RAIL - Back On Track Forum

Its quite sad to see what they've been doing over the years as they don't renew the less profitable contracts which in turns just sees more and more freight being shifted back onto the road. Its especially sad when trucks are now running the same route next to the railway lines. Not to mention railway workers who are out of a job and potentially have to move the entire family elsewhere as a result. Then theres the towns that rely on the railway and the railway workers.

Very sad. But hey. At least the shareholder gets a few extra bucks.

Indeed HTG.  Let us not forget it was the Bligh Labor Government that flogged off QR National (aka Aurizon) so no suprise the $ rules now.

Bunch of hypocrites is the Government ...

Lack of investment in the State-funded NCL and massive investment in the Bruce Highway (80 per cent of construction costs paid for by the federal government) means that costs less to move most non-bulk goods by road, as opposed to rail, south of Mackay.

QuoteLack of investment in the State-funded NCL and massive investment in the Bruce Highway (80 per cent of construction costs paid for by the federal government) means that costs less to move most non-bulk goods by road, as opposed to rail, south of Mackay.

Makes one wonder what they did with the revenue they got from the sale of QR. Perhaps it could have easily paid for NCL upgrades.

Quote from: Stillwater on June 03, 2017, 06:24:52 AM
Lack of investment in the State-funded NCL and massive investment in the Bruce Highway (80 per cent of construction costs paid for by the federal government) means that costs less to move most non-bulk goods by road, as opposed to rail, south of Mackay.

Its not just that. Its the smaller A-B contracts. And its everywhere. Aurizon is moving away from what QR had built its fleet up on and focusing everything in the mining and long haul intermodal. By doing this they sell all the rollingstock (look how many locos have been exported), scrap all the rollingstock (look how many locos and wagons have been scrapped), workers and their families that are based on certain lines have to move or look for new jobs outside the railways and theres a lot more to boot.

Aurizon would rather scrap rollingstock than sell them to another competitor who could take up the contract. We've seen it already with them scrapping the only wagons that can handle one contract, not contesting the contract renewal and now PNQ has the contract but they are using the road network because they don't have wagons to handle the contract.  Pacific National did the same thing about 15 years ago when they acquired their competitor in the area, took all their assets and then after a few years cut the rural grain/fright services and publicly told interested parties that wanted to acquire rollingstock that they'd rather sell them to an overseas operator before they sold them here. In the end the wagons were all cut up for scrap.

We've seen other businesses that want to use the railways to transport their business but Aurizon hasn't renewed the contract meaning they are forced to use trucks. Don't forget the Westlander, The Inlander.....basically all the long distance passenger trains used to haul freight too (the Aurizon split stopped that). And the other railway operators here in Queensland simply aren't eligible for the contracts because they don't have the rollingstock or facilities for them.

Daily Mercury --> The Central Queensland town that refuses to die

QuoteA LONG-TIME Bluff resident says the small mining town in Central Queensland will never die despite recent job cuts.

Rail giant Aurizon announced 29 jobs to be slashed in the town, as part of over 300 to go in CQ including at Rockhampton, Gladstone and Stanwell depots.

The resident, who wishes to not be named due to connections with Aurizon, said unless they bring in remote control trains, the Bluff depot would always need a local workforce present.

WATCH: Rail giant to close Rocky workshop, 180+ jobs axed.

"This will not be the end of Bluff," the resident said.

"There will always be a need for a changing depot here. They would need to have new trains that run themselves in order to shut this depot.

"Whether it will affect stores or not we don't know. The railway can't run without the guys, they work on their days off already.

"We don't understand the cuts at all."

The resident did say the mood was grim in town.

Anxious workers were waiting nervously until the end of the week when redundancy letters were expected to be handed out.

"It is all still a bit uncertain at the moment," the resident said.

"Nobody quite knows who is going and who is not.

Aurizon has asked for expressions of interest for redundancies but the letters were supposed to come out Thursday.

The resident said they only knew of a handful of people were thinking of taking the voluntary redundancy.

"It is scary. People are waiting to get the tap on the shoulder."

Since the resident's family arrived in Bluff some three decades or more ago, the town was vastly different.

Bluff State School was thriving with 144 kids at the school. Today, there are 16.

The resident, while concerned for the workers awaiting their fate, said the town will kick on and survive.

An Aurizon spokesperson said they "appreciate the changes to its operations are difficult for those affected".

"We have engaged with community leaders and stakeholders on the changes, and confirmed that Aurizon will continue to have a presence in the Bluff community," the spokesperson said.

"Following the proposed changes, we will still employ more than 2,000 people across Central Queensland (Gladstone to Mackay and west). Aurizon will work closely with individuals as the phased changes are implemented through to mid-2018." 

I said it a few posts above. Quite sad.

Aurizon will do anything for a short term buck.   I suppose you can't see the future when you have a pile of coal blocking your view.    Even heard rumours that they are going to offload there Standard gauge intermodal division.  It just doesn't make any sense to reject contracts just because they don't make enough money.   Qld desperatly needs another rail operator.   It's the perfect market for smaller operators like SCT, Crawfords etc.   Need to break the PacNat, Aurizon duopoly.   

