The State Government has fulfilled its election commitment to undertake a business case to investigate the viability of GlobeLink and released the full independent report.
Several road connectivity options identified in the report will now be investigated to explore opportunities that could deliver upon the objectives of GlobeLink in the long term, after the completion of the North-South Corridor.
These options include upgrades to Cross Road and new road freight routes which could potentially bypass the South Eastern Freeway to the North-South Corridor or Adelaide’s North.
“The State Government has fulfilled its election promise to undertake a business case to investigate the viability of GlobeLink and is being open and transparent with the people of South Australia and has released the full independent report,” said Minister for Transport, Infrastructure and Local Government Stephan Knoll.
“The State Government has accepted all recommendations in the KPMG report and will not be progressing the original GlobeLink proposal.
“The Government is clearly disappointed with the results of the business case, but it’s become clear that this particular proposal doesn’t stack up.
“As a responsible State Government with the best interests’ of taxpayers at the forefront of all our decisions, we will be adopting all recommendations in the report.
“Initial cost estimates to deliver the GlobeLink proposal are around $7 billion and the completion of the North-South Corridor, expected to cost in excess of $5.4 billion, is our number one infrastructure priority which will improve road freight and South Australia’s economic productivity.
“We are investing in a record $12.9 billion infrastructure pipeline – to drive positive economic and jobs growth – and our number one infrastructure priority is completing the North-South Corridor.
“The Marshall Government’s commitment to complete the North-South Corridor will impact on future road freight movements which will need to be taken into account.
“The report identifies other possible options to link road freight with the North-South Corridor, which is something we will be exploring in the long term.
“It’s also worth noting that many of the issues GlobeLink was initially designed to address have not materialised and, I am advised, are unlikely to be a problem in the medium-term.
“Particularly, with respect to the rail component, the report highlights that limited and declining volumes see limited relative economic benefit for the state.
“Therefore, with rail volumes unlikely to increase sufficiently in the future, the benefits of a new rail corridor are very marginal.
“This means that the issue of double stacking rail freight will unlikely be an issue as first predicted by other reports as rail freight volumes are limited.
“The report does highlight that the intermodal export park could provide improved connectivity and economic benefits to the state, however that would also have to be driven by private sector investment at that site.”
The report concluded that preliminary Benefit Cost Ratios (BCR) range from 0.08 to 0.21, including;
- The BCR for the initial road corridor proposal is 0.06;
- The BCR for the initial rail corridor proposal is 0.08; and,
- Current air freight is around 10 per cent of the minimum viable volumes.
An accepted measure of a viable project is determined by the BCR – with 1 being the benchmark at which a proposal’s benefits start to outweigh its costs.
The report highlighted that with spare airside capacity at Adelaide Airport, there is a distinct opportunity to provide more direct connections to new international destinations to open up additional export markets for South Australian producers.
When combined with additional seats, these new flights have the benefit of broadening the State’s high value freight and visitor export economy.
Preliminary analysis of the shortlisted road and rail alignment options has found that the high cost of such infrastructure will unlikely be justified based upon assumed population and employment projections.
The report also concluded that currently demand is insufficient to justify the investment without integrated changes to land use policy to increase demand.
The State Government spent $2.4 million of the $20 million budgeted for the business case and initial planning.