2015-10-19
Senator RICE: Thank you, Chair. Gentlemen, I want to start with some questions about some Victorian government current engagement with the federal government on their infrastructure projects, noting the answer to the question on notice that Senator Conroy asked at last estimates:
Although the Australian Government remains committed to the East West Link project, the Government is willing to consider investing in other major infrastructure projects of national significance in Victoria should the Victorian government come forward with options for assessment.
Given that, I just want to check how that is progressing and what the status of the dialogue between the Victorian government and the federal government on these projects is.
Mr Mrdak: The Victorian government have provided, at officer level, some indicative projects that they wish the Commonwealth to consider funding. We are currently working with Victoria on that and working through some of the details of that. So, yes, we are receiving project proposals from Victoria, at this stage at the strategic level—descriptions of the projects that they are seeking Commonwealth assistance with.
Senator RICE: Can you share with us what those projects are?
Mr Mrdak: Certainly. I will ask Mr Foulds to give you an update, but they include projects which Victoria have publicly announced are priorities, such as Melbourne Metro and their Western Distributor project.
Mr Foulds: There is not a lot to add to what the secretary has said, Melbourne Metro being one that they wish to progress. There is the Murray Basin Rail Project. There is the M80—the remaining four sections of the M80. The federal government has already committed to one of those four. That is from Sunshine Avenue to Calder Freeway, which has already been committed to this year. There is the Western Distributor, which as you know is a Transurban led, market led proposal, and the Victorian government are assessing that. They are in the development of the Victorian business case to assess whether they would like to go with that proposal, and we have been talking to them about that one. West Gate—
Senator RICE: On that one, they are still deciding whether they want to pursue that one, but you are having preliminary discussions about it?
Mr Foulds: Yes. The Victorian government is assessing that through its five-stage process. It is in stage 3 at the moment, which is development of a business case. That will be assessed by the Victorian government, and that will determine how the Victorian government wishes to progress with that proposal.
Senator RICE: What is the nature of the discussions with the federal government then about the Western Distributor, given that is the stage that it is at?
Mr Foulds: At the moment, it is mostly about the scope as to what it would be. They have yet to finalise their negotiations with the market to determine what it would end up being. Therefore—
Senator RICE: There is yet to be a final decision on the proposed route?
Mr Foulds: On the proposed route, and, when that has occurred, then it will be about dollars, I imagine.
Senator RICE: What input then is there? Is it information going from Victoria to Canberra, or is there—
Mr Foulds: Yes.
Mr Jaggers: Yes, it is information. As Victoria develop their business case, they are talking to us about the issues around the business case—the scope, the alignments, the options—so that we are in a better position to be able to advise government at the appropriate time. We certainly have not seen a final business case. We have seen little parts of that business case, and we have seen some data. But we are at that stage, as Mr Foulds said, of Victoria developing a business case as part of their unsolicited market-led proposal process. They are keeping us in the loop at this stage, and they are also keeping Infrastructure Australia in the loop as well.
Senator RICE: Have they given you an indication of when you are likely to see a business case?
Mr Jaggers: It is still under development, so I think it will be a few months.
Senator RICE: For the Melbourne Metro Rail project, can you tell us what stage the discussions are at with that?
Mr Jaggers: We have not received much further information on that project. We understand Victoria will be submitting information to Infrastructure Australia and to us. At this stage, we have not received very much information. The project is a longstanding one; the business case has been developed over a long period of time, and we have had active engagement in that process. But it does need to be revised; it does need to be updated, and we have not seen that updated information from Victoria at this stage.
Senator RICE: Again, have you been given an indication as to when you are likely to see a revised business case? Why does it need to be revised?
Mr Jaggers: I understand that, as the project has been redeveloped by Victoria, there have been a number of changes to the way it will work. We are not aware of those. There is also an issue around how it might be funded and financed; we have not seen any details on that or on what Victoria might be seeking in terms of Commonwealth involvement in the project. So that is, from our perspective, at an earlier stage than the Western Distributor project, where we have received more information from Victoria. But we expect that Victoria will be working towards sharing that information on Melbourne Metro with us shortly.
Mr Mrdak: As you would be aware, the successive Victorian governments have had different views on what the Melbourne Metro project should involve.
Senator RICE: My understanding is that the current government have gone back to the design that the business case was done on at the time of the previous Labor government.
Mr Mrdak: Not completely; there are some design changes and the like being contemplated and different delivery methods being contemplated. So it is not simply a case of dusting off the pre-Napthine-Baillieu government changes; it is not simply a case of returning to the Bracks-Brumby government's designs.
Senator RICE: Thank you. Have the level crossing removals been on the Victorian government's list?
Mr Jaggers: That is something that Victoria has approached the Australian government about, so it is on the list.
Senator RICE: It was not on the list that Mr Foulds just outlined?
Mr Foulds: I had not completed the list.
Senator RICE: Sorry.
Mr Foulds: The next item on the list is the level crossing removal program.
Senator RICE: Prescient!
