Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I am pleased to rise on the Infrastructure Australia Amendment (Cost Benefit Analysis and Other Measures) Bill 2014. The purpose of this bill is to amend the Infrastructure Australia Act 2008 so that it is a function of Infrastructure Australia to conduct a cost-benefit analysis of those infrastructure projects which are of national significance and which also involve Commonwealth funding of at least $100 million. We know the reason why this bill was required. It is trying to rectify the evil of the absolute debacle we had under the previous Labor government with their so-called NBN and their complete failure to have a cost-benefit analysis of that project, which saw billions of dollars of precious capital wasted. It is not only important that we have a cost-benefit analysis, it is also important that that cost-benefit analysis accounts for all the costs and makes sure it does not overstate or understate the benefits.

In the remaining time available tonight on this bill I would like to set out a textbook example of a complete failure of a cost-benefit analysis—a cost-benefit analysis full of flawed assumptions that failed to take into account all the costs and completely overstated all the benefits. The cost-benefit analysis I am referring to is that done under the previous Labor government of what is known as the Moorebank intermodal project. We saw from the so-called cost-benefit analysis that was done for this project that it assumed it would have a cost-benefit ratio of 1.72. It sounds pretty impressive until we actually go through all the costs they failed to consider.

The first cost they failed to consider was the cost of the land. This land is the existing School of Military Engineering which is between Moorebank Avenue and the Georges River. As part of the Defence annual report of 2012-13, we currently have that land, which is 333½ hectares, valued at just $261.7 million. That is less than $1 million per hectare of land. We have seen small housing lots with houses in our area selling for over $1 million, but here we have the valuation at just $1 million per hectare. And this is highly valuable land. A back-of-the-envelope calculation is that perhaps we need another zero on the end of the valuation of this land. We have land that is a stone's throw from Casula railway station. A footbridge could be put across the Georges River there, and that entire 330-hectare precinct could be accessible by a railway station. There are so many wonderful things that could be done with that parcel of land. And if that land was valued in the cost-benefit analysis at its true value, then the so-called cost-benefit analysis that was done previously simply falls over in a screaming heap.

Secondly, what the cost-benefit analysis of the Moorebank Intermodal fails to consider is the cost of all the road and bridge upgrades that are needed, the extra congestion on the local roads, and the commercial effect on the Liverpool CBD. I would like to quickly go through a few of those. The only actual cost of the needed road upgrades that this analysis has added on is a simply four-lane extension to one current section of Moorebank Avenue. That is not in their cost projections until 2029-30. We are talking about moving a million containers a year through this area. The area at the moment is completely congested. People think Port Botany is congested, but all you are doing is moving a problem from Port Botany and dumping that problem out in the Moorebank-Liverpool area. For this intermodal to work, we need billions of dollars worth of upgrades to the local road network.

I will go through just a few that are needed. Firstly, we need a new bridge over the M5 motorway across the Georges River. We need another new bridge over Cambridge Avenue at the southern end of the development, also over the Georges River. We need a new bridge on the Hume Highway over Cabramatta Creek. Currently the Hume Highway is six lanes, but the bridge is only four lanes. If we are going to put all this extra traffic in our area, that bridge needs to be upgraded to six lanes. The same goes for the bridge over Prospect Creek. Again, the Hume Highway is six lanes, and the bridge is only four. If this intermodal is going to work and have efficiencies in moving trucks around our local area, that needs to be upgraded. Then we need improved access to the M5. We need a new overpass at Glenfield. A new Liverpool CBD bypass would be required. We would also have to deal with what is either Australia's first or third worst accident hot spot in the entire country. I am talking about the Hume Highway at the back of the Liverpool CBD. Last year we had almost 200 accidents in that short few hundred yards of space, making it one of the worst black spots in our nation's history. Of all the roads we have in our country, this is one of the worst black spots. And the plan is to actually put 270,000 TEU movements through that existing road network. So, if this intermodal has any hope of being economically viable and efficient, we also need that road upgrade. The list of intersections that need upgrading just goes on and on and on. I have a list here of at least 40 different intersections. We are talking about billions of dollars worth of upgrades to local roads that are needed to make this intermodal viable. But not one of those costs is actually in the cost-benefit analysis.

