Re: QR going national?

["Switched On" <yaropolk@hotmail.com>]

Hi Ian,


Ian Harvey <ian_harvey@do.not.spam.me> wrote in message
37F388A8.CE0DD553@do.not.spam.me">news:37F388A8.CE0DD553@do.not.spam.me...
> Switched On wrote:
> >
> Qld power is cheap because the state has a significant chunk of the
> world's quality steaming coal reserves in the Bowen Basin, not because
> it has efficient rail systems.  These days most of the new base load
> power stations are connected to a dedicated coal mine by conveyor (e.g.
> Tarong).

> QR may well have efficient coal haulage but unfortunately I doubt these
> efficiencies are passed onto the coal mining companies as reduced
> freight rates.  There's a historical reason.  When the large, efficient

Question:

Should there be cheaper coal haulage rates and if so, why?

> Bowen Basin mines started to produce coal it looked like it would be the
> death of the existing coal mining industry in the Ipswich area.  In
> order to give the Ipswich coal mines a chance the state govt of the day
> substituted higher freight rates for part of the royalty payments across
> the industry.  This benefited the Ipswich mines which were closer to
> port than the Bowen Basin mines and has continued to present day despite
> most of the Ipswich mines closing anyway.
>
> In short, the Qld Govt use high coal freight rates to collect royalties
> from the mines.

Which, of course, goes back into the community and funds infrastructure
(including the railway.) This is the equivalent of profit-taking and
re-investment in the corporate world. Why is this wrong?

>Read a few annual reports for the major coal companies,
> and you'll find its a point that they've been squealing about for
> years.  Royalty collection is fair - hiding it as freight charges is
> not.  One advantage though is that it has given QR the resources to
> build the best public owned railway system in the country (I am a little
> biased here :).

I would argue that freight charges are _exactly_ where the profit should be
collected because it the point where the mines have one of their biggest
impacts on the community infrastructure. The other area where they should be
paying more is for their massive consumption of underground water in some of
the most arid regions of the country, and the further destruction of some
already very environmentally poor country, but that's another story.

Profit taking at the freight charge level is the perfect place to do it and
it means the mines can't fake their production figures.

> As for competition, BHP and Rio Tinto both have extensive experience
> with heavy haul rail systems for bulk commodities within Australia.
> There are differences (density of coal versus iron ore, rails are a bit
> closer together) but nothing that seems too dramatic.

The major difference is an operational one - the fact that they would have
to run under safety guidelines designed for mixed-traffic, which can be an
annoyance to those who want to cut-corners to increase the profits.

> I imagine that
> they would be absolutely delighted with the opportunity to set up their
> own rail operations for their coal mines in Qld.  However I suspect that
> their mining lease agreements with the state govt prevents it, granting
> QR a monopoly.

I'm not sure about this, because if you read the Network Access policies,
those mines are quite welcome to set up their own operations, and in fact
the rules governing their access state that QR's control centres have to
guarantee them equal access regardless of who they are... a fact which is
sort of overlooked by some of the southern fanatics who have been posting
disparaging remarks about the fairness of QR's operation. There really isn't
anything stopping them apart from fierce competition.

A