Rail link back on track - Australia - Brief Article

Business Asia, Oct, 2000 by Andrea Hopkins

When it comes to freight, rail has long been the poor cousin to road and air transport in Australia. But three new projects may make shifting goods via railways more viable.

THE DREAM of building a railway network across the vast Australian continent is back on the drawing board, with three projects now in the pipeline.

Though rail might seem a natural solution for a country twice the size of Europe, plans for a national grid have failed so far, with passengers opting for faster air travel and freight operators choosing cheaper road transport.

But Australia's Federal Government is once more trying to revive the long-distance rail industry, turning to the private sector to fill in the gaps in the existing patchy grid to speed up and simplify national rail travel.

Rail analyst Ron Finlay, who helped write a 1999 Government rail report, said private operators are eager to step in.

"All they want is reliability and predictable costs," Finlay said. "The willingness is there and the opportunity is there, the two (government and private) have just got to get together."

The Government, once owner and operator of the railways, began selling off rail assets four years ago, encouraging private companies to get the country on the track.

For the Government, boosting rail transport was expected to benefit regional Australia, the poor cousin of metropolitan Australia, and ease the burden on the main cities' road systems. Private operators can see the financial benefits of securing a slice of Australia's transport industry, if they are left to their own devices and given some tax breaks.

"(The Government) have got a lot of baggage from the past and we think rail can be run a lot more efficiently," said Robert Jeremy, commercial director for transport group Toll Holdings Ltd, one of five private companies operating on the existing interstate track.

"But the answers are not in the private sector alone. The Government needs to invest in the tracks and the infrastructure," he said.

But national versus state politics is taking its toll. While the Federal Government is willing to invest $250 million over four years in rail infrastructure, some of the six state governments do not want to relinquish control of the state-owned and run transport system.

This state-by-state organisation means that to move goods by rail between the cities of Brisbane, Sydney and Melbourne, companies must deal with three states -- with three different standards of access, fees and track gauges.

This is a red-tape dream for bureaucrats -- but a paperwork nightmare for industry players who have stuck to the roads to keep operations simple and moving.

Rail's share of freight moved from Sydney to Melbourne fell to about 22 per cent in 1996 from 48.5 per cent in 1971.

But blue sky developers see plenty of scope for new projects with plans at various stages in the pipeline to:

* Build a $4 billion very fast train (VFT) passenger train linking Sydney and national capital Canberra;

* Complete a line through the heart of the country from Adelaide in South Australia to Alice Springs, then add a 1,410km link to Darwin in the Northern Territory, at a cost of $1.2 billion; and

* Create a $1.4 billion east coast freight line.

A decision by the conservative coalition Government on the Sydney-Canberra speedrail project, first mooted in 1988 and based on French TGV technology, is expected shortly.

"A green light ... will open the door for a national network linking Brisbane, Sydney, Melbourne and Adelaide (by 2006)," said Neil O'Keefe, a country Labor MP who chaired the Government's transport committee from 1990. "A red light will take it off the agenda for the next 50 years."

The Speedrail Group Pty Ltd, a joint venture between Australian construction group Leighton Holdings Ltd and France's Alstom SA, won the right in August 1998 to put forward a proposal to build the line and wants a fast decision.

"It's basically an airline on the ground," Speedrail consortium general manager Joshua Baker said. "It will result in a nine per cent reduction in greenhouse gas emissions and a 16 per cent reduction in energy use -- or better."

The proposed Adelaide-Darwin freight link, which is being project managed by Halliburton Co unit Brown & Root, is considered a vital landlink between the southern ocean and sea routes to Asia.

The Brown & Root-led Asia Pacific Transport Consortium was chosen last year as preferred tenderer for the project.

Other consortium members include United States rail company Genesee & Wyoming, MPG Logistics and Australian construction companies Barclay Mowlem, Macmahon Holdings Ltd and John Holland, recently acquired by Leighton Holdings.

Final contracts are expected to be signed later this year.

The third project is less certain.

Federal Transport Minister John Anderson has described a pre-feasibility study for the inland freight railway between Melbourne and Brisbane as promising, but it has yet to win cross-party political support.

Double-stacked freight trains could travel at speeds of up to 115km per hour along the route, transporting goods between the two cities in less than 24 hours, the same pace as road travel.