ANNUAL REPORT Building a world class rail network

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1 ANNUAL REPORT 2002 Building a world class rail network

2 Our vision is to deliver a world class rail network for the people of New South Wales. PROFILE Rail Infrastructure Corporation (RIC) owns and maintains the New South Wales rail network on behalf of the State Government and provides access to passenger and freight operators. It was established on 1 January 2001 as a statutory State Owned Corporation under the Transport Administration Amendment (Rail Management) Act RIC is an important member of the rail network. Our customer base comprises SRA, Pacific National, regional freight and heritage operators. The Corporation s principal objective is to ensure that the New South Wales rail network enables safe and reliable passenger and freight services to be provided in an efficient, effective and financially responsible manner. Our vision is to deliver a world class rail network for the people of New South Wales. CONTENT 1 OVERVIEW 2 SNAPSHOT OF OUR PERFORMANCE 3 OUR OBJECTIVES 2002/03 4 CHAIRMAN S REPORT 5 CHIEF EXECUTIVE OFFICER S REVIEW 7 MANAGEMENT STRUCTURE 8 REVIEW OF OPERATIONS Building a safer future Building better systems and tools Building reliability Building capacity Building efficiencies and effectiveness Building our commercial business capabilities 18 RAIL MAINTENANCE DEFINITIONS SUMMARY 19 OUR PEOPLE 22 ENVIRONMENT 24 FINANCE 26 CORPORATE GOVERNANCE 28 BOARD OF DIRECTORS 29 FINANCIALS 57 APPENDICES IBC INDEX 30 October 2002 The Hon R J Carr MP The Hon M R Egan, MLC Premier Treasurer Minister for the Arts Minister for State Development Minister for Citizenship Vice President of the Executive Council Level 40 Level 33 Governor Macquarie Tower Governor Macquarie Tower 1 Farrer Place 1 Farrer Place Sydney NSW 2000 Sydney NSW 2000 Dear Premier and Treasurer Rail Infrastructure Corporation 2001/2002 Annual Report We have pleasure in submitting for your information and presentation to Parliament Rail Infrastructure Corporation s Annual Report for the year ended 30 June The Report has been prepared in accordance with the Public Finance and Audit Act 1983, the Annual Reports (Statutory Bodies) Act 1984, and the Annual Reports (Statutory Bodies) Regulation Yours sincerely Rod Sims Chairman John Cowling Chief Executive Officer

3 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 Safety is the top priority at RIC for our employees, customers, passengers, and everyone who works within the rail industry. RAIL NETWORK The New South Wales rail network is a complex mix of urban, rural, interstate and heavy haul railways. It consists of 8,700 kilometres of rail track, more than 5,000 rail and road bridges, and a signalling and telecommunications system combining satellite and land-based technology. The Sydney Metropolitan network is Australia s largest. In geographic area, it is one of the largest in the world. It is a unique rail system that carries both passenger traffic and heavy freight and covers 1,760 kilometres of electrified track. Each weekday, the NSW rail network supports almost 1,000,000 passenger journeys and 230,000 tonnes of freight movements. OUR FOCUS Our focus over the first full financial year of operation was to merge RAC and RSA and implement a new business model and management structure that would support the environment in which we operate. At the same time we made a commitment to our customers and stakeholders to quickly improve the long-term safety and reliability of rail infrastructure in New South Wales. In this regard, and with the advantage of increased Government funding, significant gains have been made. The performance of the network has improved and key indicators for safety and reliability show significant improvement. 1

4 SNAPSHOT OF OUR PERFORMANCE 2001/02 Achievements Stage 1 of Safeworking Rules Review Project Work on Track rules implemented and training completed for 3,850 workers. $54 million commitment for new equipment to enhance safety and efficiency. Helped to achieve almost 92% peak on-timerunning on CityRail network: the best performance in several years. Speed restrictions on four main country lines reduced by 55% to the lowest level in 10 years. Completion of: East Hills amplification (Stage 2). Dapto to Kiama electrification project. Duplication of Richmond line between Marayong and Quakers Hill. Dungog-Craven 47 km resleepering project. Tahmoor-Bargo 8 km concrete resleepering project. Stages 2 and 3 of upgrade of Port Botany freight line completed. $606.5 million spent on maintenance. Over $5.5 million invested in staff training and competency development programs resulting in 13,852 employee training days. Establishment of RIC College. Financial Summary for year ended 30 June months 6 months* ended ended 30 June June 2001 $ 000 $ 000 Revenue Access fees from Operators 561, ,951 NSW Government Community Service Obligations 246, ,933 Operator and Department of Transport Funded Capital Projects 160,306 82,417 Other 187,369 88,404 Total Operating Revenue 1,155, ,705 Expenditure Infrastructure maintenance and other 906, ,444 Operator/Government funded capital projects 160, ,165 Network control and communications 77,189 36,520 Total expenditure 1,143, ,129 Profit/(Loss) from Ordinary Activities before Superannuation Net Movement, Non-Current Asset Writedown and Income Tax Expense 12,048 (13,424) Superannuation Net Movement (32,462) 15,746 Profit/(Loss) from Ordinary Activities before Non-Current Asset Writedown and Income Tax Expense (20,414) 2,322 Non-Commercial Asset Writedown (47,840) Loss from Ordinary Activities before Income Tax Expense (20,414) (45,518) Income Tax Expense (1,167) Net Loss Attributable to Members of RIC (20,414) (46,685) *The comparative figures in this summary cover the six-month period from the date of establishment of RIC on 1 January 2001 to date of the first financial report on 30 June Revenue Other 16% Operator and Dept of Transport Funded Capital Projects 14% NSW Government Community Service Obligations 21% Expenditure Network Control and communications 7% Operator/Government funded capital projects 14% Access fees from operators 49% Infrastructure maintenance and other 79% 2