Couriermail --> Rail freight operator Aurizon posts full-year loss of $188 million

QuoteRAIL giant Aurizon will offload its general freight business including its Acacia Ridge intermodal terminal after announcing a $188 million loss for the past year.

The Brisbane-based company on Monday said continuing losses at its intermodal freight business and the impact of Cyclone Debbie on its coal network had hit its bottom line.

Revenue had flat-lined at $3.45 billion for the year after a shutdown of the Queensland coal network in Queensland following Cyclone Debbie.

Aurizon chief executive Andrew Harding said the Queensland intermodal business would be purchased by a consortium of Linfox and Pacific National for about $220 million after racking up losses over several years.

The intermodal terminal at Acacia Ridge will be sold in a separate transaction to Pacific National while the intermodal business outside of Queensland would be closed.

"The intermodal business was not a sustainable business for our shareholders or employees," said Mr Harding.

https://twitter.com/RailExpressNews/status/897011437700227072

Rail Express --> Aurizon to sell Queensland Intermodal to PN/Linfox, will close interstate terminals

Quote

Aurizon will sell its Queensland Intermodal business to a consortium of Pacific National and Linfox for a combined value of $220 million, and close its intermodal sites outside of Queensland, as a result of a twelve-month review of the company's freight business.

Aurizon managing director and chief executive Andrew Harding announced the outcomes of the review during the company's annual report on Monday.

Aurizon finished with a $188 million loss in FY17, after taking significant impairments.

"My aim is to take decisive action, no matter how unpopular or difficult those decisions those decisions may be," Harding said.

"In making the decision to exit, we considered the significant financial losses that have been sustained year on year by Aurizon Intermodal. The business has not been able to establish significant scale and a customer base to support a profitable business in such a highly competitive market."

The Queensland Intermodal business – including 350 employee positions, assets, and commercial and operational agreements – and the Acacia Ridge Intermodal Terminal south of Brisbane, will be sold off to the consortium in two separate transactions. The Acacia Ridge terminal is a 66-hectare site which includes narrow-gauge and standard gauge freight terminals, marshalling yards and warehousing.

At this stage the sale is a binding agreement between the sides. It will be subject to approval by the Australian Competition & Consumer Commission, and the Foreign Investment Review Board.

Harding said the additional closure of Aurizon's intermodal terminals outside of Queensland would affect roughly 250 jobs.

Aurizon's Interstate Intermodal business includes freight terminals at Forrestfield, Perth (freehold), Enfield, and Sydney (lease), along with locomotives, wagons and road vehicles. It also includes the import-export service between Enfield and Port Botany.

"The transaction and the shutdown actions are necessary given the history of significant losses to the business, the long-term industry sector attractiveness, and my view that in this industry sector we lack some fundamental characteristics for success," Harding said.

The former Rio Tinto iron ore boss said his recent arrival at Aurizon provided him with a "fresh set of eyes" with which to consider Aurizon's Intermodal business.

"The Intermodal business has made a loss in all but three of the last ten years," he said. "The last two years, were the first- and third-largest loss years.

"The market conditions are also not favourable. Market volume growth is forecast to be sub-GDP, and the long-term dynamics are shifting to shorter hauls, favouring road transport, as Australian manufacturing volumes are replaced by imported volumes."

In addition to a poor market outlook, Harding was not optimistic about Aurizon's chances of success in the competitive interstate market.

"Outside of Queensland, Aurizon lacks scale and is third in the east-west corridor, which is the largest profit pool," he said. "Aurizon has considerable skills in bulk haulage and below rail operations, however it has huge capability gaps in trucking and logistics systems."

Ultimately, the former mining boss said the decision was not a "complex" one.

"I do not consider it practical to turn the business around," he said. "I need to pursue the next-best alternative."

Pacific National is in a good position to buy the Aurizon Intermodal business, thanks to reported support from its major international backers, who have owned the business since the breakup of Asciano in 2016. PN's chairman Russell Smith is among the partners of Global Infrastructure Partners, which holds a 27% share in PN.

According to an AFR report, Aurizon's market testing also attracted interest from Qube Holdings and SCT Logistics.

The once great Queensland Rail freight network ... gone essentially.   

Unsurprising, it's not like QR was ever good at intermodal freight to begin with.  The one thing they have always been exceptional at is bulk commodities.  Other operators like PN, SCT, Qube etc will just jump in and offer their own services instead, probably with fewer legacy issues.

