AUSTRALIAN RAIL SUMMIT 2008

GS015/2008
23 July 2008

AUSTRALIAN RAIL SUMMIT 2008
23-24 July 2008
Sydney Convention and Exhibition Centre

Parliamentary Secretary will be met by
Anthony Sprange, Association & Communication Events Organiser

Parliamentary Secretary will be introduced by Mr Alan Burns, Chairman, Australian Railway Industry Corporation
and CEO, Asia Pacific Rail

ACKNOWLEDGEMENTS

• The Hon John Watkins MP, Deputy Premier of NSW
• Brian Nye, CEO, Australasian Railway Association

INTRODUCTION

Thank you for the warm welcome, Alan. Good morning ladies and gentlemen.

It's a pleasure to be able to join you here today in Darling Harbour for this, the seventh annual gathering of Australia's national rail fraternity. As Alan said, I am here representing my colleague Anthony Albanese, Minister for Infrastructure, Transport, Regional Development and Local Government.

Anthony is unable to be with us today and sends his apologies. You have a very full and wide ranging agenda and the Minister wishes you well with your discussions.

You are the people who know rail in this country - as your program says you are "the thought leaders". You know that we are at an important junction in our history.

The Rudd Government does not want to perpetuate the past piecemeal approach to Australia's infrastructure, not least our rail, road, air and sea networks.

As you know the rail industry to this day has to deal with the legacy of parochial decisions taken in the 19th century.

We want to establish a truly national approach backed by proper long-term planning.

We realise one of the keys to driving this process forward and achieving the best possible outcomes is through close collaboration with all levels of government and the private sector.

Events such as this summit help build on the spirit of cooperation and partnership that we need to get this country moving again.

On that note, I am pleased to see that my friends John Watkins from NSW and Robert Hudson from Victoria will be addressing you.

CHALLENGES

Two of the biggest challenges facing the Australian rail industry are:

• One -- how to strengthen rail's position in the freight market; and
• Two -- how to fulfil rail's potential in the alleviation of urban congestion.

The Australian Government is committed to working with you to meet these challenges and to realise the enormous potential of rail.

I also want to emphasise that as I outline the Rudd Government's agenda for rail, our Government is about laying a foundation for the future prosperity of Australia. This means we take a long-term view and a truly national approach.

One of the most important transport predictions to bear in mind is that our freight task is expected to double over the 20 year period to 2020.

For this growth to be sustainable we need to ensure our transport systems are able to cope.

NATIONAL TRANSPORT STRATEGY

To this end, the Rudd Government has initiated a National Transport Strategy - this is a major priority on our reform agenda.

The Strategy is being developed through the Council of Australian Governments (COAG).

The rail industry will benefit as the Strategy develops, but there is plenty for us to do in the meantime.

The harmonisation of rail safety legislation is integral to the development of a seamless national rail market. On its own this is a significant step.

But the Rudd Government is talking with the states through the COAG process because we want to go further.

Anthony Albanese will be talking with his state counterparts in the next few days on the establishment of a single national rail safety regulator and a single national rail safety investigator.

INFRASTRUCTURE AUSTRALIA AND THE BUILDING AUSTRALIA FUND

Meeting our rapidly growing freight task, reducing urban congestion and tackling climate change demands large scale investment in infrastructure.
This investment needs to be carefully planned and targeted at the projects that will have the greatest impact.

Labor has long recognised the need for planning and precise targeting. One of our election commitments was the establishment of a new body to support this process. We have delivered through the establishment of the statutory advisory body Infrastructure Australia.

Infrastructure Australia is currently conducting a national audit to take stock of our existing infrastructure, to identify shortfalls and bottlenecks, and importantly, to recommend ways in which we can get back on track.

This includes identifying ways industry and government can be smarter in using existing infrastructure and how we can best implement long overdue changes to regulation to remove barriers and encourage investment.

Infrastructure Australia will draw up a national priority list for action which it will deliver to COAG in March next year. This list will provide governments and industry with a pipeline of projects to facilitate better long-term planning.

Nation building infrastructure of this scale demands a significant financial commitment. The Building Australia Fund, with an initial allocation of $20 billion, is delivering part of that commitment.

