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  • Rail freight use by the agriculture and livestock

    industries

    Report No. 45Transport, Housing and Local Government CommitteeJune 2014

    Parliamentary

  • Rail freight use by the agriculture and livestock industries

    Report No. 45 Transport, Housing and Local Government Committee June 2014

  • Transport, Housing and Local Government Committee

    Chair Mr Howard Hobbs MP, Member for Warrego

    Deputy Chair Mrs Desley Scott MP, Member for Woodridge

    Members Mr John Grant MP, Member for Springwood

    Mr Darren Grimwade MP, Member for Morayfield

    Mr Carl Judge MP, Member for Yeerongpilly

    Mr Anthony Shorten MP, Member for Algester

    Mr Jason Woodforth MP, Member for Nudgee

    Committee Staff Ms Kate McGuckin, Research Director

    Ms Danielle Cooper, Principal Research Officer

    Ms Rachelle Stacey, Principal Research Officer

    Ms Lisa Van Der Kley, Executive Assistant (part-time)

    Ms Louise Johnson, Executive Assistant (part-time)

    Contact details Transport, Housing and Local Government Committee Parliament House George Street Brisbane Qld 4000

    Telephone +61 7 3406 7486

    Email thlgc@parliament.qld.gov.au

    Web www.parliament.qld.gov.au/thlgc

    Acknowledgements

    The Committee thanks those who briefed the Committee, made submissions, gave evidence and participated in its Inquiry.

  • Transport, Housing and Local Government Committee iii

    Contents

    Abbreviations vii

    Glossary ix

    Chairs foreword xi

    Recommendations xii

    1 Introduction 1 1.1 Role of the Committee 1 1.2 Terms of reference 1 1.3 Conduct of the Inquiry 2 1.4 Broad strategic framework 3

    2 Overview of the issues and proposed solutions 4 2.1 The benefits of rail to the community at large 4 2.2 Projected growth in agriculture 4 2.3 The trend away from rail use by the agriculture industry 6 2.4 Strategies to incentivise rail use by the agricultural industry 7

    Current strategies employed to guarantee some rail access to the agriculture industry 7 Incorporation of the regional lines into the national network 7 Proposed strategies 8

    2.5 Committee comment and summary of recommended actions 8

    3 Planning and co-ordination across government 11 3.1 Committee comment 12

    4 Modal choice agricultural industries 14 4.1 Data on the current freight task by modal choice 14

    Committee comment 16 4.2 Why agricultural commodities are moving to road as the preferred modal choice 16

    Inherent characteristics of the agricultural industry lead to it adapting less readily to rail 16 Additional impediments to the use of rail by the agriculture and livestock industries 17

    4.3 The role of strategic planning in overcoming impediments to rail use 21 4.4 Committee comment and recommendations 22

    5 Below rail Infrastructure 24 5.1 Current condition of below rail infrastructure 24 5.2 Infrastructure upgrades required across the whole network 26 5.3 Specific infrastructure upgrades identified by stakeholders 28

    Toowoomba Range rail infrastructure 28 Dedicated Rail Freight Corridor to the Port of Brisbane/Inland Rail 29 Possible rail link from the Surat Basin to the Inland Rail Line 33

  • iv Transport, Housing and Local Government Committee

    Upgraded rail link from Balonne Shire through Thallon to the proposed inland rail line 34 Oakey Abattoir 34 Other upgrades required to incentivise agricultural commodities to use rail 35 Stakeholder support for planned infrastructure upgrades 36

    5.4 Proposal to incorporate Queenslands regional rail network with the National Rail Network 36 5.5 Infrastructure planning 37

    Corridor and land use planning 38 5.6 Committee comment and recommendations 39

    6 Infrastructure funding 43 6.1 State Government infrastructure funding 43

    Infrastructure subsidy 43 Government funding based on a guaranteed commercial rate of return 44

    6.2 Potential alternative funding options 45 Public Private Partnerships 46 Beneficiary pays blockage investment model 47 Sale or lease of Queensland Government owned rail infrastructure 48

    6.3 Committee comment and recommendations 49

    7 Capacity, access to train paths and pricing 51 7.1 Third party access 51 7.2 Preserved Train Paths 52

    Issues with the preserved train paths 53 Review of the preserved train path system for non-coal freight 55

    7.3 Access to non-preserved train paths 56 Alternative grain operators 56 Proposed solutions to limited train path capacity 58

    7.4 Additional strategies for increasing rail capacity in metropolitan areas 59 Competing Passenger Demand 59 Automatic train signalling 61

