Reduced Access Fees and funding for the Mt Isa Line

 
  Sulla1 Chief Commissioner

ABC NORTH QUEENSLAND June 9th 2019


STATE GOVERNMENT SPENDS $110M ON MOUNT ISA RAIL LINE AND PORT OF TOWNSVILLE

The Deputy Premier, Jackie Trad,  has unveiled the State Government's $110 million plan to discount freight charges on the Mount Isa to Townsville Rail Line and build a new freight terminal at the Port of Townsville.

Ms Trad announced the plan that aims to increase investment in the North West Minerals Province while in Townsville today.  

"We will be providing $80 million to reduce access charges for those who use the Mount Isa to Townsville Rail Line to get bulk commodities to the Port," Ms Trad said.

Ms Trad said due to the Mount Isa to Townsville Rail Line being "monopolistic infrastructure", the $80 million would be invested over a four-year period.

"The Government is going to alleviate the cost pressures so that we can see more investment in the North West Minerals Province and we can see more jobs in Northern Queensland."  

Ms Trad also announced $30 million to be contributed towards a new freight terminal to reduce commodities from being trucked 12 kilometers from Stuart to the port.

"We can get trains right from pit to port - that will make it all the more efficient and all the more productive for those miners in the North West Minerals Province," Ms Trad said.

The Queensland Budget 2019-20 will be tabled this Tuesday.

Sponsored advertisement

  Sulla1 Chief Commissioner

The Townsville Bulletin is also reporting this funding is on top of the $380-million already committed to upgrading QR's 1000km Mt Isa line, which carries $8-billion in product per annum.

The Townsville Port will be contributing an additional $18-million for the Port rail container terminal, bringing total funding for that project to $48-million.

Centrex Metals, currently developing the Ardmore Phosphate project, which will begin railing 800,000-tonnes of phosphate per annum from Mt Isa to Townsville in 2021, says rail concessions were a "major factor" for the company.
  Sulla1 Chief Commissioner
  The Vinelander Minister for Railways

Location: Ballan, Victoria on the Ballarat RFR Line
Additional coverage from the North West Star

https://www.northweststar.com.au/story/6207514/500m-mount-isa-rail-plan-in-queensland-budget/
Sulla1

Perhaps the bean counters have finally realised it's better for everyone...and particularly for the roads to have as much moving by rail as possible.

Mike.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Additional coverage from the North West Star

https://www.northweststar.com.au/story/6207514/500m-mount-isa-rail-plan-in-queensland-budget/

Perhaps the bean counters have finally realised it's better for everyone...and particularly for the roads to have as much moving by rail as possible.

Mike.
The Vinelander
Agree, now if they could just find a few bucks to install that 100km long by-pass to provide a direct route to Mt Isa.
  Sulla1 Chief Commissioner

It's a significant turnaround in government policy, and perhaps a signal from the Palaszczuk Government that it has recognized it may have squeezed profits from government owned infrastructure beyond sustainable levels.

It's now up to rail operators and rail customers to claw back the tonnages lost to road over at least the last five years. On a positive note, from the dark days of 2017, rail traffic is increasing on the line. Combined with reduced access fees and direct mine to port container services, rail now has a real opportunity to beat parallel road train services on price, capacity and reliability.
  james.au Minister for Railways

Location: Sydney, NSW
Sulla, in a thread a while ago (which I can't find now) you identified the access revenues for the line - do you know what the latest were?  And if we can work out the line profitability to QR based on that revenue data?
  8077 Chief Train Controller

Location: Crossing the Rubicon
Rail access to the port of townsville is available today making it strange the containers would need to be trucked to the port 24 kms?  Are they lifting containers at the Stuart terminal and using trucks?

How will the new terminal fix this?
  Sulla1 Chief Commissioner

Rail access to the port of townsville is available today making it strange the containers would need to be trucked to the port 24 kms?  Are they lifting containers at the Stuart terminal and using trucks?

How will the new terminal fix this?
8077

PN and Aurizon are both trucking containers from their terminals at Stuart to the Townsville Port. So a train arrives at the rail operator's terminal, the container is lifted, trucked to the port, lifted again and stored, then lifted again to be emptied into or loaded onto a ship. A rail container terminal at the port beside the container storage area will remove the cost of the truck transfer with trains unloading at the port. Many of the bulk mineral producers are moving to containerised bulk product, and road has had a distinct advantage in being able to truck directly from the mine to the port, while rail currently needs a truck from the mine to Cloncurry, rail to Stuart, truck to the port - so you can see where the costs stack up. The new port terminal also opens up the possibility of short haul containers, such as from the new Agripower Silicon Fertiliser factory going by rail from plant to port, instead of the current use of road.
  Sulla1 Chief Commissioner

This was from QR's 2015/2016 Annual Report


"Mount Isa line (Stuart to Mt Isa and Phosphate Hill) - 5.7 billion GTKs of mineral concentrates, intermodal and general freight, sulphuric acid, fertiliser and cattle generating $91.06 million access revenue. This also includes access revenue from maintenance services, light engine/shunts and project repayments. Around 50-60 trains per week, track capacity of 88 trains per week.
Track maintenance expenditure - $50-million plus $25-million to replace 41km of rail and sleepers."



