Premier Statement: QR beats competition to $2 billion contract

[ozbob]

Premier and Minister for the Arts
The Honourable Anna Bligh
17/12/2009

QR beats competition to $2 billion contract

Premier Anna Bligh has congratulated Queensland Rail after the company beat the competition to a $2 billion contract to haul Xstrata coal.

The agreements between QR's coal business, QRNational Coal, and Xstrata Coal cover its Newlands, Collinsville, Oaky Creek and Rolleston mines in Queensland.

"QR National competed against Pacific National to this $2 billion contract - competition in this market is alive and well and QR is winning the race," she said.

"This contract sends a clear message to QR workers. A listed QR National will be successful, providing job security for its workers and creating new jobs into the future.

"On any given day, QR operates more than 70 services carrying more than 500,000 tonnes of coal.

"Those services mean exports and a stronger financial position for Queensland. That leads to more investment, more jobs, and a bright future for our mining industry and for QR workers.

"Contracts like this show that QR is competitive and as a private company they will be in a better position to reach their potential and create new jobs for thousands of Queenslanders."

Executive General Manager QRNational Coal Marcus McAuliffe said the new long term contracts would begin in 2010 and 2011.

"We are delighted to finalise these agreements because they build on our recent successes in the NSW market where we have almost trebled our market share," he said.

"Also, these are the first agreements negotiated in Qld with the new approach we are taking to our market.

"We have been working hard to understand our customers' key drivers and then have worked closely with them to design contracts that support the long term success of both our businesses."

QR CEO, Lance Hockridge said the contracts represented a step change in thinking and were designed to create value for the customer by leveraging off the strengths of QR.

"The work done to design and secure these contracts reflects QR's increased focus on our customers. This is another example of how we are working with our customers to evolve from the low cost solutions that were needed in the past to the high performance solutions that industry now needs," he said.

"To support the contracts we plan to expand our fleet with an investment of about $100 million in new locomotives."

Mr Hockridge said the existing contracts were to expire or be reviewed in 2011 and were the subject of a competitive tender process.

Premier Anna Bligh said that QR has now hauled three billion tonnes of coal in its 41 year history.

"That's an incredible milestone and today, we see the intersection of a great history and a bright future for QR jobs," she said.

Mr Hockridge said the 3 billion tonnes milestone recognised the important role QR had played in Queensland's economic development and its future.

"Because of our robust coal haulage business, we are able to provide stable employment for a workforce of more than 1,700 people, including 170 apprentices and trainees, as well as hundreds of additional jobs in associated service industries and suppliers," he said.

"In 2005 QR's coal business QRNational Coal expanded its operations into New South Wales, where we have developed a market share of 30 per cent and added to our successful Queensland operations.

"We have a fleet of locomotives and wagons worth more than $2.7 billion, and we are committed to growing to meet our customers' needs.

"By 2011, we aim to have lifted capacity on our network to more than 240 million tonnes a year, something that wouldn't be possible without a substantial investment in rolling stock and associated infrastructure.

"I congratulate everyone involved in our operations and thank them for their commitment to operating safely and productively every day."

In 2008/09, QRNational Coal's operations in Queensland and the Hunter Valley:

    * Operated about 360 locomotives and 8,200 wagons
    * Ran 28,403 services
    * Serviced 56 coal mines
    * Delivered 186.7 million tonnes of coal
    * Employed about 1,700 people

Over the last 41 years coal trains in Queensland have travelled the equivalent of more than 4,500 times around the world and if placed end to end they would stretch more than 15 times around the globe.

The coal would be worth more than $300 billion in export revenue to Queensland at current market prices.

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