CBH Group

repairs
 Below Rail Infrastructure, Freight Rail

WA to progress business cases for reopening three Tier 3 grain lines

The Western Australian government has committed to developing three business cases for the reopening of three Tier 3 grain lines in the state.

The three lines to be looked at for reopening at, Quairading to York, Kulin via Yilliminning to Narrogin, and Kondining via Narembeen to West Merredin.

The combined cost of upgrading the three lines to narrow gauge standard is $486 million. As part of the investigation the WA government will consider upgrading the Kondinin to West Merredin line to standard gauge at an extra cost of $27.41m.

The three lines were chosen based on an engineering assessment released on September 24 which estimated the cost of reopening Tier 3 lines throughout the wheatbelt.

WA Transport Minister Rita Saffioti said that the report found that certain lines could be reopened.

“While the engineering report confirms restoring the entire network would involve significant costs, there are arguably specific lines where the cost of investment could be offset by ongoing commercial and community benefits such as reduced truck volumes on local roads and cost savings to farmers.”

Arc Infrastructure, which manages the WA freight rail network, said it would support the government and grain growers cooperate CBH Group in the submission of business cases to Infrastructure Australia.

“Arc acknowledges that the government has identified an opportunity for the development of business cases to be submitted to Infrastructure Australia, for rail freight investment proposals on the Tier 1, 2 and 3 rail networks. Arc will support government and CBH in this process,” said an Arc Infrastructure spokesperson.

CBH Group, which represents grain growers throughout the state, said it would also support the efforts to make grain transport economically viable.

“We will work with the state government to progress those business cases, including providing information on any impacts of re-instating those lines on the grain supply chain or grower freight rates,” said a CBH Group spokesperson.

“CBH supports grain transport by rail where it is economically viable and the least cost pathway to port.”

The government announcement was also welcomed by the Rail, Tram and Bus Union (RTBU), with WA secretary Craig McKinley calling on the federal government to support the reopening of these lines.

“The Western Australian government is supportive of the need to rebuild key sections of track, and the commitment to undertaking business cases is very heartening,” he said.

“We hope that the business case stage can be completed quickly, so we can move on to securing funding and getting construction underway.

“The reconstruction of Tier 3 lines is exactly the sort of project that the Australian government should be investing in.”

Saffioti said the business cases will be developed in consultation with CBH Group and Arc Infrastructure before being submitted to Infrastructure Australia for potential federal funding.

“Significant funding contributions from the federal government – as per other major regional infrastructure projects – would be required for any potential Tier 3 restoration work in the future.”

The Tier 3 grain lines were closed by Arc Infrastructure in 2014, then known as Brookfield Rail. The Tier 3 lines were seen at the time as not commercially viable. With the resultant shift of grain volumes to road, road maintenance costs have increased, and safety concerns have been raised by the local community. These factors led to the WA government investigating the viability of reopening the lines earlier in 2020.

repairs
 Below Rail Infrastructure, Environment and Sustainability, Freight Rail, Workforce, Certification & Training

Repairs return WA grain line to service

The Piawaning to Miling section of the Toodyay West to Miling line has reopened to freight traffic, after repairs were completed to return the line to working condition.

The section of line, north-east of Perth, is used by growers to transport grain to ports such as Fremantle and Kwinana. Arc Infrastructure manages the network and carried out the work to repair the line.

This particular section of track was damaged in September 2019 when a CBH grain train derailed. Six wagons on the Watco-operated train derailed and no injuries occurred. The derailment was the second in the same area that year.

After the derailment, the line was closed to traffic but suffered significant damage in subsequent storms during the summer.

To get the line back into service work teams have re-railed almost 7.5km of track and replaced 2,500 sleepers.

Arc Infrastructure general manager commercial and development Nathan Speed said the credit should go to the teams involved.

“This is a great result for the teams who worked to complete this key maintenance task safely, enabling us to re-open this section of the line on schedule for the benefit of CBH and local grain farmers.”

