Shifting to Inland Rail could save Australian producers, manufacturers and growers $170 million in transport costs each year according to a CSIRO supply chain analysis. Read more
The Australian freight network will be developed as part of the Australian Government’s $44 million Inland Rail Interface Improvement Program. Read more
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.
Australia’s national science agency conducted a pilot study in 2018 using its computer logistics tool TraNSIT (Transport Network Strategic Investment Tool), along with extensive industry engagement, to focus on Parkes to Narromine in Central West NSW.
Researchers identified a baseline of existing freight movements in this area to estimate the potential transport cost savings for the entire Inland Rail project, marking the first time such a detailed analysis on road to rail supply chains in Australia has been completed.
They considered horticulture and processed agriculture such as meat, rice and dairy products.
The analysis showed if existing agricultural road trips were shifted to Inland Rail, the agricultural industry could save between $64 to $94 per tonne (depending on back-loading).
This equates to about $70 million in reduced transport costs per year based on the shift of 923,000 tonnes of horticultural and processed agriculture to the lower cost transport option that Inland Rail provides.
Additional analysis revealed that if existing coastal rail trips shifted to inland rail, this would result in an estimated saving of $28 to $35 per tonne.
“Our research has shown that Inland Rail would bring an improvement in rail travel time and transport cost, particularly important when considering perishable products.
This would make it a lot more competitive with the travel time advantages of road transport,” CSIRO TraNSIT leader Dr Andrew Higgins said.
Parkes to Narromine was chosen for the case study as it is the first section of track to undergo construction. There’s also a large number of supply chains in this pilot area involving hundreds of stakeholders.
“A big cost in food production is transport, particularly given the large distribution of where and when it is grown across Australia, and the long distances to major domestic markets, often over 1000 kilometres,” Dr Higgins said.
“These type of savings with Inland Rail would mean food companies would have lower cost access to markets further away than they supplied to in the past.
“The benefit is for those selling to market, basically large farming corporations, food companies and those behind processing facilities.
“You’d expect the savings would then be passed back onto farmers.”
The Australian Government has committed $9.3 billion to complete the 1,700 kilometre spine of Australia’s freight rail network that will connect Melbourne to Brisbane in under 24 hours.
As a next step, TraNSIT will now be applied to the broader Inland Rail corridor (commencing with the southern corridor from Narromine to Seymour) to obtain even more detailed cost savings across a broader range of commodities.
New commodities will include grains, cotton, livestock, wool, minerals and general freight.
TraNSIT has been used in previous research to test the benefits of transport infrastructure in regard to upgrading roads in Northern Australia, and calculating agriculture and forestry transport benefits for industry and various levels of government.
The TraNSIT computer modelling tool works by analysing every possible combination of transport routes and modes (road and rail) and determining those that optimise vehicle movements between enterprises in the agriculture supply chain.
The Australian Logistics Council (ALC) has welcomed an announcement that next week’s Federal Budget will contain $300 million to duplicate the freight rail line from Port Botany to Enfield as a major step forward for enhanced supply chain efficiency.
The funding forms part of an intergovernmental agreement signed in Parkes, NSW, between Ministers representing the Federal and NSW Governments. The agreement is a seminal moment in the progress of the Inland Rail Project that will form the backbone of the nation’s supply chains in the years ahead.
“ALC has been calling for the duplication of the freight rail line at Port Botany, as part of the Inland Rail Project, for a significant period of time. It was again identified as an urgent priority in ALC’s 2018-19 Commonwealth Budget Submission, and it is very pleasing that the Federal Government has now come to the party,” said ALC managing director Michael Kilgariff.
“Improving freight rail links into Australia’s major ports and boosting the use of short-haul rail from ports to intermodal terminals is essential in the drive to enhanced supply chain efficiency and safety, as outlined in Freight Doesn’t Vote, ALC’s major submission to the Inquiry Into National Freight and Supply Chain Priorities.”
“Currently, around 444,000 TEU per year moves to and from Port Botany by rail, and this continues to grow. Duplicating the freight rail line at Port Botany will allow NSW Ports to realise its objective of moving 3 million TEU annually by rail over the long term.”
“Ensuring efficient freight rail linkages to our ports and intermodal terminals is another critical piece of the Inland Rail puzzle, if we are to reap the full economic and efficiency benefits from the substantial public investment being made in the project,” Mr Kilgariff said.
Is it worth doing?
