Published on March 12, 2014
www.ara.net.au ABN 64 217 302 489 Heavy Haul Conference Bryan Nye, CEO ARA 31 July 2013
www.ara.net.au The ARA • Who we are: a member-based association that represents the interests of the rail sector • Our purpose: to create an environment that will permit the Australasian rail industry to prosper • Who we represent: all rail operators, both private and government, track owners and managers, manufacturers of rollingstock and components, and other aspects of the rail industry
www.ara.net.au 5 Election Platforms for 2013 • Public Transport -The future of our cities • Freight by Rail- Keep our economy moving • Rail Manufacturing- Skilled jobs for the future • High Speed Rail- Catching up with the world • Rail Technology- A smart, efficient and safe network
www.ara.net.au PUBLIC TRANSPORT The future of our cities
www.ara.net.au Benefiting all Australians Whether they travel on public transport or not, every Australian benefits from it • One passenger train takes 525 cars off our roads • Less cars on the road = – Less road congestion – safer roads – reduced greenhouse gas emissions
www.ara.net.au Congestion in context
www.ara.net.au Rail Patronage That means an additional 60,000 people are travelling by train each week! Urban Passenger Rail 769.9 million journeys in 2010 (6.1% increase since 2008) Non-Urban Passenger Rail 13.38 million journeys in 2010 (12% increase since 2008)
www.ara.net.au Environmental change *Marchetti Travel Principle Relative change 2004 to 2008 Petrol price +31% Population +6% Private road vehicle use +1% Heavy rail +23% Light rail +10% Bus +11% Public transport +18%
www.ara.net.au Innovative funding and IA • Sustainable, reliable funding is needed • Alternative funding options should be explored: – Tax mechanisms to fund rail and public transport eg fuel tax, parking levies, 0.5% GST increase, property tax, property development charges – Hypothecation is crucial • We support Infrastructure Australia (IA) evaluation and priority listing
www.ara.net.au FREIGHT BY RAIL Keep our economy moving
www.ara.net.au Rail Freight around the world
www.ara.net.au Freight Network Rail’s share of containerised freight
www.ara.net.au Trends In Modal Share – Road vs Rail Key questions: • Is inter-city rail freight in terminal decline, or can it make a significant contribution to the national economy? • If it can make a significant contribution, what in broad terms is required to make this happen?20% 40% 60% 80% 100% Road Rail
www.ara.net.au Coal Ore Sugar Bauxite Grain Other Bulk Source: Royal Bank of Scotland Transport Equities Update (2012) Grains 3-4% Bulk Commodities 931 million tons Non-Bulk Commodities 20 million tons Rail Freight Rail Freight moves nearly 1billion tons of goods p.a. (2011) Coal Ore Sugar Bauxite Grain Other Bulk
www.ara.net.au Rail Freight 0 200 400 600 800 1000 1200 1400 1600 1800 Y2012 Y2020 Coal and Iron Ore Source: Royal Bank of Scotland Transport Equities Update (2012) 818 million tonnes 1530 million tonnes
www.ara.net.au Inland Rail A $4.4 billion Melbourne – Brisbane 41% existing, 25% upgraded, 34% new track
www.ara.net.au Inland Rail benefits • 7 hours faster than the coastal route- whole of supply chain benefits. • Would remove trucks from Pacific, Newell, Hume and New England Highways • Allows for 1800m double stacked trains- increased benefits of scale. • Freeing of rail capacity through Sydney- currently no freight rail can enter Sydney from the north during peak hours.
