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Estimates: Rural and Regional Affairs and Transport Legislation Committee (Infrastructure Australia)

Senator RHIANNON: Mr Mrdak, in previous answers you have confirmed that the Victorian government has stated that the benefit-cost ratio of the East West Link if the so-called wider economic benefits are not included is 0.8 to one. Has IA ever recommended funding for a project with a benefit-cost ratio of 0.8 to one or even lower?

Mr Mrdak : I would have to look at the IA categorisation. I am not as familiar with all of the projects. I would have to take that on notice.

Senator RHIANNON: Can anybody else help us here? It is one of the things that is obviously surprising—that something that has such a low ratio is still on the books.

Mr Mrdak : I would have to take that on notice, Senator.

Senator RHIANNON: Can anybody else pick it up? Mr Fitzgerald?

Mr Fitzgerald : No, I cannot.

Senator RHIANNON: Mr Roe?

Mr Fitzgerald : I think we should take that on notice, if it involves projects.

Mr Roe : So the question—

Mr Fitzgerald : No, we will take it on notice.

Senator RHIANNON: Is the East West Link still in the 'real potential' category?

Mr Fitzgerald : That is where it is currently listed in the IA.

Senator RHIANNON: Given that the Abbott government talks often about infrastructure projects with Commonwealth funding to be backed by a rigorous business case and benefit-cost analysis, can you confirm that you have seen a full business case proposed for the East West Link?

Mr Mrdak : Perhaps Senator Rhiannon was not in the room when—

Senator RHIANNON: No, I was not here, I am sorry.

Mr Fitzgerald : Infrastructure Australia has not seen the full business case.

Senator RHIANNON: When you have not seen a full business case, what do you do about it? Do you request it? Do you put things on hold? Can you explain what you are doing about it and the process?

Mr Fitzgerald : We expect to receive a full business case from the Victorian government.

Senator RHIANNON: When?

Mr Fitzgerald : I do not know exactly but it is imminent. We have in fact received more information—

Senator CONROY: That would be after the $1.5 billion is offered by the Commonwealth government. 

Mr Fitzgerald : By definition, yes. We will work through that full business case with the Victorian government.

Senator CONROY: You will keep working on it until it actually shows a problem.

Senator RHIANNON: So you are going to hand over all of that money before you have got the business case and you are—

Ms O'Connell : Senator, as I outlined earlier, they are an advisory body to government. Government make decisions about funding and hand over the money. It is not IA.

Senator RHIANNON: Yes, I appreciate that.

Senator CONROY: That is the point.

Senator RHIANNON: I appreciate that but that is what is about to happen. The money is handed over and nobody within government, nobody sitting here, will have seen the business case; is that correct?

Mr Mrdak : The business case that has been developed to this point has been provided to Infrastructure Australia and the department.

Senator RHIANNON: When you say 'developed to this point' what do you mean? What has been developed to this point? How much is there? How complete is it?

Mr Mrdak : The information is reasonably complete. There are some areas which Victoria is now revising and reviewing. As Mr Fitzgerald outlined, he anticipates receiving that business case for stage 1, and also Victoria is now preparing the business case for stage 2, which will both be made available to Infrastructure Australia.

Senator RHIANNON: When you say 'reasonably complete' what sections are not there? And have you identified what you want?

Mr Mrdak : Infrastructure Australia, as Mr Fitzgerald has outlined, have gone back to Victoria and outlined some areas where they are seeking further information.

Senator RHIANNON: What are those areas, please, Mr Fitzgerald?

Mr Fitzgerald : I do not have that detail with me, I am sorry.

Senator RHIANNON: Do you mean you do not remember or you cannot—

Mr Fitzgerald : No. I have not been involved in the process between IA—I have had one discussion with the department, who sent some further information in the last few days, but I have not reviewed that information.

Senator RHIANNON: So back to you, Mr Mrdak. When you say 'reasonably complete', what are the sections that are not there? What are you after?

Mr Mrdak : I think Victoria are now reviewing in the light of what they are doing in terms of some of the planning issues and also the procurement issues which are now underway. As that is being updated, that information will be provided.

Senator RHIANNON: That is very wide ranging. That basically sounds like the whole business case.

CHAIR: We will come back to that after morning tea. Are you any relation of Rupert Murdoch, Mr Mrdak?

Mr Mrdak : No, I am not.

CHAIR: Mr Mrdak. We will take a break. The committee will have a quick private meeting.

Proceedings suspended from 10:46 to 11:00

CHAIR: We will resume.

