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WITH the dust settling on the Federal Government’s decision to contribute $220 million to the Murray Basin Rail Project in Victoria there is a surprise winner.
In the fine print of the deal there is the explicit approval for repair of the Maroona to Portland rail line, meaning grain will be able to be moved to the port of Portland, which is used by GrainCorp as a grain export facility, cheaper and more efficiently.
The announcement of funding for the repairs to the south-west Victorian line surprised some within the industry, as it is out of the strict geographic boundaries of the project, which will also standardise north-west Victorian rail lines.
Port of Portland chief executive Jim Cooper said while there was no time frame for the Maroona to Portland works as yet, the fact it had been included in the overall project was a boon for his facility.
“It is not costed yet, but we have been assured it is included in the project.”
“In the past few years it has been Geelong or bust for a lot of grain out of north west Victoria, due to the fact there are 19 tonne an axel and 60 kilometre an hour restrictions on the Maroona to Portland line,” he said.
“It has made it difficult for exporters to get the grain down here.”
Mr Cooper said a competitive Portland facility would be a win for the grains industry.
“In terms of its set up as a port, Portland has a lot of advantages over Geelong, it is a deep water port that can handle Panamax sized vessels comfortably, which can create good efficiencies by being able to load more grain onto the boats.”
Victorian Farmers Federation (VFF) grains group president Brett Hosking said it would be good for growers to have two legitimate bulk port options in western Victoria, even if they were both operated by GrainCorp, which also runs Geelong.
“Portland has struggled a little of late, because there are the issues with the rail and the road network in that part of the world is also problematic for moving grain,” he said.
“If we could see grain moved by rail efficiently to that site it would be a win for the industry, as it would release some of the pressure off Geelong at peak times, along with allowing farmers access to any short term market premiums paid when a customer wants to purchase grain quickly.”
Mr Cooper said the project did not require any major initiatives, simply repairs.
“It will be a simple matter of replacing the aging sleepers on the 170 kilometre stretch from Maroona to Portland.”
He said he had received advice the work would cost around $18 to 20 million.
Mr Hosking suggested it could be one use for the $20 million extra pledged by the Federal Government over what the State Government asked for in the announcement earlier in the month.
Mr Cooper said the Port of Portland had been doing work with an engineering firm on its site to make the facility more attractive to grain exporters.
“We are committed to grain exports, we recognise it is a volatile sector and some years there will be large tonnages to move and others there won’t, we are comfortable with that.”
Mr Cooper said he hoped to see improvements reflected in upcountry prices.
“At present, through much of the eastern Wimmera and up into the Mallee, there’s generally a premium of at least $5 a tonne for grain going to Geelong over Portland, and we’d like to see that rectified.”
He said this project represented once in a generation investment.
“This is something we will only see once every 40 years.”
“Other facets of the storage, handling and freight sectors can change, you see investment in trucks and roads varying, we’ve seen on-farm storage become more popular, but investment in rail is always important.”
The positive news for Portland comes as interest in grain port facilities in Australia continues to bubble along.
Emerald Grain earlier this year announced plans to work with miner Iron Road on a port at Cape Hardy in SA, while Bunge is working on an alternate site at Geelong to compete against GrainCorp.
However, recent investments in port facilities have not always lived up to investor expectations.
CBH is already looking to offload its stake in the recently constructed Newcastle Agri Terminal, while Louis Dreyfus currently has its Kooragang export facility, also in Newcastle, in mothballs.
This article first appeared on www.farmweekly.com.au
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