Valley's $3 billion rail and port link

A $3 billion rail line and port concept connecting the Latrobe Valley to the Bass Straight via the Ninety Mile Beach has emerged as the preferred export route by developers of alternative brown coal technologies.

According to a preliminary costing analysis by engineering consultancy firm GHD, a rail freight connection to a port near McGauran's Beach will be the most cost effective way to export large scale quantities of coal derived products, including briquettes and fertilisers.

GHD senior mechanical engineer and Gippsland Resource Infrastructure Development secretary Jon McNaught said with 90 per cent of the alternative brown coal technologies currently under development destined for export markets, the "big picture view" for the Valley 's required export capacity was 30 to 50 million tonnes annually in the next 15 years.

Mr McNaught said while the Port of Hastings and Port Anthony, the group's second preferred option, had a clear role to play in boosting Gippsland's export capacity, the McGauran's beach option proved the most cost effective option once established.

Under the concept, product could be railed to port via 16 loaded trains daily, with each 90-wagon service offering a 9000 tonne capacity, delivering a $6 per tonne freight cost, putting the route on a competitive level with Queensland's black coal export freight industry.

In making a case for the concept, Mr McNaught pointed out limitations in other options, including the current Gippsland rail line, and a potential rail link to the Port of Hastings.

"The Gippsland line is almost 100 per cent designed for passenger rail - you would struggle to get two million extra tonnes on the (Gippsland) rail line per annum," Mr McNaught said.

"Do you spend the $1 billion on a rail link to Hastings that will only allow you 20 million tonne's worth (of export capacity), or do you look straight for the bigger picture."

He said adding across available combination of transport infrastructure options, including road, there was the combined capacity to put an extra five million tonnes of freight product to ports.

Mr McNaught said the current cost of road freight from Gippsland to Melbourne ports ranged from $24 to $35 per tonne.

While stressing the plan was only in concept stages, an overarching question remained over the plan: who would bankroll the project.

"We don't want the Western Australian owner operator option where no one else gets to use the rail," Mr McNaught said, noting the concept had attracted preliminary interest from "private players" in regards to the project's funding.

While not officially briefed on the concept, Victorian Ports Minister David Hodgett said government was always happy to consider the merit of proposals from the private sector.

"The government has set out its port priorities for the next 50 years, and for us the Port of Hastings is clearly of the most benefit to Gippsland's position," Mr Hodgett said.

"Obviously this plan has clear benefits for those companies - the shorter you have to move freight the more cost efficient it is, but you can't have ports dotted along the coastal line just because it's more convenient for companies to get the freight to water.

"But we are happy to look at their concepts and where it could fit into with our freight logistics plan."

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