Pacific National has finalised a deal with grains marketer GrainCorp to contract an additional eight trains to service GrainCorp’s export haulage needs in NSW and Victoria for the next five years, and continue branch line operations until June 30, 2009.
As part of the “take or pay” deal, Graincorp will have to pay for the trains even if drought means it doesn’t have enough grain to fill them, but if the crop is large and more trains are needed, additional payments would be made to Pacific National.
Chief executive of Grains Growers Association Peter Flottmann said the deal would provide some security to growers.
“We’re pleased it’s going to give the industry some certainty leading into this harvest,” Mr Flottmann said.
“The only issue for us is that, while this is a five-year agreement for export haulage, it doesn’t address the sustainability of grains transport in the long term.”
Pacific National announced in December last year that it would downsize or divest the grains haulage business, which suffered reduced volumes from the drought and was losing $3 million a month.
NSW transport minister John Watkins announced the new deal on Monday along with an additional $45 million in funding for country rail infrastructure.
NSW Farmers Association will be meeting with Mr Watkins next week to discuss the rail line issue and will be seeking clarification on several aspects on behalf of farmers.
“The area of concern we have are the equitable and open access to other up-country storage centres and freight systems,” said NSWFA grains committee chairman John Ridley.
“If GrainCorp’s got the trains we want to make it open to other marketers.”
Greens MP and transport spokesman Lee Rhiannon has called on the details of the agreement to be released saying the deal looked like a win-win deal for Pacific National.
“Pacific National have been the winners in this deal,” Ms Rhiannon said.
“Pacific National has walked away from their contract obligations with the government in the past.
“The only way they can be held accountable is if the full details of the latest rural rail freight agreement is in the public domain.”
A GrainCorp spokesperson said details of the agreement would not be released, citing commercial in-confidence.