Coal. Photo: Shutterstock

Adani cancels mine deals with Downer

Indian energy giant Adani has cancelled $2.6 billion in potential contracts with Downer for drilling, blasting, coal and waste haulage at its proposed Carmichael project in the Galilee Basin.

Downer told the ASX on Monday the sides had mutually agreed to part ways on all Letters of Award relating to the mine services and related infrastructure, which have been in place since 2014.

Adani said it plans to move forward with the project as an owner operator.

Downer said it would provide transitional assistance to Adani until March 2018. Downer boss Grant Fenn said the company remained “committed to growing its Mining division and continuing to deliver outstanding service for its customers”.

It is unclear what the news means for the Carmichael project, which has been targeted with strong opposition from certain groups, on both environmental and economic grounds.

Adani said it was making the move after the Queensland Government formalised its veto of a potential $1 billion loan for the Carmichael project from the Commonwealth’s Northern Australia Infrastructure Facility.

“Following on from the NAIF veto last week and in line with its vision to achieve the lowest quartile cost of production by ensuring flexibility and efficiencies in the supply chain, Adani has decided to develop and operate the mine on an owner operator basis,” the Indian company said on Monday.

“Adani remains committed to develop the Carmichael project and will ensure the highest level of standards and governance.

“This will not affect our commitment or the number of local jobs across Queensland. This is simply a change in management structure and ensures that the mine will ultimately be run out of our Adani Australia offices in Townsville.”

Solar train enters service in Byron Bay

A solar-powered passenger train has entered operation at Byron Bay in New South Wales, with limited services until Christmas, ahead of a full schedule launch in the new year.

The first official trip of the Byron Bay Railroad Company’s new solar train, which the company says is the first of its kind in the world, left The Sun Bistro on Bayshore Drive around 11am on Saturday, December 16.

The train, which has a capacity for 100 passengers at $3 an adult ticket, operates between The Sun Bistro at Byron Beach and the burgeoning North Beach precinct, along a three kilometre stretch of the Casino to Murwillumbah line.

It is made up of two restored carriages from the ‘600 class’, manufactured at the Chullora Workshops in Sydney in 1949.

“We searched the country and found a dilapidated vintage train, restored it, and are now powering it with a 4.6-billion-year-old power source,” Byron Bay Railroad development director Jeremy Holmes said.

“We partnered with the incredible Tim Elderton from Lithgow Railway Workshop to restore the train and to oversee the solar conversion along with our other partners Nickel Energy and Elmofo. Local rail industry expert Geoff Clark has been guiding the project and helping to navigate the complex regulations and safety requirements.”

“This is an exciting world first, powering a train with solar power, day, night and in every type of weather,” Smart Energy Council chief executive John Grimes said.

“It shows Australia’s fantastic sunshine can be harnessed in smart ways not just to power our homes and businesses, but to address another pressing problem – cutting emissions in the transportation sector.

“With no support from government at any level the Byron Bay Railroad Company have delivered the world’s first solar train.

“True innovation meets roadblock upon roadblock so we congratulate them on their incredible achievement. Hopefully this one train in regional Australia can demonstrate the possibilities of solar technology and the power of perseverance.”

After opening day on December 16, the train will operate eight times in each direction, each day from December 18 to December 23, before closing until December 27. The operator has said a “full schedule” will commence in January.

Flood-damaged Newdegate rail line repaired and reopened for freight

Grain freight movements have now resumed along the Newdegate line, after Arc Infrastructure recently completed its repair and restoration works to the rail infrastructure damaged by extensive flooding earlier this year.

The Newdegate line had been closed since the track was inundated with floodwaters in early February, when the Newdegate-Lake Biddy area received more rainfall in two weeks than in any similar period since 1955, according to Bureau of Meteorology statistics.

In some sections, stretches of track, rail structures and culverts were completely washed away, while other parts of the network in the Lakes District remained submerged in floodwaters for months.

Paul Lowney from Arc Infrastructure said that there had been delays in carrying out its planned project to not only repair the line but prevent flood damage into the future.

“While we had wanted to restore services to this final section of the network earlier, large volume of water remained in the Lakes District and further recent rains delayed the safe return of rail operations in the area,” Lowney said.

In June the company said it been investigating a number of solutions to get the Newdegate line up and running again, including draining Lake Biddy and pumping away water from the area.

The eventual project, delivered by Arc Infrastructure and project partners and recently concluded, involved lifting the existing track to allow the formation to be built-up by 1 metre, which would help reduce the impact of flooding to the line in the long term. The project area stretched over approximately 50km of freight rail line from Lake Grace to Newdegate.

