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Rural and Regional Affairs and Transport References Committee
19/11/2020
Management of the Inland Rail project

HOLT, Mr Peter, Legal Counsel, New South Wales Farmers Association; and Legal Counsel, Country Women's Association of New South Wales

LEYS, Ms Danica, Chief Executive Officer, Country Women's Association of New South Wales

LYONS, Mr Adrian, Chair, Inland Rail Taskforce, New South Wales Farmers Association

Evidence was taken via teleconference—

[12:16]

CHAIR: I welcome back the New South Wales Farmers Association and the Country Women's Association of New South Wales, who are all joined by Mr Peter Holt. We've got three-quarters of an hour, so I will give you the opportunity to make an opening statement, and I've never met a lawyer who doesn't like an opening statement! Sorry, Mr Holt—that was a bit cheeky.

Mr Holt : I am of a kind, Senator!

CHAIR: It's great to have you here. We all need lawyers; don't worry about that. Who would like to make a brief opening statement before Senator Hanson has questions?

Mr Holt : Do you mind if I speak?

CHAIR: No! I want you to speak, Mr Holt. It's my stupid sense of humour. Feel free, please.

Mr Holt : Thank you for the opportunity to speak today. I'm from Holding Redlich, and we've been engaged by New South Wales Farmers and the Country Women's Association New South Wales to help with advice associated with their advocacy around Inland Rail. In that capacity, I've had an opportunity to go out and speak to some town hall meetings in Moree and Gilgandra. I've also had a chance to drive the alignment N2N, Narromine to Narrabri section and I've done some work for some farmers on the North Star to border section. You mentioned earlier the level of engagement. On the North Star to border there are 30 kilometres of greenfield track, and we were actually engaged at five of the seven farmers on that alignment. The majority of people there are motivated, and those are people that again had to put money into their own pockets to fund an analysis of the EIS documentation so that they could make their submission, again not because they oppose the project but because they want to see a better project.

For us, the farmers have expressed a number of concerns relating to important issues around route selection, flooding and hydrology, noise and vibration and the impact on their land, principally access and impact on their houses and livelihoods. Then, in terms of the approach, again, Senator, you mentioned earlier you can't go wrong talking to the farmer. So the approach that we took was: we went out there, we listened to these affected landholders and we asked them what their main concerns were. Then, we found experts who were able to conduct desktop analysis of the environmental impact statements for North Star to border, and then we used that to form the basis of an objection to the proposal.

It's a pretty simple thing to listen to people, to try and understand what they're worried about, and then you ask the experts, 'These are the concerns expressed by the farmers—are these concerns borne out in this impact document?' For me, the results were surprising in the sense that both the economist and the flood plain engineer that we engaged both identified that the work done to date in the context of that EIS for North Star to border was poor and needed to be redone. Again, my background is working in government for the New South Wales government advising the minister and secretary on major projects of this kind. I did not expect to get that kind of review of material that was out on public exhibition.

In terms of what we're talking about in a practical sense, from a hydrology perspective we found that the modelling that was used to justify the design of the rail line across the Macintyre River was entirely inadequate and didn't reflect the lived experiences of the landholders. Again we're talking about human experience. We're talking three and four generations of farmers. They've been here. They were there for the 1976 flood. They were there for the 2006 flood. They are told that, based on ARTC modelling, which shows a very different impact on their properties, this is the result of the consequence of this rail line. They just don't believe that, and their concerns were borne out by the analysis that our flood plain engineer did of the modelling that was made publicly available by the ARTC. Again, we're talking about a time limitation and a cost limitation, so we're not in a capacity to go deep into the model and really understand it. We just look at the headline issues and we have experts peer review the material, and then they give us their advice, and that forms the basis of the objection.

Similarly on the economic implications, again, the economist said: 'Please don't put my name on this. This is some of the worst stuff I have ever seen. I can't believe any organisation would stand behind material of this kind.' The assumptions that drive the business case for this project are such that you're just left scratching your head. The costs that were factored in and the benefits that are factored in, according to our guy, don't stack up. We started, in 2016, with a project that has a marginal benefit, and I think if you look at how costs have risen and how we haven't seen any identification of additional benefits, the advice that we had was that we're now looking at a project with a net present value of less than one. So, in real terms, the government should be taking stock at this time and looking at this project, because, again, this is a project that is going to affect not only those farmers on the alignment but all of us. Ultimately, if you have a project that has a net benefit of less than one, you're talking about society as a whole being worse off as a consequence of this project. Again, that's surprising to me. I come from the New South Wales government school of fiscal discipline and understanding project benefits, and I'm surprised that a project of this kind has gotten this far.

