Taxpayers taken for a ride on Eyre Peninsula Railway

20 July 2019

Contract documents released to Centre Alliance Senator Rex Patrick under Freedom of Information Laws show that taxpayers and residents of the Eyre Peninsula have been dudded by the South Australian Government’s contractual management incompetence.

Eyre Peninsula’s railway closed down in May 2019 meaning that all grain transport on the Peninsula now occurs by road, on a road network that is just not up to the task. 

The railway was shut down after a 2018 ‘Eyre Peninsula Freight Study’ (a document only released in response to an earlier FOI from Senator Patrick) determined that “existing rail network infrastructure requires capital investment to remain reliable and competitive with road transport”. The report further stated, “Equally, any significant capital investment on the rail infrastructure may result in an increase in rail charges such that the rail rates may not be competitive with road transport”.

The study included descriptions of the deteriorating conditions of the rail lines and sleepers which meant that over 99% of the network had maintenance related speed restrictions to it.

But lease documents obtained by Senator Patrick reveal the company that had leased the railway, Genesee and Wyoming Australia (GWA), had an obligation to maintain the system in good order. The lease contract required GWA “keep the Lessee’s property clean and in good repair and condition”. Lessee property is defined in the contract to include “track infrastructure”.

This requirement existed in the original lease contract with Australia Southern Railroad PTY LTD and was a condition passed on to the new Lessee, GWA, and was never varied across a number of contract renewals.

The Government just didn’t enforce the contractual requirement. "It was negligence and now the people of the lower Eyre Peninsula are paying the price,” said Senator Patrick.

The subsequent closure of the railway has seen the number of truck movements increase by about 30,000 per annum. This will result in an increase in fatalities on the Peninsula’s roads noting that heavy vehicles are involved in 20% of all fatalities on EP roads.

It has also resulted in a decrease in competition in grain freight and with a flow on detrimental effect to that industry's supply chain costs.

"The Government needs to rectify the situation," said Senator Patrick. "It could, and should, seek remedies under the contract and it must act now to resolve the problem. The Government needs to find the money necessary to enhance roads in the region and should also step up and provide seed funding for the proposed Cape Hardy, a port facility that would divert much of the grain transporting away from Pt Lincoln and increase competition in the transport and export market."

"The people of the Eyre Peninsula have been taken for ride, a dodgy train ride. They deserve better."

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