Arc’s Mobile Maintenance Team and Central Team 3 completed the repairs, while ensuring that environmentally sensitive areas were not disturbed, said head of maintenance delivery Dan Ellis.

“These works were completed incident free by the Mobile Maintenance Team and Central Team 3 in 35 days which is a fantastic effort, especially considering they had to deal with washaways and changes arising from COVID-19.”

Ellis said the work required experience from many areas.

“This is a great example of major works completed with input from across the business, including but not limited to; Engineering, Network Strategy, Plant Department, Flashbutt Team, Planning Team, NIS, Central Teams, Commercial, Operations and Stakeholder Engagement.”

The line was reopened to traffic in May.

 Below Rail Infrastructure, Freight Rail

WA grain growers to support rail freight

Grain growers cooperative CBH Group has welcomed the Western Australian government’s Revitalising Agricultural Region Freight (RARF) Strategy and committed to work on business cases to fund improvements to rail lines.

The RARF was released on June 29 and outlines a targeted program of upgrades and improvements to WA’s regional freight lines, particularly those that enable grain to be transported from growers to ports.

CBH Group, which provides grain haulage services to its member growers, has been working with the state government and infrastructure manager Arc Infrastructure on the project, said CEO Jimmy Wilson.

“CBH has had the opportunity to give practical and pragmatic input to the development of the strategy, including data on forecast grain production growth and a focus on what will deliver the greatest transfer of grain tonnes from road to rail,” said Wilson.

Wilson said the RARF is “an important and essential step in improving the efficiency of the Western Australian grain supply chain through strategic rail and road investment”.

The RARF named upgrades to rail lines from Perth to Geraldton, Mullewa to Perenjori, Albany to Hyden/Newdegate, and Esperance to Salmon Gums, as priority project packages. CBH is already working on business cases for a new passing loop at Broomehill and rail siding extensions at Brookton, Cranbrook and Moora, which will allow for longer trains to be loaded at those sites.

It is expected that CBH and Arc Infrastructure will lead the improvements, with support from the WA government.

“The low-cost, high benefit projects outlined in the strategy would facilitate the transfer of more grain tonnes off road onto rail, deliver more rapid rail movement from site to port to capture the market window when the Black Sea is least active, as well as improve efficiencies in the road network where rail is not an option,” said Wilson.

In her foreword to the strategy, WA Minister for Transport Rita Saffioti said that she hoped the works would improve efficiency, safety, and productivity in WA’s supply chain, and enable Australian growers to compete in international markets.

The strategy sets the foundation for improvements to WA’s network over the next 10-15 years.

“We look forward to working with the state government on progressing business cases for funding the priority projects identified in the strategy that will support the ongoing international competitiveness of Western Australian grain growers,” said Wilson.

 Below Rail Infrastructure, Freight Rail

Regional freight strategy identifies upgrades to WA network

The Western Australia state government has released a targeted program of regional freight rail upgrades to get more agricultural freight onto rail.

Rail improvements are suggested in each of the regions studied in the Revitalising Agricultural Regional Freight Strategy (RARF) report, released on Monday, June 29.

These upgrades include rail lines from Perth to Geraldton, Mullewa to Perenjori, Albany to Hyden/Newdegate, and Esperance to Salmon Gums, in addition to rail improvements throughout the Wheatbelt region.

The RARF strategy also recommends a review of the interface agreements for disused Tier 3 rail corridors and the inclusion of rail lines into the National Land Transport Network.

With the strategy now published, the state government will now prepare a submission to Infrastructure Australia for investment in regional freight networks. WA Transport Minister Rita Saffioti said that the report will guide investment and that work is already underway.

“The RARF Strategy is a blueprint for strategic investment for agricultural infrastructure in our WA regions, underpinning the agricultural sector in our State.

“Work has already started with industry on progressing project packages, with the State Government working with CBH and Arc Infrastructure to progress business cases for Tier 1 and Tier 2 railway packages identified as a priority in this strategy.”

Arc Infrastructure general manager commercial & development, Nathan Speed, said that Arc would work with CBH and the state government to upgrade lines it manages.

