Major rail freight corridor between Port of Melbourne and Dandenong to bust congestion, cut costs of last-mile

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The Federal and Victorian Governments will invest $28 million, with each contributing $18.3m and $9.7m respectively to create a direct rail freight route between the Port of Melbourne and Dandenong South.

A new track will be built linking the prime railway line with Dandenong South-based Salta Properties’ cargo hub to reduce the massive congestion in Melbourne’s growing south east region. The new track will directly connect to the Port of Melbourne’s $125 million on-dock rail project, allowing shuttles to run from Dandenong South directly into the port. It will then connect to the Cranbourne Line.

The project will be delivered by the Level Crossing Removal Project as part of the $1 billion Cranbourne Line Upgrade.

Work will start early in 2021 on what will become Melbourne’s biggest Intermodal Terminal, enabling the efficient movement of thousands more containers through the Port of Melbourne.

Salta will concurrently invest more than $50 million to construct the Dandenong South Intermodal Terminal to be located on Salta’s 180-hectare Nexus Dandenong South Intermodal Estate.

Nexus Dandenong South is home to major users of freight infrastructure including Woolworths’ $215 million Melbourne South Regional Distribution Centre, Bunnings’ 40,000m2 Regional Distribution Centre, plus major logistics businesses, Visa Global Logistics and Silk Contract Logistics.

Significant capacity exists for additional tenants to co-locate at the estate. They will benefit strategically from being adjacent to the Dandenong South Intermodal Terminal.

Salta anticipates the value of new development on the estate to exceed $1 billion over the next three to five years.

Salta Founding Director Sam Tarascio Snr said he was delighted to reach an agreement with the Victorian government after developing Nexus Dandenong South Intermodal Estate. “We have been working extensively with the state government to get to this point and it is satisfying to know that the facility will be connected directly with the Port of Melbourne. This has been a long-term project, where we set out to work with industry and government to provide the best possible inland port infrastructure to Melbourne’s south east, providing an efficient route to market for both importers and exporters,” said Tarascio.

Michael McCormack, Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development said that the new freight rail link will help Melbournians get home sooner and safer while supporting hundreds of jobs when and where they are needed most.

“We are backing this vital freight rail connection to support Melbournians through the pandemic and unlock private sector investment and economic growth into the long-term. The new spur line will connect the intermodal freight terminal at Dandenong South to the Cranbourne Line. As part of the Port Rail Shuttle Network, it will help cut the number of trucks on inner Melbourne roads by up to 100,000 each year and support hundreds of jobs during construction and as part of the terminals ongoing operations,” said McCormack.

“The focus of our government is getting people in jobs and our industries open and ready for business as we continue to deliver our record ten-year, $100 billion land transport infrastructure pipeline to lay the foundations of a financial bridge to recovery on the other side of COVID-19,” added McCormack.

Melissa Horne, Victorian Minister for Ports and Freight also said the Port Rail Shuttle Network will help improve and modernise Melbourne’s existing transport networks. “This is a massive win for both motorists and industry, as we continue to reduce congestion and make it easier and cheaper for businesses to use rail freight.”

“We’re making rail freight a more attractive option for businesses, and this investment means containers can be transported by rail the entire way from the Port of Melbourne to Dandenong South. It will reduce congestion at the port gate and cut the high cost of last-mile that so often disadvantages containers moved by rail,” added Horne.

The project is part of the Victorian Government’s work to continue supporting the Port of Melbourne, which contributes $6 billion to the Victorian economy each year and is a crucial part of the state’s supply chain.

State Member for Dandenong, Gabrielle Williams, said the new rail connection would be welcomed by the local community. “Construction and ongoing operation of the new terminal will create hundreds of jobs that are needed in the South East. It will build on the strengths of Dandenong South as one of the largest manufacturing and employment hubs in Victoria,” said Williams.

Container Transport Alliance Director Neil Chambers was among those to welcome the announcements.

“This announcement comes hot on the heels of other major Salta developments, including the 10-year leasing deal with ACFS Port Logistics at the Salta Nexus Altona site, which will also connect to the Port Rail Shuttle Network,” said Chambers. “With the right rail connections to Salta’s Nexus Industrial – Dandenong South estate, and with associated train paths and frequent rail services to and from the port, businesses could benefit from co-location to minimise last-mile freight movements and take advantage of the rail option.”

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