Talking about noise and vibration, again, farmers were concerned about the impacts of the rail line close to their properties. Again we had the work done, on exhibition, peer reviewed. That work identified that a number of homesteads were missed. So, again, the impacts on those properties were not properly assessed as part of the EIS material. Also, most importantly, you ask the farmer, 'What are the real impacts for you?' 'The real impacts for me are on night-time sleep disturbance,' and we found in the material that went on exhibition that that hadn't been properly considered.

Again, across all of these issues—hydrology, noise, vibration, ecology and economics—we found that the material that was on public exhibition was inadequate for an assessment of this kind. The advice that we had and the advice that we gave New South Wales in context of the EIS was that the project couldn't be approved in its current form. We do note that, since those submissions have closed, the New South Wales government has actually gone back to the ARTC to ask it to respond to the submissions that were raised and to provide additional information. For me, on the advice that we had, this project could not be approved in its current form. So we were looking at either a revised project or, alternatively, if it is conditioned, we're talking about it being conditioned in such a way that there'll be considerable time and energy in redoing things in order to bring them up to standards. So, from my perspective, that's what I've learnt about North Star to border, and we're expecting, as Danica indicated, something similar in the context of N to N.

The other thing I would say is that, again, because we're consistent and we want to build a better project, to me it seems that, given a project of this size, there are a number of project fundamentals that are missing. For me we're talking about a project that we now know has only a marginal benefit. It seems to me, from talking to landholders and from talking to people who used to work for ARTC, that there are a number of key parameters this project is being designed to, and I think those key parameters were set at the outset. They were: keep the cost below $10 billion, keep the travel time to less than 24 hours and keep construction time below five years. I think the next thing that should be said is that it was: make sure that we're always building some part of the project, somewhere along the alignment, over those five years.

The problem I have with those parameters is that they're arbitrary, and what I have been told by those who used to work for ARTC is that, unless the government is prepared to give ARTC permission to change those parameters, they will continue to press ahead based on the project in its current formulation. What that means for the landholders on the ground is that the ARTC doesn't have the time, the money or the capacity to respond in a meaningful way to those issues that are raised and to change the project design to give effect to the changes that are required. We run the risk of a project where the wider, intangible benefits don't arise but the real, concrete impacts—afflux, inundation, noise, vibration, delays on level crossings—are borne by landowners, now and into the future.

Senator HANSON: Mr Holt, do you feel that there has been enough consultation by ARTC with the landholders?

Mr Holt : No, I don't believe there has. I'll use the example of North Star to border. Most of that EIS documentation was done on basis of looking at the properties from afar—that is, looking from the road reserves and the existing rail corridors. In the context of the flooding, I had the opportunity to talk to Mr Eddie Billings, who has given a lot of advice to the councils on impacts associated with flooding, over a long period of time. I actually took an affidavit from him. Mr Billings is a font of knowledge that relates to flooding on the Macintyre River. The points that he made are valid, and what we could not see in the modelling work that had been done was Mr Billings's points being translated into flood modellings predicting the impact associated with this development. What happens there is, because you can't see that landholder experience translated into the modelling and the outcomes, you have real concerns about what the implications of a development of this kind will be.

Senator HANSON: So you're worried about flooding there. You've raised it with ARTC. Have they taken that into consideration and expanded the conversation with you to address your concerns?

Mr Holt : Part of the frustration here is that, while the New South Wales Farmers Association and the Country Women's Association have asked these questions and asked for responses, we're getting nothing meaningful out of the ARTC. We're now directing our questions to the New South Wales planning department, who have a task on their hands. They have to assess a major infrastructure project in New South Wales, and that needs to be done in accordance with the law. It should now be for the New South Wales planning department to ask those questions of the ARTC and for the ARTC to respond, and then we'll see the outcome of that approach. For us, out of frustration, rather than asking the questions directly of the ARTC, we now raise the issues in the context of the public opportunities that are available to us, and we know that those questions will have to answered by ARTC, otherwise the New South Wales planning minister will be reluctant to approve that part of the project in New South Wales, which he is currently assessing.