“Arc Infrastructure congratulates the Government for the release of the State’s agricultural freight strategy,” he said.

“We look forward to working with Government on these and other projects from RARF that will support the ongoing international competitiveness of WA grain growers, and deliver long-term benefits to the economy and state.”

The report notes that where private or leased infrastructure is concerned, as in the case of WA’s freight rail lines which are leased to Arc Infrastructure, the private sector is expected to lead the development of business cases.

As well as upgrades to track infrastructure, the report highlights the need for intermodal terminals around the network, including on the Avon (Northam) rail corridor, between Perth and Geraldton, Brookton and Northam, and Albany and Hyden/Newdegate.

Based on feedback received on the draft strategy, a more targeted list of projects were included in the final RARF strategy.

Earlier in June, the WA government confirmed it was undertaking an assessment of the cost of reopening the disused Tier 3 grain lines.

“We recognise there is a lot of sentiment around the Tier 3 lines and have commissioned an engineering assessment to advise on the cost and time required for potential rehabilitation,” said Saffioti.

Coinciding with the release of the RARF strategy is the release of the South West Supply Chain Strategy for public comment.

“The draft South West Supply Chain Strategy identifies and prioritises future road, rail, air and port infrastructure requirements in the South-West region and establishes a framework and direction for future freight transport related investment in the region for the next 10-15 years,” said Saffioti.

The report identifies a need for investment in the region’s rail network as strategic locations are approaching operational capacity. In addition, the reconfiguration of rail access to Bunbury Port will allow for the rail infrastructure to meet the needs of bulk exporters. Another area the report identifies as needing investment is the establishment of container rail services between Bunbury and Perth for broader export and domestic market.

To address these challenges, the report cites the need for line duplication, new passing loops, and rail sidings. The report also explores the possibility of a intermodal freight terminal at the Waterloo Industrial Precinct.

Speed said that Arc is working towards getting lithium ore onto rail.

“We continue to collaborate with Talison Lithium and government on the development of the business case for the rail based supply chain from the Greenbushes mine, as outlined in the South West Supply Chain Strategy. We hope to commence detailed project feasibility in late 2020.”

 Below Rail Infrastructure, Freight Rail

Tier 3 grain lines assessment to evaluate cost, time to re-open

The Western Australian government has committed to an engineering assessment of unused Tier 3 grain lines in the state.

The assessment will determine the cost and time of bringing the mothballed freight lines back up to scratch.

The lines, which stretch over 500km, are managed by rail network operator Arc Infrastructure but were put into care and maintenance by the WA government in 2014. An Arc Infrastructure spokesperson said that it would facilitate the assessment.

“Arc Infrastructure understands the Public Transport Authority (PTA) has engaged a third party to conduct an engineering assessment on the Tier 3 lines. Arc is facilitating the assessment as required, by providing access to the network and some baseline data, however it is being completed independent to Arc.”

Grain handler CBH Group, whose grain freight trains, operated by Watco, take its grain to port, has also supported getting grain onto rail.

“CBH’s long-standing policy is that it supports grain on rail where it is economically viable to do so,” said CBH Group chief operations officer Ben Macnamara.

In 2014, the ABC estimated that it would cost $120 million to return the lines to operating conditions.

Following the closure, CBH Group and Arc Infrastructure entered into an arbitration process over access to the rail network. That process was completed in 2019, and the final agreement decided not to reopen the Tier 3 lines due to the deterioration in quality.

The WA government is close to completion of the Revitalising Agricultural Regional Freight Strategy (RARF) and is currently considering submissions. The draft strategy recommended improving the rail network in all regions, however noted that the re-opening of the Tier 3 lines is not part of the strategy.

The Arc Infrastructure spokesperson said that it was working with CBH on initiatives proposed in the RARF.

“We will continue to support the planning and design on any of the high priority RARF initiatives that will increase volume of grain being moved on rail for the benefit of WA growers.”

