Budget 2011: no big rail spend predicted

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RailExpress.com
Budget 2011: no big rail spend predicted
by Rail Express — last modified May 04, 2011 10:59 AM

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As the next Federal Government budget looms for 2011-2012, it is hard not to feel pessimistic regarding the likelihood of serious funds being committed to the regeneration of Australia's ageing rail infrastructure, writes Francis Dwornik*.

Last year's budget acknowledged that private sector investment was required in order to fund the scale of the major rail projects that need to be undertaken right around Australia.

But the $1bn injection into Australian Rail and Track Corporation (ARTC), for example, was insufficient to kick-start investment at the scale which is required.

$20bn is required for improvements to our rail freight network over the next 20 years as well as a substantial upgrading of public transport – both vital to our long-term economic wellbeing.

A year on, and funds have been diverted from a number of rail projects to fund the recovery programs following the natural disasters in Queensland and Victoria.

While this diversion is understandable, it doesn't change the fact that there are now less funds for rail than before in the government coffers.

Unfortunately, it is not likely that these funds will be replaced in next week's budget, with a significant cut to rail funding a matter of great concern considering the government's ongoing bias towards spending on roads.

As this month's report by the Australian Conservation Foundation (ACF) demonstrated (see this week's story), road building has received four times more government spending at federal, state and local levels than new rail projects in the past decade.

This is despite a surge in the number of commuters nationally wanting to use our already strained metropolitan public transport systems, and the environmental advantages of rail over other transport systems.

Private investment needed
Infrastructure Australia's (IA) pipeline of essential rail projects are critical to regenerating Australian rail, but unless adequate funds are given to key projects, they simply cannot be begun when needed – and finished.

The upcoming budget needs to address taxation and investment incentives to lure, secure and protect private investment, otherwise it is going to be very difficult to get interest from Australian and global investors at the level for Public Private Partnership (PPP) ventures that is needed.

Instead, governments continue to invest in multiple, preliminary studies to identify key rail projects. These studies frequently establish feasibility and the best methodology for such large investments –and excellent recommendations are made.

But when it comes to actually committing funds to the project, there is little follow-through by government. We're losing long-term vision at the expense of short-term electoral cycles.

High-speed rail (HSR) is an excellent case in point. The Federal Government is to be applauded for its extensive (up to $20m) feasibility study, due for completion in July. But the government has to take the findings seriously and if positive, commit the required funds for it to progress to completion as soon as is possible.

All of these hesitations and hold-ups have a time impact and a time factor.

HSR could be built here by 2020, given the rapid development of HSR technology, and depending on the construction resources available. But it requires a government prepared to take a significant risk – even with PPP involvement. As decisions are withheld, time disappears.

This lack of decision-making is why much of our national rail network is life-expired. Is it any wonder our straining metro passenger networks simply can't operate efficiently when they are operating on outdated technology and rolling stock?

Service of the highest level is customary for rail in Europe and increasingly in Asia. We need a fundamental shift for this to occur here, as a culture.

IA's National Land Freight Strategy draft paper has just closed for industry feedback. The paper found that the need for rail freight will grow 90% by 2030.

This will be a rigorous test for the Federal Government. Will it bite the bullet and use this report to commit to the investment required or will our economic capacity continue to fall behind world best-practice?

*Francis Dwornik is general manager of Pacific Services Group (PSG) Rail division. PSG is a leading electrical engineering provider.

The redirection of funding from roads to rail is a major message we must continue to push. Our economy can not afford both and road funding is only making the transport problems worse.