Extra trucks concerning

Extra trucks concerning


Local Business Feature
OTHER METHODS: Rail is used to transport grain across the Eyre Peninsula, but this may end. Pictured is Viterra's Port Lincoln terminal.

OTHER METHODS: Rail is used to transport grain across the Eyre Peninsula, but this may end. Pictured is Viterra's Port Lincoln terminal.

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The future of transporting grain on the Eyre Peninsula is being discussed as Viterra passes the halfway mark of its rail contract with Genesee & Wyoming Australia.

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The future of transporting grain on the Eyre Peninsula is being discussed as Viterra passes the halfway mark of its rail contract with Genesee & Wyoming Australia.

The negotiations have raised questions from the industry and state and local government bodies, which are concerned that if the contract is not renewed, there will be more trucks on the road and are unsure who will pay for road upgrades to handle the extra loads.

The District Council of Lower EP estimates an extra 40 trucks would be needed to transport the 2000 tonnes of grain per train being moved between the Cummins and Port Lincoln grain handling sites.

Viterra contracts GWA to transport wheat via rail across SA.

The contract – announced in July 2015 – includes a five-year term for the main lines in central and eastern regions and a three-year term for the EP line, both with options for extension.

The contract is worth more than $100 million.

The EP service includes one line from Port Lincoln to Cummins, with offshoots to Kimba and Wudinna. Viterra is GWA’s only customer on the EP line.

At the EP Local Government Association annual conference in late February, Viterra said it was reviewing its rail operations.

A report to council in March said there had been suggestions the cost of rail freight added about $3/t on handling charges between Cummins and Port Lincoln.

Based on the estimated 66-kilometre distance by road, the report read, the cost to reconstruct that length of road would be between $17m and $30m, as the existing road is of varying age and condition.

“If the $3/t figure is accurate, and assuming about 30 per cent of freight movement is by rail, then adoption of road freight would ‘save’ between $400,000 and $500,000 per harvest,” the report said.

“But it would transfer that cost to the state and the community.”

Member for Flinders Peter Treloar said there had been restrictions on wagon load rates and reductions on train speeds on the EP rail lines as concerns about the state of the tracks had been raised.

GWA did not respond to Mr Treloar’s claim at time of print.

Viterra did not directly address Stock Journal’s question about whether it thought the EP rail line’s condition was suitable and safe enough to be commercially viable past the present contract end date.

Viterra logistics and commercial relations general manager Jonathan Wilson said Wudinna and Kimba were the furthest sites on the EP where rail was used to transport grain to Port Lincoln.

The rail lines service 15 storage and handling sites to transfer grain to Port Lincoln for shipping.

“Unlike the rail lines on the eastern side of the state that are used for many types of freight, these lines are only used to transport grain,” he said.

Viterra owns some below-rail infrastructure at its sites within the Lower EP and works closely with GWA, which provides above and below rail services.

Mr Wilson said more than 470,000t of grain had been been moved on the EP rail lines this harvest, from October 1 until the end of April.

He said where road transport was utilised on the EP, various combinations were used up to AB triples.

“Viterra’s Export Select Rates are set at the most cost-effective and efficient way to perform the grain transport task,” he said.

“Viterra is focused on the task at-hand, which is to move the record-breaking crop in the most efficient and cost-effective way possible.”

GWA operates and manages the EP narrow gauge network under a concession lease with the SA government.

The infrastructure is owned by GWA, but the land is owned by the SA government and is leased to GWA under a long-term agreement.

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