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TRANSPORT COLLOQUIUM 05 Infrastructure for the Rail Freight Industry Bryan Nye Chief Executive Officer

TRANSPORT COLLOQUIUM 05 Infrastructure for the Rail Freight Industry Bryan Nye Chief Executive Officer. Today’s Challenge Look into the Future. Freight operations. Industry structure Vertical separation on inter-capital city network and NSW

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TRANSPORT COLLOQUIUM 05 Infrastructure for the Rail Freight Industry Bryan Nye Chief Executive Officer

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  1. TRANSPORT COLLOQUIUM 05 Infrastructure for the Rail Freight Industry Bryan Nye Chief Executive Officer

  2. Today’s Challenge • Look into the Future

  3. Freight operations Industry structure • Vertical separation on inter-capital city network and NSW • Integrated networks in Qld, Vic, SA, WA, Tas - most with access arrangements in place • Heavy haul sector all integrated, some with access arrangements

  4. Freight operators Hire and Reward • Queensland Rail (QR) • Pacific National (PN) includes Tasrail • Australian Railroad Group (ARG) • Specialised Container Services • CRT Group • FreightLink • Interail Australia • Austrac Rail • Silverton Rail • Southern Shorthaul Railroad

  5. Freight operators Ancillary • BHP Billiton Iron Ore • Manildra Group • Pilbara Rail Company • Comalco • Sugar cane railways

  6. Passenger Operators • Rail Corp (NSW) • Connex (Vic franchise) • Yarra Trams (Vic franchise) • TransAdelaide • WA Public Transport Authority • QR

  7. Heritage and Tourist sector Approx 200 Operators, less than 10 major operators • Great Southern railway • 3801 Ltd • South Spur Rail • Pichi Richi • Puffing Billy railway • ARHS • Lachlan Valley Railway

  8. Track ownership

  9. Freight Movement Today • Bulk Freight - All iron ore, 80% local Coal, 70% Grain - 20% Australia’s exports worth $15 Billion • East/West Freight 70+% - Investment in infrastructure - Single access manager - Double stacking West Adelaide/Parkes - No passenger interface problems • North/South Route <20% - Lack of investment in track - Multiple track access managers - Sydney curfews - Complex safety environments

  10. Transport Challenge • Volume & movement of freight will double over next 10 years • Congestion cost 13BN in 1995, 30BN by 2015 • Current road & rail inadequate

  11. Benefits • Safest form of land transport • Environment • 9 times more energy efficient • one train, two drivers = 150 trucks & 45,000 litres of fuel • Efficient rail is a cheaper mode of freight transport than road on all inter capital corridors

  12. 20 Syd - Bris 48 68 Melb - Syd 15 50 64 Melb - Bris 25 48 73 23 Melb - Adel 42 64 31 Adel - Perth 32 63 Melb - Perth 27 33 60 Syd - Perth 33 25 58 Total Cost Comparison Variable Operating cost* Below Fixed operating cost* $ per '000 NTK's, at 2014 Capital recovery cost Variable operating cost Fixed operating cost Above Pick Up and Delivery (rail) Capital recovery cost Externalities Cost benefit of Rail Road Rail Average = 20 * assumes 50% reduction in RIC's cost base and impact of volume growth on rail fixed cost base Source: PJPL Analysis

  13. Investment Challenges • Ongoing microeconomic reform • National plan development • Industry reform

  14. Microeconomic Reform • The next big Agenda • National Regulatory framework • Access Pricing-certainty • Heavy Vehicle/Rail Pricing

  15. National Plan Development • Auslink and Political agenda • Focus on regional freight • Long term plan for terminals • Urban planning • ARTC challenge

  16. Industry Reform • Align above & below rail investment • Improve insurance arrangements • Efficiency improvements • Maturity – “Grow the Pie” • Establish a framework for assessing and allocating incident costs • Future structure of Industry

  17. Technology and People • Communication • Train control systems • Age, profile, skill levels • Image • Rail Skills & Career Council

  18. Outcome • Industry - return on investment - increase freight/passenger numbers - Improve price, time, reliability and service availability - continuous improvement to infrastructure - better investment environment • Government - employment - regional and rural impacts - reduction in road investment costs - social benefits - an improved economy

  19. Next Opportunity The Eastern Freight Corridor

  20. To Brisbane North Star Casino Weemelah Camurra Moree Merrywinebone Grafton Walgett Burren Jnct Cryon Dumaresq Wee Waa Narrabri Gwabegar Narrabri West Armidale Coonamble Gunnedah Nyngan Kempsey Tamworth Warren Cobar Binnaway Werris Creek Broken Hill To Adelaide and Perth Nevertire Merrygoen Taree Menindee Ulan Tottenham Dubbo Muswellbrook Narromine Ivanhoe Gulgong Singleton Condobolin Parkes Kandos Maitland Newcastle Burcher Blayney Orange Naradhan Hillston Lithgow West Wyalong Bathurst Cowra Griffith Koorawatha Sydney Yanco Young Moss Vale Temora Willbriggie Harden Cootamundra Narrandera Port Kembla Junee Goulburn Eastern Corridor Canberra Wagga Wagga Boree Creek The Rock Queanbeyan ARTC Lease Culcairn Possible extension to lease Bomaderry/ Nowra Albury Intrastate lines (ARTC to manage as agent for NSW Government) To Melbourne

  21. Rail has less then 20% share on the eastern corridor, Melbourne to Brisbane and declining share on the shorter Melbourne – Sydney and Sydney – Brisbane routes Sydney is a corridor bottleneck Range of track and operating constraints, single track, train length limitations, no double stacking, terminals, access pricing The eastern corridor is the highest volume freight corridor A new eastern route would carry Melbourne – Brisbane freight freeing the coastal route for the Melbourne- Sydney and Sydney-Brisbane freight Eastern Freight Corridor - Why

  22. Amajor new microeconomic reform to improve the efficiency of the Australian economy A boost to Australian GDP of $12 billion 2,400 jobs per year in rural and regional Australia over five years during construction 2,400 permanent new jobs A 50 percent reduction in the number of heavy vehicles on our interstate highways A reduction in greenhouse gas emissions and a saving in road accident costs A reduction in road construction and maintenance costs An 80% rail market share of the Melb-Brisbane freight corridor A 50% rail share of the shorter Sydney-Melb and Melb-Sydney corridors Eastern Freight Corridor - Benefits

  23. A new $2.5 billion Melbourne to Brisbane corridor will deliver transit times of 22 hours (35 currently) and unprecedented rail reliability Train speeds of up to 110 km/h 2 km trains and double-stacking of containers Major capital works in regional NSW, Victoria and Queensland This investment, together with already announced Government commitments, will give rail the following market shares: - Melbourne - Brisbane 80% (currently 21%) - Sydney - Melbourne 50% (currently 10%) - Sydney - Brisbane 50% (currently 10%) Achievables

  24. The Business Case is hampered by the costs associated with construction through the Toowoomba and Little Liverpool ranges The preferred route is through the ranges for a number of environmental, cultural and engineering reasons The costs of construction through the Toowoomba and Little Liverpool ranges is in the order of $850m Eastern Freight Corridor – the Business Case

  25. One option is a joint venture between Government and the private sector AusLink private/public partnership Eastern Freight Corridor – Investment Structure

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