Private enterprise is more than doubling government expenditure on the rejuvenation of Victoria’s rail freight sector, a new study has found.
Work done for the Victorian Freight and Logistics Council’s Infrastructure Working Group shows the state and federal governments have invested over $1.2 billion in under-wheel track and rail operations. But this has been more than matched by business investment in rail-related activities, particularly in intermodal hubs and the associated distribution centres. Current and proposed investment exceeds $3 billion.
According to the VFLC’s “The Growth and Revival of Rail Freight in Victoria”, government commitment to and private sector appetite for rail transport of freight means the sector is undergoing a significant revival of fortunes.
“Previously rail was starved of investment for a long period of time,” council chairman John Begley said. “Today rail is seeing substantial investment: the Australian Rail Track Corporation is undertaking major investment in the national inter-capital rail track corridors, and the Victorian Government has invested major capital since the re-purchase of the broad gauge track.
“Importantly, for every one dollar invested by government the private sector has already invested two dollars – and another $800 million in new private sector investment is underway. Specialised suppliers of rail freight forwarding, new above-rail operators and intermodal hub developers are emerging. The market offering is improving.”
The VFLC is unashamedly championing the rail freight renaissance, pointing out that heavy congestion costs, greenhouse emissions and higher accident rates are now creating a climate for re-consideration of rail as a co-modal solution alongside road.
“That said, the profits from road transport are still typically higher than the profits from rail transport, so it seems likely that road-related congestion, greenhouse and accident costs will increase further in Victoria,” the paper says.
“A key question pondered by many in the freight sector relates to strong forecast growth – is there a better way to maintain current supply chain and economic activity while allowing for strong future growth?
“Rail transport would seem to hold the potential to be a significant part of the solution. The need to take practical steps to address global climate change – to reduce the carbon intensity of our economic systems – adds to the appeal of increasing the level of rail freight usage in our economy.”
The Growth and Revival of Rail Freight in Victoria highlights the successes of freight movements in Victoria when road and rail combine together to achieve outcomes for freight customers.
These include set timeframes and windows for port delivery; high capacity movements for bulk products; a solution to heavy container movements; on-site, value-adding logistics that combine with rail-road choice to help future-proof supply chain investment; and lower line-haul costs through rail forwarders able to optimise use of rail.
The VFLC has released the advocacy paper as part of a broad but detailed examination of the current status of the rail freight sector and what is needed to equip it for an increased role. The Council has also made a submission to the Essential Services Commission’s Review of the Victorian Rail Access Regime, has almost completed an issues paper on rail freight in Victoria (due to be released in March) and is compiling an appraisal of the standardisation of freight lines in the Victorian rail network, which will be part of the bi-annual VFLC Freight Forward state-of the-state report to government to be released this month.
For the purposes of The Growth and Revival of Rail Freight in Victoria the aim is not to focus and examine everything that is still a problem, or still needs improvement, Mr Begley said.
“There is a ‘glass half full’ story to be told, and this paper aims to focus on that story: the principal orientation is on the revival and improvement of the rail freight sector and on freight which utilises rail-focused intermodal facilities,” he said.
“We are optimistic about the renaissance of rail.
“In a few years time maybe a rail freight story can be told about a glass nearly full to the brim!”
Copies of The Growth and Revival of Rail Freight in Victoria can be obtained from the VFLC’s website at www.vflc.com.au.
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