Eyre Peninsula Freight

In reply to the Hon. F. PANGALLO (21 March 2019).

The Hon. D.W. RIDGWAY (Minister for Trade, Tourism and Investment): The Minister for Transport, Infrastructure and Local Government has provided the following advice:

1. The Eyre Peninsula Freight Study has recently been made available. It can be found at: https://dpti.sa.gov.au/infrastructure/eyre_peninsula_freight_study.

2. It was important for the state government to complete its investigations and consideration of the best way forward. This included discussions with the federal government regarding investment options for the Eyre Peninsula road network to accommodate the closure of the rail network. As the council would now be aware, these discussions have been successful in securing federal government funding for the upgrading of roads on the Eyre Peninsula as part of the $100 million Roads of Strategic Importance initiative for the Port Augusta to Perth corridor.

3. The federal government has not requested to delay the release.

4. The South Australian government has appreciated the candour with which Genesee & Wyoming Australia (GWA) and Viterra have kept the government briefed. The announcement on 26 February 2019 by Viterra to cease its contract with GWA was a commercial decision and came after both GWA and Viterra assessed a number of options over the past two years. The state government did not participate in these negotiations, as this would have been inappropriate.

5. Built more than 100 years ago, the railway is now limited in sections to 20 km/h operating speeds and wagon loads not exceeding 12 tonnes per axle. The cost to upgrade the rail network is estimated to be around $150 million dollars, with no guarantee that there will be sufficient grain volumes to justify this investment.

An option to retain the Cummins to Port Lincoln line was considered, contingent on Genesee & Wyoming Australia (GWA) and Viterra agreeing this was a viable long-term option, when taking into account future region-wide developments. GWA and Viterra have concluded that rail operations are not viable. Under these circumstances it would not be appropriate to commit public funding to a capital upgrade and ongoing operating expenses to deliver a service that can be delivered more efficiently by road transport.

The state government is therefore not seeking to intervene in a commercial outcome.

6. The estimated increase in vehicle movements does not take into account allowance for the development of T-Ports' facility at Lucky Bay, or other potential new ports. T-Ports recently announced that the Lucky Bay port facility and associated grain storage facilities at Lock and Lucky Bay will be ready to receive grain, as an alternative to Port Lincoln, for the 2019 grain harvest. Further ports on the Eyre Peninsula, including Cape Hardy and Port Spencer, are also proposed.

The resultant impact on the movement of grain is an evolving matter. However, the increase in grain volume travelling via road through Port Lincoln is not expected to reach the level considered in the study.

7. The state government is very conscious of the potential impacts extra truck movements will have on the Eyre Peninsula road network. As previously stated, productive discussions with the federal government have resulted in funding being made available as part of the $100 million Roads of Strategic Importance initiative for the Port Augusta to Perth corridor.

The state government will work closely with local councils to identify opportunities to improve road safety outcomes as part of this package of works.