Partitioning TasRail an option

 

News article: Partitioning TasRail an option

A parliamentary committee has recommended the Tasmanian government consider splitting TasRail into two.

  Rossco T Chief Train Controller

Location: Camberwell, Victoria
TasRail is hugely significant for the state’s freight task, linking the northern ports of Burnie, Devonport and Bell Bay with the capital city Hobart in the south.
Somebody


Maybe that should read "linking the northern ports to an intermodal terminal somewhat near Hobart in the south"

Partitioning TasRail an option

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  LancedDendrite Chief Commissioner

Location: Gheringhap Loop Autonomous Zone
What's the point of vertical separation? It's not like there's any other freight operators clamouring to use the Tasmanian network.

Oh yeah, it's about killing off a moderately successful business because it's government-owned. Cut out the profit centre and let the remaining government-owned bit to wither on the vine Rolling Eyes
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
What's the point of vertical separation? It's not like there's any other freight operators clamouring to use the Tasmanian network.

Oh yeah, it's about killing off a moderately successful business because it's government-owned. Cut out the profit centre and let the remaining government-owned bit to wither on the vine Rolling Eyes
LancedDendrite
Don't know if you don't try?

Right from the state, the Tas govt said it was not going to get involved long-term in the logistics business and if the above rail could stand up on its own two feet after this massive cash injection, then it would most likely be closed.

At the moment the govt carries the risk with investment in the track. PNT refused to do this and hence why it was progressively run down and fees from the above rail didn't fully cover the costs of maintenance and neither state or feds was willing to underwrite the risk. The capital investment by the govt will NEVER be repaid so its not a commercial investment. To keep the above rail viable you have to set the track access fees at such rail is viable.

Selling off the above rail or at least opening the network to 3rd party operators will not affect the financial performance to the govt. Personally I highly doubt there will be interested competition, however there are certain requirements that the state must comply with and that is providing an open access environment should someone at least be interested and this includes heritage rail. Selling the above rail to me is not a huge issue.
  james.au Minister for Railways

Location: Sydney, NSW
Longer term how about Tasmania start the first pilot of a road user charging scheme - being an island it would be pretty good to quarantine and see the affects.  This would influence the mode share and possibly lead to greater rail volumes, and therefore better financial performance of both above and below rail.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Longer term how about Tasmania start the first pilot of a road user charging scheme - being an island it would be pretty good to quarantine and see the affects.  This would influence the mode share and possibly lead to greater rail volumes, and therefore better financial performance of both above and below rail.
james.au
Have to remember Tas does not offer alot of contestable freight for rail. Somewhere in in this Tas forum, a representative from Tasrail explained that they had something like 75% or there abouts of the contestable freight market and and the reasons the outstanding freight is outstanding could be due to various reasons that will not be resolved with a road tax, ie contracts.

Also note Tas had a road tax for freight that paralleled the railway until the early 90's. This tax was removed while I still lived there and there wasn't a shift to road following the loss of this road tax for trucks. Most of the freight lost since the early 90's wasn't lost from rail, it was lost from the state.

For example
NE line
- Clay from stopped due to the papermill switching to imported CaCO3 (or similar). Mine is now closed
- Timber products from the same location, business closed
- Fertilizer, shift from Risdon to imports from Pivot via Devonport which while they attempted rail deliveries was never really viable due to the short distances.
- Loss of Timber with changes in resource and market

Far NW Line
- Loss of Timber with changes in resource and market
- Fertilizer was never huge volumes and was last or one of last deliveries by rail in the state
- Stanley port closing

Burnie
- Closure of Papermill, timber, coal products
- Closure of Tioxide, loss of 100kpa Sulphuric acid from Risdon

Timber overall, changes and contraction of the industry, closure of wood chip mills and papermills.

The Southern Line was boosted by the abandonment of freight from Hobart Port

Devonport Port being on the opposite side river from the railway will never be favorable for rail. If you were going to build the ports for Tasmania today you would only build a port at Burnie and Bell Bay.

Numerous talk about getting milk onto rail has never been successful due to short distances. Cadbury's dehydration plant in Burnie and transport to the factory in Hobart was the best option but the volumes are not enough to make rail viable. Likewise products from the veg processes.
  12CSVT Chief Commissioner

Location: Drowning in accreditation red tape!
What's the point of vertical separation? It's not like there's any other freight operators clamouring to use the Tasmanian network.