5 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 OUR OBJECTIVES 2002/03 Continue to reduce workplace OH&S incidents through improved safety culture and targeted training programs. Deliver an accelerated expanded maintenance program. Deliver almost $50 million of savings through improved efficiencies. Development of a new possession regime. Upgrade signal control infrastructure. Progress regional resleepering projects. Build staff and organisational capability through detailed training programs Expand RIC College to include major regional areas and CBD. Extend shared business services to deliver improved service levels and achieve cost savings for both RIC and SRA. 3

6 The combination of the asset manager and the maintenance provider into a single corporation enabled the organisation to pool its knowledge and its experience. CHAIRMAN S REPORT RIC will be working hard to deliver against the very clear direction that has now been set. This last year was very significant for Rail Infrastructure Corporation. It saw the completion of the amalgamation of the two former organisations, Rail Access Corporation and Rail Services Australia into one new organisational structure, and the completion of an internal review of the track condition. The combination of the asset manager and the maintenance provider into a single corporation enabled the organisation to pool its knowledge and its experience. It also facilitated a management review of the condition of the infrastructure and the future programs required to repair and, where necessary, replace vital elements of the network. From this platform of sound infrastructure condition knowledge we were able to discuss with Government our future funding requirements. I am pleased to report that the additional Government funding for maintenance that was provided has given us a secure base for the future. It has also delivered improvement in on-time running and a reduction in train delays and speed restrictions. There was a 20% reduction in passenger train delays on the metropolitan network in 2001/02 compared to the previous year and this improving trend is continuing into the new financial year. In the country, speed restrictions on the four main country lines are at historically low levels. The Board strongly supported management s view that field equipment needed to be modernised to improve both safety and productivity and approved the order of a number of large pieces of maintenance equipment. Delivery of these during 2002/03 will underpin safer work practices and improved productivity in future years. In addition to major plant purchases significant investment has been made in providing updated tools to our maintenance teams to help reduce manual handling incidents. A fundamental outcome of our review of track condition, and discussions with Government, was the establishment of programs to save in excess of $175 million in one to five years. These programs should generate over $50 million in savings in 2002/03. These savings will pay for expanded maintenance and renewal of rail infrastructure and also represent our commitment to the Government and people of NSW in return for the continuing financial support provided to the railways. Another key focus going forward, which also flows from the amalgamation of RAC and RSA, is the need to improve our systems. The amalgamation allows us to integrate our financial, management and maintenance systems which will substantially improve coordination, productivity and reporting. The focus in 2002/03 will be on: A reduction in workers lost time injuries; Achieving the forecast efficiency savings; Expanding scope of maintenance programs; and An improvement in systems On behalf of the Board of Directors, I would like to thank management and staff for their hard work, commitment and contribution to the Corporation s achievements during the year. The amalgamation and accompanying change placed enormous pressure on many people, and the Board recognises this. The Board feels confident, however, that we now have the platform from which to make the gains required to deliver a world class rail network for New South Wales. Rod Sims Chairman Safety is the Corporation s first objective and although safety performance continues to improve on prior years, the Board recognises that continuing reductions in workplace injuries is required. The Board is confident that RIC now has the plans in place to further enhance network safety and reliability and to drive efficiencies in the way maintenance is being delivered. RIC will be working hard to deliver against the very clear direction that has now been set. 4

