Rural rail subsidised by up to $4,000 a trip, prompting overhaul call

 
  james.au Minister for Railways

Location: Sydney, NSW
Hi Sulla - can you tell me which financial statements you are using?  Id like to take a closer look.  Im surprised the whole QR operation is profitable.

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  Sulla1 Chief Commissioner
  james.au Minister for Railways

Location: Sydney, NSW
Thanks Sulla.

Ive had a look at these.  To get the true performance, I think we need to back out of the result the Transport Services Contract revenue (i.e. the subsidy from the Qld Govt).  This amounted to $1.532 billion.  Taking this out, means that QR lost $1.309 billion in the period.  (For comparison, using the same method, Sydney Trains lost $1.535 billion in the same period).

Id suspect that there is a lot of the QR rail operation (both above and below) that is not paying its way.  Unfortunately, they don't split out the performance of the three segments (which are CityTrain, Network and Travel and Tourism - the last of which contains all the long distance trains).  If they did this we might be clearer in what is making less of a loss.  I suspect that CityTrain is making a fair loss (which is normal considering Sydney Trains and probably the Metro result), and we know that Travel and Tourism is making some pretty big ones on just two routes.  Im not sure about network though.

Regarding the revenues, passenger revenue was $72.9 million, and network access was $234.6 million.  I am expecting network access to be external parties only.  For context, ARTC total access revenue is $758 million.  QR's network does carry a reasonable amount of traffic.  Are there any published traffic stats available that show exactly where the traffic is?  Id agree Sulla, if the Western line is taking a lot of traffic its probably generating the most revenue and perhaps is one of the better performing parts of the network.  Better performing doesn't mean profitable though, it could be profit, or a smaller loss than everywhere else.

If the Western line is making a loss, then regardless of whether its the smallest loss or not, the Qld Government would be better off handing the traffic over to the ARTC and cutting its losses out.
  Sulla1 Chief Commissioner

The breakdown in mainline access revenue is another couple of pages in. $94 million for the Mt Isa line, $58 million for the Western Line and $45 million for the North Coast Line.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
QR made $235-million from its track access fees last year...it also made an operating profit of $223-million last year, and that money goes into the Queensland Treasury as general revenue. Losing the Western Line traffic will have a significant impact on that profit. If that income moves to the ARTC, the Queensland Government won't be able to recoup it in the same direct way for their budget. To date there has been no sign off from the Queensland Government for funding or participating in the Inland Rail link, and the current surveys highlight that fact.

As I said, previous statements aside about dual gauging, the current surveys underway are for a separate ARTC standard gauge line beside the narrow gauge QR lines east of Grandchester...in the same manner the standard gauge line was originally built south of Albury.

As for the money the Western Line makes, it carries around 25-30 freight/coal trains a day and 7-million tonnes on its first 200km (and very little beyond). Compare that to the North Coast and Mt Isa lines that carry similar tonnages, but do so over 1000 to 1700km of track. Per kilometre, the Western Line makes far more money than the other two, and with a fraction of the annual maintenance costs. I can't see QR or the Queensland Government walking away from that income.
Sulla1
Sydney Trains also reports a profit if you look at their books, but you need to look further up and read the NSW contribution. the profit is purely demonstrating that management have operated within their budget with a small surplus. Its not a true profit and I very strongly suspect QR is exactly the same.

As a rule I would say in the Western line, any section not carrying coal losses money, same for Central. The NCL is unlikely to be profitable as such, ie funds its own major capital investments, but potentially cash flow positive.

Mt Isa Line, mmmm
  james.au Minister for Railways

Location: Sydney, NSW
Sorry - missed that useful info.  Im used to looking at public companies accounts and ignoring the glossy front bits!