Actually they sort of were/could have been. They were building the freight arm up slowly. In a couple years they had acquired many road transport logistic operators across the country and were in the process of potentially buying Linfox (their freight and logistics division - linfox were using SCT but had limitations due to their freight terminal size at the time and PN playing dirty) and FCL (PN made a bid, SCT and Linfox were interested but it was expected that QRN was going to outbid them all only for them to randomly stop takeover talks) to boost its road freight/supply and intermodal arm. QRN acquired ARG's intermodal services and bases from WA-SA-VIC. Interrail for coal and Brisbane-Newcastle-Sydney Intermodal. It acquired CRT intermodal. Only problem for QRN was that it was privatised and talks/bidding/takeovers stopped instantly. Linfox snapped up FCL. Aurizon had clear intentions of what market they were heading for by selling off locos/wagons, moving rollingstock/drivers/staff around, VRs, closing depots/workshops, keeping up its end of the split bargain by maintaining the passenger fleet at Redbank for a few years/operating cattletrains only for them to drop everything once that deadline came up (If you look hard on some of the cattle train wagon frames you will see QR (pre goc), QRN, Aurizon and now the new Queensland Government logo as they all go through different transitions). They merged all their subsidiaries for stripping (eg ARG's contracts for intermodal and minerals). They started off loading other arms such as CRT whose intermodal services were bought by PN. They've cut back on contracts by simply not renewing them or found loopholes to get out of contracts. PN have taken some up some of the dropped contracts in Queensland but have resorted to using trucks instead simply because they don't rollingstock (aurizon had either srapped or mothballed the wagons that they had used). Now the intermodal arm is in real trouble.......

Very very sad really. The young ones on here just don't know how much the whole railways side has changed. All for a few extra bucks for shareholders.

Yes HTG, this has grave implications for freight rail in Queensland.

As I understand it Aurizon will cease all cattle and other freight.  Unless the Government awards contracts to other willing operator, this could mean eventually the end of Thallon, Wallangarra, Emerald-Winton and Miles-Charleville (and Quilpie) operations.  Also the possible demise of the Inlander and Westlander?

I expect that politics may well see further contracts awarded if rail operators can be found.

There will not be much left of a once great rail network throughout Queensland way things are going.

http://www.aurizon.com.au/news/news/aurizon-announces-outcome-of-freight-review

14 Aug 2017

Aurizon announces outcome of Freight Review

Aurizon Holdings Limited (Aurizon) today announced its intention to exit its Intermodal business through a combination of closure and sale.

The decision follows an extensive twelve-month review initiated by the Aurizon Board in August last year.

MD&CEO Andrew Harding said the comprehensive review examined future commercial opportunities including divestment, joint venture, retention of the business, or closure of parts that did not offer a sustainable commercial future.

"In making the decision to exit, we considered the significant financial losses that have been sustained year on year by Aurizon Intermodal," Mr Harding said.

"The business has not been able to establish significant scale and a customer base to support a profitable business in such a highly competitive market.

"While a difficult decision for affected employees, exiting the business will allow the Company to focus on core, profitable parts of the Aurizon portfolio including the ability to recycle capital into other growing parts of our business."

Mr Harding said to facilitate the exit Aurizon intended to sell two components of the Intermodal business and close the third.

He said Aurizon had signed a binding agreement to sell its Queensland Intermodal business to a consortium of Linfox and Pacific National. The transaction includes the transfer of approximately 350 employee positions as well as assets, commercial and operational arrangements to the Linfox and Pacific National consortium.

Aurizon is aiming to finalise the transactions by the end of FY2018, subject to: Approval by the Australian Competition & Consumer Commission; and Approval by the Foreign Investment & Review Board.

Separately Aurizon has signed a binding agreement with Pacific National to sell its Acacia Ridge Intermodal Terminal. That transaction includes the transfer of approximately 30 employee positions, as well as assets, commercial and operational arrangements. It is also subject to approval by the Australian Competition & Consumer Commission and the Foreign Investment & Review Board.

Total consideration for the two transactions is $220 million. If the Acacia Ridge transaction is not complete within six months, then Pacific National will pay Aurizon an additional $5 million.

The remainder of Aurizon's Intermodal business (outside of Queensland) will be closed. This is expected to take effect by December 2017, contingent on finalising transitional and commercial arrangements with customers.

Approximately 250 employee positions will be affected by the closure of the interstate business. Aurizon will consult with employees on the transition to closure, including redundancy and redeployment options.

Aurizon will work with its customers on transition arrangements and in the interim it will be business as usual, with the provision of safe and reliable services for customers particularly in the lead-up to the busy Christmas period.

Aurizon will cascade standard-gauge rollingstock to other parts of its business as well as commence a disposal process for surplus rollingstock and other surplus owned/leased assets.

Background

Aurizon Intermodal is a containerised rail and road freight haulage business for retailers, wholesalers and freight forwarders. It comprises two businesses: Queensland Intermodal and Interstate Intermodal.

Queensland Intermodal delivers services from Brisbane north, and includes freight depots, locomotives, wagons and road vehicles.

Interstate Intermodal delivers services outside of Queensland, including the Brisbane to Melbourne and Sydney-Perth routes, and includes freight terminals at Forrestfield, Perth (freehold) and Enfield, Sydney (lease), locomotives, wagons and road vehicles. It includes the IMEX (import-export) service between Enfield and Port Botany.

