freight

Resumption of Murray Basin Rail project a “national priority”: Rail freight businesses

The Freight on Rail Group has called upon the federal government to fund the resumption of the Murray Basin Rail Project.

The coalition of rail freight businesses, chaired by Dean Dalla Valle said that with the Victorian government committing $48.8m in funding, the Commonwealth needed to come to the table as well.

“This commitment from the Victorian government is welcome – as a nation we need to get this rail freight network humming again. Given we could see another bumper crop next year, industry encourages the Commonwealth to also commit extra funding to help get the network back on track,” said Dalla Valle.

Getting the project back on track would improve the productivity of the Victorian rail network, and with forecast bumper grain harvests, the need for investment is critical.

“Due to well-documented problems with rail infrastructure in the basin, I’ve heard almost 70 percent of export grain this season will be transported by truck to Victorian ports – this is an extremely poor outcome for society; and certainly not good for regional councils already struggling to repair and maintain large road networks,” said Dalla Valle.

Since stalling in 2019, the partially completed project has led to a decline in freight carried by rail in the region. Groups including farmers, grain haulers, and now freight rail businesses are highlighting the importance of an efficient freight network.

“Inefficient transport supply chains corrode the core fundamentals of state and national economic productivity; destroying jobs and increasing cost of living pressures for millions of Australians,” said Dalla Valle.

The opportunity to reinvigorate the Murray Basin rail network had positives on a number of fronts, said Dalla Valle, beyond agricultural productivity. Moving more freight by rail would make roads safer for passenger vehicle by reducing accidents and wear and tear on roads. Additionally, as rail freight is less emissions intensive than road freight, Australia could reduce transport emissions. According to a 2017 Deloitte Access Economics report, for every kilometre of freight transport, rail produces 16 times less carbon pollution than road freight, and 14 times less accident costs.

Rebuilding the network would also provide a boost for regional economies and the Australian supply chain.

“Just imagine all the Australian-made steel that will be used in upgrading and standardising the network with new track – additional support for this project should be of the highest national priority,” said Dalla Valle.

Mildura Line

Murray Basin Rail Project revision falls short of freight needs

With the executive summary of the revised business case for the Murray Basin Rail Project now released, farmers, grain haulers, and rail experts are renewing their call for the project to be delivered in full, as per the original scope.

The revised business case recommends that the Sea Lake and Manangatang lines remain broad gauge, while work should focus on improving the existing, separate gauge network.

GrainCorp rail commercial and contracts manager Alex Donnelly said that the proposed scope of works would return the network to a viable state.

“The proposed improvements are all quite sensible and are all going to be beneficial to the rail network in the long term. They are not going to provide the capacity and costs we’d like to see, but they are certainly improvements from the current heavily degraded state of the MBRP affected network,” said Donnelly.

Since work stalled in 2017 and 2018 and then halted in 2019, increasing volumes of grain from North West Victoria have had to be hauled by road. In 2019, when NSW and Queensland were in drought, the relatively good conditions in Victoria meant that grain grown along the Sea Lake and Managatang lines missed out on markets and higher bid prices in northern NSW, as the grain could not be moved via rail on the interstate standard gauge network.

“Those farmers on the Mananagatang and Sea Lake sites really missed out, because their grain could only flow south by rail to Geelong or Melbourne, or by truck into southern NSW homes – where the bids weren’t as strong,” said Donnelly.

Victorian Farmers Federation grains group president Ashley Fraser said that the proposed works would create two separate networks.

“A commitment was made to build the Murray Basin Rail Project five years ago, including the standardisation of the Sea Lake and Manangatang lines,” he said.

“Under this revised plan these lines will not be converted to standard gauge resulting in farmers and businesses along the broad-gauge Sea Lake and Manangatang lines effectively being cut off from the standard gauge Inland Rail network.

“Ultimately this means double handling of freight which results in added costs for farmers, especially in the important grain growing regions in Victoria’s north west.”

John Hearsch, Rail Futures Institute president, said the proposed scope of works would not be able to handle the projected increase in freight volumes.

“It’s probably sufficient for the short term but, as I see it, I don’t think it properly takes account of what needs to happen in a bumper grain harvest which is what we’re about to experience. The outcome of that will be pretty straightforward; we’ll have a lot more trucks on the road than we really should have.”

Hearsch also highlighted that if the works proposed in the revised business case go ahead, while there will be marginal improvements, the plans locks in inefficiencies, such as standard gauge trains on the Mildura line from Yelta and Murrayville having to travel further to get to the port of Geelong or Melbourne via the Maryborough to Ararat connection, rather than directly via Ballarat.

