The Australian Government is investing over $9.3 billion of equity financing and grant funding in the Australian Rail Track Corporation (ARTC) to deliver Inland Rail. The accounting classification of capital contributions as equity is based on government expectations to earn a real return from ARTC over the life of the investment.
As Inland Rail is a long-term investment to boost the country’s productive capacity it is ideally suited to government investment.
There are three core governance documents between the Commonwealth and ARTC. These establish ARTC’s role in project delivery and the expectations of Shareholder Ministers, oversight and financing arrangements, and the precise parameters of the Inland Rail project. The three governing documents are:
Statement of Expectations
Details Shareholder Ministers’ expectations of ARTC in its delivery of Inland Rail, including setting out ARTC’s obligations under the governance arrangements.
Equity Financing Agreement
Establishes the quantum of financing being provided to ARTC and the terms and conditions on which the funds will be provided.
Project Development Agreement
Sets out parties’ project cooperation, development and implementation obligations and objectives, along with detailed reporting obligations to the Commonwealth.
The new governance arrangements are in addition to existing accountability and reporting obligations that ARTC has under the Public Governance, Performance and Accountability Act 2013 (PGPA Act), the Public Governance, Performance and Accountability Rule 2014, the Corporations Act 2001, the ARTC Commercial Freedoms Framework 2012 and other policy guidance as made by government.
To support Shareholder Ministers the Department of Infrastructure, Regional Development and Cities and the Department of Finance provide government with clear visibility of ARTC’s project delivery and risk management, and undertake reviews and evaluations of project implementation as necessary.
The shareholder departments are responsible for monitoring the government’s policy objectives for Inland Rail but do not have project delivery functions, which is the responsibility of ARTC.
For more information on ARTC and the construction of Inland Rail visit www.inlandrail.artc.com.au.