2.  Rail branch lines

NSW Farmers' Association is concerned that if current State Government investment levels are maintained, the 11 remaining restricted rail branch lines will deteriorate to such an extent that they will be forced to close due to safety concerns. The closure of 4 lines for safety reasons in 2005 exemplifies this concern.  If this occurs, farmers will be forced to pay higher transport costs and the 48,000 trucks required to transport this freight will cause increased road damage and road safety issues.

• The 15 lines make up 24% of the NSW Rail Network and move more than 3 million tonnes of grain per year. They transport more than 60% of annual NSW grain exports valued at approx $350million and provide approximately $10/tonne freight advantages over road transport.
• The Bureau of Transport and Regional Economics Road estimates that road damage costs are reduced by nearly $5,000 per train trip per train. If grain is diverted to roads, Councils would face this cost to build, upgrade and maintain roads in their area, leaving rural communities facing higher rates.
• If the State Government closes all restricted rail branch lines in NSW, an average of 48,000 trucks would be required to transport this grain each year.  When compared to rail this would result in an additional 3,000 tonnes of atmospheric CO2, 1,600mill additional litres of fuel and $337mill in road maintenance costs.
• NSW Farmers' Association believes that the rail lines need to be upgraded to an 81 class standard to provide weight and speed efficiency gains, long term certainty for industry and the appropriate incentives so that the asset is more attractive for private investment and use. The cost of this upgrade is estimated to be $245mill. 
• NSW Farmers' Association has developed a joint rail/ road funding package involving all relevant stakeholders namely Grain Growers Association, GrainCorp, AWB, Pacific National and State and Federal Governments.  Notably the package involves a cost sharing arrangement for the upgrade thereby substantially reducing the upfront cost and burden for Government.   Specifically it details State Government contributions, fees paid by NSW rail operators to access Government owned lines and Federal Government funding for roads affected by line closures.  It has the support of all industry stakeholders and is currently before the Minister for Transport for decision.
• Complicating matters is the fact that Pacific National is currently contracted to the State Government to provide above rail haulage services on the restricted rail branch line network until 14 November 2007.  It is also contracted to spend approximately $64mill in ‘Broadacre’ funding to build Grain Consolidation Facilities. However given the consistent and more lucrative tonnages from the coal freighting part of their business (in comparison to the seasonal and drought affected grain harvest tonnages), NSW Farmers' Association is concerned that Pacific National will not renew this contract and will instead focus just on coal freight.