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GWA: Port uncertainty, lack of road pricing led to Viterra departure

Genesee & Wyoming Australia (GWA) says it invested heavily in the Eyre Peninsula rail network prior to the departure of key grain customer Viterra, and has lambasted its unfair disadvantage against road haulage in South Australia.
GWA on July 26 addressed the recent departure of its only Eyre Peninsula regional rail network customer, Viterra, saying much of the “considerable public, political and media discussion … has not been factual in nature”.

Viterra announced in February it would stop using rail because road haulage was the cheaper option.
It said it had worked with GWA on an ongoing deal, but “the condition of the rail infrastructure, the restrictions it placed on operations, and ultimately the cost have all contributed to rail no longer being efficient or cost effective to move grain”.
GWA on Friday rejected the assertion its infrastructure was in poor condition.

“When GWA acquired the regional rail network in SA in 1997 – more than 20 years ago – many of the rail corridors were in poor condition through lack of, or no, customer use, nor adequate maintenance over many years,” a GWA spokesperson said.
“GWA in the period since has spent a very large sum, totalling tens of millions of dollars, upgrading and maintaining the regional rail routes. No more so has this been evident than across the Eyre Peninsula network which has had ongoing, regular custom, albeit supported by a single customer on the grain lines.

“In fact, the greatest amount of GWA’s rail expenditure in regional SA has been on the Eyre Peninsula rail system where GWA has kept the lines operational so that trains can keep running to as recently as May this year.”
The company, which operates nearly 5,000 kilometres of track in South Australia and the Northern Territory, said Viterra’s departure from the Eyre Peninsula network was driven by the lack of a proper road pricing policy.
“The cost of operating trucks does not reflect the full cost of maintaining the road network (truck users don’t pay for highway and road upgrades/maintenance), unlike rail,” the GWA spokesperson said.

“Over many years, regional rail in SA has come under constant competition from trucking which has been allowed to increase significantly in its tonnes capacity to haul.”
Additionally, GWA cited the lack of a unified, long-term vision for ports in the region.

“Considerable uncertainty has been created recently with numerous Eyre Peninsula port options under development. This has fuelled the inability to attract long-term support for local rail,” the spokesperson argued.
“The rail network is dependent on external patronage. Despite years of stakeholder negotiations and engagement with Government and our customers, unfortunately the decision to move to road has resulted in the cessation of rail use on the Eyre Peninsula.
“GWA would like nothing more than to have the Eyre Peninsula rail network attract fresh, economically viable rail traffic. The lines are not closed. However, any further ‘sizeable’ network investment, in the absence of any sufficient and sustainable commercial traffic, would not be commercially viable.”

GWA said it remains in regular communication with the SA Government regarding the situation.
Article by: Oliver Probert.

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