2009

By Rob McKay

The government has already outlined its desire to see hubs at strategic locations in outer-suburban Melbourne to help with the movement of freight as part of a comprehensive plan to improve freight efficiency in Victoria.
“Victoria’s freight task in tonnage terms is expected to double in the next 20 years in metropolitan Melbourne, which means it is critical to plan a more streamlined system which can deliver goods efficiently to our growing communities,” Pallas said.
“In Freight Futures, this government announced plans for a Metropolitan Freight Terminal Network (MFTN), with hubs established in the north at Donnybrook/Beveridge and also in the west and south-east.
“Planning work is still underway to identify exact locations in these areas.
“This system would naturally include high-capacity rail and road transport links connecting these terminals to the port.
“Victoria is the only jurisdiction in this country to have a plan for freight movement into the future – and part of that plan is about shifting freight from road to rail as the state’s freight task grows.
“The government is consulting stakeholders as we develop our plans for this network of intermodal hubs, which will reshape freight flows to and from the port of Melbourne and improve efficiency and sustainability.”
Meanwhile, the Port of Melbourne Corporation’s Webb Dock proposal for a third container terminal was still being considered by the government, a spokesman said.

Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au

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RailCorp recently conducted a formal back-to-back trial of the two Australian designed and manufactured mainline locomotives on the steeply graded Cowan Bank.
Downer EDI Rail chief executive, Guy Wannop said this section of track (north of Sydney) formed part of the busiest mainline in Australia, mixing commuter passenger services with intermodal and bulk freight trains.
“Given the combined function of the line, it is critical for train operators and the track owner to maintain strict schedules for train running times to avoid congestion,”
Wannop said.
Three AC traction locomotives from both suppliers were tested separately, each hauling the same 4,250 tonne coal train in a back to back comparison test up the Cowan Bank to determine if the section running times for that portion of track could be met by these locomotive models.
“Previously four older DC style locomotives were required however, the three Downer EDI Rail GT46C ACes were proven to perform superbly under the wet rail conditions, hauling the specified load in just 20 minutes. This is two minutes faster than the specified freight train section time,” Wannop said.
“The superior performance of the Downer EDI Rail locomotive was achieved as a result of the advanced AC traction control system on the GT46C ACe combined
with the high adhesion bogie design.
“These results highlight the benefits of AC traction to rail operators. The GT46C
ACe reduces transit times, allows for increased loads, and lowers fuel consumption more than any other diesel-electric locomotive currently on the network.”
Downer EDI Rail also recently conducted a fuel consumption test of a GT46C Ace locomotive with the assistance of an independent testing laboratory. The tests confirmed that the engine and support systems of the GT46C ACe provide significantly lower brake specific fuel consumption than competitive locomotives.
The GT46C ACe, designed and built by Downer EDI Rail, features many benefits
for operators including a 10,000 litre fuel capacity, in-line fuelling, 4300 traction
horsepower for intermodal speeds, reduced fuel consumption and is the only Tier 2 emissions ready standard gauge locomotive on the Australian interstate network. It is currently in service with SCT Logistics and QRNational.
Downer EDI Limited (www.downeredi.com) is an Australian top 100 company that provides comprehensive engineering and infrastructure management services to the public and private transport, energy, infrastructure, communications and resources sectors, across Australia, New Zealand, the Asia Pacific region and the United Kingdom.

