NorthSouth Rail Freight Growth Opportunities

1
North-South Rail Freight Growth -Opportunities
Impediments

• Presentation to BTRE Transport Colloquium June
  2007

2
Background

• ARTCs North-South Strategy was publicly
  announced in May 2005.
• Two key principles underpin the strategy
• ARTC is committed to growing rail volumes.
• The strategy must be driven by the market.
• This presentation will
• Outline the underlying economics behind the
  strategy.
• Describe how this translates into specific
  projects.
• Discuss the expected outcomes from the
  investment.
• Provide an update on progress with delivery.
• Briefly discuss where to next.

3
Interdependency

• The strategy revolves around five concepts
  Price, Availability, Reliability, Capacity and
  Transit time.
• These concepts are highly interdependent.
• That is, any concept that relates to one usually
  relates to all.
• Developing the strategy is therefore not a simple
  matter of following the branches of a logic tree.
• Also leads the strategy to be hugely synergistic.

4
Some Economics
5
From Economics to Projects -1
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Capacity Transit Time

• Capacity and transit time seem like distinct
  concepts but are almost circular.
• Capacity is a function of practical headways.
  Anything that reduces headways will (all other
  things being equal) increase capacity.
• A key consequence of reducing transit times is
  that it generally reduces headway.
• Hence, transit time projects increase capacity.
• Transit time is the combination of raw
  (unconstrained) transit time and delay from
  interference by other trains.
• Projects to increase capacity will reduce the
  impact of interference for a given number of
  trains.
• Hence capacity projects reduce transit time.

7
Transit Time Reliability

• Transit time also has a close interrelationship
  with reliability.
• Operators can trade-off transit time to increase
  reliability and vice versa.
• The extent to which operators do this will be a
  matter for them.
• However, it is assumed that operators will be
  aiming to achieve a step change from the current
  very poor reliability levels.
• The interrelationship between capacity,
  reliability and transit time also makes it
  convenient to express most project benefits in
  terms off their transit time impact at a given
  train volume.

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From Economics to Projects 2
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Sydney - Brisbane
10
Sydney - Melbourne
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Market Outcomes

• South projects will reduce transit time from
  approximately 13.5 hours to 10.7 at current
  average freight density. If operators chose to go
  to longer trains, transit time is estimated at
  11.4 hours.
• This transit time reduction is achieved while
  increasing train numbers from approximately 4
  each way per day to 10.
• North Coast projects will reduce transit time
  from approximately 19.4 hours to 15.5.
• Achieved while increasing train numbers from
  approximately 4 each way per day to 9.
• Operators can also trade-off transit time for
  reliability.

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Market Outcomes
13
More Economics
14
Volume Growth
15
Volume Growth
16
North-South Projects - Timing
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Project Delivery

• Alliance partners in place.
• Concrete sleeper tenders awarded.
• 3 North Coast loops under construction
  (Braunstone, Namoona, Tamrookum).
• Construction commenced on 4 passing lanes
  (Gerogery Table Top, Henty Culcairn, The Rock
  Yerong Creek, Wagga - Uranquinty).
• Concrete sleepering advancing as fast as sleepers
  are being delivered New Bomen sleeper plant
  output available shortly.
• TCC related signalling works complete in
  September.
• SSFL Environmental Approval granted tendering
  to commence shortly.
• Tottenham Dynon / Tottenham triangle underway.
• Wagga bridge completed. Leeville viaduct 60
  complete.

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Longer Term Volume Growth
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Investment in Rail Beyond 2009

• Further rail investment
• Should be directed at achieving the largest
  possible reduction in road GTK for the available
  funding.
• Should be grounded in an understanding of the
  factors that drive market share.

• By 2015 the Melbourne Brisbane market will only
  represent 13 of the combined road GTK for the
  three intercapital general freight markets.
• Future investment should benefit Melbourne
  Sydney and Sydney Brisbane as well as Melbourne
  Brisbane.

20
Investment in Rail Beyond 2009 (contd)

• Biggest issue is Northern Sydney.
• NSRCS identified reliability through Sydney as
  the biggest constraint on performance.
• Southern Sydney Freight Line will address the
  issues in the south.
• Further investment in Northern Sydney could
  significantly improve Sydney Brisbane
  performance, as well as solve the key constraint
  on Melbourne Brisbane competitiveness.
• ARTC would like to see 4 freight paths per hour
  for most of the day.
• Terminals are also important for the Melbourne
  Sydney and Sydney Brisbane markets.
• ARTC remains strongly supportive of the Moorebank
  proposal.
• The Advanced Train Management System (ATMS) will
  deliver additional capacity and reliability, and
  help reduce infrastructure costs.
• ARTC has attempted to get the best possible
  performance with the existing rail alignment. At
  some point deviations will need to be considered
  to gain further rail competitiveness.