AusRAIL, Market Sectors

Aurizon suspends two projects, axes jobs

<span class="" id="parent-fieldname-description"> Queensland-based rail haulier Aurizon says it will likely not follow through with a pair of its projects in-development, and has axed more than 100 jobs, in its latest round of cost cuts. </span> <p>Two projects under development by Aurizon, Dudgeon Point and Wiggins Island Project Phase Two, are now considered unlikely to progress in the foreseeable future, the rail business said in an ASX release late last month.</p><p>North Queensland Bulk Ports announced on June 20 that it was withdrawing its development proposal for the Dudgeon Point Coal Terminal, noting the “current and short-term forecast market demand for coal does not support an expansion to the capacity proposed in the DPCT project.”</p><p>The suspension of DPCT by the bulk port operator left Aurizon with the obvious decision to suspend its contribution as well.</p><p>As for Wiggins Island Project Phase Two, Aurizon says the current and forecast demand does not support the continued development or investment in incremental capacity in respect of phase two at the new Queensland coal port, which is nearing the end of its initial development.</p><p>Aurizon said in the announcement that it expects to finish the 2013/14 financial year within the previously advised coal tonnage guidance levels of 207mt – 212mt. On June 12, the operator’s Central Queensland Coal Network passed the 200mt milestone for coal shipments in a financial year, for the first time.</p><p>Nonetheless, the operator said times were tough, and that along with the two project suspensions, 103 of its staff will be made redundant.</p><p>Aurizon said back on May 8 that the progressive closure of the Redbank and Townsville rollingstock maintenance operations, between 2015 and 2017, will result in a significant number of positions being affected. The most recent announcement added a further 103 positions to that list, mostly at the rail operator’s head office.</p><p>Managing director Lance Hockridge made it clear that the business was focused on its shareholders.</p><p>“Our continuing focus on, and efforts to build, value and returns in our business through disciplined operations continues to show great progress,” he said.</p><p>“The impairments announced today (in the range of $130m to $160m) taken in combination with those announced at the half year represent the outcome of an ongoing, in-depth review by the company of the short, medium and long term market outlook. While that outlook for the resources sector is still very attractive, it is clearly more subdued.&quot</p>