Senator HANSON: With your permission, Chair, I wouldn't mind some of these questions being put before this committee so that we can ask them directly of the ARTC. We have the same issues with the flooding of the Condamine at Millmerran. They were reluctant to listen to the locals, and it was only through this committee asking them questions that they then consulted with the people. Mr Holt, can I suggest that you provide those questions to the committee.

I want to ask about the brown zones and the green zones for the rail line. In your area are they going for a lot of green zones, which will mean going through properties, and not listening to the landholders?

Mr Holt : I have heard the stories of people on the brownfield areas, where they're augmenting the existing alignment. But, again, my focus and my time and energy have been spent talking to landholders in those greenfield areas you refer to. These are areas where there is no current rail alignment, and this will be a train line going through paddocks. For me, those two areas in New South Wales—N2N is the biggest section, some 300 kilometres, but there is also a large section in 'North Star to border', approximately 30 kilometres, where previously there was no rail line. Those are the worst impacted.

Senator HANSON: You raised the hydrologists. They've employed a group of hydrologists and they say they have world experience, which they have, but you want to get your own independent hydrologists. Is that right?

Mr Holt : Yes; ideally. If I'm talking again about the landholders on North Star to the border, they put their hands into their own pockets to pay for a hydrologist. That hydrologist, given the time and the cost, could only get in so far. He saw enough to say that this was some of the worst work he'd ever seen and it needed to be redone. A section like N2N, for example, is a much longer section of track and the costs associated with engaging someone to do that work are considerable. The New South Wales Farmers Federation and the Country Women's Association are saying that, ideally, ARTC should allow them to engage someone and pay some of those costs, otherwise we'll find ourselves in a position where something will be approved and the impacts won't be anticipated. Ultimately, we're talking about compensation claims for farmers who are suffering due to their property going underwater for longer than it otherwise would. We're talking about real impacts. It's better to sort that out now, before the project is approved and before the reference design is finalised. In a practical sense, the modelling work that we did for North Star to the border indicated that, where you have culverts and levees, you should have bridges. That has a real cost implications for this project, but I see that as just a cost of the project. If the modelling indicates that the circumstances justify a bridge rather than a culvert and rather than a levee, then, I'm afraid, you just have to pay for the bridge.

Senator HANSON: I have grave concerns about the panel full of hydrologists that has been employed by the ARTC, because the panel consults with impacted communities—answers their emails—but is not tasked with considering the viability of alternative routes, nor making a recommendation for the adoption of a different alignment. Therefore, they're in the pocket of ARTC. They are not going to give an independent review of it. I think that communities are doing the right thing to get their own hydrologist, who will make their own assessment of it. That's just my comment on it. I hand back to you, Chair. Thank you.

CHAIR: Thanks, Senator Hanson. Adrian, was there anything you wanted to say, mate?

Mr Lyons : Yes. Senator Hanson, thanks for that question. It's a really important one, about which we have written. In our reply to ARTC, when we wrote to them, when we engaged Holding Redlich and Peter Holt, we gave them a number of questions about what we would like done, and one was to independently fund a hydrologist for this area and North Star, which was ignored. We've since written to the Deputy Prime Minister. They're going to fund Goondiwindi to North Star, to the border, and they independently funded that at his cost. We have asked for it and we've basically been given a flat no. So, it's not that we haven't asked the questions. We are very disturbed. I spent a lot of time with your guys around the Millmerran area. I talk to them frequently. They are very concerned. They've put their money where their mouth is, again as landholders—private money. They've had a drought. Why should these landholders have to put their hand in their pocket to check on something that could be risky or dangerous? It's a good question. Perhaps we could get the Senate committee to pursue that. If they're going to put the line where they are, they should independently show that it's the right thing to do. Thank you for that question, Senator Hanson.

Senator HANSON: I have read the letters Holding Redlich sent to Inland Rail, but the fact is that you have asked a lot of questions on notice. The response that I see from Inland Rail is just hopeless. They're not answering the questions. They're referring to things that happened years ago or say, 'Go to the website and look for the answers.' I just don't feel that they're actually communicating with the locals or answering your concerns. I think it has been smoke and mirrors. These questions need to be asked and answers need to be given, because it will impact on a lot of farming and the communities. Whether it will be successful rail, at a cost of over $12 billion to the public, concerns me. Thank you, Chair.

