Opinion: Inland railway – politics of disaster

Everald Compton

Back in the days of his prime, Barnaby Joyce announced that the Coalition Government had allocated 9.5 billion dollars for the construction of the Inland Railway.
He had demanded this from Malcolm Turnbull as the price for National Party cooperation at the time of Turnbull’s coup to topple Abbott.
Turnbull reluctantly agreed, but insisted that it had to be funded ‘off balance sheet’, ie, not taken from general taxpayer revenue in the next Budget, but funded by loans to be taken out by the Federal Government’s own railway company, ARTC (Australian Rail Track Corporation) against its balance sheet. Future revenue would pay back the loans.
This was mentioned only in the fine print of the public announcement. Most voters think it is being funded by regular government grants.
In other words, Barnaby Joyce proceeded with the project without allocating one cent of government funds to it. This means that his in-depth commitment to it has been Nil. It was simply a vote getting stunt.
It still is a very shallow commitment by those who have followed him and it will cause future governments huge pain when, inevitably. they are forced to pick up the large tab.

Based on current planning, it will take a full decade or more to build the railway from Melbourne to Brisbane via Parkes and Toowoomba.
Interest on the ever increasing ARTC loans will rapidly multiply over those years.
Then, it will take another ten years for freight traffic on the railway to generate enough revenue to start repaying the loans, while, in the meantime, huge operating losses will add onto those loans.
The venture will bankrupt ARTC.
The facts are that the Inland Railway can only ever attain viability if it is funded totally without debt and this was known to both Turnbull and Joyce when the deal was done.
Their actions represent one of the most irresponsible decisions in Australian political history and could easily have been avoided.
It has always been possible to run freight trains from Melbourne to North Star, which is north of Moree. All that is needed is to build a 300k standard gauge railway on from there to Toowoomba which can act as a freight hub for the whole of South East Queensland without the track going any further. It can also send airfreight from Toowoomba’s International Airport.
All that is needed is three billion dollars in tax payer funding. This would make it possible for revenue generating freight trains to run from Melbourne to Toowoomba and return, many years ahead of the current plans.
All of the creation of short cuts and upgrading in NSW could then be progressively implemented in the years ahead with small but regular doses of taxpayer funding annually.
The proposed highly expensive track from Toowoomba to Brisbane will never be needed as it is a better strategy to build the Inland Railway on to Gladstone and open up a huge regional development opportunity on the Darling Downs, Maranoa and Central Queensland.
But negotiations between the Morrison and Palaszczuk Governments have broken down over the cancellation of promised federal funding for Brisbane’s Cross River Rail by Abbott six years ago. It would have been built and operating by now if Abbott had not done this.
So, Palaszczuk now makes a fair comment to Morrison: “You restore the Cross River Rail money and we will let the Inland Railway into Queensland.”
Who can blame her? But I am sure that Albo will fix it when he becomes Infrastructure Minister in May.
In the meantime, the current Infrastructure Minister, McCormack, is spending 300 million dollars unnecessarily upgrading the rail track from Parkes to Narromine which is in his own electorate. He had earlier announced, at a sod turning ceremony beside a rail track that has been there for 150 years, that it would cost 160 million.
It will not cause even one more freight train to appear on the line to North Star and so it is an utter waste of public funds that will send that massive overdraft soaring higher.
In addition, farmers between Narromine and Narrabri are in uproar over the proposed short cut rail track which is next on McCormack’s list for the Inland Railway. Negotiations for resumption of their land have been brutal, so 300 of them abused him mightily at a recent public meeting and there is some evidence that Barnaby, who wants his old job back, helped organise the protest.
There is a similar uproar among the farmers around Millmerran in Queensland. The public relations skills of ARTC are totally missing.
The best that can be said today is that the creation of the Inland Railway, a great national development project, is in the hands of gross political and bureaucratic incompetents who have turned it into an unbelievable farce at huge cost to the nation.
It must not be destroyed by irresponsible vandalism.
Everald Compton was a founding director of ATEC Rail Group in 1996 and served as chairman for 18 years. He now serves as a consultant to the company.