Ardent critic of the project Greg Cameron is not convinced, believing neither the Port Botany duplication nor the whole of the Inland Rail Project are worth continuing.
“If Botany is a commercially viable container port, why does the NSW government charge a fee of $150 per container at the Port of Newcastle, which it pays to Port Botany lessee, NSW Ports?” Mr Cameron said.
“A competing container terminal at Newcastle also makes the Inland Rail Line commercially unviable, because it will win container business from northern NSW. This explains why state and federal governments decline to acknowledge that the Newcastle container fee is anti-competitive.”
The Australian Logistics Council (ALC) and the Australian Railway Association (ARA) have applauded the announcement that the Federal and Queensland Governments will fund a $1.5 million study that will examine ways to enhance freight rail connections to the Port of Brisbane.
Improving these connections, including the establishment of a dedicated freight rail connection to the Port of Brisbane, will be critical to unlocking the full economic benefits of the Inland Rail project, which is now being constructed.
These benefits will be examined at length as part of the Inland Rail Conference being jointly hosted by ALC and the ARA on 18-19 July 2018 in Parkes, NSW.
The Port of Brisbane is a vital economic asset, not merely for Queensland but for the nation, particularly when it comes to agricultural and resource sector exports.
Its importance will increase significantly in the years ahead, with international demand for Australian export products expected to rise.
The economic significance of establishing a dedicated freight rail link to the port was recently reconfirmed by the decision of Infrastructure Australia (IA) to again include the project as a high priority initiative on the 2018 Infrastructure Priority List.
A separate IA report on corridor protection released last year confirmed that potential savings of $66 million could be realised if governments act quickly to protect the corridor needed for the construction of a dedicated freight rail link from the Inland Rail at Acacia Ridge to the Port of Brisbane.
These factors highlight just how critical it is to act now to ensure efficient freight rail linkages between the Inland Rail and other pieces of critical freight infrastructure, including ports and intermodal terminals at key strategic locations along the route.
The Inland Rail Conference will be the first dedicated industry event exploring the opportunities and challenges presented by Inland Rail, and will draw together major political, industry and community leaders to discuss at length the potential benefits of this nationally significant project.
This article appeared in the February/March 2018 issue of Logistics & Materials Handling.
Australia’s rail freight industry has been in the spotlight in recent months, with the Inland Rail project on track to bring back the mode’s visibility – and, importantly, its viability. AusRAIL PLUS 2017 looked to champion the mode’s successes, and potential.
All governments recognise the importance and benefits of rail to Australia,” said Danny Broad – CEO of the Australasian Railway Association (ARA), as he opened the ARA’s annual event, AusRAIL PLUS 2017, in Brisbane. “Investment in rail made in the national interest will enhance rail’s contribution to the economy through greater efficiency in both public transport and supply chain networks – all Australians will be the beneficiaries.”
With forecast investment in both new rolling stock – or rail vehicles – and rail infrastructure of $100 billion over the next 15 years, and Inland Rail and a national rail industry program securing $20 million in funding in the FY17 Federal Budget, “rail certainly is the place to be,” he noted.
“An important era lies ahead of us – it is a pivotal time, and the implementation of the national rail industry plan is essential.”
Darren Chester, then-Minister for Infrastructure and Transport, echoed Broad’s comments, noting that the federal backing for the Inland Rail project and other key rail infrastructure is a clear vote of confidence in the future of the industry.
“[This is] the most exciting time in the past 100 years to be in involved in rail,” said Chester. “Australia needs Inland Rail – without it, we won’t be able to cope with a projected doubling of our nation’s freight task.
“Currently, about 25 per cent of Melbourne-to-Brisbane freight is carried on rail, and around 75 per cent is carried on road. This project will help to even the ledger.”
Seeing the value
The ARA commissioned consultancy Deloitte to produce a report looking at future strains on passenger and freight rail networks, rail safety, rail’s benefits over road, and environmental considerations for modal choices. Broad released the Value of Rail report at the event, noting that it highlights the significant role the rail industry will play in enabling Australia to cope with future challenges.
“Australia’s population is increasing at a rate of 370,000 people per year,” he said. “By 2060, both Sydney and Melbourne populations will have grown by approximately three million people.
“Freight is likely to grow with gross domestic product (GDP) rather than the population growth – with a potential 88 per cent increase in kilometres travelled by 2050, and an increase in vehicle stocks of about 2.5 million trucks and light commercial vehicles.