CHAIR: Senator Hanson, thank you. I have asked that the questions that have not received answers be forwarded to the committee, which Adrian is going to do, and I have no doubt that Ms Ley will do it as well. We will present them, under our official committee name, to ARTC and request the answers, Senator Hanson.

Mr Holt, it's great to have you on the line here. I know that Adrian was listening earlier, and I'm not sure if Ms Leys was, or if you were, but, as I said, I need to paint a picture for you. I'm really keen that your constituency, your membership, actually gets this information as well. Two of the biggest problems that I see and which I'm getting no response on—surprise, surprise!—are, firstly, that to make a success of Inland Rail, the ARTC are predicating that success on the 24-hour turnaround, as you all heard. I'm very close to the road transport industry, which are saying quite clearly, 'Yes, if it's 24 hours we'll use it'. But here's the kicker: if we talk about six minutes, or nine minutes or 15 minutes because we can't go through the Pilliga Forest then that's fine. But there's not one single cent of taxpayers' dollars going into infrastructure on the Melbourne end or at Acacia Ridge in Brisbane. Are we really seriously trying to get sucked into this bulldust argument that the transport industry will use Inland Rail for 24 hours and then accept that the container sits in Acacia Ridge or at the Melbourne end for another 24 hours? That's because there are 24 trains coming through that are 1.8 kilometres long, and we're not going to put one single roundabout or traffic light in. You get that bit, right, Mr Holt? And I know that Adrian does, and Ms Leys. That's one thing.

Here's the other kicker: there's a group named FORG, Freight On Rail Group. Have you had any contact with them, Mr Holt, Adrian or Ms Leys? Have you heard of them?

Mr Holt : I know the name but I haven't spoken to them.'

CHAIR: Let me tell you quite clearly: they have written, pleading with the Deputy Prime Minister to wake from his slumber so that he would meet with them and they could explain to him that the continuation of the exploitation of the temporary voyage permit system, where foreign shipping is carting freight in and out of our ports around our coastline, will put them out of business. I'm not making this up—these are nine rail operators screaming that they're being driven below the viability line. They employ thousands of people and they're the ones who are going to be expected to do this—they have the locos, the containers and the railcars. And this fib that the Inland Rail project, as it stands, is going to be a magnificent opportunity for Australia to advance and get trucks off the road is absolutely criminal. Do you have some thoughts around that? I'd love your people to get to know the full story.

Mr Holt : From my perspective, I'm not really alive to that issue and it's not something I can speak about. What I can say is that we had an economist look at the cost-benefit analysis that was done about the project as a whole. For him—and this is what I reflected on in the submission—it was that we have a very high price for fuel, which is not reflected in what's actually happening, and that there were no real assumptions about upgrading to the highway network. So this idea that the Inland Rail can take trucks off the road is seriously questionable.

I do accept that there are some benefits. You had Parkes and Moree on earlier, and those people will derive benefit from this project. But if you look, for example, at the North Star to border section, which we had a look at: Inland Rail couldn't reasonably answer the question about the costs and benefits of that part of the project. That's because, in truth, there's very little in the way of benefits to people in that part of the alignment. I think the best that our economist could say was that there'll be a camp in North Star and they'll sell a bit of petrol and a bit of beer, and there'll be other services provided to the men who are working there for a short period of time. But those are the benefits, and they're only for a very narrow, small group of individuals.

People across the alignment are the ones with this—it's a terrible word—'disbenefit'. They're the ones who end up wearing the disbenefits: noise, vibration and other things. So as I mentioned earlier, for me, from an economic perspective, parts of this project are sort of missing for a project of this size. To me, the benefits in this project are what you were alluding to when you talked about that impact assessment and the connection to those ports and the nearly rail losing out to shipping. In fact, it's rail losing out to the trucks on roads as well.

Again, those are what I would see our economist couldn't see the benefits.

