RAIL SERVICES QUBE LOGISTICS (RAIL) PTY LTD ABN 63 082 313 415 9 Stonny Batter Road Minto NSW 2566 PO Box 512 Matraville NSW 2036 T: 02 9603 0900 F: 02 9603 0919 qube.com.au 28th February 2013 The Project Manager Rail Access Review Transport for NSW Level 6, 18 Lee Street Chippendale NSW 2008 Re: Submission to the Review of NSW Rail Access Regime 1. Is there a case for significant change to the rail access regime, either in whole or in its application to certain networks/industry sectors? There is a need for change. The main issue is the many network owners in NSW alone. Maybe there is an opportunity to focus on industry specific freight i.e. (a) Intermodal by Interstate, (b) Port Services, (c) aggregates etc. This would then align to a model such as the Hunter whereby costs and access can be more efficiently managed. At the moment there is a conflict between the objectives of Interstate Vs regional, not to mention passenger objectives. This is further emphasized when there are no dedicated corridors on most of the main line corridors. 2. Do certified access regimes in other jurisdictions contain provisions which would improve those in NSW? If so, what are those provisions? Yes. The Hunter model is a good example. Access takings should be reinvested into the rail network for better reliability and capacity growth. For port services there is currently many players and each are increasing costs which is detrimental to the modal shift from road to rail in a competing environment. When you consider a road operator to a rail operator, the systems for access are widespread. Rail has become a difficult industry to operate when you consider access and regulation and the two "do not" go hand in hand eg. For rail to win business from road and transfer to rail it has to become a quick change whereby paths and access to rail has to be quick, the existing system does not accommodate this requirement and capacity usually has a negative effect to short notice paths. This, in addition to new and growing rail safety regulation, does not deal effectively with items such as Fatigue, whereby pathing constrains management of fatigue eg. A particular rail journey such as Dubbo to Sydney maybe 12 hours in transit but by the time you get 3 network owners to align and agree to paths this 12 hour trip could easily and often turns into 22 hours.1-Mar-13 Page 2 of 4 3. Should the regime include a test to determine which rail infrastructure facilities are subject to the regime, regardless of whether they are publicly or privately owned? We can understand the need to consider public owned infrastructure but uncertain to what extent private infrastructure could be considered under the proposed regime. 4. In addition to the CRN and MRN, what NSW rail infrastructure facilities should be subject to the NSW Rail Access Regime in the future? Most definitely locations that have state significance to both current and future growth portfolios. Botany yard is a good example given the forecast export and import growth requirements and the need for close integration with the stevedore terminals. There is existing competing commodities i.e. Interstate freight Vs Passenger Vs port freight that must be managed and prioritized more effectively, with more intense focus in order to meet the future growth trends. Suggest a strong decision is made regarding the importance to move freight. 5. What network interface issues do operators experience? What if any aspects of the NSW RAU contribute to these problems? How could they be addressed? The common issue faced by above rail operators is the fact there are way too many interfaces with differing parties. Not only is planning difficult but live run can also be tedious. A good example is a regional service that operates between port and regional areas eg. Warren means there are 7 changes of network owners on a single 1 way journey (ARTC x 3, RailCorp x 2 and John Holland x 2). A single Access Agreement/regime across all of the networks would be a simpler process with inclusion of common user systems for items such as pathing, interface management and invoicing. This way a nominated "single" party could be responsible for the complete system, inclusive of invoicing and split up of access costs. 6. Would a 1 stop shop for access to NSW rail networks overcome interface problems? Yes it would as per the above statement in (5). This single party must have total commitment to freight logistical growth and efficiency management and improvement, not just for a commercial return as this would contradict the modal shift from road to rail on a competition basis. 7. What aspects of a performance regime, if any, should be incorporated in the future rail access regime? To deal with performance, consideration must be given to the full supply chain i.e. origination parties (stevedores and empty container parks), network transit and associated constraints (passenger peaks) through to the destination (customer sites) but noting that some corridors are already congested, with passenger peak curfews that a huge constraint to freight and competing export and import customers. Above rail operators are often accused for late arrival and departure or reliability but the real issue that needs focus is the supply chain given the services are often held for late loading and network issues. With regulation becoming more stringent, specifically with safety, rail is heading towards the path of "chain of responsibility" such as road. Currently it is very difficult to manage safety components such as fatigue without responsibility and accountability being inbuilt into the network system and it has become too easy for a network owner to make a decision to hold a train for whatever reason without understanding the safety impacts.1-Mar-13 Page 3 of 4 8. In addition to strengthened performance requirements, what other measures could the access regime include to improve third party operator and network performance? Most definitely a great benefit would be a "single" party management of the network access and service management process. 