7 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 Safety incidents have decreased by 8% and reliability has improved significantly. CHIEF EXECUTIVE OFFICER S REVIEW In all areas of operation, productivity improved. I am pleased to report that the steps necessary to merge the structure of Rail Access Corporation and Rail Services Australia were completed during the financial year with the implementation of our new business model in January The model was developed in conjunction with staff and unions and meets the Government s principle objective of ensuring that the NSW rail network enables safe and reliable passenger and freight services to be provided in an efficient, effective and financially responsible manner. We have moved from two separate organisations, where one managed the infrastructure and provided access for rail operators while the other carried out on-track maintenance and construction, to a single combined operation. We have built the Corporation with three highly focused operating divisions: Access, Metropolitan and Commercial. These divisions concentrate on the immediate needs of delivering a safe and reliable system and work closely with our customers. Three centres of excellence, Safety, Engineering and Projects and Support have been established to support the operating divisions. In addition, there are four professional support groups: Finance, People and Performance, Corporate Services, and Strategy and Planning. Our business model reflects the new environment in which we operate with two very large customers, SRA in the metropolitan area and Pacific National in the rail freight market. In the metropolitan area, CityRail operates 2,900 passenger services on a daily basis, while Pacific National operates 208 services each day across the State. In addition to this, a number of smaller freight and heritage operators have access to our network. Establishment of the Metropolitan and the Access Divisions is helping in our commitment to improve safety and reliability. Safety incidents have decreased by 8% and reliability has improved significantly with peak passenger delays caused by infrastructure incidents down 20% on last year. This year, the average peak on-time-running on the metropolitan network was 91.9%, the best result in several years. An ongoing program of reducing speed restrictions on the four main country lines has resulted in speed restrictions being at their lowest level for over 10 years. Both trends are continuing in the new financial year. Commercial Division manages a diverse portfolio of businesses which relate to and directly contribute to our core business and also to regional development. Safety Division monitors and audits compliance with our internal safety regulations and those established by our accreditation from the Department of Transport. Of particular significance during the year was the completion of the total review and rewrite of the Network Safeworking Rules. Stage 1 of this process, the new Work on Track rules, was implemented in November The Department of Transport (Transport NSW) has endorsed stages 2 and 3 and training in these new rules is currently taking place ahead of implementation at the end of this calendar year. The Engineering group continues to provide valuable technical support and assurance that the organisation continues to operate within engineering standards. This Division also supports innovation and new designs for providing improved safety and reliability. 5

8 CHIEF EXECUTIVE OFFICER S REVIEW continued The focus of the Projects and Support Division is to gain efficiencies in the management of major infrastructure works. This Division carries out the major rerailing, ballast cleaning, sleeper renewal programs, as well as bridge and signals replacement. In all areas of operation, productivity improved and the results during the first quarter of 2002/03 indicate that even greater efficiency gains are being achieved. In addition, several large items of maintenance equipment have been ordered. These will be progressively delivered during the current financial year, which should lead to further productivity and increased safety levels in the execution of major maintenance works. These, in turn, will also support the expanded scope of maintenance activities. Following a review of the condition of the network carried out over the past 18 months, the Corporation was able to approach the NSW government for additional funding, which I am pleased to report was granted. Furthermore, the Community Service Obligation funding arrangements were fixed and extended for a period of five years which together with strong access agreements with our two major operators provides the organisation with a sound financial platform for planning longterm maintenance. Working very closely with SRA we were also able to re-examine the track possession management system in order to develop plans to streamline this process and minimise disruptions to passenger and freight services. The new possession regime will be implemented from 1 July This streamlined possession process together with newly acquired high production maintenance equipment delivered to the field will see a substantial rise in efficiency and productivity in 2003/04 and increased scope delivery. These several new initiatives highlight the importance of longterm planning in rail to ensure both safe and reliable infrastructure is delivered at an efficient cost. None of these changes would have been possible without the full cooperation and involvement of management, staff, unions, SRA and other rail operators, and the NSW Government. I am pleased to report that the close working relationships that exist with all stakeholders allowed us to deliver the outcomes highlighted in this annual report and I look forward to RIC producing further improvements during 2002/03 and beyond. John Cowling Chief Executive Officer 6

