New operator for WA

 
  903 Chief Commissioner

Location: Perth WA
New era for grain rail freight in Western Australia

The CBH Group today announced plans to make an investment of up to $175 million in rolling stock as part of a landmark decision to award its long-term grain rail contract to experienced United States transportation group Watco Companies.

CBH Group Chief Executive Officer Dr Andrew Crane said today's announcement marked a new era for grain rail freight in Western Australia which would deliver significantly greater value, efficiency and safety to grain growers and the grain industry.

"Our decision to go to tender for the first time for our rail transport requirement has resulted in the introduction of competition for the first time in the Western Australian grain rail freight market and the first major investment in new rolling stock for decades," Dr Crane said.

"We still need continued support and engagement with below-rail provider WestNet and the State Government to achieve an optimal outcome.

"However, subject to a satisfactory new track access agreement, and with the State and Federal Governments' $350 million funding package, our planned investment means more than $500 million has now been committed this year to the grain transport network after decades of neglect."

Dr Crane said Watco had been chosen as CBH's long-term rail partner following a year-long tender process which had drawn competitive interest from rail companies locally and around the world.

The new 10 year agreement would commence in May 2012 and would see Watco provide a comprehensive rail logistics planning service including train planning and scheduling, tracking, maintenance, inventory control and crew management.

Watco would operate and maintain the new rolling stock to be acquired by CBH, which would include a number of locomotives and a fleet of wagons to be delivered over the next 18 months.

"We welcome Watco to Western Australia and have great confidence that their experience and innovative and performance-driven culture will enable us to implement the most efficient grain logistics supply chain for WA growers and their customers and help us to keep the maximum amount of grain on rail," Dr Crane said.

"We also anticipate the new arrangements will deliver our growers material improvements in freight efficiencies."

Watco Executive Vice President, Ed McKechnie, said Watco welcomed the opportunity to partner with the CBH Group and the grain growers of Western Australia as its point of entry to Australia.

"We want to grow the rail business in Western Australia and we will do that by providing exceptional customer service," Mr McKechnie said.

"We are committed to operating a safe and efficient railroad that creates value for growers.  This is done by moving more tonnes to port and doing it through creativity and innovation.

"We believe our experience in grain transportation and the successful execution of over 40 start-ups on railroads, rail car shops, switching operations and transload locations will be of significant value when commencing operations in Western Australia."

Dr Crane said the existing interim agreement with the incumbent provider Australian Railroad Group was due to run until April 2012 and CBH looked forward to working with ARG to ensure a smooth transition to the new arrangements for the benefit of both companies and the grain industry.

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  crisfitz Chief Commissioner

Location: Enroute somewhere
Saw this coming - but still stunned that ARG have been dumped. A lot of ARG people  would be getting very nervous now.

This has massive ramifications to the whole WA rail network, depots such as Wagin, Merredin and Avon rely on grain for their existance. No grain contract - no work.

This is probably the biggest change to the WA network since Westrail became a private company.
  wn514 Chief Commissioner

Location: at a skyhooks concert living in the 70's
interesting times ahead indeed.
  P2017 Chief Commissioner

Location: Geraldton
Looks like Geraldton will be the place to be for train driving with all the ore traffic that is going to happen within the next year.
  WAGR_trains Assistant Commissioner

Interesting....Its only the grain so the other areas will be ok, maybe, but now another player is in the market ALCOA and other haulage contracts may come in for some more competitive competition, other than just ARG.
  Jarroo Chief Commissioner

and just as we thought the Yanks had gone for good............

I was looking forward to some new motive power on the iron ore trains, now it will be P class with 18 of them to be available  Sad
  crisfitz Chief Commissioner

Location: Enroute somewhere
and just as we thought the Yanks had gone for good............

I was looking forward to some new motive power on the iron ore trains, now it will be P class with 18 of them to be available  Sad
"Jarroo"


Errrrr.......

They only have 17 last time I checked. And I doubt they will all be pressed into ore haulage. The new line will take 21 ton axleload so why run 20 year old 16 t locos.