“To manage these challenges, Australia will have to develop its multimodal transport systems, with light rail and heavy rail at its spine.”
The report found that Australia’s population will double by 2075, reaching almost 45 million people. It notes that rail currently contributes approximately $26 billion to the Australian economy each year, while offering lower emissions and safety and congestion benefits compared to other transport modes.
“Significant investments are being made into Australia’s rail infrastructure,” the report continues. “In some sense, these investments are making up for a prolonged period of underinvestment.”
Dealing with disruption
Change was a central topic at the conference – in particular, uncertainty about the pace and extent of change to work, technology and population.
As Craig Rispin, Business Futurist and Technology Guru at The Future Trends Group, explained, the ability to obtain and analyse data will be key in the years ahead.
“Data is the new oil, and artificial intelligence (AI) is the new oil,” he said – since the ability to collect data means nothing without the ability to analyse it.
By 2028, he shared, the world will be far removed from the one we live in today. Fifty per cent of jobs will have been replaced by machinery, the majority of cars will be driverless, and six in ten people will be living in cities – with one in three aged over 100. The significance, he said, is businesses cannot expect to continue to keep working the same way while the world changes around them.
He pointed to the rise of the start-up culture as one risk to established companies, with organisations such as Airbnb and Uber enabling individuals to do what entire companies used to do. While competing with new, lean rail start-ups, the industry will also have to remain mindful of advances in emission-reduction technology in trucks, allowing them to travel from Melbourne to Sydney in one charge, recharge and head back again. “Be part of the future,” said Rispin. “Or try to avoid the inevitable.”
For ports to handle the incoming onslaught of freight, they will need to increase their reliance on rail, shared Jonathan Lafforgue, General Manager – Operations and Environment at NSW Ports.
“The 2016–2017 ACCC (Australian Competition and Consumer Commission) Stevedore Monitoring Report came out [in early November 2017], stating that Port Botany is now Australia’s largest container stevedoring port,” said Lafforgue. “While we welcome that news, we’re more excited about the potential capacity we’ve still got in our port to grow – right now, we’re handling a little under 2.5 million TEU (twenty-foot equivalent units) per annum. The port itself has the capacity to grow to 7.5–8 million TEU– meaning we have enough key lines, berths, and land behind that to facilitate that volume of freight.”
He noted that the only way NSW Ports will be able to put that much freight across the key lines of ships is by getting 40 per cent of containers on rail. “Right now, we’re proud of the fact that it’s about 20 per cent – but we need to double that to reach that next-level capacity.”
The majority of Port Botany’s freight is regional rail at present, and 80 per cent is delivered within a 40km radius of the Port.
“To get to that next step, we’ll need to start targeting the import freight, rather than the export freight – and to do that, we’ll need the intermodals,” said Lafforgue.
According to Priscilla Radice – Principal and Australasian Business Leader at professional consultancy Arup, the privatisation of Australia’s ports has had an unexpected effect on the conversation around freight in the country.
“With the privatisation of the ports, I don’t think anyone predicted how strong a voice [ports would] have,” said Radice, adding that their input in creating a strong supply chain is key, since ports are mode agnostic. Now, privatised ports are contributing to the conversation.
Radice noted that oppositional conversation about freight in unhelpful, especially in the government space.
“Having worked alongside governments, looking at light rail, passenger rail, road and inner-city shaping policies, I see that the oppositional speak of freight – road versus rail, freight versus commuter – I don’t think [it] helps,” she said. “Governments are shifting more and more towards city shaping, understanding their current ecosystem – they need the freight industry to provide a coordinated ‘one’ voice that is very clear […] so the supply chain does not happen in isolation.”
Radice advocated a holistic and united approach to infrastructure planning, noting that rail freight will always have to jostle for its slice of the pie after passenger rail.
“NSW Ports, your target of 40 per cent freight on rail is potentially in direct conflict with the densification of population along freight lines,” she said. “Look at what the freight piece is in the wider context for cities – you’ll never beat the commuter push. Governments need to know that the population is going to double, by getting smarter around all the technology freight will be what that looks like in terms of its infrastructure. You can’t continue to be oppositional.”
The rail freight industry has been handed an opportunity to prove itself viable as an alternative to road transport, though the years ahead will not be free of challenges. Key will be industry development focused on remaining competitive, speakers noted, whether that be through the development of intermodal freight terminals, sophisticated route planning and tracking technology, autonomous capabilities or otherwise.
