Victorian Transport Association provisional CEO made permanent

<span class="" id="parent-fieldname-description"> Victorian Transport Association (VTA) interim CEO Peter Anderson has been chosen by the board to take on the role permanently. </span> <p>Former CEO of the Scott’s Group of Companies, Anderson initially agreed to fill the role of interim chief for three months, effective October 1.<br /><br />Anderson told Rail Express affiliate publication Lloyd’s List Australia that after the VTA board had done its due diligence to see whether there were any other candidates available, it was deemed he would be the best person to fulfil the role.<br /><br />“So I maintain the role,” he said.<br /><br />“I have been an operator for 34 years with TNT, Brambles, Border Express and Scott’s Group of Companies.”<br /><br />He said this set him up nicely with a lot of experience with rail, road, wharfs and container logistics.<br /><br />VTA president Brendan Hopley said Anderson was an obvious choice to fulfil the role with his “extensive operational knowledge and experience”.<br /><br />In addition, he had already proved himself by spearheading the association’s advocacy efforts.<br /><br />“The VTA executive council is pleased that Mr Anderson accepted the role permanently and look forward to him leading the association as it continues to deliver positive, best-practice outcomes for all members,” Hopley said.<br /><br /><em><strong>This is an edited version of an article which originally appeared on Lloyd’s List Australia’s website. The original can be viewed here: http://www.lloydslistdcn.com.au/archive/2014/12-december/17/local-vta2019s-provisional-ceo-made-permanent</strong></em></p>

Rail move key to Burnie Ports $12m upgrade

<span class="" id="parent-fieldname-description"> TasPorts is set to begin its $12m optimisation project at Burnie Port, which will better integrate freight transport services, and allow Toll Group to increase its throughput at the site, according to TasPorts chief Paul Weedon. </span> <p>Container storage capacity will be increased by relocating the current rail unloading area, and realigning the port access road to expand the rail yard.<br /><br />Rail activity will thus be brought within the operational area of the port, and trains will no longer need to be shunted along the waterfront.<br /><br />The TasPorts, TasRail and Toll Group project oversight committee says the redevelopment will begin within weeks, and the project is expected to take around 10 months to complete.<br /><br />As project manager, TasPorts is finalising the construction schedule with contractor, Fulton Hogan.<br /><br />Toll Shipping general manager Tony Stewart said a direct interface with the port and the railhead will help the company take trucks off the roads and increase the company’s ability to move freight both interstate and intrastate.<br /><br />Burnie Ports’ optimisation project is funded by a $4m contribution from the Federal and $2m from the Tasmanian government.<br /><br />Toll is also contributing $2m with $1m from TasRail and the balance from TasPorts.<br /><br />Tasmanian minister for infrastructure Rene Hidding said the project will increase capacity and productivity.<br /><br />Burnie port’s tonnage throughput grew 11.4% in 2013/14 with 4.05 million tonnes, compared to the previous financial year’s result of 3.6mt, according to Tasports’ latest annual report.<br /><br />Incoming and outgoing cargo through Burnie accounted for 242,136 teu last financial year, a decline of 4.6% from 253,833 teu.<br /><br /><em><strong>This is an edited version of an article which originally appeared on Lloyd’s List Australia’s website. The original can be viewed here: http://www.lloydslistdcn.com.au/archive/2014/12-december/16/local-burnie-ports-12m-upgrade-to-start-within-weeks</strong></em></p>

Canberra light rail costs 18,000 Audi A3s

<span class="" id="parent-fieldname-description"> ACT’s shadow minister for Transport Alistair Coe has criticised the amount the territory’s government is planning to spend on the city’s new light rail network, by using quite a unique comparison. </span> <p>Coe reportedly loaned two Audi A3s and positioned them outside the entrance to Canberra’s Exhibition Park, where he then held a press conference, according to local paper The Canberra Times.<br /><br />Coe has been one of the biggest critics of plans to build a 12km light rail line through Canberra. The plan itself is costed at around $800 million.<br /><br />“When you are talking in such massive numbers, it is difficult to comprehend what that means,” Coe was quoted to have said.<br /><br />“What this exercise is all about is trying to put it into units that people can understand.<br /><br />“The cost of construction would buy 18,000 Audi A3 convertibles,” he said, “one for every househould in Gungahlin.”<br /><br />This was Coe’s latest campaign against the light rail plan, and follows his last statement, made in October, when he described the ACT government as being “arrogantly committed to light rail long before the presentation of [the project’s] business case”.<br /><br />“The project will not only be a financial disaster but a disaster for our economy as well,” he said.</p>