CBH’s Macnamara also looked forward to improving the rail network.

“The grain rail freight network is a significant part of the WA grain industry supply chain and CBH has welcomed the State Government’s development of the Revitalising Agricultural Region Freight Strategy,” he said.

“We look forward to continuing working with the government and industry on this important initiative.”

 Freight Rail

Changes to rail access regime welcomed by industry

Western Australian rail operators and infrastructure managers have positively responded to the WA government’s announced changes to the state’s Rail Access Regime.

The changes include: changes to the asset valuation method and a requirement for published standing offers; improved protection from unfair discrimination; better acknowledgement of foundation customers; increases in transparency; and finding efficiencies in the regulatory process by adding timeframes, information provision obligations, and standardising requirements.

The reforms will be implemented in changes to the Railways (Access) Code 2000. Ongoing consultation will continue with stakeholders as the process moves to the next stages.

WA Treasurer Ben Wyatt said that the changes would benefit groups near non-metropolitan railways.

“The McGowan Government has agreed to a series of important reforms to the State’s Rail Access Regime, which will make attaining access to railways easier and quicker, supporting regional communities.”

The state government has been conducting consultations for the past two years and aims to make the Regime more effective as an alternative to commercial negotiations. A spokesperson for CBH Group told Rail Express that the company appreciated the government’s commitment to reform.

“CBH welcomes the announcement by the Treasurer that the Western Australian Government has approved significant changes to the WA Rail Access Regime to make it more effective, speed up access negotiations, and ensure railway access arrangements are fair for all parties.”

Reviews of the scheme in 2011 and 2015 by the Economic Regulation Authority found that the Regime was not an effective alternative to private negotiations. Unlike access regimes in other states, parties in WA are allowed to negotiate access outside of the access code.

Arc Infrastructure, the manager and operator of freight rail lines in south western WA, similarly appreciated the approach taken by the WA government.

“ARC have been engaged through the entire review to date,” an Arc Infrastructure spokesperson said to Rail Express.

“It’s been a very consultative approach with industry led by Treasury.”

The reforms aim to ensure that more WA businesses can use the freight network owned by private companies in a cost-effective and timely manner, while encouraging private investment in privately-owned railways. The Access Regime covers the freight rail network in southern WA owned by Arc Infrastructure, the urban network operated by the Public Transport Authority, and two iron ore lines in the Pilbara.

“These reforms will encourage greater use of the rail network and support the efficient movement of freight across the State to support exports, regional businesses and jobs,” said Wyatt.

Arc Infrastructure elaborated on the effect of these changes on their network.

“Our understanding of the proposed changes will mean railway owner will publish (amongst other things) performance indicators and standing offers for rail access,” said the Arc Infrastructure spokesperson.

The Arc Infrastructure spokesperson said that the new regime will provide more transparency for users of the WA freight network.

The CBH spokesperson remained positive about finalising the reforms.

“We look forward to continuing to engage with the Government as these important proposed changes are drafted.”

 Freight Rail

CBH moves bumper crop by rail

Grain storage, handling, transport, marketing, and processing cooperative, CBH Group has announced that their rail infrastructure moved the largest amount of grain in the company’s history.

8.9 million tonnes of grain was moved by rail to port terminals in the 12 months to September 2019. These figures included six million tonnes of grain from the Kwinana Zone to the Kwinana Grain Terminal for bulk export.

These figures were the result of a record harvest of 16.4m tonnes, 13.8m tonnes of which was shipped from CBH Group’s four grain terminals. 6.2m tonnes were shipped from the Kwinana Grain Terminal.

While these figures were record breaking, global grain market forces left the group with a net loss after tax of $29.7 million and a deficit of $13.3 million.

During the year, CBH invested $285.3m in its network. These funds went towards an expansion of storage capacity, improving supply chain efficiency, and infrastructure maintenance.

CBH Group owns 574 wagons, 26 locomotives, and 12 trains, and in the 2019 year leased two additional locomotives and 131 standard and narrow gauge wagons for parts of the year. Due to the bumper year, three standard gauge fleets and nine narrow gauge fleets moved the grain crop.

