goes ahead?

Ms O'Connell : It is a commitment that the federal government made in the budget following discussions with the South Australian government, who have agreed to commit their portion of the funding. We are in discussion with them on the time line and the milestones for delivery of the project, including construction milestones. Those discussions are underway now.

Senator EDWARDS: Since you have announced this has there been any change in the endeavour of the South Australian government to fund it and get it underway?

Ms O'Connell : Not that we are aware of, no. We are holding discussions with them about the time line.

Senator EDWARDS: When would you expect a commitment from the state on this one?

Mr Mrdak : There is a forthcoming South Australian budget. We would anticipate a commitment in that budget process.

Senator EDWARDS: There is nothing to indicate that that is not likely to be funded?

Mr Mrdak : No.

Senator EDWARDS: What modifications will be made to the outer harbour train line? I will come back to the Goodwood and Torrens junctions shortly. Is that costed, funded and in planning or is that project set to go?

Mr Wood : The final details of that will be determined through the detailed construction work planning that is underway. However, the intention is that the outer harbour line would be sunk from Torrens junction—that is in the northern edge of the parklands to the north of north Adelaide—where it would go underneath the existing interstate freight rail line. So there will no longer be a need for freight trains to stop to enable the passenger trains to go forward. It would be sunk and it would come up through the Bowden area. There would be a major redevelopment of Bowden station associated with that, which would be associated with the major urban development that the South Australian government is taking forward there. That would also see three existing level crossings removed as the line is now underground.

Senator EDWARDS: I know them well. What are you waiting on from the state government for that project?

Mr Wood : We are seeing the project as a whole, the Torrens and Goodwood junctions. It is dependent on two things—firstly, the detailed construction but, most importantly, obviously, the funding component from the South Australian government.

Senator EDWARDS: Will you split them? If they come back and say they have not got enough money, will you split them?

Mr Wood : That would be a matter for government at that time. The government has made a commitment for the Torrens and Goodwood junction projects.

Ms O'Connell : We are in discussions with the South Australia government about the full project and the timing of the full project.

Senator EDWARDS: When would you anticipate, if the money is allocated in the budget, the construction phase will start and finish?

Ms O'Connell : These discussions are underway now.

Senator EDWARDS: You have allocated the funds in 2015, which is well and truly past the next election. Is there any anticipation at all that the project will not proceed?

Ms O'Connell : The commitment has been made on the understanding that the project will proceed.

Senator EDWARDS: The contingency is the state government in South Australia, is it not? Mr Deegan's department has identified it has all gone ahead. It should go ahead and it has been funded, which we are all very grateful for in South Australia, but the challenge lies with the state government to fund it.

Mr Mrdak : Certainly, all of the advice that we have from the South Australian government is that this is a priority project for them and they would seek to bring forward the works as quickly as possible.

Senator EDWARDS: Was the member for Adelaide involved integrally in the discussions to get this project underway?

Mr Mrdak : I am not aware of any discussions. There may have been discussions. I am happy to take that on notice.

Senator EDWARDS: Okay. She tried to give somebody some credit for getting the project up and running, but it is really Mr Deegan's department that dealt with the state government on it?

Mr Mrdak : This has been a longstanding priority project for South Australia, and certainly one for the Commonwealth. As Mr Deegan outlined, the Australian government has funded all of the ready-to-proceed projects that Infrastructure Australia has endorsed.

Senator EDWARDS: So it is your department that I have got to thank?

Mr Mrdak : There are a lot of people in South Australia who pushed hard for this project.

Senator EDWARDS: When did it come up for recommendation from Mr Deegan?

Mr Mrdak : I think it has been appearing on the IA list since about 2009.

Ms O'Connell : It was initially on the 2009 IA priority list.

Senator EDWARDS: That is terrific. Thanks very much. Just a couple of quick ones. How many rest stops have been built in South Australia under the national transport guide?

