Sharing the Infrastructure Opportunity

Sharing the Infrastructure Opportunity

Aurizon, on delivering mixed-use infrastructure, from Australia to Africa
© Aurizon

Stephen Heintz

Advisor to the Chairman and CEO,

Vice President, Market Development,

Oil, gas, iron ore, and other natural resources can go nowhere without the requisite road, rail, and port infrastructure. Equally, infrastructure ambitions do not progress far, or can prove seriously unsustainable, without careful, strategic planning. A critical component of this planning is to optimize infrastructure useage. For a mining company, partnering with other companies that have a shared interest in a road, rail, or port is often essential, not least to ensure costs do not spiral out of control.

Here, Aurizon, which operates one of the world’s largest coal rail networks, discuss its experiences of owning and operating shared infrastructure. The company offers astute insights for those seeking to develop new shared infrastructure projects in developing countries.

Why is shared use infrastructure important?

It can allow critical rail and port infrastructure to actually be built. Costs can be spread across stakeholders, including different mining companies, general freight, and the public sector.

Shared infrastructure can relieve the strain on the roads. In developing countries where road infrastructure tends to be of poor quality there are genuine safety and community benefits to moving freight off roads and onto rail.

What are the biggest challenges in delivering shared infrastructure?

Striking the balance in access and operating protocols that deliver optimum performance while meeting individual customer and stakeholder needs. This also requires alignment with regulatory bodies to minimize regulatory costs and administrative burden.

AURIZON’S RAIL NETWORK IN 2014 What are your biggest innovations? 

In developing and implementing inspection, maintenance and construction techniques which maximize the available capacity. The increasing use of technology is an exciting opportunity for productivity and safety enhancement, for example the use of drones to inspect track infrastructure in remote locations.

What is Aurizon doing that others are not?

First, some historic context: Queensland was one of the first rail networks in the world to adopt narrow gauge technology and it remains one of the largest narrow gauge railway networks in the world. Since narrow gauge railways are usually built with smaller radius curves and smaller gauge structures, they can be a lot cheaper to build, equip, and operate than standard or broad gauge railways, especially in more challenging terrains. They often serve industries and communities where the traffic potential may not justify the cost of building a standard or broad gauge line, in particular those associated with mining.

As a result, Aurizon has especially valuable expertise in developing and operating narrow gauge railways. For instance, Aurizon has entered into a joint venture with GVK Hancock on a proposed integrated rail and port infrastructure project that will service high-volume coal mines in the Galilee Basin. This includes a 300km narrow gauge rail line that would carry trains of up to 25,000 tonnes.

We also carry freight on standard gauge railtrack, so we have a unique combination of expertise across the different technologies. Moreover, Aurizon owns and operates integrated, bulk supply chains for multiple mining customers. The operational and commercial success of these multi-user supply chains can provide useful insights for those seeking to sustainably establish relatively complex, shared use infrastructure.

How do you translate your experiences in Australia into tackling shared infrastructure needs in Africa?

Aurizon’s experience with both narrow and standard gauge technology, in complex bulk supply chains, and in transitions from government to private sector ownership, provides an excellent template for others. New approaches in technology and commercial practices can also be of great value in an African context.

What one piece of advice would you have for developing country governments looking to develop shared infrastructure?

Develop policy that encourages a tier one rail and port developer/operator to invest and hold them to account for providing supply chain planning and coordination. Core priorities for government/s should be to provide a clear policy framework to promote multi-customer infrastructure and to ensure regulatory and tax requirements promote investment and development.

What one piece of advice would you have for mining companies in developing countries looking to benefit from shared infrastructure?

Shared infrastructure can accelerate the development timeframe and reduce the investment burden for mining companies. It involves active engagement to bring the needs of the various parties together into a common user solution with benefits for all.

About Aurizon:
Aurizon operates some 2,700 kilometres of heavy haul rail network connecting more than 50 mines with three major ports in Queensland, Australia. In 2014, this network delivered a record 214 million tons and a significant investment program that will complete in 2015 will lift capacity to more than 300 million tons per annum.

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