Rio to save on Pilbara diesel

<span class="" id="parent-fieldname-description"> Andrew Harding, iron ore chief executive of Anglo-Australian mining giant Rio Tinto, has told a seminar in London that the company could save big time in coming months thanks to the continued decline in the price of oil. </span> <p>Harding, who was joined by group CEO Sam Walsh and a number of other Rio executives at an Investor Seminar on December 4, said the recent drop in the price of oil could see the company save big on diesel fuel for its train operations in the Pilbara.<br /><br />“From an actual diesel use in the Pilbara, well, we use considerably more than half a billion litres a year, so you can figure that one out,” Harding said at the start of December.<br /><br />Diesel has dropped from a peak of roughly 85 US cents a litre in February to an average of 64 US cents in November – a drop of 21 US cents a litre.<br /><br />Using just the bottom-end of the diesel consumption range described by Harding, that would work out to a saving of as much as US$105m in rail fuel expenses, should the diesel price remain this low for the next 12 months.<br /><br />Harding also alluded to the fact that Rio can find savings on bunker fuel – the major variable cost in the global shipping industry.<br /><br />Rio, which is Australia’s biggest exporter of iron ore, can benefit from this, as shipping costs are in turn a major factor in the miner’s operational spending.<br /><br />Bunker fuel rates have been stable between about US$600 and US$700 a tonne for the last four years, but have declined to below US$400 in recent weeks.<br /><br />“The bunker fuel would be down from, say, 600 to 420 or 430 this week,” Harding said.<br /><br />“That would translate to about $1.50 a tonne [of iron ore], so it is not unsubstantial at all it is quite strong.”</p>

Leighton sells John Holland to China

<span class="" id="parent-fieldname-description"> Hong Kong-listed China Communications Construction will buy engineering, contracting and services provider John Holland from Leighton Holdings. </span> <p>Leighton, which bought 70% of John Holland in 2000 and most of the remaining stake in the company in 2004, will sell the firm to China Communications Construction in a $1.15bn deal, expected to be completed in the first quarter of 2015.<br /><br />John Holland will become part of CCCC International (CCCI), a wholly-owned subsidiary of China Communications Construction, which is largely owned by China’s state-owned assets commission.<br /><br />Glenn Palin, managing director of John Holland, said he was excited about the opportunities the deal presented for the Melbourne-based firm.<br /><br />“From our point of view, John Holland and CCCI are extremely complementary,” Palin said.<br /><br />“With the strength and capability of CCCI backing us, John Holland is set for a bright future in the Australian infrastructure market. This is the next step in our journey as one of Australia’s leading engineering contractors.<br /><br />Major projects in the books for John Holland at the moment include tunnelling and stations for Sydney’s North West Rail Link passenger line, construction of a new Children’s Hospital for Perth, and the development of part of Victoria’s new Regional Rail Link.<br /><br />John Holland also performs work for the mining, mineral processing, resource transport and port sectors, as well as general construction work across several other industries.<br /><br />CCCI president Lu Jianzhong said the acquisition was a momentous step for the Chinese company.<br /><br />“We believe there are very significant growth opportunities in the Australian market, and clearly in the proposed acquisition of John Holland, we are recognising the strong leadership and solid performance of the business,” Lu said.<br /><br />“Ownership of John Holland is the optimal way for China Communications Construction to participate in this dynamic market as part of our aim to be a global transportation infrastructure business.”<br /><br />He added: “We see JHG as a strong independent competitor in the Australian market.”<br /><br />Lu said he expects there will be opportunities to export John Holland’s skills in road, rail, tunnelling and water infrastructure.<br /><br />The sale of John Holland ends a six-month bidding process. China Communications Construction was among the names rumoured to be in the frame from fairly early in that process, and was joined throughout by talk of interest from US firm KBR, South Korea’s Samsung C&ampT, France’s Bouygues, and Australian giant Lend Lease, among several others.<br /><br />Leighton’s new owners, Spanish firm ACS, opted to sell John Holland in June as a way of paying off debt. John Holland was considered the best candidate for sale among Leighton’s key subsidiaries, which also include Leighton Contractors and Thiess.<br /><br />Marcelino Fernndez Verdes, Leighton’s executive chairman and chief executive officer, said the sale of John Holland demonstrates the progress Leighton’s new owners have made in strengthening the company’s balance sheet, and improving its operating model.<br /><br />“Following a comprehensive and extensive global sale process we have achieved a value for John Holland which reflects its position as one of the country’s leading engineering and construction companies,” he said.<br /><br />“The divestment of John Holland supports our focus on further reducing gearing and strengthening our balance sheet so that we can be sustainably competitive.”</p>

