Planning and Infrastructure Minister Alannah MacTiernan has called on the Federal Government to increase funding to Western Australia's freight rail network.
Planning and Infrastructure Minister Alannah MacTiernan has called on the Federal Government to increase funding to Western Australia's freight rail network.
The full text of a Ministerial announcement is pasted below
Western Australia is demanding its share of the Federal railway funding so generously being splashed around on the Eastern seaboard.
Planning and Infrastructure Minister Alannah MacTiernan said that WA's freight rail network faced serious decline as a result of a previous government's bungled privatisation of the network.
"Because the sale was so badly structured and due to endemic problems with road and rail pricing, about a third of the network is now facing closure, unless $800 million is found to upgrade infrastructure," Ms MacTiernan said.
"WA has put its case for assistance to the Federal Government.
"We produce half the nation's grain exports, with 80 per cent of our grain exported and 60 per cent of this getting to port by rail.
"The impending collapse of our rail network will have a devastating effect on many rural communities, as well as damaging the national economy to which the grain industry contributes an estimated $5.5 billion."
The Minister said that in addition to failing infrastructure, the rail industry faced unfair competition from road freight.
"Our analysis shows that in the grain sector, road freight is not paying its way, with infrastructure costs cross-subsidised by passenger vehicles," she said.
"A similar imbalance is occurring in the plantation timber industry in the State's South-West and with iron ore in the Mid-West.
"In the last few months, the Federal Government has committed $78 million to the Tasmanian rail sector and $120million to plan a new rail corridor from Melbourne to Brisbane.
"Given the size of our contribution to the national economy, we have every right to expect a similar consideration by the Federal Government."
Ms MacTiernan said the privatisation of WA's rail network at a low price in June 2000 provided no protection for smaller grain lines after 2007.
"Before privatisation, the freight revenue covered operating costs and debt servicing as well as producing a modest profit," she said.
"Also, because of the network approach, costs were spread across the system, ensuring the viability of smaller lines.
"At the time of the sale, the previous Government said the purchasers would spend $400 milllion on capital improvements and expand the network.
"Less than half of that amount appears to have been spent and the expansion did not happen, but now the original purchasers have sold the network and made profits totalling hundreds of millions of dollars.
"But the original contract allows the owners to close uneconomic rail lines from 2008, unless operations are subsidised, and so far about 1,000km, or a third of the network, has been put in this category.
"This was part of a $585million deal which lost the State $116 million, according to the Auditor General, and left it with a $331million unserviced annual debt.
"The bill for infrastructure upgrades could lead to substantial increases in rail costs for farmers."
The Minister said the State Government would work with the Federal Government, rail and grain companies and farmers' organisations to find a fair solution.
"The alternative will be to have hundreds of very large trucks on country roads - shifting the costs to farmers, local governments, the State Government and ultimately taxpayers," she said.