The Acacia Ridge Interstate Terminal is a freight hub for freight train services to and from Queensland. The 66 hectare site includes narrow-gauge and standard-gauge freight terminals, marshalling yards and warehousing. As part of the sale, a wagon maintenance facility on site, will continue to be operated by Aurizon under lease arrangements.

Quote from: ozbob on August 19, 2017, 12:17:51 PM
Yes HTG, this has grave implications for freight rail in Queensland.

As I understand it Aurizon will cease all cattle and other freight.  Unless the Government awards contracts to other willing operator, this could mean eventually the end of Thallon, Wallangarra, Emerald-Winton and Miles-Charleville (and Quilpie) operations.  Also the possible demise of the Inlander and Westlander?

I expect that politics may well see further contracts awarded if rail operators can be found.

There will not be much left of a once great rail network throughout Queensland way things are going.

Yeah. As I understand the LTSC and RFTSC contracts between QR/TMR and Aurizon both expire 31st December 2017. They put out a tender mid last year to combine the two into one contract but I haven't heard much. Rumor also has it that QR might infact be providing these services again due to some wagons showcasing the Queensland State Government logo with Cattle Train in a generic font instead of the old QR Cattletrain logo.

https://twitter.com/RobKatter3/status/899853082032357376

North Queensland Register --> Aurizon to sell its Queensland Intermodal business to Linfox and Pacific National

QuoteAURIZON will sell its Queensland section of its rail and road freight transportation business to Pacific National and Linfox.

State MP Rob Katter said that the company had assured him that the jobs in the sold section would be carried over in the transfer.

"So it is hard to see what the impacts are going to be for the west at this point," Mr Katter said.

Mount Isa Mines might have been affected by the transfer but Aurizon had lost the contract with the mining company last year. It is understood another North West Qld industry contracts Aurizon in the affected section of the company.

"I have already ensured Cloncurry mayor Greg Campbell is across these changes because Cloncurry has traditionally been the bigger hub for Aurizon workers," Mr Katter said.

"This is an opportunity to turn the spotlight on how the rail line and operators have been managed in 10 to 20 years and if it has delivered, and I do not think it has since it privatised.

"This is the main suppliers exiting the market when one of the main drivers for privatisation was to create competition in the market.

"Isn't it time the government stopped and considered how they managed their utilities?"

Cloncurry mayor Greg Campbell was reached for comment. In July the shire councillors had adjusted its annual operational plan to support its locally based rail workers.

Aurizon also sells its Acacia Ridge terminal to Pacific National. The total value of the sale was worth $220 million. It closes its other freight business based outside of Queensland which affects up to 250 jobs. It is understood the transition will mean that 380 staff will be transferred from Aurizon to these companies.

Aurizon chairman Tim Poole said in the company's financial report released on Monday that the sale was due to continued losses.

The sale of its Intermodal business would be used for other profitable parts of the company, Mr Poole said.

"The exit will allow Aurizon to focus on creating shareholder value through its core strengths and capabilities of heavy rail haulage operations and rail infrastructure management."

Queensland Labor Senators Anthony Chisholm and Murray Watt said that Aurizon needed to confirm its long term commitment to Queensland following the company announcement.

The announcement was concerning for workers and the broader freight network.

"The company have also indicated that they intend to hand back the Regional Freight Transport Services contract at the end of the year," the two Senators said in a joint statement.

"Should another operator not be found, this will potentially add hundreds of trucks to the Bruce Highway and regional roads across the state."

I still see red about the split. Such a bullsh%t excuse for doing it and all reasons for doing it haven't come..... Just a total load of bs to what was once a great and powerful railway operator.

Quote from: HappyTrainGuy on August 24, 2017, 01:36:57 AM
I still see red about the split. Such a bullsh%t excuse for doing it and all reasons for doing it haven't come..... Just a total load of bs to what was once a great and powerful railway operator.

+1   a tragedy for Queensland ...

Quote from: ozbob on August 24, 2017, 02:20:55 AM

Quote from: HappyTrainGuy on August 24, 2017, 01:36:57 AM
I still see red about the split. Such a bullsh%t excuse for doing it and all reasons for doing it haven't come..... Just a total load of bs to what was once a great and powerful railway operator.

+1   a tragedy for Queensland ...

A decade ago you'd go past the Redbank Workshops. There'd be lots of locos being serviced, waiting repairs, about to be refurbished or locos for spares. There was a constant output of wagons being built or repaired. Random side projects. Lots of apprentices. The odd electric unit there. Not to mention it had a large work force. Now it's less than a hundred workers doing non critical roles and a couple locos parked there. On the weekend it looks like the place is abondaned.... 

I sometimes go to Redbank for lunch and a social beer or three.  Agree, it has been sad to see the rail run down of Redbank Workshops.

The Kerwick Hotel has some very interesting railway memorabilia on the walls etc.  Used to be a popular venue for railway folk as well.