Oh yeah, it's about killing off a moderately successful business because it's government-owned. Cut out the profit centre and let the remaining government-owned bit to wither on the vine Rolling Eyes
LancedDendrite
The "point" of vertical separation is that Tasrail cannot and do not want to manage track (esp. closed lines) or access. So someones got to do it if they don't.
  12CSVT Chief Commissioner

Location: Drowning in accreditation red tape!

Numerous talk about getting milk onto rail has never been successful due to short distances. Cadbury's dehydration plant in Burnie and transport to the factory in Hobart was the best option but the volumes are not enough to make rail viable. Likewise products from the veg processes.
RTT_Rules
Milk could be viable from Smithton (together with veneer from Ta Ann) if the Smithton "short line" Option 4 Bass Hwy North proposal was proceeded with, due to the impending mass expansion of Woolnorth dairying under Moonlake for the Chinese market.

Short distances are not a factor if volume is present. Short distances can also be viable if there is customer service and willingness to work like a U.S. shortline rather than trying to act like a mini Aurizon or P.N. (who themselves are trying to ape BNSF or U.P, but fail to see the synchronicity between U.S. Class 1's, Regionals and Short Lines).
  Graham4405 Minister for Railways

Location: Dalby Qld
What's the point of vertical separation? It's not like there's any other freight operators clamouring to use the Tasmanian network.

Oh yeah, it's about killing off a moderately successful business because it's government-owned. Cut out the profit centre and let the remaining government-owned bit to wither on the vine Rolling Eyes
The "point" of vertical separation is that Tasrail cannot and do not want to manage track (esp. closed lines) or access. So someones got to do it if they don't.
12CSVT
So, who else is there to do it? Create another government entity who won't be able to do it either?
  lkernan Deputy Commissioner

Location: Melbourne
So, who else is there to do it? Create another government entity who won't be able to do it either?


Graham4405

They had one, the Rail Management Unit in the Department of Infrastructure, Energy and Resources.
It got rolled into the freight business to create the current Tasrail.
  Graham4405 Minister for Railways

Location: Dalby Qld
So, who else is there to do it? Create another government entity who won't be able to do it either?



They had one, the Rail Management Unit in the Department of Infrastructure, Energy and Resources.
It got rolled into the freight business to create the current Tasrail.
lkernan
And that worked out well didn't it! Smile
  Trainplanner Chief Commissioner

Location: Along the Line
Whilst I understand the principle, I simply cannot believe that you would risk jeopardizing what has become quite a success story in rejuvenating a rail system through investment and good management.   Tasrail is quite a success story.  It has a significant share of the contestable freight market.   The company has great, well motivated and pro-active management.   The asset/infrastructure and operations are fully harmonized. It's not broken leave it alone.  You run a real risk of completing doing a 360.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Whilst I understand the principle, I simply cannot believe that you would risk jeopardizing what has become quite a success story in rejuvenating a rail system through investment and good management.   Tasrail is quite a success story.  It has a significant share of the contestable freight market.   The company has great, well motivated and pro-active management.   The asset/infrastructure and operations are fully harmonized. It's not broken leave it alone.  You run a real risk of completing doing a 360.
Trainplanner
You cannot separate the success Tasrail has had from the financial reality. PNT hand problems because it had no confidence to invest in below rail and hence the track was basically run into the ground. We have seen elsewhere PN will run trains and invest in rolling stock for their above rail operations when there is a buck to be made.

Tasrail is currently riding on the back of a massive govt investment in the below rail asset, had Tasrail being taken back by the state and had same budget as PN, half of it would be closed by now.  The state also stated they were not in the business of running a logistics company and they would rebuild Tasrail then off load it.

Why I see the govt is looking to separate the track from trains is in readiness to sell/lease off the above rail as per their original statement and pretty much the same path the rest of the country has followed. Additionally the govt wants to open the tracks to 3rd party access which I believe is a requirement of the feds. I believe the state will retain ownership and control of the track including its upkeep and the access fees controlled (read subsidised) to ensure the ongoing commercial viability of the above rail operations.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE

Numerous talk about getting milk onto rail has never been successful due to short distances. Cadbury's dehydration plant in Burnie and transport to the factory in Hobart was the best option but the volumes are not enough to make rail viable. Likewise products from the veg processes.Milk could be viable from Smithton (together with veneer from Ta Ann) if the Smithton "short line" Option 4 Bass Hwy North proposal was proceeded with, due to the impending mass expansion of Woolnorth dairying under Moonlake for the Chinese market.