Parkes aims to become ‘Memphis Down Under’

“Parkes is known as the Elvis capital of Australia, but in the future, it will also be known in freight circles as the ‘Memphis Down Under’,” Pacific National CEO Dean Dalla Valle said.
Australia’s largest rail freight operator, Pacific National, has welcomed the NSW Government’s announcement establishing a ‘special activation precinct’ to help streamline the continued development of Parkes Shire Council’s National Logistics Hub.
“Companies like Pacific National will have the added investment confidence to help create the largest freight and logistics precinct in inland regional Australia; akin to the major freight hub of Memphis in the interior of the United States of America,” Mr Dalla Valle said.
Pacific National has committed an initial $35 million to develop the company’s Parkes Logistics Terminal, located within the National Logistics Hub, and acquire rollingstock like freight wagons.
Mr Dalla Valle said Pacific National’s terminal will act as a future facility to consolidate hundreds of thousands of cargo containers, including boxes filled with regional commodities destined for overseas markets, to be hauled by rail across the length and breadth of Australia.
“Once the Melbourne to Brisbane Inland Rail project is complete, regional enterprises can use Parkes as the launching pad to haul goods and commodities by rail more efficiently between the ports of Botany, Brisbane, Melbourne and Fremantle,’ said Mr Dalla Valle.
Located at the intersection of the main western railway line running from Sydney to Perth, the future Inland Rail corridor from Melbourne to Brisbane, and the Newell Highway, Parkes is the perfect place to establish an intermodal freight terminal – a place where trains and trucks meet.
Construction of Pacific National’s terminal commenced in October 2018. Freight trains 1,800-metres in length are expected to be hauling freight from the terminal to Perth later this year.
Mr Dalla Valle said once fully operational, Pacific National’s Parkes Logistics Terminal will have the capacity to process approximately 450,000 cargo containers each year, including the ability to haul double-stacked containers from Parkes to Perth.
“Pacific National is proud to be part of Parkes. Terminal construction is currently generating about 40 jobs, while the future terminal will have a workforce of 100 people,” said Mr Dalla Valle.
Mr Dalla Valle said today’s announcement by the NSW Government represents a ‘tripling-down’ on great ideas.
“Parkes Shire Council’s National Logistics Hub, Australian Government’s Inland Rail project, and NSW Government’s special activation precinct – three great ideas,” Mr Dalla Valle said.

Bust railway congestion in the budget: ARA

The Australasian Railways Association (ARA) is calling for the Australian government to play a more significant role in supporting and promoting passenger and freight rail infrastructure in the 2019-20 federal budget.
Australia’s population growth is making rail transport an essential component of addressing Australia’s growing public transport and freight needs.
“Cities are increasingly looking to integrated transport systems that link high-capacity metro systems with current rail networks, light rail, regional rail and other transport modes to encourage active and engaged community-based lifestyles,” said ARA CEO Danny Broad.
“Rail provides the backbone of public transport systems, for our growing cities.
“Similarly, Australia’s growing population requires an increased allocation of goods, adding pressure on our freight networks. Rail freight provides a cost-effective, safe and environmentally sound solution for reducing congestion from heavy vehicles on urban, regional and interstate roads. Rail freight will need to play a greater role in the future to meet Australia’s increasing freight task and to maintain our international competitiveness,” he concluded.
The ARA’s National Rail Industry Plan for the Benefit of Australia presents a compelling case for amore collaborative approach between Australian governments and the rail industry to overcome inefficiencies inherent in our federal system.
Specific programs that have been identified in the ARA’s submission for funding include

  1. Resourcing the Australian and New Zealand Industry Pipeline to provide a comprehensive list of rail projects to allow better industry planning for new rail infrastructure and rolling stock.
  2. Supporting a high-level task force of the rail industry, governments and education providers to address critical skilled labour shortages and provide ‘fit-for-purpose’ training in rail construction, manufacturing, maintenance and operations.
  3. Providing appropriate resources at the federal level to progress and implement measures contained in the final National Freight and Supply Chain strategy, including both infrastructure upgrades and the strengthening of regulatory frameworks.
  4. Implementing independent price regulation of heavy vehicle charges. For too long we have had unequal charging and regulatory systems, placing rail at an unfair competitive disadvantage.
  5. Support passenger rail operators to comply with Disability Standards for Accessible Public Transport (DSAPT).
  6. Tackling urban congestion by allowing Australians to salary sacrifice the purchase of public transport tickets, positioning public transport as a viable alternative to car travel.
  7. Taking steps to preserve and secure the corridor of land required to establish a high-speed rail link between Melbourne, Sydney and Brisbane.

