The CBH Group has welcomed the State Government's approval
yesterday of the grain freight package for Western Australia's rail
The deal will see a $6.9 million Transition Assistance Package
(TAP) provided to temporarily offset the additional freight costs
associated with keeping grain on rail rather than road. The package
also includes a $43.5 million commitment to re-sleeper the Great
Southern Railway - the railway line which connects grain receival
sites from Avon to Albany.
CBH Group Executive Manager for Logistics, Tim Collins said the
TAP would enable the CBH Group to continue to use a number of the
narrow gauge lines which feed grain into the standard gauge lines
to port, at least for the next 12 months.
"The CBH Group is absolutely committed on behalf of growers to
use the least cost pathway to get their grain to port. The TAP
allows us to do that whilst continuing to support the grain rail
network," he said.
"Without the TAP, those narrow gauge lines would no longer
have been competitive with road and around one million tonnes of
grain would have shifted to road," Mr Collins said. "That is the
equivalent of an extra 40,000 truck movements on local country
roads and on the major highways leading into and through the Perth
metropolitan area to reach the Kwinana Port Terminal.
"However, the TAP will only provide assistance for the next 12
months which is why it's vital that the State Government continues
to take action in future years on the remaining recommendations
outlined in the Strategic Grain Network Committee's report."
"While this package is only the start of a solution, is it
certainly a step in the right direction for WA's grain rail
"We hope that the Federal Government will also recognise the
need to invest the required matching funding to complete the
resleepering of the Avon to Albany rail line and help to secure the
future of the grain transport network of the biggest grain
producing State in the nation," he said.
Moving forward Mr Collins said the CBH Group intends to work
with the State Government in the roll out of the recommendations of
the SGNR including plans to further invest in road-to-rail and
rapid rail loading technology at its Avon and Brookton receival
sites, a key part of the longer term strategy to keep grain on rail
once the TAP is removed.
Mr Collins said the Strategic Grain Network Committee had done
an outstanding job in its review of the network, by highlighting
the immediate and long term threats facing WA's grain rail
"It's been a rigorous and inclusive process and, with Transport
Minister Simon O'Brien's support, the review is now achieving
results for the State's grains industry."
"Cross subsidisation within the network is no longer possible in
a competitive environment and the Strategic Grain Network Committee
recognised the need for a Government-led transition plan for the
industry - ensuring that grain can continue to be moved on rail
while the rail and road network is upgraded."
CBH General Manager Operations Colin Tutt said the State
Government's announcement would also enhance the process the CBH
Group now had underway to put one of its biggest contracts - the
transport of grain by rail - out to tender.
Mr Tutt said the decision to go to tender for the first time was
part of the significant change occurring in the grains industry in
"Increased competition means our commitment to delivering the
most effective and efficient grain logistics supply chain for WA
growers and their customers is stronger than ever," he said.
"This tender demonstrates that CBH Group is exploring every
avenue to provide a competitive rail system that will attract
tonnes off road and back to rail."
Mr Tutt said the expected formal release of tender documents in
early March followed extensive preliminary work by CBH to identify
potential rail providers around the world and to ensure the terms
of the new long term partnership provided all parties with both the
flexibility and certainty to make the investment needed to improve
"We have had very encouraging interest from rail companies in
Australia and overseas and the State Government's announcement
yesterday will only enhance that," he said.