IPART Submission 2009-10 · 2011. 7. 18. · In the 2009/10 year ARTC has not included any additions to the Regulated Asset Base (RAB). 2.4.4. Capital Expenditure The capital expenditure

November 2010 Page 1 of 32

2009-10 SUBMISSION

to

THE INDEPENDENT PRICING AND REGULATORY TRIBUNAL

in respect of

HUNTER VALLEY REGULATORY NETWORK

ROLL FORWARD ASSET BASE CEILING TEST

UNDERS AND OVERS ACCOUNT


CONTENTS

1. INTRODUCTION ....................................................................................................................................................3

2. ROLL FORWARD OF THE REGULATORY ASSET BASE ...................................................................................4

2.1. COMPLIANCE SCOPE................................................................................................................................................4 2.2. 2008 – 09 ASSET ROLL FORWARD...........................................................................................................................5

2.3. REGULATORY ASSET BASE FORMULA ........................................................................................................................6 2.4. CALCULATION OF THE RAB .....................................................................................................................................7

2.4.1. Opening Values (RABt-1)...........................................................................................................................7 2.4.2. CPI ...............................................................................................................................................................7 2.4.3. Additions....................................................................................................................................................8 2.4.4. Capital Expenditure.................................................................................................................................8 2.4.5. Interest During Construction (IDC) .......................................................................................................8 2.4.6. Depreciation..............................................................................................................................................9 2.4.7. Disposals ....................................................................................................................................................9 RAB Roll Forward Results .....................................................................................................................................10

2.5. CAPITAL EXPENDITURE CONSULTATION PROCESS ....................................................................................................10

3. CEILING TEST AND THE UNDERS AND OVERS ACCOUNT ...........................................................................11

3.1. COMPLIANCE SCOPE..............................................................................................................................................11 3.2. CEILING TEST ......................................................................................................................................................12

3.2.1. Ceiling Test .............................................................................................................................................12 3.2.2. Constrained Group of Mines.................................................................................................................13 3.2.3. Revenue ...................................................................................................................................................13 3.2.4. Operating Costs ......................................................................................................................................13

3.3. UNDERS AND OVERS ACCOUNT .........................................................................................................................16

3.3.1. 2009-10 Balance......................................................................................................................................16 3.3.2. Operation of the Unders and Overs Account.....................................................................................17

APPENDIX A – HUNTER VALLEY NETWORK SECTORS .............................................................................................18

APPENDIX B – 2009-10 CAPITAL EXPENDITURE TO BE INCLUDED IN THE RAB ................................................19

APPENDIX C – 2008-09 DISPOSALS.............................................................................................................................24

APPENDIX D – 2008-09 RAB “ROLL FORWARD” SUMMARY ..................................................................................25

APPENDIX E – 2008-09 RAB VALUES BY SECTOR ....................................................................................................28

APPENDIX F – 2008-09 INTEREST DURING CONSTRUCTION .................................................................................29


1. Introduction In accordance with the NSW Rail Access Undertaking (the “Undertaking”), the rail infrastructure owner must submit to the Independent Pricing and Regulatory Tribunal (“IPART”) each financial year1:

• documentation demonstrating its compliance with the Asset Roll Forward Principles; and

• details as to the compliance with the Ceiling Test, including operation of the Unders and Overs Account.

The purpose of this submission is to demonstrate Australian Rail Track Corporation’s compliance with the Undertaking as a rail infrastructure owner, as set out in Schedule 3 – Pricing Principles. Complete details of these requirements are set out in later sections of this submission, however, below is a summary of the details of this clause of the Undertaking: 1. The Asset Roll Forward Principles are defined in clause 2.1 of Schedule 3 – Definitions

and the provisions of clause 3 of Schedule 3 – Regulatory Asset Base. 2. The Unders and Overs Account requirements are set out in clause 4 of Schedule 3 –

Unders and Overs Account. 3. The Ceiling Test requirement is set out in clause 1 of Schedule 3 – Pricing Principles. 4. IPART is required under clause 5(b) of Schedule 3 – Compliance to determine whether

the rail infrastructure owner has:

(i) complied with the asset valuation roll forward principles and if it does not so determine then it is to determine a closing regulatory asset base that does comply with these principles; and

(ii) complied with the Ceiling Test having regard to the operation of the Unders and Overs Account.

The rail infrastructure owner is obliged to revise a closing regulatory asset base and to manage its Unders and Overs Account in accordance with any determination by IPART pursuant to clause 5(b) of Schedule 3.

5. IPART is required under clause 5(d) of Schedule 3 to publish its findings on its web

site and/or circulate its findings to operators. This submission by ARTC for 2009-10 is provided to IPART having regard to IPART’s assessments of the 2008-09, 2007-08, 2006-07 and 2005-06 submission.

� 1 Clause 5 of Schedule 3 Pricing Principles of the Undertaking


This submission is lodged contemporaneously and to be read in conjunction with the document entitled 2009-10 Capital Consultation, which includes:

• a detailed description of the capital consultation process undertaken in 2009-10 and an explanation of how it met the requirements of the Undertaking;

• evidence of any Access Seeker’s endorsement of any proposed capital expenditure, where relevant;

• the name, address, contact details (including email address) of stakeholders considered by Owners to be Access Seekers (noting which of those are Access Holders) and other parties consulted regarding compliance matters.

Information provided in this submission has been prepared in accordance with the IPART Guidelines of November 2006 (revised August 2007).

2. Roll Forward of the Regulatory Asset Base

2.1. Compliance Scope Regulatory Assets are defined in clause 2.1 of Schedule 3 of the Undertaking – Definitions as the facilities and associated assets used in the provision of access to the NSW rail network. The Regulatory Asset Base (“RAB”) is defined in the same clause as the capital value of the Regulatory Assets as determined in accordance with clause 3 of Schedule 3. This clause further states that the capital value of the RAB shall be based on an initial valuation of the RAB calculated using a depreciated optimised replacement cost (“DORC”) methodology. The Hunter Valley Coal Network is the only group of assets that currently has a RAB which is based on such an initial (independent) valuation and therefore compliance with the asset valuation roll forward principles is limited to this network. Clause 3.2 of Schedule 3 – Hunter Valley Coal Network, contains specific RAB provisions for this network. It is proposed that those parts of the NSW Rail Network not forming part of the Hunter Valley Coal Network satisfy the requirements of clause 5(f) of Schedule 3 to be excluded from the provisions of clause 5 of Schedule 3. The initial valuation of the Hunter Valley Coal Network was carried out by IPART in 2001. In December 2001, based on IPART’s report, the Minister of Transport advised RIC of the opening asset values to be used effective from 1 July 1999. As part of the IPART review conducted in 2003 and 2004, the above 1999 opening values were rolled forward to determine the closing values for 2003-04.


During 2004-05, IPART reviewed the remaining mine life in accordance with clause3.2(c)(iv) of Schedule 3 and determined that the remaining mine life to be 35 years from 1 July 20042. IPART advised ARTC of a closing value for 2004-05. The scope of this submission therefore is the roll-forward of the 2007-08 asset values to determine the closing values for 2008-09. This submission provides relevant commentary and documentation demonstrating ARTC’s compliance with the Asset Valuation Roll Forward Principles. As confirmed in the 2004-05 submission, the ownership of the Hunter Valley Coal Network, as defined in Schedule 6 of the Undertaking, has been split into three different rail infrastructure owners – ARTC, RIC and RailCorp. RailCorp is responsible for management of the rail infrastructure between Woodville Junction and Newstan Junction. Australian Rail Track Corporation (“ARTC”) by way of a 60 year lease is responsible for management of the remainder of the Hunter Valley Coal Network (the “Network”). This submission does not cover any sectors of the network that RailCorp is currently responsible for, which is consistent with the structure of the 2008-09 submission. For clarity, Appendix A contains the list of ARTC Hunter Valley Coal Network sectors listed within Schedule 6 of the Undertaking.

2.2. 2008 – 09 Asset Roll Forward

ARTC has received from IPART the decision statement acknowledging ARTC compliance with the Asset Valuation Roll Forward Principles for the 2008/09 financial year. The closing RAB values as at 30 June 2009 accepted by IPART are shown in Table 1: Table 1 Closing RAB values as at 30 June 2009 ($ nominal)

2008/09

ARTC – Constrained group of sectors 601,119,386

ARTC – All assets 692,113,396

� 2 Report on the Determination of the Remaining Mine Life and Rate of Return, IPART 2004.


2.3. Regulatory Asset Base Formula

Clause 3.1.1 of Schedule 3 – Regulatory Asset Base - General defines the RAB calculation formula as follows: RABt = RABt-1 + (RABt-1 * CPIt) + Addt + Capext – Dept – Dispt Where: RABt is: the RAB in any given year t and represents the closing value of the RAB for

that year. RABt-1 is: the RAB in the year prior to year t and represents the closing value of the

RAB for that year and is the opening value of the RAB in year t. CPIt is: the percentage change in the CPI from year t-2 to year t-1, calculated by

using the average of the ABS Sydney All Groups Consumer Price Index for the four quarters to June in year t-1 when compared to the average for the four quarters to June in year t-2.

Addt is: the addition of an existing sector or an existing group of sectors due to

changes in demand in a common end market, valued at depreciated optimised replacement cost.

Capext is: the actual capital expenditure for assets commissioned in relation to the

RAB for the year t, where that capital expenditure is incurred in accordance with the provisions of clause 3.3 of Schedule 3, less that proportion of any capital contribution which is to recover capital expenditure.

Dept is: the depreciation allowance for year t. Dispt is: the value of asset disposals in year t as determined by the written down

value attributed to them in the RAB. Yeart is: the current year commencing on 1 July for which access charges are to

apply. ARTC confirms each component of the RAB has been calculated in accordance with this formula, as detailed in Section 2.4 below.


2.4. Calculation of the RAB

2.4.1. Opening Values (RABt-1) The roll forward of the RAB starts with the closing value of the relevant 2008-09 values. As noted, IPART has advised ARTC that the following values are compliant for the purpose of confirming the 2008-09 closing value. Table 2

2008/09

ARTC – Constrained group of sectors 601,119,386

ARTC – All assets 692,113,396

2.4.2. CPI The CPI rate used in the roll forward process has been calculated in accordance with the formula prescribed in clause 3.1 of Schedule 3 and is set out in Table 2. The CPI change is calculated using the weighted average of the Sydney All Groups CPI using the average of the four quarters to June 2009 over the average of the previous years four quarters to June 2008. Table 3

Quarter 2007-2008 2008-2009

September 158.10 165.90

December 159.50 165.50

March 161.70 165.60

June 164.10 166.30

Average 160.85 165.83

08-09 Average / 07-08 Average

1.0309

CPI % 3.09%


2.4.3. Additions

In the 2009/10 year ARTC has not included any additions to the Regulated Asset Base (RAB).

2.4.4. Capital Expenditure The capital expenditure on new and existing assets to be included in the RAB for 2009-10 is set out in Appendix B. This appendix details the capital expenditure for each project commissioned in 2009-10, together with the sector that this capital expenditure relates to. There was no capital expenditure commissioned in 2009-10 included in the RAB for any other sector on the Network not shown in Appendix B. Evidence of Access Seekers endorsement of this capital expenditure is provided in Attachment 2 of 2009-10 Capital Consultation. 2.4.5. Interest During Construction (IDC)

During the 2009/10 year ARTC has identified 4 projects commissioned during the year for which financing costs had been incurred in a prior year. IDC has been calculated for each of these projects in accordance with the IPART approved methodology and included in the Regulated Asset Base for 2009/10. The projects for which IDC has been applied and the amounts included in the Regulated Asset Base are listed in the following table. Table 4

Project Name Commissioning Month Interest During Construction $,000’s

Maitland – Third Road $3,241.0 Newdell Junction Upgrade $ 330.9 Aerosol (Murrumbo) Valley Loop $ 95.6

Worondi (Baerami) Loop $ 94.7

Total Interest During Construction 2009/10 $3,762.2

Details of the calculation of IDC for each of the above projects are included in Appendix F.


2.4.6. Depreciation Clause 3.2 (c) of Schedule 3 – Hunter Valley Coal Network specifies that depreciation is to be calculated on a straight line basis based on the remaining mine life, which was determined by IPART to be 35 years from 1 July 20043. The calculated depreciation rate for all existing assets from 1 July 2004, for any new assets during 2004-05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 is set out in Table 3 below. In accordance with this clause of the Undertaking, new assets are only depreciated for a period of half the year in 2009-10. Table 5

Year Remaining Mine Life Depreciation %

2004-2005 35 2.857

2005-2006 34 2.941

2006-2007 33 3.030

2007-2008 32 3.125

2008-2009 31 3.226

2009-2010 30 3.333

2.4.7. Disposals

Certain assets of the RAB were disposed of for 12 of the 61 project items commissioned in 2009-10 (refer to Appendix B of this document (listing only projects requiring expenditure to be incurred) and also Appendix 2 of the 2009-10 Capital Consultation submission (listing all projects)). In all these instances, ARTC has calculated:

• the disposal values, based on the written down RAB values (with reference to the Booz Allen Hamilton DORC database); and

• ARTC’s net loss on disposal, calculated as the written down RAB value less any recovery on disposal (either through an adjustment to inventory or recovery as scrap sales).

The ‘net’ loss on disposals is therefore included in the ‘cost items’ for 2009-10 (as detailed in Table 5 of Section 3.2). An electronic copy of the spreadsheet calculating the RAB disposal values and net loss on disposals referencing to the Booz Allen DORC database is confidentially provided to IPART as part of this submission. Appendix C provides a summary of the disposals and net loss on disposals for the constrained network.



RAB Roll Forward Results Applying the roll forward formula and the relevant values for 2009-10, the closing values for the ARTC Hunter Valley Coal Network can be determined for the total network and for the constrained network. The results are summarised in Table 6 below. Table 6

Value Total ARTC

RAB Constrained Network

Opening Value RAB t-1 692,113,396 601,119,386 Additional Sectors / Segments

Add t / Subtract t

CPI Increase RAB t-1 * CPI t 21,386,304 18,574,589

Capital Expenditure Capex t 194,363,073 194,106,288

Depreciation Dep t -26,752,980 -23,626,339

Disposals Disp t -1,370,165 -1,370,165

Closing Value RAB t 879,739,627 788,803,759

Average Value 785,926,511 694,961,573

Appendix D presents a summary of the roll forward of the RAB for the constrained sectors. Appendix E presents the opening, average and closing values for each sector of the RAB in 2009-10, clearly specifying which sectors belong to the constrained network. An electronic copy of the spreadsheet underpinning the calculations for the roll forward of the RAB will be provided to IPART on a confidential basis as part of this submission. It is ARTC’s view that the roll forward of the RAB has been calculated in accordance with the Undertaking.

2.5. Capital Expenditure Consultation Process Clause 3.4 of Schedule 3 of the Undertaking details a capital expenditure consultation process to be followed by the rail infrastructure owner. The capital consultation process undertaken by ARTC in 2009-10 is detailed in the document entitled 2009-10 Capital Consultation.


3. Ceiling Test and the Unders and Overs Account 3.1. Compliance Scope Clause 1 (b) of Schedule 3 requires that revenue received from Access Seekers must not exceed the Full Economic Cost of providing services to those Access Seekers. The Ceiling Test provides a framework for determining any variance or deviation from the Full Economic Cost, including the maximum rate of return on the relevant asset value contained within the RAB. To manage average deviations around the maximum rate of return, the infrastructure owner is required to establish an Unders and Overs Account (Clause 4 of Schedule 3). In practice, only access charges payable by coal traffic operators within the Hunter Valley Coal Network are affected by the Ceiling Test. This is because it is the only network in which access charges approach (or exceed) the stand alone cost of servicing the network. On this basis, ARTC applies the Ceiling Test to the access charges payable by Access Seekers on the Hunter Valley Coal Network only. The scope of this review incorporates a determination as to whether the infrastructure owner has complied with the Ceiling Test, having regard to the operation of the Unders and Overs Account.


3.2. Ceiling Test 3.2.1. Ceiling Test ARTC has conducted a Ceiling Test covering the period 1 July 2009 to 30 June 2010. The table below shows the additional calculation of the Ceiling Test for 2009-10.

Table 7

ARTC Total ARTC Total

2008/09 2009/10

millions Actuals Actuals

Net tonnes

Export 82.41 87.59

Domestic 5.20 5.57

Total Net tonnes 87.60 93.16

Revenue

Total Revenue 114.62 124.19

Costs

Variable 12.81 12.67

Fixed 14.65 14.82

Shared Maintenance 12.92 14.15

Total Maintenance Costs 40.38 41.64

Deferred project Costs 0.00 4.57

Prolongation Costs 0.00 1.06

Project Development Costs 0.00 1.33

Network Control 5.94 6.21

Corporate Overheads 9.57 9.49

Total Operating Cost 55.89 64.29

Depreciation 17.18 23.63

Net Loss on Disposal 2.20 1.14

Total Cost 75.27 89.06

Profit/Loss 39.34 35.13

Total ROA 38.08 55.60

Full Economic Costs 113.35 144.66

Revenue - Costs 1.27 -20.47

Average Asset Base 521.58 694.96


3.2.2. Constrained Group of Mines

The Ceiling Test model (provided to IPART as part of this submission on a confidential basis) was used to test a range of mine combinations to determine the ‘constrained’ group of mines and sectors. The Ceiling Test Model calculates the amount of Access Revenue and the Full Economic Costs across the Network Segments utilised by a combination of mines. This allows for testing of a number of combinations of mines, including those combinations that could potentially fail the Ceiling Test (ie revenue for that combination of mines exceeds economic cost for the Network Segments used by that combination). The combination of mines that is closest to, or exceeds the economic cost for the relevant Network Segments is called the Constrained Group of Mines and the Network Segments comprise the Constrained Network. The Constrained network has remained unchanged from 2007/08 and includes all network sectors bounded by the Newcastle Ports, Muswellbrook and Ulan. All export hauls and domestic hauls operating fully within these bounds therefore constitute the constrained group of mines for 2009-10. The sectors between Newcastle Port and the RailCorp Boundary remain unconstrained. 3.2.3. Revenue The total revenue received and net tonnes transported from each mine within the Hunter Valley Network were obtained from ARTC’s systems. Table 7 above shows that for the constrained network, net tonnes transported in 2009-10 was 5.56 million higher than in 2008-09. Total receipts for 2009-10 were $9.57 million higher than in 2008/09 as a result of the increase in tonnage transported. 3.2.4. Operating Costs Maintenance costs Maintenance costs include major periodic maintenance (“MPM”) and reactive corrective routine maintenance (“RCRM”). As in previous years actual MPM costs were used which has been verified as an acceptable approach following the IPART 2005-06 review. Both RCRM and MPM costs are reported for each sector and split between fixed and variable based upon an engineering assessment of the extent to which the activity varies in proportion with volume.


Total variable costs for each sector are divided by total GTK’s (including non-coal and unconstrained GTKs) to derive a variable cost per GTK for each sector. Pursuant to the Ceiling Test as described in Schedule 3 of the Undertaking, the constrained group of mines are only required to pay the variable cost in respect of actual GTKs hauled from these mines fully within the constrained sectors. All fixed maintenance costs for each sector that forms part of the constrained group is included in the Ceiling Test in accordance with the Undertaking. In addition, ‘maintenance overhead’ costs (maintenance costs which are not directly chargeable to individual sectors and include management, project staff, office and support staff costs etc.) are allocated to sectors within the Hunter Valley Network on a GTK basis in the Ceiling Test. The overall cost of maintenance work performed by ARTC in 2009/10 was $1.3 million (3.1%) greater than in 2008/09 which is an increase generally in line with CPI. Project costs During the 2009/10 period, ARTC incurred costs for ARTC and Alliance personnel for the concept assessment, project feasibility, project assessment and implementation for projects that were: not proceeding; postponed for the short term; or were not yet an approved project. Costs were also incurred in retaining personnel while a delayed works program was scheduled. At the June 2010 RIG/RCG meeting, the RIG/RCG endorsed the expensing of these costs to the relevant line segments relating to the projects. As a result $5.6M was added the fixed costs of relevant line segments for the 2009/10 period. The RIG/RCG also endorsed the addition of ARTC Program Development Staff costs ($1,330k for the constrained network in 09/10) in the June 2010 meeting. These included:

o Overhead resources dedicated to the overall strategic program development

o Overhead resources required to investigate projects not yet part of the Corridor Strategy

As a result $1,330k was included in ARTC Project Development Costs for the 2009/10 period for the constrained network. Network Control Network control includes labour and materials associated with the delivery of the following functions: • train control and signalling • train planning and programming • operations and customer management


Network control costs are apportioned to the Hunter Valley on the basis of area of coverage of the train control and signalling function and where this is not relevant, on a train kilometre basis. Network control also includes the terminal management costs associated with the delivery of: • yard control • signalling • incident management Network control costs in 2009-10 increased by $266k over 2008-09, an increase of approx 4.5%. This increase is primarily due to an increase in salaries and wages in NSW. Corporate Overheads Corporate overhead includes labour and materials associated with the following functions: • human resources • property • legal • information technology • finance • procurement • risk and safety • CEO office Corporate overheads are allocated to the Hunter Valley Network by train km, on the same basis to that used in 2008-09. Total overhead costs have decreased by $82k (0.9%) in 2009-10 compared to 2008-09.


3.3. Unders and Overs Account 3.3.1. 2009-10 Balance Total revenue earned by ARTC from the constrained group of mines was compared to the Full Economic Cost of the constrained network, including the operating costs described in Section 3.2.3 above and depreciation, net loss on disposal and a permitted return of 8.0%4 on the average RAB for 2009-10, as detailed in Section 2. The difference between this Revenue and Full Economic Cost variation forms the Unders and Overs balance for 2009-10, as shown in the table below. Table 8

ARTC TOTAL ARTC TOTAL2008/09 2009/10

millions Actuals Actuals

ARTC Unders/Overs

Opening Value 0.99 1.27

Refunds/Payments -0.99 -1.27

Yearly adjustment 1.27 -20.47

Closing Value 1.27 -20.47 In accordance with IPART’s Final Decision for 2008/09 ARTC refunded $1,267,178.52 to the Rail Operators in August 2010. ARTC’s access pricing for 2009/10 was based on a forecast volume of 92.8M nett tonnes for constrained export coal and 6.4M nett tonnes for constrained domestic coal. The primary source of volume forecasts were volumes obtained directly from the coal producers, however the final volumes used by ARTC were lower than those provided. Actual volumes during 2009/10 were significantly lower than forecast due to lower than forecast system throughput and the delayed commissioning of the NCIG facility. This is the principal reason for the under recovery of revenue by ARTC through the access pricing mechanism. Approximately $12 million of the under-recovery is due to the volume shortfall, project costs as endorsed by the RIG/RCG contributed an additional $7 million (Deferred Project Costs $4.57M, Prolongation Costs of $1.06M and Project Development Costs of $1.33M) and the balance is attributed to above forecast costs due in part to greater than projected CAPEX delivery. During the 2009/10 period the lease held by PWCS for the land on which the Carrington Loop stands expired. The land on which the loop stands reverted to ARTC becoming part of the wider NSW leased network pursuant to the terms of ARTC’s Deed of Lease with Rail Infrastructure Corporation. As a result, from the 1st October 2009 ARTC became responsible for the cost of maintaining the loop. Whilst the loop is part of the coal terminal infrastructure, it is ARTC’s interpretation that it is currently excluded from the definition of the regulated coal network as defined in the NSW Rail Access Undertaking.