“I find that quite disappointing and it still means that notwithstanding some marginal improvement on the journey from Maryborough to Ararat, these trains are still having to run well over 100km extra distance, which takes extra time and involves extra cost. That looks like a semi-permanent feature of what this part of the rail network is going to look like.”

Other potential projects that depended upon the full completion of the original Murray Basin Rail Project are also looking to miss out in the revised plan. In Ouyen, a local community group that has been working to set up an intermodal terminal is furious that the revised scope will not include a standard gauge connection to Melbourne.

“The MBRP was to be a ‘once in a generation’ project for the ultimate benefit of all Victorians and we are hoping governments will sort through the current MBRP quagmire very soon, to ensure it gets completed as originally planned. The Victorian government’s announcement will result in the Ouyen train having to go on a five-hour detour via Ararat making it unsustainable,” said Ouyen Inc president Scott Anderson.

Having two separate gauges in Victoria would also place increased cost pressures on businesses, said Donnelly, and could lead to the broad-gauge network becoming a stranded asset.

“Rollingstock owners need to keep their aging broad-gauge gear alive and running, which gets more expensive every year as spares and parts become harder to source. The broad-gauge network misses out on the expensive new gear that cascades out of the big coal and interstate operations, while standard gauge sites will see the benefits of this equipment.”

One of the reasons cited in the business case summary for the change in scope to let the Ballarat corridor remain broad gauge was the potential disruption to passenger services. Hearsch said that with proper, integrated planning between Victorian government bodies, this could have been avoided.

“Of course, the freight upgrades should’ve been accounted for in the upgrades of the passenger network, that didn’t happen. The reason it didn’t happen, as I read it, is that the Ballarat line upgrade and the Murray Basin Rail Project, both of which affected Ballarat, those two projects didn’t talk to each other.”

With the Murray Basin Rail Project having been heavily criticised by the Victorian Auditor-General in a report early in 2020 for deficiencies in planning and project management, Donnelly said it was critical that the revised project is handled correctly.

“For this coming 20/21 harvest these improvements will probably not provide any benefit to rail capacity. It’s very unlikely that any of the significant components of the proposal could implemented in time to help the coming harvest export task,” said Donnelly.

“In fact, we hold strong concerns that the proposed works pose a risk to an already constrained rail network: construction closures and trackwork blocking lines will stop the trains from exporting grain and we are expecting rail to be running flat out all year long.

“Any major shutdown will reduce rail tonnes moved to port, which will transfer straight to road instead. We need very careful consultation, coordination, and planning by the department to mitigate the impacts on the industry.”

Fraser said that the original aim was the correct one and should be carried out.

“The original vision was for a modern, efficient regional rail freight network. While the execution to achieve this vision may have been flawed, the intention was right.”

MBRP should be delivered as originally planned: VFF

The Victorian Farmers Federation (VFF) has called for the Murray Basin Rail Project (MBRP) to be delivered as originally promised.

VFF Grains Group President Ashley Fraser said that the delivery of upgrades to regional rail lines in the north-west of the state would be a critical for the region to come out of coronavirus (COVID-19).

“Rural Victoria is crying out for major infrastructure projects to stimulate the economy and provide much needed local jobs. This is a nation-building project and a no-brainer to give the green light,” he said.

“This project is also key to unlocking the agricultural potential and prosperity of North West Victoria and Sunraysia and will help Victorian agriculture and the grains industry lead the nation’s economic recovery.”

The MBRP has been stalled since funds ran out and a dispute between V/Line and the contractor increased costs. Stage one of the project is complete, however stage two is only partially complete, with further stages unclear.

A new business case has been submitted by the Victorian government to the federal government for funding, however a decision is yet to be made.

Fraser said that farmers and industry needed the Sea Lake and Manangatang lines to be standardised.

“We supported the project as it was slated in 2014 and we support it today, but that support is for the full project as promised, including the standardisation of the Sea Lake and Manangatang lines.”

The two lines are currently remnants of Victoria’s broad gauge network, which requires freight to be swapped from broad gauge to standard gauge to get past Maryborough and access the ports of Melbourne, Geelong, and Portland. Standardising these lines would also future-proof Victoria’s rail network, said Fraser.

“Failure to standardise the Sea Lake and Manangatang lines would effectively isolate them from the rest of the Victorian and interstate network, including the Inland Rail, which goes against the benefits of the entire project,” said Fraser.

“The Murray Basin Rail Project was always about growing capacity, improving efficiency and providing better access from Victoria’s key grain and horticulture growing regions to major ports. We must not lose sight of this and now is the time is now to do the job properly.”

