Now is the time for Team Australia

Not since World War II has Australia’s social and economic way of life been put under such pressure. Businesses are struggling or closing, thousands have already lost their jobs, governments are shutting down all non-essential activities, and millions are working from home.

Australia’s Reserve Bank has slashed interest rates to record lows and governments are spending tens of billions to help stabilise the economy.

Anxiety is gripping the nation, with panic buying of food and household items by nervous consumers.

Now is the time for Team Australia to kick in.

What many Australians may not realise is the army of essential freight and logistic workers toiling day and night to help keep our economy ticking over. They are making sure necessities and raw materials find their way to supermarkets, retail stores, petrol stations, warehouses, steel and flour mills, and manufacturing plants.

As Australia’s largest rail freight company, Pacific National is proud to be doing our part, hauling the nation’s goods and commodities 24 hours a day, 365 days of the year along railways linking key supply chains across our vast continent.

Without goods trains, domestic and imported products like food, clothing, medical and pharmaceutical supplies, cleaning products, fuel, household products, chemicals, electronics, steel, and machinery and parts cannot be efficiently transported to depots and warehouses between cities and regional towns.

A double-stacked 1,800-metre interstate goods train can haul more than 330 shipping containers, thereby helping to free-up hundreds of truck drivers each week to focus on delivering goods and products the remaining ‘last mile’ from warehouses to stores where consumers need shelves restocked.

To put this in perspective, a single shipping container can hold approximately 25,000 toilet paper rolls, 55,000 food cans or 1,500 cases of beer.

Without freight trains, bulk exports like grain, meat, fresh and dry produce, cotton and coal cannot be efficiently hauled to ports, the gateways to global markets.

Paddock to port, pit to port, or manufacturing plant to port – essential rail freight services stretch across state borders, servicing finely-tuned supply chains.

Our company has been providing essential rail freight services since 1855. Back then we were called New South Wales Government Railways.

Today, our 600 locomotives are crewed and serviced by 2,500 men and women right across the nation. Each day and night they clock onto their shifts after practicing strict hygiene and social distancing procedures. Rail freight has the added benefit of operating within railway corridors and depots prohibited to the public.

The health and safety of our train crews are paramount, and I’m immensely proud of their efforts and dedication.

Unless ill or otherwise required by law, these crews continue to run essential freight train services around the clock. Without them, critical supply chains across state borders will break. Largely out of sight, each day they help underpin the productivity and wealth of our nation.

We thank federal and state governments for working closely with our sector during this challenging time. They moved quickly to protect the nation’s supply chains.

So next time you see a big blue and yellow Pacific National locomotive, take comfort knowing there is an army of freight and logistic workers doing their bit for Team Australia.

Dean Dalla Valle
Pacific National CEO

Joint communiqué affirms indispensability of rail freight

Australia’s largest rail freight operators and infrastructure managers have welcomed statements by Australian governments ensuring that rail freight services continue despite state border closures and shutdowns of non-essential services.

Chair of the the Freight on Rail Group, Dean Dalla Valle highlighted that rail freight services are critical for the supply of domestic and imported goods such as food, medical supplies, cleaning products, and fuel.

“Paddock to port, pit to port, or manufacturing plant to port – essential rail freight services stretch across state borders, servicing finely-tuned supply chains across our continent,” he said.

In collaboration with truck drivers working the ‘last mile’ of supply chains, rail services have hauled significant amounts of items in urgent need during the coronavirus (COVID-19) pandemic.

“A single-stacked 1,800-metre interstate goods train can haul 260 shipping containers, thereby helping to free-up hundreds of truck drivers each week to focus on delivering goods and products the remaining ‘last mile’ from warehouses to stores where consumers need shelves restocked,” said Dalla Valle.

“To put this in perspective, a single shipping container can hold approximately 25,000 toilet paper rolls, 55,000 food cans or 1,500 cases of beer.”

The move follows a meeting of the Transport and Infrastructure Council, made up of state, territory and federal infrastructure and transport ministers, on Wednesday, March 25, which affirmed that freight movements are an essential service, and will continue to operate despite restrictions on activity around the country.