To cover the cost of maintenance of the Carrington Loop, ARTC introduced a $0.003/nt rail access charge for all export coal traffic as of 1st October 2009. As ARTC does not believe that the Carrington Loop is a part of the regulated coal network, this additional rail access charge and maintenance costs have been excluded from the ceiling test and the unders/overs calculation. It is ARTC’s view that the Ceiling Test and determination of the Unders and Overs amount has been carried out on an efficient cost basis, and in accordance with the Undertaking. 3.3.2. Operation of the Unders and Overs Account ARTC has provided settlement on the 2008-09 Unders and Overs balance with relevant Access Seekers. On 2 August 2010 IPART confirmed the amount of $1,267,158.52 as being the ‘over’ for 2008-09, and confirmed the amounts to be allocated to the relevant access seekers. As part of this submission ARTC has provided the allocation spreadsheet that allocates the total Unders and Overs amount for 2009-10 to applicable Access Seekers in accordance with the Unders and Overs Policy approved by IPART on 27 August 2008. This is being provided to IPART on a confidential basis. Subject to approval of the 2009/10 submssion by IPART, ARTC intends to engage with industry to develop an agreed method to recover the 2009/10 under-recovery in accordance with the Operation of the Unders and Overs Account procedure.


Appendix A – HUNTER VALLEY NETWORK SECTORS SECTOR DESCRIPTION ROUTE KM RIC / ARTC (including crossing loops)

441 973 SANDY HOLLOW JCT TO ULAN COLLIERY JCT 103.42 418 956 CAMBERWELL JUNCTION TO GLENNIES CREEK 6.89 419 957 GLENNIES CREEK TO NEWDELL JUNCTION 8.59 448 970 MUSWELLBROOK TO BENGALLA 5.20 449 971 BENGALLA TO SANDY HOLLOW 37.98 460 944 TELERAH TO FARLEY 0.50 423 962 MUSWELLBROOK TO DARTBROOK JCT 7.53 422 961 DRAYTONS JCT TO MUSWELLBROOK 17.04 421 958 NEWDELL JCT TO DRAYTONS JCT 9.57 417 955 WHITTINGHAM TO CAMBERWELL JCT 12.66 428 948 BRANXTON TO WHITTINGHAM 18.57 416 947 FARLEY TO BRANXTON 21.59 415 946 MAITLAND TO FARLEY 1.29 510 937 THORNTON TO MAITLAND (VIA COAL) 10.40 509 936 SANDGATE TO THORNTON (VIA COAL) 12.33 504 926 HANBURY JCT TO SANDGATE (VIA COAL) 1.64 503 925 WARATAH TO HANBURY JCT (VIA COAL) 2.26 502 917 SCHOLEY ST JCT TO WARATAH (VIA COAL) 1.40 411 912 ISLINGTON JCT TO WARATAH 1.50 410 911 WOODVILLE JCT TO ISLINGTON JCT 0.87 500 915 ISLINGTON JCT TO SCHOLEY ST JCT 0.49 501 916 SCHOLEY ST JCT TO PORT WARATAH 4.94 506 931 KOORAGANG EAST JCT TO SANDGATE 0.87 505 927 HANBURY JCT TO KOORAGANG EAST JCT 1.11 507 930 KOORAGANG EAST JCT TO KOORAGANG ISLAND 9.20 532 951 WHITTINGHAM TO SAXONVALE JCT 7.97 534 952 SAXONVALE JCT TO MOUNT THORLEY 4.97 536 959 NEWDELL BRANCH 2.66

451/456/457 312 TELERAH TO CRAVEN (Formerly 941,942,943) 96.84 450 940 MAITLAND TO TELARAH 2.16


APPENDIX B – 2009-10 CAPITAL EXPENDITURE TO BE INCLUDED IN THE RAB

Appendix B:

Sector / Segment #

Line Segment Activity PROJECT Capital

Expenditure $M

Written Down Value $M

Constrained Network (Yes / No)

501 / 916 Scholey Street Junction to Port Waratah

Wayside Detection Systems - New Installation Minor Capital Works Project 0916C2 0.117 Yes

Power Supply Port Waratah to 11KV (line segment 0916)

Minor Capital Works Project 456200 0.427 Yes

502 / 917 Scholey Street Junction to Port Waratah (via Coal)

Install top of rail lubricators -Scholey st Minor Capital Works Project 091727 0.093 Yes

503 / 925 Waratah to Hanbury Jct (Via Coal)

167.755 - 169.227 - multiple squats and low head height

Minor Capital Works Project 0925E1 0.564 Yes

505 / 927 Hanbury Jct to Kooragang East Jct

Prelim planning junction upgrade

Minor Capital Works Project 0927E1

0.061

No

507 / 930 Kooragang East Jct to Kooragang Island

Upgrade lubricators to RTE delivery Minor Capital Works Project 093048 0.006 Yes

Install Airconditioning Minor Capital Works Project 0930C8 0.003 Yes

Lightning protection Minor Capital Works Project 0930C9 0.037 Yes

176.276-177.131, 177.204-177.238, 177.204-179.151, 176.276-177.131 arrival and departure rds


Renew front end on 142epts: special design to see if longer switch can be installed


Kooragang - remove old concrete weighbridge Minor Capital Works Project 0930E4 0.262 Yes

Install Spherilocks Kooragang Island



Sector / Segment #


Expenditure $M



509 / 936

Sandgate to Thornton (Via Coal)

Replace HV power supply

Minor Capital Works Project 093633

0.002

Yes

Install weighbridge Minor Capital Works Project 093672 0.044 Yes

172.632-172.899 and 178.110-178.390 worn rails Minor Capital Works Project 0936E1 0.329 Yes

Sleeve or replace culvert: 182.781km Minor Capital Works Project 0936E2 0.049 Yes

LED installs 172 turnout signal and C118.8 Minor Capital Works Project 0936E5 0.010 Yes

Post Commissioning costs Sandgate Major Capital Works Project 318406 0.167 Yes

510 / 937 Thornton to Maitland (Via Coal)

173.930km Renew poor pipe Minor Capital Works Project 093777 -0.004 Yes

Rerailing UP Coal Minor Capital Works Project 0937C4 -0.015 Yes


RAMSYS implementation Minor Capital Works Project 0937E3 0.111 Yes

450 / 940 Maitland to Telarah 430 A/B points Telarah Minor Capital Works Project 0940E1 0.182 No

Install LED's MD301 MD303 MD304 Minor Capital Works Project 0940E2 0.013 No

415 / 946 Maitland to Farley Maitland to Farley Minor Capital Works Project 094617 -0.004 Yes

192.849-193.309 up main Minor Capital Works Project 0946E1 0.268 Yes

Bi-Dir signalling Maitland to Branxton Major Capital Works Project 358401 0.024 Yes

Maitland to Minimbah Stage 1 Major Capital Works Project 358500-358560

5.039

Maitland to Minimbah Stage 1 - Interest During Construction

Major Capital Works Project 358500-358560

0.123 Yes

416 / 947 Farley to Branxton Install Crash Barrier on downside only: Wollombi RD UB


196.561,201.480,202.103,215.189 - Barrell walls and arch cracked


Bi-Dir signalling Maitland to Branxton Major Capital Works Project 358401 0.809 Yes


85.799 Yes



2.097 Yes


Sector / Segment #


Expenditure $M



428 / 948

Branxton to Whittingham

219.204-219.606 and 224.122-225.180 worn rail

Minor Capital Works Project 0948E1

0.704

Yes

Minimbah 80 kph running stage 1 Major Capital Works Project 357501 -0.189 Yes


41.772 0.052 Yes



1.021 Yes

532 / 951 Whittingham to Saxonvale Jct

238.507 and 240.038 upgrade sighting distance, earthworks required


Saxonvale branch upgrade signals to LED in branch line


417 / 955 Whittingham to Camberwell Jct


240.416-240.93 worn rail Minor Capital Works Project 0955E1 0.268 Yes

Trial emergency point operation - 201,202,203pts and install Spherilocks Whittingham 200 C&D, 202 A&B, 202 C&D, 203 A&B


Install sperolock Whittingham 200 C&D Minor Capital Works Project 0955E3 0.046 Yes

418 / 956 Camberwell Jct to Glennies Creek

Rerailing UP Main: Worn rail Minor Capital Works Project 0956C1 0.002 Yes

419 / 957 Glennies Creek to Newdell Jct

Circuit book upgrades Minor Capital Works Project 0957E1 0.031 Yes

421 / 958 Newdell Jct to Draytons Jct

Lidell: upgrade shear capacity Minor Capital Works Project 0958C3 0.003 Yes

Newdell Junction Upgrade Major Capital Works Project 346801 15.622 Yes

Newdell Junction Upgrade - Interest During Construction

Major Capital Works Project 346801 0.331 Yes

536 / 959 Newdell Branch Install Airconditioning Minor Capital Works Project 0959B3 0.016 Yes


Sector / Segment #


Expenditure $M



422 / 961

Draytons Jct to Muswellbrook

Replace HV power supply

Minor Capital Works Project 096122

0.012

Yes

Install new hot box detector Minor Capital Works Project 0961E1 0.297 Yes

Complete and commission level crossing monitors for remote monitoring Glennies Ck.Hebden Rd,Grasstree,Brook St, Limestone Rd


Antienne to Grasstree Stage 1 duplication Major Capital Works Project 357901 3.142 Yes

St Helliers to Muswellbrook Duplication Major Capital Works Project 388401 3.768 Yes

448 / 970 Muswellbrook to Bengalla

Install 2 x Top of rail lubricators - Ulan Minor Capital Works Project 097029 0.003 Yes

449 / 971 & 972 Bengalla to Sandy Hollow

2009/10 Remove DEN003,004,005&006 Minor Capital Works Project 097260 0.097 Yes

321.556-322.053 worn rail Minor Capital Works Project 0972E1 0.227 Yes

312.552,320.456,322.698,327.880,328.187 - Barrell walls cracked


Ulan Line Signalling & CTC Major Capital Works Project 357601 0.031 Yes

Mangoola: New Crossing Loop Major Capital Works Project 358001 0.106 Yes

441 / 973 & 974 Sandy Hollow Jct to Ulan Colliery Jct

Install load bearing ballast logs to 9 x steel underbridges


346.756,370.753 - Culvert roof opening and cracked barrell walls


Level crossing upgrades - 360.361,369.778,391.997,399.591 and 417.340

Minor Capital Works Project 0973E4 + 0973E5

0.137 Yes

Complete and commission level crossing monitors for remote monitoring Ulan line,Ulan Town Rd, Ulan Mine Rd,Mangoola and Bylong


Ulan upgrade UPS Minor Capital Works Project 0974B5 0.013 Yes

Level crossing upgrades - 425.213,426.525,433.696 Minor Capital Works Project 0974E1 0.080 Yes

Ulan Line Signalling & CTC Major Capital Works Project 357601 0.081 Yes

Wollar: New crossing Loop Major Capital Works Project 358002 -0.083 Yes

Bylong passing loop Ulan line - 381km Major Capital Works Project 358003 0.273 Yes

Aerosol (Murrumbo) Valley Loop - 370km Major Capital Works Project 551800-551860

14.393 Yes

Aerosol (Murrumbo) Valley Loop - Interest During Construction


0.096 Yes


Sector / Segment #


Expenditure $M



441 / 973 & 974

Sandy Hollow Jct to Ulan Colliery Jct

Worondi (Baerami) Loop - 348km


13.328

Yes

Worondi (Baerami) Loop - Interest During Construction


0.095 Yes

TOTAL Network 194.415 0.052

TOTAL CONSTRAINED 194.159 0.052


APPENDIX C – 2009-10 Disposals Appendix C:

Sector / Segment #

Line Segment Activity PROJECT

2008/09 RAB Value $M

2008/09 Written Down Value $M

Disposal Recovery

$M

Net Loss on

Disposal $M

Constrained Network (Yes

/ No)

504 / 926 Rerailing Rerailing 0.033 0.025 0.008 0.017 Yes










449 / 971/972 Rerailing Rerailing 0.036 0.027 0.002 0.024 Yes

441 / 973/974 Rerailing Rerailing 0.232 0.174 0.015 0.158 Yes

TOTAL Network 1.827 1.370 0.227 1.144

TOTAL CONSTRAINED

1.827 1.370 0.227 1.144


APPENDIX D – 2009-10 RAB “ROLL FORWARD” SUMMARY

RAB "Roll Forward"

2009 / 2010 ARTC

Total Constrained

CPI 3.09% 3.09%

Depreciation - 'Existing & 2004/05' 2.8571% 2.8571%

Depreciation - '2005/06' 2.9412% 2.9412%

Depreciation - '2006/07' 3.0303% 3.0303%

Depreciation - '2007/08' 3.1250% 3.1250%

Depreciation - '2008/09' 3.2258% 3.2258%

Depreciation - 'New' 3.3333% 3.3333%

Opening Total RAB 692,113,396 601,119,386

Additions / Deletions - Line Segments

Existing assets 2003-2004

Gross assets:

Opening Balance 448,230,019 344,991,957


CPI 13,850,308 10,660,251

Original Balance plus CPI 462,080,326 355,652,208

Less Disposals -1,826,887 -1,826,887

Adjusted Net Balance 460,253,439 353,825,321

Depreciation:

% of year 100.0% 100.0%

Depreciation CY -13,150,098 -10,109,295

CPI on Depreciation PY -1,938,325 -1,485,424

Less Disposal Acc Depn 0 0

Accumulated Depreciation -77,360,673 -59,209,968

Closing Balance 382,892,766 294,615,353

New assets 2004-2005

Gross assets:

Opening Balance 2,232,044 2,232,044

CPI 68,970 68,970


Less Disposals


Depreciation:

% of year 100.0% 100.0%

Depreciation CY -65,743 -65,743

CPI on Depreciation PY -8,868 -8,868


Accumulated Depreciation -361,588 -361,588

Closing Balance 1,939,427 1,939,427



Gross assets:

Opening Balance 4,956,751 3,646,812


CPI 153,164 112,686


Less Disposals


Depreciation:

% of year 100.0% 100.0%




Accumulated Depreciation -676,312 -497,581

Closing Balance 4,433,602 3,261,918


Gross assets:

Opening Balance 118,793,478 117,462,233


CPI 3,670,718 3,629,583


Less Disposals


Depreciation:

% of year 100.0% 100.0%

Depreciation CY -3,711,036 -3,669,449




Closing Balance 109,475,570 108,248,745


Gross assets:

Opening Balance 30,311,214 30,303,384

CPI 936,617 936,375


Less Disposals 0 0


Depreciation:

% of year 100.0% 100.0%






Closing Balance 28,806,594 28,799,152


Gross assets:

Opening Balance 164,184,574 164,184,574

Additions / Deletions - Line Segments 0 0

CPI 5,073,303 5,073,303


Less Disposals 0 0


Depreciation:

% of year 100.0% 100.0%

Depreciation CY -5,459,932 -5,459,932




Closing Balance 161,067,980 161,067,980


Gross assets:

Opening Balance 194,363,073 194,106,288

Additions / Deletions - Line Segments 0 0

CPI 0 0


Less Disposals 0 0


Depreciation:

% of year 50.0% 50.0%

Depreciation CY -3,239,385 -3,235,105

CPI on Depreciation PY 0 0



Closing Balance 191,123,688 190,871,183

Total Closing RAB 879,739,627 788,803,759

Average RAB value 785,926,511 694,961,573

Depreciation -26,752,980 -23,626,339

RABsys 879,739,627 788,803,759

Net CPI Increase 21,386,304 18,574,589


APPENDIX E – 2009-10 RAB VALUES BY SECTOR

Segment

Code

Sector

CodeDescription

Constrained

2008/09

CLOSING 2008-09 RAB

Value ($)

Constrained

2009/10

OPENING 2009-10 RAB

Value ($)

CLOSING 2009-10 RAB

Value ($)

Average 2009-

10 RAB Value

($)

970 448 Muswellbrook To Bengalla Jct Yes 6,689,222 Yes 6,689,222 6,670,732 6,679,977

971_972 449 Bengalla Jct To Sandy Hollow Jct Yes 42,802,818 Yes 42,802,818 43,310,196 43,056,507

973_974 441 Sandy Hollow Jct To Ulan Colliery Jct Yes 104,151,518 Yes 104,151,518 131,652,368 117,901,943

962 423 Muswellbrook To Dartbrook Jct No 7,710,751 No 7,710,751 7,688,045 7,699,398

961 422 Draytons Jct To Muswellbrook Yes 94,050,898 Yes 94,050,898 100,897,928 97,474,413

958 421 Newdell Jct To Draytons Jct Yes 13,432,438 Yes 13,432,438 28,889,810 21,161,124

957 419 Glennies Creek To Newdell Jct Yes 12,845,060 Yes 12,845,060 12,762,238 12,803,649

956 418 Camberwell Jct To Glennies Creek Yes 10,902,257 Yes 10,902,257 10,871,708 10,886,983

955 417 Whittingham To Camberwell Jct Yes 28,834,174 Yes 28,834,174 29,035,059 28,934,617

948 428 Branxton To Whittingham Yes 38,557,221 Yes 38,557,221 80,820,858 59,689,039

947 416 Farley To Branxton Yes 71,195,547 Yes 71,195,547 158,337,823 114,766,685

946 415 Maitland To Farley Yes 4,553,906 Yes 4,553,906 9,878,617 7,216,262

940 450 Maitland To Telarah No 2,256,353 No 2,256,353 2,440,902 2,348,628

941 451 Telerah To Martins Creek No 15,143,453 No 15,143,453 15,091,113 15,117,283

942 456 Martins Creek To Dungog No 13,179,530 No 13,179,530 13,134,015 13,156,773

943 457 Dungog To Craven No 41,522,300 No 41,522,300 41,378,715 41,450,508

937 510 Thornton To Maitland (Via Coal) Yes 25,208,557 Yes 25,208,557 25,080,778 25,144,667

936 509 Sandgate To Thornton (Via Coal) Yes 97,449,815 Yes 97,449,815 97,540,973 97,495,394

926 504 Hanbury Jct To Sandgate (Via Coal) Yes 2,748,660 Yes 2,748,660 2,715,346 2,732,003

925 503 Waratah To Hanbury Jct (Via Coal) Yes 3,481,315 Yes 3,481,315 4,025,891 3,753,603

0 405 Newstan Jct To Cockle Creek No 3,215,521 No 3,215,521 3,204,384 3,209,952

0 406 Cockle Creek To Sulphide Jct No 2,450,285 No 2,450,285 2,441,799 2,446,042

0 490 Sulphide Jct To Adamstown No 3,734,495 No 3,734,495 3,721,561 3,728,028

0 407 Adamstown To Broadmeadow (Via Main) No 4,305,282 No 4,305,282 4,290,371 4,297,826

0 497 Broadmeadow To Woodville Jct No 2,302,975 No 2,302,975 2,294,999 2,298,987

911 410 Woodville Jct To Islington Jct No 4,974,051 No 4,974,051 4,956,828 4,965,440

912 411 Islington Jct To Waratah No 1,742,290 No 1,742,290 1,736,263 1,739,276

915 500 Islington Jct To Scholey St Jct No 1,694,700 No 1,694,700 1,688,836 1,691,768

917 502 Scholey St Jct To Waratah (Via Coal) Yes 2,950,680 Yes 2,950,680 3,031,634 2,991,157

916 501 Scholey St Jct To Port Waratah Yes 9,187,328 Yes 9,187,328 9,693,961 9,440,645

931 506 Kooragang East Jct To Sandgate Yes 676,666 Yes 676,666 674,592 675,629

927 505 Hanbury Jct To Kooragang East Jct No 1,628,687 No 1,628,687 1,683,213 1,655,950

930 507 Kooragang East Jct To Kooragang Island Yes 19,432,891 Yes 19,432,891 20,880,301 20,156,596

951 532 Whittingham To Saxonvale Jct Yes 5,705,361 Yes 5,705,361 5,775,814 5,740,588

951 533 Saxonvale Branch No 0 No 0 0 0

952 534 Saxonvale Jct To Mount Thorley Yes 2,184,044 Yes 2,184,044 2,176,582 2,180,313

959 538 Ravensworth Washery Loop No 0 No 0 0 0

959 536 Newdell Branch Yes 4,079,008 Yes 4,079,008 4,080,550 4,079,779

959 547 Newdell Balloon Loop Yes 0 Yes 0 0 0

944 460 Telarah To Farley No 1,141,893 No 1,141,893 1,137,938 1,139,916

708,121,953 708,121,953 895,692,742 801,907,347

601,119,386 601,119,386 788,803,759 694,961,573

692,113,396 692,113,396 879,739,627 785,926,511

TOTAL (ARTC + RC)

Constrained

TOTAL (ARTC only)

Note: The two (2) columns headed “Constrained” are included to show that there were no changes to the constrained network from 2008/09 to 2009/10.