Then we get on to the effect and the reduced access to the Liverpool hospital. The Liverpool hospital is the largest hospital in the Southern Hemisphere. It services all of south-west Sydney, and it is planned that it will grow and grow in the years to come as our population in the south-west continues to increase. The proposal to put in an extra million TEU containers on the local road network and increasing the truck movements through that area will actually reduce access to that hospital. It will mean that someone travelling in the back of an ambulance will have to wait longer in congested traffic to get through the Liverpool CBD. None of that is in the cost-benefit analysis. The other thing that is not in there is the environmental cost, particularly the cost of increasing particulate emissions. This is one of the areas where the cost-benefit analysis that has already been done completely and utterly fails, because it falsely assumes that there are actually some environmental benefits. It considers CO2 emissions without considering the emissions of particulates. There is a big debate about what CO2 emissions do, but the effect this will have will be negligible. However, there will be a real effect on particulate emissions.

The reason for this mistake is that if we put a container on the back of a train, as compared with moving it by road, then, yes, the rail is more efficient in terms of fuel use. It is actually twice as efficient. So, we need half the amount of diesel fuel. If we are moving a container from Port Botany to Moorebank and if we take it by road, we need twice the amount of diesel fuel. But what the cost-benefit analysis failed to look at is the different levels of particulate emissions from a truck versus those polluting diesel trains. I had the Parliamentary Library do some research for me in this area. For a truck built after 2007—a truck that is getting towards seven or eight years old—compared with the diesel trains we are using, the diesel trains have 20 times more particulate pollution. So, what we will do for every container we take off the road and put on the rail, to move it from Port Botany to Moorebank, is increase the particulate emissions 10-fold. Why is this important? Already in Western Sydney and throughout New South Wales there are over 1,000 deaths a year attributed to particulate-matter air pollution.

Our monitoring station in Liverpool has continued to show an increase in particulate emissions over the last several years, because of the carbon tax and other issues that have pushed up electricity prices, such as the RET, and with higher electricity prices people have been burning more wood to keep their houses warm in winter. That has raised the particulate matter in Western Sydney—in fact, it has raised it so much that we have had levels in Western Sydney above World Health Organisation standards. The previous government came up with a plan—which, I hate to say, we have at the moment adopted, although hopefully we will see common sense—that will increase the particulate emissions for every container that is moved from Port Botany to Western Sydney 10 times. Of course, that is not included there.

Then we have the case of overstating the benefits. There are warning bells on this project. New South Wales Infrastructure, the state infrastructure strategy said:

The short-haul rail market is essentially unproven in Sydney. At present most demand in Sydney is for long-haul export freight and there is significant capacity available at a number of existing intermodal terminals.

Sydney Ports and Hutchison are currently developing a 300,000 TEU per annum intermodal facility at Enfield. which, it says, was to open in 2013 but has now been pushed back until the end of this year. Enfield proves the test case for larger-scale, short-haul intermodal freight in Sydney. The recommendation from New South Wales Infrastructure is that state public funding for additional intermodal capacity in Sydney be minimised until there is greater clarity on whether the short-haul freight market is viable. That has been completely forgotten in this cost-benefit analysis. It has also failed to consider the competitive exchanges in the market that have occurred. In the last 12 months we know we have had Enfield with a 300,000 capacity which could very easily be stepped up to 400,000 or 500,000. We also had an announcement a few months ago that Asciano would build a 600,000 TEU capacity at Chullora. So we are to have a million TEU capacity coming on line in the next 12 to 18 months. There is simply no demand whatsoever for another million TEU capacity at Moorebank. But none of that has been considered.

Then we have the announcement of Westconnex, which will open up the west of Sydney to the port areas and the airports. The issue is that most of the container freight from port Botany goes out to Western Sydney and particularly to the Eastern Creek area. It defies logic that, when a container arrives at Port Botany, an importer is going to take that container, put it on a train and freight it all the way around to Moorebank, take it off the train at Moorebank, put it on a truck and take it 20 or 25 kilometres up to Eastern Creek. When Westconnex is complete, they will be able to put that container straight on the back of their truck at Port Botany, jump on Westconnex and be up in the Eastern Creek area in half an hour or 40 minutes. So the improvements in infrastructure that this government has announced with Westconnex and the M5 upgrade make the Moorebank project completely redundant.

What is the solution? I say that if the private sector wants to go ahead with this project, let them; but under the conditions that they pay the true economic cost of that land and that they get no discounts from the Commonwealth. We look at the true value of that land—if it is one or two billion dollars, that is the amount they should pay if they want to use that land. They should also be made to make a contribution to all the road upgrades and all the bridge upgrades that are needed. If they are prepared to do those things, I say let them go ahead. I know that when those costs are truly factored in they will realise this project—(Time expired)

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