Rail industry grew by 14 per cent from 2016 to 2019

The value of the rail sector to Australia’s economy has grown by 14 per cent, as shown in a new report from Deloitte Access Economics, on behalf of the Australasian Railway Association (ARA).

From 2016 to 2019, the Australian rail industry grew by $3.7 billion. Today, the rail industry contributes $30bn to the Australian economy, 1.5 per cent of the national total.

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Narrabri to North Star

Contract awarded for Narrabri to North Star construction

The Trans4m Rail joint venture has been announced as the successful contractor for the construction of Inland Rail between Narrabri and North Star.

The $693 million contract covers phase one of the Narrabri to North Star leg, which includes upgrading 171km of existing track. A contract for phase two, including 15km of track upgrade and 2.3km of new track, will be awarded separately.

Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development Michael McCormack said the project would be built by local businesses.

“Inland Rail is going to change the freight task in Australia and in doing so will create opportunity in regional Australia with unprecedented investment and job creation,” he said.

“This nationally significant infrastructure is being built by the skills and expertise of Australian businesses – businesses that invest locally, drive regional employment and give back to communities along this 1,700km corridor of commerce.”

Trans4m rail is a joint venture between John Holland and SEE Civil. Lendlease and another joint venture RailFirst made up of Downer EDI and Seymour White had also been shortlisted for the contract.

Local member for Parkes Mark Coulton said the winning tenderer would invest locally.

“Trans4m Rail has made a commitment to employ local people, engage local businesses and suppliers and work with communities in North West NSW to ensure the benefits of Inland Rail are felt throughout the community.”

Finance Minister Simon Birmingham said that the project would enable more freight to be handled by rail.

“The upgrade of another 171km of track is another important piece in the puzzle to delivering better and quicker freight access to our primary producers in regional Australia, helping them get their product to markets in Australia and overseas with more ease.”

Coulton said that this region was already seeing greater investment.

“This project is about more than just steel tracks – we’re already seeing opportunities for industry to invest in the region through the Northern NSW Inland Port at Narrabri and the Moree Special Activation Precinct – leveraging the advantages of Inland Rail to provide long-term employment and scope for future growth.”

Preliminary design contract awarded for southern NSW sections of Inland Rail

The contract to carry out reference design and accompanying primary approvals documentation on two sections of the Inland Rail project has been awarded.

WSP Australia will carry out the work on the Albury to Illabo and Stockinbingal to Parkes sections, said project director Melvyn Maylin.

“A range of investigations will be delivered under the new contract, including ecological and geotechnical surveying, as well as scrutiny of impacts to cultural heritage, noise, air quality and utilities,” he said.

“This is an important step in progressing these two enhancement projects in southern New South Wales.”

The two sections have been combined together due to their similarities, reducing time and cost.

“The benefits of combining the two Inland Rail projects into the same service provider package is that both sections are enhancement projects in existing rail corridors, rather than new construction,” said Maylin.

“By nature, they are similar types of work and this approach will lead to cost effective and efficient project delivery.”

Work on the two sections with a combined length of 358km largely involves upgrading the current rail line to enable double stacked freight trains to run on the future route. Specific works will include increasing vertical clearances around bridges and new crossing loops.

The 37km section of new track from Illabo to Stockinbingal is still in the reference design stage.

The two sections have been identified as needing to progress by the NSW government, which handles planning approvals.

“The Albury to Illabo section has been classified State Significant Infrastructure by the NSW Government, and is currently in the process of an Environmental Impact Statement approvals pathway,” said Maylin.

“As for the Stockinbingal to Parkes project, the environmental assessment will be through four Review of Environmental Factors (REFs).”

The tenders for the first packages of construction work will follow reference design and planning approvals. This is expected in late 2021.

Port Botany

Freight coalition unite in calling for rail container incentive scheme

Freight and logistics groups have called out the NSW government’s undermining of its own mode share target for containers carried by rail into Port Botany.

The Australian Logistics Council (ALC), Freight on Rail Group of Australia (FORG), Freight and Trade Alliance (FTA), and the Australasian Railway Association (ARA) along with individual port rail freight operators are questioning the wisdom of allowing more high productivity vehicles on Sydney’s roads.

“By incentivising HPVs, government is perversely derailing their own policy to grow rail’s mode share target – at a time when Sydneysiders want safer roads and less traffic congestion and vehicle emissions,” said ALC board member and Qube managing director Maurice James.