“We, Australia’s Transport and Infrastructure Ministers, wanted to reassure Australians that supporting freight movements and supply of goods to individuals, businesses and service providers is a high priority for all governments,” wrote the ministers in a joint communique.

While Queensland was the latest state to close its borders, following Western Australia, South Australia, the Northern Territory, and Tasmania, the ministers confirmed that these would not inhibit the efficient movement of freight across Australia.

“All jurisdictions where restrictions are in place have provided exemptions to these measures to ensure Australia’s supply chains are maintained,” wrote the ministers.

“We want to thank all those Australians involved in the freight industry who are serving Australia so diligently despite the challenges we face.”

To ensure that rail freight operators do not become susceptible to COVID-19, additional measures have been put in place, said Dalla Valle.

“In recent weeks, rail freight operators have implemented strict hygiene protocols at depots, terminals and maintenance facilities, including social distancing, to protect the health of essential staff,” he said.

“Rail freight has the added benefit of operating within secure railway corridors and facilities prohibited to members of the general public.”

The Freight on Rail Group is made up of nine rail freight businesses, Pacific National, the Australian Rail Track Corporation (ARTC), Aurizon, Qube, One Rail Australia, SCT Logistics, Arc Infrastructure, WatCo Australia, and Southern Shorthaul Railroad.

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.

Inland Rail sparks discussions for rail-road-air intermodal hub in Toowoomba

Pacific National and Wagner Corporation have entered into detailed discussions for a major logistics hub at Wellcamp Business Park, in Toowoomba.

The announcement is tangible evidence of the $13.3 billion in benefits that the federal government estimates Inland Rail will bring to regional communities along the alignment.

The two companies are looking to build a 250ha logistics hub at the site next to the Toowoomba Wellcamp Airport, said Pacific National CEO, Dean Dalla Valle.

“The proposed 250-hectare Wellcamp Logistics Hub also has frontage to the future Melbourne to Brisbane Inland Rail project, allowing extensive future intermodal operations for freight to be transferred between trains, planes and trucks,” he said.

The future Wellcamp Logistics Hub would include 2.7km of frontage to the rail corridor, allowing for 1,800m long freight trains to operate. Daily cargo jet flights operate from a fully licensed and bonded international air cargo terminal next door, and the site has the potential to process up to 350,000 shipping containers by 2030, and up to half a million by 2040.

The wider Darling Downs region is not only part of the South-East Queensland food bowl, but a hub for manufacturing and resources industry. The idea for an intermodal terminal in here was sparked by another intermodal terminal connected to the Inland Rail line, said John Wagner, non-executive chairman of Wagner Corporation.

“When Wagner Corporation attended the October 2019 opening of Pacific National’s logistics terminal in Parkes – also located on the Inland Rail alignment – it gave us an exciting picture of what could be achieved with future rail freight services at Wellcamp,” he said.

Dalla Valle highlighted that the benefits would extend beyond the industry to societal and environmental outcomes.

“Integrated with Inland Rail, a future Wellcamp Logistics Hub would help reduce road accidents and fatalities, traffic congestion, vehicle emissions, and road ‘wear and tear’,” he said.

“Picture this – at a minimum, an 1,800-metre-long freight train hauling shipping containers is equivalent to removing 140 B-double return truck trips from our roads.”

Toowoomba has been a centre for discussions about the future of rail in South East Queensland, with the Inland Rail agreement signed there, and fast passenger rail options being explored.

It takes a village

Getting the community on board for a major transport project can be hard, but Pacific National found the people and businesses of St Marys to be their staunchest advocates.

As the January day began to heat up, David Trist OAM, stood by an unused rail siding in St Marys and began peeling back the history of what will soon become Pacific National’s new intermodal freight terminal.

“The historical significance of the area goes back to the third governor of Australia, Governor Philip King. He left Australia at the end of his term to go overseas and left his wife and children here. They each received a land grant from the incoming governor and Mrs King got this area and the children the areas around.”

Trist is referring to the semi-urban region that lies between Blacktown and Penrith, in Sydney’s West, which now alters between housing, industrial estates, and grassland.