Source: The Australian Journal of Mining – www.theajmonline.com

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By Sam Collyer

Speaking at an infrastructure forum held at the National Press Club in Canberra on December 11th, Woolworths senior logistics director Geoff Thomas said there had long been a policy at local government level of restricting operating hours for truck and freight train movements because of concerns about noise.
Substantially improved noise-abatement technology now made many such restrictions unnecessary but shifting freight in off-peak periods, particularly by rail, needed a concerted approach and the approval of the hundreds of local councils likely to be affected.
Thomas also put the retailer’s support behind coastal shipping, but warned that such a move needed “intervention” from government to make it viable.
Addressing the slow take-up of rail in many areas, he conceded that there was still a inaccurate perception that rail was inefficient across distances of less than 200-kilometres.
Thomas described the rail sector as “undercooked”, but said the mode needed to be more reliable in order to attract more freight from retailers such as Woolworths.
Linfox founder Lindsay Fox gave his backing to a greater use of rail, despite it not being in the best interests of his largely road freight-based company.
Fox said consistent safety and operational standards across all states and territories would have a marked effect on the transport industry.
The transport sector owed it to future generations to ease road congestion by encouraging a modal shift to rail.
Fox also advocated a shift to deepwater ports situated away from capital cities.
Australian Rail Track Corporation chief David Marchant earlier warned the transport industry not to rely on governments to change behaviour.
“The ability of governments alone to fund our transport infrastructure needs is not positive, yet we have, as a nation, become reliant on government funding of our transport infrastructure,” Marchant said.
It was not realistic that governments would fund the $325-billion of projects identified by Infrastructure Australia or the $50bn of work flagged by the road transport sector in the past year.
“These type of dollars are not going to be readily available from governments seeking to reduce national and state debts,” Marchant warned.
&quotWe need to look for more innovative ways to address and blend government investment and private sector investment.
“In the transport and logistics sector, we need to address mechanisms which will enable commercial financing and commercial pricing so that those sectors can adequately fund or contribute to their transport infrastructure.
“The current infrastructure investment boom has the potential to mask the need to address underlying structural issues in transport funding and pricing.
“The present road pricing system creates a general pool of funds in the form of registration charges and fuel excise.”
This “blunt form of taxation” was no basis for a future pricing system or infrastructure platform, as it did not take into account distinctions between routes, modes of transport and peak demand, he said.

Source: Lloyd’s List Daily Commercial News – www.lloydslistdcn.com.au

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By Paul Bugler*

The Australian political system is a federal one with powers for various governmental functions distributed between the Commonwealth and the states. Responsibility for transport rests with the states, not the Commonwealth. Granted, the Commonwealth, with its vastly superior revenue base, is able to “assist” the states with the building of transport infrastructure and therefore has some scope to engage in policy making and planning.&nbsp But, except where the states have ceded the power to the Commonwealth, the states remain in charge. So we have many governments adopting a variety of transport policy stances, some of them closely related while some seem strangely out of step.
A prime example of this is our interstate rail network. In 1997, all mainland states and the Commonwealth agreed to support the creation of Australian Rail Track Corporation (ARTC) to, among other things, manage access and infrastructure development on the interstate rail network. 12 years later and what does the interstate network look like? On the positive side, ARTC is alive and well. Having started off initially with the former Australian National network through South Australia and west to Kalgoorlie, it is now managing large parts of the nation’s interstate network and investing substantial Commonwealth grants to improve what in many cases is early 20th century infrastructure.
Salutary though this success may be, it is far from complete as a quick tour of the country will demonstrate. Starting with Western Australia, even though it was a signatory to the 1997 agreement, in 2001 the WA government sold the interstate track from Kalgoorlie to Perth to the private sector, instead of ARTC.&nbsp It seems that COAG’s ambition for ARTC to “provide efficient and seamless access to the interstate rail network” to Peth was a lower priority than other transport policy issues for WA.
So how have things gone on the east coast? As a positive, Victoria leased its standard gauge network to ARTC. This was followed in 2004 by New South Wales. Unfortunately, although the NSW Government leased a large portion of its rail network to ARTC, it kept the vital Wollongong-Sydney-Newcastle corridor under state control, thus ensuring another change of track provider for almost all interstate traffic. This will be rectified only partially by ARTC’s new Southern Sydney Freight Corridor (SSFL). Last, but not least, the Queensland Government has, so far, not been willing to transfer to ARTC the last 100 kilometres of the standard gauge corridor from the Queensland border to Brisbane. This seems all the more egregious given that the Queensland rail network is narrow gauge, except for the interstate connection, and therefore effectively disconnected from the Sydney-Brisbane corridor.
So, although our state governments have committed to having a “one stop shop” for access to the interstate network, the reality is that we have a perfect demonstration of the functioning of our federal system. Where political expediency dictates, the implementation of policy directed towards the benefit of the nation will often come a poor second to state issues.
While there was logic behind the separation of transport responsibility among the states at federation, the need for cohesive and coordinated transport networks in the 21st century demands a different approach. I’m not optimistic, but I’m hoping the New Year offers an opportunity to genuinely plan and implement transport policy and the resulting infrastructure as a nation rather than as a group of 19th century colonies. The problems we face are rapidly becoming global, let alone national and the old ways are no longer good enough.