9 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 MANAGEMENT STRUCTURE AND KEY RESPONSIBILITIES John Cowling CHIEF EXECUTIVE OFFICER METROPOLITAN ACCESS COMMERCIAL Gary Seabury Glen Dawe Karl Mociak GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER Management of the rail infrastructure assets of the Sydney metropolitan network Delivery of safe and reliable train paths to freight and country passenger customers Management of commercial businesses and joint ventures PROJECTS AND and SUPPORT ENGINEERING SAFETY Peter Mesthos Mike Hickey Ken Kelman GENERAL MANAGER GENERAL MANAGER GENERAL MANAGER Planning, management and delivery of Major Periodic Maintenance and Capital Works projects External contracts IT projects Ensure RIC infrastructure is specified and designed to authorised standards Development of asset management systems and frameworks Leadership and management of safety across RIC, including operations, infrastructure and workplace safety; safety audit and investigation; accreditation; environmental assurance and quality assurance CORPORATE SERVICES FINANCE PEOPLE AND and PERFORMANCE STRATEGY AND and PLANNING Irina White Richard Lumley* John Cairns Janet Clayton GENERAL MANAGER AND CHIEF FINANCIAL OFFICER GENERAL MANAGER GENERAL MANAGER COMPANY SECRETARY Board secretariat Legal counsel, internal audit and corruption prevention Communication management Policies and procedures, insurance Properties Finance and accounting policies, systems and procedures Budgeting and monitoring of RIC financial management performance Statutory and internal financial reporting *Appointed 26 August Strategic management of human resources Planning Corporate performance, regulatory and economic management Co-ordination of long-term asset management plans, replacement strategies and major development proposals IT strategy RIC has 5,695 employees working together and in partnership with our customers and stakeholders to build a world class rail network. RIC Workforce Support Services 20% Workshops, Trades and related 3% Argus Trades and related 2% Infrastructure Workers and related 58% Engineering and Technical 17% 7

10 Building a safer future In the past year, a huge effort has been directed towards enhancing RIC s safety culture and improving safety performance across the organisation. REVIEW OF OPERATIONS Workplace Safety RIC is enhancing its safety culture through a change process which includes reviewing our approach to OH&S and rail safety risk management, identifying the broader organisational issues influencing safety performance, and providing recommendations for further improvements. In the area of incident management, we are critically analysing all incidents that result in injuries to staff. Understanding the causes of incidents enables corrective and preventative actions to be implemented. While progress has been made, our lost time injury frequency rate (LTIFR) for the financial year was (against a target of no more than 20), although for the month of June 2002 it was less than half of the yearly average. There are pockets of the organisation that are achieving excellent performances. Mentoring programs are being implemented to extend those performances across the whole organisation. At the same time, excellent safety performances by individuals and teams are being recognised by our Club Zero Awards. Safety training A number of training initiatives have already been developed to improve our overall workplace safety. These include training in the principles of safety management for executive managers, comprehensive WorkCover accredited workshops for supervisors, team leaders and team managers and extensive on-site training in manual handling techniques for our operations staff. Network safety Safeworking Rules Review project This project is being carried out in three stages. In November 2001, Stage 1 of the new Safeworking Rules, Work on Track was introduced and 3,850 employees were trained in these new procedures. These new rules will help ensure consistent application of the appropriate worksite protection procedures. Stage 2, which covers Systems of Safeworking and Special Working, General Instructions and Train Working Rules, and Stage 3 which relates to Signalling and Signs, received final industry signoff in June 2002 and were endorsed by the Rail Safety Regulator, Department of Transport (Transport NSW) in July These will be implemented in December 2002 and will apply to every organisation and entity working on the New South Wales rail network, including over 11,000 rail industry employees. These new Network Rules and Procedures were developed after extensive consultation with stakeholders. The risk-based approach adopted within these new rules is consistent with the new OH&S legislation. Joint safety initiatives RIC works with all members of the rail family to build improved standards of safety performance across the network. There were several areas of major focus during the year, including Signals Passed At Danger (SPADs), level crossing safety upgrades, and a comprehensive and proactive program of track inspection. A number of joint audits of signal boxes were carried out with SRA. 8

11 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 SPAD reduction and mitigation programs There was a reduction in the number of SPAD incidents during the year through the implementation of several ongoing infrastructure initiatives. These include improvements to high priority catchpoints; extension of train stops; installation of advance turnout indicators at priority locations; and provision of infrastructure solutions to metropolitan multi-spad locations. In addition, improved driver training programs at SRA are helping to reduce SPAD incidents. Level crossing safety upgrades RIC, through the Level Crossing Strategy Council (LCSC), has played a key role in reducing safety risks at level crossings. This year, with the benefit of increased Government funding, RIC commenced a three-year $12 million program identifying and prioritising 130 level crossings around the State for safety upgrades. RIC commenced work on these crossings in July 2001 replacing passive warning mechanisms with active protection such as flashing lights, bells, boom gates, advance warning lights and where appropriate, Graded Crossing Predictors (GCP). The introduction of GCP substantially reduced construction costs and enhanced safety by providing improved awareness and visibility for both the train driver and road users. At the close of this financial year, safety upgrades had been completed at 31 level crossings. During the 2002/03 financial year a further 48 level crossings will be upgraded. Track Inspection Early this year, higher sensitivity testing of the State s rail track revealed a number of rail heads with internal cracking, also known as vertical split head (VSH) defects which previously may have gone undetected. RIC has a rigorous testing regime in place, which enables us to locate and manage defects in a controlled manner including removing and replacing rail as soon as possible often within 24 hours. RIC is reviewing the details of the recently completed tests to both better understand why these defects occur and to further improve our detection abilities. In addition, track staff has been trained in visual inspection methods and hand ultrasonic testing. Over the next three years RIC will spend $30 million on the replacement of over 100 kms of track. This is part of a 10-year program that is supported by special funding from the Government. Glenbrook Inquiry recommendations In conjunction with SRA and Transport NSW, RIC is progressing actions to implement the interim and final report recommendations. There has been good progress in the areas for which RIC is directly responsible. These include Safeworking Rules, training and the protection of infrastructure workers, and improved train location indication in automatic areas through the illumination of dark territories on the metropolitan network. Work is still required on project plans for significant upgrades to communication and network control. Audit and investigation During the year, over 200 hazard audits were conducted and over 80% of the major nonconformances were reviewed and closed off within six months of the original audit. In addition, 28 reports into Level 2 investigations (major incidents) were completed for Transport NSW. 9

