O'Brien reconvenes grain rail committee

First on the SGNC's agenda will be discussions about the case for the Tier 3 network to attract further government investment.

It will also discuss industry support for the Transitional Assistance Package; recognition of investment required in the road network following cessation of operations on Tier 3 lines; and the proposed commercial arrangements at the CBH Brookton delivery site, including "related investment decisions".

Merredin farmer Ian Lane has voiced repeated concerns about threats to the grain rail system's viability and the potential dangers of closing rail lines before any road investment plans are sorted out.

Mr Lane said he was pleased the SGNC was reconvening and taking a closer look at the different scenarios.

He said the decision to reconvene was made after the WA Local Government Authority recently completed a study of the SGNC report's findings and discovered that its analysis and figures on road investment costs, associated with any rail closures, were understated by 50 per cent to 60pc.

Mr Lane said he hoped the SGNC would now take more time to investigate all of the associated issues more thoroughly.

"It is a simple question. Do you spend $100 million on roads that last 15 to 20 years before you have to start again or do you put the money into rail which lasts 40 years?" he said.

"Hopefully they will give it the full time and processes required and not make an ad-hoc decision."

Mr O'Brien's office issued a statement saying the SGNC was meeting in order to "reaffirm its commitment to the report's findings and process that has previously been agreed upon".

WestNet Rail general manager Paul Larsen said he understood the SGNC had been reconvened to take a closer look at the business case for Tier 3 lines and the suitability of spending and investment on roads associated with any subsequent closures.

Tier 3 lines were earmarked for closure in the original SGNC report due to being seen as uncompetitive against road transport costs, while carrying low volumes of grain.

As a result the tracks were considered unsuitable for re-investment using government funds.

But in contrast Tier 1 lines provided a strong economic case for reinvestment which could be sustained in the longer-term.

Tier 2 lines were seen as being competitive against road, based on current transport costs.

Another issue that may need urgent discussion by the SGNC is the $135m Federal Government funding allocation that remains untapped to date.

The Federal Government money was set aside to be matched with State funding for repairs to the rail system.

But delays in finalising the State allocations means that money may now be under threat.

The SGNC reviewed the short, medium and long-term priorities for the WA grain transportation network.

After several months of analysis, discussion and financial modelling, a final report was handed to Mr O'Brien in December 2009.

The findings suggested WA's grain transportation network required significant upgrades to large sections of rail and road in order to make the system more viable and efficient.

The unprofitable rail lines earmarked for closure included several segments in the Kwinana South Zone.

The report estimated about $90m could have been spent on repairs to those lines to make them more productive and efficient but there was no guarantee the rail would get used for grain transportation, if the Government spent money on the necessary repairs.

One of the report's recommendations is to spend $90m on road improvements.

Another $130m was earmarked for improving the Chester Pass Road to ensure it becomes a safe and key avenue for grain transportation to the Albany Port for growers in the Great Southern region.

Former Transport Minister Eric Charlton said for the entire process to work properly, CBH needed to reveal individual grain transportation costs and charges to growers, on a break-down for each individual CBH grain delivery site, so they had all the facts required to make an informed decision when choosing between road or rail transportation.

Mr Charlton said CBH needed to provide a full statement of the various cost options to growers and reveal its full plan.

He also said any redirection of rail investment needed to be accompanied by an assessment of the costs for any roads that needed upgrading, to assess what upgrades were needed, such as the cost of widening roads that may be required to cater for more road train movements.

Following release of the SGNC report in January, State Cabinet committed to fund a 50pc share of the $43.5m required to complete the re-sleepering of the Avon to Albany rail line.

In addition, $500,000 was allocated to start project development and pre-construction activities on the proposed Chester Pass Road upgrade.

State Cabinet also approved the $6.9m Transition Assistance Package for the 2010 harvest to keep grain running on what, at present, are uneconomic lines.

"The State Government has seen the need to keep grain on rail on a number of uneconomic lines for a period of time until infrastructure investment in roads and upgraded grain receiving points on the rail network takes place," Mr O'Brien said at the time.

Mr O'Brien said the State Government recognised that some non-economic rail lines would ultimately need to be put into care and maintenance if the industry opted not to use rail as the preferred mode of grain transport.

"While the Government is committed to keeping grain on rail, the real onus is on farmers and bulk handlers, who currently opt to use road transport, to put their money where their mouth is and put their grain back on rail," he said.