A key task for Infrastructure Australia is to guide investment from the Building Australia Fund. In the years to come, the Fund will enable the development of critical economic infrastructure including roads, rail, ports and broadband.

The establishment of Infrastructure Australia, the Building Australia Fund, and the Major Cities Unit - of which I will speak a little later-- reflect our commitment to overcoming the piecemeal approach to infrastructure that we inherited.

RUDD GOVERNMENT INVESTMENT PRIORITIES

We have changed how the Australian Government sees Rail. By allowing Auslink 2 and other Australian Government infrastructure spending to attend to road rail port and inter modal transport hubs we have shifted the focus from the roads only approach that dominated under the previous government.

We have clearly indicated that rail is a top priority for future infrastructure investment through the $75 million we provided for feasibility and planning work in this year's budget.
This includes funding to examine the feasibility of a Western Metro from Parramatta to the Sydney CBD, east-west rail links in Melbourne, a rail link to Perth airport and the extension of the Adelaide rail network.

This investment clearly differentiates us from the former government which thought, and still thinks, that public transport is not an issue for the federal government.

We're also investing $972 million in the national rail network, both directly and through the ARTC (Australian rail track Corporation). Key investments include:

• $77 million for port rail links, the Wodonga bypass, and track standardisation projects in Victoria;
• $18.2 million to upgrade and improve the Tasmanian rail network;
• $11.5 million for the road-over-rail overpass at Daddow Road in my hometown of Perth, which will allow more efficient movement of rail freight to and from the Kewdale intermodal terminal;
• $1 million towards an Adelaide rail freight movements study, part of which will look at re-routing the main freight rail line north of the Adelaide Hills; and
• $300,000 for a pre-feasibility study of the Maldon to Dombarton line in southern New South Wales.

The Government is also fully committed to delivering on its 2007 election commitments. Over half a billion dollars of our 2008-09 transport spending is directed at getting these projects started early.

Our commitments to rail over the period 2009 to 2014 amount to over $1.6 billion.
This includes a new focus on the development of intermodal terminals in which we will invest over $440 million.

• We have committed $300 million to redevelop the current Moorebank Defence site on the outskirts of Sydney as a multi-user intermodal terminal;
• $80 million towards the development of six intermodal sites in Victoria;
• Over $60 million towards the development of a Brighton transport hub and upgrade of the current terminal at Bell Bay in Tasmania; and
• $3m each to establish joint government and industry taskforces on grain rail infrastructure is WA and NSW.

THE CHALLENGE FOR RAIL FREIGHT

I'd like now to look at some of the challenges facing the rail industry. In particular I will take a look at rail's performance on the East-West and North-South corridors.

The East-West corridor is strong and is continuing to improve. On the ARTC's count, rail has around an 80 percent market share on this route.

This success has not been emulated on the more heavily trafficked North-South corridor. Here rail's market share has been in decline for a decade. Today it carries less than 10per cent of freight moving between Sydney and Melbourne.

One key to meeting this challenge is improving freight train access through Sydney - an issue which I'll say a bit more about in a moment. Another challenge is cutting transit times between Melbourne, Sydney and Brisbane.

ARTC INVESTMENT PROGRAM

The ARTC's investment strategy for the North-South corridor targets improvements to cut transit times significantly.

The construction of seven kilometre passing lanes between Melbourne and Sydney will allow trains to pass and overtake while on the move.

The crossing loop extension program between Sydney and Brisbane will provide additional passing opportunities for long trains on that part of the network.

The ARTC's concrete resleepering program is more than halfway to completion and long-term planning for rail deviations which will further cut transit times on the corridor is continuing.

To encourage an integrated approach, the Government would like to see collaborative planning by road and rail agencies for the construction - where appropriate - of common road and rail alignments - to share corridors.

This has not been lost on the ARTC, but I know that they have found it difficult to engage road agencies, who hold concerns about delaying the delivery of projects.

One of the benefits of engaging in long-term, collaborative planning is that these issues can be resolved and planned jointly.

This is far preferable to retro-fitting a rail link into a road corridor after planning is complete and the project is about to be delivered.

INLAND RAIL STUDY

As part of our long-term commitment to the North-South corridor, the Government is funding a $15 million alignment study for an inland railway between Melbourne and Brisbane.