12 Building better systems and tools During the year a number of technological initiatives have been implemented to significantly improve system safety. REVIEW OF OPERATIONS continued Indicating Automatic Signal Sections (IASS) Project This project improves the accuracy in determining a train s position along a particular line segment removing so-called dark territories and reducing the potential of conflicting train movements. IASS has been installed at 18 locations, effectively illuminating the entire metropolitan network. The data captured on this system is also being utilised to establish technical maintenance plans to further improve system availability and reliability. RIC is also working closely with SRA to improve network control to enhance safety and reliability. Joint initiatives include: Metropolitan Signal Control System (MSCS) Project, and ATRICS (Advanced Train Running Information and Control System) Metropolitan Signal Control System (MSCS) Project This is a project to modernise existing signal control infrastructure to achieve continual improvements in safety and reliability on the network. It will also provide increased capacity for signal control in the metropolitan area to support projected demands on the network over the next 20 years. In July, we completed construction of the Sydenham Signal Box. At a cost of $12 million, it contains some of the most advanced computerised signalling technology available and greatly improves the reliability of train operations. The new centre controls signals for the Bankstown, East Hills, Airport and Illawarra lines as well as goods lines to Port Botany. It also operates as a base for a quick response team of 20 RIC technical staff, who provide 24 hour a day, seven day a week support. ATRICS: Advanced Train Running Information and Control System ATRICS provides accurate train timetable information using computer-based signalling technology. It also provides improved incident response times through an automated reporting process. This is progressively being introduced across the network and has been installed at the Sydenham Signal Box. Broadmeadow Train Control Centre As part of a staged upgrade of the northern Network s communication, signalling and control, a new $4 million train control centre is being constructed at Broadmeadow. The Broadmeadow Train Control Centre will be responsible for all rail traffic between Brisbane and Broadmeadow and west to Dubbo. This new facility will improve the operational efficiency of the network and enhance safety and reliability through the removal of life expired equipment and the upgrade of outdated technologies. Mimir and Hazan Key systems initiatives included the development of the knowledge management tools, Mimir and Hazan. Mimir uses historical data to help determine maintenance service schedules and technical plans. Hazan is a complementary tool that allows us to identify and put in place the consistent controls to manage hazards associated with maintenance tasks. It also provides valuable information to cost effectively manage our assets. An internet version of Mimir which includes a Failure Modes, Effects and Critically Analysis (FMECA) process will be ready by the end of 2002 for use by suppliers to the Parramatta Rail Link. Mimir and Hazan are scheduled for complete integration during the 2002/03 financial year and will provide a seamless connection between client requirements and all routine maintenance activities. 10

