The federal government has announced a new subsidiary company and board of directors to take over delivery of the inland rail project from the Australian Rail and Track Corporation (ARTC).

It follows a damning report by Dr Kerry Schott which found poor governance and project management by the ARTC had resulted in the ambitious Melbourne to Brisbane freight rail project being late and over budget, with a cost blowout of more than $14 billion since 2020.

Up to now Inland Rail has been managed as a division of ARTC, but Dr Schott’s report recommended the establishment of a subsidiary company of ARTC with the sole task of delivering the project.

The establishment of the new company, Inland Rail Pty Ltd, represented a separation of governance and delivery arrangements for the Inland Land from ARTC operations, the government said.

The government last month also issued a new interim Statement of Expectations for the ARTC and its new subsidiary, including “delivery of the Inland Rail project in an efficient, effective, economical and ethical manner to achieve value for money for public resources invested.”

Infrastructure SA director Robert Rust will chair the board with Sydney Metro Director Louise Thurgood as his deputy.

The other members are WestGo CEO Vivienne King, National Intermodal Corporation (NIC) chair Erin Flaherty, and James Cain, who chairs the Community Safety Building Authority Advisory Board.

As Acting ARTC Chair, Dr Schott will also sit on the new board until Peter Duncan resumes the role.

Finace Minister Katy Gallagher said the new structure and statement of expectations would ensure the rail project was properly managed.

“The government has established a dedicated subsidiary company with an experienced and skilled board of directors to ensure Inland Rail is appropriately managed,” she said in a statement.

“The government’s updated Statement of Expectations brings ARTC and Inland Rail in line with highest standards of governance, transparency and accountability for corporate and government-owned entities.

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