With the nation’s rail experts already strategising for the various unknowns, the rail industry could be on the right track.
The Victorian Government has signed up to the Inland Rail Project, a direct rail freight connection between Melbourne and Brisbane hoped to jump-start the state’s Regional Rail Revival program.
Victoria is the first state to officially commit to the Inland Rail Project, signing a bilateral agreement with the Federal Government. This pledges them to a long-term lease with the Australian Rail Track Corporation and supports the extension of the northeast inland rail corridor, in addition to changes to the North East Rail Line. This development will allow for the moving of double-stacked freight containers between Melbourne and Brisbane and is expected to return $16 billion to the national economy.
Deputy Prime Minister and Minister for Infrastructure and Transport Michael McCormack said it was a positive step forward on a project that will create both jobs and investment opportunities throughout regional Victoria.
“I’m pleased to reach agreement with Victoria, the first state to get behind Inland Rail which will improve freight travel times for local farmers and producers and support thousands of jobs,” said the Deputy Prime Minister. “Once complete, Inland Rail will create thousands of jobs nationwide and return $16 billion to the national economy during the delivery phase and in the first 50 years of operation.”
While Inland Rail is a freight project, it will also extend benefits to passengers, releasing funds for much-needed upgrades via the Victorian Regional Rail Revival program.
Victorian Minister for Public Transport and Major Projects Jacinta Allan thanked the Deputy Prime Minister for “acting quickly, so we can now get on with the job of upgrading track, stations and signalling throughout regional Victoria, to run modern trains and get people home sooner.”
Deputy Prime Minister and Minister for Infrastructure and Transport Michael McCormack and Victorian Minister for Public Transport and Major Projects Jacinta Allan have signed a bilateral agreement in relation to Inland Rail, making Victoria the first state to sign up to the Inland Rail project.
This agreement includes a commitment to negotiate a new, long-term lease with the Australian Rail Track Corporation and to support the extension of the corridor to accommodate any changes to the North East Rail Line alignment required to support the delivery of Inland Rail.
On completion, the Inland Rail Project will create a direct rail freight connection between Melbourne and Brisbane capable of moving double-stacked freight containers. Inland Rail will, they say, deliver almost $7 billion in additional state gross product through construction and in the first 50 years of operation.
Mr McCormack said this was a great step forward on a project that will create jobs and investment opportunities throughout regional Victoria.
“I’m pleased to reach agreement with Victoria, the first state to get behind Inland Rail which will improve freight travel times for local farmers and producers and support thousands of jobs,” Mr McCormack said.
“Once complete, Inland Rail will create thousands of jobs nationwide and return $16 billion to the national economy during the delivery phase and the first 50 years of operation.”
While the Inland Rail Project is a freight project, both governments acknowledge the North East Rail Line is currently used for both passenger and freight services and that this mixed use is intended to continue.
Victorian Minister for Public Transport Jacinta Allan thanked the Deputy Prime Minister for acting quickly to release the funds which will provide much needed upgrades to every regional rail line, through the Regional Rail Revival program.
“I thank the Deputy Prime Minister for acting quickly, so we can now get on with the job of upgrading track, stations and signalling throughout regional Victoria, to run modern trains and get people home sooner,” Ms Allan said.
Now an agreement on Inland Rail has been reached, money for the $1.7 billion Regional Rail Revival program will begin to be delivered to Victoria.
The works will be delivered under the Regional Rail Revival Program that will provide an upgrade to every regional passenger rail line in Victoria.
Planning and defining the scope of works has already begun to ensure these projects meet the transport needs of passengers and regional communities, and the Victorian and Australian Governments reaching agreement on the first stage of works, with some work already underway.
As part of the Regional Rail Revival program, a joint Victorian Government and Commonwealth Government steering committee was established to look at the work needed to upgrade the North East Line. The steering committee resolved the $100 million committed was not enough to upgrade the track to run new modern trains, therefore the Commonwealth Government will contribute an additional $135 million to upgrade the track to at least a Class 2 standard.
“I am also pleased that in addition to the $1.57 billion Regional Rail Revival package, the Commonwealth will increase its contribution by $135 million to upgrade the North East Rail Line to a class 2 standard to allow faster, modern trains and give communities along the North East line the services they expect and deserve,” Ms Allan said.
The Victorian Government has committed to purchase new trains for the corridor once works on the track are complete.
The Regional Rail Revival program will, they say, deliver more frequent, reliable services and support over 1000 jobs.