Nah - the P's will replace the DB's on the south west. Done it before. The AB / DAZ / D / DBZ locos will be sold or scrapped for sure. Sad
  Tiny Train Controller

Location: Kalgoorlie
Saw this coming - but still stunned that ARG have been dumped. A lot of ARG people  would be getting very nervous now.

This has massive ramifications to the whole WA rail network, depots such as Wagin, Merredin and Avon rely on grain for their existance. No grain contract - no work.

This is probably the biggest change to the WA network since Westrail became a private company.
"crisfitz"


Merredin will be okay Cris, with Polaris starting up. But yes; Avon and Wagin may be a concern. However, job opportunities will arise at other depots, or people may jump ship to the new operator.

But, that gives us 18 months to photograph, observe and report on what we can see now. And in 18 months time, we will have a whole new system to observe! At least we have plenty of warning...
  Jarroo Chief Commissioner

What sort of revenue is currently generated with grain rail haulage?
This loss of a major contract is going to hurt the bottom line, just as well this new mob weren't around when the iron ore contracts were let.
  42101 Banned

Location: Banned
So just who are this new mob i cannot say i have ever heard of them before now??
  Southwest Locomotive Fireman

Why all the sad faces? This is great news! A little competition on the NG network by other operators might just be what we need for investment Smile And why stop at grain? A new operator could chase some other traffic being hauled by ARG (like the Alumina for ALCOA as mentioned by WAGR_trains) and actually create some competition.
  Bulbous Assistant Commissioner

Like Southwest said, having a shortline operator coming over here and working the system should be great for both competition and for traffic generation....... some of the traffic/tonnage levels we think are low enough to close lines, are high enough to keep shortline operations in business and profitable in the US......

I am watching this with excitement, that's for sure.......
  WAGR Chief Commissioner

So just who are this new mob i cannot say i have ever heard of them before now??
"42101"


Google the name and read all about them
  bingley hall Minister for Railways

Location: Last train to Skaville
So just who are this new mob i cannot say i have ever heard of them before now??
"42101"

http://www.watcocompanies.com/railroads.htm

Can't say I'd ever heard of them either.

The interesting thing is that as it currently reads, Watco won't own any assets, although I would imagine that could easily change.
  42101 Banned

Location: Banned
So just who are this new mob i cannot say i have ever heard of them before now??
"42101"

http://www.watcocompanies.com/railroads.htm

Can't say I'd ever heard of them either.

The interesting thing is that as it currently reads, Watco won't own any assets, although I would imagine that could easily change.
"bingley hall"


Bing
Thanks heaps for that mate. Very HappyVery Happy
  crisfitz Chief Commissioner

Location: Enroute somewhere
Why all the sad faces? This is great news! A little competition on the NG network by other operators might just be what we need for investment Smile And why stop at grain? A new operator could chase some other traffic being hauled by ARG (like the Alumina for ALCOA as mentioned by WAGR_trains) and actually create some competition.
"Southwest"


Watco are a short line operator in the USA, not here. In the USA they own track and rolling stock.

All they are providing are crews / management and servicing. CBH will own the rolling stock. They will dictate when and where the trains run. CBH has been keen to shut down the tier three lines, even curtail the tier 2 lines so there is little hope for more services.

And how much rolling stock do you get for $157 mill ? Not much. This, to me, looks like CBH's plan to service only 10 -20 Super Sites by rail may now come to being. With only that many bins open to rail, you don't need many trains / crews.

On the surface it may look exciting, but looking deeper it means fewer trains, more ( short haul ) trucks and a loss of jobs.

I hope I'm wrong.....
  freightgate Minister for Railways

Location: Albury, New South Wales
interesting times ahead indeed.
"wn514"


This would appear to be a positive change bringing much needed investment to the WA NG network.

I guess the management at ARG who have been dumping contracts for "easier" business will now be under real pressure.  Perhaps carrying fuel is actually good business then it is the only business you have?

--Bill
  Bulbous Assistant Commissioner

Well, $157 million will get you around 20 locos at $5 million each, and 316 hoppers at $180k each...... seems like a hell of a lot of rolling stock to me, and that is paying the inflated AU prices for them too........

