The Australian Government under the Nation Building Program is investing over $36bn over six years through to 2013/14 on capacity building projects to modernise and maintain the nation’s road, rail and port infrastructure.
This represents the largest ever Commonwealth Government commitment to transport infrastructure in Australia’s history [and] includes a record spend of up to nearly $8bn on rail projects, with twenty three projects already completed and twenty two more underway.
Of course for the full benefits of investment and reform to be realised rail operators must capitalise on improvements to offer services tailored to the needs of their customers; be they passengers, operators or transporters of freight.
Challenges for government – the drivers for rail reform and investment
The transport sector generates up to 14.5% of Australia's GDP. This means that any efficiencies made in this sector translate into significant national productivity gains.
A key challenge for the Australian Government in working towards a more efficient, sustainable and productive country is modernising and expanding our transport systems to maintain our trade competitiveness.
Our competitiveness relies on our ability to move our goods and services from their source to cities and transport hubs – and then on to world markets in Asia, Europe and North America.
To move products as efficiently as possible requires unlocking the inherent advantages of rail in relation to bulk and long-distance transport and its role in easing road congestion.
Over the next two decades, Australia’s trade is forecast to grow considerably. Total rail freight is projected to double between now and 2030, largely as a result of increasing iron ore and coal exports.
Our transport systems have to adapt to be able to meet this increasing freight load.
The Australian Government recognises that improving the efficiency of rail and its attractiveness to end customers is not merely the construction of road and rail – it’s about getting the best out of our existing networks as well as legislative and regulatory reforms to foster efficiency, innovation and the ability of industry to respond to the needs of its customers.
An efficient transport system also means working both with state governments and with industry to increase the competitiveness of the rail industry through a better appreciation of the needs and value choices of customers and an outcomes oriented approach to investment.
This year’s AusRAIL topic of Innovation & Customer Service is well chosen – the challenge for the rail industry is to win customers – in particular freight customers - over to rail. Without a focus on the end customer and the supply chain rail’s share of the growing freight will remain static and the investments and reforms that I will talk more about won’t have the impact they should have on our economy.
Investment in our cities and connecting people
Improving the liveability of our cities and major regional centres is a key part of the infrastructure agenda. Well-planned and sustainable cities are crucial to our national well-being and productivity.
Infrastructure Australia noted in its State of the Cities Report 2010, that Australia’s population is projected to reach more than 35 million people by around midcentury according to both ABS and Treasury projections. Most of this growth (72%) will be in the capital cities.
As urban environments are becoming denser and more congested, they impinge on freight networks, including future storage and terminal capacity.
Additionally demand for passenger travel is forecast to increase by nearly 40% over the next 20 years.
The Australian Government has recognised that rail can play a significant role in easing congestion in our cities – it is especially effective in moving large numbers of people quickly and reliably.
This is why the Australian Government has committed to major urban rail projects in every mainland state capital.
As part of its Sustainable Cities Strategy, and in the face of transport gridlock and increased public transport demand, the Australian Government is committed to assisting State governments deliver more efficient and reliable public transport solutions.
To this end the Australian Government has committed $7.3bn in 2008-09 to 2017-18 on public transport projects; more is now being spent on urban public transport projects than all previous Australian Government’s combined have spent since federation.
These projects are more than just pieces of infrastructure. They are important enablers for urban regeneration and development in areas with high dependence on private vehicles.
Meeting the challenges - government key strategies and priorities
Getting freight on rail is fundamentally important for our economy, our environment, and our cities. Each 1500 metre freight train takes about 100 trucks off our roads. This goes a long way towards addressing congestion and improving safety for road users.
For government intervention to be effective we need to plan for the future and it is essential that governments understand how freight transport systems and supply chains work.
The government’s reform agenda is focused on delivering a national and integrated approach to investment – an approach where we plan for networks, rather than single pieces of infrastructure.
To this end Infrastructure Australia is pursuing a nationally co-ordinated approach to port and freight infrastructure planning and investment in the development of a National Ports Strategy and a National Land Freight Strategy (currently under development for consideration by COAG).
The Australian Government is also undertaking work through the Council of Australian Governments (COAG), and through our National Urban Policy to better plan our long-term infrastructure needs. This includes better integrating land use and infrastructure planning.
Moving Freight and Improving Productivity
Sound investment in our interstate freight network is a key government priority with the Australian Government investing more than $3.4bn over six years,
from 2008-09 to 2013-14, to rebuild more than a third of the existing interstate rail freight network, or nearly 3,800 kilometres of track, in order to move bulk long distance freight off road and onto rail.
Between 2008 and 2010, the Nation Building Economic Stimulus Package delivered investments of almost $1.2bn through the Australian Rail Track Corporation (ARTC) to modernise the interstate rail network and increase rail capacity in the Hunter Valley.