The ARA also provided the government with a list of rail optimisation projects to consider, where existing rail services could be enhanced.
The full submission can be found here.

Rail sector skills crisis looming

A fast-developing skilled labour crisis in the rail sector will deliver a substantial blow-out in project costs and delivery delays to rail projects in Australia and New Zealand over the next ten years, according to BIS Oxford Economics in a report commissioned by the Australasian Railways Association.
CEO Danny Broad said: “The report is a call to action to government and industry.
“Immediate corrective action to fill skills gaps with fit-for-purpose training is needed to avoid these blow-outs.
“Investment of over $100 billion in rail projects by Australian governments over the next ten years will be undermined by shortages of skilled labour that dramatically impact the construction of new rail systems, and our capacity to operate them,” Mr Broad said.
“The next ten years will herald a renaissance of rail in Australia – important urban passenger projects such as the Melbourne and Sydney Metros, Brisbane’s Cross River Rail, Perth’s Metronet and multiple light rail infrastructure and rolling stock investment as well as crucial freight projects such as Inland Rail, which will provide a direct freight link from Brisbane to Melbourne.
“Unless we address shortages due to market failure, attrition and unsuitable training arrangements, projects will blow out in terms of delivery and cost.
“Modelling shows that in 2023, the peak of the construction phase, we may have workforce gaps of up to 70,000 people,” he warned.
The report recommends the establishment of a high-level taskforce of government, industry, and education providers with a three-pronged focus:

  1. Facilitate the development and maintenance of an Australasian rail industry pipeline of rail projects to map skilled labour required across construction, manufacturing, operations and maintenance. The ANZIP pipeline, established by Infrastructure Partnerships Australia, which enjoys financial backing from both the Australian and NZ governments, should be adapted and refined for this purpose.
  2. Develop a National Rail Industry Skills Development Strategy to drive reform in education and training systems and practices that increase the availability of required skills, their productivity, transferability, and mobility while retaining a commitment to quality and safety.
  3. Boost awareness and attraction of rail careers. The need to attract skills and career aspirants to the rail industry is widely recognised. Industry has a significant responsibility in this regard. The taskforce should add its weight to initiatives such as establishing ‘branding partnerships’ with related industries across transport, mining and manufacturing.

The Australasian Railway Association engaged BIS Oxford Economics to undertake a workforce capability analysis for the rail industry based on planned and forecast rail infrastructure development in Australia and New Zealand over the next 10 years, with implications for a range of rail industry skills across construction, manufacturing, operations and maintenance.
Through expansive stakeholder and industry engagement and extensive data analytics, the report explores skills shortages over the coming decade, key threats to workforce capability, and what government and industry can do to respond to meet the challenges of delivering on the significant rail infrastructure and rolling stock investment.
The report can be found at www.ara.net.au/ara-skills-capability-study. The Australasian Railways Association represent more than 145 member organisations including passenger and freight operators; track owners and managers; suppliers, manufacturers, contractors and consultants. Members include listed and private rail-related companies, government agencies and franchisees.