CHAIR: I just want to strengthen that argument. What I'm saying is that I want an inland rail. I want a successful inland rail project. Of course I do. If everyone's consulted, everyone's happy—you're not going to make everyone happy, but if you've taken everyone's considerations—you do your best to make it as painless as possible if it's in the best interest of our nation and future generations. I have no fear because I'm an old burnt out truck driver: there is plenty of work around for all modes of transport—no argument. We've got to get goods moved in this country. We have generations now—I'm a bit older than most of you—when our kids pick up the phone, ring up and expect it to be delivered two minutes before they even made the phone call. That's Australia now; we get that. But when we talk about spending $12 billion of taxpayers' money—it won't be $12 billion, trust me; it will be a lot more than $12 billion—tipping up people's lives, including Adrian's members, the CWA members and let's not forget the mob in Millmerran in South East Queensland, and to then have a white elephant that the rail operators are saying under the current legislation that's screwing the living daylights out of them allowing foreign ships to cart all this grain around our nation who pay no taxation and don't employ Australians, whose money doesn't go back into the local Coles and Woolies and Aldi and the hairdresser and the kids' sporting things, this is where I'm trying to lead to. This is not something that the old truckie's making too much noise about and should be discarded. This is a serious issue. Why would you ruin people's lives when you haven't even got the whole costing or the benefits to our nation done properly?

Mr Holt : The perspective that I would have on that is, again, project fundamentals. What are the costs? What are the benefits? If you listen to the landowners like we did on North Star to border, they indicated that there was a more westerly route alignment. Yes, it was a little bit longer to run, but the economist said that in terms of crossing the flood plain it's going to be cheaper, in terms of integration into the Queensland rail network there are more opportunities there for intermodals. There are bigger benefits there. So multicriteria analysis rather than, I would say, rigorous cost-benefit analysis was used to choose the route, and as a result, opportunities that are there are just not being grabbed. We're now starting to see a wider effort to identify other, less-tangible benefits associated with the project. Strange things are happening. The economist was scratching his head because level crossings are going in. You can make an economic business case to rip out a level crossing every day of the week, yet as a consequence of this project, those things are being built. We know at harvest time those roads are busy. Just imagine the frustration of sitting there waiting for that train to pass with a load full of stuff. Nobody wants that. How come those fundamentals were not considered in the conceptualisation of this project? There are benefits there to be grabbed. They're just not being grabbed because of costs and because of this 24-hour constraint, in my view.

CHAIR: Spot-on. In our last remaining minutes I was getting worried, Adrian, because I hadn't heard from you. I thought I'd upset you.

Mr Lyons : My thing with Peter is he steals the thunder all the time!

CHAIR: No, he doesn't.

Mr Lyons : It's quite enjoyable to listen to Peter. It really solidifies what I've been trying to do with Danica with such passion, but having the brains trust behind that to put it into perspective because—I'm not saying it about myself—to look at 'dumb farmers who are having a whinge' and 'they're nimbys' discredits the anxiety that's going on with all the members I represent. I've got special words for it which I can't use. Alluding to some of the things that Peter was just talking about. You have the MCA process, and Richard Wankmuller said to me 'one', but it is international best practice. When an MCA has eight or nine components to that process and you have engineers doing the social impact study on that, I have a real problem with it. What I implore the Senate to do is: have you got the power, and will you come out and do a social and economic impact study, independent of an MCA? Because it is a tick-a-box process that just hasn't been worked. Heads of ARTC have said to me: 'We can't come to Coonamble, because it's not economically viable.' Prove it. You can't give figures to us and say it's going to cost an extra $450 million to go via Coonamble. Compared to what? You can't just throw out a figure and say it. I can imagine ARTC are sitting there, ready to come on here, writing notes about how to counteract what I've got to say. I'm just about sick of it, along with Danica. Peter's just weighed in here, and he's amazed and bemused about what they're trying to pull off here. You've got to be inclusive. You've got to come to these communities. When you have consultation drop-in centres, they come in with 50 staff or 10 staff—divide and conquer. We had a public meeting in 2016 after we were first alerted. We had 100 people turn up to that hall in Coonamble, and I invited Mark Holt to come along. He didn't come. I invited all the ARTC, kicking and screaming, and they thought I had no right to do it. We had a public meeting, where we had questions and answers from the floor. They don't allow that normally. What was the result of that meeting? They walked away and thought, 'That's not enough noise to be worried about.' Richard Wankmuller said, 'You're going through the grieving process for this project. All of your members are in the anger phase of it. They've done the denial phase.' This comment was two years ago. I said, 'These guys are too stubborn out here to look after what you're verbalising to us and the narrative you're using. We're sick of it.' I'm really impressed with Peter Holt and how he has looked at it, especially with the specialist. It actually backs up what we've been trying to say, because they diminish what we have said. The Deputy Prime Minister has said a number of times, 'We don't understand what New South Wales Farmers want.' He said that four years ago. That's been repeated two or three years in a row. Danica and CWA have come on board. They got it. There's plenty of media about this. I just want to put that in perspective, that we really need to go back to the basics.