“The King family ended up with 7-8,000 acres of land and as Mrs King came from a place in Britain called Dunheved, she built a homestead, and that name has gone on and this is the Dunheved Business Park.”

With this layer of substrata uncovered, Trist proceeds to the more recent use of the site, adjacent to the main Western Line out of Sydney.

“In wartime, in 1942-1943, this was taken over by the Commonwealth government and a big munitions factory was built and this rail line was part of the military rail that went out to Ropes Crossing when they had the munitions factory,” recalls Trist, who served in the armed forces during World War Two.

“When WWII concluded in 1945 and the government decided to sell off and within about 15 years there was something like 500 new businesses set up in this area.”

What happens next is of great concern to Trist, a lifelong resident of the area, as well as his fellow Rotary Club members, local business owners, and the wider St Marys community. As the sun begins to beat down on the gravel and dirt of the planned St Marys intermodal facility, Trist describes how the area is at a literal and figurative crossroad.

“The plans for the future are that there’ll be rail links from here to the Nancy Bird Walton airport, road links to the very rapidly growing suburbs in the north west and to south west centres. So, St Marys is the hub of a lot of this rail and road activity.”

As the secretary of the Dunheved Business Park Development Committee, Trist is glad that rather than erasing what is here, Pacific National hope to preserve the history of the site.

“The Dunheved name is going to be continued with this industrial estate and I think Pacific National have already shown that they’re interested in local history.”

OPENING UP A DIALOGUE

According to project director of Pacific National’s proposed freight hub, Leigh Cook, there is a requirement for community engagement in the planning process, and having Trist, as well as half-a-dozen other members of the community at the yet to begin construction site, was a key element of the project from the start.

“There is a requirement for industry to communicate,” said Cook, “We have had a comprehensive strategy to engage with community and to be open and transparent. If people raised a concern or an issue, we would address that in person. We wouldn’t just write to them, we would actually meet them in person, show them the proposal and that’s how we got involved with David.”

Another attendee that January morning was Emmanuel Stratiotis, whose family own the adjacent petrol station.

“I saw the application, I thought the way they designed the routes of the truck movements was a bit of a mistake going in and out of the property,” said Stratiotis. “There’s nothing wrong with the Forrester Road exit and this is what I proposed to them, they should come in from one side and exit from the other.”

With a key concern of the local planning authority being the number of truck movements in the immediate vicinity due to the intermodal terminal, Cook and the project team were open to hearing these kinds of ideas from the community.

“We basically said look it’s our preferred route, it’s actually 290,000 truck kilometres each year less that way and three less intersections so it was a great idea,” said Cook. “We built that into our plan and did some further studies in terms of noise, environmental impact, emissions etcetera and that came back the most positive route.”

While the back and forth of the planning process is to be expected with any major project, having begun with the community in mind from day one has meant Pacific National could work alongside the St Marys community during the planning stage.

“The community has been good,” said Cook. “We did not get one objection from the public and that’s the first time that has happened. We also had stalls at the major shopping centre, we ran advertisements in the local newspaper telling people what we’re doing here, we have a website, a hotline we’d always respond to people and I think that’s what people liked. They’d speak to the project director or the head of corporate communications. We met with all the local politicians from both sides to know what’s going on, it’s been a very positive experience.”

A NEW LINK

Today, the 10ha site feels poised, awaiting the arrival of earthmoving plant and machinery to begin transforming the site. Cook himself has the bottled-up energy of a front-rower awaiting the call to “engage”.

“We’re ready to start construction as soon as we get the development application approved,” he said.

Pacific National has been in talks with the local and state governments to turn the site into Sydney’s latest intermodal freight hub. Once complete, the site will provide a route for imports to come from Port Botany, 58km away, and then be unloaded of rail shuttles and sent to the ring of distribution centres in St Marys and nearby logistics parks. In the future, the St Marys terminal will be a node in the national network Pacific National is building, particularly with its direct connection to Parkes – located on the Melbourne to Brisbane Inland Rail.

As part of the planning process, Pacific National have studied the site’s impact
on the traffic flows in, and found that the terminal will alleviate pressures on local and regional roads.