APPENDIX F – 2009-10 Interest During Construction

Rate of Return 8.0%

08/09 09/10 10/11 11/12 12/13

Maitland to Minimbah 3rd Road Year 1 Year 2 Year 3 Year 4 Year 5

Capital Spend ($'000) 39,718 92,893 0 0 0

Year 1 1,588.7 1,588.7

Year 2

Year 3

Year 4

Year 5

Previous Years Interest Capitalisation 0.0 63.5

Total Capitalised Interest 1,588.7 1,652.3 0 0 0

Notional Commissioning Month/Year Jan-10

Proportion of final year for IDC 0.50

Interest During Construction 3,240,989


Rate of Return 8.0%

08/09 09/10 10/11 11/12 12/13

Newdell Junction Upgrade Year 1 Year 2 Year 3 Year 4 Year 5

Capital Spend ($'000) 4,055 11,567 0 0 0

Year 1 162.2 162.2

Year 2

Year 3

Year 4

Year 5


Total Capitalised Interest 162.2 168.7 0 0 0



Interest During Construction 330,888


Rate of Return 8.0%

08/09 09/10 10/11 11/12 12/13

Aerosol (Murrumbo) Valley Loop Year 1 Year 2 Year 3 Year 4 Year 5

Capital Spend ($'000) 1,171 13,222 0 0 0

Year 1 46.8 46.8

Year 2

Year 3

Year 4

Year 5







Rate of Return 8.0%

08/09 09/10 10/11 11/12 12/13

Worondi (Baerami) Loop Year 1 Year 2 Year 3 Year 4 Year 5

Capital Spend ($'000) 1,161 12,166 0 0 0

Year 1 46.4 46.4

Year 2

Year 3

Year 4

Year 5






June 2009June 2009June 2009June 2009

2009200920092009----2018 Hunter Valley 2018 Hunter Valley 2018 Hunter Valley 2018 Hunter Valley

Corridor Capacity StrategyCorridor Capacity StrategyCorridor Capacity StrategyCorridor Capacity Strategy

Consultation DocumentConsultation DocumentConsultation DocumentConsultation Document

2009200920092009----2018 Hunter Valley 2018 Hunter Valley 2018 Hunter Valley 2018 Hunter Valley Corridor Capacity StrategyCorridor Capacity StrategyCorridor Capacity StrategyCorridor Capacity Strategy Consultation DocumentConsultation DocumentConsultation DocumentConsultation Document

June 2009June 2009June 2009June 2009

2009-2018 HUNTER VALLEY CORRIDOR CAPACITY STRATEGY - CONSULTATION DOCUMENT

2

Introduction

Contents

1 -

What has changed between the last strategy and this one 2

Starting network performance 3

Reducing headways on the Minimbah, Nundah and Allandale Banks 4

Reducing junction conflicts 5

Increasing capacity between Antiene and Muswellbrook 6

Increasing capacity between Muswellbrook and Ulan 7

Increasing capacity between Muswellbrook and Narrabri 8

Reducing maintenance impacts and increasing operational flexibility 9

Terminals

Network performance with revised project scope and timing 11

Overview of the recommended projects

3

10

12

13

16

20

21

23

28

30

33

37

-

-

-

-

-

-

-

-

-

-

-

Appendix 1 - Modelling Methodology 40 -

10

12

A1


3

On 5 September 2004, the Australian Rail Track Cor-poration (ARTC) commenced a 60-year lease of the inter-

state and Hunter Valley rail lines in New South Wales.

In early 2005, ARTC began to release annual Hunter Valley infrastructure enhancement strategies setting out how ARTC planned to ensure that rail corridor capacity in

the Hunter Valley would stay ahead of coal demand.

This Hunter Valley Corridor 2009 - 2018 Capacity Strategy is the fourth of these annual strategies. It updates the 2007 - 2012 Strategy using revised forecasts of coal demand and the results of further analyses during the past year. For the first time this Strategy covers a 10-year time horizon, with the intention of providing better visibility of the longer-term solutions, given the long lead times of

many projects.

In common with the earlier strategies, it identifies the constraints on the coal network’s capacity in the Hunter Valley, the options to resolve these constraints and a pro-posed course of action to achieve increased coal through-

put.

The fundamental approach of ARTC in developing this Strategy has been to increase capacity (with a reserve surge capability) to levels sufficient to meet anticipated demand for export and domestic coal transport, while having regard to the constraints imposed by the capacity of

the Newcastle port.

The Strategy also looks at levels of operational delay on the network, and the operational robustness of the network, to highlight opportunities for improved opera-tional performance on top of the provision of sufficient

capacity.

It is important to note that the whole Hunter Valley coal supply chain is inter-related. The stockpiling and load-ing capability of the mines affects the trains required, the trains affect the rail infrastructure and so on. The capacity and performance of the system is entirely inter-related and the capacity of the rail network needs to be considered in

this context.

Volume ForecastsVolume ForecastsVolume ForecastsVolume Forecasts

Industry forecasts indicate demand for export coal capacity from the Hunter Valley of about 113 mtpa in 2009. This is projected to increase to around 127 mtpa in 2010, 159 mtpa in 2011, 190 mtpa in 2012 and 226 mtpa in 2013. Growth is then predicted to continue but at a slower rate, reaching around 265 mtpa in 2018. Obvi-ously these volumes become increasingly uncertain in later

years.

It is of particular note in the volume forecasts that the short-term volumes are considerably below those provided by producers for the 2007 – 2012 Strategy. Specifically, 2009 volume is down by 22 million tonnes, while 2010

volume is reduced by 26 million tonnes. Volume is down by 9 million tonnes in 2011 but then up by 11 million tonnes in 2012. These variations to the volume forecasts suggest that producers have adjusted their expectations in the

earlier years to reflect expected port capacity allocations.

Traffic Patterns Traffic Patterns Traffic Patterns Traffic Patterns

All but a very small proportion of the export coal shipped through Newcastle is transported by rail for ship-ping from either Kooragang Island or Carrington (Port

Waratah).

Most of this coal comes from a series of mines and coal loaders strung out along the Hunter Valley, conveyed to the ports on the railway that runs between Muswellbrook and Newcastle. Coal also feeds onto this line from Ulan and Boggabri, west and northwest of Muswellbrook respectively, and, much closer to the port, from Stratford, Pelton and the

southern suburbs of Newcastle (Figure 1).

Domestic coal is also transported over the same net-work. This sector is comparatively small, but is growing rapidly. Demand is anticipated to grow substantially over the next five years, especially on the Ulan and Upper Hunter lines. The largest volume will be for Macquarie Generation at Drayton, which will receive substantial volumes of coal

originating from mines on the Ulan line.

Export coal also arrives at the port from the Newstan and Teralba mines to the south of Newcastle. This traffic operates on the RailCorp network as far as Broadmeadow. There are no capacity issues for this coal on the short sec-tion of the ARTC network which it traverses and accordingly

this strategy does not specifically discuss these volumes.

The Hunter Valley coal network consists of a dedicated double track ‘coal line’ between Port Waratah and Mait-land, a shared double track line from Maitland to Muswell-brook and a shared single track with passing loops from

that point north and west.

The heaviest coal volumes are at the lower end of the Hunter Valley, but the expected growth in coal mining along the Ulan line and in the Gunnedah basin is likely to produce significant changes in coal demand and traffic patterns over the next few years (Figure 2 and Figure 31), necessitat-ing a strong focus in this Strategy on the single track sec-

tions of the network north of Muswellbrook.

OperationsOperationsOperationsOperations

At present the theoretical export coal capacity of the Hunter Valley rail network is estimated at around 189 million tonnes per annum (mtpa). This then needs to be reduced to reflect capacity losses due to factors such as

Introduction

1

1. Figure 3 is calculated as trains from each of the three zones as a proportion of all trains arriving at the port. The total number of

trains exceeds 100% due to domestic coal.


4

Figure 1 - The general location of the Hunter Valley network on the east coast of Australia.

Sydney

Bathurst

Cowra

Picton

Woy Woy

Gosford

KatoombaOberon

Lithgow

Portland

CanowindraBlayney

Camden

Blackheath Springwood

Campbelltown

Helensburgh

Richmond

Koorawatha

Tarana

Hornsby

Wyong

Toronto

Morisset

Cessnock

Maitland

Molong

Orange

Ulan

Dunedoo

Gulgong

Kandos

Dubbo

Gilgandra

Wellington

Mudgee

Wallerawang

Newcastle

Port Macquarie

Coffs Harbour

Sawtell

Byron Bay

Taree

Wingham

Wauchope

Kempsey

Macksville

Walcha

Manilla

Uralla

Branxton

Singleton

Dungog

Gloucester

SandyHollow

Muswellbrook

Scone

Aberdeen

Tamworth

Barraba

Grafton

Dorrigo

Armidale

Guyra

GlenInnesInverell

Delungra

Warialda

Biniguy

Bingara

Camurra

North Star Wallangarra

Boggabilla

Goondiwindi

Mungindi Weemelah

Casino

Tenterfield

Kyogle

Lismore

Moree

Narrabri

Wee Waa

Gwabegar

Baradine

BurrenJunction

Merrywinebone

Gunnedah

Boggabri

Murwillumbah

Murrurundi

Quirindi

Merriwa

Merrygoen

Binnaway

Coonabarabran

Werris CreekThe Gap

Dumaresq

Glenreagh

Raleigh

Beaudesert

Brisbane

Acacia Ridge

Ipswich

Warwick

Toowoomba

Stanthorpe

Surfers Paradise

Martins CreekPaterson

Wallarobba

Stroud Road

CravenStratford

Mt George

Lansdowne Johns River

Kendall

Telegraph Point

Eungai South West Rocks

Forster

Nambucca Heads

UrungaBellingen

Coramba

Kungala

Braunstone

Woolgoolga

YambaLawrence Road

Maclean

Camira Creek

Rappville

Ballina

Brunswick Heads

Nammoona

Cedar Point

Border Loop

Wiangaree

Tweed HeadsCoolangatta

Robina

Loadstone

Glenapp

Tamrookum

Bromelton

Boonah

Greenbank

Kagaru

Gatton

Beenleigh

Dalby

Nelson Bay

Wards River

NewdellDrayton

Whittingham


5 maintenance, surge volume, and system reliability. Practi-cal deliverable capacity is significantly less than this. It is important to note that in calculating practical capacity it is necessary to make assumptions about average train sizes, the disposition of volume from load points and the ability of participants in the coal chain to maintain constant throughput at high levels of reliability. The theoretical ca-

pacity can vary significantly depending on these assump-

tions.

The Hunter Valley Coal Chain Logistics Team (HVCCLT) declared capacity for 2009, which represents the capacity of the chain as an integrated operation, to be 94.5 million

tonnes.

Figure 2 - Volume forecasts by line sector.

Figure 3 - Percentage of Trains by Sub-Network, by Year. (Note: Numbers do not sum to 100% due to domestic coal.)


6 Most of the Hunter Valley coal network is capable of handling rolling stock with 30 tonne axle loadings (i.e. 120 gross tonne wagons), but the corridor from Dartbrook Junc-tion (near Muswellbrook) to the Gunnedah Basin, is only

rated for 25 tonne axle loads (100 tonne wagons).

As at the time of finalising this Strategy, the Hunter

Valley was serviced by:

• 17 trains of 91 x 120 tonne wagons




This 207,035 tonnes of coal train capacity compares to the 18 trains of 120 tonne wagons and 12 trains of 100 tonne wagons at the time of the 2007-2012 Strategy,

which provided 180,365 tonnes of capacity.

More importantly, the average train size continues to increase. Weighted average coal capacity per train is now around 7,200 tonnes2. This compares to an average of 5,900 tonnes at the time of the 2007 - 2012 Strategy. This continuing increase in the average train size has important

implications as it materially increases track capacity.

Coal volumes are currently constrained by train capac-ity. At the existing constrained coal volumes, an average of around 42 to 43 loaded trains need to be planned each day, or one every 33 minutes. Allowing for cancellations, this equates to approximately 38 actual trains per day, or one train every 38 minutes. This is a small increase on the 2007-2012 Strategy average of 36 minutes, reflecting the

continuing increase in train size.

Train lengths vary from around 1,000 metres to 1,550 metres, apart from the small group of trains servicing the

Stratford and Austar mines.

Trains made up of ‘120 tonne’ wagons are generally restricted to 60 km/h loaded and 80 km/h empty, while ‘100 tonne wagon’ coal trains are allowed to travel at 80 km/h empty and loaded. Because most of the coal trains are ‘120 tonne wagon’ trains, the coal network tends to move at 60 km/h in the loaded direction and 80 km/h in

the empty direction.

How this Strategy has been developedHow this Strategy has been developedHow this Strategy has been developedHow this Strategy has been developed

The development of this Hunter Valley Corridor 2009-2018 Capacity Strategy largely retains the methodology of

the 2007 – 2012 Strategy.

Coal capacity is analysed using a set of principles for the practical utilisation of track. ARTC then validates the results of the theoretical calculations using a network modelling package which simulates the interactions of

trains with the infrastructure and each other.

For the theoretical modelling, assumptions are made about background trains, possessions, cancellations, and surge requirements. For the simulation modelling, all train services are included, so the loss of paths for other freight and passenger services is accurately modelled. Mainte-nance possessions have been included in the modelling assuming four possessions per week of five hours each on the line between the port and Muswellbrook. However, no maintenance possessions have been simulated on the

single track sections.

The other factors, including train failures, major shut downs and losses due to misalignment of paths, have been accounted for by scaling up the modelled number of coal trains. Coal train numbers have been scaled up to

cover a surge capability of 15%, and a cancellation rate of

9%.

It is important to note that capacity is (up to a point) not an absolute constraint. Rather, the modelling is based on assessing system performance at a given volume. Hence, surge capacity is potentially greater than the 15% allowed, though it will always be accompanied by a deterio-ration in performance. Conversely, to the extent that the surge capacity is not used, system performance will im-

prove.

The modelling methodology is discussed in detail in

Appendix 1.

Port Capacity Port Capacity Port Capacity Port Capacity

For the purpose of this strategy ARTC has taken cur-rent (Q4 2008) port capacity as 97mtpa. Additional port capacity is assumed to be brought on-line as follows based

on advice from the HVCCLT:

• Q1 2009 – KCT Dump Station 2 upgrade, lifting

capacity by 2.5 mtpa, from 97 mtpa to 99.5 mtpa.

• Q2 2009 – KCT Project 3Exp, lifting capacity by

13.5 mtpa from 99.5 mtpa to 113 mtpa.

• Q1 2010 – Start-up of NCIG stage 1 with 2 mtpa moved in the quarter. Throughput is assumed to ramp up progressively with 10 mtpa moved in Q2,

20 mtpa in Q3 and 30 mtpa in Q4.

• Q4 2010 – KCT Dump Station 1 upgrade, Full Pads C & D and K7 berth – Lifts capacity at PWCS pro-gressively over 9 months from 113 mtpa to 128 mtpa. Ramp up is assumed to be 4 mtpa in Q4 2010, 10 mtpa in Q1 2011 and 15 mtpa in Q2

2011.

• The combination of the NCIG and PWCS works gives total port capacity of 115 mtpa in Q1 2010, 123 mtpa in Q2 2010, 133 mtpa in Q3 2010, 147 mtpa in Q4 2010, 153 mtpa in Q1 2011 amd 158 mtpa

in Q2 2011.

• Q3 2012 – NCIG Stage 2 assumed to lift capacity by a further 15 mtpa in a single step, bringing NCIG to

45 mtpa and total port capacity to 173 mtpa.

• Q4 2012 - KCT 4th dump station and 4th ship loader. This is assumed to lift PWCS capacity by 12 mtpa, from 128 mtpa to 140 mtpa, for a total port

capacity of 185 mtpa.

• Q3 2013 – NCIG Stage 3 assumed to lift capacity by a further 15 mtpa in a single step, bringing NCIG to

60 mtpa and total port capacity to 200 mtpa.

Table 1 shows the Quarter by Quarter assumed vol-

ume.

Producer forecasts provided to ARTC now show planned production to be relatively closely aligned to port capacity until Q1 2012. However, despite the rapid growth in port capacity, aspirational demand again moves well

YearYearYearYear Q1Q1Q1Q1 Q2Q2Q2Q2 Q3Q3Q3Q3 Q4Q4Q4Q4

2010 115 123 133 147

2011 153 158 (158) (158)

2012 (158) (158) 173 185

2013 (185) (185) 200 (200)

2009 99.5 113 (113) (113)

Table 1 - Port capacity assumptions

2. Note that the average is calculated on trains arriving at the Port. As the 100 tonne wagons generally travel further, they make fewer cycles and hence have a lower weighting in the calculation of the average than if a straight arithmetic average of train size was

calculated.


7 ahead of capacity from 2012. The extent of the port capac-

ity constraint is shown in figure 4.

Clearly total volume at the port will not exceed the available capacity. However, as ARTC does not know which producers will fail to obtain port capacity it is not possible to adjust ARTC’s sector-by-sector forecasts to reflect the

achievable volumes.

To effectively address this issue in the 2007 – 2012

Strategy, ARTC adopted a “hybrid” approach as follows:

• On the single-track sections of the network north and west of Muswellbrook, ARTC planned on the basis of producers achieving their full forecast vol-

umes.

• South of Muswellbrook, where port capacity con-straints will necessarily apply, throughput was con-

strained to port capacity.

For this 2009 – 2018 Strategy, ARTC has changed its approach and has assumed that producer forecasts will be

realised. This reflects that:

• There is reasonable alignment of volume and port

capacity to 2012.

• There is considerable evidence that both the market and Government have responded to the need to expand port capacity, and while current identified options still fall short of demand from 2012, this is sufficient lead time to develop further solutions for

port development.

For 2009, above rail capacity will be a constraint on total system capacity. For the purposes of this strategy ARTC has assumed that in future years above-rail capacity

will align with demand.

However, it is important to note that if rolling stock is not delivered into the system, track capacity cannot be

realised.

ARTC will continue to closely monitor coal volume ex-pectations and port capacity growth. The various capacity enhancement projects identified in this Strategy can then

be implemented more quickly or more slowly as required.

Continuous ReviewContinuous ReviewContinuous ReviewContinuous Review

ARTC is continuously analysing and reviewing the avail-able options to ensure that the value for money of projects is optimised. This process will continue right up to the com-

mencement of construction.

As such, this strategy only represents a snapshot in time. Although the formal written strategy is only produced annually, in practice it is regularly reviewed internally to

reflect the best available information and analysis.

Project CostsProject CostsProject CostsProject Costs

This document is a strategy document and the indica-tive project costs are generally orders of magnitude only unless a project is in or close to construction. Costs are not ARTC’s anticipated outturn costs as there are too many unknowns at the strategy phase to attach any reliability to the estimates. Scope and construction conditions are pro-gressively better defined until a project cost is established for approval by the industry in accordance with ARTC’s

access undertaking.

HVCCLT Master PlanningHVCCLT Master PlanningHVCCLT Master PlanningHVCCLT Master Planning

The Hunter Valley Coal Chain Logistics Team is respon-sible for the co-ordination of coal chain planning on both a day-to-day and long term basis. It is developing a Hunter Valley Master Plan that deals with the optimisation of ca-pacity enhancements across all elements of the coal chain with a view to providing an integrated planning road map

for all elements of the logistics chain.

ARTC is strongly supportive of this master planning process. It sees this Hunter Valley Strategy as both needing to provide the supporting rail infrastructure analysis for the master planning process, and to respond to the investment

options identified in the master plan

Other Assumptions and QualificationsOther Assumptions and QualificationsOther Assumptions and QualificationsOther Assumptions and Qualifications

The following additional qualifications apply to the

analysis and proposals in this Strategy:

• The capacity gains referred to in this Strategy take no account of the capabilities of loading and unload-ing interfaces, including the capabilities of private

0

50

100

150

200

250

300

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

MT

PA

Producer Forecast Demand

Estimated Port Capacity

Figure 4 - Forecast volume at Newcastle Port compared to estimated port capacity.


8 rail sidings and loops. In other words, at the conclu-sion of each project the identified rail capacity will be available, but this does not necessarily mean the coal supply chain will be able to make use of this

capacity at that stage.

• Estimates of the numbers of trains required to carry the forecast coal tonnages are based on the follow-ing (Assumed average payload per train is shown in

figure 5):

◦ On the 30 tonne axle load network Pacific Na-tional operates a mix of 91 wagon trains hauled by 3 x 90 class (8,645 net tonne) and 80 wagon trains hauled by 2 x 90 class and 1 x 82 class (7,600 net tonnes). It is assumed that trains on the Ulan line, including Macquarie Generation trains, are 80% serviced by 91 wagon trains and 20% by 80 wagon trains, while all mines between Whittingham and Muswellbrook receive a 50% / 50% split of 91 and 80 wagon trains. Between the completion of the modelling and finalisation of the strategy PN has moved to an all 91 wagon fleet. This will increase track capacity slightly and will be re-flected in the next version of the strategy.

◦ Mount Arthur is serviced by QRNational’s 74 wagon (7,400 net tonne) trains.

◦ 72 x ‘100 tonne wagon’ trains (5,400 net ton-nes) were introduced on the 25-tonne axle loading sections of the network north of Dart-brook Junction in May 2008, though some 42 wagon trains continue to operate. For the pur-poses of the Strategy it is assumed that all trains will be reconfigured to 72 wagons.

◦ 30 tonne axle load trains are introduced to the Gunnedah Basin in Q1 2011 using a similar configuration to the QR National 74 wagon (7,030 net tonne) trains. This is an important assumption and is discussed in detail in Sec-tion 8.

◦ An assumption that trains are, on average, loaded to 95% of their theoretical capacity.

• Infrastructure is treated as being available for a quarter (or year) if it is projected to be available by the end of the first month of the quarter (or year). If it is not expected to be available until later than the first month of the quarter it is treated as being avail-able in the following quarter. For example, if a pro-ject is projected to be completed by 30 April, it is treated as being available for the second quarter. If it will not be competed until 1 May it would be

treated as being available for the third quarter.

Figure 5 - Assumed Average Train Payload.

New Gunnedah loop: track in position, with ballast and tamping operations ongoing.


9

This section summarises the key methodology, as-sumption and outcome changes between the 2007 – 2012 Strategy and this 2009 – 2018 Strategy to allow ready

comparison between the two.

TimeframeTimeframeTimeframeTimeframe

It has become apparent to ARTC that the industry is keen to understand the development of the coal chain across a longer time horizon than has previously been the case. Accordingly ARTC has now extended its analysis time-frame to 10 years. Most producers have been able to pro-

vide indicative forecasts for this time period.

Volume forecastsVolume forecastsVolume forecastsVolume forecasts

Volume forecasts have been updated and extended to match the new 10-year timeframe of the Strategy. Figure 6 compares the forecast volumes from the 2007 – 2012 Strategy with the forecasts used for this Strategy. A com-parison is made at both the port and at Muswellbrook. Muswellbrook provides an indication of the contribution traffic on the Ulan Line and from the Gunnedah basin make

to total growth.

Short-term projections are now closely aligned to port capacity, providing a more realistic basis for capacity plan-ning. Beyond 2012 the key message remains that dramatic

growth can be expected.

It is worth noting that the short-term volumes reflect realism on the part of producers about their capacity allo-cations at the port. ARTC understands that in the absence of port capacity constraints producers would choose to

increase throughput substantially.

Port capacity constraintPort capacity constraintPort capacity constraintPort capacity constraint

The last version of the Strategy treated port capacity largely as a given. Since that time the industry has in-creased its focus on the port issue and adopted a starting position that port capacity should be ramped-up to meet

the industry’s aspirational volumes.

Given the better alignment of volume to port capacity in the short-term, and the prospects for port capacity en-hancement in the longer-term, this Strategy has done all modelling on actual forecast volumes rather than the hy-brid constrained approach used in the 2007 – 2012 ver-

sion.

2

What has changed between the last strategy and this one

The completed Sandgate grade separation project.


10 Completed ProjectsCompleted ProjectsCompleted ProjectsCompleted Projects

The following projects have been completed since the

release of the 2007-2012 Strategy:

• Ulan line CTC.

• Wollar, Mangoola and Bylong loops on the Ulan line.

• Extension of loops at Ardglen, Willow Tree, Breeza, Curlewis, Emerald Hill, and Boggabri, and a new loop

at Gunnedah, on the Gunnedah basin line.

• Werris Creek resignalling.

• Antiene—Muswellbrook duplication including bi-

directional signalling.

• Gap – Turrawan CTC.

• Maitland-Branxton bi-directional signalling.

