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IPART Paper – Issues and Recommendations

27 June 2011

The IPART committee has been commissioned to examine the future costs (next 5 years) of access for rail freight. It notes that COAG Road Reform Plan (CRRP) price reform will affect the projected access prices for rail. The CRRP determination will be vital to the grain industry, industry jobs in both road and rail sectors and in the bigger picture, the Australian economy.

While we support the IPART desire to find an effective pricing system for the grain rail line we have concerns over the methodology and source inputs to be used in its findings. We would like to encourage the IPART to consider our recommendations in order to have a successful project based on solid foundations.

The paper aims to find economic efficiency for the situation. This involves weighing up costs involved in both road and rail freight in order to come to a conclusion. The report also heavily relies on cost benefit analysis of what it is reviewing.

However impartial the paper sets out to be, the statement on the first page that “the cost of increased road traffic in the face of the closures is greater than if the lines were kept open” is not a proper examination of the situation based on broader evidence.

The report points out that the choice between road and rail, which is viewed as complementary modes in most cases, depends on a number of factors such as destinations, reliability, timeliness, cost, contractual arrangements, flexibility, and availability of train versus road.

While the report wants transparency in figures, we note that the statistics are either not published or will never be. For instance, access prices on access to some rail lines.