“The scientific studies prove beyond reasonable doubt that we’re taking 8.7 million truck kilometres each year off Sydney’s congested motorways,” said Cook. “That has a significant impact on traffic congestion from Port Botany to the Penrith region, let alone the reduction in emissions and carbon footprint.”

In managing the distribution of goods both in St Marys and at Port Botany, Pacific National have a partner in freight and logistics provider ACFS, who are also looking to the wider benefits of such a hub.

“There’s high unemployment out here and ACFS already have 70-75 per cent of their employees living in the region,” said Cook. “They have to travel to Port Botany each day to pick up their truck, drive out – backwards and forwards – and drive home and so for them they’re working where they live which means less commuter traffic”

With other intermodal terminals located in the south-west of Sydney, the businesses that sprang up in St Marys after the Second World War have been waiting for the freight rail connection that was laid down by the wartime munitions factories. Local business owner Tony Jones knows this as well as most.

“This is addressing this lack of freight connections that we’ve suffered for years.”

RAIL THE ROUTE TO REVITALISATION

St Marys is a long way from the glittering harbour of Sydney, and even under the Greater Sydney Commission’s Plan for a metropolis of three cities, St Marys sits in-between the river city of Parramatta and the Parkland city of Penrith. Stratiotis has been seeing how this location affects the vibrancy of St Marys.

“The area is going through a bit of a slump and if you look at the commercial area the shops there are dying a slow death, death by a thousand cuts,” said Stratiotis. He sees the emergence of a new logistics terminal as a way to avoid any further decline.

“These things just have to happen so you can have a bit of a hub and get people working here and spending money.”

To date, Pacific National have shown its commitment to local industry through a commitment to buying local. In addition, apprenticeships and traineeships will be offered as part of the project.

While the St Marys industrial area is home to manufacturers of building products, steel fabricators, and automotive suppliers, its further growth has been hampered by a lack of access to the Sydney freight network.

“We need to have growth in the area, because we need to find some kind of potential and tap into that,” said Stratiotis. “If you don’t utilise this space and get the maximum value or potential use out of it, then you’re not making anything in the area.”

Jones concurred, highlighting that such a service will increasingly be essential for Sydney to become the global hub it is projected to be.

“Importing is going to stimulate the St Marys economy, simply by being a centre of employment and factories like mine over the road will benefit from the increased activity in the area. I think an Industrial estate that doesn’t have that sort of investment is doomed.”

Before even the first sod has been turned, businesses nearby have been expressing interest in accessing a Port Botany shuttle service, and with containers emptied of imports once they reach St Marys, the potential for export is the obvious next step, said Cook.

“Our proposed freight hub will be an import terminal, so all the import shipping containers come from Port Botany to St Marys, and are dispatched as is.”

The spill over effects of such activity are what draws the interest of Stratiotis.

“It helps all our businesses; it helps my business to have traffic coming through with that area, so the more workers and trucks and activity there is, the more it helps every industry that feeds off them, and you’re hoping that would prop up businesses in the area.”

While grand plans abound for the potential of greater Western Sydney, the realities of moving goods throughout an increasingly congested region is keeping those plans on paper.

Without intermodal hubs like St Marys, freight leaving the factories of Western Sydney and coming into the distribution centres has to travel by road.

The folly of that approach is obvious to Stratiotis.

“These tracks that have been here for many years. These weren’t installed yesterday, they’ve been here for 60 years, more, so you’ve got to utilise these things, make them work for you. And if you think trucks are the way of the future, that’s wrong.”

As Sydney and Australia grapples with how to move increasingly large volumes of freight, perhaps listening to what those who are at the choke points are saying could provide an outlet.

Stratiotis certainly has an opinion.

“It’s something that should have been done years ago.”

Rail freight group meets with Environment Minister to resolve grain concerns

To resolve a standoff on noise and CO2 emissions from grain haulage, an alliance of grain freight businesses have held a roundtable with NSW Environment Minister Matthew Kean.

