Productivity Commission Report on Tasmanian Shipping

 
  BP4417 Deputy Commissioner

Location: Launceston, Tasmania
In the latest Productivity Commission Report on Tasmanian Shipping released today it makes the recommendation that Tasmania's Railways be privatised.

Its quite clear that the Canberra based public servants took no notice of the carnage that the years of privatisation took on Tasmania's Railway.
One has to ask how competent are these public servants in making decisions that could result in an already proven failed rail transport model for this State. What are the facts that they based their decision on?

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  siroch Locomotive Driver

Students of history should be wary of selective research andignoring the facts that do not align with their own beliefs. The problems facing our rail system are not dependent upon the type of owner, be they government department, commission, GBE, or private company.



Fear not as no one would be willing to pay the asking pricefor the above rail component of the TasRail business in any case.
  freightgate Minister for Railways

Location: Albury, New South Wales
Did the report actually provide detail as to the productivity advantages of privatisation ?

As I have rest posted tonight. Australia is on a hiding to
Nowhere. How do we arrest this slide ?

Privatisation in my opinion has not worked on any networks.
  BP4417 Deputy Commissioner

Location: Launceston, Tasmania
Students of history should be wary of selective research.
siroch

Privately Operated from 1871 - 1890, Failed.
Privately Operated from 1997 - 2009, Failed.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Privately Operated from 1871 - 1890, Failed.
Privately Operated from 1997 - 2009, Failed.
BP4417

If you are going to go bak 100 years in history, what about mentioning under TGR, the later years would also be considered a major fail. Track in disrepair, ancient locos, wagons, failing passenger network, almost a complete lack of capital spending outside the log traffic and BB line.

Under ATN, I would have said Tasrail was probably in its boom years after years of what was looking like a slow death under fed control.

The feds cut all the old inefficient stuff out and quickly took Tasrail from a general carrier using very old stock and huge numbers to do so when switching to a modern'ish air brake rake only system. It seemed to be moving forward, however what started to hurt AN Tasrail was the dying industry in Tasmania with many a customer closing down and lack of interest by the feds to do anything too hard. I think its been stated before that if Boyer Mill had not switched to Rail, AN may have cut the southern line.

ATN was unfortunately sold to PN, why they bought it, god only knows!

I think the main failing in this whole privatisation was the off-loading of the track, both here, Vic and NZ. This will never work on a marginal operation because the operator is reluctant to throw too much at the track for fear a major customer will close/stop and with it their main reason for existence. Tracks are portable, locos and wagons are. PN was loosing wagons and locos as well as general cost and distruption to increasing number of derailments. My understand in the later era of TGR, derailments were also a major issue.

When ANTasrail was sold, the Tas govt or the feds through ARTC should have taken over the track. Tasrail I feel is not ready for above rail sale, but perhaps in a few more years when things have stabilized. At some stage it probably will happen, but not the rails.
  donttellmywife Chief Commissioner

Location: Antofagasta
I've read the productivity commission report.  Despite looking for it I didn't see the recommendation that TasRail be privatised.

There is a suggestion that private investment opportunities in rail should be examined, but that's by no means necessarily the same thing as privatisation.  There is explicit acknowledgement that privatisation is unlikely to be successful based on recent history!

The report does question whether there is (or should be) a long term future for rail in Tasmania.
  BP4417 Deputy Commissioner

Location: Launceston, Tasmania
I've read the productivity commission report. Despite looking for it I didn't see the recommendation that TasRail be privatised.

There is a suggestion that private investment opportunities in rail should be examined, but that's by no means necessarily the same thing as privatisation. There is explicit acknowledgement that privatisation is unlikely to be successful based on recent history!

The report does question whether there is (or should be) a long term future for rail in Tasmania.
donttellmywife

In todays Examiner 30/06/14 the Productivity Commission states that Tasrail is not making a a sustainable return on its operations.
I note the Productivity Commission does not comment on the return from investment in roads to the Commonwealth, State, and Local Governments from road freight vehicles.
Personally I believe that over the next few years Tasrail will be forced by economics to become a much leaner organisation, it is then the Productivity Commission should do its analysis along with a return from investment in roads analysis.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
In todays Examiner 30/06/14 the Productivity Commission states that Tasrail is not making a a sustainable return on its operations.
I note the Productivity Commission does not comment on the return from investment in roads to the Commonwealth, State, and Local Governments from road freight vehicles.
Personally I believe that over the next few years Tasrail will be forced by economics to become a much leaner organisation, it is then the Productivity Commission should do its analysis along with a return from investment in roads analysis.
BP4417

I think its highly unlikely Tasrail will ever make a sustainable return. Any other railway moving boxes less than 400km, profitably?
  i_know_nothing Train Controller

Maybe short line operators in the US, but the playing field is much more level over there.
  Graham4405 The Ghost of George Stephenson

Location: Dalby Qld
I think its highly unlikely Tasrail will ever make a sustainable return.
RTT_Rules

Likely not, but it keeps trucks off the road, thus making the roads a safer place and reducing the cost of road maintenance.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Likely not, but it keeps trucks off the road, thus making the roads a safer place and reducing the cost of road maintenance.
Graham4405

True and as always the question is... What is the break even point for the govt? ie how much loss does Tasrail have to make before its cheaper to close it?
  12CSVT Chief Commissioner

Location: Drowning in accreditation red tape!
True and as always the question is... What is the break even point for the govt? ie how much loss does Tasrail have to make before its cheaper to close it?
"RTT_Rules"


