COMMENT: Recent comments from Aurizon CEO Lance Hockridge highlight the fact that the current road user charging system still results in the lack of a level playing field for freight transport and that its reform remains a key issue for the rail industry, but this, Mark Carter explains, is nothing new.
According to reports in the Brisbane Courier Mail, Aurizon Chief Executive Lance Hockridge told the company’s November AGM that the Federal Government had to end the unfair advantage that trucks held over rail in getting goods to market.
The article suggests that Aurizon wants to expand its intermodal freight operations to reduce reliance on coal and iron ore and at the same time wants a more level playing field against road transport.
Has the penny finally dropped for Aurizon?
After several years of almost blind reliance on coal revenues to support its business, and dabbling in iron projects while seemingly turning its back on other freight flows, are there now signs that the tide may be starting to turn?
Aurizon is a joint venture partner with Qube Holdings in the Moorebank intermodal freight facility southwest of Sydney, which when on line in a couple of years’ time will be the largest integrated warehouse rail terminal in Australia.
The company is now investigating further intermodal opportunities as it faces a sluggish global commodities market and of late has been investing heavily in new locomotives and rolling stock for its interstate intermodal operations.
But Hockridge said that for such intermodal projects, as well as bigger projects such as the proposed Brisbane to Melbourne Inland Rail to be financially viable, governments had to change their policy settings.
“There are many benefits to getting more trucks off the road and more freight onto rail but the right policy settings have to be in place,” Hockridge said.
He said that while rail freight operators paid a direct user charge to access infrastructure, truck operators primarily pay for road use through fuel excise.
The combination of low increases in excise and improved fuel technology means heavy vehicle operators are paying less in real terms for the access they are getting to improved infrastructure that delivers them a commercial benefit.
He added there was a need to implement road pricing for heavy vehicles where direct user charges genuinely reflect the cost of infrastructure, its maintenance and expansion, and ultimately, drive the best investment decisions.
Now while this is all music to my ears, there are a couple of issues with this approach that do make me squirm in my seat a little.
It is now well over 20 years since the small community based lobby group I was involved in, Rail2000, started calling for changes to Australia’s heavy road transport pricing regime – and let’s face it, while this is something the industry has been calling out for since then, there has been precious little change over that time.
A similar call to that made by Hockridge was also repeated on more than one occasion at AusRAIL last month. I am sure the same issue was raised at the very first AusRAIL back in the mid-1990s. The more things change, the more they remain the same.
In order to bring about a change in road pricing, the rail industry obviously needs a strong lobbying voice. Some would argue that the fact that nothing has happened in this area demonstrates a failure of the industry’s main voice, the Australasian Railway Association (ARA).
It could also be argued therefore that changes are required within the organisation, and with a new CEO at the helm would seem to be the ideal time to embark on a new campaign in this direction.
But rather than strengthen the ARA at this time there are continued rumours within the industry that some of the major players within the industry do not feel they are “not getting value for money” from their membership of the ARA and are considering withdrawing their support for the organisation. It has certainly been suggested to me that Aurizon is at the forefront of such moves.
Whether Hockridge’s comments are an early sign that Aurizon is thinking of going it alone on the lobbying front, remains to be seen. Despite the argument that the ARA has failed in its endeavours in the area of securing road pricing reform, it is also unlikely that one organisation, no matter how big, is going to be able to successfully force the government’s hand against the vested interests of the trucking industry.
Some years ago the industry considered a concerted lobbying exercise to bring about a level playing field in road and rail user charges, but ultimately this was knocked back by more conservative voices within the ARA at the time.
It would not surprise me if some of those same voices are those whose current machinations have the potential to destabilise the future effectiveness of the ARA.
If Aurizon and others within the industry are serious about the need for reform to the structure of access pricing for heavy road vehicles then a well thought out campaign with clear objectives and outcomes is required. The campaign also needs to be presented with unified front, rather than have lone wolves running around with their own agendas, which obviously will see nothing achieved.
Heaven forbid we are having this same debate again in another 20 years time.
I just hope that Aurizon, under this CEO, hasn’t left its run too late – in relation to Intermodal Traffic.
For years all Aurizon has been focussing on is coal, and more coal, and not pursuing the real growth area of linehaul freight which will still be here when coal is long gone…..
Good article, Mark, but who is reading this? Who can benefit from it? Are you not preaching to the converted as we all are when we write articles and comments in support of rail? It’s frustrating that rail is being kept out of the picture in so many States – especially in Victoria, but it seems that the Rail lobby is not as active as its competitors. If the ARA can’t step up its activities it might be an opportunity for another pro-rail group, more pro-active and more politically and media savvy to step up to the plate. That is certainly what rail needs right now.
Apologies Les – only just saw your comment. Can’t disagree with what you have said, but unless someone is prepared to fund an alternative lobbying voice it is unlikely to happen. A group of us tried it once before and it hurt as all in one aspect or another – personally, professionally and financially.
Further to this very good article, the question should be put to government surely – “why IS the government so pro road to the detriment of rail?”
Rail just doesn’t get a look in.