*Paul Bugler has been influential in access regulation and heavily involved in business development in the rail freight area with the development of open access. In 2009 he formed Lacertus Verum, a consulting firm offering rail management services particularly in the areas of business development, infrastructure access and contract negotiation. www.lacertusverum.com.au

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By Jennifer Perry

How do you envisage QR’s transformation from a public to a private entity?
The Government has announced a process, we’ve been cooperating with them around the process, in particular, making presentations to the sale advisors about the size, scope and opportunities for QR’s future.
We understand that the Government will make a decision about that by the end of the year, we are cooperating with all of that, we’re supportive of the notion that the business is to be privatised, with the passenger business remaining in public hands and we look forward to understanding what the decision is going to be with respect to the nature of the transaction and the timing and so forth.
For us, as much as it is a distraction in the business, it reinforces the point that we have to focus and focus heavily on the job at hand…it’s business as usual here at QR. We have been following a path over last couple of years of what we describe as getting fit: of putting ourselves in a position which is stronger from a safety, customer and commercial point of view so we can be a robust and growing business in the future, whatever be the particular ownership arrangements.
Our message to everybody in our organisation is to stay focused on the job we all have in front of us but also to push ahead with the transformation and developing projects and all of the changes we need to make to continue to improve the business.

How do you see the role of QR’s passenger business role moving forward? Is there any real alternative available than a government business?
Ultimately, that is a matter for the owners of the business, they’re very clear and we’re very supportive of the notion that the passenger business is best left in public ownership.
The form that that takes over time and how best that’s operated will be the subject of some ongoing consideration and debate.
Again, for the moment, from the point of view of QR’s passenger people, this is the time to concentrate on the job at hand – safety and lifting our performance for our customer as for the owners.

Is capital a problem for QR at the moment, given both the sale process and the global financial crisis?
Firstly, like any business in the current economic circumstances, we do indeed, have to scrutinise every dollar that we spend to make sure that firstly, it’s actually necessary to spend it and secondly, that its being spent efficiently.
Like so many companies we are lifting our game in that area.
More generally however, the availability of capital has not been constrained subject to what I’ve just said. The things that we’ve been able to do in recent months, for example, in New South Wales, we have underpinned the winning of those three major coal contracts to a commitment in excess of $300 million in capital. In Queensland, we’ve recently announced the go-ahead of the Goonyella to Abbot Point project, or better known, the Northern Missing Link project – that single project is a commitment well in excess of $1 billion.
In any analysis, we are continuing to focus on what needs to be done and continuing to get the support of our owners to spend capital where it makes sense for the future of the business.

Do you foresee the QR sale impacting on the ownership of other parts of the Australian system, e.g. any other consolidations or rearrangements of above and below rail ownership?
I think we’re only going to know that as time goes by. The good news is whatever form the privatisation takes at QR we’ll see a move to an increasingly customer responsive and efficient market place for the provision of rail and rail services in Australia. That can only be good for the customer for the industry in the medium and long-term. What it means structurally, is something that will play out as all of that becomes clear over time.

Competition between QR and other operators seems to be particularly aggressive this year. QR has been winning more market share in the NSW Hunter Valley and interstate intermodal businesses but losing market share in Queensland, particularly in the central Queensland coalfields. Do you see this as levelling out soon, or does it have some years to go before a degree of stability is established, if ever?
The nature of competition is there will always be some movement around contracts and market shares, especially in businesses where single contracts can represent big chunks of business or market share.
The important thing both in NSW and Queensland is to remember the sheer scale of the business, both of these are businesses which are already enormous and they are growing and growing at very strong rates.
Even in circumstances where there are shifts in market share, both of the major operators are in fact, carrying more tonnage – that’s an important element to keep in mind around all of this. What we’re focused on is competing for the growths in tonnage in both of those markets.
More generally, we are very supportive of the competition. I believe it is good for the customer but also good for both of the operators. It certainly injects a level of focus and of making sure as it were, that we’re both on our game, and in a QLD environment, if I can turn to that, given that QR had 100 per cent of the market for a long time, inevitably we will lose market share. From my point of view that’s actually a good thing – it means going forward, QR will compete and compete vigorously for business but we will be very much focused on the business that we can best service and the way we can best service that business to the advantage of our customers.

What are the biggest challenges for QR in expanding its business across Australia?
There’s a range of challenges. We’ve spoken about the contextual issue of privatisation and what that means from the point of view of distraction in the business, so we’re very much looking at business as business as usual as we see through those changes.
The priorities in the business are well known and are very clear – the things I’ve been talking about – first and foremost, about safety and the need to improve our safety performance. Secondly, customers and the ongoing need to improve the customer service we provide. Thirdly, it’s about building the commerciality of the business both generally and from the point of view of lifting the returns in the business.
Fourthly, we’re focused on profitable growth and I continue to make the observation that this is a business that has had outstanding growth opportunities over the coming years and finally, we’re focused on people and people capability – lifting the capability of our people in all sorts of ways so we can deliver on the promise of all those priorities.
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