Quote from: HappyTrainGuy on August 24, 2017, 11:14:47 AM

Quote from: ozbob on August 24, 2017, 02:20:55 AM

Quote from: HappyTrainGuy on August 24, 2017, 01:36:57 AM
I still see red about the split. Such a bullsh%t excuse for doing it and all reasons for doing it haven't come..... Just a total load of bs to what was once a great and powerful railway operator.

+1   a tragedy for Queensland ...

Random side projects.

Apparently it was the go to place for a box trailer back in the day.... 

We had a visit to Redbank Workshops in 2008

> https://railbotforum.org/mbs/index.php?topic=788.msg3657#msg3657 (this link is for members only).

Busy place then ..

Quote from: red dragin on August 24, 2017, 12:06:58 PM

Quote from: HappyTrainGuy on August 24, 2017, 11:14:47 AM

Quote from: ozbob on August 24, 2017, 02:20:55 AM

Quote from: HappyTrainGuy on August 24, 2017, 01:36:57 AM
I still see red about the split. Such a bullsh%t excuse for doing it and all reasons for doing it haven't come..... Just a total load of bs to what was once a great and powerful railway operator.

+1   a tragedy for Queensland ...

Random side projects.

Apparently it was the go to place for a box trailer back in the day.... 

  hahaha

https://twitter.com/Robert_Dow/status/990987961893208066

Couriermail --> Dispute sparks threat to major coal exports

QuoteTHE $7 billion coal export industry to Japan is under threat with the nation's consul general expressing concern and steel producers telling the Palaszczuk Government they may need to look elsewhere for supply.

The dispute, sparked by a Queensland Competition Authority draft ruling over maintenance of the Central Queensland coal network track, is threatening to cloud this week's trade mission to Japan by Premier Annastacia Palaszczuk.

Aurizon's reaction to the draft ruling has the potential to wipe $4 billion from the state's coal exports and slash $500 million in government royalties, adding to other major economic concerns, such as expected cuts of hundreds of millions of dollars in GST revenue from the Federal Government.

The Courier-Mail has learned that Japan's Consul General Keiko Yanai's recently expressed official concern to the Government about the reliability of Queensland to supply billions of dollars worth of coal to the Japanese steel mills.

A letter to the Government from Nippon Steel also said the company had serious concerns about supply and that Aurizon had ignored expectations of Japanese buyers which may force them to look elsewhere for coal.

Some of the world's biggest mining companies also wrote to Aurizon last week, threatening legal action if the dispute continued, whereas Aurizon maintains it has had no choice but to act.

Treasurer Jackie Trad has reassured Ms Yanai that the issue would be resolved.

"We don't think this is going to be a significant issue for the Queensland economy and we think both sides will co-operate,'' Ms Trad said.

Queensland Resources Council chief executive Ian Macfarlane said the coal industry, the Queensland Government, Japanese steel makers, Aurizon staff and investors were all scratching their head about the actions of Aurizon chief executive Andrew Harding.

"Japan is Queensland's second largest export market and it has been a key partner for our state's resources industry for more than half a century, a key customer and investor,'' Mr Macfarlane said.

"At a time when the industry and the Queensland Government is striving to increase exports and jobs, Aurizon is actively working against our efforts. Aurizon and Andrew Harding are working against Queensland.''

But Aurizon said the QRC should stop playing politics and start helping to resolve the issue.

A company spokesman said Aurizon was aware of the Nippon Steel concerns and had briefed Japan's steel and power industry representatives.

A spokesman said the Japanese had been told the changes could not be delayed because the QCA decision would be backdated to July 2017, when a final decision is made.

"If we didn't implement these changes to align to the QCA draft decision, it could potentially cost Aurizon hundreds of millions of dollars,'' the spokesman said.

"We urge the QRC to stop playing politics, get on with their job and help industry work towards a solution.''

https://twitter.com/Robert_Dow/status/1001366639546265600

Couriermail --> The battle with Aurizon over coal freight is likely cost Queensland dearly on several levels

QuoteTHE current schism between monopoly coal freight operator Aurizon and mining companies is not an entirely unique scenario.

Nor is the concern being expressed by Japanese steel producers over the imbroglio.

A decade ago pictures of dozens of ships anchored off central Queensland ports were frequently published in this newspaper, demonstrating the capacity constraints that were crippling the coal supply chain and damaging the state's reputation as a reliable resource trader.

That impasse culminated in then premier Anna Bligh wining and dining five of Japan's biggest steel producers, who represented 10 per cent of Queensland merchandise exports, at famed chef Hiroyuki Sakai's restaurant La Rochelle in downtown Tokyo in an effort to ensure them the situation would be resolved.

That episode in 2008 is instructive for those who immediately leap to the conclusion that private ownership is now the issue and that continued public possession of the rail infrastructure would have prevented this problem occurring.

It would not have.