Representatives of Southern Shorthaul Railrod, Pacific National, LINX Cargo Care Group, CF Asia Pacific, Qube Holdings, Aurizon, Manildra Group, NSW Farmers Association, and Grain Corp amde their concerns heard to Kean.

Last week, the group had banded together to protest draft emissions thresholds which would have forced grain movements off trains and onto trucks. The discussion with Kean has allayed fears of the end of grain freight via trains, said Save our NSW grain lines spokesperson Jason Ferguson and Southern Shorthaul Railroad owner.

“To his credit, Minister Kean acknowledged the importance of allowing older, lighter diesel locomotives to continue providing essential haulage services to farmers needing to transport bulk grain from regional silos to coastal ports like Kembla and Newcastle.”

Kean also reiterated the NSW’s government’s commitment to keeping freight on rail.

“I made it clear to those present that we do not want to see rolling stock taken off tracks and replaced by trucks however we do have a duty to ensure communities are not impacted by extreme noise and air pollution just because they happen to live near rail lines,” Kean told Rail Express.

The draft emissions thresholds would have prohibited the older locomotives used to haul grain. These older locomotives are the only fit-for-purpose solution due to the older tracks – some laid 100 years ago – being unable to hold newer locomotives with heavier axel loads.

“This debate was never about industry resisting the purchase of new locomotives – it was about recognising older, lighter loco classes provide fit-for-purpose haulage services on many regional rail lines,” said Ferguson.

“The minister took our advice about expensive loco emission kit technology causing higher fuel burns and therefore CO2 emissions,” Mr Ferguson.

Due to these discussions, Ferguson expects that the final Environment Protection Licences for Rollingstock operators to take the industry’s concerns into account.

“Just like any vehicle, different types of locos have different noise profiles – the EPA’s original proposals didn’t factor this in. I’m pleased the Minister has,” said Ferguson.

Kean also saw a way forward for both the EPA and the rail freight industry.

“In what are highly technical issues, I believe we found a balance between satisfying the communities concerns whilst limiting the impact on industry,” said Kean.

NSW EPA trying to put the brakes on rail freight

Draft changes to NSW environmental standards could end regional branch freight lines, warns an alliance of rail industry leaders.

The joint letter signed by freight operators, farmers, and grain growers, and seen by Rail Express, responds to draft NSW EPA standards for rollingstock emissions and noise.

The draft standards set a noise ceiling of 85 decibels, a similar volume to a lawnmower, which would rule out diesel locomotives of the type used to transport grain from silos to port.

The 48 Class locomotives which service these branch lines have a low axel load of 12.5 tonnes, and are able to run on the older steel track which are restricted to locomotive axle loads of 17 tonnes.

The letter outlines that rather than improving environmental outcomes, the restrictions on noise, if implemented would force grain to be transported by trucks. The authors write that this could lead to an extra 25,000 B-double trucks on a “conservative” estimate. This would generate a 500 per cent increase in CO2 emissions compared with rail freight.

“In short, proposed new EPA environmental standards for diesel locomotives will significantly increase net [greenhouse gas] emissions in regional NSW,” write the authors. “This is a perverse outcome.”

Other costs include increased road accidents and fatalities and job losses of locomotive drivers and seasonal silo workers.

Additionally, by forcing grain onto trucks, the cost of exporting grain would increase, placing pressure on farmers’ margins at a time when drought is impacting upon agricultural profitability.

Emissions standards proposed by the NSW EPA also place a restriction on rail freight. While emissions kits can be installed in diesel locomotives, the cost of installing them would be prohibitive and would increase the consumption of diesel by five per cent, increasing greenhouse gas emissions. The weight of these emission kits can also push a locomotive over the axel load threshold.

The signatories to the letter are:

Dean Dalla Valle, Pacific National CEO

Klaus Pamminger, GrainCorp COO

Dick Honan, Manildra Group chairman

Jason Ferguson, Southern Shorthaul Railroad director

Maurice James, Qube Holdings managing director

Matthew Madden, NSW Farmers Association Grains Committee chair

Danny Broad, Australasian Railway Association chair

Geoff Smith, SCT Logistics managing director

Luke Anderson, Genesee & Wyoming Australia CEO

Anthony Jones, LINX Cargo Care Group CEO

Ian Gibbs, CF Asia Pacific / CFCL Australia executive chairman

Aurizon’s revenue rises to $1.53bn

Aurizon Holdings Limited revenue has increased by $73.4 million or five per cent in the 2019/20 first-half earnings before interest and tax.

