Asciano wants ARTC privatised

luznug · Posted: Tue Apr 29, 2008 11:13 am

Get on track, says Asciano
The Age
Ari Sharp
April 28, 2008

THE Government should consider privatising the national freight rail network to fund a massive rebuilding operation needed to help rail compete with road for market share, says Asciano chief executive Mark Rowsthorn.

Mr Rowsthorn said governments had not invested enough in rail because of the limits of public funding, and that significant private investment was needed to increase capacity on the interstate freight rail network.

Among the options canvassed by the head of Asciano, which owns leading rail freight company Pacific National, were privatisation and public-private partnerships.

PPPs, in which funding, risk and profits from a project are shared between government and private companies, have become popular among state governments keen to manage the financial and political risk of major projects.

"I'm calling on the Government to look at privatising the whole thing, or vending in the current network, and get some serious investment into the national rail network," Mr Rowsthorn said on ABC1.

"I think a public-private type arrangement might be the most appropriate."

Among projects on Mr Rowsthorn's rail wish-list is double-tracking between all capital cities and improving connections with ports. He said lack of efficiency was hampering rail in its battle for freight market share with roads. Rail carries only 5% of freight on the Melbourne-Sydney corridor.

Privatisation of freight rail infrastructure in Victoria failed to generate the investment or returns expected, and last year the Government bought back the rail network from Pacific National for $134 million a decade after it was privatised.

Mr Rowsthorn has framed his call for a boost in investment in the context of minimising carbon emissions, citing figures showing a 30% increase in carbon emissions caused by transport in the 15 years to 2005. He said rail produced one-third the amount of emissions compared with road transport.

Mr Rowsthorn also criticised the lack of focus in federal spending on rail through AusLink.

42101 · Posted: Tue Apr 29, 2008 11:16 am

So now these grubs want it privatised so they can buy it and run it into the ground just like they did in TAS and VIC. Rolling Eyes

Thanks heaps to ALL my friends on here.

GeoffreyHansen · Posted: Tue Apr 29, 2008 11:46 am

I fail to see how privatising the infrastructure would improve anything.

Bring the 3900s back to Brisbane
Bring Karlsruhe Tramtrains to Australian cities
Extend the proposed Metro to Taylor Square
Extend the Gold Coast line to the Tweed

mjja · Posted: Tue Apr 29, 2008 1:08 pm

We all know what's behind this - Greg put his finger right on it. Message to the Australian government: if you let Mr Rowsthorn get hold of our interstate rail infrastructure, you may as well throw the idea of competition and a real market out the window and legislate against private transport of freight. Call Asciano the national carrier and rename it Aeroflot.

As for what good it would do - I presume the good Sir Mark wants to pay for his share of the ARTC pie. That would give the government a stack of money, which our nice Sir Mark wants them to spend on major improvements.

Idea: why doesn't Asciano just put up some of the money for improvements itself? That would achieve the same thing but without signing the death warrant of interstate rail freight transport.

Or better still: why doesn't it, as the biggest customer of ARTC, volunteer to pay double its track access fees to give ARTC some extra cash for improvements?

Happy Gunzelling and remember, "Go by rail!"

Michael Angelico
President, Smart Passengers Inc
(My opinions are my own unless specifically stated.)

cootanee · Posted: Tue Apr 29, 2008 1:40 pm

OK - It's not April 1 Laughing

A pay as you go railway line isn't going to be competative against a 'free' multilane highway.

Fact is that governments have distorted land transport so much that nothing short of a dramatic investment shift is needed.

Funny how carbon trading is starting to putting some focus back on rail. Shocked

M636C · Posted: Tue Apr 29, 2008 1:42 pm

I'm sure Mr Rowsthorn has an owner in mind for the ARTC, somewhere within the interlocking empire under Paul Little.

Sadly, it's not just the track that PN runs into the ground.

They promised to invest millions in new locomotives for Tasmania, but the six MKAs are all that appeared, and those probably because nobody else wanted them (including PNQ).

So far they have purchased FOUR locomotives for the standard gauge network.

They are good at threatening to close down services and holding governments to ransom - see Tasmania, Victoria and NSW so far...

The ARTC must remain in government hands if rail traffic is to survive in Australia.

M636C

TE2815 · Posted: Tue Apr 29, 2008 1:58 pm

One bites ones tongue Mwa ha ha ha!

Redundant Area Controller (anyone got a job going Question

)

dalts 1985 wrote:

(No offence intended to TE 2815 by the way with that comment/remark as TE2815 is one of the "old hands" & more knowledgeable blokes as shown in many a post/contribution")

Siderodromophobia- Fear of trains, railroads or train travel.
My fotopic site

luznug · Posted: Tue Apr 29, 2008 5:26 pm

US rail freight industry surges as trade booms
Frank Aherns, Radford, Virginia
April 28, 2008

WHEN Bob Billingsley signed on with Norfolk Southern railway 31 years ago, he was a beginner on work crews that were closing unused lines as the US economy turned its back on rail.

Now he is in charge of raising the roof of a Norfolk Southern tunnel in south-west Virginia to clear head room for the double-stacked containers that have become the symbol of the industry's sudden surge because of a confluence of powerful global factors.

"For years, we were looking for ways to cut costs to increase profits," said Mr Billingsley, as a train rumbled by. "Now, we're building business to increase profits."

The rail freight industry is having its biggest building boom in nearly a century, a turnaround as abrupt as it is ambitious. It is largely fuelled by growing global trade and rising fuel costs for big 18-wheeler trucks.

In 2002, the major railroads laid off 4700 workers; in 2006, they hired more than 5000. Profit has doubled industry-wide since 2003, and share prices have soared. The value of the largest railroad, the Union Pacific, has tripled since 2001.

