Improving efficiencies in the rail freight network

MAKE RAIL THE MODE OF CHOICE IN THE NATIONAL LOGISTICS CHAIN

AusIntermodal 2012

Improving Efficiencies in the Rail Freight Network

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Simon Ormsby

Executive GM Strategy & Growth October 2012


• ARTC established in 1998 to coordinate the national rail network

• Corporations Law Company with 100% of shares owned by the Australian Government

• Owns or leases over 8,500 route km of track on an open access basis

• Projected $700 million operating revenue in 2012-13

• Investment program of $5.5 billion since 2005

• Does not receive recurrent funding from Government

• Has received equity and grant funding for specified works programs

• Regulated by the ACCC through voluntary access undertakings

Ensures fairness and transparency

ARTC Background

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ARTC Background

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1. Establishing a National Network

2. Delivering Network Productivity

3. Future Developments

Items to Cover

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Interstate Network access arrangement in 1998

Establishing a National Network

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Melbourne

Sydney

Adelaide

Perth

Brisbane

–


South Australia and Western Australia

• 1998 - Interstate track in South Australia and to Kalgoorlie

• 2000 - Wholesale agreement covering Kalgoorlie-Perth interstate network

• 2008 - Dedicated freight connection from Interstate network to Outer Harbour (Adelaide)

Victoria

• 1999 – 15 year lease of the interstate standard gauge network in Victoria

• 2000 - Dedicated dual gauge connection from Interstate network to Port of Melbourne

• 2008 – 45 year extension of Victorian lease

• 2008 – Lease extended to include 2nd track Seymour to Albury and connection from Interstate network to Portland




New South Wales and Queensland

• 2004 – 60 year lease of the NSW interstate and Hunter Valley networks

• 2009 – 60 year lease from NSW/Qld border to Brisbane (Acacia Ridge)

• 2010 – NSW Lease extended to include Port Botany rail facilities

• 2011 – NSW Lease extended to include network from Werris Creek to Narrabri / North Star

• 2011 – Australian Government announcement of initial preparatory works for Melbourne to Brisbane Inland Route

• 2012 – Lease extended to include dedicated freight corridors in Sydney from Enfield to Port Botany

• 2013 – Projected completion of Southern Sydney Freight Line to provide dedicated freight corridor from Campbelltown to Enfield

• 2013 – Projected completion of Wholesale arrangements for future freight traffic between Enfield and Newcastle


Interstate Network access arrangement from 2013

Note : ARTC management including SSFL, Perth to Kalgoorlie wholesale agreement and North Sydney future freight access agreement from 2015 (in development)


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Melbourne

Sydney

Adelaide

Perth

Brisbane

–


Delivering Network Productivity

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General freight and passenger network that is critical to a number of economically significant supply chains

• Intercapital domestic freight

• Bulk export chains – grain and minerals

• Domestic steel industry

• Short-haul import – export markets

• NSW and Interstate passenger tourist market

A healthy, competitive rail freight sector with key players emerging

• Asciano (Pacific National Rail) – listed in 2008, ASX top 50 company

• Freightliner – UK based commenced Australian operation in 2009

• Genesee and Wyoming Australia – Parent NYSE listed

• QR National – listed in 2010, ASX top 50 company

• Qube – listed in 2007, ASX top 200 company

• SCT – first private operator – large national transport and logistics provider


A co-operative approach to a national network has achieved;

• Performance based approach to operating the national rail network

• Consistent Access Regulation

• A national Rail Safety Regulator

• A common operating framework


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This reform is supported by investment in technology;

• Upgraded locomotive fleet and fuel minimisation technology

• National Train Communication System

• Wayside technologies to prevent incidents and support maintenance

• Advanced Train Management System proof of concept


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Interstate network challenge

• Providing a service offering competitive with road

• Enabling capacity for growth for all markets

• Developing a better quality asset

Since 2005 investment program of $4b


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ARTC Network

Brisbane

Melbourne

Sydney

Adelaide

Perth

(With rail share of the land transport market)

81%

11%

19%

(M-S)

(S-B)

(E-W)



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Providing a competitive service offering

A stepped improvement in performance to support increased modal share North –South and maintain rail’s competitive position East – West by offering;

• Transit times that better meet logistics market needs

• Ability for the rail network to deliver reliably

• Reduced rail network operating costs

Key Investments

• Southern Sydney Freight Line – provides south Sydney freight and passenger separation

• Curve and alignment improvements between Newcastle and Brisbane – provides reduced transit

• Double track and additional loops – allow timetable flexibility and 1500m / 1800m services

• Replacement of aged control systems in Qld and Southern NSW – reduces train delays

• Increasing clearance outlines – allows double stacking from Parkes to Perth



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Enabling capacity for growth

Ensure the network can provide capacity for all markets it serves including forward growth;

• Additional capacity to allow for market and modal shift inter capital growth

• Planning for future freight capacity in the North of Sydney

• Investment in Sydney metro to alleviate congestion on the road network

• Support growth in regional traffic between Sydney and Melbourne

• Accommodate minerals opportunities in South Australia and Western Australia

Key Investments

• Additional track infrastructure - enabling 6 daily services Melbourne to Brisbane – current 2.5

• Melbourne – Sydney double track and passing lanes – provides for regional growth

• Reconfiguration of Melbourne metro – alleviates congestion at EW and NS junction

• Sydney metro upgrade – provides for capacity over 1m TEU on rail to Port Botany

• North Sydney works - from 2015 will enable 14 additional daily paths for freight



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Developing a quality, sustainable asset

Modern asset characterised by;

• Improved speed – axle load combination to national standard and beyond

• Reduced maintenance intervention

• Less impact on freight and rollingstock

Key Investments

• Concrete re-sleepering – over 2m new sleepers – 99%+ of the network is concrete

• Rail upgrade – over 1,200km of new heavier rail installed across the network

• Bridge refurbishment – to reduce speed restrictions and support heavier axle loads

• Signalling system upgrades with new infrastructure

• Ballast Rehabilitation Program - $135m to improve Sydney – Melbourne track structure


Future Developments

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The next steps in policy reform

• National Land Freight Strategy

• Transport Infrastructure Pricing reform

• Commercialisation of all freight infrastructure routes

• Capture of externality costs across all modes

• Heavy Vehicle Charging and Investment Reform (HVCI)


Future Developments

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The next stage of productivity

An alternate North – South corridor;

• Shorter route and better transit

• 1800m and double stacked trains

Supported by enabling works;

• Improved connections in Qld

• Improved clearances Sydney to Melbourne

• Greater Sydney to Melbourne track capacity


Future Developments

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Development of intermodal freight precincts

Essential characteristics

• Road and rail connections

• Located in freight generating areas

• Adequate size to enable co-location

• Service domestic and port traffic

• Open access multi-user facilities


Future Developments

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Efficient use of the infrastructure East to West;

• Asset and infrastructure to support longer, heavier trains

• New control systems to boost capacity and performance


The interstate rail system has been established as a vital national logistics link

A substantial investment will continue to deliver efficiencies into the future

Development of the next stage of productive investments needs to commence now

Summary

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Improving efficiencies in the rail freight network

Business

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