Newcastle rail drama as council switches sides

<span class="" id="parent-fieldname-description"> The NSW Government is sticking by its guns and will close the heavy rail line between Wickham and Newcastle on Boxing Day, despite the local council changing its mind on the issue, and an expected recommendation from Federal Parliament to delay the truncation. </span> <p>State government wants to close the heavy rail line between Wickham and Newcastle so that it can start work on the development of a light rail network for Newcastle, which will feature a new transport interchange at Wickham.<br /><br />State premier Mike Baird says that every week the government’s plan is delayed will cost taxpayers $220,000.<br /><br />But the movement against the shuttering of the heavy rail line into Newcastle is growing, with Greens senator Lee Rhiannon successfully passing a motion through the Federal Senate to recommend that the decision be reversed, and the local Newcastle council – which has until now supported the state’s plans – changing its mind at the last minute.<br /><br />Newcastle City Council, and its new, Labor lord mayor Nuatali Nelmes, reversed its decision on the project on Tuesday last week, and said it would send an “urgent letter” to Premier Baird to notify him of the change.<br /><br />The shift is supported by Rhiannon, who said the Senate’s approval of her motion at the end of November to have the rail decision reversed sent a strong message to Baird.<br /><br />“The motion that went through the Senate sends a clear message to the New South Wales Coalition Government, not to pull up the rail line going into Newcastle,” she was quoted as saying by the ABC.<br /><br />“It’s true that there is no obligation on the NSW Government, but there is certainly support there for the community and it amplifies that voice of concern that we need to retain our rail line into Newcastle.<br /><br />“Some people might argue that what comes out of the Senate is symbolic, but to have the Australian Senate give backing to the Newcastle community that will be so disadvantaged if we lose the heavy rail into Newcastle.”<br /><br />Adding to the controversy is speculation that a parliamentary inquiry into planning decisions could also suggest the line truncation be delayed.<br /><br />The state inquiry, which is set to be finalised by March 5, 2015, could intervene with the planned Boxing Day closure as part of its interim findings, citing a flawed case for the project – most specifically its lack of a cost benefit analysis.</p>

Bradken wary of lowball takeover bid

<span class="" id="parent-fieldname-description"> Rail wagon supplier Bradken has let a pair of private equity firms who want to buy the company for $872m conduct due diligence, despite the company’s board resisting the bid. </span> <p>On Friday last week it was announced a consortium of Pacific Equity Partners and Bain Capital Asia had lobbed a $5.10 per share bid to acquire 100% of Bradken. The bid follows a non-binding and indicative takeover proposal from the same consortium in August, which was at $6.00 a share, according to Bradken.<br /><br />Bradken, which manufacturers rail wagons, grinding media and other products for the mining industry, has struggled with slowing growth in the mining sector and has shed roughly 450 jobs in the past 12 months.<br /><br />But it saw its share price bounce from a $3.32 close on Thursday last week to $4.53 on Friday, and a number of analysts have said the offer from the pair of private equity firms is a good one for the company.<br /><br />Bradken’s board, responding to the bid on Friday, was not happy to be receiving the bid at the industry’s nadir, however.<br /><br />“The board notes that the proposal by the consortium has been made at a low point in the mining cycle during a time of significant share price volatility in the broader mining services sector,” the board told the ASX.<br /><br />“The board remains confident in the outlook and growth prospects for Bradken and believes that the company is well placed to continue to grow and maintain its earnings quality through the cycle despite volatility in some of its end markets and financial difficulties of some competitors and peers.<br /><br />“The company is executing a number of specific initiatives &hellip that will enable it to recharge growth within the business and it is also evaluating other opportunities &hellip”<br /><br />Bradken has appointed Merrill Lynch and Rothschild as financial advisors.</p>

