Submission by proponents of additional information for analysis

5.68 As noted at paragraph 5.2,the proponents of projects included on the Interim Priority List were provided with the opportunity to submit additional economic appraisal information. For all but six¹⁷⁷ of the 94 projects on the Interim Priority List, provision of this information was important as the Office of the Infrastructure Coordinator's December 2008 evaluation had concluded, on the basis of the supporting information submitted to that point in time, that they did not merit being included on the Interim Priority List. In this respect, of the 28 pipeline projects, 16 had been included in the 28 projects recommended by the Office of the Infrastructure Coordinator on 1 December 2008 as being worthy of inclusion on the Interim Priority List. In respect to 15 of the 16 projects, the proponent submitted updated information to Infrastructure Australia and, in 14 of these instances, the Office of the Infrastructure Coordinator updated its earlier analysis. The two exceptions related to:

• the East‐West Rail Freight Corridor project submitted by the ARTC, for which no further information was submitted to Infrastructure Australia. The Office of the Infrastructure Coordinator's December 2008 assessment was that the project involved a Good strategic fit and had an Exceptional BCR but that more information was required to support the economic appraisal; and

• the Oakajee Port Common‐User Services project discussed at paragraphs 5.64 and 5.65^.178

5.69 Of the 12 pipeline projects in the Final Priority List that had not been recommended by the Office of the Infrastructure Coordinator for inclusion on the Interim Priority List, one submitted further information which led to the Office of the Infrastructure Coordinator updating its assessment but this did not result in a clear assessment that there was a robust economic appraisal to support funding for construction. Specifically, the Northern Link Road Tunnel proposed by Brisbane City Council. The BCR originally submitted for this project was below 1.5 with the Office of the Infrastructure Coordinator's Interim Priority List evaluation assessing the BCR as Poor. At its 30 January 2009 meeting,¹⁷⁹ the Council asked the Office of the Infrastructure Coordinator to undertake further work on this project (and four other projects) and, at its 27 February 2009 meeting, the Council decided to include this project in the 'pipeline'. ¹⁸⁰

5.70 The remaining eleven projects, despite not having provided any further information to inform any change to the Office of the Infrastructure Coordinator's 1 December 2008 assessment that they were not sufficiently well advanced to meet the established criteria for inclusion on the Interim Priority List, were, nevertheless, included in the Final Priority List as pipeline projects. Of these projects:

• five were port‐related initiatives (the Abbot Point Multi‐Cargo Facility in Queensland, Bonython Port in South Australia, Hastings Port in Victoria, Bruce Highway‐Abbot Point State Development Area Bypass in Queensland and the Port of Melbourne freight terminal.) For the Abbot Point Multi‐Cargo Facility project (which, as noted at paragraph 5.63, had been assessed as having a Weak strategic fit), the proponent had submitted a BCR which the Office of the Infrastructure Coordinator had assessed in 2008 as being Satisfactory. However, in respect to the other four projects, no BCR was submitted for Infrastructure Australia to evaluate; and

• two were intermodal terminal projects (Donnybrook Intermodal Terminal in Victoria and Moorebank Intermodal Terminal in Sydney). The former had been submitted for assessment as part of the Interim Priority List process, with the Office of the Infrastructure Coordinator assessing that the claimed BCR was Satisfactory, albeit with concerns it was possibly overstated. The Moorebank project had not been the subject of a submission to the development of the Interim Priority List and so had not been assessed by the Office of the Infrastructure Coordinator. As outlined at paragraph 5.10, it was added to the Final Priority List at the 30 January 2009 Council meeting after the Minister had directed the Infrastructure Coordinator to assume lead responsibility for various processes aimed at facilitating development of this project.

5.71 The other projects were: the Bruce Highway Corridor (Brisbane to Cairns including Cooroy to Curra) in Queensland, the Mount‐Isa Townsville Rail Corridor in Queensland, the Queensland Government's 'Brisbane Future Public Transport Network (including Brisbane Inner City Rail Capacity)' initiative¹⁸¹ and the Melton Duplication and Electrification to Bacchus Marsh project in Victoria. For the first of these projects, BCRs for various sections were submitted to Infrastructure Australia as part of the process of developing the Interim Priority List with an economic appraisal rating of Poor arrived at. In respect to the remaining projects, the original submissions to Infrastructure Australia did not include a BCR for evaluation.

5.72 Overall, the above analysis highlights that, for projects other than those seen as ready to proceed:

• the December 2008 request to proponents that they provide information to support an economic appraisal by the Office of the Infrastructure Coordinator as well as a deliverability assessment was unsuccessful in significantly improving the information available to inform the development of the Final Priority List;182

• proponents either had not yet undertaken economic analysis to assess the merits of the project, or chose not to provide this information to Infrastructure Australia for analysis; and

• the project pipeline is largely comprised of projects which either had not submitted a BCR for the Office of the Infrastructure Coordinator's evaluation, or where the Office of the Infrastructure Coordinator's evaluation had identified shortcomings in the BCR.

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174 In relation to the Advanced Train Management System project submitted by the ARTC, the Office of the Infrastructure Coordinator concluded that it could not 'come to a firm view on the economic viability of the project' because the proponent had 'not provided material which meets the minimum information requirements'. Of particular note was that the economic appraisal information supplied by the proponent related to an 'out of date' (2006) study with 'very little supporting detail'.

175 For the Port of Brisbane Motorway, the Office of the Infrastructure Coordinator concluded that the economic analysis to date was robust but preliminary.

176 For the Northbridge Rail Link project, the Office of the Infrastructure Coordinator concluded that the project needed to be re-analysed using a conventional economic framework.

177 See paragraph 4.23

178 The Office of the Infrastructure Coordinator's earlier assessment had rated the project highly both in respect to its strategic fit and economic appraisal but did not undertake a deliverability assessment because it was not sufficiently well advanced to be examined in terms of their deliverability risks. In addition, the Office of the Infrastructure Coordinator had considered this project better suited to private sector funding.

179 The Council meeting was informed by an Office of the Infrastructure Coordinator assessment which outlined that the economic assessment was 'broadly robust and comparable with other projects submitted to Infrastructure Australia' but that there was a concern the project was 'unlikely to be economically viable' because the claimed BCR was likely to be overstated.

180 In February 2010, the Office of the Infrastructure Coordinator advised ANAO that, following the Council's request at the 30 January 2009 meeting, 'The Northern Link initiative was subsequently assessed as not being sufficiently developed to meet the criteria for recommendation as being "ready to proceed". In particular, questions were raised about aspects of the economic appraisal (for example, Vehicle Operating Costs). It was however assessed as having sufficient potential merit to warrant further consideration, following development of the business case. As a result, it was included in the "priority pipeline".

181 Brisbane's Future Public Transport Network was not an identifiable 'project' submitted by a proponent. Rather, the submitted project was the Inner City Rail Capacity project. The scope of Inner City Rail Capacity in the submission was the future construction of two rail tunnel corridors (south to north corridor line and the west to north corridor line). The projects were at a stage where funding was sought for a detailed feasibility study, planning and land acquisition.

182 In June 2010, the Chair of the Council informed ANAO that the Council's view was that the fact that many of the projects included in the Interim List had not provided further information by a certain time did not mean that the concept of an expanded list was not appropriate.