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Eyre Peninsula's railway network will close on May 31 as Viterra transfers its freight operations to road only.
Genesee and Wyoming Australia (GWA) notified its employees Tuesday that Viterra would not be renewing its rail grain haulage agreement and is transitioning to a road-based supply chain.
Viterra made the decision to transfer totally to road transport to ensure future efficiency and cost effectiveness of the supply chain and to remain competitive internationally.
The company's commercial and logistics manager James Murray said this decision was made based on the information it had available.
"This is a significant decision for the business, one we have very carefully assessed and considered," he said.
"We are reviewing the need for investment at our sites to support the transition from rail to road.
"If the situation changes with rail on Eyre Peninsula and it becomes efficient and cost effective compared to road freight, we will certainly reconsider our options.”
A three year agreement between Viterra and GWA began in 2015 and was extended for 12 months in 2017 as the companies worked together to assess options for shortening the line.
The options included shortening the line at Cummins and Rudall and just running to Cummins.
Viterra will begin upgrading infrastructure at its sites, including conversion of rail unloading grids to road grids.
In a statement GWA said it had worked for the past four years with Viterra and the South Australian Government to explore all commercially viable future rail options.
"These efforts have been in the face of reduced grain volumes on rail, and the historic legacy of the cost to upgrade and maintain what is an under-utilised narrow gauge-only rail network used only by one customer."
"The rail network remains open for the foreseeable future for any potential customer usage."
Thirty-three full-time GWA employees will lose their jobs as a result of the closure of the rail network.
The closure could also lead to an additional 30,000 trucks movements per year.
GWA team leader Garrie Jones said workers were informed at about 8.30am on Tuesday morning and said it had cleared up several months of not knowing the future.
"Everybody knows now, it's not so mixed up," he said.
"Some were living in hope and some weren't, but it was the fear of not knowing."
The state's peak transport industry lobby group, the South Australian Freight Council expressed its disappointment on the impending closure of the rail network.
Council executive officer Evan Knapp said the Department of Planning, Transport and Infrastructure needed to publicly release the Eyre Peninsula Freight Strategy.
This article first appeared on www.portlincolntimes.com.au
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