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THE much-vaunted Cross River Rail train tunnel will struggle to produce the economic benefit necessary to justify the project’s hefty $5.4 billion price tag.
The Courier-Mail can reveal the Palaszczuk Government used inflated figures to claim Cross River Rail was a “no-brainer” decision for Federal, Council and private funding.
However, the project’s secret business case shows $1b in costs would have to be cut to achieve the Government’s benefit cost ratio figure of a $1.21 return on every $1 invested.
The figure also does not include the impact of a new train control system that the Government has committed to fund which will address inner-city rail congestion at a fraction of the cost.
Analysis of the business case indicates a $5.4b Cross River Rail may only return a 95 cent benefit for every $1 spent after the installation of the European Train Control System (ETCS).
Cross River Rail has caused as schism within the Palaszczuk Government with some ministers privately questioning the price of the project and so-called “value-capturing” proposals to help cover costs.
Infrastructure Minister Jackie Trad conceded Cross River Rail’s benefits would shrink after construction of the $63m train control system.
Further analysis ordered by the Government following questions from The Courier-Mail estimated the benefit cost ratio at $1.06 for every $1 invested.
However, Ms Trad said that the figures did not account for the “wider economic uplift” of the Cross River Rail project, including development opportunities, jobs within the station precincts and higher property values.
“Cross River Rail remains the single critical solution to future proofing our rail network and unlocking vital inner-city rail capacity in the long term,” she said.
Treasurer Curtis Pitt, Premier Annastacia Palaszczuk, Minister for Transport Stirling Hinchliffe and Infrastructure Minister Jackie Trad announcing the Cross River Rail project. Pic: Darren England.The 10.2km project linking Dutton Park to Bowen Hills will prevent demand for train services exceeding supply by 2021.
Opposition Leader Tim Nicholls said the Government had already been caught out with secret tax plans to pay for Cross River Rail.
“Now they’ve been caught out grossly overstating the benefits of a project that is marginal at best under the standards set by their own experts,” he said.
This article first appeared on www.couriermail.com.au
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