1. www.ara.net.au ABN 64 217 302 489 MELBOURNE TO BRISBANE INLAND RAIL SYMPOSIUM Bryan Nye, ARA CEO 22 June 2012

2. www.ara.net.au The ARA Who we are: a member-based association that represents the interests of the rail sector Our purpose: to create an environment that will permit the Australasian rail industry to prosper Who we represent: all rail operators, both private and government, track owners and managers, manufacturers of rollingstock and components, and other aspects of the rail industry

3. www.ara.net.au Rail Industry: Size Labour force: 44,210 people (+9.5%) (+70,000 working in industries supporting rail) Investment Commitments in rollingstock and track $36 billion Track: 44,262 km in Australia 725 million annual customer journeys 853.5 million tonnes of freight moved across the country Over 1,800 locomotives and 32,000 wagons and carriages

4. www.ara.net.au

5. Why is transport important?

6. www.ara.net.au Transport and rail Freight 1 billion tonnes of mining product transport on rail The state of intermodal freight The uncertainty of grain freight 1 new train consist needed every week to handle mining growth Moving People (intra-region) 750 million passenger journeys p.a. Over 5% growth p.a. 60 thousand new passenger journeys every week 300 new passenger cars every year Moving People (inter-region) Rail needs to pick up it game in this area Solution: High Speed Rail

7. www.ara.net.au Passengers That means an additional 60,000 people on our trains every week! Urban Passenger Rail769.9 million journeys in 2010 (6.1% increase since 2008) Non-Urban Passenger Rail13.38 million journeys in 2010 (12% increase since 2008)

8. www.ara.net.au Congestion in context

9. www.ara.net.au Freight network Rail’s share of containerised freight

10. www.ara.net.au Rail freight - Big picture 2008/092009/10Change Coal282.73318.6212.7% Ore350.7412.0217.8% Sugar25.8827.577.7% Bauxite18.0317.91-0.67% Other Bulk56.7456.79- Non-Bulk18.8417.94- 4.8% Total755.29853.4613.39% * Numbers in million tones.

11. www.ara.net.au Source: Royal Bank of Scotland Transport Equities Update (2012) Grains 3-4% Bulk Commodities 931 million tons Non-Bulk Commodities 20 million tons Rail freight Rail Freight moves nearly 1billion tons of goods p.a. (2011) Coal Ore Sugar Bauxite Grain Other Bulk

12. www.ara.net.au Rail freight Coal and Iron Ore Source: Royal Bank of Scotland Transport Equities Update (2012) 818 million tonnes 1530 million tonnes

13. www.ara.net.au Optimise grain lines

14. www.ara.net.au Freight: A drag on our international competitiveness Australia’s geography and relative isolation puts us at a disadvantage in terms of international competitiveness The cost of our freight supply chain is extremely high compared to all other trade oriented economies: Some costs can be attributed to long shipping distances on land and sea, but equally the cost is due to inefficiencies We have some of the highest costs in terms of land transport to port and in terms of costs from the port gate to shipping 50% of market price goes to logistics Canada does it for ½ the price despite longer distances

15. www.ara.net.au Freight: Solutions for the future Containerisation of grain/ changed ownership structure A terminals strategy and inland rail route –Its all about reliability, the focus on transit time is just wrong Pricing that actually reflects the true value of transport choices –We need to get smarter in how we price our transport infrastructure

16. www.ara.net.au Freight: Solutions for the future

17. www.ara.net.au Benefits Safety: Safest form of land transport Environment: –9 times more energy efficient –One train, two drivers – 150 trucks & 45,000 litres of fuel Efficient: rail is a cheaper mode of freight transport than road on all inter capital corridors

18. www.ara.net.au East Coast challenge Transit time Reliability Availability Price Modal share

19. www.ara.net.au Inland Rail

20. www.ara.net.au Inland Rail -Why Eastern Corridor: Highest freight volume in Australia Tripling of containerised freight by 2050 requires new freight infrastructure Demand supports an inland rail route (induced demand, increased market share and larger freight market) Use of rail benefits the Australian economy (see next slide)

21. www.ara.net.au Inland Rail: Benefits Direct economic benefits ($12 billion boost to GDP, 2400 regional jobs created every year, a further 2400 permanent jobs) Wider economic benefits (creation of freight villages in regional Australia, $2 billion invested in rollingstock, reduction in road costs) Social and environmental benefits (reduced road fatalities, congestion and emissions)

22. www.ara.net.au Inland Rail –State of Rail today Low market share on N-S (> 20%, btw10-15% for Syd-Bris and syd-Melb) Geographical constraints (Sydney bottleneck) Operational constraints (terminal access, no double stacking)

23. www.ara.net.au Inland Rail: Changing the transport sector Increase rail’s reliability and efficiency –double stacking, longer trains, –avoids Sydney bottlenecks –reduce travel times by 15hrs, train speeds of 110kmph Increase rail’s market share –80% on Bris-Melb –up to 25% for shorter legs

24. www.ara.net.au Inland Rail: Cost A $4.4 billion Melbourne - Brisbane

25. www.ara.net.au Inland Rail: Must haves Must be supported by a terminal strategy- a new terminal in western VIC and a new freight village with terminal in Bromelton

26. www.ara.net.au Inland Rail: Complications The $2 billion cost of construction through the Toowoomba and Little Liverpool ranges (for environmental, cultural and engineering reasons)

27. www.ara.net.au WHAT IT WILL NOT DO It will not be a regional railroad. It will not stop at each town. It will not be a passenger line. It will not solve NSW regional grain line issue – An optimisation solution is required now. It will not solve today’s market share problem.

28. www.ara.net.au Progress to date Inland Route alignment study(IRAS) Melbourne to Sydney upgrades(integral) Commitment to First Stage-land reservation

29. www.ara.net.au IRAS findings Improved transit time Excludes Shepparton ( Vic Govt) Links to Toowoomba and Qld plan Allows for 1800m double stacked trains Supports ATMS Provides an alternate route to coastal(flexibilty)

30. www.ara.net.au Delivery strategy Challenge of planning and approvals Study recommended reassessment of timing 2015- 2020 NPV assumed 7% today projects such as HSR 4% Further investment must occur Melbourne – Cootamundra Developments in Qld could be staged and improve the network

31. www.ara.net.au