The prospect of cutting this journey from 36 to 21 hours represents a huge efficiency gain. Many of you will remember that this was the estimation made in the North-South Rail Corridor Study of 2006.

The ARTC is conducting the new study and will build on the 2006 report. They are considering the railway's possible alignment alongside engineering, economic, planning and environmental issues.

We intend this study to help gauge the needs of potential users and the appetite of the market to deliver the railway either in part or in full through private sector financing.

ADVANCED TRAIN MANAGEMENT SYSTEM

While I am focused on work being done by the ARTC, I'd like to mention the Advanced Train Management System (ATMS).

In June, the ARTC announced a $90 million trial on 120 kilometres of track between Adelaide and Port Augusta. This is an important next step towards the future for safe and efficient train management.

If proven and then implemented, ATMS has the potential to enable track side signalling to be removed. Global Positioning System technology will allow trains to operate safely with significantly shorter headways.

The ARTC tells us that the system alone has the potential to more than double the capacity of the national network.

Tackling communications and signalling differences across the country - the modern version of the rail gauge problem - is seen as an important step to the rail industry improving its productivity.

TACKLING URBAN CONGESTION

Speaking of productivity, I want to take some time now to look at the issue of urban congestion. As I said earlier, our freight task is expected to double over the 20 year period to 2020.

Our intercity highways may be able to handle this growth, but when the semis and the B-doubles hit the urban fringes they contribute to serious congestion.

Urban congestion comes with unacceptable social and economic costs.

Workers are spending more time commuting than with their families

and the statisticians report that increased congestion in urban areas may well cost our nation in the order of $20 billion annually in avoidable costs by 2020.

If we are to reduce the impact of freight growth on urban congestion, rail simply has to play a more prominent role.

Some states have set targets for the amount of freight that they aim to move by rail in their metropolitan regions. For example, here in Sydney the NSW Government has established a target to increase rail's share of throughtput at Port Botany to 40 percent by 2011.

The Australian Government supports this approach and through its investment is assisting states to achieve these targets.

INVESTMENT IN URBAN PASSENGER SYSTEMS AND THE MAJOR CITIES UNIT

The Australian Government's investment in urban freight rail solutions will have flow-on benefits for passenger systems.

We are acting directly to improve infrastructure for the benefit of the many Australian commuters suffering the effects of urban congestion.

As an initial measure the Government has established the Major Cities Unit which will work closely with Infrastructure Australia.

It will promote coordinated urban planning across governments, and will improve the sustainability and liveability of our cities.

To support this initiative, the Australian Government provided $75 million to the states last financial year towards a series of extensive feasibility and planning studies. Just over half of this investment was provided to landmark projects with an emphasis on rail, including:

• in Sydney, $20 million towards a feasibility study into the proposed Western Metro (Green Line) between Parramatta and the CBD;
• in Melbourne, $12 million towards an assessment of projects on Melbourne's East - West transport links;
• in Adelaide, $3 million towards a transport sustainability study; and
• in Perth, $3 million towards the development of a strategic framework for transport networks servicing Perth Airport.

THE SYDNEY CHALLENGE

So, what is happening here in Sydney? The metropolis of Sydney is a vital part of our national economy and it crystallises two key themes I have touched on today:

• The ability of, and the need for, rail to play a greater role in the freight task; and
• Rail's potential to help to alleviate urban congestion.

The single major reason for rail's poor performance on the North-South corridor is the severe restrictions on freight trains gaining access to the Sydney metropolitan system.

This is worst during the peak commuter periods when freight trains are locked out of the urban system by Sydney's legislated passenger priority system.

Excessive dwell times for freight trains within the urban system are a major cause of train delay and a serious bottleneck. This is one of the findings of a recent publication by the BITRE titled, Australian Intercapital Rail Freight Performance Indicators 2006-07 which highlighted that trains can spend up to 10 hours dwell time in Sydney.

While unloading and loading freight obviously accounts for some of this time, it does not account for all of this significant dwell time in Sydney.

The report is the result of collaboration between the Bureau of Infrastructure, Transport and Regional Economics and the Australasian Railway Association. It provides a comprehensive set of indicators and targets for performance in Australia's rail industry.

