2015-10-19
Senator RICE: I will start with a question regarding the Melbourne Metro Rail, which I obviously asked this morning with Infrastructure Investment, in terms of where the Melbourne Metro Rail is currently sitting in Infrastructure Australia's assessment lists.
Mr Davies: Infrastructure Australia reviewed the then Melbourne Metro Rail back in June 2012, and it was put on to the Infrastructure priority list as real potential.
Senator RICE: Yes, but there was a media statement by Minister Truss on 8 October stating that 'while projects like the Melbourne Metro, Brisbane Rail and the rail link to Badgerys Creek and around Western Sydney are yet to be planned, have no business case and the costs are unknown, they have not been through any Infrastructure Australia or detailed assessment process.' I want to know whether that assessment that was done in 2012, and I think published in 2013, is still considered current by Infrastructure Australia.
Mr Mrdak: Perhaps if I might add to my answer this morning. The projects, as you heard in evidence this morning from my officers, are going through considerable rework. I think the view of the Victorian government is that this is a different project in terms of the project that was assessed in 2012. There are changes to scope and delivery being contemplated by the Victorian government.
Senator RICE: Where does it sit in Infrastructure Australia's priority list? Is it still considered a threshold project? Has its status changed?
Mr Mrdak: I think it will have to be resubmitted.
Mr Davies: In response to the Australian Infrastructure Audit we are in discussions with each state and territory government. They are submitting to us various initiatives and projects for us to consider as part of a refreshed infrastructure priority list. This may well be a project where we will be asked to look at it again as part of that process.
Senator RICE: What is the status as far as the previous assessment of it?
Mr Davies: That is on the record, but I expect there might be some changes to that project which would require us to look at it again.
Senator RICE: Until it is looked at again is it still there standing at the same status as it was before?
Mr Davies: Yes.
Senator RICE: That is there. So, the minister's statement saying that it had not been through the Infrastructure Australia process is not accurate?
Mr Mrdak: As I said earlier, the project is changing in scope and delivery methodology. Therefore, it is a different project from the one that was looked at in 2012. The minister's statement is right. The business case is being developed by the State of Victoria for its new project.
Senator RICE: But that is a different view from what Mr Davies has just said; that at the moment the old Melbourne Metro assessment is sitting there on the books. It is still there and it is still—
Mr Mrdak: That is not the project.
Senator Colbeck: It is a different project. I think you are verballing the officials a bit, quite frankly. Mr Mrdak has quite clearly said that the project has changed. The Victorian government is going through another process. Yes, the old project sits on the books, but the assessment is that because of some changes there is a new process that is going to occur. As Mr Mrdak clearly said, it may be that it gets resubmitted. I do not think that you can try to tie the two things.
Senator RICE: How is it being considered in the development of the infrastructure plan?
Mr Davies: In response to the audit we have sought submissions from each state and territory government. As part of that process each has identified their own priorities, some of which are early thinking around projects which we are calling initiatives and then some are actually more fully developed business cases for projects. That is all part of the mix at the moment which we are working through.
Senator RICE: What is the status of Melbourne Metro in terms of communications with the Victorian government to Infrastructure Australia in relation to the plan?
Mr Davies: There has been some early discussion around the next iteration of Melbourne Metro, but at this stage we do not have a business case to review.
Senator RICE: Is it more in the category of an initiative rather than a specific developed project?
Mr Davies: Yes, that is correct.
Senator RICE: Moving on to the Australian Infrastructure Plan, at the last estimates we were told that the Infrastructure plan would be completed by the end of the year. Where are we currently at with that?
Mr Davies: We are still working to completion by the end of the year subject to consultation. That is our full focus at this time.
Senator RICE: When you say 'subject to consultation', you will essentially have a draft that would be released by the end of the year and then consultation? Is that the process?