Mr Mrdak : This is under the heavy vehicle program?

Senator EDWARDS: It is. I am sorry to jump around.

Mr Mrdak : That is all right. We will get the right person at the table.

Ms O'Connell : We were discussing the total number of rest stops previously. I will clarify whether we have got them by state.

Mr Foulds : We do.

Mr Jaggers : In South Australia in the first round of the heavy vehicle program there were three rest stops in South Australia. There were 10 upgrades to existing rest stops, six in the parking and decoupling bays, and three upgrades to existing parking and decoupling bays. In the second round there were two new rest areas.

Senator EDWARDS: Are any of those on the Dukes Highway?

Mr Foulds : I would have to take that on notice.

Senator EDWARDS: No problem at all; I thought you would have to. Has there been any feedback from the trucking industry on the quality and suitability of the roadside rest areas?

Mr Jaggers : The proposals that were approved in round 1 and round 2 of the Heavy Vehicle Safety and Productivity Program came through from state and territory governments or from industry. Industry was involved in making recommendations and having its solutions assessed as part of that process. I have not got any feedback. Maybe Mr Foulds can help with that.

Mr Foulds : As a requirement under the act, a report on meeting the objectives of this program to date has to be tabled to parliament. That will be done in the next month. In essence, that report indicates that industry has supported what is happening.

Senator EDWARDS: I will look forward to it. That is fine. How much revenue has the road user charge generated this year?

Mr Mrdak : I would have to take that on notice.

Senator EDWARDS: No problem.

Mr Mrdak : That is a Treasury figure. We will get that for you.

Senator EDWARDS: How much of the 20.3 joint state-Commonwealth funding for South Australia has been spent?

Ms O'Connell : I am sorry, Senator?

Senator EDWARDS: There was $20.3 million of joint state-Commonwealth funding for South Australia, which obviously was out of that program, which was due to be spent. How much of it has been spent?

Ms O'Connell : In relation to the Heavy Vehicle Safety and Productivity Program, Senator?

Senator EDWARDS: Yes.

Ms O'Connell : The program as it has stood would conclude at the end of this financial year with the new program that the government announced in the budget commencing next financial year.

Mr Mrdak : We will take it on notice and get back to you.

Senator EDWARDS: No problem. You can say that whenever you like. I am just trying to get information.

Mr Mrdak : We will try to answer as many as we can tonight.

ACTING CHAIRMAN ( Senator Gallacher ): Have you run out of questions?

Senator EDWARDS: No, I have not. I am doing a Richard Colbeck. I am going to move on because I want to give Senator Nash some time.

Senator NASH: We can move on to AMSA if we run out. That is fine.

Senator EDWARDS: I will move on to the Dukes Highway, if I may. In the context of spending $220-odd million for the Goodwood and Torrens project—I am not sure how many road deaths were factored into getting all of those upgrades done—I will just say that the Dukes Highway is a very dangerous highway in South Australia. It accounts for almost one-third of South Australia's 85 highway deaths, certainly between the years 2005 and 2009. It is being upgraded. How much of the six-year $80 million allocated by the Commonwealth to the Dukes Highway has been spent this year on road safety measures such as widened parallel centre line markings, vibrating audio tactile lines and overtaking lanes?

Mr Jaggers : We have a range of projects that were funded on the Dukes Highway. Would you like us to take you through those projects now?

Senator EDWARDS: You can take that on notice. That is fine.

Mr Mrdak : We will give you the specific road safety measures.

Senator EDWARDS: That is not my big issue. You can take that on notice. Have they come in on budget and on time? That is obviously the supplementary question.

Mr Jaggers : There are a number that were completed. There was an overtaking lanes project that was completed in January this year that involved $5.3 million from the Australian government. There are a number of other projects, including rest areas and hazard mitigation, that are either completed or under construction at the moment. We are happy to give you a breakdown of what we are doing on the Dukes Highway in terms of safety.