Mr Foulds: You would be aware that the St Albans project has been approved by the government and that Infrastructure Australia assessed that and said that, on its own, a level crossing is not nationally significant and that, in its assessment of a full line or suite of them, it might be a different answer. But that is a question for Infrastructure Australia at the time. At the moment, they have put forward that as a proposal but not in any great detail yet.
Senator RICE: So they have put just St Albans forward?
Mr Foulds: This is initial correspondence from the Victorian government. These are the things that they are interested in progressing. We have not got very deeply into it.
Senator RICE: Can I clarify: they are interested in progressing the suite?
Mr Foulds: Yes.
Senator RICE: Again, have you got a time line as to when you would expect to receive information from the Victorian government on that?
Mr Foulds: They will be working on all of these at the same time, so we expect it would be in the next few months. This is when we would get the detailed work, or the detailed proposals, which we can then do a detailed assessment on—as will IA, if it is applicable to them, as well.
Senator RICE: What is the government's response to the Victorian government putting the Port Rail Shuttle project on ice?
Mr Mrdak: The department considers that the Port Rail Shuttle proposal is a very good proposal which needs to be progressed. We are talking to Victorian officials at the moment along those lines. Mr Wood can give you an update. We would like to see the proposal move more quickly. We recognise that the Victorian government has views that this needs to be considered as part of the port sale, but we do consider that, whatever option is adopted in terms of the future of the port, some of these works, particularly connecting the two in intermodal facilities, need to happen more quickly. Richard, is that a fair summary?
Mr Wood: Yes. I am not sure if there is much more to add to that. Certainly, links to rail and freight, and more generally to our ports, are key issues of concern. They are identified in the Infrastructure Australia audit as a general area of focus for future infrastructure investment. I think the Port Rail Shuttle, in whatever form it eventually comes, is going to be important and, as Mr Mrdak as indicated, we remain in discussions with Victoria in relation to that.
Senator RICE: So you would say that, regardless of the outcome of the privatisation of the port, that should not be a barrier to progressing the Port Rail Shuttle project?
Mr Wood: Ultimately there will be some judgments there for the Victorian government and the private owners of the port, but one would expect that rail will continue to play a role in the port—and most likely a greater role, particularly for the metropolitan freight task. As you would be aware, there are already rail links into the port for regional freight, and a new one was reinstated recently from Horsham. That metropolitan service has not worked in Melbourne to date, and we think there is real potential for that to do so with a range of terminals in the metropolitan area.
Senator RICE: Is it the government's view that having an effective Port Rail Shuttle development should be a critical part of any potential privatisation of the port—that it should be an essential prerequisite, essentially, for the conditions for the privatisation?
Mr Mrdak: I do not know about a prerequisite for the privatisation but certainly, as Mr Wood indicated, our view is that Melbourne requires that port-rail interface to happen if it is to continue to meet the throughput that is going to have to be handled. With the way in which the Melbourne freight-handling picture is developing with their use of intermodal terminals, clearly rail to the port is going to be critical to that.
Senator RICE: I have a couple of questions about Melbourne Airport. I presume you are engaged with the third runway development plan?
Mr Mrdak: Yes, we are.
Senator RICE: What level of involvement do you currently have with the planning or preparations for the third runway?
Mr Mrdak: Melbourne Airport is currently completing its planning. We are engaged with Melbourne Airport to enable the acquisition of the land, which is currently off airport. That would be done through an arrangement utilising the Commonwealth land acquisition powers. We are currently facilitating a memorandum of understanding with Melbourne Airport to enable the Commonwealth to assist with the acquisition of additional land required for the development of that runway.
Senator RICE: Is that the limitation of your involvement?
Mr Mrdak: At this stage. Our main priority is the land acquisition. Obviously, once the major development plan and the like need to be progressed we will be engaged, as we are with all of the airports, as the regulatory planning-approval body.
Senator RICE: What is your understanding of the community consultation that is required in the development of the major development plan?
Mr Mrdak: The act sets out quite specific requirements in relation to the consultation required and the format in which that has to be provided back to government covering all of the issues raised in the public consultation.
Senator RICE: Noting that the Avalon Airport Master Plan has recently been approved, do you see any interplay between this decision and the Tullamarine third runway proposal?
Mr Mrdak: Avalon and Melbourne are operating in different markets. It is quite clear that Avalon is serving a geographic market which is quite different. I think the experience to date is that they are not competing head to head for a lot of traffic in relation to primary destination. We certainly do not see them as closely tied together. Avalon is proceeding with its own development. Melbourne is reaching runway capacity, which has to be met.
Senator RICE: Have you got any process that has overall long-term planning for the Melbourne-Geelong airport capacity which would interlink Avalon and Tullamarine?
Mr Mrdak: When we look at the Melbourne Airport 2013 Master Plan, which is our primary responsibility under the Airports Act, we certainly do look at what is happening across the Melbourne region and we do look at the interaction between the two airports. But at this stage they are growing and serving quite different markets.