“Throughout this process we worked closely with the sole customer of the line to ensure they were kept informed of progress and we thank our employees, contractors and CBH for their hard work, support and understanding during the clean-up efforts and look forward to working with them as services resume,” Lowney said.

Ettamogah Rail Hub shortlisted for NSW rail investment

A project to extend the rail siding at Albury’s Ettamogah Rail Hub has been shortlisted for funding as part of the NSW government’s $150 million investment in the first round of its Fixing Country Rail infrastructure program.

The rail siding requires an extension of 3500 metres to enable 1800-metre-long trains to have access to the Hub, an intermodal transport facility for national and international freight passing through the Albury-Wodonga region.

The rail siding has direct access to the main Melbourne to Sydney freight rail line, and improving the ability of longer trains to deliver freight along the rail corridor will lead to cuts in delivery times and increases in the loads being transported by train, improving the efficiency of services.

“The addition to the shortlist is great news for the area and means the siding expansion is in line to potentially share in $150 million in funding,” NSW premier Gladys Berejiklian said.

Twenty-seven projects from across regional NSW have entered the shortlist for the Fixing Country Rail program’s first stage, chosen from the 49 projects which entered expressions of interest.

Final funding recommendations will follow the preparation of business cases and their assessment by Infrastructure Australia early next year.

State roads minister Melinda Pavey said the investment program was aimed at projects that would boost productivity and efficiency of freight movements in regional NSW.

“Transport costs can make up a third of the price of goods sold by regional producers harvesting grain, cotton, citrus, meat or other commodities and moving them to market,” Pavey said.

China funding setback for Adani

Indian energy giant Adani has suffered another blow, after a major Chinese bank ruled out funding its Carmichael mine, rail and port project planned for Queensland’s Galilee Basin.

Industrial & Commercial Bank of China (ICBC) over the weekend issued a statement saying it would not be involved in Carmichael.

“ICBC has not been, and does not intend to be, engaged in arranging financing for this project,” ICBC said on December 3. “ICBC attaches great importance to its social responsibilities and keenly promotes ‘green financing’. In Australia ICBC has provided financing to a series of renewable energy projects.”

The statement follows similar comments from China Construction Bank, which recently said it “is not involved with, nor considering involvement with, the Adani Carmichael Mine project”.

The pair add to a growing list of around two dozen of the world’s largest financial institutions who have ruled out funding Carmichael, including each of Australia’s ‘big four’ banks.

Reports last week suggested Adani would turn to China for funding help after Queensland Premier Annastacia Palaszczuk said she would veto any loan for Carmichael from the Commonwealth’s Northern Australia Infrastructure Facility. Palaszczuk’s Labor Party looks poised to secure a slim majority in Queensland following the state election on November 25.

Greens senator for Queensland Andrew Bartlett welcomed the news from the Chinese banks, saying the banking sector knows Carmichael is “a bad investment and will be an environmental catastrophe”.

“They know Australians want investment in renewable energy, not the dying fossil fuel industry that tries to get its way by giving millions in payments to Labor and the Coalition and employing their former MPs as lobbyists,” Bartlett said.

Wild weather affects Melbourne trains. Photo: Shutterstock

PTV warns passengers ahead of major weather event

Public Transport Victoria has advised commuters to delay or defer non-essential travel after the Bureau of Meteorology issued a severe weather warning for heavy rain across Victoria on Friday.

The BoM has warned an “unprecedented” amount of rain is expected to fall in the state over Friday, Saturday and Sunday, with forecasts up to 300 millimetres.

PTV on Friday reminded all passengers to take extreme care on public transport, and to not travel if it was at all possible.

“Heavy rain can cause flooding on our roads, impacting tram and bus services, and some station subways and tracks can flood,” PTV warned.

“PTV is working with public transport operators to minimise the impact on services over the weekend and keep passengers moving safely.”

PTV has activated its Incident Control Centre, and is working with Emergency Management Victoria and the BoM to gather intelligence about the likely impacts to public transport.

The BoM has particular concern over the level of rainfall expected in the state’s northeast, with the area now facing a “significant” flood event.

Melbourne is also expected to experience up to 160mm of rainfall.

“The operators are undertaking preparatory work to increase the network’s resilience, which includes drain clearing in high risk areas and positioning standby buses to keep passengers moving in the event of unplanned disruptions,” PTV explained.

“Over the weekend, additional staff will be located across the network to provide assistance to passengers.”

