Failure of rail privatisation in Qld

 
  raymond Deputy Commissioner

Location: Gladstone, Queensland
The sale of ARIZON INTERMODIAL to pacific national has all but signalled  the failure of privatisation in Qld.

All arizon wanted was the coal network and took a long term way to achieve it. the rest of the sale[workshops ,mainline and other parts of the business] were disposable.

There will be some people now coming on here to argue the opposite ,but in hindsight that is what happened.

RAYMOND

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  tazzer96 Deputy Commissioner

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  allan Chief Commissioner

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tazzer96
Tomato, for me...
  The Vinelander Minister for Railways

Location: Ballan, Victoria on the Ballarat RFR Line
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allan

Hot Chilli or Hickory BBQ for me.
  Dangersdan707 Chief Commissioner

Location: On a Thing with Internet
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The Vinelander
I Prefer Mayonnaise
  bevans Site Admin

Location: Melbourne, Australia
This was of course known at the time Queensland Rail Freight was privatised into QR National.  As were the job losses and the wholesale shift of cattle and other freight from rail to road.  Queensland Taxpayers now left with a mess of road trains and a lot of job losses and industry now having to rethink their approach to freight.  Most of all the government of Queensland will pay out 3 times the amount they received for the sale in road maintenance over a medium term view.
  Lockspike Deputy Commissioner

This was of course known at the time Queensland Rail Freight was privatised into QR National.  As were the job losses and the wholesale shift of cattle and other freight from rail to road.  Queensland Taxpayers now left with a mess of road trains and a lot of job losses and industry now having to rethink their approach to freight.  Most of all the government of Queensland will pay out 3 times the amount they received for the sale in road maintenance over a medium term view.
bevans
Rail privatisation is about satisfying ideology. At the same time a few mates can make some bucks outa' the good bits and the not so good bits we receive gov't subsidies for, what's not to like.
When it becomes obvious it's a mess, doesn't matter, those responsible have left the scene for others to sort out.
  RTT_Rules Dr Beeching

Location: Dubai UAE
This was of course known at the time Queensland Rail Freight was privatised into QR National.  As were the job losses and the wholesale shift of cattle and other freight from rail to road.  Queensland Taxpayers now left with a mess of road trains and a lot of job losses and industry now having to rethink their approach to freight.  Most of all the government of Queensland will pay out 3 times the amount they received for the sale in road maintenance over a medium term view.
bevans
Lets not get too carried away.

The movement cattle to road on all but a few major corridors was because it cost the Qld taxpayer so much to move cattle, pigs and other livestock by rail air transport was probably a practical alternative. The losses were worse than Brisbane commuter rail at less than 20c in $1 revenue return. Similar other freight tasks followed again because their costs were so high it wasn't deemed viable option. Queensland Transport which funds the road network also issued the contracts for the CSO rail operations and converted to road. Also interesting to note that the freight switched to road hasn't been on most other railways for decades.
  RTT_Rules Dr Beeching

Location: Dubai UAE
The sale of ARIZON INTERMODIAL to pacific national has all but signalled  the failure of privatisation in Qld.

All arizon wanted was the coal network and took a long term way to achieve it. the rest of the sale[workshops ,mainline and other parts of the business] were disposable.

There will be some people now coming on here to argue the opposite ,but in hindsight that is what happened.

RAYMOND
raymond
I'm going to interject here because I think you are putting 2 and 2 together and getting 10.

I'm not sure what hindsight you are leading too. Prior to selling off Aurizon, it had expanded interstate, but never seriously took on PN as it doesn't have the supporting logistics chain behind it and never will. The smaller players that have come and gone have similar issues, hence why grain was a natural target, containers less so.


Opening up the railways to 3rd party operators was never a bad thing as the govt railways had more than their fair share of issues including poor customer service, poor reliability and slow to accept new technology. Over the years I've had business with a number of sites that used to use rail and much to my amazement not one of them said they wanted rail back (with one exception), trucking was far easier. The exception being CQ Petroleum which preferred rail over truck, which said govt owned QR had planned to close the CQ diesel services as they refused to fund the Gladstone port facility upgrade.  

At the time way back in the early 2000's when open access was announced, I have it on good authority via another project I was working on that no small rail operators were interested in operating in Qld while QR was both track owner and above rail operator. ie we were talking with Rail Victoria/Australia about picking up a contract as QR wasn't interested. They indicated that they and other smaller players were keen on Qld and this project was a healthy tonnage for them but needed a bigger operator to go first to test the water.