Negativity flows like a biblical flood round these parts.......
  jmt Deputy Commissioner

Comments re Watco on trainorders.com

"it is well known that Watco will never spend money on anything new. Or pay crews a living wage. Or maintain their track, when they can threaten to embargo service unless the government either rebuilds the track for them or buys the railroad and leases it back to them."

"As a citizen of the United States I would like to apologize in advance to the good people of Australia."

With this sort of reputation they should be a good fit with the grower controlled silo operator
  bingley hall Minister for Railways

Location: Last train to Skaville
Well, $157 million will get you around 20 locos at $5 million each, and 316 hoppers at $180k each...... seems like a hell of a lot of rolling stock to me, and that is paying the inflated AU prices for them too........

Negativity flows like a biblical flood round these parts.......
"Bulbous"

It's $175 million....

......and what's the current fleet involved with the grain task?
  freightgate Minister for Railways

Location: Albury, New South Wales
Interesting to see if these guys also look at Barley traffic?

--Bill
  Mike_in_the_west Chief Commissioner

Location: Perth, WA
Poor buggers having Watco at the helm now.  I've heard fun stories from the USA on the American forums.    Awesome for railfans though.   Plenty of GP7's and B23-7's...but not much 'new' power.  I'll actually be checking out a few of thier shortlines in September.

Maybe CBH might order KiwiRail DL Class locos?

Or...does $175m allow CBH to snap up D/DA/DB/AB class and all NG/SG hoppers?  Send the P's to the SW main and bring the 4100/SA class over to Geraldton?

"Fun" times ahead.
  Bulbous Assistant Commissioner


It's $175 million....

......and what's the current fleet involved with the grain task?
"bingley hall"


Sorry - I read Crisfitz's post which mentioned $157 million......
  crisfitz Chief Commissioner

Location: Enroute somewhere
Well, $157 million will get you around 20 locos at $5 million each, and 316 hoppers at $180k each...... seems like a hell of a lot of rolling stock to me, and that is paying the inflated AU prices for them too........

Negativity flows like a biblical flood round these parts.......
"Bulbous"

It's $175 million....

......and what's the current fleet involved with the grain task?
"bingley hall"


Currently 7 narrow gauge fleets and 3 standard gauge fleets of wagons.

Loco's come from the general pool, but as a roughy 3 x AB ( Merredin mostly ), 6 DAZ and 15 P class. Usually 2 DBZ's are also used in Albany. The standard gauge fleets use either a single Q or double LZ's, depending on the size of the train.

Recently the DAZ loco's have been used in the south west on coal, with the AB's stored ( given the ocassional 'cobweb removal run ) a/c no trains running in Merredin. Also the 2 AD's are stored, were used in the grain districts last.
  crisfitz Chief Commissioner

Location: Enroute somewhere
Well, $157 million will get you around 20 locos at $5 million each, and 316 hoppers at $180k each...... seems like a hell of a lot of rolling stock to me, and that is paying the inflated AU prices for them too........

Negativity flows like a biblical flood round these parts.......
"Bulbous"



OK. So based on your numbers ( and my mistake, $175 m ) 20 loco's and 416 wagons.

Currently we have 7 ng fleets ( 7 x 50 = 350 ) plus 140 standard gauge wagons. Roughly 500 wagons at the moment. So we are looking at 2 less fleets.

20 locos for 8 fleets would be about right.

With 2 less fleets, thats Merredin and one central district fleet gone. CBH have stated they are not interested in running on tier 3 lines, only to their 'super sites' like York, Mingenew and Kalannie. So the reduction in wagons should work out about right for this.

As I said earlier, Watco are only supplying crews and maintenence, not rolling stock and frieght. The trains will run where CBH want them to run, not down some track just for the sake of it.

As for Watco, unless they purchase some rolling stock in WA they will just be a supplier of human resources, nothing more. Check out their website, note the large trucking involvement, knowledge that CBH may use for the teir 3 lines.........

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