However, while the particulars differ, the effect is much the same with consumers of Queensland's high quality coal demanding action so they can have much greater faith in supply.

Premier Annastacia Palaszczuk will this week act as the state's top envoy to reassure Japan that the issue will be resolved.

She will meet with Japan Foreign Affairs Minister Taro Kono on a whistlestop tour before venturing once again to the US.

Ms Palaszczuk and Treasurer Jackie Trad have also warned Aurizon and regulator, the Queensland Competition Authority, of the need to resolve this issue quickly.

With legal proceeding afoot, this is probably the most the Palaszczuk Government can do currently apart from some verbal arm twisting.

But it would be prudent of the administration to start working on a "Plan B" if negotiations drag on.

The genesis of this deadlock is a draft QCA decision in December that would allow Aurizon to earn $3.9 billion from its Queensland coal network business between July 2017 and June 2021.

This is nearly $1 billion less than Aurizon is convinced it should make.

The company has accused the regulator of not operating in the "real world" with its decision.

In a high stakes act of brinkmanship, Aurizon has imposed immediate changes to its maintenance schedule on the central Queensland coal network, choking the system and delaying mines getting their product to port.

The Queensland Resources Council has calculated out the impact on royalties, claiming Treasury's coffers stand to be $2 billion worse off over the life of the QCA decision if Aurizon's restricted use of its network continues unabated.

While it is hard to fathom that this deadlock will continue for four years, it does underscore the cost that will be incurred by every Queenslander if it is not resolved.

Queensland has been a reliable resources trading partner for decades so the Japanese should grant this state and its miners a degree of latitude while this issue gets resolved.

However, the fact Japan remains Queensland's second biggest trading partner also means the Palaszczuk Government is encumbered with the responsibility to ensure this dispute doesn't drag on.

Queensland's merchandise exports to Japan surpassed $10 billion in 2016-17, which represented almost 16 per cent of our international trade.

Nearly half this was coal products.

Queensland's reputation as a trader can certainly sustain a brief dispute between a regulator and coal freight company.

However, the costs in both monetary and reputation terms will become substantial if this fight is allowed to drag on.

Couriermail --> Aurizon loses Graincorp freight contract, shares down 20 per cent

QuoteAURIZON'S bad run has continued with the loss of a major grain haulage contract.

As the freight company continues to deal with the fallout from its strategy on the central Queensland coal network, it was also this week advised by GrainCorp that it would not renew its contract.

"GrainCorp has advised Aurizon that it has committed their Queensland grain haulage volumes to another carrier at the expiration of Aurizon's current contract in November 2019.

"Aurizon provided a highly-competitive offer to GrainCorp to continue hauling their grain task from central-west and southwest Queensland.

"As a valued customer, we remain focused on safety and customer service in the delivery of GrainCorp's product for the remainder of the contract period."

Aurizon hauled about 750,000 tonnes for GrainCorp in 2016/17, but it has been a lower harvest this year.

It follows a report released by the Queensland Competition Authority in which it distanced itself from Aurizon's strategy on the central Queensland coal network.

Aurizon has maintained that its strategy, to effectively reduce the number of trains that can get to port through changes to its maintenance schedule, was in response to a draft decision by the QCA.

But QCA said that it did not prescribe that Aurizon Network change its maintenance program, or the operations of its maintenance practices.

It also said it did not agree with Aurizon's characterisation that the QCA would not revisit issues if new information became available.

Aurizon's changes could cost the coal industry about $4 billion a year, but Aurizon has said it has no option because the QCA ruling has slashed about $1 billion from its revenue on the Central Queensland coal network and that a final ruling from the QCA would be backdated to July 2017.

https://twitter.com/brisbanetimes/status/1002077105205608449

Queensland Parliament Hansard

Questions without notice

https://www.parliament.qld.gov.au/documents/hansard/2018/2018_06_12_DAILY.pdf

Mr MANDER: My question without notice is to the Premier. The Premier sat in the Bligh cabinet
when Labor sold off the essential Queensland coal rail network. Does the Premier now concede that
Labor's asset sales led to the dispute between Aurizon and the Queensland coal industry, putting at
risk $2 billion worth of royalties?

Ms PALASZCZUK: I reject the premise of that question because there have been very good
talks happening between Aurizon and the QCA. On my recent trade mission to Japan I had the great
opportunity—which is usually not afforded to a Premier of our state but it was because of our good
trade relationship between Queensland and Japan, better than any other state, may I add—to meet
with not only the minister for the Olympics but also the minister for foreign affairs. I reassured them that
there were no issues with the long-term supply of coal that is used to make and manufacture steel in
Japan.

Japan and Queensland have been long-term friends. In fact, Japan is our second largest trading
partner. I also had the opportunity to host about 50 key investors in Queensland at a dinner to talk more
broadly about Queensland and the opportunities for them, and they were very receptive to what they
heard. Let me make it very clear. On that side of the House under—

Mr Mander: We haven't sold assets.

Ms PALASZCZUK: You wanted to.

