1. Rail Industry Issues PART TWO Grain Industry Advisory Council 8 August 2008

2. Key Outcomes In April 2008, Government announced funding of $23.7m for upgrading Gold network (except Portland) and an additional $19m for general freight network maintenance ARTC leased Portland (Gold) line as part of north-east project and will spend $15 million to upgrade it Silver lines to be upgraded as required in consultation with grain industry. Silver line investment program presently being developed.

3. Korong Vale – Junction of Kulwin and Robinvale lines

4. RFNR recommendations Many RFNR recommendations implemented:  Access pricing reduced  Network investment – Gold lines, Mildura, North-East  Port rail access – Melbourne, Geelong  Intermodal terminals – Dooen, Shepparton (both funded), Altona

5. Mildura Line Upgrade $73 million upgrade of Geelong to Mildura railway line ($53m in State funds/$20m in Federal Government AusLink funds) commenced in Dec 07 for completion in 2 nd half 09 300,000 timber sleepers (1:2.5) – 150,000 installed so far: project is on time and within budget. Will provide 80km/h freight train standard Reduce transit times from 14 hours to 10 hours and improve reliability Ensure rail remains key transport mode for export of grain and agricultural products from State’s north-west

6. Mildura line at Dunolly

7. North-East Rail Revitalisation Project Conversion of 208km of broad gauge track between Seymour and Albury to standard gauge Track leased to Australian Rail Track Corporation Wodonga Rail Bypass – bypass of Wodonga city centre Upgrade and standardise broad gauge track to modern standards to accommodate faster passenger trains and faster, longer and heavier freight trains. Will result in 70% of Melbourne – Sydney rail corridor being double track Project will help reduce Melbourne – Sydney freight train transit times from 14 hours to 11.5 hours because of fewer delays Increase capacity and reliability in critical north-south corridor to enable rail to increase market share of growing freight task: Melbourne – Sydney rail market share only 10% and needs to grow to reduce customer reliance on trucks

8. Interstate freight train in north-east corridor

9. Last 12 Months May 2007 – intrastate rail lease buyback ($133.8m) May 2007 – $25m provided to V/Line for track maintenance: Dunolly - Boort/Wycheproof, Echuca – Deniliquin and Shepparton – Tocumwal lines all repaired June 07 – Rail Freight Network Review (RFNR) commissioned June 07 - AWB GrainFlow contracts with El Zorro for 2 year grain haulage contract (export and domestic) Dec 07 – RFNR released and announcement of average $6/tonne rebate for domestic grain transported by rail Dec 07 - $73m ($53m State, $20m Federal) Mildura track upgrade project commenced (due for completion 2 nd half 09) Dec 07 – Pacific National (PN) threatens to withdraw from Victorian export container and container rail services.

10. Feb 08 – Government announces $20m Rail Freight Support Package over two years providing rebate for containers and export grain transported by rail: regional rail freight services to Warrnambool (El Zorro), Horsham (PN), Merbein (PN) and Shepparton/Tocumwal (PN) still operating April 08 – Government announces $42.7m for regional rail freight network: $23.7m in funding to rehabilitate Gold network and $19m for general maintenance across the freight only rail network May 08 – PN/Asciano sign deal with GrainCorp for 8 grain trains for NSW/VIC May 08 – Federal/State agreement to lease north-east broad gauge corridor to Australian Rail Track Corporation and standardise it: $501m project ($330m Federal, $171m State) July 08 – Maroona – Portland line leased to ARTC Last 12 Months

11. Investment $900m in rail freight projects presently being undertaken in Victoria:  $45m Tottenham – Dynon project (Federal)  $15m Tottenham flyover (Federal)  $120m+ Dynon Port Rail Link ($110m Federal, remainder State)  $73m Mildura line upgrade ($53m State, $20m Federal)  $40m Geelong Rail Access Improvement Project  $43m in Gold line funding and freight network maintenance  $501m North-East Rail Revitalisation Project ($330m Federal, $171m State)  $45m Seymour – Sunshine crossing loop extensions (Federal) In addition:  Regional rail network buyback: $134m (May 07)  Rail Freight Support Package: $20m (Feb 08) Total: $1 billion in rail freight investment

12. Opportunities Government wants rail freight to be virtuous upward cycle not vicious downward cycle:  trucking costs will increase – driver shortages, fuel price, road user charges  rail: improves road safety reduces road wear and tear reduces fuel use and transport greenhouse gas emissions can efficiently handle large volumes

13. Opportunities Government working with industry, rail operators and infrastructure managers to:  identify rail freight opportunities eg Iluka mineral sands from State’s north-west to Hamilton; containerised grain  improve rail infrastructure to lower transit times, increase reliability and reduce costs to customers  simplify rail regulatory environment to facilitate new entrants  generally remove impediments to efficient rail operations

14. Conclusion Government providing environment for rail freight:  Network buyback  Access fee rebates for grain  Container freight rebate  Network investment  Revised rail access regime david.hill@transport.vic.gov.au