NSW freight plan launched

A new plan that “will deliver safer, faster, more efficient and sustainable freight movement to boost a growing NSW economy” has been launched b y the NSW Government.
The NSW Freight and Ports Plan 2018-2023 is said to guide more than $5 billion to be invested across the sector to support the growing freight task while managing growth and congestion across road and rail.
Minister for Roads, Maritime and Freight Melinda Pavey said more than three million households and businesses across the state tap in to the freight network every day, relying on the timely and efficient movement of good to markets nationally and globally.
“The amount of freight moved through NSW is set to grow by 28 per cent to more than 618 million tonnes by 2036. To support this, the NSW Freight and Ports Plan 2018-2023 provides more than 70 initiatives for increasing capacity on the existing network, including building new infrastructure,” Mrs Pavey said.
“From big businesses to farmers, retailers to consumers – we all rely on our goods getting to us in a safe and efficient manner. For this reason the NSW Government has set firm targets to achieve faster, more efficient and higher capacity networks to remain competitive, support jobs and deliver economic growth across NSW.
“With freight and logistics contributing more than $180 million to the NSW economy every day, an increasing population and consumer preferences changing, the freight network will face increased future demand.
“This, compounded by a desire to have same day delivery for online goods, requires government and industry to have the freight network capable of working at full throttle.
“The NSW Freight and Ports Plan 2018-2023 highlights the government and industry plans for road, rail, air, shipping and pipelines and builds on investment from the 2013 NSW Freight and Ports Strategy,” Mrs Pavey said.
The plan is said to bring together policy makers, producers, operators, regulators and government allowing for more coordinated and better freight planning.
 

Cities report recommends elevating freight in planning

Will the North West Rail link carry freight? Photo courtesy of Transport for NSW.

The Australian Logistics Council (ALC) says the report of the inquiry into the Australian Government’s role in the development of cities is an endorsement of its continuing efforts to have freight movement prioritised in the nation’s planning regimes.
“ALC particularly welcomes the inquiry’s recommendation that planning at all levels include freight access as a matter of priority,” said ALC chairman Philip Davies.
“Making sure that our planning regimes properly account for freight movement has been a long-standing policy objective for ALC.
“This includes ensuring a nationally consistent approach to corridor protection, and promoting land use planning that allows freight infrastructure to have the 24/7 operational flexibility it needs to meet a growing freight task.
“Many of the recommendations contained in the inquiry report can help to achieve these objectives, and promote safer and more efficient movement of freight through our supply chains.
“ALC also welcomes the inquiry’s recognition of the need for a national plan of settlement, so that our growing population is managed in a way that ensures our major cities remain functional and desirable places for Australians to live and work.
“Such an approach will be essential to address issues that are already having an effect on the safety and efficiency of our supply chains, particularly road congestion.
“We are pleased that the inquiry’s report has noted so many of the issues around planning and freight movement that were reflected in ALC’s own submission to the Inquiry, especially around the benefits of separating freight and passenger transport infrastructure.
“The release of this report is timely, coming as the Commonwealth Government continues working with other jurisdictions on the development of a National Freight and Supply Chain Strategy.
“ALC encourages governments at all levels to give freight movement the priority it deserves in planning by incorporating these recommendations into their planning regimes.”
 

Biosecurity Levy: $360m ‘cash grab’

