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RUCKER Mike Almond accepts that the economics of rail can no longer be ignored. His company, Newcastle-based Mountain Industries, runs 22 trucks and sub-contracts about 100 others for its road freight business, which extends from South Australia to Queensland.
But just over a year ago Mountain laid a rail siding into its depot at Forbes in central-west NSW and now contracts Lachlan Valley Rail to provide locomotives twice a week. The trains haul fertiliser from Sydney to Forbes and return to Port Botany carrying local exports including granite, wheat and hides.
Almond says the old enmity harboured by truckers against rail no longer has a place. The nation's freight movements are going to double in the next 10 years, but that will not mean twice the number of semi-trailers on the road. Road transport companies have to leave their antagonism toward rail behind.
"There will be a shift to rail," says Almond. "If [trucking companies] ignore that, they do it at their peril."
Almond has done the sums. Diesel fuel accounts for up to 40 per cent of the cost of operating trucks. But it accounts for less than 15 per cent of the cost of running two trains a week between Sydney and Forbes. With rises in the diesel price (which is now about $1.30 a litre) oustripping growth in labour and tyre costs and overheads, the focus is on slashing fuel consumption.
Freight contracts have typically been negotiated on the basis that diesel comprises 30 per cent of the trucker's price. The oil shock has raised that close to 40 per cent.
The Australian Long Distance Owners and Drivers Association is claiming that more than 6000 trucking subcontractors have gone broke since April as a result of rising fuel prices. It says most operators are earning $1.10 for every kilometre travelled. Yet a large semi-trailer might burn 73c/km of diesel. That doesn't leave much to cover the interest on a $300,000 rig, insurance, tyres and income for the driver.
The future, as seen by Mountain Industries, is the increased use of rail for long-distance haulage with trucks doing pick-up and delivery around the inland rail hubs such as Forbes.
It may be a case of what goes around, comes around.
Fifty-one years ago, the trucking industry drove a stake into rail's heart. One road operator, Hughes and Vale, went to the High Court challenging the tax imposed by NSW on interstate road freight. It lost, but appealed to the Privy Council, which struck down the NSW tax and ruled invalid any state licensing or taxing of interstate freight operators.
The floodgates were open - freight could be transported by road without incurring taxes. Remember, too, that there was, until 1962, still a break of rail gauge at Albury, where NSW Government Railways employed about 340 people to carry goods by hand between standard-gauge 1435mm NSW and broad-gauge 1600mm Victorian rail wagons while trucks sailed over the border without any delay.
Rail took a beating - trucks were getting bigger, roads better - one it never really recovered from. To this day road charges on trucks are well below the true cost of their impact on the roads in terms of the space they take up and the damage they do. Today, road transport accounts for 89 per cent of freight moving between Sydney and Melbourne.
Australia's railway freight network is controlled under a mix of private and public ownership.
Successive state governments, particularly in NSW and Victoria, adopted policies of benign neglect toward their rail networks.
It has become primarily an eastern-states problem due to a run-down, inadequate Melbourne-Sydney-Brisbane rail corridor combined with the growth of these states' economies over the past 20 years.
Western Australia has no known bottlenecks, the line to Darwin via Alice Springs is underused, and the only difficulty in South Australia is on the main line over the Adelaide Hills, where steep climbs and tight curves limit train loads while the existence of several tunnels rules out double-stacking containers on rail wagons.
The legacy in the east includes a steam-age rail system between Sydney and Melbourne. There are still old semaphore (non-electronic) signals in places, a bridge across the Murrumbidgee dating from the 1880s that trains cross at a 20km/h crawl, and 445km of line between Junee and Melbourne that is single track all the way, resulting in trains having to wait at crossing loops to pass those coming in the opposite direction.
University of Wollongong research fellow Philip Laird, who has written several reports on this main line, found that in the 43 years between 1962 and 2005 no significant upgrade occurred on the Sydney-Melbourne railway. By contrast, 86 per cent of the Hume Highway was reconstructed to modern engineering standards.
Rail took another blow last week when rail operator Pacific National said it was cancelling many of its train services in Tasmania because it needs federal or state assistance for track upgrades. It will also stop carrying containers, logs and coal on the Hobart-Burnie route, the main artery of the island's rail system.