Senator EDWARDS: There are some safety targets that we are looking to hit, aren't we, with this program? Is there sufficient funding for it under the current program?

Mr Jaggers : There is an agreed level of funding with the South Australian government around a number of initiatives at the moment. I would have to take on notice what the safety targets were to hit in relation to that and where we are up to. I do not have that in front of me.

Senator EDWARDS: I am just interested in whether we still have some way to go.

Mr Pittar : We are working closely with the South Australian government on the highest priority works on the Dukes Highway in relation to, as Mr Jaggers said, things like overtaking lanes, dividing median treatments and that sort of thing and hazard reduction on the side of the road. The South Australian government, within the overall funding envelope, has identified the areas for priority attention.

Ms O'Connell : We will come back to you with a complete program of works and what has been done and what is still to be done.

Senator EDWARDS: Every time I make some inquiry with the state government they say that I have to be better at getting money from you guys so they can do more. This is why I am asking the question, so that it is relevant. They handball my inquiries back to me and say, 'You've got to go and talk to Mr Mrdak about all this.' If you could just include, when you come back to me, things like the new centre line treatments that are being installed at four locations. They cover about 39 kilometres. The highway is 189 kilometres. Are we rolling these out in the time frames or can we be doing it faster across the whole highway? It is a problem area. I will wait for your response on that one. I will now go to the South Road-Sturt Road intersection. No changes?

Ms O'Connell : No.

Senator EDWARDS: So the same treatment. I understand the traffic volumes are much higher and delays are much greater at this intersection than they were when the project was cited for federal funding in November 2007. Has the funding for this been diverted until we get a resolution on this issue? Is that true? Is that assertion that I have just made true? Is that holding up the project?

Mr Pittar : My understanding is that that particular intersection is in the vicinity of Darlington—

Senator EDWARDS: It is.

Mr Pittar : Flinders University and the medical centre.

Senator EDWARDS: It always has been, by the way.

Mr Pittar : Sorry? I missed something there.

Senator EDWARDS: It has not moved.

Mr Pittar : No, that is right. Primarily, funding in that area has been directed towards planning for the nature of intersection upgrades in that area. The focus to date in funding has been on planning as part of a broader planning program in relation to the whole of South Road, running from the Port River Expressway in the north through to Darlington in the south.

Senator EDWARDS: Has the planning budget blown out by virtue of the underestimation or were there delays? Have you got to a stage where you are now having to re-plan because there were originally some miscalculations as to what the traffic flows were going to be?

Mr Pittar : The planning in relation to that area is still underway. I do not have the details in front of me as to changes in traffic volumes in that area.

Senator EDWARDS: Five years is a long time to be planning an intersection.

Mr Pittar : It is also a very complex area in terms of, as you say, traffic flows and future needs. Having to look at that South Road corridor as a whole corridor—I think it is something like 22 kilometres long and there are something like 28 sets of traffic lights—

Senator EDWARDS: Are we going to see this Darlington intersection announced—reannounced—at the third federal election? It is now five years. You are coming up to the next election cycle. Are we about to see the Darlington interchange announced again by the minister as a new project going forward? Because we are still planning it.

Mr Mrdak : We could not comment. That is a matter for the future commitments.

Senator EDWARDS: I did not expect you to, really. Minister, the planning for this is five years. It is an important project. The state government has committed a lot of money to it. It is starting to look a little bit fractured, this whole process. I guess the people of the southern suburbs of Adelaide are looking for some real direction on where this is going to go, how this is being planned and how this department is going to pull this whole project up by the boot straps.

Senator Kim Carr: The secretary has outlined the processes from here. I suggest that it is appropriate that the proper discussions occur with the state government about how to implement that.

Senator EDWARDS: How much longer do you think that planning will go on? Have you projected anything? You must have costed some more planning resources. Do you have an idea how much this five years of planning has cost us so far?

Mr Jaggers : As I understand it, the planning project is due to complete mid to late this year.