Australia’s largest rail-based transport business has released a half year report for the period ending 31 December 2019, detailing new growth in the company.

Aurizon stated in the report that the higher revenue is offset by the sale of the rail grinding business.

A spokeswoman from Aurizon said the large sale transaction for the rail grinding business was completed with Loram in October 2019 for $167m with $105m net gain on sale (not included in underlying earnings).

With revenue up five per cent to a total of $1.53 billion, the company’s underlying net profit rose 19 per cent to $268.9m.

The group credited the UT5 Undertaking as a factor that improved revenue. In December last year, Queensland Competition Authority (QCA) approved the agreement that governs access to its rail network. 

Aurizon executives stated that the company’s financial position and performance was partially affected by the closure and sale of Acacia Ridge Intermodal Terminal. 

Two years ago the Australian Competition and Consumer Commission (ACCC) opposed the sale of Acacia Ridge Intermodal Terminal and commenced proceedings against Aurizon and Pacific National in the Federal Court. Aurizon and the proposed new owner of the terminal, Pacific National, both filed notices of cross-appeal that will be heard by the full Federal Court later in February. 

Aurizon executives highlighted its full-year earning guidance to $930 million from $880 million. This figure was noted before assumed impacts from the Australian bushfires and the world health emergency, coronavirus.

The coronavirus has delayed the arrival of 66 rail wagons being made in the epicentre of the disease, Wuhan in China. 

A spokeswoman from Aurizon said an initial order of 66 wagons have already been delivered and the remaining 66 wagons are planned for delivery in February or March.

The first batch of 132 coal wagons have been completed by our supplier. The construction of the second tranche of 132 wagons has been delayed due to a slow down of production in China,” the spokeswoman said.

Operating costs increased $13.9m or 2 per cent, which were identified as due to to increased labour costs.

Aurizon’s network operates the 2,670km CQCN, the largest coal rail network in Australia. 

Aurizon executives stated in the 2019/20 half year report that 58 per cent of the company’s revenue, a total of $887.5m, was from transporting coal from mines in Queensland and NSW to customer ports.

Operational performance across the network  “remained strong” during the first half of the new financial year, according to Aurizon.

Total system availability improved from 81 per cent to 82.2 per cent, and cycle velocity improved 4 per cent.

Aurizon’s executives said the focus has been on the trial and implementation of schedule adherence in the Blackwater system in QLD.

Compared to the previous half, the network delivered an average reduction in turnaround time of 1.2 hours per service and both on-time arrival to mine and to port increased.

Aurizon’s executives said the network is now working with operators to improve the current scheduling process by realigning maintenance constraints to unlock capacity and optimising the weekly Intermediate Train Plan to avoid pathing contests between operators. The report stated that system throughput is expected to increase, in the third quarter of this year.

Video released of Pacific National’s new Parkes Logistics Terminal 

Construction is wrapping up on Pacific National’s Parkes Logistics Terminal, with the official opening of the intermodal freight terminal taking place on Wednesday, 30 October.

The terminal is located at the intersection of the main western railway line running from Sydney to Perth, the North South Newell Highway and, once it is up and running, the Inland Rail corridor from Melbourne to Brisbane.

The freight trains are 1,800-metres in length, which is equivalent to 70 B-double trucks. They are expected to begin hauling double-stacked shipping containers from the terminal to Perth by the end of 2019. Once operational, more than 450,000 shipping containers from around Australia will be consolidated in Central NSW.

Construction of Pacific National’s terminal began in October 2018 after the company committed an initial $35 million to develop the terminal within the National Logistics Hub and acquire rollingstock-like freight wagons.

The National Logistics Hub forms one of the NSW government’s Special Activation Precincts, as outlined in its 20-Year Economic Vision for Regional NSW. Parkes will be the first of the precincts, which are infrastructure projects in regional locations across NSW.  They are intended to stimulate the local economy and provide more local employment opportunities.

