Mr BAYLEY - Page 20 of the annual report details your business arrangements, including in relation to forestry and talks about transport of logs from south to north, a third Tasmanian government forestry stimulus package, and a range of other initiatives and responsibilities. I am interested in Sustainable Timber Tasmania specifically but also some private operators, and a contract for the transport of products from south to north. Have you got a contract to deliver services to Sustainable Timber Tasmania and what can you tell us about the terms of that contract in terms of duration, types of services sought, potential partnerships and the like?
Mr DIETRICH - Yes, we do have a contract with Sustainable Timber Tasmania. There are prescribed volumes within that contract and a prescribed time frame as well. It is effectively taking around 80 000 to 100 000 tonnes of product from the south of the state up to the Bell Bay region for processing. I think the contract has about another two to three years to go on it. I'm pleased to say that Sustainable Timber Tasmania, formerly known as Forestry Tasmania, was our foundation customer for the log industry. Ten years ago we had zero logs and zero customers on the rail. We're now going to move upwards of 250 000 tonnes of logs on the rail from the south of the state to the north and also through our Parattah terminal as well. We are servicing multiple customers. The profile of the freight now for the log market is 80 per cent plantation and 20 per cent native. It's thanks to the investment in the new equipment, the bookends, the log wagon and gates, the installation of trackway bridges to the de-twitching station that we have been able to move more towards the plantation as well to safely handle that product.
Mr BAYLEY - Is that statewide or is that the south-north journey?
Mr DIETRICH - Effectively through our Brighton and Parattah terminals, up through to the George Town region, servicing the customers up there. We have another three customers as well with multiple products across each one of those and they're all under contract.
Mr BAYLEY - Has Sustainable Timber Tasmania had to terminate any haulage requests?
Mr DIETRICH - I don't believe so. They still run from their harvest points and the coupes directly through to the Brighton facility. It was through COVID 19 that rail really stood up for them because there was a shortage of truck drivers and a lot of supply chain issues and we did not miss one service supporting that volume. Those tonnages probably remained in Tasmania, so it's not like it is a whole new tonnage or a new market. It's effectively a conversion from logs being on the Midland Highway to rail, which is where they should be for the safety of everybody in Tasmania.
Mr BAYLEY - Before making any investments in some of the infrastructure you talked about before, did you make any assessment of forestry markets longer term and the prospect of the need and demand for these services in the long term?
Mr DIETRICH - Absolutely. That's why we've got some of the private operators on board who are big forestry owners and processors of wood. We've got a big business development pipeline at the moment around the opportunity of moving bulk logs from the west of the state through Burnie through to Western Junction, and looking at opportunities even out at the Fingal Valley, their existing volume and talking with customers around the potential. There are also new markets around. We do a lot of the residues around the peeler and sawlogs as well, and we have even sent some logs on our log-tainers to Melbourne for processing at some of the sawmills.
Mr BAYLEY - Native forest or plantation logs?
Mr DIETRICH - Plantation, in the main, for private customers.
Mr BAYLEY - There is obviously significant consternation, and there long has been and always will be until it ends around native forest logging, which could and should end as soon as possible. Do you have any concerns around the contracts you've got with Sustainable Timber Tasmania about that? If contracts were broken or needed to be broken, how much they would be liable?
Mr DIETRICH - As I explained, Mr Bayley, the contract is for the next two to three years and we've diversified the business to potentially forecast that native may decline, which is why we've moved more into the plantation space and set up the supply chain to cater for the plantation space.
Mr BAYLEY - Are you receiving any other state or federal assistance to move those logs direct?
Mr DIETRICH - Not one cent.
Mr FERGUSON - I'd just like to add that this business doesn't have a position that we need to get out of native forestry operations, nor does the Government. I wish to make that clear.
Mr BAYLEY - I understood that, but -
Mr FERGUSON - I want to make sure that's not assumed to be our position at all. We speak well of all of our customers in TasRail and wish them all every success commercially.