Senator EDWARDS: Mid to late this year?

Mr Jaggers : Yes.

Senator EDWARDS: We are only a month away from being mid this year.

Mr Jaggers : A lot of work is happening on South Road at the moment. You would be aware that the South Road Superway is under construction at the moment. We have large construction projects on South Road and we are doing the planning on further work for South Road as well, including at the Darlington end and pieces of the South Road in between. We are on track in terms of the construction project and the completion of that project. The planning work is coming to some conclusion as well, which will enable governments to make decisions once that work is finished.

Senator EDWARDS: How much has it cost us to go through the five years of planning since it was first announced prior to the first election in 2007?

Mr Jaggers : As I understand it, the Commonwealth contribution today is in the order of $6.5 million.

Senator EDWARDS: For planning?

Mr Jaggers : Yes.

Senator EDWARDS: Is that capped?

Mr Jaggers : The Australian government has committed to $20 million for the project.

Senator EDWARDS: For the interchange or for the entire extension of the Southern Expressway?

Mr Jaggers : Some of that money would also be used for acquisition work, strategic acquisitions that the South Australian government needed to make. The South Australian government is also putting money into the planning work and strategic acquisitions to enable the project to proceed into the future.

Senator EDWARDS: Have those properties been acquired?

Mr Jaggers : As I understand it, there are a number of properties that have been acquired. I might ask Mr Pittar.

Mr Pittar : Our understanding is that negotiations have started and are continuing.

Senator EDWARDS: We are spending money planning an interchange that we cannot build yet because we do not own the property?

Mr Pittar : That is part of the normal process in terms of planning and design.

Senator EDWARDS: What is holding us up? Five years later we still have not acquired the property essential to build what has been promised at two elections now.

Mr Pittar : All I can say is that the South Australian government is continuing to have those discussions with affected landholders as the planning process comes to fruition. As Mr Jaggers said, we anticipate having some of the outcomes of that during the course of this year.

Senator EDWARDS: Of the $20 million, you have spent nothing on property acquisitions, although you have provision for it, which is good. Is that right?

Ms O'Connell : I think it is best if we take this on notice and come back to you on the division of the $20 million and also an expectation of the time line for concluding the planning process and what it contains.

Senator EDWARDS: I am not looking to take cheap shots here. I would not even mind a briefing on it as to where we are at.

Ms O'Connell : We are happy to.

Senator EDWARDS: It sounds like we have a few problems with it. The people of South Australia do not really know what is going on.

Mr Mrdak : We are happy to take that on notice, Senator, and, through the minister, come back to you.

CHAIR: Can I clarify something? There is land to be bought. There is land acquisition. Is that correct?

Senator EDWARDS: There has been for the last five years.

CHAIR: I was with the Treasurer last week in Perth. It is 30 years in the planning. That is not unusual if there are land acquisitions. We all want it done tomorrow, but it is not as if this is something out of the blue and we are obviously dragging the anchor.

Mr Jaggers : As alignments are determined through the planning work it is quite common to start making strategic acquisitions of properties.

CHAIR: It is those pesty land owners. That is what it is, isn't it?

Senator EDWARDS: It has struck an impediment, hasn't it? It is no longer the interchange that you planned five years ago?

Mr Pittar : The interchange work in that vicinity takes account, as we understand it, of changing usage. We would expect to see that report later this year reflect that sort of information and the sorts of design that will be needed in order to accommodate not just traffic flows now but traffic flows that will be projected into the future—so there would adequate capacity for projected traffic usage in that area over the medium term.

Senator EDWARDS: That is the challenge. If we keep putting it off we will always be able to get it right for whatever time we do build it.

Mr Jaggers : As Ms O'Connell suggested, maybe we can put together some information for you on where it is up to. I am happy to put that together and provide it to you.

Senator EDWARDS: Could I tell you that you are not making me confident in any way, shape or form. I would like to fully understand where you are at with it. I do not think that you fully understand where we are at with it.

