Australasian Railway Association—AusRail 2015 Gala Dinner



26 November 2015

Melbourne Convention and Exhibition Centre

Thank you very much, Danny, and good evening ladies and gentlemen, it is a pleasure to be with you again.

I would like to thank Bob Herbert and his fellow board members for their great work in promoting the progress of rail in Australia, and across the ditch.

AusRrail provides an excellent structure for collaboration between experts and leaders to network and build knowledge, and I once again congratulate the ARA for another successful conference.

I also want to thank the ARA's former CEO, Bryan Nye, for his tireless advocacy of rail for many years—and I wish him all the best in the future.

When I spoke at AusRail last year, I said that 2015 was likely to be a big year for rail—and this prediction is being realised.

We have seen major developments, including:

  • consolidation and possible ownership changes—which given current activity in the market and regulatory considerations I won't go into further tonight;
  • the announcement of the Scoping Study into options for the future management, operations and ownership of the Australian Rail Track Corporation (ARTC);
  • the accession of Western Australia to the National Rail Safety regime, and Queensland's commitment to join in the near future;
  • the continuing development of rail industry bodies including reform of the Rail Industry Safety Standards Board, the Australian Centre for Rail Innovation, and the Freight on Rail Group; and
  • significant investment by Commonwealth and state governments in infrastructure as well as significant investment by the private sector.

These developments are also driving greater Australian Government engagement with the rail industry.

Not only does our record $50 billion infrastructure plan include significant investment in rail, the Australian Government is taking stock of its broader objectives with rail.

The Scoping Study into ARTC, announced by Minister Cormann last May, launched this process.

I encourage you to engage with the Department of Finance on this Study as opportunities emerge. In conjunction with this the Government will also be considering a range of broader rail policy issues, beyond the ARTC.

We want to be clear about our objectives and the role that government plays in achieving these. This may be through infrastructure investment by both governments and the private sector, or through regulatory settings, or a combination.

I would be interested in your views on these important matters.

Urban passenger rail

The Australian Government recognises that investment in public transport is critical to easing congestion and boosting productivity in our major cities and regions.

While urban public transport is largely the responsibility of other tiers of government, the Federal Government has provided support to public transport projects—both road and rail—over many years.

As you know, the Coalition Government has emphasised our commitment to consider all road and rail projects based on their merits, regardless of mode.

It is important to emphasise that we have made very substantial investments in passenger rail, as our funding for Victoria's Regional Rail Link and Queensland's Moreton Bay Rail Link projects show.

We are also supporting investment in public transport through the $4.2 billion Asset Recycling Initiative.

This includes payments of $60 million to support light rail development in the ACT, and up to $1.6 billion towards urban rail projects in NSW, including Sydney Rapid Transit and a second harbor crossing.

We were similarly ready to provide funding for the Brisbane Bus and Train Tunnel, prior to the new Queensland Government's axing of the project.

Last month the Prime Minister announced that the Government had made an ‘in-principle’ commitment of $95 million towards the second stage of the Gold Coast Light Rail project which will strategically link the Light Rail to the broader State network.

The Light Rail project is of course spurred by the Gold Coast's hosting of the 2018 Commonwealth Games. It will improve public transport and create an enduring legacy linking Queensland's two largest cities—Brisbane and the Gold Coast.

Release of Trainline 3

Once again, I have the pleasure of releasing the latest edition of Trainline at AusRAIL—and it is again essential reading for all of us involved with rail.

Trainline 3 shows that rail is moving even more iron ore and coal.

In fact, in spite of the end of the mining construction boom, Pilbara iron ore rail tonnages increased by more than 50 per cent in in 2013–14.

However, the report also shows mixed results for other rail sectors.

There has been an estimated 21 per cent decline in intermodal tonnages—driven primarily by reductions in intrastate volumes in the eastern states.

However, this follows a significant increase in intermodal tonnages since 2010.

Trainline 3 shows major differences within the intermodal sector. On the Melbourne-Brisbane corridor scheduled train services have been declining since 2010, but increased or remained steady in most parts of the east-west corridor.

There has also been a structural shift in some services. There are for example fewer landbridge services between Adelaide and Melbourne as logistics managers shift to exporting from Adelaide and hubbing in Singapore.

The complex rail picture painted in Trainline 3 extends to passenger rail. Here in Melbourne, light rail patronage continued its decline from a 10 year high in 2011–12, falling eight per cent in 2013–14. But encouragingly, Melbourne's heavy rail patronage grew by around 4.5 per cent over the same time.

These varied results reflect the rail industry's diversity and the sensitivity of its sectors to particular economic factors.