This is making a big difference on the ground where improvements to the freight line between Brisbane, Sydney and Melbourne have already resulted in savings of around seven hours on 2005 travel times.
We have also ensured that rail does not become the bottleneck that hampers the growth in our high quality Hunter Valley coal exports by matching rail’s capacity to that of the port.
Between 2010 and 2012, the Australian Government is investing a further $960 million in rail projects that will enhance the productivity of rail and rail freight users.
Rail on critical sections of the East West interstate network will be replaced with heavier gauge steel that will enable heavier axle loads at faster speeds. Steel and other freight from our resource-rich regions will be transported more quickly and at less cost.
The Australian Government is also funding major rail upgrades at a number of priority locations across the country, such as Port Botany in New South Wales and Geelong Port in Victoria to make the movement of freight in and out of these export hubs more efficient.
The $177m Australian Government funded Port Botany rail upgrade project will improve rail freight capacity in Sydney and help meet a growing demand for container transport by rail. It will be complimented by an $840m Australian Government investment to remove the largest freight bottleneck on the interstate corridor, North of Sydney.
Intermodal terminals
From a national and logistics perspective it is clear that the competitiveness and efficiency of the transport sector, including rail operations, are inseparable from the health of its intermodal terminals.
Moving freight between economic centres as well as shifting bulk commodities to ports quickly and reliably is a key driver of productivity improvements.
Under the Nation Building Act, intermodal terminals are now recognised as key elements of the freight transport network and eligible for funding in their own right.
The direct investment in intermodal terminals by the Australian Government represents a new direction for the Commonwealth and complements the investment in the interstate rail network aimed at supporting our productivity.
The Government is currently investing in ports and intermodal terminals in New South Wales, Victoria and WA.
The development if an intermodal terminal at Moorebank in south-west Sydney is a good case study. Establishing an intermodal terminal at Moorebank will address the critical shortage of intermodal terminal capacity in Sydney and help protect the health of the city by alleviating urban congestion and encouraging a more efficient distribution of containers through the increased use of rail.
From an industry perspective the site is ideally located adjacent to the South Sydney Freight Line and the M7, M5 and Hume Highway Road network.
The Australian Government has established the Moorebank Project Office to manage the feasibility study into the project. A detailed business case is expected to be completed by February 2012.
Regulatory reform
The Australian rail industry has waited a long time for a single National Rail Safety Regulator. On November 4th, with industry and the unions present, the federal, state and territory transport ministers took a big step forward and unanimously agreed to national rail safety laws.
These laws, once passed by Parliaments, will create the National Rail Safety Regulator who will begin operating from January 2013. At the same time, the Australian Transport Safety Bureau will become the National Rail Safety Investigator.
Minister Albanese has described these regulatory reforms as ‘the most important micro economic transport reform in our history.’ (IA Conference 8/11/11)
However, as ... previously noted, agreement to the laws is the not the final step in the reform process - but it is a major step forward. The opportunity is now there for industry to align practices, cut costs and gain efficiencies.
Governments, owners and operators, and unions are working together on the implementation of this important reform with a number of complex issues being addressed such as fatigue risk management, drug and alcohol testing and implementation arrangements for the tourism and heritage rail sector.
It will be a busy year ahead and many details to be worked through, but I can report that we are well on the way towards the goal of micro-economic reform and safety improvement in the rail industry.
During the next year, the National Rail Safety Law will be introduced into the South Australian Parliament. Once passed, other states and territories will follow suit and introduce the related enabling legislation into their own parliaments.
The national regulator will be based in Adelaide with branch offices in each mainland state capital city. Some states may choose to retain the regulatory staff as state-employed and deliver the national regulation under a Service Level Agreement.
Under the new rail safety law, rail operators will be able to get streamlined national accreditation instead of applying in every state and territory where they operate.
A common approach across Australia to the safety regulation of rail transport operators and railway operations will reduce compliance and reporting costs, red tape and help lift national productivity without compromising safety. Benefits to the rail industry from reduced costs from this reform could be up to $73 million annually.
Wide reaching reforms
The Government’s nation building and transport reform agendas are wide reaching and are squarely aimed at boosting this country’s productive potential and social and economic prosperity by ensuring sufficient transport capacity both now and into the future.
The Australian Government is providing unprecedented support to the rail transport sector ranging from regulatory reform to investment across the board including into intermodal terminals, urban passenger networks and upgrading interstate lines.
The challenge for industry ... is to capitalise on this reform and investment with the aim of growing rail’s market share by focusing on creating supply chains which are reliable and meet the needs of your customers.
That’s the challenge for this conference and aligns with your theme – Innovation and Customer Services.
