Cross River Rail Budget snub unsurprising given weak business case – will QIC now step in?

Last night’s federal Budget offered some positive news for Queenslanders, such as a commitment to the Melbourne-to-Brisbane Inland Rail project ($8.4 billion) and Bruce Highway upgrades ($844 million), but disappointed some by not providing funding for the State Government’s priority project, Cross River Rail (see Brisbane Times coverage). Instead, Queensland would have to compete with other States for a share of funds from a new $10 billion National Rail Program, on the strength of Cross River Rail’s business case.

Alas, as I have noted previously, the business case for Cross River Rail has never been compelling, and the reported estimated net benefits are surprisingly small for a project that allegedly is essential to avoid a looming capacity limit on Merivale Bridge and a public transport network that could not cope with passenger growth:

XRR business case should be released in full to give public comfort it is value for money

Either the business case failed to properly model the full range of benefits and avoided costs, or this rationale was incorrect. But it’s hard for independent observers to tell, because the Government has refused to release the full business case. This is actually against the best interests of the Government itself and the wider community. Public scrutiny of a draft business case would have helped strengthen the final business case. If a compelling business case was produced, it would have been difficult for the Federal Government to snub the project.

Other comments I have made on Cross River Rail include:

Cross River Rail equals mega-project equals mega-risk

On Cross River Rail, Government appears confused over meaning of “business case”

I doubt the State Government was surprised by the lack of funding for Cross River Rail in this Budget, and I expect it would have been planning for it. Indeed, the Government’s investment manager, the government-owned QIC, is very likely considering a major investment in Cross River Rail, as I have discussed previously:

Debbie hits Qld Budget, but QIC may help out Government by investing in Cross River Rail

This would be unfortunate, given Cross River Rail appears to be such a marginal project, and it would raise doubts about QIC’s independence in investment choices from its owner, the Queensland Government. But the Government needs Cross River Rail to prove it can get things done. So I expect it will do everything it can to get Cross River Rail moving.

CRR_map

Cross River Rail: Great maps and brochures, but weak business case

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2 Responses to Cross River Rail Budget snub unsurprising given weak business case – will QIC now step in?

  1. Jim says:

    I welcome the new found belief in cost benefit analysis by the Treasurer. Can we now safely assume that the none of the non-economic dam proposals being pushed by men in big hats will get be funded either?

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