Intermodal developments and port shuttle services

Rail has long been viewed as only a long distance and bulk carrier and rail is certainly in a league of its own on big volume, long distance hauls. In capital cities such as Sydney, Melbourne and Brisbane we can see this concept is being turned on its head.

Infrastructure Australia's 15 Year Audit found freight rail will need to play an increasingly important role in the movement of goods across the short distances between ports and inland freight terminals. This is critical for maintaining adequate landside access to ports.

That is why the Government is facilitating the development of the Moorebank Intermodal Terminal through a joint venture between the Moorebank Intermodal Company (MIC) and the Sydney Intermodal Terminal Alliance (SIMTA).

This is a multi-faceted project that will enable future expansion of Port Botany's container handling capacity, and investment and employment opportunities in Western Sydney.

The investment in the intermodal terminal will create around 7,700 ongoing operating jobs and more than 1300 construction jobs in south-west Sydney.

Government investment in Port Botany's rail linkages will improve the performance of that line. The market is also responding to opportunities to move more freight onto rail and investments have occurred or are mooted to develop or upgrade a range of other terminals, as well as the Port itself.

Like Sydney, Melbourne also faces land side constraints on its Port's operations. A rail shuttle and intermodal terminal system to support the Port seems a sensible and obvious response.

That is why the Australian Government retains its $38 million commitment to help deliver this shuttle. Improving Melbourne's rail linkage and intermodal capacity is clearly an issue of national significance but we're reliant on the Victorian Government to get it moving.

Effective rail connections to our national ports are vital for economic growth, and the Government is committed to enhancing these connections.

Inland Rail

While passenger rail carries clear benefits, I continue to recognise the great benefits of rail freight, and the need to maintain momentum in this area.

The Inland Rail Implementation Group, chaired by the Hon John Anderson, released the Delivery Plan for the Inland Rail project in September this year.

This followed 18 months working with stakeholders, including yourselves.

The Delivery Plan included a comprehensive Business Case developed by ARTC which outlines a 10-year timeframe, including eight years of construction, to complete the 1,700 km project. The project will incorporate some 600 km of new track, and is projected to cost $10 billion.

ARTC has undertaken a tremendous amount of quality work on Inland Rail. It has also developed a Service Offering endorsed by all major freight customers, end users and the Implementation Group which defines the required performance outcomes.

This includes a design for 1800 metre long trains with future-proofing for 3600m trains, axle loads of 21 tonnes at 115 km per hour with future-proofing for 30 tonnes at 80 km per hour, full interoperability and an ability to connect with the interstate mainline standard gauge network, and dual gauging in Queensland.

Other work that has been done so far includes:

  • conducting early consultation and technical workshops with councils within the priority construction and development areas;
  • developing an environmental approvals plan for each project;
  • commencing design and environmental approvals work for Parkes to Narromine and Narrabri to North Star;
  • completing detailed spatial imaging and data management of the entire 1700 km alignment; and
  • developing a plan for early construction works.

You will soon see people working on the ground with ARTC commencing field studies and working with the community to finalise the preferred alignment in greenfield sections.

I recently announced that ARTC has released its first tender for the role of technical advisor to guide engineering requirements for the project.

Inland Rail has attracted great interest as it offers a decisive step change in capacity, capability and interoperability of the national freight rail system.

It promises to deliver economic benefits of around $22.5 billion.

Inland Rail will increase gross domestic product (GDP) by $16 billion over the 10 year construction period and 50 years of operation.

It will create up to 16,000 direct jobs during its 10-year construction period and 600 ongoing jobs once operational.

This is a huge project and it is important to get it right. That is why I have referred the Business Case to Infrastructure Australia for review.

Once this review is complete, the Government will fully consider possible financing structures and delivery options in the context of framing the 2016 Budget.

Northern Australia rail feasibility analyses

Before closing, I want to briefly touch on another Government effort that reflects rail's continuing potential to advance Australia's national development.

Subject to the participation of Northern Australia's three other jurisdictions, we have committed $5 million to undertake several freight rail feasibility studies in northern Australia.

This will include a pre-feasibility study on a potential rail line between Mount Isa and Tennant Creek—and focusing on the viability and economic opportunities of this new freight transport link.

The Northern Territory has taken an important first step in commissioning a study and we can then determine what further work may be required and any other priorities for analysis in northern Australia.

I urge you to support efforts to pursue the case and make the most of one of our most useful levers for northern development a comprehensive and interconnected rail network.


I hope I have given you a demonstration of the Government's future directions and current efforts in a very exciting time for rail.

Rail is a major contributor to the high quality of Australia's economic and social connections—and it has a great potential to expand this contribution further.

I want to emphasise that the Australian Government is open to innovative solutions which will encourage this expansion—and I look forward to your suggestions.

Thank you very much.