 Freight Rail, Market Sectors, Products & Technology

Arc Infrastructure committed to WA SuperNet

Arc Infrastructure have this week reaffirmed their commitment to the WA SuperNet project, a planned enterprise-grade, affordable broadband service along 4000km of WA’s grain railway line.

Arc Infrastructure, which manages the freight rail network on behalf of the state government, are on the WA SuperNet steering committee alongside CBH group, with whom their three years long arbitration was settled this week.

“Arc Infrastructure thank CBH for their support toward the (SuperNet) project to date,” Arc Infrastructure executive director Murray Cook said in a press release earlier this week.

“We will continue to work with WA Supernet, Innovation Central Midlands and both State and Federal Governments on this exciting project.”

The project is slated for completion within three years and involves 4000km of optic fibre, buried within the easements of the regional rail network. Forty-metre towers will be constructed at 100 CBH receival bins. Where there is no rail, radio deployment could be used on towers on CBH sites.

“Arc has invested over $500,000 into the project to date and expects to spend a similar amount during this next phase of technical studies over the coming months,” Murray said this week.

Tim Shanahan, who chairs WA SuperNet, in 2018 said that WA SuperNet is likely be structured as a not-for-profit, non-distributing co-operative, enabling the service to be delivered at competitive rates.

He said it was hoped the service could, where possible, dovetail with existing wholesale and retail providers, including the NBN.

Access to competitive, enterprise-grade broadband services continue to be one of the single biggest issues restricting operations in WA’s grain-growing businesses.

According to a 2016 KPMG report, Infrastructure for Smart Farming, high-speed digital connectivity will deliver a $1.2 billion return to the WA industry by helping agribusinesses to be globally competitive.

 Freight Rail, Market Sectors, Uncategorized

Grain growers win access to grain freight rail network

A dispute over access to Western Australia’s Grain Freight Rail Network has ended, but grain trucks will still be used while the freight line remains closed.

Arc Infrastructure, which manages the freight rail network on behalf of the state government, and grain handling co-operative CBH Group have been in arbitration since since 2016 after failing to agree over the cost of access to the state’s grain rail network.

The outcome, CBH Group announced on November 1, provides CBH and grain growers access to the rail network at least until the end of 2026.

“The arbitrated outcome has resulted in our growers being in a better position than if we hadn’t sought access under the Code, resulting in a sustainable, long-term access agreement with minimum performance standards for the grain rail freight network,” said CBH Chairman Wally Newman.

“Our objective had always been to achieve a fair price for the level of performance provided so that WA grain growers can remain internationally competitive.

CBH claimed Arc had demanded “unreasonable” price rises, while the Canadian-owned rail operator said the costs of maintaining and upgrading ageing lines were significant and needed to be passed on.

Due to the deterioration of the Tier 3 lines, however, said Newman, they would not be re-opened as part of the arbitrated outcome. The Tier 3 network was closed by the state government in 2014 due to concerns over its viability and maintenance costs.

“Unfortunately, after years under ‘care and maintenance’ the capital costs associated with re-opening Tier 3 lines, as part of the arbitrated outcome, were substantial and the investment required was simply uneconomical for CBH to accept on behalf of growers as it would have required freight rates to increase significantly,” said Newman.

“While the costs are confidential, due to arbitration obligations, accepting these costs would have significantly impacted the international competitiveness of growers and the entire Western Australian grain industry as a whole.”

“In order to avoid a repeat of our experience, CBH will continue to engage in the State Government’s review of the Railways Access Code and push for substantial and immediate changes, with the objective of gaining reasonable access prices, greater transparency and more appropriate timelines for decisions,” said CBH Chief Executive Officer Jimmy Wilson.

“CBH will also continue to drive for fundamental changes to the Western Australian transport landscape in an effort to maximise tonnes we move on rail and to ensure we have the least cost pathway to export markets, keeping our growers internationally competitive and in support of our regional communities.”