| Results: Infrastructure Bottleneck – impartial diagnosis and shared pathway forward |
The Mine-Rail-Port Chain was a vital link for delivering mined product to market, yet had not performed at contracted tonnage levels for the past few years. This underperformance had resulted in lost economic benefit to the regional economy and miners of more than $1 billion during the preceding year alone. Several improvement programs and capital projects in recent years had not resulted in sustained improvement.
Significant growth had been targeted for the next 3-5 years, but there were substantial doubts about the ability to realise this potential.
There was a lot of history involved with all participants having contributed to the situation. The objective was not to assign blame to any participant, but rather to gain agreement to a common plan to re-capture the economic benefit of operating at contracted levels of throughput, both now and in the future.
The team identified issues driving underperformance that would limit future growth if not addressed. The key issues were:
- Lack of an integrated cross-chain governance structure to drive throughput as a key imperative
- No execution mindset or commitment to delivery – rail planning in particular was lagging well behind port expansion
- Gaps in capacity to deliver either the contracted tonnage or the full system potential
- Insufficient rolling stock to move contracted tonnage
- No commercial foundation to make the necessary investments in rolling stock
- Locomotive reliability causing disruptions in the scheduling and arrival of trains
- General distrust in projections and operating capabilities of various participants in the chain
There was an opportunity to address these issues, but a change in governance and near-term actions were required.
The result was agreement by all participants on the following key actions:
- Create an integrated governance structure to drive agreement on the operating paradigm, coordinate master planning, set business rules and hold users and providers accountable
- Commit resources to improvement projects and capacity extensions to mitigate the current operational risk inherent in the system
- Negotiate new contracts with commercial terms that align users and service providers, providing a sound commercial basis for necessary capital investment
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