Rail Industry Issues PART ONE

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Rail Industry IssuesPART ONE

• Grain Industry Advisory Council
• 8 August 2008

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Victorian Rail Industry Structure

• Victorian rail network owned by Victorian
  Government through VicTrackInterstate rail
  network (825 km) leased to the Australian Rail
  Track Corporation, a Federal Government
  corporation that owns or manages most of the
  national interstate rail networkUrban rail
  network (400 km) leased to ConnexIntrastate,
  non-urban rail network (3,670 km 2,300 km
  freight only) leased to Freight Australia in
  1999 Freight Australia (including track lease)
  sold to Pacific National in September
  2004Government bought back lease of intrastate,
  non-urban rail network for 133.8 million in May
  2007. Regional intrastate rail network now
  leased to and managed by V/Line under Regional
  Infrastructure Lease

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(No Transcript)
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Victorian rail freight operators

• Pacific National (PN) interstate and regional
  freight trainsQueensland Rail National (QRN),
  SCT interstate freight trainsEl Zorro -
  Warrnambool container train, AWB grain trains,
  shunting and maintenance trainsSouthern
  Shorthaul Rail shunting and maintenance trains

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Victorian rail freight

• The regional Victorian rail freight task is over
  five million tonnes per annum comprising
  1. export grain (2 million tonnes average
  non-drought year)
• 2. domestic grain (0.3 million tonnes)
  2. export containers (1.8 million tonnes)
  3. industrial freight crushed rock and
  cement (0.9 million tonnes) 4. paper products
  (0.4 million tonnes) 5. logs (0.2 million
  tonnes)

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Grain

• In non-drought years, the most significant
  component of the Victorian intrastate rail
  freight task is grain (in tonnes) Large
  components of the rail network are retained
  purely to service the grain industry Changes
  occurring in the grain industry have a major
  influence over the rail freight network

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Victorian rail freight

• Average freight task on Victorian regional
  network has fallen by estimated 20 since late
  1990s (before privatisation) despite strong State
  economic growthAttributable to increased road
  competition (particularly B doubles and now
  pressure for B-triples), continued Government
  on road network and seasonal conditionsDegradati
  on of freight network also a factor affects
  operating efficiency and causes loss of customer
  confidenceOnly traffics to increase are export
  containers, logs and quarry productsMajor
  declines in grain, cement and paper - petroleum,
  gypsum, sand, fertiliser no longer on rail

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May 2007 Lease buyback

• Buy-back enables State to better manage
  investment in network including upgrades and
  rectifying maintenance backlog Track lease
  post-1999 privatisation no specific maintenance
  obligations for freight-only rail network
  1999-2006 almost zero major maintenance or
  investment on freight-only lines only essential
  fix when fail repairs (State provided 25m to
  Pacific National in 2006-07 for maintenance of
  freight-only rail network)Today some lines
  inoperable (5 of network), others nearing same,
  most under speed restriction mainly due to very
  poor timber sleeper condition

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Rail Freight Network Review

• RFNR recommended investment in the network based
  on the following categories 1. Platinum (the
  base passenger, ARTC and AusLink network assumed
  to be retained and maintained)2. Gold (core
  grain network) 3. Silver (secondary grain
  network)4. Bronze (marginal grain
  network)Grain network recommendations developed
  in consultation with grain industry.
• The recommended total investment package requires
  capital of 83.5 million and three years ongoing
  maintenance cost of
• 57.2 million for a total of 140.7 million.

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RFNR recommended network