As Aurizon was the former QR and much of the practices and management went with it, yes they stuck with what they knew. One commodity making up roughly 90% of their traffic with about 10% of the effort. The coal growth was delivering far more tonnes without trying compared to the effort for boxes.

Many of the former QR workshops were relics of the govt era based on branch lines and local traffic and no longer needed in a modern more streamline operation, hence once unchained from govt interference they followed their natural destiny and closed. The same rationalization occurred elsewhere south of the border. For example why does Rockhampton workshops need to be retained? Its no longer a hub, barely even a junction! Its just a terminus station for one daily passenger train and location source for some inter-modal traffic and track maintenance. No more swapping locos etc etc.

Back to the original statement, Is Qld Rail privatisation a failure? No, not entirely. In the early 90's the then Qld govt tried to close most of what eventually closed anyway 20 years later and was also proposed to be closed by ANR in the early 70's had the fed been successful in forming a National Railway as planned by Goff Whitlam, Qld just delayed the inevitable which enable us from the south to enjoy Querky Rail's mixed services decades after they ceased in the south.

Australia wide what was a failure of rail privatisation was selling the tracks, Qld didn't go down this path however I believe Anna Bligh did try to hive off the NCL and Mt Isa lines to the Feds at one stage, but the ARTC seems to have a phobia against NG as hey also said no for Tassie.

Also what has proven a failure of ideology was the belief that opening up rail access would see hand full or more operators start up (yes I also remember when this BS proposal was announced for Tassie), of note its also proven a failure in the skys as well, 25 years after removing the Air Duopoly we still have a Air Duopoly, probably more so today than before!


Question, you have a choice to buy a rail business, but only one, which would you choose?
1) QR Coal
2) QR Inter-modal

Yep, I think most of us agree.
  locojoe67 Assistant Commissioner

Location: Gen X purgatory/urban Joh-land
Much of the general freight traffic has successfuly been privatised - straight onto road, where it is likely more time efficient, at least for the consignors.

Helped by the asset divestment policies of the former vertically integrated QR. Locomotives were sold off overseas, to Asia and South America. Rolling stock was sold or cut up.

With no access to locos or rolling stock, third party operators on the narrow gauge never had an economically viable way to enter the low margin containerised traffic.

This is cost shifting of maintenance  from the below rail owners to road, which is partly local but moreso state government-funded for the major highways, iirc. With lobbying of Feds for contribution to really major projects.

Problem with freight growth on road though is that there is no pathway for it to return to rail as tonnages increase. There are few locos and minimal rolling stock to accommodate the extra traffic. Funding for rail corridor improvements with heavier rail and re sleepering is also much harder to justify than funding for open access road improvements. Either is expensive. But road improvement announcements can arguably win more brownie points for vote hungry politicians in marginal electorates.

Which reminds me...When is the next state election?
  Sulla1 Chief Commissioner

Nothing has happened in Queensland that is any different to the path taken by other rail operators - prior to and after their privatisation - in every other state. A company moving 260-million tonnes of freight per annum with revenues of $3.452-billion and an EBIT of $836-million in 2016/2017 could hardly be considered a failure. That is not to say Aurizon couldn't do anything better - it can, and it should. For all of the cost-cuttings and service suspensions carried out by the current management team - a team dominated by staff recruited from outside of the rail industry - the savings and ideologies used to achieve those savings has seen an overall decline in share value, suggesting investors are not impressed by the current direction Aurizon has taken. At a time when Pacific National has adopted a diversified tonnage growth policy to raise revenue, Aurizon adopted a cost saving policy to raise returns - and the owners of PN seem a lot happier with their company's performance than those invested in Aurizon. At some point in the near to medium future, Aurizon will have to try something else to increase its share price, and PN's model is the most likely version the Andrew Harding team (or its replacements) will use to grow back into the diversified rail business.
  BrentonGolding Chief Commissioner

Location: Maldon Junction
At a time when Pacific National has adopted a diversified tonnage growth policy to raise revenue, Aurizon adopted a cost saving policy to raise returns - and the owners of PN seem a lot happier with their company's performance than those invested in Aurizon. At some point in the near to medium future, Aurizon will have to try something else to increase its share price, and PN's model is the most likely version the Andrew Harding team (or its replacements) will use to grow back into the diversified rail business.
Sulla1
Remembering of course that PN did exactly the same thing down south when it took over Freight Victoria / Australia, sent much traffic to road and concentrated on the bulk side of the business.

it seems that they may be back tracking a little now but the highways and byways of Victoria are groaning as they try to cope with trucks hauling frieght that used to be on rail.