Recommended projects, timing and costRecommended projects, timing and costRecommended projects, timing and costRecommended projects, timing and cost

A summary of the recommended projects comparing previous and new proposed delivery timeframes is shown

in Table 2.

Loaded coal train speeding up on approach to the Main Line from the completed Muswellbrook Loop Extension.

Figure 6 - Forecast volume at Newcastle Port and at Muswellbrook - 2007 Forecast vs. 2009 Forecast.

0.0

50.0

100.0

150.0

200.0

250.0

300.0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Forecast volume at Newcastle Port and Muswellbrook - 2007 Forecast v 2009 Forecast

2007 Volume - Newcastle

2007 Volume - Muswellbrook

2009 Volume - Newcastle

2009 Volume - Muswellbrook


11

2007200720072007----2012 Strategy 2012 Strategy 2012 Strategy 2012 Strategy

TimingTimingTimingTiming

2009 2009 2009 2009 ---- 2018 Strategy 2018 Strategy 2018 Strategy 2018 Strategy

TimingTimingTimingTiming CommentCommentCommentComment

Newcastle Newcastle Newcastle Newcastle ---- Muswellbrook Muswellbrook Muswellbrook Muswellbrook

St Heliers - Muswellbrook duplication Q3 2009 Completed

Bidirectional signalling Grasstree - St Heliers Q3 2009 Completed

Antiene to Grasstree duplication Q1 2009 Completed

Bidirectional signalling Maitland to Branxton Q3 2009 Completed

Allandale resignalling for 8-minute headways Q3 2009 Completed

Newdell Junction Upgrade Q1 2010 Q1 2010 No change

Minimbah Bank 3rd road - 8 min headway Q4 2009 Q2 2010 Adjusted back 2 quarters

Drayton Junction upgrade 2011 2011 No change

Minimbah - Maitland 3rd road 2012 2012 No change

Provisioning Centre 2012 New

2 Export Terminal Arrival Tracks 2012 New

Nundah Bank 3rd road - 8 min headway 2013 New

Muswellbrook Junction reconfiguration 2015 New

Camberwell - Whittingham 3rd Road 2016 New

Muswellbrook Muswellbrook Muswellbrook Muswellbrook ---- Ulan Ulan Ulan Ulan

Muswellbrook - Ulan CTC Q1 2008 completed

Mangoola (304 km) loop Q4 2008 completed

Bylong (381 km) loop Q4 2008 completed

Wollar (410 km) loop Q4 2008 completed

Aerosol Valley (372 km) loop 2010 Q1 2010 No change

Worondi (345 km) loop 2010 Q1 2010 No change

Radio Hut (317 km) loop 2012 Q1 2010 Brought forward 2 years

Bylong Tunnel Ventilation Q1 2010 New

Bengalla Loop 2012 2012 No change (Replaces Duplication)

Wilpingjong (422 km) loop 2012 New

337 km loop 2012 New




Mt. Pleasant loop 2014 New


Muswellbrook Muswellbrook Muswellbrook Muswellbrook ---- Gap Gap Gap Gap

Willow Tree loop extension Q1 2008 completed

Ardglen loop extension Q2 2008 completed

Braefield loop 2010 Q1 2010 No change

Quipolly loop 2011 2011 No change

Parkville loop extension 2011 2011 No change

Murrurundi loop extension 2011 2011 No change

Scone reconfiguration 2011 2011 No change

Werris Creek Bypass 2011 2011 No change

Koolbury loop 2011 2011 No change (replaces duplication)

Quirindi loop extension 2012 New

New Liverpool Range alignment and duplication 2012 2013 Adjusted back 1 year

Wingen loop 2012 2012 No change

Scone - Parkville Duplication 2014 New

Koolbury - Aberdeen duplication 2014 New

Parkville - Wingen Duplication 2015 New

Togar - Scone duplication 2015 New

Quirindi - Werris Creek duplication 2015 New

Willow Tree - Braefield Duplication 2015 New

Wingen - Murulla duplication 2016 New

Braefield - Quirindi duplication 2016 New

Aberdeen - Togar duplication 2016 New

Murulla - Murrurundi Duplication 2017 New

Gap Gap Gap Gap ---- Narrabri (RIC) Narrabri (RIC) Narrabri (RIC) Narrabri (RIC)

Gunnedah loop Q1 2008 completed

Breeza loop extension Q3 2008 completed

Curlewis loop extension Q3 2008 completed

Werris Creek to Turrawan CTC 2010 completed

Emerald Hill loop extension 2010 completed

Boggabri loop extension 2010 completed

Watermark passing loop 2011 2011 No change

Burilda loop 2012 2012 No change

South Gunnedah loop 2012 2012 No change


Werris Creek - Gunnedah duplication 2017 New

Table 2 - Comparison of project timings between the 2007-2012 and 2009-2018 Hunter Valley Capacity Strategies.


12

3

Starting network performance As already noted, this Strategy has taken the 2007 –

2012 Strategy as its starting point. Figure 7 graphically illustrates this starting point. The graph shows simulated network performance assuming the infrastructure en-hancements set out in the 2007 – 2012 Strategy, and the volume forecasts developed for this Strategy. Performance is expressed as minutes of delay per 100 km for groups of trains. This allows normalisation across sub-groups and mitigates the effect of changes in the mix of destinations

over time.

The graph shows performance separately for Hunter Valley, Ulan Line and Gunnedah Basin trains, as well as for

All Trains. The sub-groups refer to coal trains only, where the All Trains includes passenger and general freight as well as coal. Hunter Valley includes trains servicing load points as far north as the Drayton Branch. All trains from the Ulan line, including Bengalla, Mangoola and Mt Pleas-

ant trains, are included in the Ulan line category.

The key point of this analysis is that the infrastructure solutions recommended in the 2007 – 2012 Strategy continue to be appropriate up to 2012. In 2013 delay starts to accelerate, and no simulations were able to re-

solve for 2014 onwards.

Figure 7 - Quarter By Quarter Performance of the Hunter Valley Network, 2009 Strategy Train numbers, Infrastructure as per

2007-2012 strategy.

0

10

20

30

40

Q109 Q209 2010 2011 2012 2013 2014 2015 2016 2017 2018Q409

50

Note: Q3 2009 and Q4 2009 are equal. All quarters 2010 equal.

Min

ute

s D

ela

y p

er

10

0 k

m

Simulation does

not resolve

Gunnedah Basin Trains

All Trains

Ulan Line Trains

Hunter Valley Trains


13

The issuesThe issuesThe issuesThe issues

Between the ports and Muswellbrook there are only two ‘plain track’ sections of the coal rail network — as distinct from the junctions considered in Chapter 5 of this Strategy — for which the minimum headway between

loaded coal trains is more than eight minutes:

• The ‘Minimbah Bank’, which climbs from just south of Muddies Creek to a crest just south of Minimbah

(figure 8).

• The ‘Nundah Bank’, from Glennies Creek to a crest on the line just south of Camberwell Junction (figure

8).

Headways on Allandale Bank (see figure 8) were previ-ously 10 minutes but were reduced to 8 minutes in con-junction with the Minimbah-Maitland bi-directional signal-ling project. At this headway, capacity will not become constrained until 2015. For the reasons discussed in Sec-tion 9 the Minimbah-Maitland Third Road will be com-

pleted by then, avoiding any capacity constraint.

The minimum headways for loaded coal trains on the Minimbah and Nundah banks were originally around 17 and 20 minutes, respectively. These headways were re-duced to approximately 14 and 16.5 minutes with the introduction of 80 km/h approach speeds to the two banks

in January 2007.

Minimbah BankMinimbah BankMinimbah BankMinimbah Bank

Although Minimbah bank has shorter headways than Nundah bank, and hence greater nominal capacity, its true capacity will inevitably be constrained by the Nundah bank configuration. Trains that operate over Nundah bank can be no closer than 16.5 minutes apart. Trains exiting the Mt Thorley branch are not at the full 80 km/h speed and hence their transit time up the Minimbah bank is slower than mainline trains, also increasing the headway. Conse-quently, the effective headway on Minimbah bank is also

around 16.5 minutes.

The current configuration on the three banks provides sufficient theoretical capacity to last until NCIG Stage 1 ramps-up to around 10 mtpa, which is assumed to be in Q2 2010. At this time the capacity of Minimbah bank will be reached. The 2007 – 2012 Strategy recommended that a third road be constructed on Minimbah bank with com-pletion in late 2009. ARTC has now secured industry sup-port to proceed to construction of a new track in the loaded (Up) direction in the existing corridor on a reduced (1 in 100) grade. The current expectation is that this third road will be available in Q2 2010. As the timing of the ramp up of NCIG Stage 1 has moved back since the 2007 – 2012 Strategy. The revised Mininmbah Bank Third Road

timing will still ensure adequate capacity.

Minimbah bank is not expected to become capacity constrained again in the loaded direction before 2018. The empty (down) direction reaches capacity in 2015. How-ever, it is expected that there will be sufficient spare ca-pacity in the up direction to accommodate the overflow of down direction trains using the existing bi-directional capa-

bility of what will become the centre road.

The primary benefit of a reduced grade is that the track would climb to a lower maximum elevation. Transit time and fuel consumption are both a function of the amount of energy required to lift a given mass to a given elevation. Accordingly, a reduced gradient does not in itself have much effect on operational performance if the train configuration remains the same, but a lower maximum elevation will both improve transit time and reduce fuel

consumption.

In addition, the reduced grade of 1 in 100 means that trains can be brought to a stand on the new track with minimal risk of them not being able to restart. Accordingly it is intended that up to three trains will be able to be held

on the third road while a passenger service overtakes.

Nundah BankNundah BankNundah BankNundah Bank

The capacity of Nundah bank is reached in Q1 2012 if there is no port capacity constraint and Q3 2012 under the assumed port capacity expansion program. However, de-

mand is very close to capacity for 2011.

Two options are available to increase capacity on

Nundah bank:

• Re-signalling of the current track to further reduce

headways for loaded coal trains.

• An additional track (third road).

Reducing headways would be achieved by reducing the distance between signals and providing additional signal indications. This allows coal trains to be more closely spaced while ensuring that fast passenger trains and other freight trains continue to have adequate braking

distances.

Fundamental to this option is that the signal spacing will allow two coal trains to be on a bank at the same time,

thereby increasing the capacity of the bank.

However, if a train is required to come to stand on the bank for any reason there is a risk that it might not be able to resume its climb from a standing start, with the conse-quence of significant operational delays. While in theory all the train types using the Nundah bank are capable of restarting, there are divergent views about the level of risk

that this type of operation creates.

Provision of a third road allows alternate trains to be directed to opposite tracks, effectively doubling the capac-

4

Reducing headways on the Minimbah, Nundah and Allandale Banks


14 ity. This option would also:

• Allow two trains to be on the grade without the risk

of the second train needing to come to a stand.

• Provide greater recovery flexibility if a train stalls on

the grade.

• Reduce the impact of the capacity “shadow” caused by passenger trains, by allowing passenger services to overtake coal trains on the grade, where the

speed differential is greatest.

• Permit re-sequencing of coal trains if this is re-

quired.

10-minute headways on Nundah bank would provide

adequate capacity through to 2015.

However, the 10-minute headway option is a less than ideal solution with some risk attached. Given the additional benefits of a third road this is considered the first best option and is therefore recommended. It is also recom-mended that it be pursued with a view to completion by Q3

2012.

Nundah Nundah Nundah Nundah ---- Whittingham Whittingham Whittingham Whittingham

Simulation modelling has also identified that the re-maining double track section, between the top of Nundah bank and Whittingham Junction, becomes a bottleneck as volume increases. While it does not constrain capacity, it does impose material additional delay. This Strategy there-fore flags potential infilling of this section by 2016. Com-pletion of this section of third road would then provide a continuous three tracks from the foot of Nundah bank to Maitland. This would provide excellent levels of capacity

and robustness and keep operational delay to a minimum.

ProposalProposalProposalProposal

It is proposed that a third road be constructed on Nun-dah bank. It is desirable that this be completed by Q3 2012. A third road in the vicinity of Allandale bank is re-quired around 2016 though the Minimbah – Maitland third road discussed in section 9 will address this constraint and is proposed for completion by early 2012 for reasons other than pure capacity. Infill with a third road on the remaining double track section between the crest of Nundah bank

and Whittingham Junction is desirable by 2016.

Figure 8 - The Nundah, Minimbah and Allandale Banks.


15

Existing Minimbah Bank, looking up the Bank, at approximate chainage 230km.

A southbound coal train climbing the Minimbah Bank.


16

The constraintsThe constraintsThe constraintsThe constraints

There are numerous junctions on the Hunter Valley rail network where trains travelling from coal-loading branch lines conflict with empty trains travelling in the opposite

direction on the main line, or vice versa.

The effects of these conflicts on rail capacity are par-ticularly acute at three junctions that have slow junction speeds and/or high frequencies of train movements: Whit-

tingham, Newdell and Drayton (figure 9).

Newdell and Drayton Junctions also have high mainte-nance turnouts, necessitating excessive track mainte-

nance and producing additional train delays.

With the strong growth of coal volume from the Ulan and Gunnedah basin lines, the junction of these two lines at Muswellbrook will also come under increasing pressure as will the junction at Maitland, where passenger and

general freight services merge and diverge with coal traffic.

The optionsThe optionsThe optionsThe options

The options identified to address junction constraints

are:

• Relay junctions with new high-speed, low-

maintenance turnouts.

• Separate entry and exit tracks (or in the case of

Muswellbrook, double track on both branches).

• A three-track mainline configuration.

• 8-minute headways in the down direction.

• Grade separation.

Relaying with high speed turnouts is an obvious and simple option. It reduces junction occupancy times and ongoing maintenance costs, and in some circumstances the faster speeds through the junctions may also allow a simplification of the junction arrangements, further reduc-ing the up-front cost, installation time and ongoing mainte-

5

Reducing junction conflicts

Figure 9 - The Maitland, Whittingham, Newdell, Drayton, and Muswellbrook Junctions.


17 nance.

The separation of entry and exit tracks may be justified if it is desirable to be able to hold an arriving empty train clear of the main line, although the need for this may be partly offset by higher junction speeds. This option would generally have higher costs and in some cases it might be

complicated by track ownership issues.

In the case of Muswellbrook, a double track configura-tion on both branches would minimise delays at the junc-tion by avoiding the situation where a northbound train needs to be held at Muswellbrook awaiting a southbound train off the same line, and in turn delaying a following

northbound train with a destination on the other line.

A three-track mainline configuration allows up direc-tion and down direction conflicts to be managed sepa-rately. At present, a departing up train off the Mount Thor-ley, Newdell and Drayton branches needs to cross the down line and slot in between up direction trains, meaning that there is a high probability of a conflict in one or other direction. A third track at the junction permits a departing up train to proceed across the down line during a gap and then be held on the centre track until a suitable gap in the

up direction is available.

Consistent eight-minute headways on the main line in the ‘down’ direction would compensate for the fact that, at present, the conflict between ‘up’ trains exiting the branch lines and ‘down’ through services, reduces the main line’s capacity in the ‘down’ direction even though it does not produce a corresponding reduction in ‘up’ direction capac-ity. Sustaining a consistent 8-minute headway in the ‘down’ direction is easier than in the ‘up’ direction due to

the faster average speeds of empty ‘down’ direction trains.

Grade separation is a high cost option, but if train frequency is high it may be the best way to reduce conflict-ing train movements and reduce the wear from loaded coal

trains on main line turnouts and crossovers.

DiscussionDiscussionDiscussionDiscussion

ARTC investigations suggest the first option would be the best for Newdell and Drayton Junctions, both of which

have slow-speed, high-maintenance turnouts.

Although the existing junctions have adequate capacity for the immediate future, renewal of the junctions is highly desirable as a way of reducing the impacts of infrastruc-ture maintenance and reliability downtimes. Accordingly, ARTC has now commenced design work on these renew-

als.

It is proposed that both Junctions should be renewed with 1:18 turnouts, raising the junction speeds for trains moving onto and off the branch line from 25 km/h to 60 km/h. This will approximately halve the junction occupa-tion time, ensuring that interference between trains and hence delays, are minimised in the short term and ensur-

ing adequate capacity in the longer term.

Train numbers on the Mt Thorley line are expected to jump significantly, from 13 each way per day in 2010 to 22 trains each way per day in 2012. As already noted, indus-try has agreed to support the construction of a third road on Minimbah bank. This project has been configured such that the new third track extends to the north of Whitting-ham Junction (figure 10). This will allow loaded trains to cross the down track largely independent of the flow of up trains, reducing conflicts and hence increasing the capac-ity of the junction. This configuration should be sufficient to accommodate this projected growth in trains off the

branch.

In the medium term the continuing growth from both the Ulan and Gunnedah basin lines means that the capac-ity of the at-grade junction at Muswellbrook will become stretched. This issue requires further detailed modelling, but it is expected that a comprehensive solution will be

required as volumes exceed 100 mtpa at the junction, currently forecast for 2015. An indicative configuration for a future Muswellbrook Junction grade separation is shown in figure 11 - option 1. Alternatively, a three track configu-ration (figure 11 - option 2) may be adequate for the me-

dium term.

Similarly, the junction arrangements at Maitland will become increasingly tested as volumes grow. With the proposed Minimbah – Maitland third road it is intended in the first instance to provide only for a simple connection with a short section of double track between the third road junction and the junction for the main lines at Maitland.

This is illustrated as Maitland Option 1 in figure 12.

The operational flexibility of the Maitland area could be enhanced by reducing the length of the residual double track and a solution for doing this is shown as Maitland

Option 2.

For a number of reasons it is intended that up direc-tion passenger and general freight services will use the centre road on the Whittingham – Maitland section once the third track is complete. Consequently they will neces-sarily conflict with up direction coal trains at Maitland and there is therefore only small benefit in adopting a three

track configuration solution as proposed at Whittingham.

The only mechanism to fully address the conflicts is a grade separation. Options for such a solution are shown in Maitland Options 3a and 3b at figure 13. Current prelimi-nary design work on the Minimbah – Maitland third road is having regard to these concepts. ARTC is not at this stage advocating adoption of the grade separation solution.

However, this will be further assessed in future Strategies.

Finally, the efforts to increase network capacity on heavily trafficked lines are adversely impacted when a train departing the network to a siding or loading balloon loop delays the following train. This is particularly so when this is a shunt signalled move over a 25 kph turnout to the (private) facility. Generally ARTC have discontinued the practice of shunting wagons from the mainline to sidings. The movement of full trains to these sidings should as a general rule be via a running signal with a high speed turn-out. This would typically achieve a speed of 50 kph for the

train exiting the network.

It is recognised that in some cases the high speed configuration is unachievable due to the distance between the junction and the point at which the train needs to come to a stand. While ARTC is prepared to review projects on a case-by-case basis and to be flexible recognising the spe-cific circumstances of the project, as a general principle it will be moving to secure higher junctions speeds at the

new construction stage or the traffic upgrade stage.


ARTC proposes that both the Newdell and Drayton junctions be upgraded with high-speed swing-nose turn-

outs.

Whittingham Junction will be effectively addressed by

the Minimbah bank third road project.

By 2015 it is anticipated that a solution will be re-quired for Muswellbrook Junction. Grade separation and 3

track solutions will be further analysed.

This Strategy does not proposed any change to the arrangements at Maitland, but the issue of the junctions in

this area will be subjected to further analysis.


18

Figure 10 - Drayton, Newdell, and Whittingham junction configurations.


19

Figure 12 - Maitland Junction Concept Options.

Figure 11 - Muswellbrook junction reconfiguration illustrative option.

Muswellbrook288.783 km

Bell St

No 1 Goods Siding

Up Main

Down Main

To Ulanand Gulgong

To Newcastleand Sydney

To Dartbrookand Werris Creek

288.5km

286.5km

Option 2

1650 metres

Muswellbrook288.783 km

Bell St

No 1 Goods Siding

Up Main

Down Main

To Ulanand Gulgong

To Newcastleand Sydney

To Dartbrookand Werris Creek

288.5km

286.5km

Option 1

Down Main

Up Main

Maitland

192.548 km

Track to be retained

Additional track

Potential long-term 4 track arrangement

Down Coal

Up Coal

This distance should ideally be ~1650+ m

Track to be removed

Down Main

Up Main

Down Coal

Up Coal

Option 3b

Flyover

Down Main

Up Main

Maitland

192.548 km


Additional track


Down Coal

Up Coal


Track to be removed

Down Main

Up Main

Down Coal

Up Coal

Option 3a

Flyover

Down Main

Up Main

Maitland

192.548 km


Additional track


Down Coal

Up Coal


Track to be removed

Down Main

Up Main

Down Coal

Up Coal

Option 2

Down Main

Up Main

Maitland

192.548 km


Additional track


Down Coal

Up Coal

Track to be removed

Down Main

Up Main

Up Coal

Option 1


20

There were two single track sections of the Main North line between Antiene and Muswellbrook, the first of them being a 7 km section between Antiene and Grasstree, and the second a 2 km section between St Heliers and

Muswellbrook Yard (Figure 13).

The capacity of these single track sections was signifi-cantly lower than the capacity of the rest of the Newcas-tle–Muswellbrook line, and well below the demands fore-cast within the next five years as a result of new mine developments along the Ulan line (see Chapter 7) and the Muswellbrook–Werris Creek–Narrabri lines (see Chapter

8).

Train numbers between Antiene and Muswellbrook were restricted by these single track sections to around 70

trains per day in total.

ARTC has now completed duplication of the Antiene – Muswellbrook section, including bi-directional signalling. These works provide a comprehensive solution to this section of the network, and no further works are expected

to be required on this section for the foreseeable future.

6

Increasing capacity between Antiene and Muswellbrook

Figure 13 - The two single track sections of the Main North line south of Muswellbrook (Antiene—Grasstree and St Heliers–

Muswellbrook).

Typical track section prior to duplication.


21


The Ulan line extends approximately 170 km, between Muswellbrook in the upper Hunter Valley, and Gulgong,

west of the Dividing Range.

It is a single track line, with passing loops at Man-goola, Sandy Hollow, Kerrabee, Bylong, Coggan Creek, Wollar and Ulan. The line was upgraded from electric staff

working to CTC during 2007/08.

Although the line is used mainly by coal trains, it is also used by one or two country ore and grain trains per day and occasionally by interstate freight trains that are bypassing Sydney during posssessions. The line services long-standing mines at Bengalla and Ulan. The Wilpingjong mine has recently commenced operation. Two new mines, Moolarben and Mangoola, have been granted develop-ment approval. There is also a prospect at Bylong, though

this is not under active development.

Coal demand on the line is forecast to increase rapidly for both export coal and for domestic coal to Hunter Valley power stations, in particular the new Antiene unloading

loop.

The completion of Muswellbrook, Mangoola, Wollar and Bylong loops, and CTC, places the line in a good posi-tion to meet demand to Q1 2010, but continued rapid

growth will require further capacity enhancement.