If they want our support for an Inland Rail—and we want to support it—they've got to be more inclusive and not just look at stakeholders like LGAs. They represent a town and some members. You've had one council member today saying, 'Most people are happy with it.' But he's picking out a suburb of Coonamble, which is great if they get it to go that way and it happens and they prosper from it and it's well done, but they're getting political pressure to go that way, whereas we're saying, 'Go back to the start, look at the numbers, look at the figures, see what the economic loss is going to be for a whole region, not Coonamble.' I'm talking from Narromine right around to Narrabri. We'd like to see diesel in our town, not Parkes and Moree. They've got enough added-value benefits. We could see the fertiliser come to us. We could see how we could value-add our products—chickpeas or fava beans or whatever we grow. GrainCorp is backed up in there. We need more competition to make these communities work and not be decentralised. There are jobs for the taking everywhere out here. There is room to build this infrastructure. There's my soapbox. I just thought I'd let you know a couple of things.

CHAIR: Who could argue with that? Ms Leys, in wrapping up, is there anything else that you wish to add?

Ms Leys : No, not really, other than just to reinforce the point that I made earlier and that has been made repeatedly by Adrian and Peter and you, Senator. It is important. This isn't an issue that a minority of people are making a lot of noise about. It's an issue that actually impacts a large group of people, not just the directly affected landholders but the communities that they live in as well. There are the negative impacts that have been spoken about in relation to the rail alignment choices and hydrology concerns et cetera, but there is also, on the other side of the ledger, the loss of what could be a really positive thing for some regional communities that they're not going to see. So we're really grateful that you're looking into this in more detail, and we're very happy to cooperate further if there's anything that we can do.

CHAIR: That's tremendous. Mr Holt, in summary, what do we need to take on board in the interim now, bearing in mind that I'm looking way over the other side of the five-year construction, because I know transport companies aren't going to be around; I know that they're haemorrhaging money now. We can have the best Inland Rail but, if this government doesn't wake up to the damage that foreign shipping is doing to our rail industry, boy oh boy they really are on another planet. That's the rail operators telling me.

Mr Holt : For me, it's about those three parameters that I think still govern this project. If there is an acknowledgement that those parameters can change, that the 24 hours is not set in stone and that there are additional costs that are going to be necessary to do this right if we're going to forge across flood plains—if those things happen—then somewhere out there, I'm convinced, is a better project, one that brings more benefits than the current project that's on the table.

CHAIR: Just on that 24 hours, trust me, the transport industry will take the cheapest route possible. Make no mistake about that. Timing does come into it, but I come from a state where rail carts most of the freight across the Nullarbor, or used to. We used to have two rail freight operators. We've now got one. The clients are going, 'They did want it all yesterday but, if it's 50 bucks, 60 bucks or 80 bucks a tonne cheaper, they'll wait another couple of days as it comes by ship.' Trust me, the Melbourne to Brisbane line will not compete on timed shipping versus road versus rail. It won't; it will be driven by cost. That's freight. It's not the grain. It's not the agricultural products that are being added and all the other good stuff that people are talking about. We talk about 'base loading' in transport. The base loading that is going to be there day in, day out is what we build our cost models on. All the other stuff on top is just an added bonus. Trust me, if the base loading is not there, it ain't gonna happen—it'll be on road or on ships. Thank you very much for your time. I have no doubt that we will see you again. Where are you based, Mr Holt?

Mr Holt : In Sydney. I'm happy to meet in Gilgandra!

CHAIR: That's what we'll do. I said to Adrian that we're not going to rush this; we'll do this properly. Thank you Ms Leys, Mr Lyons and Mr Holt.

Proceedings suspended from 12:51 to 13:47