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Future Freight Networks : Yearbook 2016
96 ALC MEMBER INSIGHTS ‘If you are trying to develop a more discrete BCR, what you put in and put out of the calculations is very important. What is increasingly happening in other parts of the world – and what I think would help the financial analytics in Australia – is the adoption of a more value-based model. ‘For example, in places like the United Kingdom, where there are new rail projects, they are very much looking at the overall value creation of that rail, rather than just comparing the costs of the specific, discrete infrastructure versus the revenue on the link. They are looking at a whole value creation model: things such as land valuations, the potential for urban renewal, and the development of business opportunities. Then they are packaging that together to see whether the analytics are different. And typically, they are. ‘So, I think that is probably a model that Australia would benefit from, although it is not without complexities. It has been somewhat difficult because of the potential conflicting priorities between national and state governments and who will fund various activities. There are also private proponents out there looking to undertake their own alternative infrastructure developments, particularly in rail. This would indicate to me that there is a strong appetite for private sector investment, if the right investments can be found.’ What needs to be done? Cummins says a number of initiatives can be pursued in the short and longer term. One step is for the government to invest in existing rail infrastructure. ‘At the moment, agricultural exporters in the west of the state cannot move 40-foot-high cube containers on the rail, which is their preferred type of container. They can’t move them because the tunnels are not deep enough, the axle loads on the railways are not high enough, and the passing loops are not sufficient to allow longer trains. ‘The upgrades required to allow those containers to come to the port are actually quite small. The government only needs to spend in the order of $50 million to address this. So that is, I think, low-hanging fruit. ‘Then, for the medium to long term, the real issue is ensuring that there is a dedicated freight corridor to the port. At the moment, in Brisbane, the freight paths come through the congested urban sector. And when you have a conflict between passengers and freight, there is only one winner. ‘So, we need a dedicated freight corridor, whether that is using the freight corridor that is earmarked along the Gateway Motorway, or whether it is analysing other private proponents. We are not fixed to where that corridor should be. But we do strongly support the fact that there needs to be a dedicated freight corridor to the port.’ Cummins says if that new corridor is not preserved, ‘multiple pressures will come to bear’, especially when the Queensland Government is considering Cross River Rail in Brisbane to improve passenger services. ‘Unfortunately, both in the construction phase and post the construction phase, Cross River Rail is actually going to limit even further the amount of freight paths that can get through the city. Unless we have a dedicated freight corridor, I fear we will have a real problem. ‘The Port of Brisbane is a vital artery for the state. Approximately 50 per cent of the state’s international trade comes through the port: $50 billion of trade. So if you have that vital artery, but you are slowly but surely applying a clamp to it because of the lack of rail access, you are restricting the ability of the importers and exporters of the state to trade effectively in the long term. It is a very important issue to be thinking about now, in advance of that occurring.’