Environmental studies underway for Stockinbingal-Parkes Inland Rail section

Survey work and inspections are now underway for the Stockinbingal to Parkes section of the Inland Rail project, including environmental, technical and engineering studies for the feasibility design process that will form the basis of the project’s environmental approvals and submissions.

“Studies that begin today include air quality and vibrations surveys; investigations into existing structures; ecological surveys to identify any flora and fauna; and cultural heritage surveys,” federal member for Riverina and small business minister Michael McCormack said.

McCormack visited Forbes on Wednesday to join representatives from the Australian Rail Track Corporation (ARTC) and Lycopodium, the company carrying out the feasibility design work, and other technical and environmental experts.

“Inland Rail is good for business and will deliver immense opportunities for our rural and regional communities. I am delighted to see this work get underway and am looking forward to seeing construction start in 2018,” he said.

The Stockinbingal to Parkes section will involve enhancements to 169km of existing rail corridor to enable it to accommodate the 1.8 km, double-stacked trains that will run on the Inland Rail track.

Further progress is also being made towards getting the Parkes to Narromine section of the Inland Rail project underway, with the ARTC putting requesting tenders for the supply of rail culverts for the upgrade.

Works on the Parkes-Narromine section will also consist in upgrades of the existing rail corridor, plus the construction of 5 km of new rail connection at Parkes.

The culverts must be manufactured in Australia with Australian materials, comply with Australian standards and specifications, and be regularly supplied to the project from April 2018 to January 2019.

The closing date for tender submissions is Monday 18 December.

$100m transport interchange part of Turnbull’s Bennelong push

Prime Minister Malcolm Turnbull on Tuesday announced a major new transport interchange for the Macquarie Park precinct in Sydney, as part of his campaign to help John Alexander retain his seat at the Bennelong by-election set for December 16.

Turnbull said a $100 million deal between his Government and NSW’s Berejiklian Government would mean faster and smoother transitions between buses, trains and taxis, thanks to the construction of a new bus interchange connecting Macquarie University and Macquarie Centre, above the Macquarie University train station.

“This interchange is a game-changer for peak-hour commuters who travel to and from Macquarie Park every day,” the PM said. “It will provide faster, safer and easier transitions between various transport options.

“John Alexander has campaigned tirelessly for better transport services for his community. We are delivering the transport infrastructure to ensure Sydney residents spend more time at home with their family and less time commuting.’’

Alexander resigned from parliament in early November, conceding he may be a citizen of the United Kingdom, along with Australia.

Having sorted out his citizenship, he is now running in the subsequent by-election for his seat of Bennelong, against Labor’s candidate, former NSW Premier Kristina Keneally.

The Coalition needs to win Bennelong to maintain its slim majority in the House of Representatives.

NSW transport minister Andrew Constance said federal funding towards a new interchange would support the NSW Government’s work in improving local transport and the construction of the Sydney Metro, which will see Macquarie University station transformed to a metro standard.

“We have been doing our homework in preparing a strategic business case for the transport priorities of Macquarie Park, this important injection of funding from the federal government will allow us to fast track a better interchange for our customers,” Constance said.

Work will begin immediately on a business case that will determine the final design and whether parts of the interchange should be built underground.

Victorian treasurer Tim Pallas slammed the news, labelling Turnbull (not for the first time) as the “Prime Minister for Sydney,” and saying the PM was “pork barrelling Bennelong in a desperate attempt to save his political bacon”.

“Malcolm Turnbull is a one-trick pony,” the Labor state treasurer said, “forever focused on Sydney while short changing Victoria. We’re the fastest growing economy in the country, no thanks to Malcolm Turnbull who couldn’t find us on a map and refuses to give us our share.”

Pallas highlighted figures showing Victoria receives just 10% of federal infrastructure funding despite being home to more than a quarter of Australia’s population.

The Queensland election outcome is a death knell for Adani’s coal mine

COMMENT: The Adani project is already a stranded asset, and definitely not worthy of taxpayer support, or the risks to the Chinese of any involvement, former Liberal leader John Hewson writes.

 


The coal mine proposed for Queensland’s Galilee Basin by Indian mining giant Adani has been a moveable feast, with many stories about its scale, purpose, financing, job prospects, and commerciality. The prospect of a return of the Palaszczuk government in Queensland is effectively the death knell for the project.

Labor has so pledged to block a concessional, taxpayer-funded loan, while embracing a significantly expanded program to develop regional solar thermal power in the state.

