What's on the line: The findings from the Kandos to Gulgong rail feasibility study

The approximately 93km railway line from Kandos to Gulgong - passing through Mudgee, Lue and Rylstone - has been suspended since 2007. The Kandos end connects to Lithgow, while the Gulgong end could be connected to the nearby Sandy Hollow line (through to the Hunter Valley) and thus create a link to Ulan.

And it's that route Energy Australia has expressed interest in to source coal for the Mount Piper Power Station near Lithgow. The station is currently fed by the adjacent Springvale Mine, which is scheduled to close in 2024 and in recent years has encountered supply problems.

Mt Piper, on the other hand, has a lifespan until 2043 - potentially longer - which is also outside of the mine life of Angus Place that if approved could take over from Springvale until 2038.

A connection to the Ulan coalfields would open up a diversified supply, namely from Ulan, Wilpinjong or Moolarben. However, sections of the Kandos to Gulgong line has deteriorated significantly during its non-operational period and the study unpacks what would be needed to bring it back and the cost.

The study suggests "degradation of the assets, including rail quality, sleeper degradation, timber bridge deterioration and discontinuation of rail line at several locations including sites where the rail corridor crosses existing roads".

The engineering assessments recommend a 25-tonne axle load (TAL) as suitable for the power station's requirements. Although if 25TAL is adopted for the Kandos to Gulgong section, the line from Wallerawang to Kandos would also need to be upgraded to the same limit.

Passing loops would need to be constructed in areas at Renkan (outside Rylstone) and Canadian Lead (outside Gulgong). And a new rail spur would need to to be built to bypass Gulgong junction and connect to the Sandy Hollow line.

It was also noted that while Ulan, Moolarben and Wilpinjong mines do have rail infrastructure, none currently have west-facing train access. But any arrangements with the power station hadn't been taken into account for the study.

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The study considered several scenarios for use of a reinstated line and found a viable proposition in Scenario 3b, which would be; to source coal for Mt Piper, 4,000 kilotonnes per annum, from the Ulan area by increasing coal production.

Based on demand and travel time savings, this scenario would return an estimated $1.20 for every dollar invested or $422m over the life of the project compared against a cost of $350m. This is a benefit-cost ratio (BCR) of 1.20 and it was the only scenario predicted to deliver above 1.0.

However, the study did indicate that coal demand assumptions were difficult to make. And that Mt Piper could need as low as 500 kt p.a or as much as 4,000.

The study has sought to identify other potential freight demand that could be captured from the broader freight network and a bespoke model was developed to consider potential markets and origin-destination pairs that could be attracted to the Kandos to Gulgong route. Although, stakeholder engagement indicated only "limited" support.

The study noted that the lifespan of Mt Piper is until 2043, which could be increased 2056, although this might be out of step with future NSW policy. But as the newest coal-fired power station in NSW, and having undergone refurbishment works in recent years, it's also possibly the most efficient - and could be vital for the energy security of the state until more sustainable energy sources come on line.

The life of the nearby mines are Springvale to 2024 and Angus Place to 2038 - if the latter gets planning approvals to commence extraction when Springvale closes.

Coal from the Ulan area can't be transported via road and the study didn't consider transporting it by rail via the Merrygoen line to be cost competitive. There are no future freight rail line projects expected to come on line that would change travel times or distances across the NSW network.

Even though the study identified limited significant ecological impact, during engagement with stakeholders in November 2019 Council suggested the potential for public opposition to the reinstatement of railway operations on the line. Particularly regarding coal trains passing through local towns along the line.

And indicated that the lack of rail activity over time has meant that the residents no longer expect train operations. Especially in Mudgee, where housing is now near the rail corridor.

These issues would need to be considered as part of a subsequent business case and a Review of Environmental Factors assessment.

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