An unusual capacity constraint is posed by the ventila-tion in the tunnels on the Ulan line, in particular the Bylong tunnel. Although the line only opened in 1982, the four tunnels were built as part of the original uncompleted construction of the line which commenced in 1915. Ac-cordingly the tunnels were built to a relatively small outline and ventilation in the tunnels is a problem. Train spacing and track maintenance are limited by the ‘purge times’ for air in the tunnel. Current loop spacing limits following loaded trains to operating at around 45 minutes apart and opposing loaded and empty trains to around 24 minutes apart. As new loops are built closer to the tunnels, thereby reducing these inherent train separation times, it will be

necessary to address the ventilation issue.


The options identified to provide capacity beyond Q4

2008 are:

• Increased train speeds.

• Additional passing loops.

• Double track / passing lanes.

• Tunnel ventilation works.

A 33% increase in coal train speeds on the Ulan line

from 60 km/h to 80 km/h would give a transit time reduc-tion of only around 15 minutes, or 8%, as the tight curves and significant gradients on much of the line limit the ability of trains to make use of the increase in the maxi-mum speed. Average section times would reduce by about 1.5 minutes and allow a small deferral of the loop projects, though this would be offset by an increase in track mainte-

nance cost and possessions time.

An increase in track speeds through Muswellbrook would, however, have a significant benefit. This project requires the removal of the current 25 km/h junction at the northwestern end, permitting trains to run at 50 km/h instead. This project represents stage 2 of the Muswell-brook loop works and will improve train speeds and capac-ity not only on the UIan line, but also on the Werris Creek / Gunnedah line (see Chapter 8). This stage 2 project is scheduled to be completed in conjunction with the St He-

liers – Muswellbrook duplication.

Additional passing loops represent the main mecha-nism to deliver further incremental increases in capacity

on the line.

Double track may become desirable once passing loops start to be required at intervals of around 8 kilome-tres or less. While further passing loops can be inter-spersed, double track becomes increasingly attractive due to lower signalling costs, simplified train control and re-duced delay due to stopping / starting and signal clear-ance times. The choice between double-track and passing

loops depends mainly on site specific costs.

The Ulan line also has quite difficult terrain, offering relatively few locations that are desirable for new passing loops due to train handling issues. This will also become an important consideration in choosing between loops and

double track as volumes grow.

Ventilation options for the tunnels have now been assessed in detail. The study identified five options as

follows:

• Tunnel portal door.

• Portal fan stations.

• Portal fan station with tunnel portal door.

• Longitudinal jet fans.

• Vent shaft and above ground fan station.


The 2007 – 2012 Strategy identified a requirement for up to 6 additional loops on the Ulan line. Three of these were constructed during 2008. With the extended time-frame of this Strategy and the continuing strong growth in volumes, a need for up to 9 additional loops has now been

7

Increasing capacity between Muswell-brook and Ulan


22 forecast.

The three remaining loops identified in the previous Strategy are now all proposed for completion by Q1 2010. This does not represent a change for the Aerosol Valley and Worondi loops, but involves bringing the Radio Hut

loop timing forward by 2 years.

It should be noted that the original names given to these loops were provisional and it is proposed to better reflect the local names of the sites in the loop names. The local names are Murrumbo for Aerosol Vlley, Baerami for

Worondi and Yarrawa for Radio Hut.

The 6 new proposed loop locations are at 337 km, 353 km, 378 km, 390 km, 404 km and adjacent to the Wilpingjong mine junction at 422 km. These 6 loops will split each of the sections as they stand at 2010, with the exception of Kerrabee – Aerosol Valley which will already be a relatively short section. The 6 loops are proposed to be constructed over the 2012 – 2014 period and will re-duce all sections on the Ulan line to between 8 and 11

minutes running time.

The proposed locations are based on optimisation of section running times and are only nominal at this stage as no site investigations have been undertaken. The Ulan line has some difficult geography which constrains the location of loops. As sections become shorter, the scope to adjust the location of the loop declines. Accordingly, as investiga-tion of sites proceeds it may become necessary to adopt alternative solutions. Specifically, it may be necessary to construct “passing lanes”, which are effectively short sec-tions of double track. The 378km proposed loop for in-stance coincides with the location of the Bylong Tunnel, and it may instead be necessary to extend both adjacent loops instead. Such solutions will necessarily be materially

more expensive than straightforward loops.

At the Muswellbrook end of the line there is expected to be large growth with the Bengalla mine being joined by Mount Pleasant and Mangoola (formerly Anvil Hill). By 2011 there will be a requirement to provide additional capacity between Muswellbrook and Bengalla. This section is only 7 km long and would most logically be enhanced by double tracking rather than by splitting the section with a loop. However initial project cost estimates indicate that

duplication will be a high cost solution, with relatively little advantage over a loop on a cost per km basis. Accordingly, the strategy is now leaning toward a loop rather than dou-

ble track as the preferred solution.

By 2012 there is a similar requirement for additional capacity between Bengalla junction and the junction for the Mangoola mine. Again, this section at around 11 km lends itself to double-tracking, but the initial cost estimates suggest that this would represent poor value for money

and a loop solution is therefore preferred.

The first loop, between Bengalla and Muswellbrook is proposed for 2012. The second loop, in the vicinity of Mt

Pleasant Junction, is proposed for 2014.

The tunnel ventilation analysis has recommended the portal fan station with tunnel portal door as the most cost effective solution. However, it has identified that a tunnel portal door may, in the first instance, provide a sufficient interim solution at lower cost. It has therefore been recom-mended that this be pursued as a first stage. This work will need to be timed to align with the Aerosol Valley loop, which when completed will allow a significant reduction in

the time between trains.

All of the proposed works on the Ulan line assume that there is no change to the current pattern of limited back-

ground (non-coal) trains on this line.


The proposed sequence of projects is:

• New loops at Worondi (345 km), Aerosol Valley (371 km) and Radio Hut (317) km and a tunnel

portal door on the Bylong tunnel by Q1 2010.

• New loops at Bengalla 422 km (Wilpingjong),

378 km and 337 km by 2012.

• New loops at 390 km and 353 km by 2013.

• New loops at 404 km and Mt Pleasant by

2014.

Figure 14 - Locations of proposed additional loops on the Ulan line.

St Heliers looking north pre-duplication works commencement.

Ulan loop

SandyHollow

Aberdeen

KerrabeeBylong

Coggan CreekWollar

Muswellbrook

Antiene

Denman

Newdell Jn

GrasstreeSt Heliers

Drayton Jn

Mt Arthur loopDrayton loop

Newdell/Liddell/Hunter Valley loop

Bengalla loop

Ravensworth Washery loop

Dartbrook Junction

Dartbrook loop

Koolbury

Mangoola mine loop

Wilpinjong loop

Moolarben loop

Antiene loop

Aerosol Valley

Worondi

Radio Hut

Mangoola

422 km

412 km 397 km

404 km

435 km

362 km

330 km

317 km

304 km

345 km

383 km

371 km

301 km

289 km

297 km

295 km

307 km

296 km285 km

281 km

274 km

390 km

378 km

353 km337 km

• Dartbrook

• Ulan • Moolarben • Bengalla• Mt Pleasant

• Mangoola

• Wilpinjong

• MacGen unloader

• MacGen unloader

• Mt Arthur

• Drayton• Saddlers Ck

• Newdell• Liddell• Hunter Valley • Newpac No 1

• Cumnock No 1• Ravensworth Narama• Sandy Creek

Existing passing loops

Extensions of existing loops

Proposed new loops

Proposed Duplication


23


The single-track Muswellbrook–Werris Creek–Narrabri

line is highly complex.

In addition to its coal traffic, it carries passenger trains (CityRail services to and from Scone and CountryLink ser-vices to and from Moree and Armidale) and a proportion-ately high level of grain, fuel, cotton and flour train activity. This ‘background’ traffic is up to 12 trains each way per day as far as Scone, then up to nine each way to Werris Creek, seven each way to Gunnedah and six each way to

Narrabri.

Coal demand on the line has already increased signifi-cantly and is forecast to continue to increase very rapidly. Considerable increases in capacity will be needed to ac-

commodate this growth.

There are currently three coal train origins and destina-tions along the route, at Werris Creek, Gunnedah and Boggabri5, but in the future these are expected to be joined by new coal loader loops at Murulla, Caroona6, Wa-

termark6 and the proposed Narrabri colliery.

The Ardglen bank, crossing the Liverpool Range, is a particular impediment. The severe grades on the short section between Willow Tree and Murrurundi dictate limits for train operations on the whole Werris Creek to Newcas-tle route. The need to use ‘banker’ locomotives for loaded coal and grain trains on this section means it will reach its capacity limits earlier than the rest of the line, because the return of the ‘banker’ locomotives adds a northbound train path for each southbound coal or grain train, though this is mitigated to some extent by the ability of bank engines to

use the short loop at Kankool.

The existing passing loops on the Muswellbrook–Narrabri route (figure 15) have highly variable lengths. Many are around 650–750 m, some are as short as 400 metres and there is now a number of 1350 m – 1450 m loops developed to accommodate the recent increase in

train length to 1250 metres.

The track north of Dartbrook is only rated for 25 tonne

axle loads (i.e. ‘100 tonne’ wagons).

All of the network currently carrying coal is now CTC with the recent conversion of The Gap – Turrawan from

electric staff working.

The Gap - Narrabri section of the route is managed by ARTC on behalf of the NSW Rail Infrastructure Corporation (RIC), and decisions on investments in this section are a matter for RIC. ARTC is working closely with RIC to facilitate an integrated approach to investments across the entire

corridor.

Four major new mines are proposed for the Gunnedah basin: Narrabri; Caroona; Watermark, and; Maules Creek. For the purposes of the Strategy, it has been assumed that Caroona and Watermark will load from new load points close to Werris Creek, Narrabri will load from a new loop to the north of Boggabri at 540 km, and Maules Creek will load at the existing Boggabri loader. To the extent that the actual load points vary it may require some adjustment to

the extension of loops in the immediate vicinity.


The options identified to address capacity constraints

between Muswellbrook and Narrabri are:

• A new alignment over the Liverpool Range.

• The progressive lengthening of existing passing

loops, and construction of additional long loops.

• Reopening and reconfiguration of the former Gap – Werris Creek alternative route to create a Werris

Creek bypass.

• Track duplication (passing lanes) on sections where

desirable loop spacing falls below around 8 km.

• The upgrading of structures and track to accommo-

date trains with 30-tonne axle loads.

• A further increase in train length.

• Reconfiguration of the asymmetrical loop arrange-

ment at Scone.


During the past year ARTC and RIC have delivered the planned capacity enhancement projects on the Gunnedah Basin line. This allowed 72 wagon trains to be introduced in May 2008 and ARTC has now provided 7 paths per day

for 72 wagon trains as intended.

The previous strategy had provided for CTC between Werris Creek and Narrabri to be introduced progressively, with loop extensions following as required. During the year RIC took the tactical decision to complete the CTC as es-sentially a single project and to undertake the loop exten-sions as part of the works, allowing total costs to be mini-mised. As a result, capacity to the Gunnedah basin, par-ticularly north of Werris Creek, is now well ahead of de-

mand.

The maximum practical length of trains on the line is likely to remain at about 1,300 m until a new alignment is constructed across the Liverpool Range, because of in-train forces on grades. The option of using ‘distributed’ power to permit even longer trains on the existing grades,

8

Increasing capacity between Muswellbrook and Narrabri

5. The Dartbrook mine closed two years ago.

6. On the line between Werris Creek and Gunnedah.


24 with one or more locomotives in the middle of each train rather than at the front, would present technical complexi-

ties and is regarded by ARTC as unlikely.

In 2007 ARTC completed a study on options for a new alignment across the Liverpool Range in the vicinity of Ardglen. This report assessed four tunnel options and two new surface alignment options, as well as duplication of the existing alignment (figure 16). All of the new align-ments have a maximum grade of 1 in 80 or less, compared to the existing 1 in 40 grade. Adoption of a new alignment would allow the elimination of ‘banker’ locomotives cur-

rently required to assist trains on the long climb.

The tunnel alignments connect Willow Tree to Murru-

rundi while the surface alignments would connect Willow Tree to Ardglen. If a surface alignment was adopted, coal trains would use the existing alignment to descend from Ardglen to Murrurundi. An information sheet on the Liver-pool Range New Alignment Study is available on the ARTC

website under ‘Infrastructure Strategies’.

The report concluded that under any option for a new alignment the existing track should be retained for all northbound trains, and southbound trains other than coal and grain. This effectively duplicates the line from Willow Tree to Murrurundi, or in the case of the surface align-

ments, Willow Tree to Ardglen.

ARTC is continuing to discuss with the relevant coal

Figure 15 - Proposed new and extended loops, and duplication, on the Gunnedah Basin line.

Manilla

SandyHollow

Muswellbrook

Aberdeen

Tamworth

Gunnedah

Boggabri

Murrurundi

Quirindi

Merriwa

Werris CreekThe Gap

Willow Tree

Curlewis

Breeza

Ardglen

Parkville

Wingen

Coggan Creek

Kootingal

Dartbrook JunctionDartbrook loop

Warral

Murulla

Blandford

Kankool

Togar

Koolbury

Braefield

Quipolly

Nea

Emerald Hill

Burilda

Watermark

South Gunnedah

GrasstreeBengalla loop

Moolarben loop

AnvilHill loop

Gunnedah loop

Antiene

Boggabri loop

Werris Creek bypass

504 km

Scone

Existing long passing loops

Proposed extensions of existing short loops

Existing short passing loops

Proposed duplication / passing lanes

Proposed new loops


25 producers the way forward for this project.

Duplication across the Liverpool Range, whether on a new alignment or not, is an expensive project. Also, there is a risk of creating redundant assets if smaller projects are pursued on the Willow Tree – Murrurundi section and these are subsequently superceded by a new alignment. Accordingly, for the purposes of this Strategy ARTC has sought to delay the need for any duplication until as late as possible, while at the same time avoiding any further

works on the Willow Tree – Murrurundi section.

On the Strategy volume forecasts, 2012 is the year in which the project becomes necessary using the theoretical capacity calculations. However, as discussed in Appendix 1 the theoretical model only provides a generalised view of approximate capacity. Accordingly, the need for the project in 2012 has been tested using simulation software and this shows that deferral of the project to 2013 is feasible, though capacity will be tight. This is one year later than proposed in the 2007 – 2012 Strategy and has come about as a result of the firming of the intention to go to 30

tonne axle loads.

It also appears highly desirable to duplicate the Ardg-len – Murrurundi section by 2013 given current volume forecasts. ARTC remains neutral between surface and tunnel options. As a tunnel option would achieve duplica-tion between Willow Tree and Murrurundi this Strategy has assumed that the full section is duplicated as part of the

new alignment project.

However, it should be noted that ARTC will only be pursuing the new Liverpool Ranges alignment if it is strongly supported, and fully underwritten, by the coal

industry.

Progressive lengthening of selected existing passing loops and constructing additional passing loops will be necessary for the projected volumes to be accommodated. This process is already underway with a number of loops

already extended to a standard length of 1350 metres.

Previous strategies have raised the prospect of extend-ing grain trains to a similar length as the 72 wagon coal trains so as to free up additional paths for coal services. There are a number of complexities associated with this, in particular constraints at the Port Waratah grain loader. Accordingly, modelling for this strategy has assumed a

continuation of the current grain arrangements.

There is a view that as volumes grow 72 wagon coal trains standing in Werris Creek loop may create opera-tional inefficiencies. A large proportion of non-coal trains need to access the yard, which is blocked by a coal train in the loop. While this can be mitigated by standing the coal

train on the mainline, a longer term solution is desirable.

An opportunity under consideration to resolve this problem and achieve a number of other desirable opera-tional outcomes is the reopening and reconfiguration of the alternative Gap – Werrris Creek line (figure 17). This line is understood to have been constructed in the 1940’s to allow trains from the cross-country line from Dubbo to proceed toward Tamworth (and ultimately Brisbane) with-out reversing. It fell into disuse during the 1980’s but was partially reinstated in 2005 to provide the track for the

Werris Creek mine coal loader.

If the line was reinstated the full way to Gap and a triangle connection established at the Werris Creek end, it would provide an effective bypass of Werris Creek. It would also give tremendous operational flexibility, with trains able to cross through the use of both lines. If a triangle connection was established at the Gap end it would also create a balloon loop configuration for use by Werris Creek

coal trains.

This configuration would also have potential benefits for grain services, with the Werris Creek sub-terminal effec-tively located on a balloon loop for trains from both the

north and the south.

A final enhancement would provide a second track for an appropriate distance either side of the Werris Creek mine coal loader, so that loading operations could be un-dertaken without interfering with the operation of through

trains.

Axle loads beyond Dartbrook are currently limited to 25 tonnes. Increasing axle loads to 30 tonnes would per-mit the use of 120 tonne wagons and thus increase the carrying capacity of each train. This would deliver signifi-cant cost savings as well as allowing some capacity pro-jects to be deferred. In particular, it would allow the dupli-

cation across the Liverpool Range to be deferred.

RIC has recently completed resleepering of the Gap – Gunnedah section in concrete, which was identified as the lowest cost solution for necessary resleepering. ARTC is continuing to review its sleeper replacement strategy for the Dartbrook – Werris Creek section, with a leaning to-

ward extensive use of concrete.

These initiatives have further strengthened the case for 30 tonne axle loads and this Strategy has assumed that these are introduced by 2011. Train configuration is assumed to be equivalent to the QR 74 wagon train, which

will fit in the loops at their currently extended length.

The exact scope of work to introduce 30 tonne axle loads remains unresolved. In the short term, it may be possible to upgrade only the structures and track that are structurally unable to accommodate 30 tonne axle loads. The rest of the track would be upgraded to a stronger structure, with concrete sleepers and 60 kg/m rails, as

renewals were required.

This approach minimises the up-front capital costs but will increase short and medium-term maintenance and renewal costs and the amount of time taken in posses-sions. ARTC would need to recover the capital costs and additional maintenance cost by way of increased access

charges.

A separate but related issue is the option of resleeper-ing with concrete sleepers. Concrete sleepers are not man-datory for the introduction of 30 tonne axle loads. However their instillation would contribute to a reduced mainte-nance task both in terms of cost and possession hours. As tonnages increase, the magnitude of the maintenance savings increase thereby making the case progressively more positive. ARTC is aware of the need to minimise maintenance possessions and adopting concrete sleepers early would allow a material decrease in possession time. The cost of installing concrete sleepers between Muswell-brook and Werris Creek is in the order of $42m. The cost

for Gunnedah to the Narrabri mine is in the order of $23m.

Pending resolution of the strategy to facilitate in-creased axle loads, and the consequent scope of up front capital works, no allowance has been made for this in the expenditure forecasts. In the event that upgrade to 30 tonne axle loads does not occur, capacity will be limited to approximately 15mtpa between Willow Tree and Murru-rundi until the new Liverpool Range alignment is com-

pleted.

The passing loop at Scone is short (410 m) and has an asymmetric layout, requiring all trains to negotiate a curved turnout leg and slowing speeds through the station area to 25 km/h. Level crossings and the proximity of the

town make an extension of the loop unattractive.

Passenger trains are the only services that stop at Scone. It is therefore proposed that the track arrangement at Scone should be altered to give an unrestricted run for through trains. This would save approximately 4 minutes in

the section between Togar and Parkville.

Capacity in this section becomes tight in 2012 and the reconfiguration of Scone together with the extension of Parkville loop is required. The strategy provides for this work to be completed for 2011 in line with the objective of allowing the construction of the new alignment between Murrurundi and Willow Tree to be deferred as long as pos-


26

Figure 16 - Route options identified in the “Liverpool Ranges New Alignment” Study.

sible.

From 2014, volume on the line to the Gunnedah basin begins to reach a level where the current loop pattern becomes insufficient. Loops are spaced at around 8 km – 10 km and at this spacing it becomes undesirable to split a section with an intermediate loop, both because of the high fixed cost of the infrastructure, and the “transaction time” at the loop. It therefore becomes preferable to move to double track, though site specific construction costs mean that the decision needs to be assessed on a case-by-

case basis.

Analysis suggests that growth between 2014 and 2017 will require the entire distance between Muswell-brook and Gunnedah to be further sub-divided into shorter sections to become double track, with the priority order being largely dictated by section length (ie the longest sections will require duplication first). A hybrid option would be to extend each loop to around 4 km rather than providing full double track. Whether this is operationally or

cost effective requires further research and for the pur-poses of this Strategy it has been assumed that full dupli-

cation is the base case solution.

An alternative option would be a further significant increase in train length. Train length represents a trade-off between the operational and capacity efficiency of running a longer train, and the inefficiency of having wagons effec-tively idle while the longer train spends more time loading and unloading. The further the train needs to travel the larger the operating and capacity efficiencies are, while the inefficiency of longer loading and unloading time is essen-tially fixed. Hence, the greater the journey length the better

the case to increase train length.

The obvious option for the Gunnedah Basin region is to go to either 111 wagons (ie a 50%, or one locomotive, increase in the standard QR train) or 121 wagons (ie a 33%, or 1 locomotive, increase in the standard PN train). Assuming a 50% / 50% split between these two train types, this change would give a 51% increase in capacity


27

FUEL

LOCO

WORK

SHOPS

SAND

Footb

ridge

410.9

66km

411.1

87km

408.995km

Single St

408.7

26km

Loading bin

Werris Creek Coal411.871km

Private

431.300km

Private

421.951km

Werris Creek

To

Bin

naw

ay/

Dubbo

416.2

70km

Main

417.735km

418.183km

Breeza Rd

Gap

409.

865k

m

~408.4

86 k

m

~409.216 km ~410.425 km

411.750 km /

~410.540 km

412.524 km /

~411.334 km

Current Stop Block

Werris Creek Loco

Werris Creek

Werris Creek Yards

No 9 Siding 606m

Werris Creek

410.884km

To Armidale

Werris Creek

Bulk Grain

Terminal

411.641km

To Newcastle

To Gunnedah

416.050 km

(~ 414.100 km via

alternative route)

Loco storage road

32M (105’) Turntable

Through Road

Middle Road

Drop pit Rd

Oil Road 298m

Sand Road

Breakdown Siding 145m

No 12 Siding 430m

No 11 Siding 424m

No 10 Siding 142m

No 7 Siding 598m

No4 Siding 614m

No 2 Siding 407m

No 1 Siding 392m

Weighbridge Road 442m

Goods Loop (918m catchpoint to catchpoint)

Water train sdg

Perway

siding

NorthW

est Pl

atfo

rmRo

ad

North

W

estLine

Loco

Dragging

Equipment

Detector

409.373km

Down/Up Main

No 1A Shunting Neck

No 1 Shunting Neck

No 2 Shunting Neck

Loco releasero

2ad

60m

Loco

arrival road

L

a

oco

deprture

road

Rep

air

di

Si

ng

439

m

W

ater

Road

No

2G

rain

Sid

ing

968m

overa

ll

Office Road 183m

N

aR

ad

eck

No

22

o

389m

Up Loop

Figure 17 - Potential Werris Creek bypass configuration.

compared to the 74-wagon trains assumed to operate once 30 tonne axle loads are introduced. It is assumed that these longer trains would operate with distributed

power to appropriately manage in-train forces.