It seems the proposal has been reduced in scale, with the original A$21 billion plan reined back to just its initial stage, costing about A$5 billion. Its purpose has changed from exporting coal to India’s Adani Power, to now possibly shipping coal to Bangladesh and Pakistan. Its job prospects are confusing with early estimates well in excess of 10,000, down more recently to fewer than 1,500, after Adani admitted that the mine’s operations will be heavily automated.

The project’s financing has been under a continuous cloud given the scale of the debts of the Adani Group, and the reluctance of global banks in a world transitioning to low-emission technologies. All of this is complicated by the potential for concessional finance from the Northern Australia Infrastructure Fund (NAIF) and Chinese money. As a high-cost, low-grade coal project, its commerciality has bounced around, given variations in “offtake prices” and expectations on coal futures prices.

The latest version is that the project has been scaled down from some 60 metric tonnes per year (mtpa) to about 25mtpa, requiring an extra investment of some A$2 billion for the mine development, and A$3.3 billion for the rail link to the export terminal at Abbot Point, but avoiding the need to expand Abbot Point. Adani Enterprises is already financially strapped, with net debt exceeding market capitalisation, and the Adani family needing to refinance Abbot Point. The Adani family has already spent some A$3.5 billion on acquiring the deposit and developing their Australian project to date.

So with virtually no capacity to inject additional equity, the focus is on whether even this scaled-down proposal can be financed by additional debt? This is why a government-sponsored concessional loan of up to A$1 billion from the NAIF to build the rail link has been seen as crucial to the project moving forward. It could be accepted by potential financiers as low-cost, high-risk “quasi equity”. It would also effectively hand Adani a monopoly position in standard gauge rail, in turn creating monopoly conditions at Abbot Point.

A more recent constraint on sentiment towards to the project has come from the Indian government’s rapidly changing attitudes to future power generation, accelerating the transition from coal-fired power to renewables. Recent statements by RK Singh, India’s Minister of Power and New and Renewable Energy have confirmed that India can exceed its target of 275 gigawatts of renewable energy by 2027, a massive shift from its historic reliance on coal.

This accelerates the likely end to coal imports by India, which has seen the Adani project seek alternative markets in Bangladesh and Pakistan.

Indeed, there is now documentary evidence of an electricity offtake agreement with the Bangladeshi government’s power board, setting a contractual “cost plus plus” supply of low-quality imported coal delivered at prices that are likely to approach 50% above the current coal spot price. But even at the current futures price of about US$80 per tonne, the Carmichael mine could be cashflow-positive.

Funding the Carmichael mine

Can the Adani group hope to raise the necessary additional debt? This is a two-pronged challenge – the family needs to refinance Abbot Point requiring some A$1.5 billion over the next 12 months, and the A$5 billion-plus project itself.

It looks like the family had to enlist the services of second-tier investment bank Jeffries to initiate a bond refinancing for Abbot Point – to be rated just above junk bond status. However, Jefferies reportedly pulled out within a week, its reasoning unstated.

With some 20 to 30 global banks, including Australia’s big four, having ruled out financing the mine, and Indian banks strapped for capacity, the focus has shifted to Chinese group CMEC as a potential financier, against likely Bangladesh or Pakistani alternatives. However, even with such offtake agreements the project’s longer–term viability is questionable.

Obviously the Chinese Communist Party, and other Chinese authorities, will need to think carefully about the potential consequences of getting involved now that the project lacks direct financial support from state and federal governments in Australia. This is especially so when the issue of Chinese influence and involvement in Australia generally, and in our politics specifically, is becoming controversial.

I also suspect that the federal Labor opposition may now adopt a position against the Adani project, in light of Queensland’s state election result.

The bottom line for financing is an assessment of the longer-term risks with Adani Enterprises, the family, and the project. Both the company and the family are already heavily exposed financially, and the project is a high-cost, high-risk one.

Bearing in mind the Paris climate agreement, the rapidly falling costs of reliable renewables, and India’s shifting energy strategy, the development of any new coal mine is certainly a very big call.

I suspect that the Adani project is already a stranded asset, and definitely not worthy of either Australian taxpayer support or Chinese investment.

 


 

The Conversation logo

John Hewson is Professor and Chair, Tax and Transfer Policy Institute, Crawford School of Public Policy, Australian National University, and was federal leader of the Liberal Party from 1990 to 1994This article was originally published on The Conversation. Read the original article here.

Delegates at AusRAIL PLUS 2015. Photo: RailGallery.com.au

AusRAIL: Artificial intelligence pitch wins young professionals comp

The Young Rail Professionals Pitching Competition, a feature of the final day of the AusRAIL PLUS conference in Brisbane last week, saw five newcomers present their ideas to innovate the rail industry.

