Australasian Railway Association (ARA) Port and Rail Forum

Speech

WTS016/2015

14 August 2015

Port of Brisbane Offices, Brisbane

Thank you Phil [Allan, Acting Chief operating Officer, Australasian Railway Association] for the introduction.

Good morning ladies and gentlemen, it is good to be in Brisbane, and to be speaking again at the nation's fastest growing port.

In January last year I had the pleasure of officially opening the Brisbane Container Terminals on behalf of Hutchison Ports Australia.

Recent events highlight the significance of today's forum.

The forum will contribute to government and industry's understanding of the issues involved in driving improved performance from our national freight and logistics chains. 

Before I move on, I would therefore like to congratulate the Port of Brisbane and the ARA (Australasian Railway Association) for initiating today's discussion.

I also want to record my gratitude to the former CEO of the ARA, Bryan Nye, who for some 12 years has ably led the peak industry body for the rail industry and done so with distinction.

This forum brings together government and leaders in the port and rail industries and to develop a forward thinking and solution-driven agenda.

Perhaps there has been a tendency to treat freight transport modes in isolation, resulting in a lack of effective coordination between the different modes.

Today's discussions recognise that there is a vested interest to ensure that the long-term capacities of our transport corridors—both road and rail—are aligned with that of our ports, and for each part of the supply chain to be as effective as it can be.

Indeed, such collaboration across the supply chain is a must if we are to meet our rapidly growing freight task and to do justice to the many new opportunities on the table in northern Australia, in Asia and with the growing number of free trade partners.

Unlocking Australia's Potential

Over the past 40 years, Australia has enjoyed strong economic performance.

I can attest to this, having been in Parliament for more than 25 years—during that time there has only been one quarter of negative growth—and that was a long time ago.

As the longest and largest mining boom in Australian history tapers off, we can no longer rely on increasing terms of trade to sustain our economic growth.

Population, labour force participation and productivity are the three drivers of economic growth.

Understanding the changing nature of these drivers must inform the actions of current and future governments if we are to build jobs, growth and opportunity and unlock Australia's great potential.

Now, more than ever, we need to be firmly focused on growing our national productivity.

Essentially we need to do more with less. We need to focus our attention—not just towards building new infrastructure, but also to maintaining and upgrading existing networks, as well as implementing micro-economic reforms and cutting red tape to attract greater private sector investment.

The Government recognises the critical role infrastructure plays in delivering prosperity to the states and territories, and to the national economy more broadly.

The recent Australian Infrastructure Audit, undertaken by Infrastructure Australia, is helping the Government and industry to assess the nation's infrastructure needs over the next 15 years.

Not surprisingly, the Audit's key message is that without action, Australia's productivity and quality of life will be tested, as population and economic growth are set to cause increasing congestion and bottlenecks.

A focal point for Australia's freight growth pressures will be its ports.

A key finding in the transport sector shows that container movements through Australia's ports are projected to grow by 165 per cent between 2011 and 2031, while non-containerised trade is projected to grow by 138 per cent over the same period.

The Audit acknowledged that freight rail will need to play a growing role in the movements of goods between ports and inland freight terminals, as well as in the movements of containerised freight and general freight over longer distances in our major cities and regional centres.

Statistics from July to December 2014 published in the May issue of Waterline, released by the Bureau of Infrastructure Transport and Regional Economics indicate that throughput at Australian ports increased by 3 per cent while wharf-side labour productivity showed a modest improvement of 0.9 per cent.

However, land-side efficiency continued its decline in all ports except Adelaide—with average truck turnaround time increasing by 5.7 per cent. As well, port costs increased between $10 and $14 a TEU over the same reporting period.

This demonstrates that there is an opportunity for freight rail in Australia to grow its market share, help reduce traffic congestion and support national productivity, sustainability and liveability.

We all know that federal governments have sought ways to better connect our national transport network.

A notable example was the establishment by the Howard Government of the Australian Rail Track Corporation in 1998 as a step towards uniting a highly fragmented national rail market.

In 2015 the quest continues. The Coalition Government wants to see more freight carried by rail by ensuring it is as competitive as it can be and it achieves its full potential.

This means governments and industry need to work together to address some of the constraints that are preventing freight rail from exploiting its many advantages.

Intermodal connectivity is a big part of this. Improvements that make it easier, cheaper or faster for freight to get from market or port to a rail hub will only enhance the case for using rail.

This isn't about advantaging rail over road freight. It's about ensuring the economy gets the benefit of rail's natural advantages in carrying long haul freight.

To support this, the Government's plan for improved freight rail includes a number of priority projects around the country.

The Melbourne to Brisbane Inland Rail will go a long way to ensuring that Australia has the logistical muscle and infrastructure backbone needed for decades to come.

The Coalition Government sees many compelling reasons for building it and that's why we made the $300 million commitment to urgently get the project underway.

Inland Rail will provide an efficient freight connection between Melbourne and Brisbane; it will substantially improve the rail connection between Perth, Adelaide and south-east Queensland; and it will enable through freight to avoid the congestion of Sydney.

It will deliver what the market has said it wants—a competitive price with road freight.

By 2055, the equivalent of 250 B-doubles per day are expected to be diverted to Inland Rail, and by 2075 this number could rise to more than 800.

I know there is great interest, particularly from this group, on progress.

Pre-construction is well advanced and the Implementation Group, chaired by my distinguished predecessor John Anderson, will shortly submit a delivery plan and business case.

This will provide the Government with the advice it needs to take further decisions on the delivery of the project, including funding for construction.

As part of the Government's commitment to evidence-based planning, I intend to ask Infrastructure Australia to independently assess the Inland Rail business case.

We want to make sure the investment the Government makes on behalf of the tax payer in Inland Rail is transparent and clearly understood.

