Re: Steam builds for Alice to Darwin rail link

[mauried@tpg.com.au (Maurie Daly)]

In article <KmjY4.273$mQ5.358059@news0.optus.net.au> dbromage@fang.omni.com.au (David Bromage) writes:
>From: dbromage@fang.omni.com.au (David Bromage)
>Subject: Re: Steam builds for Alice to Darwin rail link
>Date: Mon, 29 May 2000 01:04:42 GMT

>T & J Jones (jonest@senet.com.au) wrote:
>> > I sure hope that there is more, a lot more than 1 train a day.
>> > This line will need around 30 trains a day to simply break even,let alone
>> earn
>> > the projected 18% return after tax ,estimated by the consortium.
>> > $700 M of private capital for 1 train a day ,you gotta be kidding.

>> 30 trains a day.  What other interstate line carries 30 freight freight
>> trains daily??

>Where does the 30 trains a day figure come from?

>Cheers
>David

None do ,and thats why all other interstate lines had to built and paid for in 
their entirety by Govts ,both Federal & State.
Expecting the private sector to build a $700M rail line to carry 1 train per 
day is economic stupidity.
But to explain where the 30 trains per day come from.

Capital investment of the consortium is $700 M ,(the Govts Fed and State pay 
the rest.)
To acheive an 18% return on investment after tax requires $163.8 million in 
income from the new line per annum.
As the consortiums income will be from track access charges,(I have assumed 
charges similar to ARTCs of 0.25 c per GTK).
If the consortium charges much higher than this then there will be no trains 
at all, as all the freight will go by truck.
To achieve a return of $163.8 million PA from track access charges ,we need a 
total of 65 billion GTK, PA over the line.


A 1000 tonne train from Tarcoola to Darwin will generate 2.3 Million GTK so we 
need 28260 1000 tonne trains per annum ,which is arond 78 trains per day.
As its likely that the trains will be more than 1000 tonnes, I have assumed 
2500 tonnes as thats what operators like NRC seem to like running,which gives
31.2, 2500 tonne trains per day.
Even if we run 5000 tonne trains (difficult with 1:50 grades north of AP and 
north of Katherine) we still need 16 trains per day.
This project is simply not viable unless the Govts (State and the Feds) pay 
the whole of the construction costs,or guarantee the revenue base for the 
Consortium over the 50 year life span of the project.

One train per day would generate enough revenue to cover the running costs and 
maintenance costs,but not the capital cost.


MD