The NSW government has been issuing permits for high productivity vehicles to access the Sydney road network and major motorways such as WestConnex. By allowing trucks which can carry two containers to travel within Sydney, this reduces the competitiveness of rail for the metro import container market.

The NSW government has set itself the goal of having 28 per cent of the container trade through Port Botany being handled by rail by 2021, however just 17.6 per cent is currently hauled by rail.

Instead of having each mode compliment each other, with rail for longer distances and trucks for the first and last mile, road transport was monopolising container traffic, with impacts on the local community, said FORG chair and Pacific National CEO Dean Dalla Valle

“Today, many HPVs are doing ‘every mile’ of the freight task in Sydney, placing heightened pressure on traffic congestion, road safety and vehicle emissions,” he said.

Dalla Valle advocated for a measure such as the Western Australian government’s Port of Fremantle container incentive scheme was needed in NSW.

“Prior to introduction of the incentive scheme at the Port of Fremantle in 2006-07, rail mode share was a meagre two per cent. The scheme underpinned growth of rail’s mode share which is now above 20 per cent – the highest in the country,” said Dalla Valle.

Director of the FTA and secretariat to the Australian Peak Shippers Association Paul Zalai said that governments should encourage importers to use rail services.

“Governments must maximise port assets and manage our trade gateways through incentivisation of rail usage for imports to metropolitan sites and importantly, streamlined connectivity to regional areas to cost effectively reach export markets.”

ARA CEO Caroline Wilkie said communities would be feeling the brunt of the lack of rail transport.

“The balance has tipped so far we run the risk of Sydney’s roads being over-run with trucks unless there is urgent action to use more rail.”

Rainbow to Dimboola line sleeper replacement work underway

Work has begun on replacing 39,000 sleepers on the Rainbow to Dimboola line in Victoria’s North West.

V/Line crews with the support of contractors are conducting the works that are funded through the Victorian government’s Building Works program which sets aside $83 million for regional rail maintenance.

Victorian minister for Ports and Freight Melissa Horne said the works would support freight movements and economic growth in the region.

“This investment will help improve our freight network and ensure we are continuing to support farmers and freight operators at a time when they need it the most,” said Horne.

“We’re continuing to maintain and improve the network, taking extra steps to allow projects like this to continue safely and help keep track workers, suppliers and contractors working.”

In addition to sleeper replacement works, ballast will also be renewed and resurfacing will improve the condition of the track. Scheduling has aimed to minimise the impact on freight services using the line.

Member for Western Victoria Jaala Pulford said the works were essential with a large grain harvest expected this year.

“This upgrade will provide easier and more efficient ways for farmers to transport their goods ahead of what is expected to be a bumper grain harvest,” said Pulford.

“The line has already been put to good use since re-opening in April, and this investment will make it even better.”

The 66km line from Rainbow to Dimboola was reopened in April after a $1m investment to replace 5,000 sleepers. So far, 38 freight services have used the re-opened line, carrying 100,000 tonnes of grain and replacing 5,700 truck movements.

Heavy use of the line has led farmers to previously call for further reopening of freight lines servicing grain growers and other primary producers throughout regional Victoria.

Bullsbrook intermodal terminal takes the next step

The Western Australia state government is taking a market-led proposal for an intermodal terminal at Bullsbrook to the next stage.

The intermodal terminal proposed by Harvis Capital would be built at Bullsbrook, north east of Perth, and could facilitate further development in the outer Perth suburb.

WA Transport Minister Rita Saffioti said the WA government is considering the proposal and the proposal has progressed to stage 2 of the project assessment process. Harvis Capital will now submit a detailed business case for the project.

“An intermodal terminal at Bullsbrook has the potential to boost the efficiency and capacity of the rail freight system, reduce truck movements on metropolitan roads and to increase job creation and economic development in Perth’s north-eastern corridor,” said Saffioti.

“We will continue to work closely with industry to encourage and support more freight on rail, to make our freight supply chains as efficient and cost effective as possible.”

The WA Department of Planning, Lands and Heritage is preparing a district structure plan for Bullsbrook to support the proposed intermodal terminal.

The area is earmarked for further industrial expansion, with an intermodal terminal supporting rail to connect the future businesses with the Fremantle Port and Kwinana Outer Harbour, as well as the northern regions of Western Australia.

The proposed intermodal terminal would be located alongside the narrow-gauge freight rail line passing through Bullsbrook and connecting north to Dongara.

Saffioti said that the intermodal terminal would be a catalyst for moving freight onto rail and ensuring future freight needs produced by the development are handled by rail.

