Meatworks expansion reliant on funds for railway upgrade

 

News article: Meatworks expansion reliant on funds for railway upgrade

Australia's third largest beef processor says its $60 million meatworks expansion will not go ahead unless the Queensland Government pays for a small railway upgrade.

  freightgate Minister for Railways

Location: Albury, New South Wales
The Queensland government should stump up. Would the meat works need to pay for a road to their processing plan ?  Unlikely. 

The meat processing company is already investing in new plant and people to increase capacity. The government should provide the siding upgrades.

Meatworks expansion reliant on funds for railway upgrade

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  Graham4405 Minister for Railways

Location: Dalby Qld
The Queensland government should stump up. Would the meat works need to pay for a road to their processing plan ?  Unlikely.

The meat processing company is already investing in new plant and people to increase capacity. The government should provide the siding upgrades.

Meatworks expansion reliant on funds for railway upgrade
freightgate
The meat processor has to pay for "roads" for truck access to their plant from the public road system. The sidings they want upgraded are a similar proposition as nobody else will be using them. Why should the state government subsidise the industry? What guarantees are Nippon Meats providing that the expansion will go ahead? They state "It could take its workforce from 750 to 1,300" but are not providing any guarantees that this will happen. They will potentially profit, so why shouldn't they pay?
  james.au Chief Commissioner

Location: Sydney, NSW
In NSW, the state is paying for siding extensions to improve rail access to GrainCorp facilities (e.g. Ardlethan).

I have no idea which is the 'right' approach.  Perhaps the volumes to justify the connection to the Western line just don't exist for cattle like they do for grain (i.e. bulk) commodities.

Who owns the rail sidings/connections to the AWB GrainFlow sites?  AWB or the rail network operator?
  locojoe67 Assistant Commissioner

Location: Gen X purgatory/urban Joh-land
Highlighting the connection between the upgrade and company profits won't stop local roads from being hammered by more trucks. So upgrading the siding is a good idea, but make in contingent on a specific increase in jobs over twelve months.

That way their can be a link demonstrated between cost of the siding upgrade and positive outcomes for the area.

The local council benefits too, as they would  pay for maintenance on regional roads other than main highways.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
In NSW, the state is paying for siding extensions to improve rail access to GrainCorp facilities (e.g. Ardlethan).

I have no idea which is the 'right' approach.  Perhaps the volumes to justify the connection to the Western line just don't exist for cattle like they do for grain (i.e. bulk) commodities.

Who owns the rail sidings/connections to the AWB GrainFlow sites?  AWB or the rail network operator?
jamesbushell.au
There are a few options rather than just them or us pay.

The meatworks would prefer not to pay as its significant capital for which they will need to procure finance for.

Perhaps the govt could pay on a take or pay agreement. ie they will build the branch on the basis it is used x many times a year and for each movement they are paid a fee. If the meatworks fails to use as predicted there is a pay anyway clause and should the meatworks be closed or cease using rail transport, there is a termination fee equal to the cost minus any fees paid to date.

Or words to the above effect.

NSW may be paying for Graincorp because they know it will be used and the traffic volumes are expected to be sufficient to justify.

Typically any branch built on private land is privately owned by the user and this includes paying the upkeep.
  james.au Chief Commissioner

Location: Sydney, NSW
So, we are talking about 5750 head of cattle per week.  If we say an animal is 800kg, then that is 4600t/week.  Or just under 240,000t per year.  This is probably comparable to the throughput from Ardlethan, where the NSW govt is paying for the siding upgrade and Graincorp is paying for the onsite infrastructure (i.e. rail loaders etc).

RTT, I like the take or pay idea.  It probably derisks the investment to the Qld Govt in a way that is probably not needed at Ardlethan given the more reliable production in the area.
  a6et Minister for Railways

I think you will find that when it comes to the building of points & infrastructure associated with a new siding complex in NSW & likely the same in most of Oz its always been the cost of the user that pays for it.  After that, the cost of maintenance to keep the point & trackworkd intact is also at the cost of the user, makes it hard when there is just one user & that's how I read this need.

Looking at what is likely the meatworks at Oakey, there is already a rail siding that could be used for unloading into paddocks, but very much old century stuff with just a single line of the main line connection.  Would assume they are wanting points for run round operation off the main line for a more direct transfer operation.  I can understand both sides of the argument though, & the meat owner would see hug advantages in having the sidings & loading facilities for rail owing to the shor distance to Toowoomba & join up with the Inland rail to Brisbane ports
  james.au Chief Commissioner

Location: Sydney, NSW
At least in NSW, i think that TfNSW would be taking a look at the whole of economy cost when deciding on investing in rail.  These sidings would reduce the use of the road network, saving maintenance costs etc.  You are correct, the users (e.g. GrainCorp) of the sidings pay for it through their rail access charges.  Perhaps TfNSW is taking a commercial approach and knows that it will get extra revenues on the line if it makes this investment?  I wonder if the Qld government is doing this?  The cost of road maintenance surely would cost more than a couple of million over the life of the siding?
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Just remembered Hellyer Mine in Tassie was connected with a 11km long branch in 1989. Built and funded by the privately owned EBR. This and other upgrades were all done for a "Take or Pay" contract about 650,000tpa for about 12 years (planned and actual).

