Viewpoint: Running with or against the grain?

By Mark Carter

Despite a significant portion of the export grain task still being carried by rail, the percentage varies widely from state to state while much of the domestic grain task is moved entirely by road.

The privatisation of the rail industry and separation of above and below rail assets, when combined with the abolition of single desk marketing and other changes within the grains industry have created a cloud of uncertainty over the rail haulage of grain in recent years. 

A positive development has been the recently announced $320 million investment in the Western Australian rail/ road grain network, although approximately a third of the grain rail network has missed out on funding.

The investment program reflects the recommendations of the state government’s Strategic Grain Network Committee that funding should be made available for the resleepering of 1265kms of Tier 1 and Tier 2 narrow gauge rail lines dedicated to grain.

Approximately $188 million in state and federal funding will be made available over the next four years for cyclical re-sleepering and rail capacity improvements. A further $118 million is allocated to road upgrades although this falls short of the $300 million plus recommended.

The remaining 736 kilometres of Tier 3 lines will not receive any funding, in theory saving government around $93 million in capital investment. While some of these lines are already moribund and the others carry relatively low tonnages, once again it is disappointing that little or no consideration has been given to the North American low-cost shortline model as an alternative method of operation for these lines.

Break of gauge
Ironically the funding announcement comes just as WA is facing its worst harvest for many a year with a predicted yield around half of last years 11.2 million tonnes. This is in contrast to the eastern states where, last minute wild weather and locust plagues permitting, South Australia, Victoria and New South Wales are all looking at bumper crops – in some case the best in over a decade.

This change in fortunes has seen WA rail operator Australian Railroad Group (ARG) suggest that it might be able to lease locomotives and rolling stock to help out with the eastern harvest. Unfortunately the bulk of the rolling stock in WA is on narrow gauge while the eastern states operate on either standard or broad gauge tracks.

The century-plus old problem of the “break of gauge” continues to haunt the rail industry in Australia. Victoria’s reliance on a largely broad gauge rail freight network has created its own post-privatisation set of problems.

Rail Express Newswire carried an article last week that highlighted a number of concerns stakeholders have in regard to the movement of this year’s harvest in Victoria leading Victorian Freight and Logistics Council (VFLC) chief executive Rose Elphick saying that farmers faced a “foreboding set of circumstances” in transporting their grain to port".

Some of the locomotives and wagons once used in the harvest have been put onto standard gauge and spirited away to work in NSW by their new owners. Pacific National’s (PN) will we walk/ won’t we walk attitude to regional rail freight in Victoria has seen considerable assets moved to more lucrative bulk flows in NSW.

PN has said it will make available a number of train sets for the coming harvest, but the shortfall will be made up by niche operator El Zorro which largely has to rely on heritage diesel locomotives from various preservation societies around the state. At least agri-business AWB and has progressively introduced its own new rolling stock in recent years.

Since separation of above and below rail assets in Australia there has never been clarity as to who is ultimately responsible for maintaining infrastructure on seasonal and marginal branch lines. As well as WA, some government money (albeit rarely enough) has been made available for track upgrades to regional lines in Victoria and NSW in recent years.

The quality of the rail infrastructure in Victoria has also come in for recent criticism, but this is becoming a bit of an old chestnut. In reality the age and capability of the silo network can be just as big a problem as rail capacity issues and sometimes greater efficiencies could be gained for dollars spent by improvements to parts of the supply chain other than just the rail infrastructure.

The WA Strategic Grain Network Committee Report concluded that deregulation of grain handling and marketing, has profoundly affected the economics and operation of the grain network.

This has been compounded by the various changes within the rail industry and unresolved issues relating to the break of gauge to a deliver arguably, less than optimal solutions for many stakeholders. In SA this harvest, 250,000 tonnes of grain will be roaded from just one country storage site to the port, solely because the tracks are six and a half inches too wide.