Australia axes northern half of Inland Rail as cost balloons to $45 billion

Key facts

• The Inland Rail project was originally envisioned to run 1,700 km from Melbourne to a port near Brisbane.
• The cost estimate has blown out to more than $45 billion, over five times the initial $8.4 billion estimate in 2017.
• The government will now only complete the section from Beveridge, Victoria, to Parkes, New South Wales, about half the distance.
• An independent review by Kerry Schott in 2023 estimated costs at $31.4 billion and completion by 2031, but further costings pushed completion to 2036.
• The government reallocates $1.75 billion of the $14.5 billion budget to other national rail upgrades.
• Sean Sweeney has been named incoming chief executive of Inland Rail, replacing Nick Miller.
• The Coalition announced the project in 2017 with an estimated cost of $9.3 billion.
• The project was expected to provide a 24-hour freight connection between Melbourne and Brisbane with double-stacked trains.

A nation-building vision reduced to half its length

The Australian government has effectively killed the northern half of the Inland Rail project, abandoning the dream of a direct freight rail link from Melbourne to Brisbane. The decision comes after warnings that the entire 1,700-kilometer line would cost well over $45 billion and take until at least 2036 to complete. Originally touted as a transformative infrastructure project, Inland Rail was meant to slash travel times for freight and boost national supply chains. Now, only the southern section from Beveridge, on Melbourne's northern outskirts, to Parkes in central-west New South Wales will be built — roughly half the original distance. The government expects construction on that truncated segment to be finished by late 2027, allowing double-stacked freight trains to run from Melbourne west to Perth and east to Newcastle.

A $45 billion price tag that keeps growing

The latest cost forecast for the entire line is three times the $14.5 billion the government had budgeted. It is also more than five times the original estimate of $8.4 billion made by the Turnbull government in 2017, when the project was announced with a completion date of 2025. In 2020, the estimated cost had already risen to $16.4 billion, with a target completion of 2026-27. But the most dramatic increase came after an independent review by Dr. Kerry Schott in 2023, which put the cost at a minimum of $31.4 billion and completion by 2031. Schott called the increase “astonishing” and said she was not confident in the figures. Further costings commissioned by Inland Rail and conducted by consultants ACIL Allen found the project would now take until 2036 and cost more than $45 billion. The government cited serious doubts about whether the line could even be delivered for that amount, fearing the final bill would be considerably higher.

Blame and accountability: failures in planning and governance

Federal Transport and Infrastructure Minister Catherine King blamed the cost blowout on the previous Coalition government, saying the 2023 independent review found “major deficiencies in the governance and delivery of Inland Rail by the Liberals and Nationals.” Schott’s review pointed to “immature preliminary designs and approval requirements,” prolonged approval processes, and “recent escalations” as reasons for the spiraling costs. Schott also criticized the Australian Rail Track Corporation, which had been directly managing the project, for basic failures in planning and project delivery. The project was not counted against the budget bottom line because the government treated it as an investment that would pay for itself. In 2024, then Inland Rail chief executive Nick Miller insisted the project was not stalled and that the government remained committed to the northern half. But the latest cost forecasts have forced a dramatic reversal.

New leadership and a redirected budget

In a bid to salvage what remains of the project, the government has appointed Sean Sweeney as the new chief executive of Inland Rail, replacing Nick Miller. Sweeney, a veteran of suburban train projects in Dublin and Auckland, takes over as interim chair Collette Burke is made permanent in her role. The government will redirect $1.75 billion of the $14.5 billion budgeted for Inland Rail to targeted upgrades of the existing freight rail network. This includes renewing tracks and extending passing loops, on top of an existing $1 billion funding commitment. The reallocation will deliver a small improvement to the budget bottom line. While the sections north of Parkes are on ice, bureaucrats will consider preserving the rail corridor to Queensland, as well as sites for intermodal terminals near Ipswich, leaving the door open for future governments to revive the project.

What remains and what is lost

The truncated Inland Rail will now run from Beveridge to Parkes, a distance of about 850 kilometers. This will allow double-stacked freight trains to travel from Melbourne to Perth via Adelaide, and to Newcastle on the east coast. But the original vision of a 24-hour freight connection between Melbourne and Brisbane, with double-stacked cars traversing central Victoria and inland New South Wales, is dead. The government is still seeking environmental and state approvals and preserving land where the northern sections were intended to be built, through northern New South Wales and south-eastern Queensland. But without funding, those plans are effectively shelved indefinitely. For the communities and businesses that had hoped for a direct rail link to Brisbane, the decision is a major setback. The project was once seen as a nation-building endeavor that would transform Australia’s freight logistics.

A cautionary tale of infrastructure ambition

The Inland Rail saga is a stark reminder of the risks of mega infrastructure projects with inadequate planning and oversight. From an initial cost of $8.4 billion in 2017, the price tag has ballooned more than fivefold, with no end in sight. The project has become a political football, with both sides of government trading blame. As the government focuses on completing the Beveridge-to-Parkes section by late 2027, the question remains whether even that reduced goal can be met on time and on budget. The $45 billion figure — and the fear it could go higher — has forced a painful but perhaps necessary recalibration. For now, the Inland Rail dream is half-built, a monument to ambition that exceeded both cost and capability.

The bottom line

• The Inland Rail project has been scaled back to only the southern section from Beveridge to Parkes, halving its original length.
• The total cost estimate has blown out to over $45 billion, more than five times the initial 2017 estimate.
• The government has reallocated $1.75 billion from the project to other rail upgrades.
• Sean Sweeney has been appointed as the new chief executive of Inland Rail.
• The project was originally expected to provide a 24-hour freight link between Melbourne and Brisbane.
• The decision leaves the northern sections indefinitely shelved, with only land preservation ongoing.