WA on the right track, for now

27 Apr, 2005 08:45 PM

THE Australian Railroad Group (ARG) has admitted to concerns that the WA rail grain network might not be sustainable in the long term, but in the same breath refuted claims the network is under immediate threat.

ARG, which runs all WA's track and rolling stock, says the WA rail grain network is in the best condition of any grain network in Australia.

The company also says an Australasian Railways Association (ARA) claim, that 68 per cent of Australia's grain export crop was at risk if urgent investment in regional rail lines was not made, was mainly aimed at Eastern Australia.

ARG also pointed to the WA Government's $126 million program to strengthen the grain rail network before privatisation in 2000, with more money spent by ARG since then.

However an ARG spokesman said the sustainability of the WA rail grain network was a longer-term consideration.

"Under current circumstances, rates and volumes are such the network may face sustainability issues if solutions cannot be found," he said.

The spokesman said ARG, Cooperative Bulk Handling (CBH), AWB Ltd and the WA Government had been trying to explore possible long-term solutions.

"ARG wants the grain business on rail, and is working to attract more, not less," he said.

ARG supports a Committee for the Economic Development of Australia (CEDA) report released two weeks ago which called for governments, federal and state, to accept responsibility for repairing the country's ailing infrastructure.

Meanwhile, in response to other claims that the WA rail network relied on road transport in big harvests, ARG said the network was ready to handle a larger harvest than last year's record 14.7mt.

The spokesman said the WA grain rail network carried 8.7mt of the record 14.7mt record harvest for 2003-04, with every indication up to 10mt could be efficiently handled on the existing network.

He also said WA's core mainlines were in excellent condition, and concerns about derailments on January 30 at Booran and Koolyanobbing were misplaced.

He said while investigations over the derailments were continuing, the areas of track involved were in excellent physical condition.

CBH attributed the grain rail network problems to government privatisation of the industry in areas such as rail, the public listing of AWB, and creation of the Grain Licencing Authority (GLA).

CBH logisitics strategy manager Rob Voysey said this had allowed other industry players, who had little commitment to the rail system, to come into the market.

He said that since then there had been a significant increase in commercial pressure on the grain rail network.

"Westnet is unable to justify the huge ongoing investment required to sustain the network on commercial grounds," he said.

"The resultant lack of investment will see a steady deterioration of the network as we know it today, and more grain moving by road."

He said the industry had to work together to address the fundamental problems hindering the rail system, to ensure it was sustainable and capable of handling increased demand in future.

Hyden farmer and former WAFarmers president Colin Nicholl said he had not noticed any rail freight rebates flowing back from the rail system since the rail network was privatised.

He said farmers were charged a set amount, with a margin up front for freight on grain, because the exact amount transported was not known until the entire crop was in.

Mr Nicholl said there was usually some rebate paid out a year or so later after the grain was transported.

"It is a long time since we have had a rebate back," he said.

Mr Nicholl said while ARG might not say it was closing branch lines, it would simply not use them.

He said grain was being transported by road alongside narrow gauge railway lines from Konnongorring to Geraldton, and from Nungarin to Merredin, which put pressure on roads.

"One wonders how we are going to handle a 20mt crop," he said.

Mr Nicholl said there was also a requirement for ARG to negotiate third party access to the rail network, and for a mediator to be put in place to allow that to happen.

He said while it would be commercially impossible to open up narrow gauge lines to competition, it could help reduce freight costs on main lines.

"The government needs to put pressure on third party access to offer genuine competition," he said.

Mr Nicholl said grower groups had little input to the rail grain network issues since Planning and Infrastructure minister Alannah MacTiernan took them off the grain logistics committee.

Meanwhile, the NSW Government has announced it will close three rail branch lines, and ARA chief executive officer Bryan Nye said train speeds were down to 30km on South Australia's Eyre Peninsula lines, operated by ARG.

ARG, comprising Wesfarmers and Genesee & Wyoming Inc (GWI), was the successful bidder for the WA Government's Westrail freight business in 2000.

The joint venture paid $585m to buy the business, which included rolling stock, customer contracts, and a 49-year lease on the rail network.

Meanwhile the CEDA report says there is $25b worth of infrastructure investment needing immediate attention nationally, in areas such as water, energy and land transport.



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