NSW maybe paying, but will more than likely build the cost into the haulage charges as well.
  james.au Chief Commissioner

Location: Sydney, NSW
Just remembered Hellyer Mine in Tassie was connected with a 11km long branch in 1989. Built and funded by the privately owned EBR. This and other upgrades were all done for a "Take or Pay" contract about 650,000tpa for about 12 years (planned and actual).

NSW maybe paying, but will more than likely build the cost into the haulage charges as well.
RTT_Rules
Who is EBR?

Id imagine that having greater use of the line would be one way of paying for it, i.e., the additional revenue attracted to the line doesn't cost more than the cost of the siding.
  Bogong Chief Commissioner

Location: Essendon Aerodrome circa 1980
Just remembered Hellyer Mine in Tassie was connected with a 11km long branch in 1989. Built and funded by the privately owned EBR. This and other upgrades were all done for a "Take or Pay" contract about 650,000tpa for about 12 years (planned and actual).

NSW maybe paying, but will more than likely build the cost into the haulage charges as well.
Who is EBR?

Id imagine that having greater use of the line would be one way of paying for it, i.e., the additional revenue attracted to the line doesn't cost more than the cost of the siding.
jamesbushell.au
The EBR was the Emu Bay Railway, a private company that ran the long line connecting many mines on the west coast of Tasmania with the Port of Burnie on the north coast (which is located on Emu Bay). It ran as a private line for over a century before being incorporated into the main Tasmanian network around the turn of this century.

The EBR has an impressive history and for over half of it's life provided the only land connection between the West Coast mines at towns like Zeehan, Queenstown, Renison Bell, Tullah, Waratah etc with the north coast, before the highway was built through the mountains circa 1960. Thus it also ran an important passenger service in addition to hauling millions of tons of mineral ore.

It was the only main line that made a success of the much maligned Australian Standard Garratt. Apparently the EBR rarely made a profit, but it is important as Australia's longest lasting and most successful private railway.
  james.au Chief Commissioner

Location: Sydney, NSW
Thanks @Bogong.  Ill read up on it.

Though not sure if you can say it was one of the most successful private railways if it rarely made a profit Wink !
  Trainplanner Chief Commissioner

Location: Along the Line
As outlined in another thread on the same topic and by RTT above there are various ways these works can be funded as per the examples In Victoria etc which I quoted previously.  Even so I might be a bit biased but if this was a mining related project no one woul blink for an instant about the Government funding enabling infrastructure to make such a project happem.   We have Governments throwing hundreds of millions to support the wind down of the car industry for a start and subsidies on power etc to keep alumina plants running in Victoria and here we have in really desperate economic times a company investing $60 million to expand agricultural operations in a regional area, increase jobs in an existing rural community and deliver benefits for farmers and we can't find $2.5 million.   Really!!!!!   I'd rather see the Government subsidize this if thats the right word than operating hugely unprofitable passenger trains in the same region!!!  (Even if we do like them)!!!   Which would deliver greater benefits??? It's a no brainer!!!

It simply staggers me.   (How much will get paid in unemployement benefits for the next 12 months because there are no jobs - a damn sight more than $2.5 mill)
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Thanks @Bogong.  Ill read up on it.

Though not sure if you can say it was one of the most successful private railways if it rarely made a profit Wink !
jamesbushell.au
EBR had hit and miss profits but everytime they started to get their head above water they get kicked in the guts by a major mine closures, smelter closures, poor choice of technology (originally it was a timber line), bad loco choice, war, depression, closure of govt line connection to Zeehan and later EZ's Rosebery mine was starting to be their basically only saviour and then the mine knowing this kept the pressure on prices.

In the early 60's, they started the successful motorrail passenger service to connect the west coast to Burnie, then 3 years later the govt opened a road. Finally the aquired a DM to take over the bulk of the ore work in the 60's. Despite the loco having significant problems, it actually helped push EBR into profitability for 3 years, after which EZ finally had enough and bought EBR around mid 60's. EZ later fell under CRA who off loaded the zinc:lead business and EBR in I think the 90's called Pasminco. That loco was only retired in last 10 years, although it finished mainline work decades ago.

EBR was bought by ATN Tasrail in the late 90's as the Hellyer Mine was about to close around 1998-99. ATN was later aquired by PN and then into govt ownership for the first time after about 115 years of operation when the Tas govt took over PNT.

EBR prior to being bought by EZ was a publicly listed company and hence the books were public. We can only assume that since the take over it was continued to be a cash flow positive part of the business, especially in the 12 years of servicing Hellyer Mine.

Ironically the most profitable part of EBR was their substantial engineering bushiness at Burnie. I'm not sure what happened to that, probably a victim of PN?
  Graham4405 Minister for Railways

Location: Dalby Qld
Looking at what is likely the meatworks at Oakey, there is already a rail siding that could be used for unloading into paddocks, but very much old century stuff with just a single line of the main line connection.
a6et
The meatworks is here. There is no operational siding there. You can see the remains of the former long closed Cecil Plains branch running SW to the E of the plant. It is disconnected from the main line. As loaded cattle trains would likely approach from both directions any upgrades should include an angle to allow trains into the sidings from either direction directly. The level crossing on Bridge Street might need to be grade separated which would be a big job on dead level ground.
  NSWGR8022 Chief Train Controller

Location: From the lands of Journalism and Free Speech
Any further news on the funding did they provide some to the meatworks?

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