Mr Davies: There is a number of parts to the plan. The first part is structured around the 10 challenges we identified in the audit. They are the basis of policy reforms and commentary. The second part is an updated Infrastructure priority list which, as you mentioned, has initiatives on it as well as projects. We are working through all of that at the moment. There has been a very collaborative engagement with each state and territory government. We have had in the region of 90 meetings with our colleagues around the country. We have also had private sector submissions. Again, we have had about 90 submissions from the private sector, from industry bodies, associations and so on as well. We are working through all that detail at the moment and that will be what we bring together and then have further dialogue with states and territories towards the end of the year.
Senator RICE: Are you planning to release a version of the plan that would be open to the public, not just governments and private sector input, for public consultation before the plan is finalised?
Mr Davies: All the submissions, at this stage, have been provided on a confidential basis. Hence the close working relationships. That is still a behind closed doors discussion in terms of working through the final detail of what we assess through that process as being nationally significant.
Senator RICE: When will there be something that the public can engage with and will that be a final version or will it be a draft version?
Mr Davies: That will be a final version.
Senator RICE: There will be no public engagement before the finalisation of that plan?
Mr Davies: There is no public engagement planned.
Senator RICE: That is extraordinary. The private submissions are confidential submissions to you and so there will be no opportunity for people to engage with that plan before it is a final plan?
Mr Davies: The private submissions that I mentioned, around 90, are not just private submissions, they are regional development associations and local government. Some of those have been provided on a confidential basis. We are just in the process of going back to those organisations that made those submissions, and we intend to make those public in the near future following confirmation that we can do so with the people who submitted.
Senator RICE: I want to go back to one of the inputs into that plan, which was the cost-benefit analysis or the assessment framework, which at last estimates we were told would be available to the public within three months. That was the end of May so that makes it the end of August, and it is now almost two months late. That assessment was originally due by the end of March. Where are we at with the release of that assessment framework?
Mr Davies: As part of developing the plan we have also, as you have quite rightly mentioned, had a look at the assessment process we use. That has been done in collaboration, again, with state and territory governments through the Infrastructure Working Group, which is a COAG group, which in turn has also been updating the transport guidelines. Those guidelines are due for release by the end of the year. The update to the framework has very much been done in concert with that. As part of that process, we also had a look at the potential for wider economic benefits, which I think I mentioned previously. As part of that process the Bureau of Infrastructure, Transport and Regional Economics is looking over the medium term to develop tools in terms of models and data sets to enable us to look at wider economic benefits as a stronger part of our assessment, but at this stage there is still work that needs to be done to provide those data sets. As Infrastructure Australia we are still keen to encourage proponents to look at wider economic benefits. Where applicable, we are suggesting that we look at some of the guidelines used in the UK to support that process, but at this stage we cannot make that a key part of the process, because we simply do not have the models unfortunately or the data to do that. Again, we are working very closely with our state and territory colleagues on that process. We have had lots of good input. We are going through the final stages of finalising that process, which again will be released as part of the plan.
Senator RICE: So, the framework will be released as part of the plan. The framework was meant to also have a consultation process around it, not just with the jurisdictions but also wider community consultation. You are saying that there is no opportunity for consultation on the final plan. How is the wider community, academics or anybody, able to have input into that key process in the development of your plan if it is not being released until the plan itself?
Mr Davies: There are two parts to the assessment process. The first consideration in making any assessment is around national significance. The second part of the assessment is around does initiative solve a nationally significant problem and is there a clear line of sight to that? As part of this new process we are very much using the Australian Infrastructure audit as the baseline for that evidence, which is where we have been in this very collaborative process with the states and territories. We did not have that data set before, so that has been the starting point for this process. Then the last part of the process, which only really applies to full-blown projects with a full business case, is looking at the cost-benefit analysis. Again, I mentioned the wider economic benefit part of that, but there is little room for improving that part of the process. It is well tried and tested. It is a good process. The only real change that we are looking at there is providing better templates to actually make the process more streamlined and to try to align it with what everybody is doing around the country. There has been some feedback around having to fill in different pieces of paper for similar purposes in the state and territory governments. Sometimes there are several versions there, and for ourselves; we are trying to streamline the process to make the templates more user friendly and actually present the information that we need to do our assessment in a better way.
Senator RICE: So, you are not envisaging big changes for the cost-benefit analysis?