Drones gain traction as Aurizon jumps on board

<span class="" id="parent-fieldname-description"> The commercial use of drones throughout is transitioning from a short term fad to a full-blown trend, as rail operator Aurizon follows Google, Rio, and other big businesses in using unmanned aerial vehicles (UAVs) in their operations. </span> <p>Aurizon spoke back in October about how they were using a pair of drones to inspect their rail assets, in an effort to save time and money, while improving safety.<br /><br />And the company’s acquisition of a pair of Microdrones MD4-1000 UAVs earlier this year went very public over the weekend, with a full page feature in the Australian Financial Review.<br /><br />Aurizon vice-president of network operations Clay McDonald was on hand to tell the Fairfax paper about how the company was using the drones to inspect bridges and other fixtures along its network in Central Queensland.<br /><br />The company’s foray into the UAV scene began in July when it was faced with the annual challenge of inspecting one of the highest bridges in its network.<br /><br />“There was a problem with how we were going to inspect the bridge at that height and span,” McDonald was quoted as saying by the AFR. “So we thought: hey, could we do it by a drone?”<br /><br />Following the initial trial, the company now uses the two drones as part of its inspection and maintenance program for the 286 bridges, and other assets in its Central Queensland coal network.<br /><br />“Today we fly [the UAVs] over the top of the electrical asset with live trains running underneath. It is quite amazing what you can do with them.”<br /><br />Aurizon’s move towards drones is part of a growing trend across a multitude of businesses, which are finding out the benefits of UAVs in their operations.<br /><br />Google and Amazon have investigated using a network of drones steered by GPS to deliver packages to people in cities, and in rural areas. Drones have also been trialled by emergency response personnel as a means of delivering potentially life-saving apparatus to the emergency scene in the fastest way possible.<br /><br />The mining, agriculture and associate infrastructure industries are among the latest in this growing trend.<br /><br />As <a href="http:// http://www.bulkhandling.com.au/news/2014/november/november-26-2014/supplier-news/drone-business-engineer-team-up-for-mining-audits">Rail Express sister publication ABHR wrote in November</a>, engineering firm Soto Consulting and aerial photography specialist Coptercam recently teamed up to use UAVs to inspect large structures like shiploaders, conveyors and other industrial machinery.<br /><br />Soto’s managing director, Frank Soto, said the move was made to provide a safer and more efficient option for infrastructure operators.<br /><br />“Heavy industrial and mining environments, for instance, are harsh on both the service personnel and equipment, plus the downtime associated with work can be a very expensive exercise,” Soto said.<br /><br />“Safety of the people involved is always at some sort of risk as inspection procedures normally involve an element of physical danger.<br /><br />“Then there are cases where the overall condition of structures on some sites is perpetually overlooked because access is difficult, dangerous and expensive for operators and auditors.”<br /><br />Mitch Beck is a commercial airline pilot, and the CEO of UAV West, a company he started to deliver UAV services for infrastructure, plant and track inspections at onshore and offshore mining, oil and gas sites in Australia.<br /><br />“I’ve been following the development of the unmanned aviation industry for a couple of years now,” Beck told Rail Express.<br /><br />“I decided the best place to focus my interest would be towards inspection of infrastructure, and anything to do with the mining and resources industry.”<br /><br />Beck, who has worked in aviation for over 15 years, says he’s first looking to target the rail industry as a starting point.<br /><br />“We’d be using it for everything,” Beck said. “We can use it for broad-form inspection, or more targeted-type inspections.<br /><br />“For stakeholders and decision makers, it gives them access to data. So they can make decisions, and have historical evidence of what’s going on, or on a developing situation.”<br /><br />Beck said aside from increased access for decision makers, the major bonus of using UAVs is in safety.<br /><br />“I’m an airline pilot,” he said. “Having that background is a very good thing, as we’re very safety focused, and very risk-aversed.<br /><br />“My philosophy is you can use the aircraft to take someone from an unsafe or potentially dangerous environment.”</p>