Mr Hinchliffe interjected.

Mr SPEAKER: Order! Minister for Local Government, you are warned under standing orders. I
was on my feet. Premier, I remind you to direct your own comments through the chair. Deputy Leader
of the Opposition, your interjections are very loud. That is not a badge of honour.

Ms PALASZCZUK: The member for Everton must have forgotten that he sat around the cabinet
table that wanted to sell our power assets.
Honourable members interjected.

Mr SPEAKER: Order!

Ms PALASZCZUK: You called it stronger choices. You might want to speak to the member for
Clayfield about that one.

Honourable members interjected.

Mr SPEAKER: Order, members!

Ms PALASZCZUK: The member for Everton asked a good dixer there!

Mr Dick interjected.

Ms PALASZCZUK: He was a cabinet minister.

A government member interjected.

Ms PALASZCZUK: That is right. He was the minister. Do we not recall selling off government
buildings—

Mr SPEAKER: Order! Pause the clock. Premier, resume your seat. Deputy Leader of the
Opposition, you have asked a question. You have been warned and were cautioned earlier. You are
warned under standing orders. Members, it is not an invitation to yell across the chamber. If you wish
to ask a question get yourself on your questions list. I want to hear the speaker.

Ms PALASZCZUK: They wanted to sell off our power assets. They wanted to sell off the power
assets. That is what they wanted to do.

Ms Grace: They wanted to sell the schools.

Ms PALASZCZUK: They wanted to sell the schools and the TAFEs. There is a bit of rewriting of
history here. It is called the Peter Costello—

Honourable members interjected.

Mr SPEAKER: Wait, Premier, please. All members, I could not hear the Premier's contribution.
That means your interjections are too loud. I will start sending members out of the chamber. I realise
there is passion on this issue, but I ask you to remain parliamentary.

Ms PALASZCZUK: Obviously the member for Everton has forgotten. He has wiped three years
of his life—

Ms Grace interjected.

Ms PALASZCZUK: I do not blame him; I would wipe it out as well. They actually had a
Commission of Audit by Peter Costello which came up with a long list of things they wanted to sell and
things they did sell like the buildings. I believe the member for Everton was misleading the parliament
and I will write to Mr Speaker about that.

(Time expired)

========================

^ rabble ...   

Queensland Parliament Hansard

https://www.parliament.qld.gov.au/documents/hansard/2018/2018_06_14_DAILY.pdf

Questions without notice

Queensland Rail

Mr MANDER: My question without notice is to the Premier. When the Premier jetted often to
Japan last month was the Premier up-front with our trading partners that she was one of the Bligh
cabinet ministers who made the decision to sell off part of Queensland Rail, leading to the dispute with
Aurizon which threatens their coal supply and $2 billion worth of royalties?

Ms PALASZCZUK: I thank the shadow Treasurer for the question. We got to six budget
questions yesterday and today we have hit two. I would urge everyone to listen to the shadow
Treasurer's interview that he did on ABC this morning. I would urge all members to have a listen to that.
It puts in context what the shadow Treasurer thinks about the opposition's response to the budget that
will be made very shortly. I have answered the honourable member's question this week, but I am
happy to talk about it again.

Let me say very clearly that Japanese investors are very supportive of this government. As I said
this week and I will say it again, I had the opportunity not only to meet with the Minister in charge of the
Tokyo Olympic and Paralympic Games but also to meet with the Minister for Foreign Affairs. I am very
grateful that the government made time to meet with me as Queensland Premier. I was very honoured
to host a dinner where over 50 investors came along to hear about our plans for Queensland. I talked
to them about how our budget will be coming down this week, once again delivering for Queensland
but also strongly backing our resources sector and our innovation sector. Once again, I gave them the
clarity that we would maintain our long-term coal commitments to them, and for that they were grateful.
I intend to continue to meet with the Japanese coal companies. In fact, I toured the Japanese
steel mill—the first Premier to ever tour the JFE steel mill—on my previous visit to Japan. They know
my government's commitment to them. They know my government's commitment to growing this state.
My government will continue to engage with Japan. While other states are focusing firmly on China, I
believe that, as Queensland is the gateway to Asia, we will continue to honour our trading relationships.
Japan is our second largest trading partner and we will continue to have a full presence there. In fact, I
know that the Deputy Premier and Treasurer will also be travelling to Tokyo in the next couple of
months—I have advised the Japanese government of that—as well as a number of other senior
ministers. We will back our trade and we will back Queensland.

(Time expired)

Couriermail --> Aurizon says coal stand-off is about more than just maintenance

QuoteAURIZON has made another submission to the Queensland Competition Authority in the drawn-out fight with coal ­miners over what it can earn on the central Queensland coal network.

The company's submission remains the same but it said the maintenance issue that has created the furore with miners was not the only consideration.

Aurizon has radically changed its maintenance on the network with the effect of reducing the number of trains that can reach the port, thereby cutting exports by 20 million tonnes.