    7.5 Committee comment and recommendations 62 7.6 Freight charges and take-or-pay contracts 64

    Case study Aurizons take or pay contract with GrainCorp 64 Committee comment and recommendations 66

    7.7 Road versus rail pricing and heavy vehicle charging 66 Committee comment and recommendations 69

    8 Transport Services Contracts for livestock and regional freight 71 8.1 Transport Service Contracts 71

    Regional Freight Transport Services Contract 71 Livestock Transport Services Contract 72 Producer pays 74 Issues with delivery of the service 76

  • Transport, Housing and Local Government Committee v

    Transparency of information/data under the Transport Services Contracts 77 Future Transport Services Contracts 77

    8.2 Committee comment and recommendations 78

    9 Linkages to improve the supply chain efficiency 81 9.1 The need to understand agricultural supply chains 81 9.2 Access to ports 82 9.3 Intermodal terminals and inland ports 83

    Prospective sites for intermodal terminals 86 9.4 Warehousing/storage depots 90

    Committee comment and recommendations 91 9.5 Containerisation 91

    Committee comment and recommendations 94 9.6 Loading/unloading 95

    Investment in loading and unloading infrastructure 96 High volume loading and unloading 97 Backloading on baseloads 97 Committee comment and recommendations 98

    9.7 Rolling stock innovation 98 Committee comment and recommendations 100

    9.8 Freight train co-ordination 100 Freight co-ordination across agricultural commodities 100 Livestock freight co-ordination 102 Committee comment and recommendations 103

    10 Above rail service and competition 105 10.1 Issues with the above rail service provided to the agriculture and livestock industries 105

    Lack of interest/commitment to agricultural freight provision 105 Lack of competition diminishes service delivery under the Transport Services Contracts 106 Rolling stock ownership as a barrier to competition 107 Other issues with attracting above rail competition 109

    10.2 Facilitating above rail competition - one approach to ensure better service 111 Opportunities in relation to delivery of the Transport Service Contracts 111 Opportunities in relation to below-rail infrastructure 111 Opportunities in relation to rolling stock availability 111

    10.3 Committee comment and recommendations 112

    11 Data and information availability 115 11.1 Committee comment and recommendations 117

    Appendices 119 Appendix A List of Submissions 119 Appendix B Witnesses at public briefing and public hearings 120

  • vi Transport, Housing and Local Government Committee

    Statements of reservation 124

  • Rail freight use by the agriculture industry Abbreviations

    Transport, Housing and Local Government Committee vii

    Abbreviations

    ACCC Australian Consumer and Competition Commission

    AQIS Australian Quarantine and Inspection Service

    ARA Australasian Railway Association

    ARTC Australian Rail Track Corporation

    ATC Automatic Train Control

    ATMS Advance Train Management System

    COAG Council of Australian Governments

    Committee Transport, Housing and Local Government Committee

    CRRP COAG Road Reform Plan

    CTEE Centre for Transport, Energy and the Environment

    DAFF Department of Agriculture, Fisheries and Forestry

    DNRM Department of Natural Resources and Mines

    DRFC Dedicated Rail Freight Corridor

    DSDIP State Development, Infrastructure and Planning

    DTP Daily Train Plan

    GATC Great Australia Trunk Railway

    HVCI Heavy Vehicle Charging and Investment Reform

    IA Infrastructure Australia

    Inquiry THLGC Inquiry into rail freight use by the agriculture and livestock industries

    IRSE Institution of Railway Signal Engineers

    mt Mega tonnes or one million tonnes

    NMP Network Management Principles

    NTC National Transport Commission

    PPP Public Private Partnership

    QCA Queensland Competition Authority

    QR Queensland Rail

    QSFM Queensland Strategic Freight Model

    QTLC Queensland Transport and Logistic Council

    SEQ South East Queensland

  • Abbreviations Rail freight use by the agriculture industry

    viii Transport, Housing and Local Government Committee

    SFM Strategic Freight Model

    SQSC Strengthening Queenslands Supply Chains

    TI Act Transport Infrastructure Act 1991

    TMR Department of Transport and Main Roads

    TSC Transport Service Contract

    TSDA Townsville State Development Area

    WA Western Australia

  • Rail freight use by the agriculture industry Glossary

    Transport, Housing and Local Government Committee ix

    Glossary

    Above rail

    Means those activities required to provide and operate Train Services such as rolling stock provision (i.e. trains, carriages, etc.), rolling stock maintenance, train crewing, terminal provision, freight handling and the marketing and administration of the above se

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