This is the second time the competition has been held, after Aurecon engineer Michelle Doolan took out the inaugural prize at the 2016 AusRAIL event in Adelaide.

This year’s winner, announced at the 2017 Gala Dinner on the final night of AusRAIL, was Jamie Ross-Smith, the head of asset systems at UGL Limited.

Earlier that day Ross-Smith presented his concept of an “intelligent asset management system” (IAMS) – an innovation, he said, that would enable the rail industry to ride the wave of the coming “data revolution”.

The IAMS combines artificial intelligence capabilities – such as machine learning and pattern recognition and prediction – with the integration of data system networks. Such a system, Ross-Smith said, enables fast, data-driven solutions to a variety of incidents across the areas of asset condition and maintenance planning, network control and operation systems, safety management and logistics, and resource planning and scheduling.

According to Ross-Smith, the IAMS can take an incident, such as the failure of an asset, and compare the details of this failure with millions of historical data points, thus providing a list of previous incidents with the same features for the system’s probability and prediction monitoring functions. Once the system determines the incident’s causation, again by using the system’s historical data, it will then point technicians towards procedures for its rectification.

Another finalist in the competition who made her pitch at AusRAIL was Victoria Burke, a graduate engineer with Metro Trains Melbourne.

Burke outlined her idea of powering station facilities –  including lighting, ticket barriers, and wireless hotspots – using the kinetic energy generated by passenger footsteps.

This elegantly simple idea involves installing special energy-harvesting tiles into station floors, platform surfaces and stairs. Downward pressure upon the tiles caused by the steps of those walking over them stimulates rotations in electro-magnetic generators lying beneath the surface, converting the kinetic energy of the footstep into electrical energy.

Up to 20 watts per module can be produced in this manner, Burke said, and can either be utilised immediately for low-voltage applications or stored in batteries for later use.

Burke’s analysis of Melbourne’s busy Flinders Street Station determined that, on an average day, 5,600 watt-hours could be produced there using foot-traffic, “which is the equivalent to powering 20,000 mobile phones in a day”.

Indeed, one person can generate 5 watts of continuous power while they walk, producing enough power to light up an area of 15 square-metres. In this way, Ms Burke said, walkways featuring user-generated LED lighting could be established, providing safer journeys at night for passengers moving between station platforms and carparks.

With steadily increasing population growth and rising energy prices, this kind of pollutant-free, energy efficient electricity generation could be, Burke proposed, “the future advance we need to create a smarter approach to our stations by increasing sustainability and reducing our carbon footprint”.

Another finalist, Sydney Trains rolling stock engineer Oliver Lake, gave a compelling outline of how providing technicians with augmented reality glasses (AR) can improve asset maintenance strategies and procedures, and thereby enable rail operators to meet the demands of increasing passenger numbers and rising freight volumes.

AR glasses provide technicians with superimposed computer-generated images and text relating to precise data on rolling stock equipment, and can display procedural instructions in real-time for the safe and efficient repair and maintenance of this equipment.

This would therefore eliminate, Lake said, “the need to constantly stop and refer to procedurals and manuals,” and speed up the process of getting rolling stock back on to tracks to resume services.

Ross Anderson, an engineer with Frazer-Nash Consultancy, pitched his app-based approach to an integrated, multi-modal transport system that would help secure the future of rail by “reimagining” a more desirable commute for passengers.

After entering the start and end points of their journey into the “Corridors” app, the user would be presented with the various times and costs for the range of travel options – partly determined by user-data collection – for their journey’s completion. These would include a selection of privatised transport modes best suited to the “first and last mile” of the commute, such as short-term car rentals, e-bikes, and taxis, alongside public transport services such as rail.

Presented in this app-format, Anderson said, transport options can be integrated and available via single method of access and payment for the entire journey.

And finally, Tyler Plowright, a rolling stock engineer from Pacific National, guided the audience through the complexities of using dynamic brake batteries to save energy on heavy haul freight operations.

The fuel and energy wastage of diesel locomotives can be mitigated, Plowright said, by utilising batteries to store energy – generated by dynamic braking and currently emitted as heat – which can be used by the locomotive at a later point in time for auxiliary and traction power. Plowright said heavy haul services would be best suited to the application of these dynamic brake battery systems, despite the lack extensive testing so far.

Each year locomotive diesel locomotives use 84 billion litres of diesel, pumping out 250 million tonnes of C02 annually worldwide. And, as demand for diesel locomotives remains robust, Plowright said, it is therefore important for the industry to move towards dynamic brake battery technology and thus improve the sustainability and efficiency of freight fleets.