13 Building reliability RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 There has been a reduction in both incidents and delays and a significant decrease in number of speed restrictions. Metropolitan On-time-running (OTR) on the CityRail network during the year averaged almost 92%. This is on target and is the best OTR result in several years. This was achieved through a reduction in infrastructure incidents and minimisation of delays as a result of incidents. Peak period incidents fell by 12% on the previous year and delays were down by 20%. In addition we improved our response time to incidents by 6%. Several factors and specific initiatives contributed to these improved results. The proactive approach of frontline staff in identifying and remedying potential defects. During the year, RIC commenced a two-year $16 million project to upgrade the overhead wiring system in the Sydney CBD. The existing system has been in place for 70 years. To date, the overhead wiring system between Redfern Station and Goulburn Street, Sydney, has been replaced. This is the most heavily used section of rail infrastructure in the State, with around 2,300 rail services passing through it daily. Further work on this project is scheduled for October FAST FACTS Metropolitan network Is bounded by Broadmeadow/ Newcastle, Lithgow, Macarthur and Bomaderry. Comprises 1760 km of electrified track. In geographic terms, is one of the world s largest metropolitan networks. CityRail is RIC s largest customer. Regional network Provides access to rural, interstate, and heavy haul freight services, and long distance passenger services. Establishment of a Reliability Project Team which focuses on the use of data and analysis to identify initiatives to improve network reliability. Formation of the Incident Recovery Project to provide faster and safer maintenance response solutions to infrastructure incidents. Formation of the Infrastructure Operations Centre (IOC) to coordinate responses to incidents across the metropolitan network. RIC will build upon the reliability initiatives introduced this year to help provide further gains in OTR performance during 2002/03. Regional During the year, the Government allocated $80 million to improve country rail infrastructure. An ongoing works and maintenance program including resleepering, bridge renewals, track resurfacing, rail grinding and ballast cleaning has achieved a significant reduction in the number of speed restrictions on the regional network. At year-end, there were 38 speed restrictions on the four main country lines, a reduction of 55% over the previous year. This is the lowest level in almost 10 years. The four main country lines comprise the Main South (Glenlee to Albury), Main North Coast line (Newcastle to Brisbane), which are the busiest long distance rail corridors in Australia, and also Main North-West (Newcastle to Moree) and West (Lithgow-Dubbo) corridors. RIC and Transport NSW signed a new Community Service Obligation (CSO) line funding agreement in December 2001, which incorporates the additional $80 million each year as an ongoing commitment for a five year period. This brings the Government CSO support of country rail infrastructure to $285 million per year. This certainty of funding has enabled RIC to undertake and complete several major regional track upgrades during the year. These projects include the $6.3 million Junee to Albury track upgrade; the $11.2 million upgrade of the Nyngan to Cobar rail line; resleepering the Main North Coast line between Dungog and Craven; and the installation of 30,000 concrete sleepers and 20 kilometres of replacement track on the Main South line between Bargo and Tennessee. In addition, bridge renewal works are being carried out in the Gunnedah and Moree-Narrabri area and also between Taree and Grafton. Ballast cleaning is being carried out over 55 kilometres on the Main South line. Several major resleepering projects to further improve reliability on the regional network will be carried out in 2002/03. These include work on the Main North Coast line, and the Parkes to Roto section of the Main Western line. In addition, reconditioning and resurfacing will be carried out on the Stockinbingal to Forbes line. Peak OTR on metropolitan network (average for year*) 85.4% 99/ % 91.9% 00/01 *target: 92% /02 Speed Restrictions on four main country lines (as at 30 June*) *control target no more than 60 11

14 Building capacity Increased government funding has enabled expansion works to be carried out across the network to support forecasted passenger demands and to increase the competitiveness of rail freight. REVIEW OF OPERATIONS continued Metropolitan passenger network Increasing urban development, especially in the Southern, North Western and Western suburbs of Sydney, will lead to steady growth in passenger traffic. To lay the platform for this future growth, RIC has progressed or completed several large expansion projects. These include: East Hills amplification South Coast electrification Richmond line duplication; and Parramatta-Chatswood Rail Link East Hills amplification: completed in September 2001, this project involved the doubling of tracks from two to four between Turrella and Beverly Hills and a complete rebuild of all the assets in that section. The works covered a total rail corridor distance of 5.6 kilometres and required the widening of three existing road overbridges, the construction of a new rail bridge, 4,000 metres of retaining walls, and the laying of 37,500 concrete sleepers. Cost of the capital works was $90 million, with an additional $16 million for major periodic maintenance. South Coast electrification: the electrification of the South Coast line between Dapto and Kiama was completed in October This $45 million project provides improved service quality and capacity for train services south of Dapto by providing for through services from Sydney and Wollongong. The scope of works included overhead wiring, power transmission system, substations, associated track changes, bridge and tunnel clearance works and platform alterations to accommodate longer trains. The project also included signalling upgrades from Dapto to Kiama. Richmond line duplication: in December 2000 the Government allocated $25 million in funding to expedite construction of an additional three kilometres of track between Marayong and Quakers Hill to improve capacity and reliability for the entire Richmond line. Work commenced in April 2001 and also involved installation of overhead wiring and bi-directional signalling on each track; construction of a new platform and buildings at Marayong station; a new bridge; new footbridges and retaining walls; earthworks, stormwater drainage and landscaping, and power supply upgrade. The comprehensive construction work was completed in early July this year. Parramatta Chatswood Rail Link: the year saw enormous progress on the largest public transport initiative undertaken in New South Wales, the Parramatta-Chatswood Rail Link. Once complete, the link will greatly increase capacity to the Main North and Main West lines. Planning approval for the link was issued in February 2002 and in June, the contract for the largest component of the construction work was awarded. The construction work includes the 14 kilometre tunnel and station excavation works between Epping and Chatswood and the installation of track, signalling and communications systems at a total budget of $858 million. In an effort to minimise the impact on Lane Cove National Park, the original plan was modified to include a cut and cover tunnel crossing the Lane Cove River. The project has also incorporated very high standards for noise and vibration. The first stage, Chatswood to Epping with stations at Delhi Road, North Ryde, Macquarie University and Macquarie Park, will be complete by Easy Access RIC in conjunction with the SRA, has provided improved Easy Access facilities at the following CityRail stations via CityRail s Station Upgrading Program: Allawah, Caringbah, Engadine, Katoomba, Regents Park and Wollongong. Easy Access works are well underway at a further 18 stations in the metropolitan area. 12