Increasing train length has an array of implications. This includes the need to reconfigure load points and the dump station tracks at the port, increase loop length, and

potentially adjust signal spacings.

Initial analysis suggests that this solution would defer the need for duplication until volumes exceeded 50 mtpa, which is speculatively forecast for 2021. This solution would require up to 20 loops to be extended to around

2,300 metres.

This is likely to be a more cost effective solution than extensive construction of double track. However, this op-tion requires significant further technical analysis and the in-principle support of operators. Accordingly, this Strategy has taken the conservative approach and has been based

on adjustments to the infrastructure.

It should be noted that the option of going to longer trains is only feasible once a new alignment across the

Liverpool Ranges is completed.


The proposed sequence of projects is:

• A new loop at Braefield by Q1 2010.

• By 2011, the extension of the loops at Parkville, Murrurundi and Quipolly, construction of new loops at Watermark and Koolbury, reconfiguration of Scone loop, and reinstatement of the Gap – Werris Creek alternative route with a triangle connection at

the Werris Creek end.

• New loops at Wingen, Burilda and South Gunnedah,

and extension of Quirindi loop, by 2012.

• A new alignment over the Liverpool Range in the vicinity of Ardglen by 2013, including providing

effective double track from Willow Tree to Murru-

rundi.

• Progressive duplication between Koolbury and Gunnedah between 2014 and 2017 with the se-quencing largely determined by the need to dupli-

cate the longest sections first.

• A new loop at 504 km (between Emerald Hill and

Boggabri) by 2015.


28


The need for on-track maintenance inevitably results

in some loss of capacity for coal trains.

This loss will become more significant as coal ton-nages increase, because maintenance requirements will increase and there will be a greater loss of coal tonnage

for any given duration of maintenance activity.

For the purposes of modelling, track closures for main-tenance purposes have been assumed to require the same amount of time as at present. This generally follows a pattern of four possessions of approximately 5 hours on Monday, Tuesday, Wednesday and Thursday. Generally, only one track is closed at a time, with a heavy skewing toward possessions of the ‘Up’ direction track due to the much larger tonnages it carries. These routine possessions are supplemented by a small number of weekend mainte-

nance closedowns.

In practice, the growing tonnages may result in greater impact on the track and it will be necessary to either de-velop strategies to achieve more maintenance in the same amount of track closure time, or provide a further small increment of capacity, for the essential maintenance activi-

ties to be done.


The infrastructure options identified to reduce these

constraints are:

• Additional tracks to allow more on-track time while

retaining train running capacity, and

• Bi-directional signalling, allowing some train running

while maintenance is being carried out.

For both of these options a secondary benefit would be the general ability to recover from train or track failures more quickly than with a single track or uni-directional

tracks.

Bi-directional signalling provides a significant degree of operational flexibility without the cost of extra tracks. Bi-directional signalling is already in place between Maitland and Whittingham Junction. It was also installed between Antiene and Muswellbrook as the marginal cost of bi-directional signalling was relatively small and it will provide material benefit in dealing with domestic coal services

operating from the Ulan line to the Antiene unloader.

ARTC’s Advanced Train Management System (ATMS) is continuing to be developed with proving trials now under-way on the section between Adelaide and Port Augusta. In the event that ATMS was installed in the Hunter Valley it would provide bi-directional functionality as an inherent feature of the technology. Further work is required before a decision is made on whether ATMS will be pursued in the

Hunter Valley.

The provision of additional tracks is a high-cost option with long lead times, and is justified only where capacity enhancements are approaching their limits with the exist-ing number of tracks (see Chapter 4). A third road on the Whittingham to Minimbah section is already underway to

address capacity constraints in this area.


A key issue for addressing maintenance requirements is the need for the unloading facilities at the port to receive a constant flow of trains, rather than the need to increase capacity in absolute terms. To the extent that the flow of trains at the loader is interrupted, this creates a direct

unrecoverable loss of coal chain capacity.

Analysis of the capacity benefits of bi-directional sig-nalling has been undertaken by both ARTC and the Hunter Valley Coal Chain Logistics Team. The analysis suggests that bi-directional signalling of the Maitland – Branxton section will deliver at least 1.5 million tonnes of capacity that will contribute directly to increasing the capacity of the entire coal chain, as it will feed trains to the port unloaders when they would otherwise be idle. At current coal prices it is believed that this project will have a payback period of significantly less than four years, suggesting that early delivery of the project was well justified despite the poten-tial redundancy of the works should ATMS be rolled-out in

the Hunter Valley.

During possessions north of Whittingham it is still possible to achieve a flow of trains off the Mt Thorley branch. Hence, the benefit of delivering the capacity on Maitland – Branxton is significantly greater than doing so north of Whittingham. Having regard to this, and the poten-tial roll-out of ATMS, no further bi-directional specific sig-nalling schemes are proposed, though this will continue to

be kept under review.

The marginal cost of bi-directional signalling installed in conjunction with duplication of the Antiene – Grasstree and St Heliers – Muswellbrook sections was small and these sections were being constructed as bi-directional. This also resulted in the short Grasstree – St Heliers sec-tion becoming bi-directional. In this case, the bi-directional signalling has the added benefit of increasing flexibility for

domestic coal trains to the Drayton unloader.

The section between Minimbah and Maitland is built on relatively poor quality formation. There is a strong pros-pect that with the rapid increase in volume this formation will require a significant increase in maintenance fre-quency and intensity. As this section is also the most heav-ily trafficked of the network, the option of constructing a

third road needs to be seriously considered.

The third road will also serve to further reduce the impact of maintenance on the throughput of the port

9

Reducing maintenance impacts and increasing operational flexibility


29 unloading facilities, as it will allow two tracks to remain open at all times. In doing so it potentially delivers benefits from a “whole-of-chain” perspective that are not immedi-

ately identifiable as track capacity benefits.

The HVCCLT has analysed this issue and suggested it would be desirable to accelerate delivery of the third road to Q1 2011. However it is not realistic to expect that con-struction could be completed in this timeframe due to the scope of issues involved in the project. The HVCCLT has concluded that this will not impact total capacity but may result in an increase in the vessel queue as a result of greater peaking than would be the case with a full third road. ARTC is continuing to assess options of staged deliv-ery of the project but for the purposes of this strategy has

assumed that it will open as a single stage in early 2012.

Infrastructure options may also be supported by in-

vestments in higher production rate track maintenance equipment, so maintenance tasks can be completed more quickly. ARTC is continuously reviewing its maintenance techniques to ensure that they are optimised having re-

gard to both cost and capacity impacts.


Work has commenced on planning and design for a Minimbah – Maitland Third Road and this Strategy has assumed that it is delivered in early 2012. There is the potential to incrementally access some of the benefits of the project earlier by pursuing a staged delivery approach

and this is being further assessed.

No further bi-directional signalling will be progressed at this stage pending clarity on the potential for ATMS to be

introduced to the Hunter Valley.

Bi-directional signalling on the Minimbah Bank.

High speed tamping machine.


30

BackgroundBackgroundBackgroundBackground

The Hunter Valley coal industry is serviced by two coal loader terminals, Port Waratah and Kooragang Island. The coal loaders are owned by Port Waratah Coal Services (PWCS), but most of the track in and around the terminals is leased by ARTC and all train operations are controlled by

ARTC.

The Kooragang Island facility has a nameplate capac-ity of 77 mtpa as at late 2008, while the older Port Waratah facility has a capacity of 25 mtpa, with no expec-tation of expansion. There are options to significantly in-crease capacity at Kooragang Island with an ultimate ca-

pacity of 115 mtpa as set out in Section 1.

A third terminal, to be located on Kooragang Island, is proposed to be developed by the Newcastle Coal Infra-structure Group (NCIG). The first stage of this terminal is proposed to have a capacity of 30 mtpa. Stage 2 would

take capacity to 45 mtpa and stage 3 to 60 mtpa.

There are concept options being developed for further expansion on Kooragang Island that would take total sys-

tem capacity to significantly above 200 mtpa.

The Port Waratah facility is located in a highly devel-oped and constrained location with extensive rail facilities servicing a variety of activities. This includes steel products for One Steel, grain for the GrainCorp loader, ore for the Pasminco loader, general freight through Toll / R & H Transport and other minor customers. There are also loco-

motive and wagon servicing and maintenance facilities.

The Port Waratah coal facilities include 3 arrival roads and 2 unloaders. While there are nominally 10 departure roads, these range in length from 414 metres to 863 me-tres, all of which are shorter than all coal trains other than the short trains used for Stratford and Pelton services. Only two of the 3 arrival roads can accommodate 80 wagon and

longer trains.

Kooragang Island terminal is better configured for modern rail operations. It has 3 arrival roads, with cross-overs immediately before the 3 dump stations, and 6 de-parture roads with reasonably flexible crossover arrange-

ments immediately after the dump stations.

Number 3 departure road on Kooragang Island is used for provisioning of locomotives. There is a large locomotive maintenance facility connected at the entry point to the

terminal.

The NCIG terminal will connect to the Kooragang Is-land branch not far from the Hunter River bridge. For NCIG Stage 1 this will be a simple at-grade connection leading to two arrival roads and a single dump station. For NCIG stage 2 it is intended that the junction become grade sepa-rated. A third arrival road and second dump station will be

provided.

The ConstraintsThe ConstraintsThe ConstraintsThe Constraints

Terminal constraints can be meaningfully divided be-

tween arrivals and departures.

The critical issue in regard to arrivals is the require-ment for “buffering” capacity between the mainline and

the dump stations.

When there is a gap between trains due to a change in coal type, a train departs and, some time later (up to 40 or 50 minutes), the following train arrives and can proceed

direct into the dump station following pre-dump checks.

However, when a second train is loaded with the same coal type it can be unloaded immediately following the first train. This is estimated to occur approximately 25% of the time and in this case it is essential that the second train be in a position to arrive as the first train departs. This can be

achieved by:

• Having a separate arrival road, allowing the second train to arrive at any time while the first train is

dumping.

• Holding the second train on the mainline until the

first completes dumping and departs.

• Timing the arrival of the second train so it aligns with departure of the first, though the practicalities of this are so challenging that it can be discounted

as a realistic option.

A probability based analysis of terminal throughput patterns has been undertaken, leading to the following

conclusions:

• Carrington terminal has two dump stations and three arrival roads, though one arrival road is not suitable for 91 wagon trains. This amount of infra-structure is relatively generous for the capacity of

the terminal and gives it a high level of flexibility.

• Stage 1 of NCIG will have two arrival roads for a

single dump station, giving it complete flexibility.

• Stage 2 of NCIG is conceptually intended to provide a second dump station, but only one additional arrival road. This means that (unless planned out) 6.3% of the time a fourth train will arrive during a 2 hour window and it will need to stand on the

mainline.

• Kooragang Island currently has 3 dump stations and 3 arrival roads. This means that 42% of the time a fourth train will arrive within the 2 hour pe-riod and it will need to stand on the mainline. 14.1% of the time a fifth train will arrive and will also need to stand on the mainline, and 1.6% of the time a

10

Terminals


31 sixth train will do likewise. In other words, 1.6% of the time there will be three trains queuing. This inevitably creates significant congestion and se-

quencing issues.

• In the event that a fourth dump station was con-structed on Kooragang Island with only a single additional arrival road, the proportion of time that trains were needing to be held out on the mainline would increase to a total of 68.4%, with three trains

queuing 4.7% of the time.

The mainlines from Kooragang Island to west of Hex-ham are bi-directionally signalled and there are a number of cross-overs. This configuration is providing the required flexibility at this time, though with some compromise to

efficiency.

However, when NCIG stage 1 starts-up, the queuing of trains on the mainline to access Kooragang Island is likely to have a material impact on access to NCIG. This will be exacerbated by NCIG stage 2, which with current plans will also have a small but material requirement for mainline

queuing.

An alternative perspective on this issue can be pro-vided by a simple analysis based on an assumed average queuing time. Assuming an average of one hour queuing per train, and applying this to a projected rolling stock fleet size, gives the following average number of trains in the

queue at any one time:

This reinforces the point that the growing task will

result in an increase in the size of the typical queue.

While in general this can be accommodated by queu-ing on the mainline, the critical issue is going to be the need to correctly sequence trains into the three separate terminals. The third tracks on Minimbah and Nundah banks (and to a lesser extent the Minimbah – Maitland Third Track) are going to increase the flexibility of opera-tions and improve sequencing ability. However, with a do nothing scenario in terms of holding / arrival roads there is a serious risk of inefficiency and loss of throughput due to

congestion in and around the terminal area.

To address this risk it would be desirable to provide a

small number of additional holding or arrival roads.

The key issue in regard to departing trains is that the

departure roads are effectively being used as a yard.

The departure tracks are used for stabling trains while locomotives are serviced and fuelled, trains are examined, and while waiting a path. There are six departure roads, but each of the three dump station requires a departure road to be vacant for a train to feed onto as it unloads. One departure road is effectively occupied with fuelling activi-

ties.

As the throughput rate of the Kooragang Island facility has progressively increased, so to has the scale of occupa-tion of the departure tracks, leading to congestion and the potential for unloading activities to be compromised by the

lack of a suitable departure track to feed onto.

There are also environmental contamination concerns

with the current fuelling arrangements.

OptionsOptionsOptionsOptions

With regard to the provision of buffering capacity for arriving trains, it would be desirable to provide two tracks by the time volume reaches 173 mtpa in 2013. Depending on the final design of NCIG Stage 2/3 and a fourth dump station at PWCS Kooragang or a fourth terminal, it may be desirable to provide up to a further 2 holding/arrival

tracks.

There are essentially two options for how additional

tracks could be configured:

• Provide arrival road capacity at or immediately adja-cent to the terminals, with PWCS Kooragang Island

the primary candidate for such tracks.

• Provide a single multiple-track holding facility that is

remote from, but able to service, all three terminals.

The options with regard to departing trains are to:

• Persevere with servicing, examination and train stabling at the terminals by building additional ca-

pacity, or reconfiguration.

• Move to a “dump-and-go” approach and consolidate the activities at a site that can service all three

facilities.


The primary advantage of constructing arrival tracks immediately adjacent to the dump stations is that it mini-mises the risk of delays. Trains can be called forward as required without the need to secure a path on the mainline, and hence without any risk of interference be-

tween trains proceeding to different dump stations.

The advantage of providing a holding yard remote from the terminals is the benefit of economies of scale and the enhanced resequencing ability. A single multi-track holding facility would provide high levels of flexibility and may be able to achieve greater overall holding capacity for the

same amount of infrastructure.

However, given the highly constrained environment around the terminals the primary determinant of a solution may be the availability of suitable sites. Crewing arrange-

ments may also be a consideration.

A full assessment of options is required to determine

an optimised solution.

The advantage of persevering with the current arrange-ments for train departures is that there is already some

infrastructure in place.

The locomotive provisioning process requires trains to be stabled while the locomotives are detached, moved to No 3 road, provisioned, and then returned to their train. One solution to this would be to provide provisioning facili-ties on additional, and potentially all, departure roads. However, this would still result in trains occupying depar-ture roads for an extended time, which will continue to cause unacceptable congestion. Also, the NCIG terminal will have no provisioning facilities, meaning that locomo-tives would need to shuttle between NCIG and Kooragang for provisioning if the facility remains at Kooragang, further

increasing congestion.

The only real option for accommodating train inspec-tions and the standing of trains awaiting a path while re-maining in the existing terminal area is the construction of additional departure tracks. Given the physical constraints

of the site this is likely to prove challenging.

The advantages of moving to a new site for yard type

activities are that it:

• Moves the activities to a remote location, reducing

congestion at the terminals.

YearYearYearYear Q1Q1Q1Q1 Q2Q2Q2Q2 Q3Q3Q3Q3 Q4Q4Q4Q4

2010 2.67 3.33 3.33 3.33

2011 3.33 3.33 3.33 3.33

2012 3.33 3.33 4.00 4.67

2013 4.67 4.67 4.67 4.67

2009 2.67 2.67 2.67 2.67

Trains in Queue Assuming 1 Hour Queuing per Cycle


32 • Provides economies of scale by being able to ac-

commodate all activities at a single site.

• Avoids expensive brownfields construction.

ARTC has been promoting a move to a remote location for some years. After extensive discussions with rail opera-tors it became apparent that the objectives would be best met by ARTC taking the lead in the development of a single multi-user facility. ARTC is now pursuing this path and has selected a preferred site at Rutherford (immediately to the north of Maitland). This facility would be a multi-user facil-ity offering fuelling, sanding, shunting and some stabling, with the option for a small maintenance centre co-located

on the site.


It is provisionally proposed that two holding / arrival tracks be constructed by 2012. Depending on the final design of further terminal enhancements, up to two further tracks may be desirable at a later stage. However, scope and timing will be heavily influenced by tactical considera-

tions around site options and construction efficiency.

ARTC proposes that all fuelling and provisioning be relocated out of the terminal areas as soon as possible. Given that rail operator initiatives in this area have failed to gain momentum to date, ARTC is now proceeding with establishing a multi-user facility itself. Investigations to date have identified that construction of a facility at Ruth-erford, immediately to the north of Maitland, is the pre-ferred solution. ARTC will be considering a range of com-mercial structures for this project and might not directly

fund all or part of the project itself.


33

Demand and capacity by sector, based on the project timings recommended in this Strategy, and using the cal-culation methodology set out in Appendix 1, is shown in

figures 18, 19 and 20.

Figure 21 shows theoretical capacity of the rail net-work to deliver export coal to the Port. This graph has been created by calculating the capacity of each line section in a given period, adding forecast volumes from the port side of that section, and then identifying the section with the smallest combined volume. The calculation is therefore highly dependent on the distribution of volume between load points and does not indicate an absolute limit to ca-pacity in a given period. For instance, if the capacity limit-ing sector is Mt Owen Junction – Camberwell Junction, volumes could still be increased from the Mt Thorley branch, thereby increasing the volume delivered to the port. Care should therefore be exercised in interpreting this

graph.

Chapter 3 set out the modelled performance of the network assuming the infrastructure scope and timing

from the 2007 – 2012 strategy, and the train numbers adopted for this Strategy. Figure 22 shows modelled per-formance with the same train numbers and the infrastruc-ture scope and timing recommended in this 2009 – 2018

Strategy.

Figure 23 shows the differential between the two.

Performance is expressed as minutes of delay per 100 km for groups of trains. This allows normalisation across sub-groups and mitigates the effect of changes in the mix

of destinations over time.

The recommended scope of work in this Strategy is largely the same as the 2007 – 2012 Strategy in the early years. The major capacity driven change is the inclusion of the Nundah bank third road, with completion by Q3 2012. Accordingly, performance under the 2007 – 2012 Strategy and this Strategy is similar up to 2012. Performance early in the period is somewhat better on the Gunnedah basin line due to the bringing forward of the CTC and loop exten-sion projects beyond Werris Creek, while performance on the Ulan line through 2011 and 2012 has been improved

11

Network performance with revised project scope and timing

Figure 18 - Demand and theoretical capacity: Gunnedah Basin Line.

Cessnock

Maitland

Newcastle

Branxton

Singleton

Dungog

Muswellbrook

Martins Creek

Paterson

Hilldale

Stroud Road

Wards River

Greta

Antiene

Whittingham Junction

Sandgate

Thornton

Minimbah

NewdellJunction

Kurri Kurri

Mindaribba

Belford

Wallarobba

Kooragang Island

Port Waratah

LochinvarTelarah

GrasstreeSt Heliers

Drayton Junction

Mt Arthur loop

Drayton loop


Bengalla loop

Ravensworth Washery loop Mt Owen loop

Rixs Creek (Camberwell) loop

Camberwell Junction

Mt Thorley loop

Saxonvale loop

SaxonvaleJunction

Hexham

Hanbury Junction

Scholey Street Junction

Broadmeadow

Bloomfield loop

Raymond Terrace

Karuah

Glennies Creek (Mt Owen) Junction

Anvil Hill loopDuralie loader

Wambo loop

Antiene loop

Nundah

Padulla

Pelton

Teralba loop

Ashton siding

Pelton branch line

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018

Million tonnes of coal per annum

Maitland - Port

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


Allandale - Maitland

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


Branxton - Allendale

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


Wittingham - Branxton

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


Camberwell - Wittingham

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


Mt Owen - Camberwell

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018



34

Ulan loop

Dunedoo

Gulgong

Walcha

Manilla

Uralla

SandyHollow

Muswellbrook

Scone

Aberdeen

Tamworth

Gunnedah

Boggabri

Murrurundi

Quirindi

Merriwa

Binnaway

Werris CreekThe Gap

Willow Tree

Curlewis

Breeza

Ardglen

Walcha Road

Parkville

Wingen

Coggan Creek

Wilpinjong loop

Kootingal

Coolah

Dartbrook JunctionDartbrook loop

Warral

Murulla

Blandford

Kankool

Togar

Koolbury

Braefield

Quipolly

Nea

Emerald Hill

Pages River

Burilda

Watermark

South Gunnedah

Craboon Junction

Birriwa

Grasstree

Drayton Junction

Bengalla loopMoolarben loop

AnvilHill loop

Caroona

Gunnedah loop

Antiene

Premer

Weetaliba

Boggabri loop• Boggabri• Maules Creek

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


Figure 20 - Demand and theoretical capacity: Muswellbrook to Ports.

Figure 19 - Demand and theoretical capacity: Ulan Line.

Ulan loop

SandyHollow

Scone

Aberdeen

Merriwa

Parkville

KerrabeeBylong

Coggan CreekWollar

Muswellbrook

Denman

Newdell Jn

GrasstreeSt Heliers

Mt Arthur loopDrayton loop


Bengalla loop

Ravensworth Washery loop

Dartbrook Junction

Dartbrook loop

Togar

Koolbury

Lue

Anvil Hillloop

Wilpinjong loop

Moolarben loop

Antiene loop

Aerosol Valley

Rylestone Rd

Worondi

Radio Hut

Mangoola

422 km

410 km397 km

409 km

435 km

362 km

332 km

317 km

304 km

345 km

381 km

371 km

301 km

307 km

315 km

322 km

289 km

297 km

295 km

307 km

296 km285 km

274 km

2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018


2009 2010 2011 2012

Demand

Capacity

2013 2014 2015 2016 2017 2018



35 as Radio Hut loop has been brought slightly forward.

Performance under this Strategy is generally either

stable or improving.

A project by project analysis has also been done to validate the benefit of delivering a project at the recom-mended time. This has been done by running a simulation without each project in turn, and comparing the result to the base case including the project. The output should show a material increase in delay for each project. Figure

24 shows the results of this analysis.

In a number of cases this analysis does not show such an increase in delay. These projects, and the reasons for

nonetheless recommending them, are:

• Maitland – Branxton bi-directional signalling: The simulation modelling does not capture the commer-cial benefit of being able to sustain a flow of trains

to the coal terminals.

