Asciano: heads I win, tails you lose

After threatening to withdraw from Victorian and NSW grain rail transport and taking the ball with it, Asciano (Pacific National) has signed a grain haulage contract with GrainCorp on which it cannot lose.

Asciano Group has finalised agreements with GrainCorp to provide export grain rail haulage services "that will deliver commercially viable outcomes for Asciano for the next five years". This is after Asciano said it would abandon its grain services in NSW and Victoria but refused to sell its specialised rolling stock to other operators in Australia.

Under the new agreements, Asciano’s rail subsidiary, Pacific National, will contract to GrainCorp eight trains that will service GrainCorp’s export haulage requirements in NSW and Victoria on a ‘take or pay’ basis. ‘Take or pay’ means that the trains will be at GrainCorp’s disposal even when not required, as it will have to pay for them even if there is no grain to be moved. Pacific National will benefit further through additional variable payments for export grain volumes moved.

“Securing a ‘take or pay’ contract with GrainCorp reduces Asciano’s risk in its grain segment and will ensure an acceptable rate of return for our dedicated grain assets”, Mr Rowsthorn said. “We are very pleased to have reached a conclusion that drives supply chain efficiency and satisfies the needs of the grain industry and of Asciano security holders.”

Mr Rowsthorn commented, “the Australian Bureau of Agricultural and Regional Economics is predicting a bumper winter grain crop this year. Asciano will be well placed to benefit from any upside while ensuring the grain business remains viable in the event that drought conditions persist”.

In concert with these new arrangements, Asciano has resolved its Broadacre obligations with the NSW Government and will, as was originally intended, invest in the future of the export grain rail haulage market in NSW.

This $70 million Broadacre obligation will reduce by $30 million upon the transfer of a number of ‘branch line’ rail assets that Asciano no longer intends to operate beyond the date of transfer. These assets will be transferred from Asciano to an entity nominated by the NSW Government. Certain elements of ongoing maintenance capital expenditure on main line locomotives used in the NSW export grain business will be credited against the remaining obligations. As a consequence, Asciano expects its obligations under the Broadacre agreement to reduce to zero within 5 years.

GrainCorp Managing Director Mark Irwin said, “GrainCorp and Asciano have entered into a deal that secures a commercially viable future for grain transport in NSW and Victoria.

“The dedicated trains are an investment that underpins our core business of storing and handling grain upcountry, and providing export opportunities for wheat, barley, sorghum and other grains through our ports. The trains will also be used for domestic transhipment of grain, a key part of our business,” Mr Irwin said.

 

Victorian Transport Association approves, with reservations

The Victorian Transport Association (VTA) has announced support for the Victorian Government’s new $112.7 million congestion plan, "Keeping Melbourne Moving".

VTA CEO, Philip Lovel said, “The plan aims to ease congestion in the short term, and we support that. Melbourne needs these immediate solutions.”

The new plan comes out of consultation at the Premier’s Congestion Roundtable held earlier in the year with community and industry leaders including the VTA. The Keeping Melbourne Moving plan will standardise the more than 150 clearways within 10 kilometres of the Melbourne CBD from 6.30am to 10am and from 3pm to 7pm, helping traffic flows during peak traffic times. Clearways will also be more strictly enforced. Also included is an extension of the tram and bus priority program, an extension of rapid response patrols to clear broken-down vehicles; a funding boost for cycling and pedestrian facilities, and an information campaign for motorists.

Mr. Lovel continued “The VTA has also identified further practical initiatives, which it has shared with the Government. These can be implemented quickly and cheaply to help limit congestion growth. These include, allowing more productive trucks on the road and encouraging working around the clock.

"Authorities need to approve access arrangements for more productive truck designs such as High Efficiency Container Transporters (HECTs) outside the Port precincts and the PBS-based Cubic Freight Vehicle to carry greater quantities of light-weight payload on intrastate and interstate routes. Without these, the roads won’t be able to cope with a 33% increase in trucks in the next 15 years. This can be done at virtually no cost and very quickly.

"In addition, bans and curfews by local government are restricting the use of the road system during the night by many transport operators, including supermarkets, quarry and sand operators and the Port. Unlocking this opportunity for freight operators should be a high priority, as it maximises the use of existing investment.

The VTA is very supportive of the Government taking on congestion problems, and the move to extend and standardise clearways is a welcome initiative. We also back the increased rapid response patrols, and know that our members will see the benefits of this.”

Notwithstanding the recent plans, Mr. Lovel remains adamant that “Melbourne needs a complete plan, not just a variety of smaller band-aid solutions. With the Eddington East West Study and the Keeping Melbourne Moving Plan, the VTA anticipates the Government will soon accomplish better policy & planning integration”.

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