MELBOURNE, VICTORIA, AUSTRALIA — The Australian government made a commitment in August to deliver three further stages of work to upgrade rail freight lines in the Murray Basin region. These upgrades will help meet the increasing demand for freight services.

The Victorian government has already committed up to A$220 million ($156 million), and work is under way on the first stage, with completion expected in 2016. The next stage of work will start in the second half of 2016.

The estimated cost for the entire project is A$416.2 million ($296 million).

The Murray Basin is a nationally important producer of grain, mineral, sands, fruits, vegetables and wine. Much of this product is exported via the ports of Portland, Geelong and Melbourne and is transported using the regions road and rail network, according to the Murray Basin Rail Project Business Case released by the Australian Department of Economic Development, Jobs, Transport and Resources in August.

Around 2 million tonnes of grain per year are exported from the Murray Basin region.

The project involves standardizing the rail freight lines servicing the region in the northwest of Victoria and increasing the axle loading of the rail freight lines. The lines in the region are a mix of broad gauge and standard gauge.

The report said several issues will be addressed with the project including:
•           Lack of capacity.
•           Lack of competition between rail operators.
•           Lack of competition between ports.

The two gauges of rail lines have the effect of isolating the Murray Basin from the Port of Portland – rather than having the state’s two bulk ports compete. The Port of Geelong has a natural advantage because it is serviced by both the broad and standard-gauge network while Portland is serviced solely by standard gauge. The Port of Portland has a deeper draft than Geelong, yet has lacked rail access to the Murray Basin.

Delivering efficiency improvements will support the freight industry in the Murray Basin region to deliver growing export volumes to Victoria’s ports as cost competitively as possible, the report said.

“The project will deliver significant rail efficiencies and enable more grain from this significant production region to be transported to port by rail,”  Angus Trigg, GrainCorp’s director of government and media relations, told World Grain. “The investment will provide improved access to the Portland grain terminal and the inclusion of the Murrayville branch line unlocks substantial investment by GrainCorp at its Murrayville facility, including upgrade of our loading infrastructure and $1 million from GrainCorp to extend the government-owned rail siding at its facility to enable a full unit-train to be loaded.”

The project is expected to increase export ability and private sector investment, as bulk handlers build new loading facilities to take advantage of the efficiencies delivered by the project. Rail operators all over Australia will actively compete to provide rail services, in particular to the grain marketers and intermodal operators, the report said.

Axle loading will increase from 19 to 21 tonnes. Upgrading the lines to a 21-tonne axle loading will provide an immediate15% productivity efficiency improvement that will increase train loads by 300 to 400 tonnes.

Higher axle limits significantly improves operators’ flexibility and capacity to respond to market needs and meet rigid shipping slots, particularly for grain operators who wish to take advantage of higher prices on the export market during the December to July period. Reduced needs for trucking will also lead to lower port receival fees.

Average grain train payloads will increase to 2,500 tonnes per train. An extra 500,000 tonnes of grain could be transported by rail per year once the project is complete.

Emerald Grain spokesman Adam Chilcott commended the government for “having the courage to invest in rail” and said this plan was something all state governments could learn from as reported by The Weekly Times.

Farmers in the Murray Basin will gain access to a deep-sea port at Portland, delivering them the efficiencies that more heavily-laden bulk carriers offer. Ships berthing at Portland can be loaded with more grain than ships berthing at Geelong, the report said.

The upgrade and standardization of the Ouyen to Murrayville rail line – which would have otherwise become gauge isolated – will enable grain from this corridor to be carried by rail to Victoria’s ports rather than travelling by road to competing ports in South Australia, the report said.

“It will assist the competitiveness of Victoria’s grain exports and improve farmgate returns,” Peter McBride, Cargill spokesman, told The Weekly Times.

Subject to funding all stages of the project are capable of being completed by the end of 2018.