I would like to thank both rail infrastructure managers and train operators for their ongoing cooperation in providing information for the preparation of this report. Top-quality information like this tells us what the problem is - the challenge is to then try and fix the problem.

Two of our key rail election commitments address the challenge directly.

First, we are providing $840 million towards construction of a dedicated freight track from North Strathfield to Gosford.

Second, we are providing a further $150 million towards improving Port Botany road and rail access and handling.

These projects will complement the $280 million Southern Sydney Freight Line (SSFL) that the ARTC will soon be commencing on the southern approach to the city.

The completion of these projects will see maximum path availability for freight trains on the South Sydney Freight Line through to Port Botany and could also see up to four freight paths per hour for 22 hours per day between Sydney and Newcastle.

This availability will greatly improve our ability to get freight trains through Sydney.

Of course to make our improvements to infrastructure fully effective, complementary improvement in the performance of operators is also required - reliability is one of key factors currently holding back rail.

On time performance, facilitated by improved terminal efficiency is vital in order for freight trains to meet scheduled train paths.

This is a classic example of the need for governments and industry to work together to maximise the value we get from our investments.

CLIMATE CHANGE

Before I close today, I want to take a few minutes to discuss climate change. Tackling climate change is a major result of our rail agenda.

Recent weeks have seen plenty of discussion about the Government's climate change response.

The development of an Australian Carbon Pollution Reduction Scheme and the engagement of the transport sector within it have been particularly scrutinised.

Why is a Carbon Pollution Reduction Scheme so important? Because the most responsible, effective and efficient way to address carbon pollution is to create an economic environment in which we can transition to a low carbon economy.

The ETS is taking action now to ease future burdens.

Our 2010 start time is ambitious but it is achievable. The Carbon Pollution Reduction Scheme Green Paper which was recently released outlines the Government's approach to the design of a national emissions trading scheme.

The paper identifies the key design decisions that are required, discusses alternative approaches to dealing with the key questions to be resolved, and indicates preferences among options.

The Government welcomes your feedback on all elements of the Green Paper, feedback that will inform the Government's decision on the final scheme and the design of the ETS.

Transport accounts for some 14 per cent of our total greenhouse gas emissions so we need to consider the sustainable options.

Rail should play an important role.

For instance, according the Australasian Rail Association, each 1500 metre train replaces about 100 semi-trailers. Each tonne of rail freight uses only one third of the fuel used to transport the same tonne by road.

Moreover, rail is becoming increasingly cost-competitive with the ever increasing price of fuel. Transport fuel price rises have been greater than increases in the price of electricity.

The ARTC has recently undertaken a survey which demonstrates that rail not only competes on the longer haul routes such as the East-West corridor -- for the first time it has undercut the road door-to-door delivery price on the Melbourne to Sydney route.

I am not talking about depot to depot. I am talking about door to door - the overall task including the road pick-up and delivery.

As we deliver on major projects within the urban environs of Sydney and Melbourne, and as we bring greenhouse emissions into the marketplace, the economic rationale for rail freight will continue to be strengthened.

CLOSING

When we were elected to Government, we inherited some significant challenges including:

• A rapidly growing freight task;
• lack of a national transport policy;
• increasing urban congestion; and
• a need to act on climate change.

Rail has the potential to be a significant part of the solution to all of these challenges.

However, let me be clear -- the modal choice is not one of road OR rail, but one of road AND rail. Our national approach to meeting the transport challenge is multi-modal.

The Rudd Government is responding to our transport needs by planning carefully and establishing national frameworks. Critically, we are supporting these measures with the necessary investment.

We are up to the challenge. And with your engagement, we are committed to success.

I'd like to leave you today with a thought. Yesterday, I was in Lithgow at a Jobs Summit. Lithgow has an important place in Australian rail history as the home of the the Zig Zag railway. This 19th Century engineering masterpiece was the gateway to the NSW central west and a marvel of its age.

But we can't afford any more zigging and zagging in Australian rail. We need a straight forward, sensible and sustainable approach which we can implement nation-wide.

I urge you to make the most of these two days. I thank you all for taking the time to be part of this valuable forum and wish you well during the remainder of the 2008 Australian Rail Summit.

Thank you