Re: NT govt may scuttle Darwin rail

[mauried@commslab.gov.au (Maurie Daly)]

In article <382cb503.8692629@news.ozemail.com.au> telljb@OZozemail.com.au (< Tell >) writes:
>From: telljb@OZozemail.com.au (< Tell >)
>Subject: Re: NT govt may scuttle Darwin rail
>Date: Fri, 01 Oct 1999 13:20:07 GMT

>mauried@commslab.gov.au (Maurie Daly) wrote:
>> 
>> When the Hawke Govt came to power , building AP to Darwin was one of their 
>> primary , (in todays terms core ) election promises.
>> Of course after they got in , Hawke found a heap of reasons why it should not 
>> be built, mainly economic ones.
>> And Tells right , AP to Darwin is totally uneconomic , bit so are a heap of 
>> existing railways.
>> The TAR today if it had to be built again would be totally uneconomic, as 
>> would be building Broken Hill to Parkes.
>> Building Badgereys Creek Airport is also totally uneconomic , but that wont 
>> stop em.
>> 
>> It seems to me a bit hard to be criticising a private company , in this case 
>> the AP consortium for not being able to raise enough money to build an 
>> uneconomic railway, after all , this railway will eventually revert to Govt 
>> ownership.
>> There seems to be these days an ongoing trend to expect the private sector
>> to do the Govts work, including raising the funds,
>> What the hell do we pay taxes for?


>There was an expectation from the amount of interest
>shown that the funding of the line mostly by private
>capital would not be a problem.  
>I wonder what has changed.?

>The Feds could easily make worthwhile taxation breaks
>to have the thing built, but they have been avoiding
>that like the plague.

>----Terry Burton
>[clear OZ in address for email reply]
>  


Tax breaks only work if the project is ultimately profitable , and in the 
early days during the construction phase,one is allowed to write off the 
losses on subsequent years when profits are expected.
There is some analysis on the NCCs web page of the likely track access
charges needed to make this line economic with the existing annual tonnage now 
going to AP.
Works out at 34 c/gtk , obviously totally unviable .
I worked out that to break even with an access charge of 0.25 c/ntk and 
maintenance costs of 0.07 c/gtk something like 27, 1000 tonne trains per day 
between Tarcoola and Darwin were needed, 7 days per week.
Assumes access charge of 0.25c/gtk plus flagfall of $5K per train with revenue
from the whole route , ie Tarcoola to Darwin going to the consortium.
 This doesnt allow for any upgrading of the Tarcoola to AP bit.
The ony possible way to further the project without the feds forking over 
buckets of money , would be to make the whole project more attractive to the 
consortium.
One way of doing this would be to hand back to the SA and NT Govts all of the
existing SG track between Adelaide and Tarcoola so that it could be leased at 
a peppercorn rental to the Consortium which would provide revenue in the early 
years from current train operations .
Obviously ARTC will scream at any sort of proposal like this , but I cant see 
any other options.
The relevant state govts arnt in any position to contribute more money.

MD