25/03/2010 - 00:00

Mining, grain rail networks prioritised

25/03/2010 - 00:00

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THE private owner of Western Australia’s freight rail network has budgeted to spend $918 million over the next five years expanding its rail infrastructure.

Mining, grain rail networks prioritised

THE private owner of Western Australia’s freight rail network has budgeted to spend $918 million over the next five years expanding its rail infrastructure.

WestNet Rail is targeting the Mid West region’s emerging iron ore industry for growth, and will also play a key role in the proposed upgrade of the state’s ageing grain rail network.

However the detail of both projects hinges on negotiations currently under way with the state government, farming groups and miners.

WestNet Rail chief executive Paul Larsen told WA Business News the future investment followed spending of more than $1 billion since the state’s 5,000-kilometre freight rail network was privatised in 2000.

Owned by ASX-listed Prime Infrastructure, which in turn is 40 per cent owned by Canadian investment group Brookfield, WestNet Rail is budgeting to spend between $350 million and $450 million in the Mid West.

The company plans to align services for miners in the southern part of the Mid West (namely Mt Gibson Iron, Sinosteel Midwest, Karara Mining and Asia Iron) to the Oakajee port and rail project.

A rail line with greater capacity will be built in parallel to the existing WestNet line from Morawa to Mullewa and the line will be extended to meet with existing WestNet lines to Geraldton and the Wokatherra Gap, where access to the Oakajee port will be available on the proposed Oakajee rail line.

Mr Larsen said the new rail system would have a vital role to play in bringing the southern miners to the market.

The project is currently in the detailed design and costing phase and the company is in procurement discussions with Karara Mining to link Karara’s privately owned rail up with WestNet’s planned network.

Mr Larsen said the rail network would be running by mid to late 2011.

But the Midwest is not the only region in which WestNet is involved.

The Welshpool-based company is working with state and federal governments and farming groups to finalise plans for a much-needed upgrade of WA’s grain rail network.

Mr Larsen said a government audit undertaken last year concluded that, for the rail network to remain operational and a viable alternative to road, it would need a $258 million upgrade.

The state government’s Strategic Grain Network Committee, chaired by Fred Affleck, has been formulating detailed spending plans.

In January, Transport Minister Simon O’Brien announced the state government would contribute $22 million to upgrade the grain rail line from Avon to Albany – a figure likely to be matched by Canberra later this year.

The Avon-to-Albany line is considered the backbone of the grain network in the Great Southern region

The committee also recommended that parts of the network be shut down and replaced with a $96 million upgrade of roads.

The region between Merridin, Quairading and Kulin will be most affected by rail closure – a move that farming groups continue to fight.

Mr Larsen said the federal government had $135 million set aside for the upgrade of WA’s grain rail network, and if the decision was not made to upgrade the network soon, the money would go to another project.

He added that the grain network was not the company’s highest earner but WestNet Rail remained committed to running the service for farmers.

“WestNet doesn’t make any money through grain, but we view it as a corporate social responsibility,” Mr Larsen said.

WestNet has its eye on development across WA, with big growth plans for the next five years.

The company has increased its capacity by 20 million tonnes per annum (mtpa) to 50mtpa since 2000 and aims to reach 100mtpa by 2015.

Its plans involve a $40 million investment in the Collie line, a $60 million rail duplication for the Brunswick Junction to Bunbury line (which was pitched to Infrastructure Australia by Premier Colin Barnett late last year), and investment in both the Goldfields east west line and the Esperance line.

“$200 million will be spent in the South West to facilitate growth,” Mr Larsen said.

As well as investing in the grain rail network, the state government plans a much larger investment in the suburban passenger rail network.

Late last year, Mr O’Brien announced the government had given the green light to the Joondalup rail extension, along with a $240 million capital package to fund the project.

The Joondalup line will be extended by 7.5 kilometres to Butler and will be open in 2014.

 

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