The future of grain on rail GrainCorp’s perspective

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Presentation transcript:

The future of grain on rail GrainCorp’s perspective AusRAIL PLUS 2005 22 November 2005

GrainCorp – why rail matters to us

Impact of rail on the grains industry The delivery of rail services significantly impacts GrainCorp’s ability to service its customers: Adequate capacity and timely delivery The absolute level of rail rates set by the rail provider Relative rail rates between silos affects the viability of GrainCorp silos against competitive

The nature of the grains industry Historical receival comparison (ex-farm) 2005/06 (forecast) 11 million tonnes winter crops only (Qld, NSW, Vic) 2004/05 (actuals) 9.5 million tonnes summer & winter crops (Qld, NSW, Vic) 2003/04 (actuals) 11.8 million tonnes summer & winter crops (Qld, NSW, Vic) 2002/03 (actuals) 2.1 million tonnes summer & winter crops (NSW, Vic) 2001/02 (actuals) 12.0 million tonnes summer & winter crops (NSW, Vic)

Investment An ongoing role for government investment Branch line maintenance - $69 million welcome but more needed Community benefit requires community investment – below rail responsibility remains with government Plan for post 2007 Investment must be linked to rewards A place at the table for all participants Those who benefit from an efficient grain line system should invest in it Those who invest in the system are entitled to share in the benefits The value of collaborative investment

Access Victorian Government initiated reform process in July 2004 by declaring that existing arrangements were “unworkable”. Pricing regime under development with new system scheduled to be operational before harvest 2005/06 The Victorian system provides a model of how things should not work

Contestability Transparent and impartial administration of below rail infrastructure can only be carried out by governments Victorian system requires: Access to conditional paths on fair terms Protocols for train programming Access to safe working systems; and, Standardised access agreements Collaboration and limited competition are not mutually exclusive

The future of grain on rail GrainCorp’s perspective AusRAIL PLUS 2005 22 November 2005