End of an era for EP rail network

The decision, announced Tuesday, comes as Viterra ends its agreement with rail operator Genesee and Wyoming Australia, citing rising operational costs associated with the rail network.

A three-year agreement with GWA, established in 2015, was extended for 12 months to allow more time for a freight study on EP by the Department of Planning, Transport and Infrastructure, although this has still not been released.

Viterra commercial and logistics manager James Murray said the company made the decision to ensure it remained as efficient and cost-effective as possible for growers.

The company estimates remaining with rail would add an additional $3 a tonne to freight costs.

Across the past five years, an average 750,000t - an estimated one-third of the region's crop - has been carried by the rail network annually, with the balance carried by trucks.

Viterra believes this decision will add 48 loaded trucks onto the roads each weekday, or about 12,000 trucks a year, dependent on production.

Mr Murray said the company would review its investment needs at sites to support the transition.

“Since 2010, Viterra has spent $128 million on maintaining and improving our supply chain and services to growers and exporters on EP," he said.

Mr Murray said the decision had been carefully considered but could be reassessed if the rail cost situation changed.

EP Local Government Association president Sam Telfer said the increased grain movements on the road network would have an impact on the safety and longevity of local roads.

"Some estimates say it will be another 30,000 trucks on EP, which brings extra pressure on the existing infrastructure that have not had adequate investment," he said.

"It is now imperative that direct investment goes into the necessary areas, such as the access area at Port Lincoln, overtaking lanes on highways, access to upcountry storage sites and shoulder sealing on the Tod and Lincoln highways."

Mr Telfer said "collaboration and cooperation" was needed across the three tiers of government to support the industry and regions that contributed significantly to the state and federal economies.

He said this raised the opportunity for "leadership" on future export opportunities, such as developing new ports.

Flinders MP Peter Treloar said the decision, although not unexpected, marked the end of the rail system that had been a critical part of EP's settlement, travel, freight and communication.

"It’s disappointing in the sense that for more than 100 years the rail system has been a critical part of EP settlement, travel, freight and communication," he said. 

"It’s important to remember however that it is a completely autonomous narrow gauge line, not connected to the national rail network. This has brought its own set of challenges."

He said it was likely, without use, the rail system would be left to deteriorate further.

Mr Treloar said there had been talks at all levels of government about securing funding into major arterial roads, particularly into Port Lincoln.

"We’ve been having discussions for many months now, at all levels of government, around securing funding into the major arterial roads," he said.

"The largest increase in volume and pressure will be Port Lincoln, and certainly strategies are being discussed as to how best handle the increased traffic in the city itself."

He was also concerned about the estimated 40 employees of GWA that may lose their jobs as a result of this decision.

"My understanding is that GWA have kept their employees as informed as possible along the way – and have offered relocation or separation packages where appropriate," he said. 

"There will certainly be more jobs available for truck drivers."

Mr Treloar said it was disappointing the DPTI freight report had not been made public.

"There are many stakeholders in this discussion including local councils and the residents of EP and it’s incredibly frustrating that we’ve not been able to see this body of work," he said.

Transport, Infrastructure and Local Government Minister Stephan Knoll said this was a commercial decision by Viterra and GWA.

"The economic viability of this rail network has been in doubt for a long period of time," he said.

"The condition of the rail infrastructure and the restrictions it places on operations have added to the costs for doing business for Viterra such that it is simply no longer efficient to move grain by rail. 

"It is important to keep in mind this is a very aged network only capable of low axle loads."

Mr Knoll said the state government had been in discussions with the federal government about the added pressure on the road system and were "confident we are close to delivering a solution"

"We also look forward to engaging with Port Lincoln Council as we refine options going forward," he said.

GPSA chief executive officer Caroline Rhodes said the Port Lincoln grain export port terminal was a critical piece of infrastructure for the state's grains industry.

“It is in Viterra’s commercial interest to see this port remain competitive as new entrants begin to operate in the region,” she said.

Ms Rhodes said GPSA had met with regional Viterra staff at Port Lincoln to better understand the impact of the closure and capacity to manage additional road movements.

She said they would work with Mr Treloar and Mr Knoll to develop a solution that improves the EP road freight network.

“We will also engage with DPTI to ensure the EP road network is capable of handling an increase in heavy vehicle movements, including road train combinations," she said.

"In addition, GPSA is calling for a state-wide infrastructure blueprint for the grains industry to assist long-term planning and target government funding to improve export pathways."  

Kimba graingrower and Grain Producers SA director Dion Woolford said the news was not a surprise, with tracks deteriorating.

He said there was a nostalgia element for the railways, which had played a major part in opening up the EP for grain production, but it was necessary for the system to be efficient and cost-effective for growers.