“One of our key election commitments was to move more freight onto rail to help ease road congestion and improve safety,” said Saffioti.

ALC

Improving rail’s share of freight task starts with policy settings: ALC

CEO of the ALC Kirk Coningham writes that significant efficiencies can be found without massive spending.

Among the many disruptions wrought by the COVID-19 pandemic was the need to defer the 2020-21 Commonwealth budget, which will now be handed down some five months later than originally scheduled.

As always, ALC made a submission to the federal government ahead of the originally planned date. This was well before the full effects of the pandemic reached Australian shores and our industry faced the challenge of keeping essential supplies moving, despite unprecedented restrictions on movement and the effect of state and territory border closures.

All of us – governments, industry and the wider community – have learned lessons as a result of the COVID-19 experience. Perhaps more than ever before, communities now understand the very real and immediate impact that supply chain disruption can have on their daily life.

As consumers witnessed empty supermarket shelves as a result of unprecedented demand caused by the COVID-19 pandemic, there is a clear need to ensure that logistics operators are given the flexibility to they need to meet increased and changing demand.

This is equally true right across the supply chain – from deliveries into supermarket loading docks through to the movement of freight trains across state borders.

Perhaps the single most effective government action taken during the pandemic to address supply chain disruption did not involve massive expenditure, but simply the removal of operational curfews through non- legislative ministerial action.

Industry has called for the removal of such operational restrictions over many years. With many of them suspended for the duration of the pandemic, both government and the community have been able to see the benefits.

As the Prime Minister himself noted in June this year: “Trucks were allowed to resupply along roads and during hours where they were previously banned. And the sun came up the next day. It was extraordinary.”

This goes to the heart of the key point ALC has made to the federal government ahead of this year’s Budget.

With the pandemic having placed the nation’s finances in a challenging position, this is the time to focus on regulatory reform that may not cost big money – but can nevertheless have a profound impact on supply chain efficiency.

The need for such regulatory reform was a key focus of ALC’s pre-budget submission in January – and the urgency of that task has been underscored in the supplementary submission provided to the federal government in August.

In the rail space, this includes supporting the development of a National Rail Plan that will finally establish a single set of consistent national laws to regulate the movement of freight by rail in Australia that address environmental regulation, workplace health and safety, workers’ compensation and drug and alcohol testing.

The COVID-19 pandemic and its associated border closures have put a spotlight on the disruption that can be caused by inconsistent regulatory approaches between jurisdictions. The upcoming federal budget is the place to start work that will finally make the changes needed to overcome such disruptions.

freight

Get the freight basics right and benefits will follow

To make the most of infrastructure investments, the playing field for rail freight needs to be evened out, writes Caroline Wilkie, CEO of the ARA.

The confirmation of funding for the Port of Melbourne direct rail line to South Dandenong in August was welcome news for business, industry, and residents in the region.

The direct rail connection to the port forms part of the wider Port Rail Shuttle Network and will make it easier and more cost effective for businesses to access port facilities.

The Federal and Victorian government funding will deliver tangible benefits to businesses in Dandenong’s manufacturing sector and improve the efficiency of port operations.

Ultimately, the project will also take 100,000 trucks off the road, helping give local residents their city back in the process.

In the same month, the NSW government fast tracked approvals for the Botany Rail Duplication and the Cabramatta Rail Loop, putting its support behind greater use of rail within its freight network.

The projects will not only deliver this critical new infrastructure to meet the state’s freight needs but will take 54 trucks off busy city roads with every additional freight train travelling on the Botany line.

That will make a crucial difference as the Port of Botany’s freight task increases by 77 per cent in the 20 years to 2036.

As Minister for Regional Transport and Roads Paul Toole observed when announcing the approvals, these new connections are so important because the more freight is moved on rail, the less congestion there is with fewer trucks on the roads.

These projects are great examples of the difference rail freight can make, and why continued investment is essential to the continued liveability of our cities and towns.

But while the benefits of projects like these are obvious, more needs to be done to ensure the rail sector can meet our increasing freight needs.

While Australia’s freight task is growing – and will continue to grow – the role rail freight plays in meeting this demand has actually declined.

Recent years have seen the rail industry’s share of the freight task eroded by policy settings that favour other modes of transport and frustrate investment in the sector.

As a result, less than one per cent of freight travelling between Sydney and Melbourne is moved by rail – a far cry from the 40 per cent share the rail network maintained in the 1970s.