• Gunnedah basin line loop projects in 2011 and 2012: The Strategy aims to only proceed with the high-cost New Liverpool Ranges Alignment project when all the capacity from loop projects has been exhausted. This is facilitated by an extensive pro-gram of loop extensions. Deleting any one of the projects, as is done in this exercise, results in the simulation having very poor resolution rates, which

leads to aberrant results.

Figure 22 - Performance of the Hunter Valley Network, 2008 Trains, Infrastructure as per the 2009-2018 Strategy.

Figure 21 - Rail capacity compared to producer forecasts and port capacity.

0

10

20

30

40

Q109 Q209 2010 2011 2012 2013 2014 2015 2016 2017 2018Q409

50


Min

ute

s D

ela

y p

er

10

0 k

m


All Trains

Ulan Line Trains

Hunter Valley Trains

0

50

100

150

200

250

300

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

MT

PA

Producer Forecast Demand

Forecast Port Capacity

Planned Rail Capacity

Note: Planned rail capacity reflects the limits imposed by the most constrained section of the network,

given the distribution of volume by load point.


36

10

12

14

16

18

20

22

24

26

28

30

Q110 Q210

2011

2012

2013

2014 2015

2016

2017

Projects

Base Case

Increase in delay due to exclusion of projects

Min

ute

s d

ela

y p

er

10

0 k

m

Figure 24 - Increase in Delay Due to Exclusion of Projects.

An empty coal crossing a loaded grain train at Ardglen.

0

10

20

30

40

Q109 Q209 2010 2011 2012 2013 2014 2015 2016 2017 2018Q409

50


Min

ute

s D

ela

y p

er

10

0 k

m

Earlier completion of

Antienne - Muswellbrook

Later Completion of

Minimbah Bank

Later Completion of

Minimbah - Maitland 3rd Road

Earlier Completion of Radio Hut Loop

and Muswellbrook - Bengalla Duplication

Wilpingjong

Earlier Completion of Werris Creek -

Emerald Hill CTC

Later Completion of

Liverpool Range New Alignment


Ulan Line Trains

Hunter Valley TrainsNundah Bank

3rd Road

Figure 23 - 2007 infrastructure – 2008 infrastructure performance differentials.


37

Table 4 (overleaf) provides a summary of projects by

availability date.

Figure 25 provides a summary of the design and con-struction timeframes for the proposed major projects. Timeframes for the projects to be delivered early in the Strategy are based on properly developed project plans, while later projects are an approximation based on recent

experience.

Table 3 (opposite) shows current project cost esti-mates. The level of detail in these budget estimates varies, with the earlier timed projects developed to a higher level of accuracy. These project cost estimates should be inter-preted in the context of the comments in Section 1 under

the heading “Project Costs”.

The projects set out in this Strategy amount to $1,414 million over the next five years on the ARTC network. Pro-jects recommended for the RIC controlled network be-tween Werris Creek and Narrabri amount to $58 million. Accordingly, total investment on capital enhancements

amounts to $1,472 million.

The second five years of the Strategy envisages an additional $605 million being spent on the ARTC network and $222 million on the RIC network for total expenditure

of $827 million.

Total expenditure over 10 years is $2,299 million.

In comparison to the 2007 – 2012 Strategy, cost estimates for proposed projects have increased by $151.9m (or 18%), reflecting a better understanding of scope and market costs as projects have been better de-

fined, as well as general inflation.

The capital investment proposed by ARTC is large and continuing to grow. However, as in previous Strategies these investments will be made in the context of - and within timeframes that match - a large growth in the vol-umes of coal to be transported. They will also be subject to close consultation with the coal industry to validate their benefits as they move forward. These projects, as with all projects, will only proceed if they receive the support of the

industry.

12

Overview of the recommended projects

Figure 25 - Indicative work program for the projects recommended in this Strategy.

Newcastle - Muswellbrook

Minimbah Bank 3rd road - 8 min headway

Newdell Junction

Drayton Junction

Minimbah - Maitland 3rd road

Nundah Bank 3rd road - 8 min headway

Muswellbrook Junction reconfiguration

Camberwell - Whittingham 3rd Road

Muswellbrook - Ulan

Aerosol Valley (372 km) loop

Worondi (345 km) loop

Radio Hut (318 km) loop

Bylong tunnel ventilation

Bengalla loop

337 km loop

378 km loop

Wilpingjong (422 km) loop

353 km loop

390 km loop

Mt Pleasant loop

404 km loop

Muswellbrook - Gap

Braefield passing loop

Koolbury loop

Scone reconfiguration

Parkville loop extension

Murrurundi loop extension

Quipolly passing loop

Werris Creek Bypass

Wingen passing loop

Quirindi passing loop

New Liverpool Range alignment

Koolbury - Aberdeen duplication

Scone - Parkville Duplication

Togar - Scone duplication

Parkville - Wingen Duplication

Willow Tree - Braefield Duplication

Quirindi - Werris Creek duplication

Aberdeen - Togar duplication

Wingen - Murulla duplication

Braefield - Quirindi duplication

Murulla - Murrurundi Duplication

Gap - Narrabri

Watermark passing loop

Burilda loop

South Gunnedah loop

504 km loop

Werris Creek - Gunnedah duplication

Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul OctJan Apr Jul OctJul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul

20092008 2010 2011 2012 2013 2014 2015 2016 20172007

Pre-Construction TimeConstruction time


38 $ 2008 m $ 2008 m $ 2008 m $ 2008 m ---- (indicative costs) (indicative costs) (indicative costs) (indicative costs) 2009200920092009 2010201020102010 2011201120112011 2012201220122012 2013201320132013

Newcastle Newcastle Newcastle Newcastle ---- Muswellbrook Muswellbrook Muswellbrook Muswellbrook

St Heliers - Muswellbrook duplication 27 - - - -

Bidirectional signalling Maitland to Branxton 40 - - - -

Newdell Junction Upgrade - 12 - - -

Drayton Junction upgrade - 12 - - -

Minimbah Bank 3rd road - 8 min headway - 120 - - -

Minimbah - Maitland 3rd road - - 300 - -

Provisioning Centre * - - 125 - -

2 Export Terminal Arrival Tracks - - 50 - -

Nundah Bank 3rd road - 8 min headway - - - 125 -

Muswellbrook Muswellbrook Muswellbrook Muswellbrook ---- Ulan Ulan Ulan Ulan

Aerosol Valley (372 km) loop 10 - - - -

Worondi (345 km) loop 10 - - - -

Radio Hut (318 km) loop 10 - - - -

Bylong Tunnel Ventilation 10 - - - -

Bengalla loop - - 10 - -

Wilpingjong (422 km) loop - - 10 - -

337 km loop - - 10 - -

378 km loop - - 10 - -

390 km loop - - - 10 -

353 km loop - - - 10 -

404 km loop - - - - 10

Mt Pleasant loop - - - - 10

Muswellbrook Muswellbrook Muswellbrook Muswellbrook ---- Gap Gap Gap Gap

Braefield loop 12 - - - -

Quipolly loop - 8 - - -

Parkville loop extension - 8 - - -

Murrurundi loop extension - 8 - - -

Scone reconfiguration - 2 - - -

Koolbury loop - 10 - - -

Werris Creek Bypass - 15 - - -

Quirindi loop extension - - 10 - -

Wingen loop - - 10 - -

New Liverpool Range alignment / duplication * - - - 300 -

Scone - Parkville Duplication - - - - 40

Koolbury - Aberdeen duplication - - - - 60

Gap Gap Gap Gap ---- Narrabri (RIC) Narrabri (RIC) Narrabri (RIC) Narrabri (RIC)

Boggabri loop extension 10 - - - -

Emerald Hill - Narrabri CTC 15 - - - -

Watermark loop - 11 - - -

Burilda loop - - 11 - -

South Gunnedah loop - - 11 - -

Subtotal ARTCSubtotal ARTCSubtotal ARTCSubtotal ARTC 119119119119 195195195195 660660660660 320320320320 120120120120

Subtotal RICSubtotal RICSubtotal RICSubtotal RIC 25252525 11111111 22222222 0000 0000

TotalTotalTotalTotal 144144144144 206206206206 682682682682 320320320320 120120120120

* ARTC may adopt commercial models for these projects that mean that ARTC does not directly fund all or part of the project.

Note: All the above projects (including scope, timing, and funding arrangements) are subject to consultation with and endorsement by the industry.

Note: Dollar estimates are based on current known: Scope; Survey and geotechnical knowledge; legislation and tax regimes. Project dollars are order of

magnitude estimates only and do not represent concluded project dollars.

Note: Amounts are shown in the year preceding the year in which the project will be available on the basis that this is the year in which the majority of invest-

ment will occur.

Note: Costs to introduce 30 tonne axle loads to the Gunnedah Basin have not been included in this scope. This issue is discussed in detail in Section 8.

Table 3 - Proposed investment program expenditure by year in which construction completed.


39

Table 4 - Proposed investment program by quarter/year each project is proposed to be available.

Q1 2010Q1 2010Q1 2010Q1 2010 Q2 2010Q2 2010Q2 2010Q2 2010 Q3 2010Q3 2010Q3 2010Q3 2010 Q4 2010Q4 2010Q4 2010Q4 2010 2011201120112011 2012201220122012 2013201320132013 2014201420142014 2015201520152015 2016201620162016 2017201720172017

Braefield loop

Minimbah Bank 3rd road

- 8 min

headway

Newdell Junction

Upgrade Koolbury loop

Minimbah - Maitland 3rd

road

Nundah Bank 3rd road - 8

min headway

404 km loop

(Ulan Line)

Muswellbrook Jct Reconfigu-

ration

Aberdeen - Togar Duplica-

tion

Murulla - Murrundi

Duplication

Worondi-Baerami

(345 km) loop

Scone Recon-

figuration Wingen loop

New Liverpool Range Align-

ment/

Duplication

Mt Pleasant

Loop

Togar - Scone

Duplication

Wingen - Murulla

Duplication

Werris Creek - Gunnedah

Duplication

Aerosol Valley- Murrumbo

(372 km) loop

Parkville loop

extension

Quirindi loop

extension

353 km loop

(Ulan Line)

Koolbury - Aberdeen

duplication

Parkville - Wingen

Duplication

Braefield - Quirindi

Duplication

Radio Hut- Yarrawa

(318 km) loop

Murrurundi loop exten-

sion Burilda loop

390 km loop

(Ulan Line)

Scone - Parkville

Duplication

Willow Tree - Braefield

Duplication

Camberwell to Wittingham

3rd road

Quipolly loop South Gunne-

dah loop

Quirindi - Werris Creek

Duplication

Werris Creek

Bypass Bengalla Loop

504 km loop (Gunnedah

line)

Watermark

loop

337 km loop

(Ulan Line)

Drayton Junction

upgrade

378 km loop

(Ulan Line)

Wilpingjong

(422 km) loop

2 Export Terminal

Arrival Tracks

Multi-use Provisioning

Centre


40

A1

Appendix 1 - Modelling Methodology The development of this Hunter Valley Corridor 2009-

2018 Capacity Strategy largely retains the methodology of

the 2007 – 2012 Strategy.

Coal capacity is analysed using a set of principles for the practical utilisation of track. ARTC then validates the results of the theoretical calculations using a network modelling package which simulates the interactions of

trains with the infrastructure and each other.

The calculation of practical coal capacity varies be-

tween single and double track sections.

On single track the methodology uses a simple princi-ple that theoretical daily capacity on a given section of track is equal to the number of minutes in the day divided by the section running time of the longest section, plus an

allowance for safeworking / signal clearance.

This theoretical calculation implies continuous occupa-tion of the longest section, which is unworkable in practice. Accordingly, the theoretical capacity needs to be adjusted to practical capacity using a factor. An adjustment rate of 65% has been adopted for this analysis. That is, it is realis-tic to expect a section of track to carry 65% of its maximum

theoretical capacity.

The theoretical calculation is complicated where a line section has a mix of loop lengths as the longest section then varies depending on the length of any given combina-tion of trains. The methodology used in this Strategy makes an allowance for this by calculating capacity at a series of train length thresholds and allowing short trains to take advantage of the capacity available with short

loops before consuming the capacity of the longer loops.

To calculate the capacity available for coal traffic, existing ‘background’ general freight and passenger ser-vices are deducted. The remaining capacity is then ad-justed down by 9% for cancellations and 15% to allow for

volume surges.

In the previous strategies no specific allowance was made for maintenance possessions on single track. In this Strategy track capacity has been adjusted downwards by

12% to reflect maintenance downtime.

On double track a similar methodology applies. Theo-retical capacity is determined as the number of minutes in the day divided by the maximum signal clearance time for the relevant section. This is adjusted down from a theoreti-cal capacity to a practical coal capacity by discounting the available paths by 50%. This 50% nominally covers back-ground general freight and passenger trains, cancellations, surge capacity and maintenance possessions3. An adjust-

ment to allow for junction conflicts is also made.

The theoretical capacity is then tested using simula-tuion software. This works by randomly generating timeta-bles for a given scenario of infrastructure and trains. Basic

The box below shows a worked example of the calculation of capacity on a single track section:

Worked example of theoretical single track capacity based on Wilpingjong Worked example of theoretical single track capacity based on Wilpingjong Worked example of theoretical single track capacity based on Wilpingjong Worked example of theoretical single track capacity based on Wilpingjong ----

Mangoola Q1 2009Mangoola Q1 2009Mangoola Q1 2009Mangoola Q1 2009

a Highest nominal average loop-to-loop headway

(minutes) 36.8

b Minutes per day 1,440

c Absolute paths per day 39.1 c = b / a

d Single direction paths per day 19.6 d = c / 2

e Practical single track path utilisation factor 65%

f Practical single direction paths per day 12.7 f = d x e

g Non-coal trains per day 0.5

h Practical single direction coal paths per day 12.2 h = f - g

k Surge capacity 15%

l Cancellations against planned paths 9%

m Average coal paths as percentage of peak

planned paths 76% m = 1 - k - l

n Average coal paths 8.2 n = j x m

o Average train net weight (at Wilpingjong)

8,014

Assumes 95% effective

loading

p Theoretical coal capacity (mtpa) 23.9 p = n x o x 365

i Maintenance path loss 12%

j Nominal average coal paths per day 10.8

3. The effect on available paths is calculated as a 12% reduction for maintenance plus a 22% reduction for non-coal traffic to give a nominal average coal path capacity. This is then further reduced by

9% for cancellations plus 15% for surge capacity.

Worked example of theoretical double track capacity based on Camberwell Jct Worked example of theoretical double track capacity based on Camberwell Jct Worked example of theoretical double track capacity based on Camberwell Jct Worked example of theoretical double track capacity based on Camberwell Jct ----

Whittingham Jct 2011Whittingham Jct 2011Whittingham Jct 2011Whittingham Jct 2011

a Nominal average following headway

(minutes) 8

b Minutes per day 1440

c Absolute paths per day

180.0 c = b / a

d Maintenance path loss 12% weekly average

e Coal paths consumed by non-coal

trains 22%

40 paths - allows loss of approxi-mately 6 paths per passenger

train

f Percent capacity available for coal

paths 66% f = 1 - d - e

g Nominal average coal paths per day

118.4 g = c x f

i Surge capacity 15%

j Cancellations against planned paths 9%

k

Planned peak coal path requirement as percentage of nominal average

per day 76% K = 1 – h - i - j

l peak coal paths planned 87.8 L = g x k

m Average train net weight (at Camber-

well Jct)

7,640

Assumes 95%

effective loading

n Theoretical coal capacity (mtpa)

244.9 n = l x m

h Paths lost to conflicts at Mt Owen

and Camberwell Junctions 2.4%

The box below shows a worked example of the calculation of the capacity on a double track section:

infrastructure is entered into the model at the level of track configuration and safeworking delay. Trains are entered by specifying departure time, length and section running time. The model generates timetables by making random deci-sions when there is competition between two trains for a single piece of infrastructure, such as when a cross occurs, or a train seeks to enter the network from a loading point close to a through train. It produces a user specified num-

ber of timetables.

The key purpose of this approach to modelling is to allow scenarios to be analysed in a manner that is statisti-cally robust. That is, for a given infrastructure scenario and train plan it will generate statistically valid measures of performance which can then be used to make considered judgements on the relative merits of different projects and predict network performance over time. The output data can also be analysed to identify the location of bottlenecks

to speed the process of targeting investments.

For the purposes of developing this Strategy, the ca-pacity modelling and simulation modelling have been used interactively and iteratively. Options to ease the capacity constraints identified in the capacity modelling have been validated though simulation. The nature and timing of projects have also then been adjusted based on their ef-

fect on delay.

This approach has a number of important implications.

First, it means that the analysis of capacity has regard to both capacity of a section in isolation, and its capacity in an integrated network. The fact that the simulation gener-ates resolved timetables means that the combination of volume and infrastructure at a point in time is compatible and that there is sufficient capacity for the network as a whole to be able to operate. This provides a more holistic view of the network and ensures that the benefit of each of the individual projects results in a capacity increase that is

harmonious with the rest of the network.

Second, it creates the opportunity to focus on transit time as a key factor in network performance. To some extent, capacity and transit time are substitutes. That is, an increase in volume can be accommodated on a given infrastructure, but only by accepting an increase in transit time. Alternatively, by bringing forward capacity enhance-

ment projects, it is possible to reduce transit time.

Third, it also considers the robustness of the opera-tion. While it may be technically possible to create a time-table that delivers a target level of capacity, there is a risk that, when applied in the real world, unplanned events propagate in such a way that performance falls below acceptable levels. The simulation modelling aims to dem-onstrate that there is a sufficient number of timetable solutions that it is possible to have some confidence in the

robustness of the scenarios.

Worked example of train numbers for simulation modelling based on anony-Worked example of train numbers for simulation modelling based on anony-Worked example of train numbers for simulation modelling based on anony-Worked example of train numbers for simulation modelling based on anony-

mous producer Q1 2009 mous producer Q1 2009 mous producer Q1 2009 mous producer Q1 2009

a Producer demand (mtpa) 4.0

b Average train net weight 7,716 Assumes 95% effec-

tive loading

c Average path demand per day 1.4 c = a / b

d Surge capacity 15%

e Additional surge paths required 0.2 e = c x d

f Peak paths run 1.6 f = c + e

g Cancellations 9%

h Paths cancelled 0.2 h = g x i

i Planned peak path demand 1.8 i = f / ( 1 - g )

The box below shows a worked example of the calculation of path numbers for simulation modelling.

Australian Rail Track Corporation Ltd ABN 75 081 455 754 Keswick Terminal Road Mile End South Australia 5030

Australian Rail Track Corporation Ltd 2009-10 Capital Consultation Process

11 October 2010 2009-10 Capital Consultation Process Page 1

2009-10 CAPITAL CONSULTATION

HUNTER VALLEY COAL NETWORK



October 2010 1. Introduction.......................................................................................................................................3 2. Capital Consultation Process ............................................................................................................4 2.1. Compliance Scope ........................................................................................................................4 2.2. Industry Approach to Capital Consultation ..................................................................................5 2.2.1. Overview...................................................................................................................................5 2.2.2. Rail Infrastructure Group ..........................................................................................................6 2.2.3. Industry Communication Sessions............................................................................................7 2.2.4. Hunter Valley Coal Chain Coordinator ....................................................................................8 2.2.5. Contact Details of Stakeholders................................................................................................9 2.3. Development of the Hunter Valley Network Improvement Strategy ...........................................9 2.3.1. ARTC Approach .......................................................................................................................9 2.3.2. Strategy Development.............................................................................................................10 2.4. Project Consultation....................................................................................................................12 2.4.1. Project Consultation Process...................................................................................................12 2.4.2. Project Endorsement ...............................................................................................................13 2.4.3. Major Capital Projects ............................................................................................................14 2.5. Compliance with the Undertaking ..............................................................................................15 3. Conclusion ......................................................................................................................................16

APPENDIX 1 – CONTACT DETAILS FOR STAKEHOLDERS 17

ATTACHMENTS

1. 2009-2018 HUNTER VALLEY CORRIDOR CAPACITY STRATEGY CONSULTATION DOCUMENT

2. PROJECT ENDORSEMENT DOCUMENTATION

2009-10 CAPITAL WORKS PROJECT DETAIL AND DISPOSAL TREATMENT



1. Introduction

Australian Rail Track Corporation (“ARTC”) commenced a lease of certain parts of the NSW Rail Network

(including the Hunter Valley Coal Network) on 5 September 2004. Under this lease, ARTC is committed to

operating under the NSW Rail Access Undertaking (“Undertaking”) in relation to the Hunter Valley Coal Network

until such time as an ARTC Access Undertaking is approved by the Australian Competition and Consumer

Commission.

In accordance with the Undertaking1, ARTC must submit to the Independent Pricing and Regulatory Tribunal

(IPART) by 31 October each year in respect of the financial year completed on 30 June of that year:

• documentation demonstrating its compliance with the Asset Valuation Roll Forward Principles; and

• detail as to compliance with the ceiling test, including the operation of the Unders and Over’s

Account.

ARTC is responsible for meeting all obligations under the NSW Rail Access Undertaking for the 2009-10

financial year.

In determining whether ARTC has complied with the Asset Valuation Roll Forward Principles, IPART may have

regard to the activities undertaken by ARTC as part of the capital expenditure consultation process described in

the Undertaking2. This document is provided to IPART for the purpose of supporting those aspects of the Asset

Valuation Roll Forward Principles, including:

• a detailed description of the capital consultation process undertaken in 2009-10 and an explanation of

how it met the requirements of the Undertaking;

• evidence of any Access Seeker’s endorsement of any proposed capital expenditure, where relevant;

• the name, address, contact details (including email address) of stakeholders considered by Owners to be

Access Seekers (noting which of those are Access Holders) and other parties consulted regarding

compliance matters.

1 Clause 5 of Schedule 3 Pricing Principles 2 Clause 5(c) of Schedule 3 Pricing Principles



2. Capital Consultation Process

2.1. Compliance Scope In accordance with the Undertaking

3, ARTC is required to establish a consultation process with access seekers

with the objective to identify, prioritise and evaluate future network investments and refine the capital works

programme. To achieve this objective, ARTC is required by clause 3.4(b) of the regime to have a consultation

process that incorporates the following:

• explain the Rail Infrastructure Owner’s planning approach, including the trade-off between routine

maintenance and major periodic maintenance and capital expenditure;

• identify the proposed capital investment needs for the forthcoming year and forecast capital

expenditure for the following ten years;

• explain the inputs to and outcomes of the evaluation undertaken for the proposed capital

expenditure for the forthcoming year;

• provide an assessment of the impact of the proposed capital expenditure on the Regulatory Asset

Base (“RAB”)

• identify the projects that will be funded or partly funded by capital contributions; and

• establish a process for Access Seekers’ input.

In determining whether ARTC has complied with the Asset Valuation Roll Forward Principles, IPART may have

regard to submissions from users to the capital consultation process. However, IPART will not have regard to

any submission that is in direct conflict to the outcomes of the consultation process4.