Mr Mrdak : I do not think we have all the information at the table to give you the assurance you need. Let me pull that together and we will come back to you.

Senator EDWARDS: Let us do that. Would you mind?

Mr Mrdak : No. We are very happy to do that through the minister.

Senator EDWARDS: Thank you.

CHAIR: Thank you. Senator Nash, you have questions?

Senator NASH: I do, Chair. The inland rail proposal: can I have an update as to where that is at?

Mr Mrdak : It is a commitment for Nation Building 2. There is $300 million committed to the project to start the next stages of planning and land acquisition for the corridor.

Ms O'Connell : The report and the study are available on the internet.

Senator NASH: Do not refer me to the internet, please.

Mr Mrdak : We have completed the Australian Rail Track Corporation.

Senator NASH: It is late. I am in day 3 and I am very tired. Luckily, I have not looked at any answers to questions on notice so I do not know if anything referred to the website was done.

Mr Mrdak : In this program there is $300 million programmed from 2014-15onwards for the project.

Senator NASH: That takes into account the rest of the planning and land acquisition?

Mr Mrdak : That will complete the finalisation of the planning and start some land acquisition for the corridor.

Senator NASH: Over what period will that $300 million be rolled out?

Mr Mrdak : The first year of funding—my colleagues will correct me—is $30 million in 2014-15. I will ask Mr Jaggers just to give you the profile at this stage.

Mr Jaggers : In 2015-16 we are expecting $30 million.

Senator NASH: I am sorry?

Mr Jaggers : Let me start from the beginning: 2014-15, $30 million; 2015-16, $30 million; 2016-17, $120 million; and 2017-18, $120 million.

Senator NASH: I need you to take this on notice because I cannot run through it all now, but can you give me a breakdown of exactly what that funding is allocated to do within each of those four-yearly brackets?

Mr Mrdak : Certainly.

Senator NASH: The reason I am interested is that I think it was announced back in August 2010 about a visionary project. I absolutely agree that the Nationals were talking about inland rail long before the Labor government ever did. It looks like it will be four years before we see any funding. Is there any reason why there is such a delay from the initial announcement in August 2010 to the actual delivery of the funding?

Mr Mrdak : It reflects the funding availability.

Senator NASH: Does that mean that regional communities and inland rail are not a priority?

Mr Mrdak : Not at all. It is a project commitment for Nation Building 2.

Senator NASH: Are there other things that are getting funding before it?

Mr Mrdak : You have seen the current program. There is a program underway of $36 billion. The government is making commitments for the next Nation Building program. As I said, the budget included Nation Building 2, which was a very positive step for us.

Senator NASH: I knew I was on a hiding to nothing with that one. If you could take on notice the breakdown of all of that funding within those annual components, that would be very useful. Just quickly, on some of the Sydney road projects, this is really an understanding of the budget. The F3 to M2 Sydney orbital: is it correct that there was no new money in the budget for that?

Mr Mrdak : The government has a commitment of $150 million to that project. The government has made an offer to New South Wales of some $25 million essentially to try to bring that project to the market by bringing forward work to allow private sector investment in that project and also the M5 expansion.

Senator NASH: That was the $150 million that was delayed in last year's budget; wasn't it? Is that correct?

Mr Mrdak : There is $150 million in the current program; that is right.

Senator NASH: The M4 east project: was there any new money in the budget for that?

Mr Mrdak : There remains $30 million against that project.

Senator NASH: But no new money?

Mr Mrdak : No.

Senator NASH: Finally, the M5 upgrade: was there any new money in the budget for the M5 project?

Mr Mrdak : No additional funding, apart from $25 million which has been offered to New South Wales to bring those projects to the market for private investment.

Ms O'Connell : That is both projects, M5 and—

Senator NASH: Thank you.

Proceedings suspended from 18:28 to 19:30