Re: Alice Springs-Darwin loses financier

["Andrew Honan" <ahonan@zipworld.com.au>]

"Maurie Daly" <mauried@tpg.com.au> wrote in message
3a7260ae.30136397@can-news.tpg.com.au">news:3a7260ae.30136397@can-news.tpg.com.au...
> On Sat, 27 Jan 2001 00:27:54 GMT, "Peter Berrett"
> <pberrett@optushome.com.au> wrote:
>
> >
> >Dear Paul
> >
> >I hasten to disagree with this statement for a number of reasons.
> >
> >Fistly, there are costs associated with accessing the ocean namely port
> >handling charges, fuel, ship staff wages etc
> >
> >There is also a question of timelyness.
> >
> >Secondly, the advantage that rail has over sea travel is that it the more
> >direct route to get from south east Australia to south east Asia. That
must
> >equate to savings in fuel.
> >
> >Finally I disagree with your statement that goods will cost more as a
result
> >of landing in Darwin.
> >
> >If it is cheaper to carry goods by sea, exporters will still use sea
travel
> >to ferry their wares. They will choose the cheaper option. Given that the
> >company(s) railing freight from Darwin to south east Austarlia and vice
> >versa will be competing against sea freight they will have to drop their
> >freight charges lower.
> >
> >cheers Peter
> >
> Sorry Peter.
> Paul is spot on.
> Rail cannot ever compete with shipping when the cost of building the
> railway in the first place has to be factored into the track access
> charges.
> Ships dont have to pay track access charges, nor do they have to pull
> their loads up and down hills.
> If rail was as efficient as shipping then we would be railing all the
> wheat and grain grown in NSW and Victoria to Brisbane and then loading
> it into ships as Brisbane is closer to the final destination than
> places like Melbourne, Geelong or Portland.
> As for reducing rails charges to compete with shipping , in the case
> of AP to darwin it simply isnt possible.
> You have a $700 million debt plus annual interest bills to pay which
> you can only derive from track access charges.
> As for timrlyness, rail can only compete with shipping when the
> function of train control is in the hands of the rail operator.
> In an environment where a 3rd party provides the train control ,rail
> operators have no certainty that their trains will arrive on time.
> Its in most cases in the hands of 3rd party train controllers.
> And there is also the road freight industry.
> People seem to beleive that once AP to Darwin is built then all of the
> existing freight that goes by road will magically switch over to rail.
> Why??

I thought long distance non-bulk freight was up for grabs (for rail). I
thought rail was competitive on the east coast to west coast leg, and would
have thought the Adelaide to Darwin leg would be comparable.
It is just a question of volume of traffic (both ways).

It is true that $750M may have to be paid back, but if we ignore this and
say it is a sunk cost, then rail should compete with road (its just that I
do not think it will ever pay back the debt).
Maybe the pricing of access fees should only be on the basis of short run
marginal costs (i.e. maintenance costs only rather than provisioning for the
network)

> It hasnt anywhere else.
>
> MD
>

AH