9. Is the allocation of train paths to freight operators a matter for future rail access regime? If so, how should the regime address it? If not, what is the most appropriate approach for dealing with such matters? Yes we believe it is by allowing fair and equitable access with much emphasis on freight growth opportunities and the ability to respond quickly when gaining new freight, specifically for modal shift from road to rail whereby a swift response and action is needed. Again, a great benefit would be a "single" party management of the network access and service management process. 10. How should the Commonwealth's objectives for the NSFC be addressed in the future regime? As above in item 9, by allowing fair and equitable access to freight considering the freight growth strategy and freight opportunities. It is sad to learn the decision that the new freight loop will be positioned at Hornsby, an area already congested with passenger services and the fact the loop will now have overhead wiring for passenger services. Decisions need to be made wisely in the interests and benefit of freight. The sooner ownership is given to prioritise freight versus the competing passenger market, freight growth will be inhibited. 11. Should RailCorp's Hunter Valley sectors continue to be subject to price regulation under the new access regime? If so, what form of regulation is appropriate given the size of the sectors? Should the floor and ceiling test be retained? Suggest this may pass onto the Hunter Valley for ease of management if used specifically for coal. 12. Should the Country Rail network continue to be subject to price regulation? If so what form of regulation is appropriate given the wide variety of traffic on the network? For example, would a simple form of price monitoring be sufficient for some freight tasks? We believe the pricing should be commodity based and we consider the need to move freight from road to rail so pricing should allow the opportunity to be competitive. 13. Should the restriction on vertical integration continue to apply to the CRN or should the regime be flexible in accommodating alternative business models including potentially an exclusive rail franchise? We believe the regime should be flexible to accommodate business modeling for modal shift in order to achieve rail freight growth requirements and at the same time reduce the need for trucks to transport freight on already busy road networks. 14. What terms and conditions now covered by the standard access agreements should be included in the future access regulatory provisions? Items that need to be included are systems for improving path and access management, fair and equitable access, mitigation for network stoppages or blockages, improvements for access management. It needs to be1-Mar-13 Page 4 of 4 a simple process that all understand and interpreted consistently between the stakeholders is reality based without legal jargon. 15. How should the network management principles be dealt with in the regime? Again, these need to be fair and equitable with consideration of freight growth and with ease of interpretation to ensure consistency between the stakeholders. 16. What parts of a standard access agreement should be negotiable, and which should not? Pricing should be commodity based and reflect allowance for competitive freight growth. Message again is to enable rail freight to be competitive with road and keep costs low and in proportion. 17. What other sets of rules or agreements pertaining to the process for gaining access to the network, if any, should be considered for inclusion in the future rail access regime? It is important to keep the process simple and allow the rail freight operators a quick process in order to compete with a "road" market. 18. What form of price regulation should be included in the NSW rail access regime in future? Should the pricing principles in Schedule 3 of the current RAU be retained? If they should be varied or replaced, what alternatives should be considered? Regulation in any environment to cut through red tape to allow for growth is fundamental but care needs to be taken to protect the commodity and freight interests. 19. Are the existing RAU provisions on new network investment sufficient to facilitate third party investment in capacity enhancements on the NSW rail network? If not, how else could the future regime facilitate network investment? Keeping the costs low to build the volume growth should allow for growth of access takings to enable reinvestment into the network. The issue with 3rd party investment may mean risk regarding investment return and we need to protect rail freight viability and to keep costs low to enable current and future growth. A 3rd party may drive up costs if not managed correctly. 20. Is the regulator's existing arbitration role suitable for a future access regime? No comment. 21. In addition to arbitration of disputes, should the regulator be given additional responsibilities under the future access regime? If so what should they be and what would be the benefits? No comment Please let me know if you require any further information and/or clarification. Yours faithfully Mark Owens General Manager - Safety, Infrastructure and Planning