15 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 Freight network The Corporation has an extensive freight customer base and operates in the coal, grain, minerals, and general freight markets. There are 10 freight operators on the RIC network, including one new operator that started up during the year. Performance has been strong in all freight markets, with the exception of grain. Gross tonne kilometres (GTKs) increased by 8% over the previous year. Coal GTKs increased by 5% and growth of 7% in general freight and minerals arose primarily from new freight flows. These new freight flows included increased container growth through Port Botany, increased volumes on the North Coast, new train movements from the MoreeLink terminal to Sydney and increased aggregate volumes between Shellharbour and Sydney. Hunter Valley: the Hunter Valley is the world s largest coal export centre, with capacity expected to increase from the current 70 million tonnes per annum to over 80 million tonnes over the next four years. During the year, RIC invested $15.3 million on commercial projects to enhance the capacity, safety and reliability of the network in this region. These projects included rerailing, resleepering and bridge renewals between Maitland and Singleton. A major achievement in this regard was the replacement of both the Allandale and Jump-Up Creek underbridges with minimal disruption to our customers operations. Port access at Kooragang was improved through commencement of replacement works on Sandgate Junction turnouts, and removal of speed restrictions. To meet future coal demand requirements, RIC has developed a 10-year business plan which includes capital works and maintenance programs. During 2002/03 RIC will invest $30 million in this region. Projects include installation of wayside devices, upgrade of Whittingham Junction and Singleton Yard, grade separation at Metford and bridge replacements. Port Botany: The number of export containers moved by rail increased by 5.5% in 2001/02 and over the past four years has almost doubled. To accommodate this and forecast growth, infrastructure upgrades have been carried out to improve accessibility and capacity. A four-stage program, stage 1 was completed in 2001, and stages 2 and 3 in April, These works involved the track duplication and upgrading from Marrickville to Cooks River, and bi-directional signalling from Marrickville to Port Botany. The duplication of the existing goods line provides a passing/crossing loop for freight trains travelling to and from Port Botany. This will enable operators to meet the predicted future increases in container traffic carried by rail into this busy port. Paterson loop extension: the North Coast corridor experienced 18% freight growth in 2001/02. In order to accommodate future growth and increase competitiveness of rail freight, services are dependent on the number of crossing loops capable of supporting 1,500 metre long trains. Following comprehensive studies, Paterson was assessed as a priority location for a loop extension and, as a result, the $2.4 million program commenced in May This extension will not only result in additional train path capacity for Sydney-Brisbane services, but also an increase in revenue and a reduction in travelling times on this busy corridor. Another eight to ten locations are being considered across the country NSW network for loop extension. MoreeLink: To develop the rail freight potential of inland New South Wales, RIC is working closely with the Premier s Department. During the year the new MoreeLink intermodal terminal was opened to generate additional freight on rail. It will also provide a boost for the local community by enhancing the commercial viability of local industry. Over the next 12 months, RIC will focus on initiatives to improve rail freight market share on the Sydney to Melbourne corridor. In particular, we will investigate appropriate resignalling schemes to reduce the current restriction on train headways on this line. 13

16 Building efficiencies and effectiveness RIC has adopted a multi-faceted approach to improve network and organisational efficiencies and effectiveness. REVIEW OF OPERATIONS continued FAST FACTS Asset management improvements A consolidated review of asset management has provided increased knowledge of the assets and the work required to provide sustainable infrastructure performance. At the routine maintenance level detailed technical maintenance plans are being built on a condition based approach. In the asset renewal area, we are developing new tools that will accurately capture and define asset condition in order to develop optimum replacement strategies. Possessions review project A key issue for RIC is maintaining the availability of the metropolitan network while essential maintenance is carried out. The possessions review project was initiated during the year by the Coordinator General of Rail. A structured possession program is expected to be implemented from July This new possession program will remove the complexity in the current system, improve safety, reduce operational costs, provide greater certainty of possession times and increase productivity and efficiency for all stakeholders by maximising works carried out in a minimum number of possessions. Major plant and equipment upgrades During the year, RIC committed $54 million of a planned five-year $92 million major plant and equipment upgrade program. This new plant and equipment will enhance operator safety, reduce costs and limit the time that track is taken out of service for maintenance. In April, RIC took delivery of a $1.4 million high speed ballast regulator which is being used to carry out multi-purpose resurfacing on the Metropolitan network. This equipment was delivered ahead of schedule and under budget. Two high-speed tampers, valued at $12 million, are under construction. The first is scheduled to be delivered in October 2002, and the second in June This equipment will give us the capacity for concrete turnout tamping and also allow flexibility for plain track tamping in the same possession. A $30 million commitment to new generation ballast cleaning equipment is expected to return savings of at least $3 million per year, by significantly reducing the time taken to ballast clean the network. It will also improve ballast RIC has adopted a multifaceted approach to improve network and organisational efficiencies and effectiveness. This multi-faceted approach includes: Asset management improvements Possessions review project Major plant and equipment upgrades Project management improvement initiatives An on-going War-on-Waste campaign 14