The precincts will be funded through the $4.2 billion Snowy Hydro Legacy Fund, which was established following the sale of the Snowy Hydro Scheme to the Commonwealth.

As well as creating jobs in the freight and logistics industry, the National Logistics Hub at Parkes will optimise opportunities in agriculture and exportation.

“Pacific National’s terminal will consolidate hundreds of thousands of cargo containers, including boxes filled with regional commodities destined for overseas markets, to be hauled by rail across the length and breadth of Australia,” said Pacific National chief executive Dean Dalla Valle.

“Once the Melbourne to Brisbane Inland Rail project is complete, regional enterprises can use Parkes as the launching pad to haul goods and commodities by rail more efficiently between the ports of Botany, Brisbane, Melbourne and Fremantle,” said Dalla Valle.

“If a freight train delayed by congestion misses a loading window for containers at Port Botany, then exporters suffer financial penalties and a loss of goodwill with clients.”

Pacific National estimates for every 1000 shipping containers gravitating to ports in Victoria and Queensland, up to 10 jobs in NSW are lost.

“The NSW Government needs to be acutely aware of these future competitive dynamics,” said Dalla Valle.

Pacific National, Aurizon critical of ACCC appeal in Acacia Ridge case

Aurizon and Pacific National have criticised the competition watchdog’s decision to extend its “expensive and reputationally damaging” campaign against the agreed sale of the Acacia Ridge intermodal terminal in Queensland.

The Australian Competition and Consumer Commission (ACCC) on June 27 said it would appeal the Federal Court’s rejection of its case against Aurizon selling Acacia Ridge to Pacific National.

Aurizon and Pacific National have been trying to finalise the deal since August 2017, when they announced PN would team up with Linfox to acquire Acacia Ridge and Aurizon’s Queensland Intermodal above rail business.

Initial opposition from the ACCC led to a split in that sale, with Aurizon selling Queensland Intermodal to Linfox, and PN to acquire Acacia Ridge.

An unsatisfied ACCC pressed on, however, taking its challenge of the Acacia Ridge sale to the Federal Court in July last year.

At that time the ACCC not only challenged the sale on competition grounds, but went so far as to make the pernicious accusation that PN and Aurizon had conspired to limit competition in the Australian rail market with the deal.

The ACCC dropped this component of its case before the court’s ruling, but was still unsuccessful with its competition claims, with the Federal Court approving the sale on May 15. The Court told the ACCC the competition issues it had raised were resolved with an unconditional access undertaking presented to the court by Pacific National.

Now the ACCC has announced it will again try to block the sale with an appeal of that Federal Court decision.

“This court action by the ACCC has been an expensive and reputationally damaging exercise,” a PN spokesperson told Rail Express on June 27.

Pacific National believes the Federal Court judgement created a pro-competitive outcome for freight in Australia by guaranteeing access for new entrants to get freight from road to rail. It’s important to remember the undertakings we’ve committed to did not previously exist at Acacia Ridge Terminal and any assertion that we would somehow subtly work to discriminate against other users is simply wrong.”

Aurizon responded to the news of the ACCC’s appeal through an ASX statement.

“The ACCC is asserting they believe the Court made an error in accepting an access undertaking in relation to use of the terminal,” Aurizon said. “Aurizon does not accept this assertion and is of the view this matter was fully considered by the Federal Court and the decision handed down in May 2019 was clear and comprehensive.”

If the appeal is granted, Aurizon said the Acacia Ridge sale will have to wait until the case is finalised by the Full Bench of the Federal Court, a process which could take several months.

The ACCC said its appeal would focus on the court’s involvement in the access undertaking itself.

“Among other things, we will argue that the court made an error by accepting the undertaking, and then using it as a relevant fact when determining whether there was likely to be a substantial lessening of competition,” ACCC chairman Rod Sims said.

“This appeal is crucial to Australia’s merger regime because acceptance of undertakings of this kind by the Court means that anti-competitive mergers could be approved, and this has the potential to damage the Australian economy.”