The federal government has decided to pause the Inland Rail initiative, which is Australia’s largest freight rail infrastructure project, ahead of the upcoming budget announcement. An independent cost evaluation has revealed that the total expenses for the project have surged to at least $45 billion.
The government confirmed that the construction of the rail link between Beveridge in Victoria and Parkes in New South Wales is projected to be completed by the end of 2027. However, plans for the Melbourne to Brisbane segment of Inland Rail have been discontinued due to concerns that the overall costs could surpass $45 billion.
This new freight corridor, stretching 1,600 kilometers, was intended to be the largest rail undertaking by the Commonwealth in a century, aimed at enhancing freight efficiency, improving road safety, and reducing emissions. Nonetheless, the government announced that it would discontinue funding for the project beyond Parkes, a regional town in New South Wales.
Construction from Beveridge to Parkes will continue, utilizing a reallocation of $1.75 billion from previously allocated “off-budget” funds. This funding will facilitate double-stacked freight trains to operate between Melbourne and Perth via Parkes.
Infrastructure Minister Catherine King stated that the government is making “sensible decisions” to adjust the future of Inland Rail, striving to establish a safe, efficient, and reliable transport network moving forward. Ms. King previously characterized Inland Rail in 2025 as a “significant project” that the Australian Government takes pride in delivering for the public.
Both the Labor Party and the Coalition had made commitments of $300 million during the 2013 federal elections to initiate the Inland Rail project, with the funding eventually being secured by the winning Abbott administration. In 2017, the Morrison government allocated $8.4 billion in off-budget funds to the Australian Rail Track Corporation (ARTC) to advance Inland Rail.
Ms. King noted that ARTC had experienced “decades of underinvestment” under the previous Coalition government. An independent analysis by ACIL Allen determined that the full delivery cost of Inland Rail has now exceeded $45 billion, more than tripling the original budget. The report also projected that the project would not be completed before 2036.
Three years earlier, ARTC had estimated that expenses for the project had risen to $31 billion. Kerry Schott, a seasoned public service executive, expressed skepticism about ARTC’s cost projections in her independent review of Inland Rail conducted in 2023, recommending that these figures “should not be accepted by the shareholder.”
Ms. Schott emphasized that there is “insufficient certainty about the scope, the related schedule, and delivery costs” to have any confidence in these estimates. In light of her findings, Everald Compton, a retired corporate fundraiser and a key proponent of the Inland Rail project, suggested the development of a shorter freight line terminating at Toowoomba. He remarked, “It will never get to Brisbane,” adding, “I reckon hell will freeze over quicker than this railway gets to Brisbane.”
The recent decision to halt the project at Parkes raises questions about the potential job impacts, though the revised project direction will be overseen by newly appointed chair Collette Burke and chief executive Sean Sweeney. Ms. Burke previously served as the interim chair for Inland Rail, while Mr. Sweeney has held recent positions with MetroLink in Dublin and City Rail Link in Auckland. Ms. King stated that these appointments “reinforce” the government’s commitment to ensuring strong governance and clear accountability for the future of Inland Rail.
