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Review of the Victorian Rail Access Regime Final Report Volume Ii: Detailed Analysis and Discussion of Issues

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Review of the Victorian Rail Access Regime Final Report Volume Ii: Detailed Analysis and Discussion of Issues Level 2, 35 Spring St Melbourne 3000, Australia Telephone +61 3 9651 0222 +61 1300 664 969 Facsimile +61 3 9651 3688 REVIEW OF THE VICTORIAN RAIL ACCESS REGIME FINAL REPORT VOLUME II: DETAILED ANALYSIS AND DISCUSSION OF ISSUES FEBRUARY 2010 An appropriate citation for this paper is: Essential Services Commission 2010, Review of the Victorian Rail Access Regime Final Report: Volume II Analysis and Discussion of Issues , February. Essential Services Commission. This publication is copyright. No part may be reproduced by any process except in accordance with the provisions of the Copyright Act 1968 and the permission of the Essential Services Commission. STRUCTURE OF THE FINAL REPORT The Commission’s final report on its review of the Victorian rail access regime is set out in three volumes: • Volume I sets out the Commission’s findings and recommendations to the Minister for Finance. • This volume provides a comprehensive explanation of the Commission’s analysis and its findings on each part of the terms of reference. It elaborates on the reasoning behind its recommendations and discusses responses received from stakeholders and notes some of the wider issues raised. • The third volume comprises supplementary material set out as appendices to the report. The appendices provide background information and more technical analysis related to the review. Essential Services Commission Review of the Victorian Rail Structure of the Final Report 3 Victoria Access Regime ESSENTIAL SERVICES COMMISSION REVIEW OF THE VICTORIAN CHAIRPERSON’S 4 VICTORIA RAIL ACCESS REGIME: INTRODUCTION DRAFT REPORT ACRONYMS ABARE Australian Bureau of Agricultural and Resource Economics ACCC Australian Competition and Consumer Commission ACRFD Alliance of Councils for Rail Freight Development AEMO Australian Energy Market Operator AER Australian Energy Regulator ARA Australasian Railway Association ARG Australian Railroad Group Pty Ltd ARTC Australian Rail Track Corporation BITRE Bureau of Industry, Transport and Regional Economics CIRA Competition and Infrastructure Reform Agreement COAG Council of Australian Governments CPA Competition Principles Agreement CRT CRT Group DOI Victorian Department of Infrastructure ESC Essential Services Commission ESCOSA Essential Services Commission of South Australia GIFT Gippsland Intermodal Freight Terminal GTK Gross Tonne Kilometres GVFLC Goulburn Valley Freight & Logistics GWI Genesee & Wyoming Incorporated IMT Intermodal Terminal Essential Services Commission Review of the Victorian Rail Acronyms 5 Victoria Access Regime IPART Independent Pricing and Regulatory Tribunal ISO Independent System Operator MCE Ministerial Council on Energy MFT Melbourne Freight Terminal MFTN Metropolitan Freight Terminal Network MOU Memorandum of Understanding MTM Metro Trains Melbourne NCC National Competition Council NERA National Economic Research Associates PBRT Port Botany Rail Team PFN Principal Freight Network PoMC Port of Melbourne Corporation POTA P&O Trans Australia PPP Public-Private Partnerships QCA Queensland Competition Authority QR Queensland Rail RCA Rail Corporation Act 1996 RFNR Victorian Rail Freight Network Review RFR Regional Fast Rail RIC Rail Infrastructure Committee SCT SCT Group TPA Trade Practices Act 1974 VBS Vehicle Booking System VFF Victorian Farmers Federation VFLC Victorian Freight and Logistics Council VRAR Victorian Rail Access Regime Essential Services Commission Review of the Victorian Rail Acronyms 6 Victoria Access Regime GLOSSARY Access agreement An agreement between an access provider and an access seeker for the provision of one or more declared rail transport services. Access arrangement A mandatory access undertaking under the current VRAR. Access provider A provider of a declared rail transport service. Access regime Procedures to govern access to rail track including setting an access pricing policy, criteria for permitting access and operating conditions. Access seeker A person seeking access to a declared rail transport service or seeking interconnection. Access undertaking A document which establishes the terms and conditions under which a service provider is willing to offer or negotiate access to service(s) provided by an essential facility to an access seeker. Broad gauge Means that the distance between the rails (rail gauge) is 1 greater than the standard gauge of 1,435 mm (4 ft 8 ⁄2 in). Container A reusable steel rectangular box for carrying cargo. Container terminal A docking, unloading and loading area within a port designed to suit the sizes and needs of container ships. Declaration Order An Order of the Governor in Council pursuant to