Industry News

Scheme for moving SCT containers to rail from road extended

A scheme has been extended by the State Government to reduce rising truck numbers on Wimmera roads in Victoria.

The Mode Shift Incentive Scheme (MSIS) will be extended for another year, effectively keeping rail freight viable for Wimmera Intermodal Freight Terminal rail operator SCT.

Under the program, SCT receives a small rebate for the cost of each container it puts on rail instead of sending it by road.

About 15,000 containers of hay, grain and pulses are moved by rail per year on the service which runs three days per week.

“With modern farming practices, we are seeing unprecedented levels of strain on roads in our municipality because so many trucks are delivering commodities to port directly,” said Horsham Rural City Council Mayor Robyn Gulline.

“This not only damages our already failing road infrastructure, but creates congestion in Horsham where trucks must travel through the centre of town, because, at the moment, there are no alternative routes,” she said.

“The MSIS doesn’t solve the problem, but it certainly helps alleviate some of the strain that is placed on local government as our already fragile roads bear the brunt.”

An average 1000m-long intermodal service from Dooen to the Port of Melbourne carries about $2.5 million worth of produce and the equivalent amount of freight to 70 trucks.

The economic base of the Wimmera is heavily reliant on agriculture with tourism and social services regarded as active labour markets, one increasingly reduced in prominence by the presence of the other, following restrictions placed on the community through government intervention in the past two years.

Gulline, who was elected mayor in November 2020, said the planned growth of mining in the Horsham area meant that rail freight would be even more critical in the future.

Four of the world’s largest sand-mining projects have been planned within a 70-kilometre radius of Horsham.

Yet to justify the rail rebates, Gulline also wants to service this development by rail.

“For the Wimmera there is a lot riding on our capacity to send containers by rail,” she said.

“Over long distances, trains burn less fuel and carry far higher volumes than road transport.”

The Victorian Government has allocated $3.5 million in its Budget for 2022/23 to extend the MSIS until 30 June 2023.

The funding is shared between Dooen and other regional freight terminals at Shepparton, Mildura and Warrnambool.

However Gulline said she wanted the scheme to do more to encourage change.

She said guaranteeing the MSIS for at least three years would provide more certainty in the Wimmera’s rail freight capabilities and encourage more local companies to opt for rail over road.

“The subsidy has been steadily reducing since 2014 when $5m was offered to the four operators,” she said.

“Unfortunately, for potential exporters, one-year extensions to the scheme may not provide enough long-term certainty for them to be able to make the shift to rail. And we know there are significant export projects proposed for our municipality that are now looking at their transport options.

“The beneficiaries of this scheme go far beyond the intermodal terminal operators,” Gulline said.

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