It said there were other significant factors, including the return on capital the QAC has mandated in its draft decision, which was well below the rate Aurizon says it needs.

"This has been our consistent view to the regulator and to industry. Any meaningful discussion on a commercially-sustainable solution for (the undertaking) must include ­investment returns and risk profile, operating and maintenance practices,'' the company said.

"Maintenance is inextricably linked to investment in the rail network assets and the manner the network is operated. Maintenance is dependent on the extent of investment – lesser investment will generally result in a less reliable asset, with any required level of reliability necessarily having to be supported by a need to undertake increased maintenance. ''

Couriermail --> Japanese steelmakers annoyed by Aurizon coal dispute

QuoteJAPAN'S steelmakers have complained that they continue to be annoyed and frustrated by the continuing Aurizon dispute which threatens the $7 billion trade.

The Queensland Resources Council said it met with one of the steelmakers yesterday as the potential cost of the dispute to State Government's royalties blows out by more than $100 million as coal prices grow well above forecasts.

A peace offering from Aurizon of a 10-week moratorium on its controversial maintenance changes was rejected by the industry and a meeting with the State Government to try to resolve the dispute also appears to have failed.

The brawl started when Aurizon implemented major changes to the maintenance of its central Queensland coal network, claiming the decision to do so was forced on it by a Queensland Competition Authority draft decision on how much it could earn from the monopoly track which was $1 billion less that it wanted.

The industry appeared to give some room on Monday when QRC chief executive Ian Macfarlane said that if Aurizon resumed its normal maintenance practices immediately and maintained that until the QCA made a final decision then the coal industry would be prepared to discuss presenting a united position to the Queensland Competition Authority.

The coal producers have been angered by Aurizon's attempts to go outside the QCA system and attempt to negotiate with companies independently.

Aurizon said it's open to a discussion but it has to be about all issues including the rate of return it can have on the track.

The QRC confirmed it had met with one of the steelmakers which had also voiced its concerns to Premier Annastacia Palaszczuk on her trade mission to Japan last month.

"The industry appreciated the efforts of the Premier to try to reassure steelmakers when she visited Tokyo late last month. However, Aurizon have persisted with its threats," QRC chief executive Ian Macfarlane said.

"Aurizon have maintained a pig headed position since. Instead of offering olive branches, all the coal industry has had is the stick from Aurizon.

"Aurizon's treatment of its customers would make Basil Fawlty blush."

QRC estimates the cost of Aurizon's new maintenance plan, which they say will choke off as much as 20 million tonnes of exports a year, would cost up to $4 billion per annum in lost Queensland exports and up to $500 million in lost royalties which pay for the wages of teachers, nurses and police.

"Queensland simply can't afford to keep paying the price of Aurizon's intransigence," Mr Macfarlane said.

The QRC estimates that at the current price for coking coal of $US200 a tonne and the exchange rate the dispute has added an extra $118 million to the previous $500 million in forecast losses.

The State Government has said it doesn't believe the dispute will be as bad as predicted while Aurizon said yesterday its forecast of lost export volumes of 20 million tonnes from the maintenance changes would likely be in foregone sales rather than a reduction in previous totals.

Couriermail --> BHP, Glencore among major mining companies fighting Aurizon

QuoteSOME of the biggest mining companies in the world have joined forces to oppose rail freight operator Aurizon in court, in an increasingly bitter industry brawl.

The 10 coal companies, including BHP, Glencore, Peabody and Anglo American, have banded together to fight alongside the Queensland Competition Authority in a case brought by Aurizon in which they accuse the then QCA chairman Roy Green of apprehended bias.

The strategy adds to the crisis in the coal industry, which is attempting to stop Aurizon from permanently adopting maintenance changes on the central Queensland coal network that will slash as much as $4 billion from coal exports.

The move comes as a report from UK market analyst Wood Mackenzie says Australia is on a path to losing up to $2 billion already this year because of issues that include the Aurizon dispute.

As about 30 ships back up at the Dalrymple Bay coal port in central Queensland, the report from Wood Mackenzie predicts the Aurizon dispute will last until September at least.

The issue arose in February when the QCA made a draft decision relating to how much Aurizon could earn from the monopoly it holds over the central Queensland rail network.

It was $1 billion less than what Aurizon wanted, so it cut back its maintenance as a cost-saving measure.

But just days after making that draft decision, Professor Green announced he would be leaving the QCA to join the Port of Newcastle, which is considered a competitor to Aurizon. That sparked the allegation of apprehended bias.

In advertisements in Wednesday's The Courier-Mail, the message from the 10 coal companies to Aurizon is they are damaging the reputation of Queensland's largest export industry.

Japanese steel companies that buy Queensland's coking coal have expressed frustration over the dispute and some have warned they will go elsewhere to buy coal.

https://twitter.com/Robert_Dow/status/1011639812476977153

https://twitter.com/Robert_Dow/status/1011641018620375040

https://twitter.com/Robert_Dow/status/1012010638598533120