Logistics News

Tasmanian rail study: Investment saves $159 million

Study concludes Tasmania’s investment in rail will pay off in the long term

 

Rail freight will save the Tasmanian economy $159 million over the five years to 2019, a study commissioned by TasRail has revealed.

The study, undertaken by infrastructure consultants Pitt&Sherry, believes that by switching freight transport from road to rail, the reduction in road accidents, pollution and road maintenance will see huge financial savings for the state over the long term.

On the back of growth in Tasmania’s rail freight system, TasRail CEO Damien White says it sought to quantify the improvements.

“The study highlights one of TasRail’s important competitive advantages, which is to help industries strengthen their social licences by moving freight by rail rather than by road, is providing vital social, environmental and economic benefits,” White says. 

“Over the past five years, the Tasmanian and Australian Governments have provided the funds to rejuvenate the state’s rail system, which they clearly recognise as a critical part of Tasmania’s transport infrastructure.”   

This investment will “approximately equal” the total savings made over the next five years, the report says, but in the following years the investment will pay dividend returns.

The advantage is found in major freight corridors, such as between Brighton and Burnie, White says. On these routes, trains can move hundreds of tonnes of freight at a lower cost and at a lower accident rate.

“These physical and economy-of-scale advantages translate to very low overall costs on a per tonne kilometre basis,” White says.

“Investment in TasRail infrastructure allows these fundamental rail efficiency advantages to be captured by the Tasmanian freight system.”

Based on data sourced from government studies, Pitt&Sherry’s report calculated Tasmania saved $26 million in 2013-14 thanks to a decrease in road accident costs ($7 million), environmental costs ($1 million), road maintenance costs ($9 million) and business and industry operating costs ($9 million).

 

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