A better question is, how much does governments have to keep losing on increasingly unsustainable subsidisation of heavy road transport before they start recovering the exorbitant capital costs ONLY required by heavy road transport, at which point market forces will default to rail as the most efficient land transport mode. Then the question of Tasrail making a profit or loss should be irrelevant, unless there is a failure of management.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
A better question is, how much does governments have to keep losing on increasingly unsustainable subsidisation of heavy road transport before they start recovering the exorbitant capital costs ONLY required by heavy road transport, at which point market forces will default to rail as the most efficient land transport mode. Then the question of Tasrail making a profit or loss should be irrelevant, unless there is a failure of management.
12CSVT

Agree, for short to mid haul rail freight to be viable there needs to be a move to nt/km pricing for truck freight which is what happens in NZ. I believe there is some moves in the govt to do this, but there is also a natural resistance to anything that will increase freight haulage costs by the general taxpayer. Currently we have a blind subsidy, taxes would need to be immediately reduced to offset the increase in trucked freight and those furthest from cities wil have most to loose.

However even if this was implemented it doesn't equal containerised freight being cheaper on rail for short to mid distances. In the past some companies were happy to pay penalties for using road over rail for good reason, its still cheaper. Double handling, longer indirect distance and increased working capital, higher capital infrastructure costs, lower frequency are still issues that dog the rail freight business without even touching the haulage costs.
  BP4417 Deputy Commissioner

Location: Launceston, Tasmania
A Tasmanian Study into the transport of logs said that the road transport of logs returned between 21 and 30% of costs generated. This means the subsidy from the taxpayer is between 70 and 79%. This does not include a cost for pollution, road deaths, trauma etc. all of which are accounted for in rail costings.
Australia has a road centric National Transport Commission who fail the rail industry with its free kicks to the road transport industry. This can be seen in the differences in Medicals, Failure to mandate digital event recorders. Failure to mandate annual checks of speed limiters, Failure to get rid of cheat books - drivers logs for event recorders. Failure for the road transport industry to have a Safety Management System regulated similar to rail. The Commission down plays pavement damage caused by heavy vehicles, apparently rain is a major player. They regulated last year that heavy vehicles are no longer required to be fitted with spray suppressant equipment because it will save the truckers about $200.00 a truck, bugger the motorists who are blinded by water spray.
Ever noticed whenever the NTC regulate a weight increase for heavy vehicles bridges and some roads always seem to have funds spent on them but if for example if Tasmanian rail wanted to increase its axle load no funds would be forthcoming for track upgrades Rail costs versus Road - equal? No not by a long shot.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
A Tasmanian Study into the transport of logs said that the road transport of logs returned between 21 and 30% of costs generated. This means the subsidy from the taxpayer is between 70 and 79%. This does not include a cost for pollution, road deaths, trauma etc. all of which are accounted for in rail costings.
Australia has a road centric National Transport Commission who fail the rail industry with its free kicks to the road transport industry. This can be seen in the differences in Medicals, Failure to mandate digital event recorders. Failure to mandate annual checks of speed limiters, Failure to get rid of cheat books - drivers logs for event recorders. Failure for the road transport industry to have a Safety Management System regulated similar to rail. The Commission down plays pavement damage caused by heavy vehicles, apparently rain is a major player. They regulated last year that heavy vehicles are no longer required to be fitted with spray suppressant equipment because it will save the truckers about $200.00 a truck, bugger the motorists who are blinded by water spray.
Ever noticed whenever the NTC regulate a weight increase for heavy vehicles bridges and some roads always seem to have funds spent on them but if for example if Tasmanian rail wanted to increase its axle load no funds would be forthcoming for track upgrades Rail costs versus Road - equal? No not by a long shot.
BP4417

21 to 30% seems a bit low if those other factors are not counted but fair enough.

I would also add, that the shear volume of logs trucks in the past have seen a few friends who visited say never again until they do something about the log trucks.

If you compare the trucking industry in general in Australia to other countries
- Trucks do 100-110km/hr, most Middle East is 80km/hr strictly limited and likewise in Europe speeds are more controlled
- In Middle East and Europe trucks must strictly stay in left lane. On two and three lane carriage ways they are often prohibited from the middle lane and always the inside lane.
- Routes of over length semi's such as B-doubles and road trains are strictly limited and usually to multi carriage way roads
- Trucks are banned from over taking on single lane each way roads.
- Axle loads are controlled, based on the route
- road access charges are mt/km, not fixed rate like Australia.

The problem with Australia is that all these extra costs are currently funded by the taxpayer, rail cannot be everything to everyone in Australia and even using the more rail friendly road charges you would unlikely see rail exceed 25% of container freight volumes. Even in Europe trucks still move the bulk of freight especially cross country borders. So these subsidies need to be transferred from the general taxpayer to the end user (mostly the same). The cost of freight to regional Australia would increase without the off-set in tax if it was passed on. However the status quo needs improving and the first step needs to be moving to a nt/km for access charging anything over 2-3 axles.
  12CSVT Chief Commissioner

Location: Drowning in accreditation red tape!
I think all but the most impractical fantasising foamers would understand rail's role in the wider logistical industry has its limitations, but it does have an important role in the overall scheme of things and the essence of the debate is to allow rail to do what it can do best without being undermined.

The trucking industry also has and will always have an essential role. Trucking has more than enough of a role to play without being given unfair financial advantage and being encouraged to poach market share off other modes that are more appropriate to those modes.

Economic regulation should be applied to allow each mode; road; rail; air and sea (and in today's economy electronic communication), to operate in a fair and balanced manner, with an equal contribution from the taxpayer to allow each mode to achieve their best without undue support or undue restriction. The market will then work out where and when the most efficient mode is applicable and not be distorted by uneven support of one mode at the expense of another.

Rail cant do everything, but it shouldn't be restricted in doing what it can do well.

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