Review of rail freight project targets governance, planning for improvement

The Victorian Auditor-General has delivered a withering critique of the governance and delivery of the stalled Murray Basin Rail Project (MBRP) and the Freight-Passenger Rail Separation Project (FPRSP).

The MBRP, which promised to upgrade over 1,000km of rail track in regional Victoria to standard gauge, has been left unfinished as funds ran out and disputes between V/Line and the contractor, a McConnell Dowell and Martinus Rail joint venture, caused the project to spiral beyond its original budget.

The Victorian Auditor-General brought in V/Line and the Department of Transport for criticism, nothing that both projects “have not met scope, time, cost or quality expectations”.

Particularly concerning for the Auditor General was the way that the project had been handled.

“From a project and program management perspective we identified deficient project planning, cost estimation and scoping by the Department of Transport’s (DoT) predecessor agencies. V/Line Corporation’s (V/Line) inadequate contract and project management has also contributed to project delays and cost overruns for the MBRP Stage 2 works,” wrote the Auditor-General.

Rail industry figures have encouraged both the Victorian and federal governments to continue with the project, with the many benefits flowing to hard hit areas, said Pacific National CEO, Dean Dalla Valle.

“Governments of all political persuasions must be acutely aware how vital regional exports are to the overall health of the nation’s economy. With the current coronavirus outbreak, domestic and international trade are facing significant headwinds, now is not the time to neglect key transport supply chains in Australia,” he said.

Rail Futures Institute president, John Hearsch, echoed these statements.

“Until the project can be brought to a successful conclusion the rail industry and its operators are being disadvantaged in terms of service and cost and that impacts their competitiveness.”

The current works have left the network with extensive speed restrictions and roundabout routings, with the objective of improving axle loads not met. Rectifying this would see significant benefit for regional communities said Dalla Valle.

“Upgraded rail lines result in operators like Pacific National being able to run heavier freight trains at increased speeds. Upgraded lines also enhance safety across the network. This means safer, more cost-efficient and reliable rail haulage services to port; hence regional producers and exporters benefit. By extension a significant workforce in regional Australia benefits, including train crews, primary producers, farm workers – the list is long.”

The Rail Freight Alliance (RFA), a grouping of regional councils in Victoria, said that it is essential that the project is completed.

“With Victoria’s freight task estimated to treble by 2051 the Andrews government owes it to industry and Victorians to fix and complete the Murray Basin Rail Project to its original scope, as promised, and now is the time to do it.” RFA chair councillor Anita Rank said.

Currently, the Victorian government is finalising an updated business case for the remainder of the project, said Minister for Transport Infrastructure, Jacinta Allan. Once completed, the revised business case will be submitted to the federal government for consideration, which had contributed funding to the initial stages.

“We’ve been disappointed with the performance of the previous contractor and the management of the project previously by V/Line and that’s why some time ago the project has moved across to be delivered by Rail Projects Victoria,” said Allan.

According to the DoT, the MBRP remains a “priority project”.

“The Murray Basin Rail Project has already delivered benefits for the freight industry, but we know that there is more work to be done. That’s why the Victorian Government is working with the Commonwealth government to progress the business case,” said a DoT spokesperson.

In its report, the Auditor-General issued a number of recommendations, including recommending that V/Line expedite finalisation of all unfinished works in Stage 2 of the MBRP, improve its contract management of major infrastructure projects, and expedite assessment of the reason for temporary speed restrictions on the re-opened standard gauge line from Yelta to Ararat.

The Auditor-General also recommended that V/Line and the DoT both develop a sustainable funding approach for regional rail freight lines and improve network reliability and performance standards. The report also highlighted the need to identify regional rail freight needs, and ensure compliance with project risk management processes for all major capital projects.

Both the DoT and V/Line accepted all the recommendations, and in an action plan the Department of Transport noted that it would review the original MBRP business case by engaging with industry, and complete detailed modelling of the Murray Basin rail network. The Department pointed to the recently formed Rail Freight Working group as a method by which government and industry will work together on rail freight infrastructure projects.

Work completed on the rail network to date includes updating the Mildura and Murrayville to Ouyen lines to standard gauge, as well as the Maryborough to Ararat line. A junction near Ararat station will have its signalling upgraded in the coming months.

Dalla Valle highlighted that work to build a staging area for standard-gauge freight trains at Maryborough could act as a “pressure valve” for the network.

“The Murray Basin is the economic lifeblood of northwest Victoria, with regional rail veins pumping exports worth hundreds of millions into the state’s ports. Thousands of country and city jobs are supported by this freight and logistics ecosystem,” he said.