Southern Shorthaul Railroad fees to jump from $119k to $700k

Safety accreditation fees for small and medium-rail freight operators have gone through the roof, under regulatory changes proposed by the national safety body.

The Office of the National Rail Safety Regulator has proposed increasing fees by between 400-600 per cent from July 1.

Operators say the costs will be passed on to primary producers and consumers.

Southern Shorthaul Railroad, East Bendigo, rail director Jason Ferguson said the company paid $119,000 in accreditation fees two years ago.

"The rail regulator told us six months back that our costs would increase to about $400,000 per year and now they are saying $700,000 per year," he said.

"Over the last two years the accreditation fees have gone up 20.3pc without any consultation."

Mr Ferguson said from late 2024, SSR would carry 100 per cent of all Victorian and NSW grain to bread producers.

"This will impact on the cost of living and further push up prices," he said.

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The ONRSR, set up 10 years ago, had traditionally charged accreditation fees based on train kilometres travelled by rail operators and track kilometres under management by access providers (such as the Australian Rail Track Corporation).

The NSW and Victorian governments had withdrawn funding of ONRSR and Mr Ferguson said it was understood that the agency still needed to increase fees by 30pc on the 2020/2021 charges to make up for the shortfall.

The regulator had spent a significant amount of money developing a new tier-based approach, based on risk, which would deliver what Mr Ferguson said were "perverse outcomes.

"One large government passenger rail operator will go from paying around $4.3milion per year in accreditation fees back to $2.2m per year," he said.

"The assumptions used by ONRSR in their new approach are deeply flawed - you don't have to be (Albert) Einstein to work out where the areas of greatest risk are.

"Let's look at the history of major rail incidents - Granville, Glenbrook, Waterfall - all involving passenger trains, yet under this new model they are deemed to be less risky than rail freight and should be paying less."

Mr Ferguson said ONRSR did not spend money wisely.

"They spend massive amounts on consultants, contractors and IT," he said.

"They spend almost $800,000 per year on travel expenses such as sending people from interstate to perform audits when they have people in local offices.

"There's wastage everywhere and they expect industry to pay for it."

Under the old system, the regulator was partially funded by governments, which provided some accountability over costs.

"Under the new regime this accountability is removed, and we are concerned about the risk of future increases without care as it is apparent that they feel industry will just foot the bill," Mr Ferguson said.

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Among other operators likely to be affected are Watco, Qube Logistics, SCT, Bowmans Rail and Manildra.

NSW operator Watco carries one million tonnes of bulk grain a year and has up to seven livestock services a week, during the season, on the east coast.

Qube Holdings transports hay from Ultima, as well as steel, cement and paper.

A spokesman said Qube shared many of the concerns raised by others in the industry about the lack of transparency, equity and clarity, with respect to the new cost recovery model.

"We have written to ONRSR urging the regulator to provide the industry with a briefing on the proposed changes and we remain hopeful this is acted upon," the spokesman said.

An ONRSR spokesperson said state and federal transport ministers met last week to discuss proposed changes to the fee regulations.

"The regulation was not passed and ONRSR is now awaiting formal advice before confirming fee arrangements for 2023/24," the spokesperson said.

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