BG
  speedemon08 Mary

Location: I think by now you should have figured it out
At a time when Pacific National has adopted a diversified tonnage growth policy to raise revenue, Aurizon adopted a cost saving policy to raise returns - and the owners of PN seem a lot happier with their company's performance than those invested in Aurizon. At some point in the near to medium future, Aurizon will have to try something else to increase its share price, and PN's model is the most likely version the Andrew Harding team (or its replacements) will use to grow back into the diversified rail business.
Remembering of course that PN did exactly the same thing down south when it took over Freight Victoria / Australia, sent much traffic to road and concentrated on the bulk side of the business.

it seems that they may be back tracking a little now but the highways and byways of Victoria are groaning as they try to cope with trucks hauling frieght that used to be on rail.

BG
BrentonGolding

Not everything PN lost was their fault... fuel trains and the Bairnsdale log train are the big ones that were caused by other parties
  Dangersdan707 Chief Commissioner

Location: On a Thing with Internet
At a time when Pacific National has adopted a diversified tonnage growth policy to raise revenue, Aurizon adopted a cost saving policy to raise returns - and the owners of PN seem a lot happier with their company's performance than those invested in Aurizon. At some point in the near to medium future, Aurizon will have to try something else to increase its share price, and PN's model is the most likely version the Andrew Harding team (or its replacements) will use to grow back into the diversified rail business.
Remembering of course that PN did exactly the same thing down south when it took over Freight Victoria / Australia, sent much traffic to road and concentrated on the bulk side of the business.

it seems that they may be back tracking a little now but the highways and byways of Victoria are groaning as they try to cope with trucks hauling frieght that used to be on rail.

BG

Not everything PN lost was their fault... fuel trains and the Bairnsdale log train are the big ones that were caused by other parties
speedemon08
Well then, what was Lost By PN that was there Fault?
  Dangersdan707 Chief Commissioner

Location: On a Thing with Internet
At a time when Pacific National has adopted a diversified tonnage growth policy to raise revenue, Aurizon adopted a cost saving policy to raise returns - and the owners of PN seem a lot happier with their company's performance than those invested in Aurizon. At some point in the near to medium future, Aurizon will have to try something else to increase its share price, and PN's model is the most likely version the Andrew Harding team (or its replacements) will use to grow back into the diversified rail business.
Remembering of course that PN did exactly the same thing down south when it took over Freight Victoria / Australia, sent much traffic to road and concentrated on the bulk side of the business.

it seems that they may be back tracking a little now but the highways and byways of Victoria are groaning as they try to cope with trucks hauling frieght that used to be on rail.

BG

Not everything PN lost was their fault... fuel trains and the Bairnsdale log train are the big ones that were caused by other parties
Well then, what was Lost By PN that was there Fault?
  RTT_Rules Dr Beeching

Location: Dubai UAE
The reality is privatisation or public ownership neither dictates what is or isn't carried by rail, it all gets down to what the govt chooses to or not subsidise and there are privately run rail freight services in Australia that are partly funded by a state govt so myth busted.
  x31 Chief Commissioner

Location: gallifrey
The reality is privatisation or public ownership neither dictates what is or isn't carried by rail, it all gets down to what the govt chooses to or not subsidise and there are privately run rail freight services in Australia that are partly funded by a state govt so myth busted.
RTT_Rules

The government and us as taxpayers already subsidise every truck on the road.  The idea of privatisation is trains are now no longer subsidised and will be able to compete pushing freight onto road.  This is a false economy as the costs to the taxpayer increase.
  RTT_Rules Dr Beeching

Location: Dubai UAE
The reality is privatisation or public ownership neither dictates what is or isn't carried by rail, it all gets down to what the govt chooses to or not subsidise and there are privately run rail freight services in Australia that are partly funded by a state govt so myth busted.

The government and us as taxpayers already subsidise every truck on the road.  The idea of privatisation is trains are now no longer subsidised and will be able to compete pushing freight onto road.  This is a false economy as the costs to the taxpayer increase.
x31
As are many freight services not hauling rocks.

I think the level of subsidy of many services killed off in last 30 years was the issue, not that there was a subsidy.

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