Mr Davies: No.
Senator RICE: Is your current methodology for the cost-benefit analysis publicly available?
Mr Davies: Yes. The guidelines are on the website.
Senator RICE: In general the key measure that was being used in the audit was the development of direct economic contributions. That is the key thing that was being measured. Can you say how much of the assessment of those direct economic contributions in the audit is going to influence the assessment of transport priorities in the plan?
Mr Davies: As you quite rightly said, the direct economic contribution was a big part of the audit but also, in terms of transport, we specifically carried out some strategic modelling looking at where the corridors would be, particularly in the capital cities where we would see congestion potentially after 2031. That was some modelling done by Vietch Lister. The same approach was used for each capital city. We had one lens looking at those key corridors. That has been one of the evidence bases for looking particularly at the transport space in terms of where we feel we need to see some clear plans for the future. That has been the baseline.
Senator RICE: Did that modelling then feed into the direct economic contributions?
Mr Davies: Yes. My colleague Mr Alchin is probably better placed to speak about how that was set up.
Mr Alchin: That is correct. We commissioned two pieces of work; the broader economic analysis that was the debt calculations which was across the four sectors, which was supplemented with transport modelling in the six largest capital cities and for the very large cities their nearby areas. That modelling gave estimates of delay cost and economic contribution not just at a metropolitan-wide level but also in particular corridors. As Mr Davies was saying, that is one of the pieces of evidence that we are looking at in assessing proposals for inclusion in the plan. It is not the only piece of evidence that we are taking. Submissions, both public and jurisdictional, are part of that. It is certainly part of the evidence base: are proposals are coming in that address some of those high-priority corridors, for example, in the urban areas?
Senator RICE: So, if something has a high direct economic contribution that would have a significant influence as to whether it is assessed as an area that needs attention?
Mr Alchin: That is something that we are certainly looking at as a point of evidence for inclusion in the plan.
Senator RICE: How important do you think it is that the audit and the plan are mode neutral as to the potential contribution from private passenger cars and public transport?
Mr Davies: The transport modelling that we just spoke about basically looked at the corridor and it is taking a neutral view of what are the pressures of the corridor. It is not presupposing what the answer is or what the solution is. Certainly that is the approach we are taking in working with the jurisdictions to say, 'This is a problem. What potential solutions do you have to this problem?' It is a neutral approach.
Senator RICE: How is the plan going to overcome the assumptions that are in the audit that actually overemphasise the importance of car passenger travel versus public transport? There are a number of assumptions that, in terms of the direct economic contribution, value passenger car travel more highly than a journey by public transport. It values the time of people who travel by car at twice the value of people who travel by public transport. It is $26 an hour for the time of somebody travelling by car compared with $13 an hour for public transport, which means that the direct economic contribution is more for car travel. The modelling in it presumes low ongoing public transport share, because the modelling presumes new road infrastructure but in general not new public transport infrastructure. How is it going to overcome those implicit assumptions that are built into the audit?
Mr Davies: I will ask Mr Alchin to respond again on that one.
Mr Alchin: The modelling was done, we believe, on a robust basis. It took account of the travel time values for different modes that have been discussed around the industry. In relation to the presumption of road projects, the only projects that we incorporated into the modelling for 2031 were projects both public transport and road that were either under construction or had a funding commitment. We quite consciously did not include any other potential road projects that were not yet the subject of hard financial undertakings in budgets and things of that nature.
Senator RICE: I saw the statement that that was the case, but when you investigate, in fact, what projects are included there—in the case of Melbourne, East-West Link Stage 1 is included in the assumption. In the case of Sydney, WestConnex is there. In the case of Perth, Roe Highway is there. Again, in terms of public transport investment, there is no public transport investment in Melbourne other than growth area bus planning.
Mr Alchin: As I said, our approach to the modelling was not to prejudge the plan. It was only to proceed with or include in the modelling those projects where they were either under construction or where a financial commitment had been made to proceed with the project. Yes, a number of those projects were road projects, but if there were also hard commitments to fund public transport project those were also added.