Senator RHIANNON: Could you just outline what submissions have been received from the Victorian government that cover transport projects?

Mr Mrdak : Submissions? Sorry, how do you mean?

Senator RHIANNON: What requests for assistance, what projects have been floated with you, however you interact with Victoria outside the East West Link? Can you outline what other transport projects are on the books in any way?

Mr Mrdak : Certainly we have an ongoing engagement with Victorian officials. The Victorian government has made a number of submissions to the Australian government in relation to future investment programs. Obviously, as you are aware, the government made a series of commitments in the State of Victoria in the lead-up to the last federal election. Subsequent to that the Victorian government has put forward a number of proposals for changes and variations to the investment program, which have been reflected in this year's budget with a number of key decisions.

In the budget this year the government has announced its commitment to the East West Link, both stage 1 and stage 2. The government has also made some announcements in relation to a significant rail level crossing project, St Albans, and also some other variations to the program—

Senator RHIANNON: The question was: what has Victoria put to the government? What else have you received apart from East West, please?

Mr Mrdak : In relation to those other projects we have also received project proposals or at least indicative project information in relation to all of the Victorian projects which appear in the program as announced in the budget.

Ms O'Connell : Things like the duplication of the Princes Highway, for example.

Senator RHIANNON: So everything in the budget is what you received from Victoria? There is nothing additional? You are saying everything is in the budget?

Mr Mrdak : All of the projects that have been agreed with Victoria—

Senator RHIANNON: No, I know 'agreed'. The question was: has the Victorian government put forward any other transport projects?

Mr Mrdak : That are not reflected in the budget?

Senator RHIANNON: Yes.

Mr Mrdak : Clearly, like all jurisdictions, they have a list of projects they would like to receive Commonwealth funding for, some of which—

Senator RHIANNON: Can you release those, please?

Mr Mrdak : I would have to take that on notice. They are clearly a long list of projects that each jurisdiction would like to see Commonwealth funding for.

Senator RHIANNON: If you could take that on notice?

Mr Mrdak : Certainly.

Senator RHIANNON: Just going back to what we were talking about before with regard to the business case, when you do receive it for the East West, will that be publicly available?

Mr Mrdak : That will be a matter ultimately for the Victorian government and Infrastructure Australia, depending on the nature of it. But certainly the government has indicated that it certainly sees in the future that as much as possible Infrastructure Australia's assessment and material will be made publicly available, provided they are not matters which go to commercial-in-confidence that might affect procurement processes and the like, yes.

Senator RHIANNON: That is your understanding, Mr Fitzgerald?

Mr Fitzgerald : Yes, that is my understanding. I have the same understanding.

Senator RHIANNON: Is that the usual practice, that it is released publicly?

Mr Mrdak : As part of its reforms, Infrastructure Australia is looking for a greater level of transparency around the publication of materials. To this point Infrastructure Australia has published its priority list as well as, in the last few years, benefit-cost ratios against projects that are all available on its website. In future—

Senator RHIANNON: The question was, though, about the business cases. The usual practice is that the business case for a project that IA is involved in is publicly released?

Mr Mrdak : It has not been the usual case.

Senator RHIANNON: It is not?

Mr Mrdak : No.

Senator RHIANNON: So it has not happened in the past?

Mr Mrdak : Information has been released and Infrastructure Australia's website contains details of many projects, including their assessment. In the future the government has made a commitment to increase the amount of information that is available once the assessments have taken place, yes.

Senator RHIANNON: But not the full business case—a commitment has not been given?

Mr Mrdak : It will depend. There may be elements of the business case which are not publicly released where the Victorian government or other state governments or territory governments wish those matters not be publicly released because they may affect the procurement process that they have underway. For instance, information such as patronage forecast and the like may not be released in full because they may form part of a commercial negotiation with, say, a PPP proponent. So in those situations you may not publish all of the information, but certainly as far as possible the government is seeking to increase the amount of information available.

Senator RHIANNON: Who makes that decision on what will be released?

Mr Mrdak : Ultimately it will be Infrastructure Australia and the Australian government, if material was provided to the government.

Senator RHIANNON: So ultimately the minister?

Mr Mrdak : Ultimately the Infrastructure Australia council in the first instance would make judgments based on advice they receive from the proponents of the project.

Senator RHIANNON: I thought you just said 'and the government'?

Mr Mrdak : Where information is provided separately to the government, the government could choose—and I think may increasingly choose—to provide that information publicly.

Senator RHIANNON: You are saying IA can make their decision independently?

Mr Mrdak : IA can make their own judgments based on the request from the proponents as to what information can be made available.

 

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