Based on an average of 55 trains per week, the "average train" cost $31,839 in access fees. With a $20-million discount on access fees, then the "average train" drops to $24,846. Remember that most trains are empty in one direction and loaded in the other, so the "average train" doesn't really exist when measured in GTKs.

Now, if this government move is intended to increase volumes, thence revenue, then the line will need to run 70.1 "average trains" per week to earn back that $20-million drop in revenue. In the late 2000s the line regularly saw 84 trains per week.
  james.au Minister for Railways

Location: Sydney, NSW
This was from QR's 2015/2016 Annual Report


"Mount Isa line (Stuart to Mt Isa and Phosphate Hill) - 5.7 billion GTKs of mineral concentrates, intermodal and general freight, sulphuric acid, fertiliser and cattle generating $91.06 million access revenue. This also includes access revenue from maintenance services, light engine/shunts and project repayments. Around 50-60 trains per week, track capacity of 88 trains per week.
Track maintenance expenditure - $50-million plus $25-million to replace 41km of rail and sleepers."



Based on an average of 55 trains per week, the "average train" cost $31,839 in access fees. With a $20-million discount on access fees, then the "average train" drops to $24,846. Remember that most trains are empty in one direction and loaded in the other, so the "average train" doesn't really exist when measured in GTKs.

Now, if this government move is intended to increase volumes, thence revenue, then the line will need to run 70.1 "average trains" per week to earn back that $20-million drop in revenue. In the late 2000s the line regularly saw 84 trains per week.
Sulla1
Thanks for the detail.

So the line is probably profitable but that 25m capital cost suggests that if capital costs are added in (through depreciation) it might actually be at cost recovery.  Though as you say, its a volume exercise so if they get more trains back it might cover those again too.

I really do think that line profitability would be an interesting number to have across the entire Australian network....
  8077 Chief Train Controller

Location: Crossing the Rubicon
Rail access to the port of townsville is available today making it strange the containers would need to be trucked to the port 24 kms?  Are they lifting containers at the Stuart terminal and using trucks?

How will the new terminal fix this?

PN and Aurizon are both trucking containers from their terminals at Stuart to the Townsville Port. So a train arrives at the rail operator's terminal, the container is lifted, trucked to the port, lifted again and stored, then lifted again to be emptied into or loaded onto a ship. A rail container terminal at the port beside the container storage area will remove the cost of the truck transfer with trains unloading at the port. Many of the bulk mineral producers are moving to containerised bulk product, and road has had a distinct advantage in being able to truck directly from the mine to the port, while rail currently needs a truck from the mine to Cloncurry, rail to Stuart, truck to the port - so you can see where the costs stack up. The new port terminal also opens up the possibility of short haul containers, such as from the new Agripower Silicon Fertiliser factory going by rail from plant to port, instead of the current use of road.
Sulla1

Thx for the detail which was not something I was aware of.  hard to fathom a rail cannot use the port at Townsville for any goods or just containers?
  8077 Chief Train Controller

Location: Crossing the Rubicon
Google maps shows rail connected to the Townsville container terminal.

  Sulla1 Chief Commissioner

Rail access to the port of townsville is available today making it strange the containers would need to be trucked to the port 24 kms?  Are they lifting containers at the Stuart terminal and using trucks?

How will the new terminal fix this?

PN and Aurizon are both trucking containers from their terminals at Stuart to the Townsville Port. So a train arrives at the rail operator's terminal, the container is lifted, trucked to the port, lifted again and stored, then lifted again to be emptied into or loaded onto a ship. A rail container terminal at the port beside the container storage area will remove the cost of the truck transfer with trains unloading at the port. Many of the bulk mineral producers are moving to containerised bulk product, and road has had a distinct advantage in being able to truck directly from the mine to the port, while rail currently needs a truck from the mine to Cloncurry, rail to Stuart, truck to the port - so you can see where the costs stack up. The new port terminal also opens up the possibility of short haul containers, such as from the new Agripower Silicon Fertiliser factory going by rail from plant to port, instead of the current use of road.

Thx for the detail which was not something I was aware of.  hard to fathom a rail cannot use the port at Townsville for any goods or just containers?
8077
Just containers being lifted off and onto rail. There's around six million tonnes of bulk loading handled directly by rail to the port, plus containers decanted while still on their wagons - such as molasses, or filled - such as cement.
  Sulla1 Chief Commissioner

Google maps shows rail connected to the Townsville container terminal.

8077

This image is somewhat out of date, with Berth 4 heavily redeveloped for the expanding container trade. That's mostly Berth 3 shown in the image. Additional container cranes are on order. The sidings shown are currently used for unloading molasses. Whether these will be integrated into the new rail terminal, I don't know.

https://www.townsville-port.com.au/projects-development/infrastructure-projects/berth-4-upgrade/

Sponsored advertisement

Subscribers: james.au, RTT_Rules

Display from:   

Quick Reply

We've disabled Quick Reply for this thread as it was last updated more than six months ago.