The Victorian Government has approved a $125 million in on-dock rail infrastructure to be built at Port of Melbourne.

The Port Rail Transformation Project (PRTP) aims to get more freight onto trains, take trucks off local roads and improve Port of Melbourne’s productivity.

The port’s rail solution will be developed over 2020-2022 and will see more containers moved by rail more efficiently, by-passing roads in inner Melbourne.

Port rail shuttle trains will have a capacity of 84 Twenty-foot Equivalent Units (TEU) containers, in comparison to a B-Double truck having a capacity of three TEU. This project also supports regional exports by taking cost out of the rail supply chain.

Key elements of the Port Rail Transformation Project are:

  • Integrated Port of Melbourne provision of port rail land and assets – Port of Melbourne is restructuring the port rail land and asset commercial arrangements for leaseholders within the Swanson Dock East Precinct to provide rail land and assets on the same basis it provides wharf and road land and assets
  • New on-dock rail terminal capacity – development of a new on-dock rail terminal at Swanson Dock East. Locating this new rail terminal next to the Swanson Dock East International Container Terminal will provide a lower cost transfer of containers between rail and ships
  • Improved rail terminal operation arrangements and transparency –new working arrangements between Port of Melbourne and Rail Terminal Operators at most current and all future port rail terminals. This encourages market competition between rail terminals and increases transparency.

Victorian Minister for Ports and Freight, Melissa Horne, approved the proposal by Port of Melbourne Operations on 30 January 2020.

The on-dock rail plan is part of the Victorian Government’s work to continue driving the economic success of the port, which currently contributes $6 billion to the state’s economy each year and is a crucial part of the state’s agriculture supply chain.

Improving rail access to the Port of Melbourne is a legislated condition of its lease, with its delivery part of a wider push to improve rail freight across Victoria.

Port of Melbourne CEO, Brendan Bourke, said the port’s rail solution was a critical and missing link in Melbourne’s transport and supply chain network.

“It expands the rail offering for freight and delivers environmental benefits by reducing truck movements, congestion and pollution,” Mr Bourke said.

“Everyone we talk to says rail is a good thing and industry has called for a rail solution for more than a decade.

“The port’s rail solution is a vital piece of infrastructure delivered with no cost to taxpayers. Our export market, especially farmers, will benefit from this project.

“The project is more than an infrastructure project; it also provides industry reform and drives efficiency in the rail supply chain. It is the result of significant engagement with industry,” said Mr Bourke.

The project is being funded by a small increase in the tariff on full import containers of $9.75 per Twenty Foot Equivalent Unit (TEU) to take place no earlier than 1 April 2020. This equates to less than five cents on the wholesale price on an average sized television.

The PRTP is the key project of the port’s Rail Access Strategy – Our Plan For Rail, which is a comprehensive plan for an integrated freight rail network across Victoria.

“We are committed to investing in the port – it is a key driver of economic activity in the state. We want to move freight in and out of the port more quickly and to deliver the everyday goods needed to support our daily lives,” Mr Bourke said.

Project expands state-wide freight plan

The Victorian Government is also supporting the Port Rail Shuttle Network connecting freight hubs in Melbourne’s north and west to the port, new intermodal terminals planned at Truganina and Beveridge, new automated signalling for faster rail freight to GeelongPort and improvements in the regional rail freight network.

It is hoped on-dock rail will make rail transport more competitive, cut the high cost of the ‘last mile’ and reduce truck congestion at the port gate – a big win for Victorian exporters delivering goods to the Port of Melbourne.

It will also allow importers to use rail to move containers to distribution centres around Melbourne efficiently.

To make on-dock rail possible, the Port of Melbourne will introduce a $9.75 per twenty-foot equivalent unit charge on imported containers. The funds raised from the charge will directly deliver new sidings and connections for the rail project.

The charge keeps the port competitive with Port Botany and won’t apply to exporters from the port.

The Victorian Government will closely monitor the progress of the project, which is scheduled for completion in 2023, and keep looking at ways to improve port pricing and access – keeping Victoria’s regional exports cost-competitive and growing the state’s economy.

“The Port of Melbourne is a vital part of our multi-billion dollar export sector and agriculture supply chain and on-dock rail will make its operations more efficient for Victorian exporters – removing congestion at the port gate,” Ms Horne said.

“This will cut costs for regional exporters and increase the competitiveness of the Victorian industry – creating local jobs.”

View more information on the Port Rail Transformation Project here.

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