Inland Rail Central West Nsw Regional Economic Analysis on the Potential Impact of the Proposed Inland Rail
Total Page:16
File Type:pdf, Size:1020Kb
INLAND RAIL CENTRAL WEST NSW REGIONAL ECONOMIC ANALYSIS ON THE POTENTIAL IMPACT OF THE PROPOSED INLAND RAIL A NSW Government Initiative / December 2016 Report prepared for Regional Development Australia — Central West by A.P. SHEERE CONSULTING www.apsheereconsulting.com / With funding from: / Acknowledgment A.P. SHEERE CONSULTING would like to acknowledge the support of Regional Development Australia — Central West (RDACW), Lycopodium Rail, Telesis Consulting, Parkes Council and the businesses and associations who kindly assisted with the development of this report. / About Regional Development Australia — Central West Regional Development Australia — Central West is part of a national network of 55 locally managed, not-for-profit incorporated associations and is jointly funded by the Australian and NSW Governments. Our region extends from Lithgow in the east to Lake Cargelligo in the west and comprises the local government areas of Lithgow, Oberon, Bathurst, Blayney, Orange, Cabonne, Cowra, Parkes, Forbes, Weddin and Lachlan. A NSW Government Initiative / Disclaimer The details provided in this report are based on information available at the time of preparation and terms of reference of the project. All estimates and statements made are given in good faith and in the belief that such statements are not false or misleading. All sources of information are detailed in the report. Readers are recommended to make appropriate enquiries and/or take appropriate advice before acting on information supplied in this report. A.P. SHEERE CONSULTING is not liable to any person for loss or damage incurred or suffered as a result of acting on or accepting any offer contained in this report. This report was produced by Regional Development Australia — Central West and does not necessarily represent the views of the Australian or NSW Governments, their officers, employees or agents. Contents 1 Executive summary 4 Part 2 — Regional Impact 15 5 Conclusion 33 5.1 Recommendations 34 Part 1 — Context 6 4 Economic analysis 16 4.1 Existing and future Part 3 — Appendix 35 2 Introduction 7 stakeholders 16 2.1 Purpose of the report 7 4.2 Consultations with 6 Bibliography 36 2.2 Report methodology 7 potential stakeholders 17 2.3 Background to Regional 4.2.1 Rail haulage operators 7 Lycopodium Rail Report 37 Development Australia – and bulk commodities Central West 8 producers 17 8 RDACW Profile 50 2.4 The RDACW region 8 4.2.2 Regional businesses 17 8.1 Regional demographic 4.3 Potential opportunities 18 profile 50 3 The Inland Rail project 9 4.3.1 Opportunities for Parkes 18 8.1.1 Estimated resident 3.1 Inland Rail project 4.3.2 Freight Handling 18 population 50 background 9 4.3.3 Maintenance Facilities 18 8.2 Age profile 51 3.2 Project description 9 4.3.4 Intermodal hubs/terminals 18 8.3 Regional economic profile 52 3.3. Inland Rail Programme 4.3.5 Large grain terminals 19 8.3.1 Gross regional product 52 objectives and route 10 4.3.6 Distribution centres 19 3.3.1 Regional hubs 10 4.3.7 Business growth 20 3.4 Operations and services 10 4.3.8 Short haul services 20 3.4.1 Access to the Inland Rail 10 4.3.9 Inland container storage 21 3.4.2 Double stacking services 11 4.4 Potential economic impact 22 3.4.3 Capacity of the Inland Rail 12 4.4.1 Impact of construction 22 3.4.4 Regional freight hubs 13 4.4.2 Impact by industry 22 3.5 Freight haulage cost 4.4.3 Impact by State 23 assumptions 13 4.4.4 Impact by Economic 3.5.1 Fees to access the Region 25 Inland Rail network 13 4.4.5 Impact on local GRP 3.5.2 Reduction in operational by LGA 26 costs 14 4.4.6 Employment and local 3.5.3 Overall cost to use the sourcing of resources 27 Inland Rail network 14 4.4.7 Reduction in regional traffic incidents/congestion 29 4.4.8 Freight cost savings 29 4.4.9 Business relocations 30 4.4.10 Real estate implications 31 4.4.11 Population growth 31 1 Executive summary Inland Rail is Inland Rail is the proposed 1,700 Road freight provides a number of km freight rail connection between benefits in terms of flexibility and expected to Melbourne to Brisbane which costs vis-à-vis rail freight, especially boost regional travels via regional Victoria, New for non-bulk consignments over South Wales and Queensland. shorter distances (typically less economic than 200 km). Until such time as The purpose of this report is rail operators can demonstrate growth and to undertake a professional, a service offering with shorter drive national independent assessment of the journey times, high levels of likely economic and supply chain reliability, and considerably lower productivity opportunities arising from the costs, road freight will continue to commissioning of the Inland Rail. be seen as the transportation mode of choice by a significant number The Inland Rail