ARTC recognises that the scope of compliance in 2009-10 relates to both capital works commissioned in 2009-

10 and incorporated in the 2009-10 Asset Valuation Roll Forward in addition to consultation in relation to

ARTC’s investment in the Hunter Valley Coal Network to be commissioned in 2010-11 and in future years.

3 Clause 3.4 of Schedule 3 Pricing Principles 4 Clause 5(c) of Schedule 3 Pricing Principles



2.2. Industry Approach to Capital Consultation

2.2.1. Overview

Since taking responsibility for the NSW Hunter Valley Network in September 2004, ARTC has maintained it’s

approach to consult all industry stakeholders with an interest in the movement of coal on the Hunter Valley rail

network (the “Network”), and every effort to provide a comprehensive understanding of, and have input into,

ARTC’s overall strategy for the Network has occurred. This strategy was detailed in the document entitled 2009-

2018 Hunter Valley Corridor Strategy Consultation Document (refer to Attachment 1), which was released for

consultation on 7th July 2009.

This consultative process continues to provide ARTC with significant insight and understanding of stakeholders’

expectations of the rail infrastructure owner and has led to improved interaction between ARTC and Access

Seekers along with a clearer and more precise methodology of dealing with project endorsement. The

consultative process has principally been facilitated through a number of industry forums attended by rail

operators and coal producers, including:

• Rail Infrastructure Group (“RIG”)

• Industry Communication Sessions

• Hunter Valley Coal Chain Coordinator Board and associated Sub-Committees

The purpose of each of these forums are discussed in more detail in Sections 2.2.2 to 2.2.5 below.

All capital expenditure on the Network is subject to one of the two consultative processes depending on the

type, value and strategic significance of projects. For significant and strategic capital enhancement projects (e.g.

Sandgate project), consultation is undertaken through a number of strategic and operational forums with

industry participants. Through this process, ARTC seeks input from Access Seekers to ensure that the overall

Hunter Valley Corridor Capacity Strategy reflects industry requirements.

In relation to less significant asset replacement or minor operational improvements projects, ARTC are of the

view that consultation through a single, operational forum is most appropriate. The RIG is currently such a

forum. This process ensures a disproportionate amount of industry resources is not consumed when seeking

endorsement of asset replacement or minor operations capital works.



At either level of consultation, full support and industry endorsement is necessary before ARTC will proceed to

project implementation phase and formal endorsement for the value of the project to be added to the RAB

occurs at the RIG.

This consultation process is designed to provide maximum opportunity to work with Access Seekers to identify

and prioritise network investment and to refine capital work programs.

2.2.2. Rail Infrastructure Group

The RIG comprises a senior executive representative from two rail operators hauling coal on the network (

Pacific National and QR national), four large coal producers (Rio Tinto, Whitehaven, BHP, Xstrata) and one

representative from the smaller producers (Bloomfield Coal), ARTC is represented by personnel from Asset

Management, Operations and, as necessary, by representatives from the project delivery and strategic group.

This RIG meets each month and has a standing agenda that covers:

• asset replacement and minor capital works on the Network

• major capital investment on the Network

• strategic proposals necessary to meet coal industry forecast in the coming five (5) year horizon and

beyond..

The RIG deals with the detail of investment proposals. ARTC provides detailed and extensive project

submissions to the RIG for their review and inputs. At each of the monthly meetings, considerable discussion

has focussed on identifying not only the projects required to deliver enhanced capacity but assessment of

whether the projects were the right projects and the priority of delivery to meet demand or service the industry

need operationally.

As discussed above, the RIG is currently the forum for consultation on all minor capital investment that is not

included in the Hunter Valley Corridor Capacity Strategy. Expenditure of a minor capital nature is presented for

review and approved annually by the Rail Infrastructure Group in advance of the work being undertaken5.

ARTC does not ‘trade off’ expenditures, rather ARTC uses a professional and standardised approach for

classification of maintenance and capital expenditures. It uses the internal ARTC definitions and classifications

of reactive corrective routine maintenance, major periodic maintenance and capital expenditure, which is made

5 The only exception to this is when for either safety or urgent operational needs, an expenditure of a capital

nature is necessary. The details of such expenditure are advised to the RIG.



clear to the RIG. However, when there is not a clear treatment, the issue is brought to the RIG for consultation

and guidance.

While ARTC understands the direct relationship Pacific National and QR National have with the coal producers

as their customers, ARTC also acknowledges the contribution the producers can make through direct

consultion. ARTC concludes that it is inefficient and impractical for ARTC to consult with every individual coal

producers on the specifics of each investment. As such, ARTC relies on the small producer representative

(currently Bloomfield Coal) to take back any or all information pertaining to infrastructure investment that their

constituents may have an interest in, in order to ensure the successful and timely delivery of all projects. ARTC

understands that this approach is acceptable to the coal industry.

In addition, further Industry Representatives have been in attendance as observers during 2009-10, which has

facilitated the consultation process for various projects.

In addition to the Industry Representatives in attendance at RIG meetings, ARTC recognises the importance of

input from all coal producers, particularly at the strategic level. As part of the consultative process, ARTC seeks

input from coal industry senior executives or their representatives at the following forums:

• Industry Communication Sessions

• Hunter Valley Coal Chain Coordinator Board and associated Sub-Committees

These forums also provide the opportunity for ARTC to keep all coal producers and stakeholders fully informed

of the status of various projects, including delivery timelines and expected value of capacity enhancements.

2.2.3. Industry Communication Sessions

ARTC also engage in quarterly meetings with the coal producers’ representative group known as the Industry

Communication Sessions. This group is represented by any corporate entity that can demonstrate a

commercial interest in the operation of the Hunter Valley Coal chain with respect to being:

• a buyer or seller of coal;

• involved in the transport of or handling of coal;

• a miner of coal; or

• an agent of any of the above parties.



This group is generally considered as a body of personnel who have detailed insight into the day to day

business of the coal supply chain and can feed into the Capacity Management Forum on matters relating to

capacity enhancement and how each proposal affects the respective business or businesses they represent.

This is not considered a decision making group but one that has considerable influence with the Senior

Executives of the Coal producers.

At these Industry Communication Sessions, ARTC has continued to provide an update on the delivery status of

each project included in the 2009-2018 Hunter Valley Corridor Capacity Strategy Consultation Document, and

any newly identified projects.

2.2.4. Hunter Valley Coal Chain Coordinator

On 27 August 2009 the Hunter Valley Coal Chain Coordinator Limited (HVCCC) was incorporated as a new

independent legal entity and formally replaced the HVCCLT (Hunter Valley Coal Chain Logistics Team)

The membership of the HVCCC has been expanded to include all current Hunter Valley Coal Chain Producers

as well as Service Providers

ARTC is a member of the Hunter Valley Coal Chain Coordinator (“HVCCC”).

The HVCCC’s mission is to plan and co-ordinate the co-operative daily operation and long term capacity

alignment of the Hunter Valley Coal Chain. Its strategic objectives include;

• To plan and schedule the movement of coal through the Hunter Valley Coal Chain in accordance with

the agreed collective needs and contractual obligations of Producers and Service Providers

• To ensure minimum total logistics cost and maximised volumes through the provision of appropriate

analysis and advice on capacity constraints (whether physical, operational or commercial) affecting the

efficient operation of the Hunter Valley Coal Chain; and

• To advocate positions, on behalf of Producers and Service Providers, to other stakeholders and

governments on issues relevant to the efficient operation of the Coal Chain in order to maximise

opportunities for improved co-ordination and/or further expansion of the Coal Chain.

ARTC works very closely with the HVCCC in the delivery process of the major capital works as the impact of the

works can be significant. The HVCCC assist with any modelling to determine benefit on a throughput basis and

assessment on timing of projects to meet other coal chain expansion.



As an integral part of managing each project, ARTC undertakes a process review of effects on network

throughput impacts and consults with the HVCCC on options to mitigate or reduce the impact wherever

possible. HVCCC is also involved with ARTC in the coordination of works and track possession closedown.

Additionally, the board of the HVCCC consisting of senior executives from each member group meets each

month to discuss coal industry requirements for expansion and other strategic development. ARTC provides

this group with regular updates of project progress, cost and benefits associated with infrastructure investment.

In providing the HVCCC detail of ARTC’s strategic investment intent, it allows a comprehensive understanding

of the linkages of investment in the supply chain. ARTC considers the approach to include the HVCCC in this

process a vital cog in the mechanism to ensure the investment fits cohesively with other coal chain

development.

2.2.5. Contact Details of Stakeholders

As described in Section 2.2 above, ARTC has consulted widely within the coal industry, particularly through the

various industry forums. Appendix 1 presents the contact details for industry stakeholders and parties consulted

regarding compliance matters.

2.3. Development of the Hunter Valley Network Improvement Strategy

2.3.1. ARTC Approach

The development of the Hunter Valley Coal Corridor Capacity Strategy involves:

• assessments of the capacity of the existing Hunter Valley rail network for transporting export coal

to the Newcastle ports and domestic coal to Hunter Valley power stations

• update demand forecasts by obtaining revised industry forecasts and views



• comparisons of this capacity with anticipated demand, to identify existing and future likely

constraints

• reviews of the options previously proposed to address these constraints

• where necessary, the development of additional or refined options, and

• the selection of preferred actions to address each of the identified constraints.

2.3.2. Strategy Development

ARTC has continued to review and develop changes where necessary to the Hunter Valley Corridor Capacity

Strategy.

Since taking up the lease of the NSW rail network in September 2004, ARTC has continued to gain a better

understanding of the Network and the expectations of ARTC as a rail track owner. As a consequence of this

and the supply of information relating to specific growth areas, several key changes in the now current version

of the Network Improvement Strategy document have been made. Upon release of the 2009-2018 version,

ARTC wrote to all coal producers in the constrained and non-constrained Network making them aware the

document is available for public distribution.

The major changes to 2009-2018 version of the strategy document (as previously outlined) included:

• Timeframe extended from 5 to 10 years.

• Fully revised volume forecasts.

• Assumed that port capacity will largely accommodate producer aspirational volumes.

• Project timing adjusted as required.

To ensure it had the best possible understanding of forecast volumes, ARTC sourced forecast information from:

• QR National

• Pacific National

• HVCCLT (on a line section basis)

• those producers who were prepared to make volume forecasts available placing particular

emphasis on those coal producers who were proposing new developments.

The revised strategy will give the coal chain increased certainty with timeline delivery of the projects along with

updated projected costs and as such offers options to resolve constraints and understand how coal producers

can better manage their proposed course of action to increase coal throughput.



Consultation undertaken between 1 July 2009 and 30 June 2010 has been maintained from the previous year.

ARTC has focussed on the critical aspects of delivering capacity on all areas of the Network for the next ten

years and is confident the level of endorsement for the proposed investment program included in 2009-2018

version of the Hunter Valley Corridor Improvement Strategy will be received.

ARTC will continue to monitor and review the strategy to ensure proposals for infrastructure change are

developed ahead of demand. ARTC intends to update annual profiles of coal industry haulage demands to

further develop future strategy requirements based on a rolling ten year horizon.



2.4. Project Consultation

2.4.1. Project Consultation Process ARTC undertakes a comprehensive capital consultation process for all capital projects. There are generally

three categories of capital projects:

• major capital capacity projects

• major asset renewal projects; and

• minor capital projects

The major capital capacity projects are those which are capacity enhancement projects that form part of the

Hunter Valley Corridor Capacity Strategy described in Section 2.3 above, while the other projects are classified

as either asset replacement or asset enhancement projects.

For major capital capacity projects, consultation and endorsement is performed in stages to ensure that

stakeholders are fully informed before final endorsement for construct is provided. The rail operator

representatives are provided with detailed analysis of key elements of each project stage and all major projects

sign off endorsements includes details of:

• project aim

• timing – start / finish

• benefits and deliverables (e.g. capacity improvement, operational performance improvement,

safety, cost savings)

• diagrams / document references

• cost and contingency to RAB and loss on disposal where applicable

• endorsement signatory.

For the major asset renewal or replacement projects, a submission detailing the projects objectives, options,

financial and risk management aspects is provided for review and endorsement by RIG. This endorsement

process is often iterative, and ARTC works closely with the rail operators in providing all necessary information

for evaluation.

For the minor capital projects, the programme of smaller projects is typically submitted collectively for

consultation and endorsement to the RIG. Additionally for the minor capital projects where the classification

between regulatory capital and maintenance is unclear, guidance is sought from the RIG.



2.4.2. Project Endorsement

Attachment 2 shows detail of project status for all projects (minor, major or asset renewal in nature).

This attachment presents:

a) projects on the constrained network commissioned in 2009-10 and sought for RAB inclusion,

together with disposals treatment

b) projects on the constrained network but not completed in 2009-10 (i.e., WIP carried forward to

2010-11), including expenditure incurred to date.

c) projects on the unconstrained network commissioned in 2009-10and sought for RAB inclusion,

together with disposals treatment

d) projects on the unconstrained network, but not completed in 2009-10 (i.e., WIP carried forward to

2010-11), including expenditure incurred to date.

Minor projects have been separately identified. These projects (where marked as endorsed) were endorsed as

a group by RIG at the meeting held on 02 July 2009

91 capital projects (61 on the constrained network) were completed and commissioned in 2009-10. ARTC is

seeking to include the commissioned projects on the Network at a total value of $218.690m ($190.344m on the

constrained network) to be added to the Regulatory Asset Base in the 2009-10 Asset Valuation Roll Forward.

Asset disposals of $554,517(including net values) have been determined in relation to commissioned projects in

2009-10.

• ARTC was not able to provide the exact disposal values of the projects they related to, for advanced

endorsement by the RIG as the prospective values of any offset to the disposal value (arising from sale

as scrap or transfer to inventory) for equipment that was to be replaced was not yet known.



2.4.3. Major Capital Projects

During the year, fourteen (14) major capital enhancement projects at a total cost of $193,754,106 were

commissioned for which ARTC is seeking inclusion of the associated expenditure in the 2009-10 roll forward of

the RAB.

Breakdown of each large capital project and actual cost are;

• Maitland to Minimbah Stage 1 $132,558,439

• Newdell Junction Upgrade $15,622,302

• Aerosol (Murrumbo) Valley Loop - 370km $14,392,831

• Worondi (Baerami) Loop - 348km $13,327,586

• Braefield Passing Loop – 386km $9,723,032 Constrained Total $175,931,158 Un-Constrained Total $ 9,723,032

In addition ARTC commissioned minor capital enhancement/replacement projects at a total cost of $24.935m

($6.313m constrained) is also sought to be included in the RAB roll forward for 2009-10. A full summary of

major and minor capital works and the associated cost breakdown is included at Attachment 2

An additional 11 minor capital projects (all on the constrained network) were endorsed by RIG during the year,

but will not be commissioned until subsequent years. Therefore, these projects have not formed part of the

RAB for 2009-10. ARTC has evidence of endorsement for these projects and this evidence will form part of

ARTC’s future submissions to IPART. The projects are detailed in Attachment 2.



2.5. Compliance with the Undertaking

ARTC considers that the consultation undertaken as described in Sections 2.2 to 2.4 (above), provides

comprehensive evidence that ARTC has complied with the relevant requirements of the NSW Rail Access

Undertaking.

ARTC has worked very closely with Access Seekers, both rail operators and coal producers, in identifying and

prioritising network investments and refining capital works programs. Through this extensive consultation

process, Access Seekers have provided input into the major capital enhancement projects that form part of the

overall Hunter Valley Corridor Capacity Strategy. This strategy document identifies the proposed capital

investment needs for the forthcoming year and includes forecasts of capital expenditure for the following ten

years.

ARTC has spent considerable time in communicating each project with the RIG, and have been purposeful in

advising the coal industry producers at Industry Communication Sessions and at senior executive level through

the HVCCC board. As is required by the undertaking, ARTC has provided comprehensive detail of each

project explaining the input to and outcomes expected for the forthcoming year(s).

This has included a process where all options are assessed by the ARTC investment committee who consider

the viability of each proposed expenditure before being passed forward for consideration and endorsement as

capital expenditure to the RIG as an alternative to RCRM or MPM. For each project, ARTC has been consistent

in the classification of works as either maintenance or capital expenditure. Importantly, where the classification

is unclear, ARTC has consulted with the RIG.

ARTC has, through the consultative process, provided an assessment of the impact the proposed capital

expenditure will have on the Regulated Asset Base for the forthcoming year.

ARTC also provides clarity in relation to projects which are intended to be partly or fully funded by capital

contributions. There were no such projects in 2009-10.



3. Conclusion

The consultation activities that ARTC has engaged in has revolved around obtaining a comprehensive

understanding of new coal mine development proposals and their timing of development where increased

capacity is required on the Network. This information is reviewed against other industry information and ARTC

seeks confirmation, where applicable, that its priority of project delivery matches other coal chain capacity

deliverables.

During 2009-10, ARTC has found the level of co-operation and advice provided by rail operators, coal producers

and the other services providers to be both informative and constructive in all aspects of managing and

progressing with investment options. In particular, ARTC is satisfied it has well developed working relationships

with the coal chain as a whole and looks forward to continuing the work started.

The capital consultation process is constantly improving with experience, particularly at the RIG level.

Improvements made throughout 2009-10 include continued enhanced formalisation of information provision &

sign off, and importantly the inclusion into the RIG of Industry Representatives.

ARTC considers the development of the Hunter Valley Corridor Capacity Strategy and the delivery of the

identified projects to be an important commercial and mandatory requirement, and as such, ARTC is strongly

committed to implementing each phase of the capacity plan in a timely manner.

ARTC is committed to the ongoing consultation through the various industry forums and looks forward to a

continued delivery of optimal rail network solutions in the Hunter Valley Coal Network.



Appendix 1 – Contact Details of Stakeholders

CompanyStakeholder

RelationshipFirst Surname Position Phone Email Address 1 Address 2 City State Postcode

Anglo Coal Australia Pty Ltd Access Seeker Seamus French Chief Executive Officer 07 3834 1333 [email protected] GPO Box 1410 Brisbane QLD 4001

Austar Coal Mine Pty Ltd Access Seeker Brian Flannery Managing Director 02 4993 7200 [email protected] PO Box 806 Cessnock NSW 2325

BHP Billiton - Hunter Valley Energy Coal Access Seeker Eduard Haegel Chief Operating Officer 02 6542 4816 [email protected] Thomas Mitchell Drive PMB 8 Muswellbrook NSW 2333

Bloomfield Collieries Pty Ltd Access Seeker William Cant Managing Director 02 4933 7077 [email protected] PO Box 4 East Maitland NSW 2323

Centennial Coal Company Ltd Access Seeker Bob Cameron Managing Director 02 9266 2700 [email protected] Level 18 - BT Tower 1 Market Street Sydney NSW 2000

Donaldson Coal Pty Ltd Access Seeker Brendan McPherson Chief Executive Officer 02 9220 9900 [email protected] Level 7 167 Macquarie Street Sydney NSW 2000

FreightLiner John McArthur Managing Director 02 9477 4602 [email protected] PO Box 1056 Hornsby NSW 2077

Genesse & Wyoming Robert Easthope Managing Director 08 8343 5490 [email protected] PO Box 2086 Regency Park SA 5942

Gloucester Coal Ltd Access Seeker Barry Tudor Chief Executive Officer 02 9413 2028 [email protected] PO Box 137 Chatswood NSW 2057

Hunter Enviro-Mining Stephen Elliott General Manager 02 4930 8149 [email protected] PO Box 470 Kurri Kurri NSW 2327

Idemitsu Australia Resourcees Access Seeker Thor Berding GM - Boggabri 07 3222 5600 [email protected] GPO Box 1127 Brisbane QLD 4001

Integra/Vale Coal Access Seeker Michael Mapp Chief Executive Officer 02 6570 2111 [email protected] 653 Bridgman Road Singleton NSW 2330

Macquarie Generation Access Seeker Grant Every-Burns Chief Executive & Managing Director 02 4968 7499 [email protected] PO Box 3416 Hamilton DC NSW 2303

Newcastle Coal Infrastructure Group - NCIG Service Provider Rob Yeates Project Director 1800 016 304 [email protected] Locked Bag 6003Hunter Region

Mail CentreNSW 2310

Newcastle Port Corporation Service Provider Gary Webb Chief Executive Officer 02 4985 8222 [email protected] PO Box 663 Newcastle NSW 2300

NSW Minerals Council Ltd Industry Group Dr Nikki Williams Chief Executive Officer 02 8202 7200 [email protected] PO Box A244 South Sydney NSW 1235

Pacific National Access Holder Mark Rowsthorn Chief Executive Officer 02 8484 [email protected]

Level 6 15 Blue Street North Sydney NSW 2060

David Irwin GM - Northern Coal 02 4968 7616 [email protected] PO Box 125 Carrington NSW 2294

Peabody Pacific Pty Ltd Access Seeker Julian Thornton Managing Director 07 3225 5500 [email protected] GPO Box 164 Brisbane QLD 4001

Port Waratah Coal Services - PWCS Service Provider Graham Davidson General Manager 02 4907 2000 [email protected] PO Box 57 Carrington NSW 2294

QR National Access Holder Marcus McAuliffe Chief Executive Officer, Coal Operations 07 3235 1373 [email protected] GPO Box 1429 Brisbane QLD 4001

Glenn Baird National Access Manager 61 7 3235 7849 [email protected] GPO Box 1429 Brisbane QLD 4001

Rio Tinto Coal Australia Access Seeker Bill Champion Managing Director 07 3361 4200 [email protected] GPO Box 391 Brisbane QLD 4001

Timothy Renwick General Manager - Infrastructure 0457 851 [email protected]

GPO Box 391 Brisbane QLD 4001

Whitehaven Coal Access Seeker Tony Haggerty Chief Executive Officer 02 8507 9700 [email protected] Box R1113

Royal

ExchangeNSW 1225

Whitehaven Infrastructure Company Tony Galligan (04) 3904-0756 [email protected]

Xstrata Coal Australia Pty Ltd Access Seeker Mick Davis Chief Executive Officer 02 9253 6732 [email protected] Level 13 133 Mary Street Brisbane QLD 4000

Anthony Pitt Group Manager Rail Ports & Rail [email protected]

Steve Bridger General Manager Commercial [email protected]

Yancoal Australia Access Seeker Tony Page Marketing Manager - Coal & Logistics 02 4929 4211 [email protected] Suite 2B 125 Bull Street Newcastle NSW 2300

CONTACT DETAILS OF STAKEHOLDERS



Attachment 1

2009-2018 Hunter Valley Corridor Capacity Strategy Consultation

Document – 7th July 2009



Attachment 2

2009-10 CAPITAL WORKS PROJECT DETAIL AND DISPOSAL TREATMENT

Documents

IPART Submission 2009-10 · 2011. 7. 18. · In the 2009/10 year ARTC has not included any additions to the Regulated Asset Base (RAB). 2.4.4. Capital Expenditure The capital expenditure