North-South Rail Freight Growth - Opportunities & Impediments
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Transcript of North-South Rail Freight Growth - Opportunities & Impediments
14 June 2007 1
North-South Rail Freight Growth -Opportunities & Impediments
Presentation to BTRE Transport Colloquium – June 2007
21 July 2006 2
Background
• ARTC’s 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.
21 July 2006 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.
Price
Availability
Reliability
Transit Time Capacity
21 July 2006 4
Some Economics
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2
Road / Rail Price Relativity
Ma
rke
tS
ha
re%
Melbourne - Brisbane
Sydney - Brisbane
Melbourne - Sydney
Melbourne - Adelaide
Melbourne - Perth
Sydney - Perth
Sydney - Adelaide
ARTC Elasticity Analysis
21 July 2006 5
From Economics to Projects -1
Price
Availability
Reliability
Later cut-off /Earlier Availability
Reduce pathing constraints
Reduce impact of delays
Reduce asset cycle time
Reduce driver hours
Increase train capacity
Reduce distance
Increase Capacity
Reduce Transit Time
Reduce Impact ofSydney Curfew
Train Length
Outline Gauge
Deviations
21 July 2006 6
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.
21 July 2006 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.
21 July 2006 8
From Economics to Projects 2
Increase Capacity /Reduce Transit Time
Reduce Impact ofSydney Curfew
Increase Train Length
Increase Outline Gauge
Deviations
Increase Cant Deficiency
South Passing Lanes
North Passing Loops
Loop / Lane Configuration
CTC / Auto Block
Yard Upgrading
Brooklyn / Sunshine Triangle
Southern Sydney Freight Line
Northern Sydney FreightWorks (Auslink)
4250 mm Clearance
In-principle decision to staywithin current land boundary
21 July 2006 9
Sydney - Brisbane
21 July 2006 10
Sydney - Melbourne
21 July 2006 11
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.
21 July 2006 12
Market Outcomes
Elasticity Model Inputs
Melbourne - Sydney
Sydney - Brisbane
Melbourne - Brisbane
Transit Time Hours Hours Hours2005 13.5 19.4 32.92010* 11.4 15.5 26.9
Reliability % % %2005 55 55 452010 75 75 75
Availability % % %2005 50 35 602010 75 60 85
Cost Index# Index# Index#
2005 100% 100% 100%2010 93% 94% 92%
* Assumes 1800 metre train Mel-Syd and 1500 metre train Syd-Bris.# 2005 cost = 100%
21 July 2006 13
More Economics
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2
Road / Rail Price Relativity
Ma
rke
tS
ha
re%
Melbourne - Brisbane
Sydney - Brisbane
Melbourne - Sydney
ARTC Elasticity Analysis
21 July 2006 14
Volume Growth
High Case Volume Growth
-
2,000,000,000
4,000,000,000
6,000,000,000
8,000,000,000
10,000,000,000
12,000,000,000
14,000,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Coal
Grain
Minerals
Mel - Syd
Syd - Bris
Mel - Bris
Other Intrastate
Other Interstate
Passenger
21 July 2006 15
Volume Growth
North - South Corridor - Comparative GTK Growth
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5,000,000,000
10,000,000,000
15,000,000,000
20,000,000,000
25,000,000,000
30,000,000,000
35,000,000,000
40,000,000,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Base Case
Low Case
High Case
21 July 2006 16
North-South Projects - Timing
21 July 2006 17
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.
21 July 2006 18
Longer Term Volume Growth
Total North South Market Volumes(Current Investment Scenerio)
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2006 2011 2016 2021 2026 2031 2036 2041
GT
K
Rail
Road
21 July 2006 19
Road GTK (billions) by Market 2015
Mel - Bris, 11,493 , 13% Syd - Bris, 36339, 42%
Mel - Syd, 39353, 45%
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.
21 July 2006 20
Investment in Rail Beyond 2009 (cont’d)
• 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.