This year alone, the railroads will spend nearly $US10 billion ($A10.7 billion) to add tracks, build switch yards and terminals, and open tunnels to handle the coming flood of traffic. Freight rail tonnage will rise nearly 90% by 2035, according to the Transportation Department.

In the 1970s, tight federal regulation, cheap truck fuel and a wide-open interstate highway system conspired to cripple the rail freight industry, driving many lines into bankruptcy.

The nation's 480,000 kilometres of rail became a web of slow-moving, poorly maintained lines, so dilapidated in places that tracks would give way under standing trains.

The Staggers Rail Act of 1980 largely deregulated the industry, leading to consolidation. More than 40 major lines condensed into the seven that remain, running on 256,000 kilometres of track.

But the changing global market has fuelled prosperity — and the need to add track for the first time in 80 years. Soaring diesel prices and a driver shortage have pushed freight from 18-wheelers back on to the rails.

At the same time, China's unquenchable appetite for coal and growing US demand for Chinese goods, means more US rail traffic is heading to ports in the north-west, on the way to and from Asia. Coal still accounts for the most tonnage carried by US railroads.

But it is the ocean-crossing shipping container — carrying vehicles, toys, furniture and nearly every product a consumer will buy — that has lit a rocket under the railroad industry.

Passenger rail traffic is also increasing; 2007 was Amtrak's fifth consecutive year of passenger growth, up 6% from 2006.

As well, a "green" gift has dropped in the industry's lap.

A train can haul a tonne of freight 680 kilometres on one US gallon (3.78 litres) of diesel fuel, about a 3-to-1 fuel efficiency advantage over 18-wheelers, and the railroad industry is increasingly touting itself as an eco-friendly alternative. Trucking firms also use the rail lines; UPS is the railroad industry's biggest customer.

Rail traffic, revenue and profit began to soar in 2002-03 and seem largely immune to the economic downturn. At the industry's nadir in the 1970s, the average annual rate of return on investment for a railroad company was 1.2%. By 2006, this was 10.2%.

And even though the economic slump has reduced key traffic about 4% this year compared with last, it has not slowed the railroads' urgent track-laying. Capital spending this year is up.

Seven railways control nearly all the freight shipped in the United States.

In the west, they are, from largest to smallest by track kilometres, Union Pacific, BNSF, Canadian Pacific/Soo Line and Kansas City Southern. In the east, they are Norfolk Southern, CSX and the Canadian National/Grand Trunk lines. Most have extensive expansions planned or under way.

WASHINGTON POST

Is it finally a good time to buy shares in Asciano if this is anything to go by?
USA Rock 'N Roll!

USA

ParkesHub · Posted: Tue Apr 29, 2008 6:14 pm

That's an interesting article, Luznug.

I don't think Mr Rowsthorn is in for the long haul (pardon the pun). It seems to be yet another iteration of him wanting Governments to put up something (money or, in this case, a Federal organisation) in order to further his company's ambitions. Sadly, he doesn't have a good track (hey, another pun!) record of delivering on his own promises (Tranzrail, Tasmania, rural Vic, NSW).

luznug · Posted: Tue Apr 29, 2008 9:33 pm

These are some paragraphs from a series in The Age by Martin Feil who argues, infrastructure is a primary responsibility of government.
http://business.theage.com.au/build-foundations-to-economys-future/20080428-2948.html

“The real devil in the detail is that the public-private partnership was never equal. The private partners have no real risk. The failure of a tunnel road or rail project to deliver an appropriately high return simply puts the pressure on governments to tip in some more money or ultimately to buy back the project."

"Closing a tollway or tunnel that is underdelivering the initial revenue projections is not an option for government. Sydney's Cross City Tunnel and rail tunnel to the airport are examples. Too many voters use the toll roads and tunnels."

"Infrastructure is a priority for the Labor Government. The Council of Australian Governments (COAG) has agreed to create a new authority called Infrastructure Australia that will concentrate on water, energy, transport and communication. A National Infrastructure Audit is supposed to be completed by the end of June. A National Priority List will then be created over the next year to establish an order for action.”

With a new Senate Laughing

“AusLink made the unassailable point that unless we move a lot of freight from road to rail, the east coast land transport task will be gridlocked by 2020.”

What if Asciano and ATEC team up they could build our missing links and create their own private rail links while running on ARTC rail too?

rjaygee · Posted: Wed Apr 30, 2008 12:03 am

Seven railroads service a population of approx 300m in the USA whereas the Australian population is a shade over 21m. The seven railroads in the USA will probably reduce to 5 in the not too distant future. Just working on the maths it is probably only economically viable to have one railroad company in Australia and that should be totally private, both above and below the tracks. Anything that does not add up is closed. Governments should butt out as their record with rail in Australia is appaling. We are just fiddling around the edges now. Nothing short of full AAR standards using off the shelf US locos is economically viable. The cost of trying to shrink EMD/GE locos to fit our silly loading guage is just too costly. In any case all the new locos are aweful looking things.

Cheers

Rod Gayford

perthite621 · Posted: Wed Apr 30, 2008 12:48 am

Asciano apparently want to own everything, just another name for Toll. Why don't they put up the money to upgrade the tracks like anyother business has to do when they want to improve their services. Maybe though asciano don't really want to improve services but are just looking for a way to close down services as they have done elsewhere.

FieldShunt74 · Posted: Wed Apr 30, 2008 1:34 am

CaseyJones · Posted: Wed Apr 30, 2008 8:46 am

ParkesHub · Posted: Wed Apr 30, 2008 9:01 am