project is being of freight generating businesses. designed to provide a dedicated Melbourne to Brisbane freight Although recent announcements link that is fast and reliable at a by the Australian Government competitive price. It is expected to on further investment into land boost regional economic growth acquisition and engineering works and drive national productivity. provides additional confidence in the future commissioning of This report finds that it is Inland Rail, the reality is that the reasonable to conclude that commencement of operations is at the Inland Rail project will have least ten years away. a positive impact on the NSW Central West region both during Many of the businesses consulted and after construction. There are are taking a “wait and see” a number of reasons why Parkes, philosophy. While significant in particular, stands to benefit from volumes of freight are expected Inland Rail given its central strategic to be generated from Inland Rail, location and existing road and which will have direct and indirect rail infrastructure, including the benefits for regional producers and National Logistics Hub. other local businesses in Parkes and surrounding communities, it was However, it should be noted that difficult to solicit much meaningful the study also found that there feedback from rail operators on are, at least at the present time, their long term plans to take up the a number of challenges and capacity that Inland Rail will offer. impediments to overcome in order The likelihood is that major rail to maximise the potential benefits operators have yet to incorporate that Inland Rail might bring to the Inland Rail into their long term region. These include a heavy business plans. Alternatively, reliance by regional businesses on operators may be unwilling at road freight as the principal mode this stage to divulge details of of transportation. their proposed service offering for competitive reasons. 4 / Inland Rail / Executive Summary Some businesses are optimistic 6. Enhancements to 700 km of 14. From a regional development about the prospects of Parkes existing interstate track, major perspective the new rail line assuming a pivotal role as a key upgrades to 400 km of track will allow communities to intersect point on the national rail and constructing 600 km of further capitalise on Free network. Others are yet to articulate new track. Trade Agreements which are significant regional opportunities 7. Minimised impact on the expected to continue to for their businesses. Until such community by utilising 1200 boost exports. time as businesses with an interest km of existing rail corridors. 15. Potential increase in land values in moving freight by rail start to 8. Freight consolidation and and property in and around negotiate an operating concept distribution may enable those regions with close or and broad costings with existing strategic freight cost direct access links to Inland Rail terminal and rail operators, it is decisions to be made to are likely to be experienced difficult to get a clear view as to minimise export freight cost, once construction begins. the level of demand for short with railed access to Brisbane, haul regional services and/or Melbourne, Adelaide, Sydney consolidation services and terminal and Perth ports. activity at Parkes. 9. At a 7% discounted rate the Key business opportunities economic impact of the Inland highlighted in this report include: Larger businesses may see Inland Rail project on the Central 1. Rail maintenance and Rail as an opportunity to establish West region over 60 years is provisioning facilities for in-house terminal capacity or estimated to total $216 million. carriages, track, containers, etc indeed an in-house rail service. 10. Reduced lifecycle costs for could also be expanded and This report finds that there will infrastructure owners/operators established. be plenty of network capacity to on the road network as a result 2. Opportunity for both smaller accommodate such activity but it of lower freight volumes which regional hubs as well as is too early to tell, at this stage, the reduce maintenance costs and larger intermodal hubs to be likely demand for such services. enable investments in capacity expanded and constructed. to be avoided or deferred. 3. Parkes National Logistics Key economic benefits or enablers 11. The expansion in the Hub growth creating more of economic benefits found in this construction sector employment opportunities report include: supports additional flow on post-construction. 1. Increased productivity that will demand in the economy 4. Grain handling terminal benefit consumers through through the construction potentially located in Parkes. lower freight transport costs. industry supply chain and 5. Distribution centre 2. Improved road safety, ease additional spending on development. of congestion and reduced consumer related products by 6.