www.ara.net.au Inland Rail- delivery strategy • 2010 ARTC Study is key • NPV assumed 7%. Today projects such as HSR 4% • Inland Rail is financially net beneficial when you take into account positive externalities generated. • So far secured $300 million in funding for planning and acquisitions – commencing late 2014 • ARA’s view- Inland Rail needs to be completed by 2020
www.ara.net.au Inland Rail- demand analysis • There is demand for the railway that would result in a freeing of capacity through Sydney (removing 5 northbound M-B services from the Main North Line by 2030) • Rail mode share increases to be greater than road’s share Melbourne to Brisbane freight modal share without Inland Rail Melbourne to Brisbane freight modal share with Inland Rail commencing in 2020
www.ara.net.au Carbon Pricing- objective Ensure equal pricing treatment for road and rail
www.ara.net.au Message • The current exemption for trucks fails logic. • This exemption is effectively promoting more carbon emissions by moving freight off rail. • In any future carbon pricing scheme, road and rail should be treated equally. • Government incentives for carbon abatement initiatives and alternative fuels are encouraged.
www.ara.net.au Supporting funding for emissions reduction 1. Supports changes to fuel standards that are implementable 2. Introduction of alternative fuels e.g. Gaseous fuels or Biodiesel 3. Greater use of more-fuel efficient locomotives and vehicles
www.ara.net.au Heavy Haul- Project example Roy Hill • Roy Hill will build, own and operate a 342 kilometre single line, heavy haul railway to transport processed iron ore to the south of Port Hedland • Five ore trains will operate per day, with a total payload of 31,450 tonnes of ore • An advanced communications based signalling system will provide improved safety and operational efficiency, while also making the rail system ready for future autonomous operations
www.ara.net.au Port Project Overview • Roy Hill has been allocated 55Mtpa of export capacity through the Port Hedland inner harbour Port design includes: • Stockyard with the capacity to store over five million tonnes of ore. • Two berth wharf, 800m long, caters for 2 vessels with a combined capacity up to 420, 000 tonnes
www.ara.net.au Project Overview Remote Operations Centre Mining Processing Rail Ports Remote Operations Centre Rapid problem identification & rectification Better decisions, faster. Better people, cheaper. 1. Standardised KPI’S 2. Improved communication across roles 3. Integrated production visibility Mine planning Mine scheduling Asset management Integrated planning Integrated planning Commercial in Confidence 1 • Roy Hill’s Remote Operations Centre (ROC) will introduce a significant new dimension and standard to the mining industry • The end-to-end, state- of the-art automation will deliver a higher level of safety, reliability and operational efficiency to Roy Hill’s operations
www.ara.net.au Locomotives Locomotives • 21 x GE EVO – ES44 ACI Locomotives • 15 by July 2014 with 6 to follow in 2015 and 2016 • Locomotive Superintendent • Maintenance Planner • Ramping up to 20 Locomotive Maintainers in 2016/17 • 30 Day Minor Services • 184 Day Maintenance cycle for Major Services • Capability for minor to major maintenance (Engine and Bogie changes on site) • Major component repairs off site
www.ara.net.au Rolling Stock Wagons • D & C Contract - CSR • 1196 x Ore Cars – Standard Pilbara Design – Tandem Pairs – 40TAL – ECP Brakes – Auto Park Brakes – Amsted bogies • 12 x Rail Tank Cars • 5 x Flat Tops • 3 x Ballast Wagons • Maintenance Superintendent • 15 Ore Car Maintainers
www.ara.net.au Lessons learned • Pit to port • Total supply solution • Safety, Safety, Safety
www.ara.net.au RAIL MANUFACTURING Skilled jobs for the future
www.ara.net.au Impacts of increased demand • Every additional 1 million tonne means 1 new train set • More tracks • More skilled employees - Skill shortage • Increased cost for all projects
www.ara.net.au ARA Economic Analysis of Rollingstock Procurement: Industry Brief Deloitte Access Economics | 32 • Time gaps between orders creates significant resourcing issues for the industry. For instance, Future Australian Passenger Rolling Stock Report Phase 2 Sporadic Ordering • Repeated re-tooling and disassembly of production lines increases costs. • Investments in R&D or equipment may also need to be recouped over a shorter timeframe. • Ongoing uncertainty regarding the timing and size of orders impact on how industry is able to invest. • Over 1,200 rail cars are aged 30 years or over • Over the next 20 years national fleet will grow from 4,000 to 11,000 cars.