I also asked the Implementation Group to investigate what would be required for a dedicated freight rail link to the Port of Brisbane because of the clear benefits for regional producers who are currently moving their goods to port by road.

That said, the port link is part of a larger picture and must be integrated into the broader port, city and regional Queensland network along with complimentary terminal investments.

How best to provide the necessary capacity to the Port of Brisbane, and particularly the timing, is a decision to be made jointly with the Queensland Government, the Port of Brisbane and the ARTC.

That's just a snapshot of progress from the government perspective. Dale Budd from ARTC will fill in much more detail later this morning.

Moving south, the Government's Moorebank Intermodal Company recently concluded an agreement with Sydney Intermodal Terminal Alliance to develop the Moorebank intermodal freight precinct.

The deal directly addresses two of the key issues identified in the Infrastructure Audit—easing congestion and removing bottlenecks.  

At full development the Moorebank precinct will have an import-export terminal with a handling capacity of up to just over a million containers a year, an interstate terminal with capacity for up to 500,000 containers a year, extensive warehousing facilities, and most importantly, a direct rail link to Port Botany.

The combined precinct will facilitate more containers to be unpacked onsite, which has the potential to boost national productivity and reduce costs for business and consumers.

By leveraging private sector investment, this significant rail infrastructure development will be at a much lower cost to the taxpayer than originally anticipated.

Once the precinct is fully developed, over a 30-year period it will generate close to $9 billion in economic benefits to New South Wales, create 1,300 jobs during the construction phase and up to 7,700 jobs mainly in south-west Sydney.

In addition, Stage 3 of the Port Botany Rail Line is underway to alleviate constraints in transporting freight to and from Port Botany.

Work includes investigating capacity enhancements to the Southern Sydney Freight Line and Metropolitan Freight Network which will further support the Moorebank Intermodal Terminal precinct and other cross-metropolitan freight shuttle services.

Once the Port Botany Rail is completed, freight rail customers will see increased service reliability, efficiency and productivity.

In Western Australia, the North Quay Rail Terminal at the Fremantle Port has been expanded to enable the terminal to accommodate longer trains, without necessitating breaking up and shunting trains.

The Government also remains committed to the Victorian Port Rail Shuttle project, however the lease negotiations for the Port between the private sector and the Victorian Government may impact on the future shape of the project.

A rail shuttle service would redirect some of the projected increase in truck movements onto rail, improve the overall health of the national freight network and provide an efficient rail link into Port Melbourne.

In Northern Australia, as part of the development of the Northern Australia White Paper stakeholders identified the need for better freight infrastructure.

We have responded with a commitment to a $5 million rail freight analysis starting with a pre-feasibility analysis of the Mount Isa to Tennant Creek railway and an upgrade of the Mount Isa to Townsville line.

Should this line prove viable, it will provide industries in the Northern Territory and Queensland with access to both the Port of Darwin and the Port of Townsville.

And in Tasmania, the Freight Rail Revitalisation project will deliver a greater share of the contestable freight market for rail.

A recent study of the benefits of freight rail to the Tasmanian economy suggests TasRail could deliver almost $160 million in savings to the Tasmanian economy by 2019 if it continues to grow its business.

The report also notes a saving of $9 million in road maintenance costs alone by not having that freight transported by road.

In South Australia, the Goodwood and Torrens Junctions project will remove capacity bottlenecks enabling more freight to be moved by rail on the strategically important Melbourne to Perth corridor.

Just as there are opportunities for rail to take a bigger share of our nation's freight task, as an island continent we need a strong shipping industry to step up to the plate in a similar way.

As you know, we rely on maritime transport for 99 per cent of our exports.

The case for reform is crystal clear and work has progressed on a raft of issues to allow this to happen.

We have taken a further and very important step towards putting in place a regulatory framework that strips back the red tape. 

In May this year, I announced a substantial de-regulation of Australian coastal shipping that will introduce a single, streamlined permit for all ships—Australian and foreign—operating along our coast. 

The legislation is now in the Parliament and will be the subject of full public scrutiny through the Senate committee processes.

I encourage all those with an interest in the survival of our shipping industry to speak out during this national discussion.

I firmly believe that if we could better utilise just a fraction of the capacity on the foreign ships that visit our shores, it could make a major difference to the long-term efficiency of Australia's sea freight movements.

Before I conclude I want to mention an important planning tool that crosses modal barriers and fully captures issues associated with our major ports and broader land use planning.

Last November, transport ministers agreed to the public release of the first ever Key Freight Route Maps which clearly show current land, road and rail transport routes and their connections with major ports, airports and intermodals.

Importantly, Transport Ministers also agreed to ‘as of right’ access for B-double vehicles on key freight routes.

For the first time we have a dynamic tool for key stakeholders to identify gaps in the supply chain and to develop a greater understanding of our freight logistics system.

Importantly, the maps will continue to be developed to best inform future land use projects and commercial, regulatory and policy initiatives to ensure that critical freight linkages are recognised and strengthened.

Industry's role here is vital.

It is my desire to see the Key Freight Route Maps become an integral information source about our national land freight system to assist decision makers such as yourselves to build the freight transport system Australia must have to remain competitive.

Conclusion

In summing up, it is very obvious that the release of the Northern Australia White Paper and the Agricultural Competitiveness White Paper will both create great challenges and great opportunities that will require us all to be open to new approaches and new ideas.

This includes new approaches to how we, as a nation, manage our logistical challenges and a willingness to recognise the benefits of seamlessly connecting all transport modes.

This forum is a big step in the right direction.

Before I finish I want to give a plug for the next speaker.

Dr Renée Kidson, who is the Director, Infrastructure and Surface Transport Statistics in my department will discuss the importance of statistics and how we need your help to build a national picture of our freight opportunities and challenges.

Thank you.