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Infrastructure Australia has defended its decision not to approve Brisbane's $5.4 billion Cross River Rail business case after the Queensland government accused it of relying on "false" assumptions.
"We stand by our analysis," Infrastructure Australia's chief executive, Philip Davies, told The Australian Financial Review.
"We've benchmarked some of the material that has been presented to us and we have serious concerns around the patronage growth that is being forecast and also the benefits which are significantly overstated.
"The consequence is that at the moment the costs of the project are likely to exceed the benefits."
Infrastucture Australia's initial map put Brisbane in the wrong spot and mis-named Highgate Hill as "Hill Gate" Supplied
The infrastructure body said the benefit-cost ratio of the project was likely to be "less than 1", meaning the projected benefits would not even cover the costs. The Queensland government had forecast the project would have a benefit-cost ratio of 1.4.
Queensland Deputy Premier Jackie Trad said the Infrastructure Australia analysis was "based on mistakes and also on assumptions that are clearly false," suggesting it was producing evidence "to support Malcolm Turnbull's funding decisions".
"We don't have faith in the process that Infrastructure Australia has undertaken," Ms Trad said.
The Palaszczuk government is providing $2.8 billion to help pay for the 10.2 kilometre rail line, which includes twin rail tunnels running through Brisbane's CBD, after the federal government refused to help fund it.
It is worried that Infrastructure Australia's decision to describe the rail link as a high priority "initiative" rather than a high priority "project" on its official evaluation lists will prevent it from receiving any future federal funding.
But Mr Davies said Infrastructure Australia was a "fully independent" body.
"Every assessment of a business case we do follows the same evidence-based process...we're doing due diligence on behalf of the Australian taxpayer," he said.
Mr Davies acknowledged that errors in a map of the proposed rail link submitted in a draft report to the Queensland government were "unfortunate," but said the mistakes should not distract from the project's "significant issues."
The assumptions used to justify the benefits in the Cross River Rail business case were "well in excess" of those used for comparable projects, he said.
The forecast rail patronage growth used in the project's business case is 7 times faster than actual growth in Brisbane over the last decade and 2.5 times that of comparable projects in bigger Australian cities, he said.
The Cross River Rail business case estimated that rail patronage in the Brisbane region would rise by 6.9 per cent annually from 2015 through to 2026, even if the rail project is not built, and that there would be less crowding on other public transport.
Infrastructure Australia said it was concerned the forecast growth in patronage and "de-crowding benefits" would not be achieved, and that estimates of reduced congestion on roads following the rail line's development were "overstated".
The Cross River Rail Delivery Authority said there were historical precedents to support its projections and that it had found more than 20 instances of "unsubstantiated opinions, assertions or errors" in Infrastructure Australia's analysis.
Infrastructure Australia said it would consider a revised business case that addressed its concerns, including the impact that changes in public transport would have on land use in Brisbane, which could improve the project's forecast benefits.
The dispute over Cross River Rail comes amid the release of a new book, The Oxford Handbook of Megaproject Management, which argues large projects need to be planned more carefully to avoid technical problems and cost-blow outs.
This article first appeared on www.afr.com
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