Evening all
A few months ago we wrote to the Minister for Transport in relation to the Burra railway station and regarding a possible hand back of some of the states closed railway infrastructures. We have received a response which was promised to post once we got one back, for those of you who can't remember the original questions, I have reposted these for your convenience along with the response.
(1) When is the Burra railway station going to be handed over which did not happen on the 21st April as stated by Minister Koutsantonis?
(We wrote to the late Dr. Bob Such regarding the Burra railway station and that it was according to the Government going to be handed back to the State last June, Bob wrote to Minister Koutsantonis in relation to the Burra station and the delay on itss hand over, Minister Koutsantonis responded to Dr. Such and said that the Burra railway station was going to be handed back to the state from GWA on the 21st of April 2014)
(2) Besides this building, is GWA going to handover any or all closed lines that they are not going to operate on back to the state govt in the near future?
Ministers response This response came from Mr. Stephen Mullighan
Thank you for your letter regarding the rail infrastructure. I apologies for the delay in responding to you.
Geneese & Wyoming Australia leases land from the minister for transport and infrastructure throughout South Australia for its rail operations, following the privatisation of the states railway lines by the then Federal Liberal Government in 1997. The lease commenced on 7 November 1997 for a 50 yr term with a right of renewal for a further 15 years.
I have been advised by the department of Planning, Transport and infrastructure that Genesee & Wyoming Australia has not approached the South Australian Government regarding the surrender of any rail land.
The rail infrastructure is not a South Australian Government asset, however Geneese & Wyoming Australia is obligated to maintain it to a requirement to ensure the network is in such condition that trains could be operated at two weeks' notice.
Thank you for your interest in this matter
Your sincerely
Minister for Transport And Infrastructure
Also I would like further reiterate that:
In their own annual report from 2010 GWA have stated
Our concession and/or lease agreements in Australia could be cancelled, and there is no guarantee these agreements will be extended beyond their terms.
These concession and lease agreements are subject to a number of conditions, including those relating to the maintenance of certain standards with respect to service, price and the environment. These concession and lease agreements also typically carry with them a commitment to maintain the condition of the railroad and to make a certain level of capital expenditures, which may require capital expenditures that are in excess of our projections. Our failure to meet these commitments under the long-term concession and lease agreements could result in the termination of those concession or lease agreements
Also, it is also worth further pointing out:
however Geneese & Wyoming Australia is obligated to maintain it to a requirement to ensure the network is in such condition that trains could be operated at two weeks notice.
This simple statement has told us a lot more than what we have tried to find out in the last few years. It was not long after this that we received, through Freedom Of Information (FOI) the GWA Lease Agreement.
If the above statement by Mr Mullighan is true, then GWA are most certainly in breach of their lease, as it would take a lot more than two weeks to maintain the lines to a minimum standard, in fact the section that runs through Hanson alone would take two weeks, as would the section through Stockport.
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In addition to the Minister's reply some futher questions have been put forward to the Government regarding the Lease Agreement that
"Geneese & Wyoming Australia is obligated to maintain it to a requirement to ensure the network is in such condition that trains could be operated at two weeks notice."
(1) Does this lease condition include all rail infrastructures that are leased by GWA or only certain lines and buildings?
(2) If the lease conditions cover all the rail infrastructures, then is the Government aware that some of these lines may not have be maintained in such a way as to ensure the network is in such a condition that
"trains could be operated on within two weeks notice"?
(3) At what efficiency are the trains expected to operate on these lines? Would the infrastructure need to be reopened that the trains could be run at a reasonable speed or, could the clause in the agreement be interpreted in such a way that GWA would only need to reopen the infrastructures even if it meant that the trains could only operate at very low speeds but the lines are usable?
(4) Who would have to pay the cost of these repairs so that the infrastructure could be operated on within a two week period?
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We received a response from the Minister the Hon Stephen Mullighan, it appears that he did not get the memo.