While the vast expanses of the country have seen east- west connections hold up better, rail freight’s modal share has started to slip there too, with rail now carrying just 54 per cent of the freight task across the Nullarbor.

It is hard to reconcile the declining role of rail freight at a time where the sector needs more capacity than ever before.

Part of the problem is how we price rail freight when compared to road.

While getting trucks off the roads remains a focus in these busy and often congested urban areas, heavy vehicle road reform has simply not progressed.

So, while rail freight access charges are based on maintaining and operating the infrastructure it requires, the road freight industry is not expected to fully cover the cost of maintaining and operating the roads it uses.

As we hear more about the importance of easing congestion, the sustainability benefits of using more rail services and the value of creating city precincts that make it easier for residents to get around, favourable pricing models for road freight is increasingly difficult to reconcile.

We must have a level playing field for all to ensure rail freight can grow to support the increasing demand for freight across the country.

This, together with harmonisation of standards across the country, could enliven the rail freight sector again and ensure it is ready to support the growth of our economy over time.

After all, the industry has shown how much can be achieved under the right settings.

Australia was the first country to move to fully autonomous freight trains when the mining sector adopted the technology to service iron ore mines in the Pilbara.

This capability has become a hallmark of mining in the region and the significant benefits the industry delivers to the broader economy.

Use of rail for bulk commodities has increased, bucking the trend of the broader sector.

With a level playing field and certainty of standards across the country, there is no telling what additional benefits further innovation in the sector could deliver.

But first, we need to get the basics right so that rail freight can compete equally and fairly.

After all, we cannot allow new investment in rail infrastructure that busts road congestion in our cities to be eroded by a policy environment that only encourages business and industry back to the roads in the end.

freight

Resumption of Murray Basin Rail project a “national priority”: Rail freight businesses

The Freight on Rail Group has called upon the federal government to fund the resumption of the Murray Basin Rail Project.

The coalition of rail freight businesses, chaired by Dean Dalla Valle said that with the Victorian government committing $48.8m in funding, the Commonwealth needed to come to the table as well.

“This commitment from the Victorian government is welcome – as a nation we need to get this rail freight network humming again. Given we could see another bumper crop next year, industry encourages the Commonwealth to also commit extra funding to help get the network back on track,” said Dalla Valle.

Getting the project back on track would improve the productivity of the Victorian rail network, and with forecast bumper grain harvests, the need for investment is critical.

“Due to well-documented problems with rail infrastructure in the basin, I’ve heard almost 70 percent of export grain this season will be transported by truck to Victorian ports – this is an extremely poor outcome for society; and certainly not good for regional councils already struggling to repair and maintain large road networks,” said Dalla Valle.

Since stalling in 2019, the partially completed project has led to a decline in freight carried by rail in the region. Groups including farmers, grain haulers, and now freight rail businesses are highlighting the importance of an efficient freight network.

“Inefficient transport supply chains corrode the core fundamentals of state and national economic productivity; destroying jobs and increasing cost of living pressures for millions of Australians,” said Dalla Valle.

The opportunity to reinvigorate the Murray Basin rail network had positives on a number of fronts, said Dalla Valle, beyond agricultural productivity. Moving more freight by rail would make roads safer for passenger vehicle by reducing accidents and wear and tear on roads. Additionally, as rail freight is less emissions intensive than road freight, Australia could reduce transport emissions. According to a 2017 Deloitte Access Economics report, for every kilometre of freight transport, rail produces 16 times less carbon pollution than road freight, and 14 times less accident costs.

Rebuilding the network would also provide a boost for regional economies and the Australian supply chain.

“Just imagine all the Australian-made steel that will be used in upgrading and standardising the network with new track – additional support for this project should be of the highest national priority,” said Dalla Valle.

Mildura Line

Murray Basin Rail Project revision falls short of freight needs

With the executive summary of the revised business case for the Murray Basin Rail Project now released, farmers, grain haulers, and rail experts are renewing their call for the project to be delivered in full, as per the original scope.

The revised business case recommends that the Sea Lake and Manangatang lines remain broad gauge, while work should focus on improving the existing, separate gauge network.

GrainCorp rail commercial and contracts manager Alex Donnelly said that the proposed scope of works would return the network to a viable state.

“The proposed improvements are all quite sensible and are all going to be beneficial to the rail network in the long term. They are not going to provide the capacity and costs we’d like to see, but they are certainly improvements from the current heavily degraded state of the MBRP affected network,” said Donnelly.

