Integration vital to Queensland's rail network: industry

Date: 24.06.2010

Queensland operators encouraged to move past competitive work dynamic and commit to long term infrastructure development

By Jayne Munday | June 24, 2010

Queensland has the potential to emulate the Hunter Valley’s successful rail network if operators get past the dynamic of competing for work and commit to long term infrastructure development.

This was the message delivered to industry leaders at the Queensland Export and Infrastructure Forum, hosted by Committee for Economic Development of Australia (CEDA) in Brisbane today.

CEDA State Director Robert Fuller says there is a clear need for Queensland to capitalise on international hunger for its export resources and remove past impediments which have affected the state’s rail networks and port facilities.

"Our reputation as a reliable exporter is critically linked to having infrastructure to meet demand," Fuller says.

"Our mining industry has previously faced export delays due to queuing in the supply chain," he says.

"As the global economy recovers it is vital that Queensland is supported by a system of infrastructure that positions us as leaders within a competitive global market."

QR SUPPLY CHAIN CHALLENGES

Queensland Rail Chief Operating Officer Ken Lewsey outlines the importance of supply chain management and offers insight into the state’s evolving rail system.

Last financial year, QR National carried close to 250 million tonnes of freight to customers with export value of close to $50 billion.

"QR National therefore provides critical links underpinning Australia’s export wealth….from iron ore in Western Australia to coal in Queensland," Lewsey says.

"To best realise our potential, supply chain capability is vital and planning is integral," he says.

A key part of QR’s success has been its large capital program, which has seen continued investment in metallurgical coal expansion in North Queensland.

This includes the Jilalan Rail Yard, located three kilometres south of Sarina near Mackay, which is an important link in the Goonyella coal supply chain.

"These examples not only illustrate what we are doing now but also the essence of the integrated QR National, that we are putting to market later this year," Lewsey says.

Looking past QR National’s privatisation plans, he assures total system performance is the "ultimate scorecard".

"The obvious aim for all providers is to optimise individual performance, but more importantly, to work constructively and cooperatively across the supply chain together."

Lewsey wrapped up his address by saying despite roadblocks such as the GFC and the recently announced resource super profits tax, QR has not taken its foot off the pedal.

"We will fight furiously to win work in the Hunter Valley and Queensland, but will then work together, and align with port and rail interfaces," he says.

"We still have a long way to go to see the supply chain as one synchronised system, but we have made great progress."

LEARNING FROM THE HUNTER VALLEY

Australian Rail Track Corporation (ARTC) General Manager Commercial, Simon Ormsby, elaborated on the rail networks in the Hunter Valley and shared his tops tips to unlocking system capacity.

"The Hunter Valley coal network is a mixed-commodity network made up of over 700km of track," Ormsby says.

He says there are four key principles which have ensured success: long-term investment planning; aligned investment across the system; aligned contracts; and path utilisation.

While these tactics have helped the NSW system prosper, Asciano Divisional General Manager for Coal David Irwin says the challenges Queensland now faces – especially in the Goonyella supply chain – are very different.

He says the Hunter Valley network, which was established five years ago, is a small geographic coal chain and much more dense in terms of rail traffic compared to the sunshine state.

Ensuring trains are not waiting for port stackers, and coal is ready to go on the right train at the right time is all part of the challenge.

"Micro-managing those interfaces ensure you get the best out of capital expenditure," Irwin says.

INTEGRATED RAIL NETWORK

Making reference to QR’s management shake-up, Irwin says any independent players need to be integrated into the supply chain, ensuring transparency and healthy competition.

"We know and recognise that in Queensland we will always be a minority…we have no aspiration or expectation that we will ever become bigger that QR National," he says.

"All we want to ensure is that our role is not encumbered in terms of how we service our customers."

Irwin finishes by assuring there are "masses" of capital expenditure happening around the state in coal networks.

"The key for us is to ensure that we explore every avenue to make sure we don’t make a decision in the next six months that has ramifications for the whole industry for the next 20 years."

Speakers at the half-day forum crossed both the private and public sector and included Queensland Minister for Transport Rachel Nolan, Port of Townsville Limited Chairman Ross Dunning, Gladstone Ports Corporation General Manager Operations Craig Walker and GHD transportation Economics and Logistics Business Leader Steve Meyrick.