Thank you for your recent letter regarding correspondence regarding the lease agreement with Genesee & Wyoming Australia, unfortunately, neither my office nor the Department of Planning, Transport and infrastructure, have any record of receiving correspondence, dated 20th august 2014 matching your description
We have since resubmitted the aforementioned questions, as well as additional questions in response to the GWA Lease Agreement which we now have:
(1) In the copy of the GWA Lease Agreement it states:
RENT, AND OUTGOINGS
3.1 Rail Corridor Rent
Rent for the Rail Corridor is:
3.1.1 $1.00 per annum; and
3.1.2 after the expiry of 5 years after the Commencement Date, in respect of
any portion of the Rail Corridor which is sublet, Commercial Rent.
3.2 Balance of the Land Rent
Rent for the Balance of the Land is:
3.2.1 for the first five years of the Term $1.00 per annum; and 3.2.2 for the balance of the Term, Commercial Rent.
Can you please provide us with what GWA are paying in rent to the public/Government of South Australia given the first 5 years of $1 per annum started on the 7th of November 1997, and ended on the 7th of November 2002 , what is the current rate GWA are now paying in rent from the 7th of November 2002 for the rail infrastructure in South Australia?
(2) In Section 9 of the lease agreement
9. TERMINATION
9.1 Events of default
9.1.1 The Lessor may terminate this lease forthwith and re-enter and take
possession of the Land or, subject to clause 9.1.2, convert this Lease to a monthly tenancy if any of the following events occurs, is not remedied and is not waived by the Lessor:
It states in the agreement that if the lessee
9. TERMINATION
(e) (Fails to provide Minimum Services) during the first five years of
the Term, the Lessee fails:.
And in clause
9. TERMINATION
(F..(Railway ceases) the Lessee ceases to conduct Railway
Operations on the entire Rail Corridor for a continuous period of eighteen (18) months.
Many of these lines have not seen movement for several years, and it also appears that several other breaches have been made in relation to the agreement.
Why hasn’t the Government therefore terminated the lease agreement as stated in these and other clauses?
In Comparison, & to give some examples
When one person or company hires, rents or leases property from another, it is often written in a clause that the property, or equipment must be returned in the same or better condition, such as Government Housing Trust homes, this should be no different to the lease agreement with GWA and the railway infrastructure in South Australia.
(3) What if any procedures has the Government made to ensure that GWA is held accountable, that also makes sure that the rail lines and other rail infrastructures are kept, and maintained that ensures that the people of this state are getting the most out of the lease agreement, and that insures these states infrastructures are maintained to the extent, that ensures the network is in such a condition
"that trains could be operated on within two weeks notice” this would not only be in the State Governments best interest, but the people who they represent in this state?
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Additional information...
In a statement by the productivity commission report in 22/3/2010, it was stated that SAFF Grains were given details of how Genesee & Wyoming Australia Pty The South Australian Farmers Federation (SAFF) Ltd, who have a five-year agreement with Viterra have put unreasonable controls on their rail-lines in South Australia and are charging exorbitant fees, This pricing structure virtually precludes any other company but Viterra from using rail in South Australia easily and cost effectively
“On their line from Dry Creek to Port Adelaide they require an additional pilot – while only a distance of 10 km, the charge for the pilot is $2.00 per mt. It has been calculated that for one train carrying 2200 tonnes over 145 km of track, that Genesee & Wyoming Australia would charge $59,400 compared with V/Line $6,224, Australia Rail Track Corporation $2,482 and NSW Rail $2,317”.
This sort of price gorging is a result of privatisation, something we have seen in many other areas in infrastructures that have also been privatised in SA, the massive price difference being charged for rail freight in South Australia compared to the other states, could, and has had a negative impact to the rail industry in SA, Privatisation was supposed to create competition and lower the cost, this clearly has not happened, and the govt needs to be asked why private companies are being allowed to get away with holding the monopoly by charging exorbitant fees that discourages other operators from using many of the rail lines in our State.