Since work stalled in 2017 and 2018 and then halted in 2019, increasing volumes of grain from North West Victoria have had to be hauled by road. In 2019, when NSW and Queensland were in drought, the relatively good conditions in Victoria meant that grain grown along the Sea Lake and Managatang lines missed out on markets and higher bid prices in northern NSW, as the grain could not be moved via rail on the interstate standard gauge network.

“Those farmers on the Mananagatang and Sea Lake sites really missed out, because their grain could only flow south by rail to Geelong or Melbourne, or by truck into southern NSW homes – where the bids weren’t as strong,” said Donnelly.

Victorian Farmers Federation grains group president Ashley Fraser said that the proposed works would create two separate networks.

“A commitment was made to build the Murray Basin Rail Project five years ago, including the standardisation of the Sea Lake and Manangatang lines,” he said.

“Under this revised plan these lines will not be converted to standard gauge resulting in farmers and businesses along the broad-gauge Sea Lake and Manangatang lines effectively being cut off from the standard gauge Inland Rail network.

“Ultimately this means double handling of freight which results in added costs for farmers, especially in the important grain growing regions in Victoria’s north west.”

John Hearsch, Rail Futures Institute president, said the proposed scope of works would not be able to handle the projected increase in freight volumes.

“It’s probably sufficient for the short term but, as I see it, I don’t think it properly takes account of what needs to happen in a bumper grain harvest which is what we’re about to experience. The outcome of that will be pretty straightforward; we’ll have a lot more trucks on the road than we really should have.”

Hearsch also highlighted that if the works proposed in the revised business case go ahead, while there will be marginal improvements, the plans locks in inefficiencies, such as standard gauge trains on the Mildura line from Yelta and Murrayville having to travel further to get to the port of Geelong or Melbourne via the Maryborough to Ararat connection, rather than directly via Ballarat.

“I find that quite disappointing and it still means that notwithstanding some marginal improvement on the journey from Maryborough to Ararat, these trains are still having to run well over 100km extra distance, which takes extra time and involves extra cost. That looks like a semi-permanent feature of what this part of the rail network is going to look like.”

Other potential projects that depended upon the full completion of the original Murray Basin Rail Project are also looking to miss out in the revised plan. In Ouyen, a local community group that has been working to set up an intermodal terminal is furious that the revised scope will not include a standard gauge connection to Melbourne.

“The MBRP was to be a ‘once in a generation’ project for the ultimate benefit of all Victorians and we are hoping governments will sort through the current MBRP quagmire very soon, to ensure it gets completed as originally planned. The Victorian government’s announcement will result in the Ouyen train having to go on a five-hour detour via Ararat making it unsustainable,” said Ouyen Inc president Scott Anderson.

Having two separate gauges in Victoria would also place increased cost pressures on businesses, said Donnelly, and could lead to the broad-gauge network becoming a stranded asset.

“Rollingstock owners need to keep their aging broad-gauge gear alive and running, which gets more expensive every year as spares and parts become harder to source. The broad-gauge network misses out on the expensive new gear that cascades out of the big coal and interstate operations, while standard gauge sites will see the benefits of this equipment.”

One of the reasons cited in the business case summary for the change in scope to let the Ballarat corridor remain broad gauge was the potential disruption to passenger services. Hearsch said that with proper, integrated planning between Victorian government bodies, this could have been avoided.

“Of course, the freight upgrades should’ve been accounted for in the upgrades of the passenger network, that didn’t happen. The reason it didn’t happen, as I read it, is that the Ballarat line upgrade and the Murray Basin Rail Project, both of which affected Ballarat, those two projects didn’t talk to each other.”

With the Murray Basin Rail Project having been heavily criticised by the Victorian Auditor-General in a report early in 2020 for deficiencies in planning and project management, Donnelly said it was critical that the revised project is handled correctly.

“For this coming 20/21 harvest these improvements will probably not provide any benefit to rail capacity. It’s very unlikely that any of the significant components of the proposal could implemented in time to help the coming harvest export task,” said Donnelly.

“In fact, we hold strong concerns that the proposed works pose a risk to an already constrained rail network: construction closures and trackwork blocking lines will stop the trains from exporting grain and we are expecting rail to be running flat out all year long.

“Any major shutdown will reduce rail tonnes moved to port, which will transfer straight to road instead. We need very careful consultation, coordination, and planning by the department to mitigate the impacts on the industry.”

Fraser said that the original aim was the correct one and should be carried out.

“The original vision was for a modern, efficient regional rail freight network. While the execution to achieve this vision may have been flawed, the intention was right.”