Monday, February 15, 2010

Australian Review Of Rail And Truck Freight Under Discussion

Local Producers to Discuss Plans with Government Representatives
Shipping News Feature

AUSTRALIA - Grain prices at the point of delivery, along with all bulk products, are constantly under pressure from the price in the market for other global commodity producers. When the Baltic Dry Index is low then competition in key markets is much keener. Major producers such as Canada and Europe find it easier to sell produce at competitive rates when the shipping price is depressed and factors such as the cost of domestic haulage can have a crucial effect on Australian export prices. Now the Freight and Logistics Council of Western Australia have worked for six months to prepare a review of transport facilities in the region.

Following the publication of the Strategic Grain Network Report last month, Simon O’Brien, the Western Australia Transport Minister, has agreed to go ‘on the road’ to discuss the implications of the immensely comprehensive eighty seven page study which raises key points about the future of rail freight throughout the region. After publication the Government has agreed to invest A$30 million in improvements to the rail system.

The report points out the necessity to bias competition in favour of rail against trucks and the Minister intends to discuss long term development intentions with local producers as well as the short term plans outlined. Trucks in certain regions may only be permitted on certain routes in future and this is a concern for the many remote areas with insufficient or degraded rail access.

In some ways the freight rail system under review demonstrates the problems which can arise under Public Private Partnerships. The majority of the network used by grain trains is operated by WestNet Rail (WNR) under long term lease from the WA Government through the Public Transport Authority (PTA). Infrastructure company WNR emerged as lessee of below-rail assets when the original purchaser of the Westrail system sold below- and above-rail segments of the business to Babcock & Brown Infrastructure Pty Ltd. WNR is obliged to provide above-rail access to the network under the terms of WA’s Rail Access Regime administered by the Economic Regulation Authority (ERA). Under the lease agreement, WNR may return to government control any line sections that are demonstrably non-commercial.

The review points out the necessity to relay track sleepers on a regular (10 to 15 year) basis to prevent degradation of the system. The regional meetings planned will enable producers to discuss the future of the entire bulk product distribution system with the authors of the report.