s.38I of the RCA (Declaration of rail transport services). Declared rail transport A rail transport service declared under a Declaration service Order. Essential Services Commission Review of the Victorian Rail Glossary 7 Victoria Access Regime Interconnection Means that access seekers who own or operate, or intend to own or operate, railway track or sidings, may connect that infrastructure to the access provider’s declared railway track. Intermodal A system whereby standard-sized cargo containers can be moved seamlessly between different ‘modes’ of transport, typically specially adapted ships, barges, trucks and trains. Line haul The distance ‘point to point’ between terminals. Multi-user rail Intermodal A facility that provides: a rail terminal service; rail access terminal services; transfer interfaces with other non-rail logistics and transport modes; and support services, to any and all organisations within and related to the rail industry subject to capability, capacity and the completion of agreements with those organisations on reasonable commercial terms. Non-reference service A declared rail transport service that is not a reference service. Pricing Order or Pricing An Order of the Governor in Council pursuant to s.38J of Principles Order the RCA (Pricing Principles Order) specifying the principles and/or authorising the Commission to the methodology for calculating prices for declared rail transport services. Rail corridor A rail network running from one location to another. Rail gauge The distance or width, between the inner sides of the rails. Rail infrastructure A facility that is used to operate a railway and includes- railway track, railway track sidings, associated track structures and works (such as cuttings, tunnels, bridges, stations, platforms, excavations, land fill, track support earthworks and drainage works), over-track structures, under-track structures, service roads, signalling systems, rolling stock control systems, communications systems, notices and signs, overhead electrical power supply systems and associated buildings, depots, yards, plant, machinery and equipment. Rail sidings A low-speed track section distinct from a main track or branch track. It may connect to main track or to other sidings at either end. The distinction between sidings and other types of track is that a "siding" generally denotes an Essential Services Commission Review of the Victorian Rail Glossary 8 Victoria Access Regime auxiliary or not exactly specified usage. Sidings often have lighter rails, meant for lower speed or less heavy traffic, and few, if any, signals. Reference service A declared rail transport service that is likely to represent a significant proportion of demand by access seekers, or a service provided by the access provider to itself or an affiliate. Reference tariff or price The price, or an indicative price, for a reference service. Rolling stock A vehicle that operates on or uses a railway track or tramway track, and includes a locomotive, carriage, rail car, rail motor, light rail vehicle, train, tram, light inspection vehicle, road/rail vehicle, trolley, wagon or monorail vehicle. Standard gauge The distance between the inside edges of the rails of standard gauge track is 1,435 mm (4 ft 8½ in). Stevedore Individual or firm employed for the purpose of loading and unloading a vessel. Supply chain A sequence of activities related to transportation of raw materials into saleable products. These activities are typically performed by multiple firms in a ‘chain’ or network. TEU ‘Twenty-foot Equivalent Unit’ is the industry standard to measure containers. A 20-foot container’s dimensions are twenty feet long (6.09 metres), 8 feet wide (2.4 metres) and 8 feet six inches high (2.6 metres). Terminal A facility at which freight is loaded or unloaded from rolling stock, or stored, and includes hard stands, equipment and other infrastructure used for the loading or unloading of freight from rolling stock at the facility. Terminal ancillary services Terminal services which include shunting, wagon maintenance and storage, which a user may not necessarily need to use when acquiring other terminal services. Train kilometres Distance travelled by a train. Essential Services Commission Review of the Victorian Rail Glossary 9 Victoria Access Regime Vertical integration The degree to which a firm owns its upstream suppliers and its downstream buyers. Essential Services Commission Review of the Victorian Rail Glossary 10 Victoria Access Regime CONTENTS STRUCTURE OF THE FINAL REPORT 3 ACRONYMS 5 GLOSSARY 7 CONTENTS 11 1 INTRODUCTION 13 1.1 Purpose and scope of the review 13 1.2 Objectives of the Commission and relevant principles 14 1.3 Review process 15 1.4 Structure of the Report 16 2 POLICY CONTEXT 17 2.1 Freight Futures 17 2.2 Rail Freight Network Review (Fischer Review) 19 2.3 CIRA 20 2.4 Transport Integration Bill 2009 21 3 THE NEED
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