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Is the Second Golden Age of Rail Upon Us?

19/09/2008

A specialist in Australia’s rail infrastructure industry forecasts over $20 billion worth of major project investment opportunities in the industry in the next two decades.

Rail Engineering Director for O’Donnell Griffin, Mr Francis Dwornik, said this roll-out of major infrastructure works would be required for two reasons:

1 – the requirement to upgrade public transport systems after decades of insufficient investment by government and private sector which prioritised road infrastructure instead.

2 - the boom in mineral exports that requires major rail infrastructure to haul the mined materials from the desert to the ports and world markets.

The $20 billion figure is based on information from leading forecasters and is likely to continue to strengthen from its already robust level, he said.

“The second golden age of rail may be upon us,” said Mr Dwornik. “But it is important to recognise that the infrastructure requirements for passenger and freight, whilst not looked at in isolation, carry very different demands.”

But the reasons why rail is coming to the forefront in mass transport and freight transport solutions are similar: “Rail’s carbon emission levels are low compared to road transport and aviation. This at a time when conventional fuel prices are also expected to continue to rise beyond current peak levels, further jeopardising the economics of road freight and aviation. Meanwhile, in the resources sector, it is essential for rail infrastructure to be improved for optimal mine-to-port delivery during the current resources boom, especially in Queensland and WA.”

Mr Dwornik acknowledged that all transport modes are being hit by overload and congestion, including rail – especially on urban metro passenger networks. The Bureau of Infrastructure, Transport and Regional Economics estimates cost of congestion at $9 billion in 2005 and rising to $20 Billion in 2020. This cost is avoidable.

“But rail has the ability to utilise the existing infrastructure and upgrade it via signalling and electrical systems to significantly boost its capacity, along with being able to have substantial new infrastructure added in,” he said.

“In the case of planes and cars, there is a limit to how many more facilities can be added, and how many more carbon emissions can be tolerated, both environmentally and, as we move to a carbon economy, economically.”

In the past few years ODG has worked projects with an end value of $2 billion in Victoria, SA, NSW and WA, specialising in signalling and electrical contracts.

Since 2000, more than $9 billion has been invested in rail including tracks, rolling stock and signalling plant and equipment, he said.

Mr Dwornik said a number of large, multi-billion-dollar rail projects on the immediate horizon in Australia include some $9.5 billion opportunities in NSW, $2 billion in Victoria and $4.7 billion in Queensland, along with the substantial $1 billion South and North Improvement Alliances works involved in upgrading the Brisbane-Melbourne rail corridor, currently underway.

Mr Dwornik said the construction of new mines in Queensland would also drive rail expansions. Significant investment will continue in the near term, he said.

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