Melbourne–Brisbane Inland Rail Alignment Study - Australian Rail ...

7.3.3 Land acquisition
A total of almost 600 km of greenfield alignments was
identified where land acquisition would be required.
Several factors were considered when estimating the
valuation including value of land, severance, injurious
affection, effects on irrigation systems, crop losses
and disturbance.
In addition to the estimates of compensation, other
applicable land acquisition costs which would likely be
incurred by an acquiring authority undertaking a land
acquisition program of this nature were included. These
included costs relating to land access and valuation,
legal expenses and registration fees.
Finally an estimate was made of total land division costs.
These costs, which relate to transferring land ownership
to the acquiring authority, include solicitors’ fees to
facilitate contract and transfer documentation, plan
registration fees, transfer registration fees, Crown land
fees and stamp duty.
7.3.4 Risk assessment
A probabilistic risk estimate was developed to assess
the financial impact of the various risks and opportunities
associated with the proposed inland railway alignment.
Box 7 below explains the risk estimation process.
The risk estimate was based on the capital cost
estimate for the railway together with an analysis
of identified risks and opportunities. This bottom-up
approach to risk estimation aimed to capture the
breadth and detail of the project; it also enabled an
accurate level of contingency for the project to be
calculated in a transparent and methodical manner.
Each element of the cost estimate was reviewed to
determine the possible variability in the estimated most
likely value. This variability was assigned to a program
evaluation review technique (pert) distribution profile to
calculate the range of costs.
A risk register was developed and risk mitigation
measures were considered. Residual risks were
evaluated in terms of their likelihood, the minimum,
maximum and most likely values.
The risk model uses the variability and the residual risk
values to calculate the capital cost estimate including
the project risk contingency.
7.3.5 Capital cost
Capital cost estimates for the inland railway were
produced using the estimated range in costs obtained
from the risk assessment process described above.
The P90 and P50 figures in the table below represent
the probability that the actual cost can be achieved
for these amounts or less. Their calculation is further
explained in Box 7.
The outturn capital cost for the Melbourne–Brisbane
inland railway is contained in Table 17.
Table 16 Summary of land acquisition costs (2010 dollars)
Category Estimated cost ($)
Land compensation estimate 239,125,000
Additional land acquisition 32,090,000
Consultants costs 21,696,000
Total 292,911,000
Table 17 Outturn capital cost (2010 dollars)
Item Base estimate ($m) P50 estimate ($m) P90 estimate ($m)
Capital construction cost 3,688.0 3,926.1 4,098.2
Land acquisition cost 292.9 312.8 344.6
Risk and opportunity allowance 181.1 258.5
Total project cost 3,980.9 4,420.0 4,701.3
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7. Delivery program and capital cost
ARTC • Melbourne–Brisbane Inland Rail Alignment Study – Final Report