Brookfield calls for State rail funding

Rueben HaleThe West Australian

Brookfield has warned the State Government that it needs to foot the lion's share of the multi-million Tier 3 repair bill.

CBH and Brookfield will begin Tier 3 access negotiations at the end of this month and will have 90 days to broker a deal to reopen four of the closed lines.

It is understood the cost to make the lines operational could be more than $50 million.

As part of the negotiations CBH has applied through the Economic Regulatory Authority seeking access to theKulin to Kondinin, Kondinin to Merredin and Bruce Rock to Merredin lines for loaded trains.

CBH has also sought access to a Yilliminning to Bruce Rock line to their empty trains out of the Merredin zone.

All Tier 3 lines closed on June 30 last year, meaning thousands of extra trucks travelling on crumbling Wheatbelt roads to get this year's bumper harvest to port.

The negotiations will also include brokering an access deal on the Tier 2 milling line which Brookfield had flagged for closure in 2016.

It is estimated if a deal can be struck it would mean about 50 per cent of the Tier 3 network would reopen.

Brookfield chief executive Paul Larsen said the costing model to make Tier 3 viable against roads is more competitive than the rest of the freight rail network.

"The reality is that for the bulk of Tier 1 and Tier 2 lines the majority of the money came from government, so If we are to make this work and for rail to be a good cost and the substantial portion of that would need to come from government," he said.

"For Tier 1 and Tier 2 to stay competitive against road the majority of the money for re-sleepering had to come from the government, but having said that we did put in $18.5 million. "And Tier 3 is in probably a more challenging position with road transport competition as the Tier 1 and Tier 2 lines."

Mr Larsen said his company had spoken with the National Party about a deal but ultimately the CBH would have to broker a viable proposal.

"The figure is an item that we need to negotiate with CBH and then depending on what they are willing to do we would then go and talk to Government about the balance," he said.

"The tonnage is one issue.We have to work through with CBH to establish exactly how many tonnes they are going to put on each line. And then the level of operation that is required will then determine how much of the $50 million would need to be spent.

"And the tonnage would then ultimately dictate how much money Brookfield and CBH would each need to put in and then what is left over is what we would need to talk to government about in a three-way cooperative and collaborative discussion."

But a stickling point which has the potential to unravel the deal will be Brookfield's insistence that a future sub-lease for CBH will never be on the table.

"We want to run and operate the Tier 3 lines and at the end of the day we're in the business of selling access to those lines," he said.

"And the sub-leasing model is not a viable option for us. We paid the government a substantial amount of money for the rights to run the State's railway for the next 50 years and we've got the best experience and are best-placed to run these railway lines."

Get the latest news from in your inbox.

Sign up for our emails