That could mean an extra 2000 truck journeys a week on Tasmanian roads, primarily on the Midland Highway.
Pacific National executive Neil MacKinnon says the railway lines in Tasmania need about $100 million spent to improve tracks and buy new rolling stock.
And there is the nub of the problem.
Pacific National, which has to make a profit, is expected to pay out of its own pocket to maintain and improve its rail track. Yet the trucks speeding past the trains on the Midland Highway run on a road provided courtesy of the taxpayer. Pacific National wants a level playing field: that is, state money to upgrade the tracks.
Nationally, road transport is used for 1.55 billion tonnes of freight a year. The rail figure looks impressive at first glance - 544 million tonnes in 2003 - but that includes 226 million tonnes of coal and 223 million tonnes of ores, along with grain and other bulk goods. The astonishing bottom line is that only 15.83 million tonnes - or 2.9 per cent of all rail freight - consisted of non-bulk freight, including manufactured goods.
Freight volumes increase every year. What is called the "land transport task" is expected to double between 2001 and 2015, exacerbated not only by population growth and demand but by industry trends towards centralising production and distribution into bigger and fewer sites.
On the rail scene things are changing, due mainly to the Federal Government's AusLink program. The scale of the task of rebuilding is shown by what the Australian Rail Track Corp is having to do on the Melbourne-Sydney line to get it up to the minimum standard for a 21st-century railway line.
About $15 million is being spent on a new bridge across the Murrumbidgee; there will be 220km of track duplicated so freight trains can pass each other without stopping; all signal boxes will be automated.
One other issue that will come back on the agenda is electrification of main freight routes. Continued rises in diesel costs will make electric train haulage - using power generated by local coal rather than imported fuel - more appealing.
One forgotten aspect of the infamous 1974 Khemlani loans scandal is that among the spending plans for the $4 billion to be raised was the electrification of interstate railways.
The collapse of the extraordinary plan by the Whitlam government to use a Pakistani businessman to raise money from Arab oil sheiks, and thus bypass Treasury, was one of the final nails in the government's coffin - and it also destroyed the dream of electric trains running between the state capitals.
Malcolm Fraser raised the issue again in 1980, but it soon died.
Now, with the third oil shock hitting, Australia is as far away from interstate rail electrification as it was 30 years ago.
Only Queensland has acted by electrifying lines connecting Brisbane, Gladstone and Emerald, which are used for coal and general freight trains. With Gladstone set to become the world's biggest coal export facility, Queensland Rail saves itself up to 200 million litres of diesel a year.
John Hoyle, national affairs editor of the monthly Railway Digest, believes the interstate rail electrification could be back on the agenda but it would need much higher diesel prices to justify the capital investment. Hoyle says rail's greatest argument is that it uses less diesel to move a given tonnage than trucks. The standard ratio is that it is three times more expensive to move freight by road than rail.
"Steel wheels running on steel rails is the most fuel-efficient system," he adds. "The day of rail has returned."
Yet the $730 million upgrading of the Sydney-Melbourne rail line will not be completed for another four years. And a much-needed inland Melbourne-Brisbane rail route (through central NSW and Toowoomba) is six years away under the most optimistic scenario. It will cost an estimated $3 billion, with $600 million of that spent crossing the Toowoomba Range.
But the neglect of railways not only means more trucks on the Hume Highway or, hurtling between Melbourne and Brisbane, on the Newell Highway - but also on country roads all over the nation due to the closure or neglect of country lines.
Earlier this year, the NSW Government said it would cost $105.6 million to improve country roads rather than lay out a slightly larger $128.7 million to upgrade and maintain 15 grain lines for another 20 years. It also decided to close four of those lines.
Adelaide-based Mark Carter, formerly a rail campaigner and now commentator, says changes are already happening in some parts of the network. Freight growth on the corridor between Sydney/Melbourne and Perth rose 13 per cent in the year to June.
But he worries about the state of the rolling stock. "Present locomotive and wagon fleets are ageing and almost stretched to capacity but, with a few exceptions, there is very little new equipment either being built or planned," he says. He argues that what the Americans call "Ma and Pa Railroads" - that is, regional short-haul operators - should be encouraged to keep branch lines alive.
Robin Bromby is The Australian's mining writer and author of The Railway Age in Australia.
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