Logistics News

Scurrah warns against misguided National Intermodal plan

Pacific National says govt should focus on upgrading existing tracks and Trans-Australian Railway

The Australian Government’s announcement regarding the establishment of the National Intermodal Corporation Limited (National Intermodal) has received a critical response from Pacific National.

As one of Australia’s largest rail freight operators, Pacific National sees the move as posing a direct competition to private rail transport sector.

It comes after the government announced last week that it will set up National Intermodal, previously known as Moorebank Intermodal Company, to support the planning, delivery and operation of the government’s investment in new state-of-the-art intermodal terminals across Australia’s east coast.

Transport minister Barnaby Joyce says the National Intermodal will service Inland Rail and facilitate an integrated approach to Australia’s interstate rail freight network.

However, Pacific National CEO Paul Scurrah says instead of developing terminals, the government should focus on upgrading existing tracks and helping local and state governments deliver enabling infrastructure for future intermodals.

The last two decades has seen huge government investment in roads and regional highways, resulting in an explosion of larger trucks hauling more freight,” Scurrah says.

“It’s hard enough competing against the rapid growth of road freight, let alone now facing direct competition from government using taxpayers’ money to develop intermodal terminals.

“Let me stress, Pacific National welcomes government investment to upgrade and improve the interstate rail freight network, but this initiative is misguided.

“Pacific National would prefer the Australian Government focus its attention and resources on building greater resilience into the existing interstate rail network, notably allocating funding to upgrade the Trans-Australian Railway – the umbilical cord for critical east-west freight movements which was recently closed for almost a month.

“The expansion of MIC’s role will have the perverse effect of stifling future private sector investment in the national rail supply chain, including capacity to support the Inland Rail project.

“This initiative will not support the goal of both governments and rail operators driving modal shift of freight from road to rail to help deliver environmental and safety benefits for the nation.

“Pacific National is strongly committed to growing freight volumes on rail, has an existing national network of interstate terminals supporting the national freight task and has initiated plans to further increase its capacity for container movements on rail by ten per cent early this year and a further five per cent by September 2022.

“On top of this, additional capacity will be boosted another 25 per cent over the next four years.

“This represents a significant existing and future commitment of capital and resources to continue the growth of freight on rail and meet the demands of our customers.

“However, we must now ask the question, why would a private company invest in the development or enhancement of an intermodal terminal when the government has announced its intention to publicly fund competing rail terminals rather than investing in the existing interstate network.”

Pacific National has long advocated for increased government grant funding to enhance the safety, efficiency, and resilience of interstate rail freight networks, Scurrah adds.

“As a recent case in point, the TransAustralian Railway – the umbilical cord along which huge volumes of goods and commodities flow between the east and west coasts of our continent – could do with a major upgrade,” he says.

“However, taxpayers’ money should never be spent on replicating what the private sector is doing in terms of building intermodal terminals.

“Rather than the federal government getting into the business of developing terminals, it should instead focus on upgrading existing tracks and helping local and state governments deliver enabling infrastructure for future intermodals.

“This is exactly what happens in NSW under the very successful Special Activation Precinct program. For example, at Parkes in Central West NSW, Pacific National constructed inland regional Australia’s largest intermodal terminal (>$35 million private investment), with the state government supporting the roll out of enabling infrastructure like improved access roads and utilities for the broader logistics hub.

“We ask the question: does government use taxpayers’ money to develop truck depots?

“They invest massively in upgrading local roads, interstate highways and building urban motorways (e.g. Pacific, Newell and Bruce highways, WestConnex etc) which in turn helps to give confidence to private road freight operators to set up shop along these transport corridors.

“In this country, the private rail freight sector has a proud and successful history of constructing intermodal terminals in strategic locations to meet the needs of our many customers – long may this model continue.”

The government, on the other hand, says the move will add resilience to supply chain operations.

“As an exporting nation, Australia relies on our commodities and manufactured goods reaching international markets to generate the wealth that underpins our standard of living and prosperity,” Joyce says.

“We are building Inland Rail to build additional resilience into Australia’s supply chains and better connect our exporting industries with their customers, so that our nation can continue to earn the money that pays for the services Australians need and deserve.

“National Intermodal will work with the Commonwealth, state governments, the Australian Rail Track Corporation and industry to develop and operate the Melbourne and Brisbane intermodal freight terminals in time for the commencement of Inland Rail’s full operations in 2027.”

Urban Infrastructure minister Paul Fletcher says the government-owned company delivering Moorebank is well placed to deliver the Commonwealth’s future intermodal investments.

“Moorebank Intermodal Company has built up significant expertise over the last decade, facilitating the development of Australia’s largest open access intermodal terminals precinct – the Moorebank Logistics Park in Sydney,” Fletcher says.

“We now want the company’s board and management to utilise that experience and expertise in the development of the national network of modern, state-of-the-art, open access interstate terminals.

“Through the establishment of National Intermodal, Australia’s east-coast interstate rail network will for the first time have a network of interconnected modern, efficient terminals, managed by an independent company, leveraging industry experience, and genuinely promoting open access to encourage new entrants.

“These important terminals will provide additional resilience and choice for the nation’s supply chains to ensure that supermarket shelves remain stocked and industry gets the materials it requires.”

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