The Australian Logistics Council, Australasian Railway Association, Ports Australia and Shipping Australia have joined together to call for clarification of how the Biosecurity Levy, announced by the Australian Government in the Federal Budget, will operate. Particularly how the generated revenue will be spent.
The proposed Biosecurity Import Levy will charge $10.02 per incoming container and $1 per tonne of non-containerised cargo, generating an estimated revenue of $360 million.
Ports Australia chief executive Mike Gallacher said: “Our concern is that this import levy has been announced with almost no engagement with the supply chain and with no plan on how it will be used in the biosecurity system.
“The complete lack of detail on this ambiguous proposal lends weight to the impression that it is a broad import levy across all goods coming into the country.
“The revenue measure estimates $360 million over three years. Only $76.6 million of this is will be spent enhancing Australia’s biosecurity system over the same period.
“That leaves $283.4 million unaccounted for.
“The Port sector has stringent biosecurity measures and will always continue to leverage our expert capabilities to meet the Australian Government’s objectives on biosecurity.
“Australians use and interact with the supply chain every day, from food to cars furniture to building materials it is essential for day to day life. Yet there has been virtually no engagement on this plan for a blanket charge on imported goods moving through the supply chain.”
The shipping industry’s peak body Shipping Australia Limited chief executive Rod Nairn said: “A budget that at its core promises tax cuts for all Australians will simultaneously slug Australians almost $290 million to import the goods they use every day, with no clear explanation of the biosecurity benefit.
“If $360 million is needed to protect Australia’s unique environmental assets than there should be a plan detailing precisely what the money is paying for and how the government arrived at the figure.
“This is another example where one sector of the supply chain is being forced to fund something that is not directly related. As things stand, this levy measure currently has no clarity, no plan and no purpose.”
Australian Logistics Council managing director Michael Kilgariff said: “Measures in the Budget are expected to be accurately costed. There should be no exception for this one.
“Until such details are made clear, a broad charge on every item imported from another country simply cannot be justified. The freight logistics sector should not be used as a ‘cash cow’ to fund unrelated Budget initiatives.
“Not only will everyday consumers be impacted by this measure on containerised goods, but anyone importing non-container goods will pay $1 a tonne.
“That means a construction business importing 50,000 tonnes of concrete will now have to pay an additional $50,000. Imagine the impact such a measure will have on infrastructure costs.”
Australasian Railway Association chief executive Danny Broad said: “The proposed levy is a significant issue for ARA members and everyday Australians. The levy will ripple right through the supply chain and hit the end consumer. Every product that comes through our ports, onto our rail networks and delivered to the consumers will feel the effects of this levy.
“Industry is committed to continue working with the Government cooperatively to enhance biosecurity.
“However, urgent clarification and rationale is needed on the details of this new levy, which is being imposed with almost no consultation with those it will affect the most.”
Road transporters fear they’ll be the collecting agency, again
Peak body Road Freight NSW (RFNSW) has described the new Biosecurity Levy on cargo as a re-run of the crippling port surcharges already imposed on truck operators.
RFNSW today joined supply chain stakeholders in calling for further details from the Federal Government on the justification for the new levy.
“From our perspective, it’s a re-run of the port infrastructure surcharges which have been slapped on truck operators with no consultation, no explanation and certainly no justification. Nothing more than a blatant cash grab,” RFNSW’s chief executive officer Simon O’Hara said.
“Of the $360 million raised through the Biosecurity Levy, it’s estimated that only $76.6 million is actually being spent on biosecurity – that’s why it’s only fair and reasonable that our industry stakeholders are calling on the Government to explain where the rest of the money will be used.
“Undoubtedly, such a blanket surcharge, like the port infrastructure taxes imposed on truckies, will simply be added to goods all through the supply chain.
“Everyone in the freight logistics sector will be hit, and hurt, by this new tax.
“Our members, who are already struggling to operate on increasingly tight margins as a result of the port taxes imposed by stevedores, are going to be impacted. And ultimately, so will Australian consumers who will be paying more for their imported goods.
“RFNSW joins the Australian Logistics Council, Australasian Railway Association, Ports Australia and Shipping Australia in raising our concerns about this new import tax and calling on the government to give us a ‘please explain’.”
 

