LEADERS of the Wheatbelt Railway Retention Alliance (WRRA) have called on the State government to consider options which might allow closed Tier Three grain lines to be returned to service.
The lobby group, formed in 2010 to unite local government, farmers and others in the fight to keep regional rail lines open, effectively went into recess while the extended arbitration between CBH Group and WA's freight rail network operator Arc Infrastructure was underway.
But with CBH and Arc reaching agreement on November 1 on running grain trains on currently-used lines until 2026, WRRA members have re-entered the political battle over the future of Tier Three grain lines that Arc withdrew from service in 2013-14.
WRRA founder and co-ordinator Jane Fuchsbichler, Belka, last week called on the government to "look at options to take back control of the closed rail lines, which are vital State-owned infrastructure and which Arc has clearly shown it does not wish to operate".
Former WRRA chairman and Quairading grain farmer Greg Richards endorsed Ms Fuchsbichler's call and said now the CBH-Arc agreement was out of the way, business cases including prospective freight rates should be prepared on reopening the York-Quairading and other Tier Three lines, so farmers and other potential users could assess for themselves whether they would be viable.
The Department of Transport, Main Roads Western Australia, Public Transport Authority (PTA) and Department of Primary Industries and Regional Development are collaborating on a Agricultural Region Freight Strategy which is expected to be considered by parliament and released early in the new year.
The strategy proposes six key objectives to improve efficiency and encourage regional economic growth through "seamless" integration of "optimised" infrastructure for grain, livestock, agricultural lime, fertiliser and hay supply chains.
But the strategy, which will cover the Mid West, Wheatbelt, Great Southern and Goldfields-Esperance regions and is expected to guide future State government spending on road and rail grain freight routes, does not take Tier Three lines into consideration.
When the strategy, which the government claims will identify "core issues relating to the movement of agricultural freight over the next 10-15 years and a list of infrastructure and non-infrastructure priorities to support improved efficiency of the State's agriculture supply chains", was launched last year, negotiations between CBH and Arc were still being conducted in secret before administrator Kevin Lindgren.
Pre-amble to a draft of the strategy, released for public comment in July, stated: "Re-opening Tier Three rail lines is not a part of this strategy, but may be reviewed in future following the conclusion of the rail access negotiations between Arc Infrastructure and CBH".
The draft acknowledged upgrading and maintaining local roads to an acceptable standard was a "challenge" for rural councils because of their limited rate base and was "compounded by an increase in road freight following the cessation of rail services on economically unviable (Tier Three) rail lines".
It also acknowledged Australia's grain rail infrastructure quality ranked poorly when compared to major grain export competitors around the world, with only Argentina having more inefficient rail infrastructure for grain, but its government had forecast a major works program to rectify that.
Farm Weekly understands the State government has privately asked CBH if it would be interested in using Tier Three lines if the government contributed to the cost of bringing them back to an operational standard.
But the government has interpreted CBH's response as it was not interested, Farm Weekly understands.
But publically, at last week's announcement of the agreement with Arc and again at a meeting with grain growers at Bruce Rock on Thursday, CBH chief executive officer Jimmy Wilson confirmed there "could be a set of circumstances whereby we see those lines come back".
Mr Wilson indicated that set of circumstances would probably require Tier Three lines to be "gifted" to CBH so it had control over them for an unlimited period of time.
He also confirmed CBH was talking to State Treasury about rail issues and possibly about Tier Three lines - separate to the Agricultural Region Freight Strategy, Treasury is conducting its own review of the State's freight rail access regime.
As previously reported in Farm Weekly, in a submission to Treasury in March a group of six eastern Wheatbelt farmers argued Arc should surrender the Tier Three lines to the government so they could be offered to CBH and other potential users.
The problem for the government is that Arc has a lease of the freight network, including Tier Three lines whether they are used or not, until 2049 and any ability for the government to take lines back or force Arc to bring them back into service was removed from the lease agreement in 2010.
Sources under the previous government have said for the first 10 years of the freight rail network lease agreement there were clauses, referred to as 'get out' clauses, that could have enabled the government to dissolve all or parts of the lease agreement under certain circumstances.
But in 2010, the same year that Arc - then known as Brookfield Rail - took full control of the freight network, discussions with the Public Transport Authority over proposed amendments to the lease saw the 'get out' clauses dropped in favour of other changes.
Current government sources have described the current lease as a "terrible deal" leaving no "wriggle room" for the government on the future of Tier Three lines, even though the State retains ownership of the rail line easements.
Farm Weekly understands the possibility of the government forcing change by enacting legislation to enable the Tier Three lines to be reopened has been discussed at least at departmental level.
But there are concerns any legislated moves to strip Arc of the lines or force Arc to bring them back into service could expose the government to a substantial sovereign risk compensation claim.
Transport and Planning Minister Rita Saffioti last week pointed out the arbitrated agreement between CBH and Arc had potential to lead to greater grain volumes on rail and more investment in existing lines, but blamed the previous government for the Tier Three predicament.
"I note the news report that the high capital costs handed down in arbitration has led CBH to decide that opening the Tier Three lines would be uneconomical," Ms Saffioti said.
"While this is disappointing, the privatisation of WA's rail network and the lease entered into by the previous Liberal-National government excludes the State as a party to the agreement.
"It is exactly the sort of outcome the Liberal-National government was warned about before privatising WA's rail network," she said.
Ms Saffioti said the government was investing a record amount on regional roads.
"Together with the Commonwealth, we currently have a program of works worth $87.5 million to upgrade Wheatbelt secondary freight routes, as well as increased expenditure on regional road maintenance across WA.
"Looking to the future, our final Agricultural Region Freight Strategy is set to be released in early 2020 and will guide investment towards these key routes.
"Projects identified in the final strategy will be considered as part of the next budget process," she said.
Complexity of the State's Tier Three and rail freight issues generally could increase further next year with potential further changes to the grain-on-rail landscape.
The Economic Regulation Authority (ERA) is due to conduct a fourth statutory review of the State's freight rail access regime under the Railway (Access) Code 2000 next year.
ERA recommendations from the 2010 and 2015 statutory reviews were not acted upon by the previous government and became a catalyst for the current review by Treasury.
Also, CBH's contract with its train operator Watco expires in December next year - CBH own its own locomotives and grain cars but the trains are crewed by Watco drivers - and it has not yet made its intentions clear on whether it will seek to renew that contract.