That means about a quarter of the revenue for what is much less than a quarter of the route km.  If I have a few spare minutes ill work out the route km involved.
  tazzer96 Chief Commissioner

How is the western line so profitable.  I get that a fair chunk of coal goes through it, but the Mt isa line has a heap more tonnage.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
How is the western line so profitable.  I get that a fair chunk of coal goes through it, but the Mt isa line has a heap more tonnage.
tazzer96
short answer its not. Only a small section is used by frequent coal traffic and this section is high maintenance cost and with additional route km compared to road and the trains both short and light weight using aging rolling stock compared to their CQ cousins. The remainder of the western network is used by hand full of weekly infrequent services over a large section of route km and in SW significantly longer route km than road, again short and light weight that are either marginal in their operating costs or subsidised.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
and the SG run to the coal mines. No ifs or buts on this.
Is that just a hunch RTT or do you have something else more firm that suggests conversion will happen?
james.au
educated guess.

Pick a coal mine 200km from coast.

Currently its limited 15.75TAL and about 600m and forced on a slow long route. The Inland will save a number of km in distance and allow coal to be moved in assume 23TAL and say 1200m trains (containers are 1800m, but lets say 1200m for now). As the wagon weight will only increase marginally from say 15t to 18t,  the coal per wagon will increase from around 45t/wagon to close to 70-74t, or more than 50% increase in coal per wagon carried.

Overall each SG coal train will be able to move nearly 3 x the coal per movement than now and thats with a lowly 23t axle load and 1200m coal train. what if the coal trains can be longer and heavier?

It will also have a faster cycle time mine to port thus increasing the productivity (lower capital and operating cost per tonne) of the rolling stock and be able to use off the shelf wagons and locos made today, rather than 40 years ago for low weight low profile tunnel profile.

Hence overall, how do we think the NG coal trains will be able to compete longterm? If the mine has a life exceeding 10-15 years with tonnages of a few million tonnes, then funding DG of the existing corridor from Toowoomba to the mine (which is generally flat and with limited curvature and hence easily suitable for SG profile) will I'm sure prove attractive.

On the SW, the SG will run within 50km or even past the current locations where the SW traffic is sourced from. So its unlikely the NG would survive the first year of Inland operations if the Qld govt has a brain. With every tonne taken off the NG, especially positive cash flow tonnages, the future for the NG line will get bleaker. Honestly once the feds commit to construction of the Inland in QLd or even prior, the Qld govt should be sitting down with the feds to discuss branches of SG to the current customer base on the NG. Hence enable as quick as possible closure this outdated piece of infrastructure and enable its customers to reep the benefits of the SG as much as those from NSW, Vic and beyond.
  Sulla1 Chief Commissioner

The Mt Isa line and the Western Line both move around the same tonnage, and that's 7-million tonnes. The difference is the Mt Isa line haul is close to 1000km, while almost all of the Western Line tonnage is less than 200km.
  tazzer96 Chief Commissioner

I understand the western line (east of rosewood and west of toowomba, in between it would be huge) doesn't have alot of maintenance needs due to the lighter axle load and more limited curves, but track access fees are usually per Km and per 1000 tonnes on top of the train path fee.
  Sulla1 Chief Commissioner

I understand the western line (east of rosewood and west of toowomba, in between it would be huge) doesn't have alot of maintenance needs due to the lighter axle load and more limited curves, but track access fees are usually per Km and per 1000 tonnes on top of the train path fee.
tazzer96
And I think that's why QR is doing so well out of the deal. Aurizon and PN only run about ten trains a day on the Mt Isa line, while Aurizon runs almost thirty a day on the Western Line to move the same tonnage. Lots of short trains should generate more money for QR even if each train is making less money in tonnes/km.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
I understand the western line (east of rosewood and west of toowomba, in between it would be huge) doesn't have alot of maintenance needs due to the lighter axle load and more limited curves, but track access fees are usually per Km and per 1000 tonnes on top of the train path fee.
And I think that's why QR is doing so well out of the deal. Aurizon and PN only run about ten trains a day on the Mt Isa line, while Aurizon runs almost thirty a day on the Western Line to move the same tonnage. Lots of short trains should generate more money for QR even if each train is making less money in tonnes/km.
Sulla1
But this all equals cost to the customer. Those 30 trains a day could be 10 movements and increased rolling stock utilisation through faster trip times. Meanwhile other freight has been bumped to make room for coal.

