Drop in grain freight rates will save farmers about $9M

13/9/96

Transport Minister Eric Charlton today announced a drop in grain freight rates that will save farmers about $9 million this season.

The new freight rate for farmers transporting their grain by rail is an 11.82 per cent reduction after inflation. With the new rate, the savings for farmers could be even higher than $9 million if the new crop exceeds last year's harvest.

"It is a massive cost saving for Western Australian growers and is largely due to the efficiencies introduced by Westrail over the past year," Mr Charlton said.

"Growers are now reaping the benefits from the restructuring of the State's rail services which has led to a dramatic increase in Westrail's productivity."

The new rates, which were approved today by the Grain Freight Steering Committee, will take effect from October 1. This is a month earlier than normal, giving WA's grain growers more time to make informed decisions about their transport needs before harvest. At the same time, the market share rebate scheme will no longer apply.

Railways Commissioner Ross Drabble said the new rates again demonstrated Westrail's commitment to the grain industry and came only weeks after the announcement that Westrail would spend nearly $250 million upgrading its track.

"The reduction in rates and the improvements being made are the result of a more efficient Westrail, brought about by the modernisation program," Mr Drabble said.

"The changes are being made so that we can continue to provide competitive services that our customers want to use".

The new grain freight rate was set as part of an annual review of a five-year contract drawn up in 1994 between Westrail and the grain industry. The contract ensures that productivity gains made by Westrail are passed on to growers.

Mr Charlton said the new price arrangement was a real incentive for growers to make the best possible use of the rail system.

"The improvements are starting to take effect and the opportunity is there now for farmers to take advantage of the gains being made," he said.

"The success of Westrail in making its operations more efficient must be matched by complementary decision-making by the Australian Wheat Board, Co-operative Bulk Handling and the Grain Pool to ensure that returns to growers are maximised."

Media contact: Sally Squires 321 7333