How a Newcastle container terminal would save $6bn +

Greg Cameron

Any legal action by the ACCC to reverse the anti-competitive Port of Newcastle container fee could take years, now that it has started looking into it.
That would further damage the NSW economy.
But a solution exists.
Replace all Port Botany container trucks with Newcastle container trains. With imagination and cooperation, the lessees of Botany and Newcastle can combine their resources to transfer Botany operations to Newcastle and build a rail freight bypass of Sydney – from Newcastle to Port Kembla, via Eastern Creek.
Trains become the means of transporting containers between port and intermodal terminals throughout the entire state, possibly including Victoria and southern Queensland.
Trains would replace trucks for general freight entering Sydney from regional areas and interstate.
One million container trucks a year use Port Botany. By 2040, there will be an estimated six million container trucks. If the Moorebank intermodal terminal proceeds, Port Botany container trucks will still number 4.9 million a year by 2040. Moorebank intermodal will require all of Sydney’s available rail freight capacity. This capacity, obviously, is insufficient.
It is unlikely that a container terminal will be built at Port Kembla because of the reliance on container trucks at Port Botany. Port Kembla needs to have a rail connection to the main southern line, which is accomplished by building the much awaited Maldon-Dombarton link. A rail freight bypass of Sydney from Newcastle will justify building this line. The South Coast will be connected to container ports at both Port Kembla and Port of Newcastle. The ports would operate interchangeably.
Construction would start immediately on building the section of the bypass line between Glenfield, Badgery’s Creek and Eastern Creek. This will enable existing rail freight capacity to service new intermodal terminals, but not Moorebank. The best use of Sydney’s existing rail freight capacity is increased passenger services. The Moorebank intermodal would be discontinued.
It will take around ten years to complete construction of the entire line linking Newcastle and Port Kembla.
Upon line completion, containers railed between Newcastle and intermodal terminals in outer western Sydney would be de-consolidated at the intermodal terminals and the goods transported to their end destinations in Sydney.
Export goods manufactured in Sydney would be consolidated into containers at the intermodal terminals and the containers then railed to Newcastle for export.
Empty containers would be railed from Sydney to all regional areas of NSW to be filled with export goods and the containers then railed to Newcastle for export. Currently, empty containers are NSW’s main non-bulk export.
The proposed rail freight bypass will generate investment in manufacturing for export by providing cost-effective access to a container port for the first time. Investment is not occurring at present because of the impediments to getting goods to market.
With the bypass, there would be no need to build stages 2 and 3 of the Northern Sydney Freight Corridor to provide the equivalent of a dedicated rail freight line between Newcastle and Strathfield. The cost saving is $5 billion.
There would be no need to build the Western Sydney Freight Line, between Chullora and Eastern Creek, to enable containers to be railed between Port Botany and outer western Sydney. The cost saving is $1 billion.
Freight would be removed from the Wollongong-Sydney rail line.
All of Sydney’s current rail freight capacity would be used for passenger services to provide a higher economic return than freight.
The Southern Sydney Freight Line would be used for express passenger services from southwestern Sydney growth areas, including Badgery’s Creek Airport.
All of the current rail capacity between Newcastle and Sydney would be used for passengers.
A second rail bridge would be built over the Hawkesbury River as part of the rail freight bypass.
The short parallel runway at Sydney airport could be extended from 2600 metres to 4000 metres by terminating container operations at Port Botany.
A rail freight bypass would enable Sydney firms to relocate to regional areas. In western Sydney, 5,000 hectares of land is used for industrial purposes. Many of these firms could profitably relocate to regional areas if they were able to use rail to freight goods to Sydney and ship containers through the Port of Newcastle.
It is appropriate and necessary to examine the implications to NSW of building a rail freight bypass of Sydney.
Greg Cameron is a former executive of BHP Steel and is an active proponent of the Newcastle container port.

ALC welcomes Infrastructure Priority List

The Australian Logistics Council (ALC) has praised the Infrastructure Priority List released by Infrastructure Australia (IA) last week. The list confirms an ongoing need for investment in freight infrastructure projects that will enhance supply chain efficiency and safety, ensuring Australia remains internationally competitive.
“As an industry leader, ALC has always been among IA’s most enthusiastic supporters, because we have long believed that the best way to ensure effective infrastructure investment is for an independent umpire to make evidence-based assessments of projects, which can then be used by governments to inform decision-making,” said ALC Managing Director, Michael Kilgariff.
“The release of the 2018 Infrastructure Priority List comes at a crucial moment, as the Commonwealth continues to develop the National Freight and Supply Chain Strategy – an initiative which is again included as a high priority initiative on this year’s list,” continued Michael.
The key freight initiatives identified in the list are:

  • the Sydney Gateway connecting WestConnex to Port Botany & Sydney Airport;
  • the Port Botany Freight Rail Duplication to boost port efficiency;
  • the Chullora Junction upgrade to enhance Sydney’s freight rail network;
  • Preserving the corridor for the Western Sydney Airport fuel pipeline;
  • Preserving the corridor for Western Sydney Freight Line and Intermodal Terminal access;
  • Improving connection between Melbourne’s Eastern Freeway and CityLink;
  • Inland Rail and a dedicated freight rail connection to the Port of Brisbane; and
  • Implementation of the Advanced Train Management System on the ARTC network.

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