Buffett?s rail bet on America pays off

<span class="" id="parent-fieldname-description"> COMMENT: Investment guru Warren Buffett’s biggest ever purchase – of the US’s largest railroad at the height of the GFC – is paying off in spades, with record profits and dividends. In fact, coal companies are complaining that the rail network can’t cope with demand. </span> <p>When investment guru Warren Buffet paid US$26.5bn for around three quarters of US railroad Burlington Northern Santa Fe (BNSF) in the aftermath of the GFC in 2009, some US pundits questioned his sanity.<br /><br />At the time, Buffet, whose compound returns from his Berkshire Hathaway conglomerate equate to 19.7% per annum from 1965 to 2013, told markets that his investment was “an all-in wager on the economic future of the United States.”<br /><br />Some of Buffet’s peers were dubious. Professor Bruce Greenwald, a noted value investor and academic, who The New York Times has described as “a guru to Wall Street’s gurus” said “It’s a crazy deal. It’s an insane deal”. Greenwald said he had run the numbers on BNSF at $75 and couldn’t make a deal stack up at that price, far less the $100 in cash and shares that Buffett paid.<br /><br />For his money, Buffett snared the US’s largest railway company, operating in the country’s west and mid-west.<br /><br />BNSF carries 90% of the coal from the Powder River Basin of Wyoming and Montana that keeps the lights on across much of the US. It’s also a substantial carrier of grain and fertiliser and containers of goods arriving at west coast ports from China and other exporting countries.<br /><br />In recent years, however, BNSF has been a prime beneficiary of the US’s shale gas fracking boom, a phenomenon probably not anticipated by Buffett. The company’s tracks sit astride areas like North Dakota’s Bakken formation which has seen a multi-billion dollar investment surge and explosion in gas and liquids output. With inadequate pipeline capacity in the area, oil companies have turned to railway companies like BNSF to shift their product to refineries.<br /><br />According to Bloomberg, BNSF has paid Berkshire Hathaway over US$15bn in dividends since 2009. BNSF, which employs around 43,000 people, reported 2013 revenues of US$22bn, up over 50% since Buffett purchased it. In the same period, its earnings have more than doubled to US$3.8bn.<br /><br />In fact, BNSF is currently a victim of its own success, unable to roll out enough track, locomotives and rail cars to service frustrated customers.<br /><br />According to the Wall Street Journal, electricity utilities country-wide are pressuring BNSF to speed up coal deliveries, with stocks at many power stations slipping under their preferred one month buffer.<br /><br />BNSF maintains it has invested US$5.5bn in 2014 on new facilities and equipment, including adding 500 locomotives to its fleet of 7,000, hiring 6,000 employees and adding 5,000 rail cars. Next year it plans to spend US$6bn.<br /><br />Despite this, power and coal producers and their lobby groups are fractious, asking regulators to mandate timetables for upgrades.</p>

Alternate inland rail plan mooted

<span class="" id="parent-fieldname-description"> A project supported by Thiess, Commonwealth Bank and Allens-Linklaters reportedly sees a new route for inland rail between Brisbane and Melbourne, that would deliver efficiency gains of up to 30%. </span> <p>Former Thiess chairman Martin Albrecht reportedly told an Engineers Australia conference last Friday that ‘National Trunk Rail’, would cost roughly $11 billion – around twice what the ARTC is planning – but would deliver a much better result in the long term.<br /><br />“Railways should be designed and built for a century, not an election cycle,” Albrecht was quoted by The Australian.<br /><br />“This is our ‘once in a lifetime’ opportunity.”<br /><br />In the past, proponents of the National Trunk Rail have pointed out that Bureau of Infrastructure Transport and Regional Economics analysis has found that “investment in Australia’s interstate rail networks delivers a return of $2.65 on every $1 now being invested.”<br /><br />The National Trunk Rail network is 136km shorter than the ARTC’s proposed 1731km route, which involves the construction of around 600km of new track. The project is said to develop a shorter, flatter and straighter link between Brisbane and Melbourne.<br /><br />A major change in the National Trunk Rail plan is a tunnel underneath Brisbane to reach the city’s port – thus avoiding the city’s existing network.<br /><br />Albrecht reportedly told the conference that compared to road freight, rail costs half as much, generates a third of the carbon emissions and is at least seven times safer.<br /><br />He said the new inland link between Brisbane and Melbourne could be comparable to the north-south railway between Darwin and Alice Springs, which now carries 90% of all freight between the cities.</p>