A proposed inland Australian rail freight line MIGHT NOT make economic sense –

The proposed 1,700 Kim’s of new freight railway has a capital cost estimate to build it.

IF BUILT, then it has all kinds of job creation and “soft” society economic benefits that surround the project scope like an angel’s halo.

However, there is no published traffic mix forecast. There is no train operations projected income statement for the generalized scope of possible future rail business.

There is instead a “build it, and they we come” conceptual expectation. The “they” being shippers.

There is no information about commercial rates and the shippers ability or willingness to pay those rail rates.

But there is an acknowledgement that the government will have to write the checks to pay for the capital cost.

In summary, there is very little due diligence as to the economic feasibility of this inland route as an investment. This is the kind of planning that made the recently built north-south Australian rail building project a financial disaster.

I suspect that none of these Australian inland rail proponents could ever hold a job working as rail planners for the big profitable North American rail companies like Canadian Pacific or Union Pacific.

What do you think of the projects financial feasibility prospects?

http://www.macrobusiness.com.au/2015/09/an-inland-rail-freight-line-makes-economic-sense/ Sent from my iPad

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