Rail could save more than $15m a year in local freight costs
Reinstatement of a freight rail service between Mount Gambier and Heywood could benefit local business by as much as $15.6 million annually according to a report released today by Regional Development Australia Limestone Coast (RDALC).
Commissioned by RDALC, the report was undertaken by CSIRO which used modelling to map the region’s freight task and supply chains for major commodities including timber, livestock, dairy products and crops.
RDALC Chair, Peter Gandolfi said the report showed that reinstating the rail line along the currently unused rail corridor from the eastern outskirts of Mount Gambier to link into the existing rail services at Heywood would open the door for products from this region to more efficiently reach major Australian markets and ports.
“This report has critically analysed the volume, variety and movement of the commodities in our region so we can understand our region’s freight demand and supply chains and the opportunity for rail in the Limestone Coast,” RDALC Chair Peter Gandolfi said.
“This analysis estimated road and rail transport costs for major commodities moving across and out of our region. Crucial to the process was identifying where potential savings can be made through reinstating rail for current and future freight demands.
“The report has revealed that for the commodities included in this study, approximately 527,000 truck movements use at least part of the Limestone Coast region’s transport network. Of these about 476,000 movements originate in or are destined for the region,” said Mr Gandolfi.
Mr Gandolfi said not only does the report identify direct freight savings for local businesses, it also indicates other economic and social benefits if a rail freight service was reinstated.
“A further $1.5 million in savings each year has been identified through reduced road maintenance and avoided accidents,” Mr Gandolfi said.
The RDALC has conservatively estimated that an investment of between $120 and $150 million to reinvigorate the line between Mount Gambier and Heywood would offer a return on investment within nine years. The investment would also include establishing a freight depot (intermodal) on the eastern outskirts of Mount Gambier from where the rail would be re-instated along the existing corridor to Heywood.
The reinstatement of the line between Mount Gambier and Wolseley was evaluated by CSIRO but was found to have a very low economic benefit to the region and incur a much greater cost to reinstate than the Heywood line.
“With our economic prosperity in this region being directly linked to market access, the cost of transporting our product to market is critical,” Mr Gandolfi said. “This report has provided an analysis of total and per tonne transport costs and potential transport cost reduction by commodity and mode of transport, which means decision makers now have clear information to make investment decisions on infrastructure needs.
“The next step is to work with governments to undertake a full engineering assessment and cost analysis for the reinstatement of the rail line between Mount Gambier and Heywood,” Mr Gandolfi said.
The report, ‘Rail corridor and freight analysis for the Limestone Coast and South West Victoria – Application of TraNSIT’, is available below or by contacting the office via email email@example.com.
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