This is why the NG won't survive the Inland opening for long.
  Sulla1 Chief Commissioner

What should happen logically and what will happen politically don't often share the same path. The ARTC has Federal money to do its surveys and QR has Queensland money to upgrade the existing rail infrastructure. The twain is not meeting...and as of yet there is no indication it will. Ultimately it will probably be up to Aurizon and New Hope to place pressure on the current or future infrastructure providers for the best deal and outcome.
  Graham4405 The Ghost of George Stephenson

Location: Dalby Qld
What should happen logically and what will happen politically don't often share the same path. The ARTC has Federal money to do its surveys and QR has Queensland money to upgrade the existing rail infrastructure. The twain is not meeting...and as of yet there is no indication it will. Ultimately it will probably be up to Aurizon and New Hope to place pressure on the current or future infrastructure providers for the best deal and outcome.
Sulla1
This will likely be a missed opportunity if the Federal Government don't step in and insist that it be done right. That won't happen of course...
  simstrain Chief Commissioner

What should happen logically and what will happen politically don't often share the same path. The ARTC has Federal money to do its surveys and QR has Queensland money to upgrade the existing rail infrastructure. The twain is not meeting...and as of yet there is no indication it will. Ultimately it will probably be up to Aurizon and New Hope to place pressure on the current or future infrastructure providers for the best deal and outcome.
This will likely be a missed opportunity if the Federal Government don't step in and insist that it be done right. That won't happen of course...
Graham4405
Maybe the federal government should build it's own railway on a separate alignment instead of cheapskating off someone elses railway.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
What should happen logically and what will happen politically don't often share the same path. The ARTC has Federal money to do its surveys and QR has Queensland money to upgrade the existing rail infrastructure. The twain is not meeting...and as of yet there is no indication it will. Ultimately it will probably be up to Aurizon and New Hope to place pressure on the current or future infrastructure providers for the best deal and outcome.
This will likely be a missed opportunity if the Federal Government don't step in and insist that it be done right. That won't happen of course...
Graham4405
Inland is still 9 years away from its announced loose opening time, QR needs to manage the Coal route now. I don't blame Qld for not aligning at this time or until construction actually starts. They waited for the Southern Missing Link for 10 years and its still missing.

Ideally the whole thing should be more concrete and the Qld govt throwing in for some of the Inland as it will enable them to pull out of funding the W/SW NG network. If they part funded the Qld side of the Inland, the Qld govt would then be a stake holder in its revenue.
  tazzer96 Chief Commissioner

Inland rail is not replacing the southern, south western and western mainlines.   It is designed to get containers to and from melbourne in the most efficient manner.   It won't be replacing the QR network.
  RTT_Rules Oliver Bullied, CME

Location: Dubai UAE
Inland rail is not replacing the southern, south western and western mainlines.   It is designed to get containers to and from melbourne in the most efficient manner.   It won't be replacing the QR network.
tazzer96
Incorrect

The Inland railway is a general purpose railway to fill in a gap between Brisbane and Nth Star and combined with other upgrades its principle intention is to achieve sub 24hr Brisbane to Melbourne.

However, at no time is or was the design intention to be exclusive for this purpose and the route chosen reflects this to a degree.  

Not surprisingly in Qld the line passes within 50km or less most of the major customers of QR, ie Goodawindi, Grain loading point on Millmermium Line and Toowoomba district. Only Thallon grain and some minor customers west of Dalby would be out of immediate reach. Tallon grain maybe truckable to Nth Star or Goondawindi or if the tonnages are significant worthy to covert the line to SG. The traffic west of Dalby is on borrowed time and I don't think many would dispute this unless there is someway to fine 1000t per day minimum.

My guess the coal miners will run towards the SG in a blink of an eye. Competitive bidding on operator, larger more efficient rolling stock. The SW grain haulers and I believe the containers from Goondawindi will do the same. So whats left for QR to haul, a few Cattle trains a year?

Will the NG survive the SG? I think the answer is very clear on this and has it survived anywhere else under the same circumstances?

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