“SWITCHPOINT”

1. “SWITCHPOINT” Template for rail to revive and thrive Hon Tim Fischer AC

2. SWITCHPOINT • Nerves of steel required • Worldwide massive swingback to rail • Double stack freight dominating USA • Passenger London Paris – about 2 hours • Australia East West Interstate rail freight • Adelaide Darwin 90% freight goes by rail - I declare Director APT Freightlink, Chair RFNR

3. SWITCHPOINT • Rail is Greenhouse friendly • Rail Branding – Greenhouse Great! • Steel wheel 1 / 7 th friction rubber tyre wheel • Need both good rail and good road operation • Need now from Governments: • Balance in rail road policies • Investment with priorities • Grain and General Freight Mega Hubbing

4. SWITCHPOINT • Victoria: Four operational gauges !!!! • RFNR appointed June 2007 to investigate • Unanimous Report Dec 2007 with 29 Recs • Key Access Charges and Network Priorities

5. SWITCHPOINT • Platinum • Gold • Silver • Bronze

7. Switchpoint • Take the Riverina: “The Good the Bad and and the Ugly” • Bethungra Spiral: No bi-directional running • Wodonga saga • Branchline deterioration

8. SWITCHPOINT Versus: • Upgraded Mainline and Regional Lines • Final elimination of 19th Century Signalling • New rail bridge Wagga Wagga • New Rail Bridges Lockhart and Boree Creek

9. SwitchpointNew rail bridge at Boree Creek NSW

10. Getting Started – the inheritance … • Significant maintenance neglect – last 15 years • Private Track Lease Operator – 99 to 06 • A dispersed rail freight network created over 120 years

11. Getting Started – the inheritance … • Private lease buy back by Vic Govt – May 2007 • RFNR – established June 07 • Govt Policy – Target 30% freight railed to port Vs 15% actual…but its heading south!!

12. The Team……a balance of skills… • Chair – Tim Fischer AC – ABC Train Show Host ++ . • Rail & Transport Mgt– Bruce McGowan (BHP Transport; Freightlink) • Career Economist - Journeyman – Peter Wilson • Skills in Rural Development & Infrastructure • Kerry Murphy (ex CEO RDV, now CFA Chair) • John McQuilton (Rural MLC ret’d; “97 out of 100” Red Winemaker) • Rob Spence (CEO, MAV)

13. The Approach…….getting started • Stakeholder Group – V/Line; AWB Grainflow; Graincorp; ABB/ABA; VFLC;VFF; Alliance of Councils – RFD; PN – Asciano • Call for Public Submissions – 103 rec’dof all varieties • Strong Secretariat Assistance

14. The Approach…….getting started • Stakeholder Group – V/Line; AWB Grainflow; Graincorp; ABB/ABA; VFLC;VFF; Alliance of Councils – RFD; PN – Asciano • Call for Public Submissions – 103 rec’dof all varieties • “Getting out there” • Visits to all Major Tracks / Hubs • Local Hearings in 13 Centres / Regions • City Hearings – in plenary, and ‘six on one’

15. The Approach…….getting started • And ….a Robust Applied Economic Model (of course) – per SdD (the Strategic Design and Development Group).

16. An Early Perspective…..is this all too hard!? • And more…. • B – Doubles……winning the political and economic battle • Greenhouse Impacts of Rail & Road……totally unpriced!! • “Don’t You Dare Close my Rail line!” • Sub Economic Pricing – what subsidy, if any, makes sense?

17. Moving Forward…..the emerging fundamentals • Broad community and business support for Rail – all city burghers and citizens want the ‘B-Doubles out of Main Street & off the Main Roads’ • Greenhouse impact of Rail – its one third cost of road (city); one seventh of road (country) • Economic evidence strongly favours Rail for long hauls to Port • Economic Hubbing favours Rail revival • Evidence that Access Pricing wasn’t either market relevant or policy consistent

18. A Case for Government Intervention • Road subsidies heavily weighted against a rail revival; • Rail network re-entry barriers are high; • Competition in ‘Above Rail’ operations is low but emerging • Emerging demands for new product on rail – mineral sands; woodchips; logs; paper and packaging products; fuels.