www.ara.net.au ARA Economic Analysis of Rollingstock Procurement: Industry Brief Deloitte Access Economics | 33 Australian rolling stock orders over the past 10 years suggests that economies of scale is reached when the order size is around 200 rail cars. Future Australian Passenger Rolling Stock Report Phase 2 Order Size Small orders tend to lead to higher costs per car as:- • many of the ‘fixed’ costs of building a train, such as • research and development and • production line mobilisation, can only be spread over fewer units.
www.ara.net.au HIGH SPEED RAIL Catching up with the world
www.ara.net.au The preferred route • 1,748 km • 4 city stations • 4 city-peripheral stations • 12 regional stations • 144km tunnels (8% of the line) or 29% of costs
www.ara.net.au Competitive travel times…
www.ara.net.au Study proposed stages • Stage one: Sydney, Southern Highlands, Canberra, Wagga Wagga, Albury Wodonga, Shepparton, Melbourne. – Sydney, Southern Highlands, Canberra = $23 billion – Canberra, Wagga Wagga, Albury Wodonga, Shepparton, Melbourne = $26.9 billion • Stage two: Sydney, Central Coast, Newcastle, Taree, Port Macquarie, Coffs Harbour, Grafton, Casino, Gold Coast, Brisbane.
www.ara.net.au Forecast travel demands • 355 million East Coast trips forecast by 2065 without high speed rail • Our cities, highways and airports are congested today. • In 2065, without alternatives our East Coast will be gridlocked.
www.ara.net.au Without alternatives by 2065 • All airports will need additional runways • Sydney will need a 3rd airport • The 800km Hume Hwy will need duplicating again
www.ara.net.au 2020: China’s 25,000km HSR Network
www.ara.net.au Creating new living circles What about here in Australia?
www.ara.net.au We have the population for HSR Source: John Daly, GRATTAN Institute
www.ara.net.au RAIL TECHNOLOGY A smart, efficient and safe network
www.ara.net.au ARA analysing cost of Rail v Road Drivers of cost under the current paradigm • Higher safety standards/more sophisticated infrastructure than roads • Operators won’t wear disruption and limit construction access (build with teaspoons) • Operators’ conservatism driven by high public profile of disruptions and fear of backlash • Commercial drivers put on Rail Operators • Unique regulatory burden placed on rail projects (red tape) • Unnecessary gold plating of specifications. (Projects more than 5 years old would not meet current specifications).
www.ara.net.au Rail v Road - Cost Benefits Bridge Construction nominal 100m long bridge: Two lane road bridge ( D&C sell price) • Structure, 100m x 8m wide @$9k / sqm = $7.2M • Road Furniture = $1.0M Total $8.2M Single track bridge ( D&C sell price) • Structure, 100m x 4m wide @10k/sqm = $4.0M • Rail systems, Track, OHL, Sigs 100m@$5k/m = $0.5M • Stations allowance, $12m station every 3km, 100m @$4k/m = $0.4M Total $4.9M Key Take-Away Points • Comparing two lanes of road against single track is conservative • Rail infrastructure is more cost effective • If planned properly, rail will deliver step-change results
www.ara.net.au Design Benchmarking – Rail v Road Benchmarked a number of projects across the east coast, results as follows: • For large rail projects, design is generally in the order of 4 to 9% of D&C sell price (including construction phase services and development). Greenfields were at the lower end, brownfields at the higher end. • For road projects, design is generally in the order of 5 to 8% of D&C sell price (including construction phase services and TOC development) • In both rail and road, the costs of design during bid was high “As a % of construction cost, it is no more expensive to design rail against road projects on the east coast of Australia”
www.ara.net.au Road v Rail – The New Paradigm • Gold Coast rail corridor is 1/3rd the width of the Pacific Motorway Smaller footprint results in a lower environmental impact Much more viable solution for every day commuters Catalyst for growth – build it and they will come
www.ara.net.au Rail… it’s always better • Travelling to work • Sending freight • Getting there safely • The impact on the environment • Costing less • Rail… it’s always better
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