The Western Australian-based academics behind a new rail competition study hope their research will not only help to solve Australia’s infrastructure crisis but also draw significant global interest as well.
The Western Australian-based academics behind a new rail competition study hope their research will not only help to solve Australia’s infrastructure crisis but also draw significant global interest as well.
As commodity exports surge, governments, regulators, private infrastructure owners and their users are battling over huge infrastructure bottlenecks reportedly costing millions of dollars in export revenue and stifling further infrastructure upgrading and investment.
WA transport research group Planning and Transport Research Centre director Fred Affleck said while the two-year study was fortuitously timed it had been planned for at least a year.
“It is certainly addressing one aspect of what has become a big issue [the infrastructure crisis] … in this country,” he said.
Mr Affleck said there were basically two parts to the current infrastructure debate.
One was the readiness of governments to publicly fund infrastructure – an issue that he believes is amenable to fairly simple economic decision making processes.
The second part is finding a balance between regulation, pricing structures and investment so that businesses are able to, and encouraged to, finance infrastructure on an ongoing basis – something the study will look at in the rail sector.
“That is a far more complex and involved issue because it requires an analysis about the long-term capacity of the economic entities to generate cash flow that is capable of being reinvested,” Mr Affleck said
He said the research would be timely when complete in two years time, saying rail infrastructure degradation was a perennial issue.
PATREC estimates Australian rail infrastructure will need to carry at least double present loads in the next two decades.
“The cycle of rail infrastructure degradation is very, very long … it’s almost political fashion,” Mr Affleck said.
Specifically the study, which will cost six figures, will look at part three of the Trade Practices Act which says train operators must be given access on negotiated terms to rail track owned by any operator.
“Our focus is very much more on the fundamental economics of whether or not prices being paid by infrastructure users are adequate to generate the cashflow that will provide for investment into the structure in the long run,” Mr Affleck said.
The problem, according to the recently appointed PATREC research fellow and experienced economist Nick Wills-Johnson, is that globally no-one has examined the relatively new form regulation, as set out in part three of the act, and its impact on rail.
“This is groundbreaking research and I should also say it is quite difficult research to undertake because the data is not very plentiful and confidential and we are going to have to persuade rail entities to give it to us on a confidential basis,” Mr Affleck said.
PATREC is the collaborative research centre of Curtin University of Technology, Edith Cowan University, Murdoch University, the University of WA, the WA Government and the Australian Railroad Group.
Despite the financial involvement of ARG, Mr Affleck said he was confident of the independence of the study.
“They have shown no sign what-so-ever, at this stage that they are inclined to direct the research,” he said.
“We will have an advisory committee that will go far beyond ARG in an academic and business sense that will assist with the direction of this study and make it impossible for the thing to be bent.”