19. Recommendations – Rail Network – “Use it or Lose it” • Evidence and Economic Modelling – • produced a consistent 4 Colour Heat Map for ‘Nerves of Steel Winners’ • Risk, Demand, Community Value and Probabilities determined the colour ranking

20. Recommendations – Rail Network – “Use it or Lose it” • ………the colour ranking… • Platinum – ARTC I/S; V/Line; Auslink • Gold – priority 1 for rehab to Class 4 or 5 (>50-60kmh) • Silver – priority 2 for rehab sub. to private commitment ‘above rail’ • Bronze – basic maintenance / Canadian model – local mgt.

22. Recommendations - Access pricing • 2007 Rail Access prices had just gone up 250% - based on ESC logic to recover 40% of full costs. • The problem - Rail Freight is not a regional monopoly like Water • It is an intensely competitive market……small variations in cents per tkm, will lead to instant shifts in demand amongst alternative transport media. • Results were counter to 30% rail freight policy objective, compounded by maintenance of all existing road subsidies

23. Recommendations – Supply Chain – “Cycle Times” • Cycle times have deteriorated in Vic, because of a loss of focus on total supply chain – eg connections to Port of Melbourne • RFNR recommend maximum hubbing and making the hard calls to get connections to port working efficiently

24. Recommendations – Supply Chain – “Cycle Times” • RFNR recommend maximum hubbing and making the hard calls to get connections to port working efficiently…….by….. • Grain Logistics TaskForce • Accelerating growth of Regional & Outer Metro Hubs • Intermodal Hubbing – optimising mix of road and rail • Set up RF Development Fund to make the catalytic investments to better connect supply chain and improve the cycling

25. Recommendations – Standardisation • RFNR concludes Rail Standardisation is not a panacea….. • ….but Selective Standardisation is a big “Yes” • In Nth West Vic (re mineral sands) • Albury to Wodonga via lease to ARTC • Geelong – around Gheringhap and Nth Geelong

26. Recommendations – Other Infrastructure • Portland – improve Maroona line and PoP terminal receivals • Melbourne Dynon Link and better access to Port of Melb needed • Better planning between passenger and rail freight post Eddington Inquiry

27. Recommendations – Other Infrastructure • The Great Swap – Vic & SA • Swap Pinnaroo - Tiego to SA • Swap Penola - Rennick to Vic • Reason – comparative economic costs and benefits don’t support public mgt acc to State Boundaries

28. Recommendations – Rail Services and Practices • To a World of Best / Better Practices for Rail (Freight) • Simplify driver accreditation and safety training • Remove unnecessary regulation re accred’n; insurance • Provide “One Stop Shop” for Above Rail Access By private operators • Improve Track operation procedures eg better crew flexibility

29. Recommendations – The Green Impact • All Road and Rail projects to include capture of externalities; • Any national carbon trading scheme include capture and pricing of road and rail impacts.

30. 29 Recommendations – & unanimously so… • A small but positive start to implementing the RFNR report, based on the principles of • public – private co-operation, and • mutual obligation and benefit sharing. • Hopefully more implementation of RFNR soon………………….

31. Switchpoint Remember key Auslink Quotes: • There will be an integrated corridor approach to planning. • The new (Auslink) approach focuses on meeting future passenger and freight needs in the best way, irrespective of the transport mode. • Wall to wall Labor Governments: Anything if not everything re transport is possible!

32. SWITCHPOINT: “We went very close to losing large chunks of our interstate and intrastate rail network in the last quarter of the 20 th Century but now there is some rail revamp and revival. Rail properly operated, especially through mega hubbing with efficient elements of road, is the way of the future.

33. Switchpoint Remember……. RAIL: Greatly reliable & Greenhouse Great! -Tim Fischer