In July I hosted a forum in Parliament House with major rail and energy users from across the North West Minerals Province to address issues hindering growth in the North West. It was attended by mine managers from across the region, MITEZ, and Townsville Enterprise Ltd.
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The major problem is the rigid, non-commercial pricing structures used by Government Owned Corporations (GOCs) such as Queensland Rail and Ergon. This allows urban-centric governments to use GOCs as a cash cow to prop up their budgets, rather than as an economic enabler to drive growth and investment.
Currently, there is no incentive for operators to increase their use of say, rail infrastructure. The prices keep increasing and there is little or no provision for making a bulk-use deal with the GOCs without entering into long term contracts that may not be suitable for an emerging business.
The upshot of this is more and more bulk freight is being hauled along our roads rather than using rail. Current estimates suggest that over 400,000 tonnes of freight has been squeezed off the rail system primarily due to GOC pricing policies.
There is opportunity here for the government to use its GOCs to stimulate economic growth, development and activity. The government made the right decision to keep these assets in public hands, however they need to be used to their full potential.
The GOCs have an obligation to deliver their services in a way that not only ensures they are commercially viable, but also act as an incentive for private enterprise.
If the government is demanding that GOCs concentrate on maximising their own bottom lines, rather than providing a platform to help drive commercial development, they should have just sold them.
While I think these policies were implemented with the best of intentions, we need to look at whether they have worked. When you have close to half a million tonnes of additional ore and bulk produce going on the road while a perfectly good rail line sits largely unused, that is clear evidence that these policies are not working.
It has got to the point where it’s causing safety risks on our roads. Don’t forget we taxpayers only make money off ore transported by rail. Big changes are needed to get the most out of these state owned assets.
I plan to get the main users in front of the government to help sort this mess out and ensure a strong future in the North West Minerals Province.