Short distances are not a factor if volume is present. Short distances can also be viable if there is customer service and willingness to work like a U.S. shortline rather than trying to act like a mini Aurizon or P.N. (who themselves are trying to ape BNSF or U.P, but fail to see the synchronicity between U.S. Class 1's, Regionals and Short Lines).
12CSVT
Don't disagree, but after numerous discussion at getting Milk since ATN days, nothing has ever eventuated and I suspect it doesn't add up. DO you know how many tonnes per year we are talking about? My thinking is the cost of the extension and upgrade of the remaining 90km of track we are talking $300m or more and to justify this would probably need them to sign a 10 year contract at least. Probably need no less than 500,000tpa of milk alone.

The worst thing for rail is usually the infrastructure cost even if track runs past their front gate. A few years back I was talking to a CQ fuel company Manager and he liked hauling his diesel 500km to Emerald, but the loading facilities were out of date and needed a major upgrade and no one was willing to pay for the modest volumes on offer so it would switch to road, even though it was more costly and takes more management time.
  james.au Minister for Railways

Location: Sydney, NSW
What third party might operate in Tas?  Is there room for another operator down there to pick up freight?
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
What third party might operate in Tas?  Is there room for another operator down there to pick up freight?
james.au
Who knows, but it enables others to at least try and enables Cement Australia and the mines to go open tender to potential rail operators rather than just Tasrail vs the various road haulage companies.
  Sulla1 Chief Commissioner

Open Access does not work in a low volume environment. Dividing a small pie up into even more pieces just makes the primary rail operator/s increasingly unviable. If Tasrail was to lose its most profitable rail hauls to an Open Access competitor it would almost certainly be forced to start withdrawing from its more marginal operations to survive - or it may simply collapse completely.
  Graham4405 Minister for Railways

Location: Dalby Qld
Open Access does not work in a low volume environment. Dividing a small pie up into even more pieces just makes the primary rail operator/s increasingly unviable. If Tasrail was to lose its most profitable rail hauls to an Open Access competitor it would almost certainly be forced to start withdrawing from its more marginal operations to survive - or it may simply collapse completely.
Sulla1
This is exactly why it needs to remain under the state government umbrella, it's a public service.
  james.au Minister for Railways

Location: Sydney, NSW
Yeah I agree, I think Tas might be just too small to have 2 operators, sustainably.  Even if it was SG and the cost of transferring locos/wagons was small, id think it would be the same.  Happy to be proven wrong though of course.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Yeah I agree, I think Tas might be just too small to have 2 operators, sustainably.  Even if it was SG and the cost of transferring locos/wagons was small, id think it would be the same.  Happy to be proven wrong though of course.
james.au
There is what they want to do and there is reality and yes I highly doubt anyone will be lined up to compete as there is no easy access to NG equipment in Australia and QR or Aurizon won't be interested.
  12CSVT Chief Commissioner

Location: Drowning in accreditation red tape!
Don't disagree, but after numerous discussion at getting Milk since ATN days, nothing has ever eventuated and I suspect it doesn't add up. DO you know how many tonnes per year we are talking about? My thinking is the cost of the extension and upgrade of the remaining 90km of track we are talking $300m or more and to justify this would probably need them to sign a 10 year contract at least. Probably need no less than 500,000tpa of milk alone.
RTT_Rules
When I last visited Woolnorth, they were talking about expanding to about  14 (in the short term) then up to 17 (if I recall correctly) dairying operations, stretching down to Redpa / Marrawah. Can't remember the proposed tonnage, but they estimated a 'B' Double truck out of Smithton, along the Bass Highway, every 20 minutes, 24 hours a day, 365 days a year to move the volume. If that doesn't justify rail, I don't know what would. Then of course there is current significant loading from Ta Ann as well.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
1m tonnes pa should be viable for 90km of rail but I know of others similar alongside a railway that couldn't make it take up.
  Z VAN Locomotive Driver

I do not profess to understand what is so special with vertical separation.  
It has been stated in previous posts Tasrail have a high percentage of contestable frieght.
Equally there does not appear to be a lot of independent rail operators complaining how they cannot get a start.
Union Pacific in America seem to be able to own the track and Rolling stock as well as have other operators run on their track.
Somewhere I have missed why we cannot run a Railway like some run a successful Railroard.


PTE.

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