The Economic Benefits
Inland Rail will support more than 21,500 jobs at the peak of construction and deliver a boost of more than $18 billion to gross domestic product during construction and the first 50 years of operation. With upgrades to the existing North East Rail Line (NERL) complete Inland Rail construction in Victoria focuses on the enhancement of 12 sites between Beveridge and Albury.
Construction in Victoria commenced on 1 February 2023 with the first tranche of works to construct new bridges and station precincts, and undertake track realignments and lowering at Seymour, Glenrowan, Wangaratta and Barnawartha North.
Victoria is expected to benefit significantly from Inland Rail operations with considerable growth in gross state product estimated from the freight efficiencies over the first 50 years of operation. Businesses in Victoria are already benefiting from Inland Rail, 58 contracts at a value of over $269 million have been committed to Victorian businesses for services and supplies to the Victorian section of the project.
Of the 1,700km Inland Rail line, 305km is in Victoria and this section of Inland Rail is planned along the existing rail corridor from Tottenham in metropolitan Melbourne to the Victoria/New South Wales border at Albury/Wodonga (T2A).
The 12 enhancement sites for the Tottenham to Albury section are:
- Broadford-Wandong Road bridge, Wandong
- Hamilton Street bridge, Broadford
- Short Street bridge, Broadford
- Marchbanks Road bridge, Broadford
- Hume Highway bridge, Tallarook
- Seymour-Avenel Road bridge, Seymour
- Hume Highway bridge, Seymour
- Anderson Street bridge, Euroa
- Benalla Station Approach Road, Benalla
- Beaconsfield Parade bridge, Glenrowan
- Wangaratta Station Precinct, Wangaratta
- Murray Valley Highway, Barnawartha North
While population growth slowed in Victoria during the COVID-19 pandemic the state still exhibits the strongest growth rate of all Australian states. As Australia's economy bounces back, Victoria will be a key driver of economic growth and employment.
With the availability of Inland Rail's fast, cost-competitive and reliable freight transport the regions and industries of Victoria have the potential for growth. Sectors such as agriculture, tourism, energy and freight are well positioned to benefit from Inland Rail's service offering of a 24 hour transit time and connectivity to the broader national network of roads and rail.
In rural Victoria, agriculture is the dominant industry, however Victoria is also rich in diverse natural resources that present significant opportunities for further economic development.
Freight and logistics contribute to the regional economy as an established industry and support the region's renowned manufacturing, agricultural, forestry, fishing, and horticulture sectors.
Transport infrastructure, such and Inland Rail, is a key enabler of Victoria's economic growth and potential. Victoria already has a well-established road and rail freight infrastructure in regional areas. Improving access for high-productivity vehicles and supporting heavier freight rail operations could support the development of additional mining and renewable energy resource activities.
When considering these strong infrastructure foundations, interconnectivity with markets and ongoing plans for development, Victoria is in a strong position to capitalise and expand on the opportunities presented by Inland Rail.
- The major freight generators within 100km west and 50km east of the Inland Rail alignment are construction and manufacturing, which account for a combined 17% or $55.3 billion of gross value for those regions in Victoria.
- Since 2015, Victoria has seen year on year growth in the agriculture, manufacturing and construction sectors, all of which have potential to generate freight demand for Inland Rail and attract and boost investments along the rail corridor.
- The Inland Rail region in Victoria transports a total 704 million tonnes of freight to and from the area each year – that's the equivalent of 24.2 million B-double trucks.
- There are potential investment opportunities in expanding freight hubs, timber and paper manufacturing, food processing and defence manufacturing over the short, medium and long term.
An enduring boost for Victoria
In addition to the direct economic benefits identified by ARTC in 2020, the EY Inland Rail Regional Opportunities report identified that Inland Rail can further boost gross regional product (GRP) by up to $4.6 billion over the first 50 years of the rail line's operation.
The report also identified that Inland Rail could provide up to an additional 940 full time jobs in its 10th year of operation and add up to $600 million to gross regional product.
A technical report is also available with a detailed summary of the research approach, methodology and supporting analysis.
Industry Growth and Investment
North East Rail Line (NERL)
The Victorian section of Inland Rail is part of the North East Rail Line (NERL).
The Australian Government's commitment to the NERL upgrade delivered a Victorian Class 2 track performance standard between Melbourne and Albury. Early works began in 2019, with major works completed ahead of schedule in March 2021.
The NERL upgrade enables the Victorian state government's passenger rail operator, V/Line, to introduce new, faster and more reliable 'VLocity' trains on standard gauge, and enhances track performance for Victoria's north-east.
Port of Melbourne
The Port Rail Shuttle Network is a joint Australian Government and Victorian state government initiative to improve the efficiency of rail freight movements between the Port of Melbourne and major suburban freight hubs using the existing rail network.
The Australian Government has committed $38 million to the initiative along with $20 million from the Victorian state government. This funding will be used to deliver capital works and rail infrastructure on public land to successful applicants, leveraging private sector co-investment to establish port rail shuttle operations. The targeted investments will support competitiveness and road-to-rail mode shift of freight in Melbourne, easing road congestion.
The Australian Government has also committed $7.5 million for a business case to be undertaken to investigate improving the connectivity to the Port of Melbourne, including between the Port and the future Melbourne intermodal terminals. The Australian Government’s funding towards this project is contingent on a matching contribution by the Victorian Government.
Melbourne Intermodal Terminals
Intermodal terminals play a significant role in the consolidation, storage and transfer of freight between rail and road at the beginning and end of each rail journey.
In the 2022-23 Budget, the Australian Government committed up to $3.1 billion for the $3.6 billion Melbourne Intermodal Terminal Package that will deliver two new intermodal terminals in Melbourne at Beveridge and Truganina to strengthen supply chains and generate new opportunities for freight and exporting businesses using Inland Rail.
CSIRO Supply Chain Mapping Project
To better understand how Inland Rail could reduce transport costs and make supply chains more efficient we partnered with the Commonwealth Scientific Industrial Research Organisation (CSIRO) to map and model the transport cost reductions available to businesses that use Inland Rail.
The results of the CSIRO Supply Chain Mapping Study showed an average transport cost reduction of 37% for freight moving to Victoria, providing potential savings of $28.7 million in transport costs each year.