Growers will suffer financially and thousands of tonnes of freight could be forced back onto roads due to a proposed “dramatic” fee increase to use a Queensland rail line, says a leading grain handler.
Key points:
- Aurizon has proposed a major price hike for its access fees
- Rail line users say they’ll be forced to use road freight again
- Less than five years ago millions of taxpayer dollars were spent upgrading the rail line
In 2018, millions of taxpayers and private industry dollars was spent upgrading the rail line between Emerald and Blackwater in central Queensland to support the transport of coal and other freight.
But due to the closure of the Minerva coal mine near Emerald, rail operator Aurizon Network has applied to the Queensland Competition Authority (QCA) to raise the access fees for non-coal users from Burngrove to Wurba Junction.
The mine closed and stopped running coal in late 2021 and Aurizon Network sent their draft amending access undertaking to QCA in September 2022.
Aurizon Network said they notified stakeholders in July 2022 of the “tariff uplift”.
While the documents submitted by Aurizon didn’t specify by how much fees would increase, GrainCorp Limited said they would rise by “approximately 500 per cent”.
‘Real and immediate implications’
GrainCorp transports chickpeas, sorghum, barley and wheat by train to Gladstone for export.
In a statement, GrainCorp corporate affairs manager Jess Simons said the price rise would make rail transport unfeasible and could force freight to be trucked by road.
“This will impact returns for Central Queensland growers and result in a shift back to road transport,” she said.
“Which, in turn, will affect the competitiveness of this region.
“This is a complex issue that has real and immediate implications.”
In documents submitted to QCA, Aurizon Network said they had engaged Queensland’s Department of Transport and Main Roads (TMR) to explore subsidising non-coal users for expensive access fees.
However, a TMR spokesperson told the ABC it was a commercial matter between Aurizon Network and its customers.
“The Queensland government strongly encourages Aurizon Network to work with its customers to agree an amicable outcome,” the spokesperson said.
“Customers and stakeholders are encouraged to contact the Queensland Competition Authority to discuss any concerns they may have.”
An Aurizon Network spokesperson said while the proposed tariff was initially scheduled to start from January 1, 2023 it had been deferred until March.
The QCA was expected to make a draft decision next month with a final decision in May 2023.
Volume of coal traffic drops
In a statement, an Aurizon spokesperson said there were no longer any coal trains running along the 60 kilometre stretch of rail.
“This volume of coal traffic had effectively supported lower access tariffs along this section for all users,” the spokesperson said.
“Aurizon Network is required to recover the costs of operating and maintaining the line.
“Aurizon Network has aimed to keep costs to a minimum whilst maintaining the track to the required safety standards for users but acknowledges a tariff increase is necessary.”
But Agforce Grains president Brendan Taylor said returning to trucks would be unfeasible.
“Road freight, with the cost of fuel has been going up steadily,” he said.
“You’d be looking at effectively doubling the freight rate.”
Mr Taylor said the trucking industry, like other sectors, was dealing with labour shortages, making it an impractical option.
“I can’t see physically how there would be enough trucks in the supply chain to be able to handle that freight task,” he said.
“To shift that volume of grain efficiently and quickly during the harvest period — just wouldn’t be possible via road.”
Mr Taylor said even if the grains industry could get enough trucks, that would have a major impact on road conditions.
Central Highlands Development Corporation CEO Peter Dowling said the proposed price hike would have flow on effects through the whole supply chain and even impact outside of the region.
“They are all local businesses that are playing a part in this,” he said.
“If they don’t have that [rail line], that is to the detriment of the economy and to those businesses directly.
“There’s tourism opportunities to the west that are impacted, plus many others.”
Major investment questioned
The Central Queensland Inland Port (CQIP) was built less than five years ago to freight produce and goods to Brisbane, Gladstone and Townsville by rail, with the expectation it would reduce supply chain costs.
The Queensland Government and Central Highlands Regional Council spent more than $5 million combined on road and rail upgrades in 2018 to facilitate the build.
“The whole investment of that inland port comes into question,” Mr Dowling said.
“That’s both state, local and federal government investment with private [investment].”
GrainCorp opened their $18.5 million bulk grain facility at CQIP in 2020.
The Yamala facility received more than 140,000 tonnes of the winter crop this harvest, the biggest local crop growers had seen for more than a decade.
CQIP managing director Alan Stent-Smith said they invested more than $10 million personally into the facility.
“We created CQIP from scratch on a property we purchased initially to graze cattle and build our dream house on — only to be advised by governments that it was needed as an intermodal facility,” he said.
“We hope the government will consider the request seriously for a 12-month moratorium on Aurizon’s dramatic increased price proposal.”