FUTURE OF FREIGHT Don Telford CEO WHO IS

FUTURE OF FREIGHT Don Telford CEO

WHO IS PACIFIC NATIONAL Main heading to fit here as required Bulk Services § 405 locomotives § 8, 525 wagons Intermodal § 234 locomotives § 4, 814 wagons § Operates through 5 terminals

PACIFIC NATIONAL RESTRUCTURE Main heading to fit here as. Pacific required National Bulk Services Intermodal Operations Services Coal Forwarders Asset Management Grain Express Procurement Industrial Products Steel. Link Maintenance General Freight Shipping PN Queensland PN Tasmania

UPDATE ON PACIFIC NATIONAL • Sale 50% of Pacific National • Victorian Government buy back of regional rail network • Grain business • Hunter Valley Coal services • Acacia Ridge Terminal • Enterprise Agreement

AUSTRALIA’S FUTURE FREIGHT TASK • Australian land Total Domestic Freight Task (btk) Main heading fit here as required freight tasktohas been estimated to double between 2000 and 2020 • Continued rapid growth in coal and minerals sector in Australia

WHAT A TIME FOR RAIL • Major investment in road and rail • Fuel prices are fluctuating • Intermodal rail has major potential for growth • Focus on climate change • Rail can deliver social and environmental benefits

WHY RAIL MAKES SENSE 10 trains each way, each day Main heading to Melbourne fit here as required Sydney to = ZERO semi-trailers Sydney to Melbourne 9 x more energy efficient 9 x less energy efficient 1. 2% transport fatalities 94% transport fatalities 0. 3% total CO 2 emissions 12% total CO 2 emissions

WHERE ARE WE GOING WRONG • No sense of urgency • Same messages • Same presentations • Same conversations • Preaching to the converted • NO ACTION

THREE YEARS AGO Pacific National Presentation - Aus. Rail 2003 “Infrastructure investment and high access fees, compared to road, act as barriers to increasing capacity on some corridors” “North South Corridor – at its limits today – yet $25 million spent on a few passing loops and automatic signaling would enable the industry to go from 20% of market share Sydney/Brisbane to around 37%” “THIS INVESTMENT IS NEEDED NOW IN FACT IT WAS NEEDED YESTERDAY”

NORTH SOUTH CORRIDOR North South Corridor 2003 2006 2009 Market Share 20% ? Infrastructure improvements 0 0 ?

CONTRIBUTING FACTORS NEXT 3 YERAS • Pacific National starter pack • Infrastructure improvements 5 to 6 years away • More track speed restrictions • No investment in above rail – no return • Competition • Customers

WHAT IS THE INDUSTRY SAYING • ARTC • QR • Productivity Commission • Pacific National

RAILWAY OR THE HIGHWAY Main heading to fit here as required

NOW OR NEVER The timing is right • Election year approaching • Focus on climate change • Waiting 5 to 6 years - not an option Less talk, more action

SHORT TERM ACTIONS • Reduce access fees NOW • Zero access fees N/S corridor next 4 years • Road pays 5% - Rail pays 27% • No logic to rail user charges • Solution easy to administer • Road not expected to provide commercial return to Government - why should rail?

LONG TERM SOLUTION • Bring forward Inland rail • Remove access fees • Introduce Swedish pricing model • Introduce locomotive registration • Increase fuel surcharge

ACHIEVES THE RIGHT OUTCOMES • Increase volume of freight on rail • Reduce CO 2 emissions and road fatalities • More incentive for investment in fuel saving R&D • More incentive to invest in rolling stock and terminals • New entrants to enter the market - more competition

Less talk More action