17 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 recovery rates, and reduce soil and noise pollution. An inspection car providing computer-based track fault detection will be in operation on the network after a three-month trial commencing January It will provide significant safety and OH&S improvements by minimising the use of foot patrols for track maintenance functions. In addition, various support equipment was ordered, such as tractors, loaders, compressors and forklifts. At year-end most of these items had been delivered and were in operation across the network. A $4.8 million program to refurbish existing ballast cleaners, resurfacing equipment and resleepering equipment is in progress. Our regional in-house facilities are being used wherever possible to carry out this refurbishment program. A long term plan to upgrade RIC s fleet of aged support vehicles, both on and off track, was another major focus during the year, with 732 replacement vehicles delivered. We are now planning to decentralise routine purchasing and fleet support functions through master supply agreements. Project management improvement initiatives Considerable work has been undertaken to enhance our project management capabilities as well as integrating project management related systems across the organisation. The objective is to obtain uniformity, consistency and world s best practice in the way we manage projects. We are beginning to realise the benefits from this initiative with cost and efficiency savings on several major infrastructure projects. For instance the use of on-site project management tools on the recent Tahmoor to Bargo concrete resleepering project, together with an effective possession management program, helped bring it in almost 15% under the original budget of $8.9 million. These project management tools are now being used on several other major regional projects, such as the North Coast Resleepering Project, which commenced in July War-on-Waste This initiative commenced in February 2002 to achieve two principal objectives: to help RIC become a more efficient organisation and, as a result, channel the money saved back into extra maintenance on the track. The program also sent a clear message to RIC staff and management to engage in the process of moving the organisation forward. During the year, a series of interactive workshops were held across the state to encourage employee suggestions. Over 800 employees participated in this process which resulted in almost 500 suggestions being received. These were analysed, categorised and allocated to the appropriate members of RIC s executive team for action. To date over $10 million of savings have been identified with over $1 million already being realised through suggestions that have been actioned. One of the War on Waste suggestions from staff was that RIC should recover and reuse redundant materials left by the track. As a result, 6,000 tonnes of excess recovered ballast from the Moss Vale- Unanderra project was reused in the Tahmoor to Bargo concrete resleepering project. This ballast was used as bottom ballast and saved around $200,000. RIC also used all 500 tonnes of recovered ballast from the Bargo project as capping material, saving a further $20,

18 Building our commercial business capabilities RIC has a diverse portfolio of commercial businesses, that relate and directly contribute to the core business and regional development. REVIEW OF OPERATIONS continued FAST FACTS Argus Telecommunications Argus Telecommunications manages and maintains telecommunications services for the NSW rail industry. Achievements this year include the installation of modern touch-screen technology for voice communications to the new Broadmeadow Train Control Centre. Along with the Junee Train Control upgrade, this will assist in the standardisation of communications across the NSW rail freight network. During the year, Argus played a major role in implementing the NSW Government s strategy of utilising state owned communications infrastructure to benefit other Government agencies and the wider community. In conjunction with the Department of Information Technology and Management and the Department of Education and Training, two TAFE Colleges and seven schools have been connected to the Argus network. Rolling Stock and Rail Fabrication Centres RIC has two rail fabrication centres located in regional New South Wales, at Bathurst and Goulburn. Bathurst specialises in points and crossings and welded rail. Goulburn concentrates on rail wagon building and modification. Bathurst Rail Fabrication Bathurst s rail welding plant meets all NSW requirements for welded rail. This centre has undergone a major change over the last year. The workplace has been reconfigured, and the product range increased. In addition, employees have gained new skills as a result of a cooperation agreement entered into with VAE Aktiengesellschaft, an Austrian company which provides access to its technology for the manufacture of points and crossings. Investment in plant and equipment and continual improvements in quality and efficiency enabled the points and crossings business to achieve a small profit this financial year. Commercial businesses Argus Telecommunications Rolling Stock and Rail Fabrication Centres Ballast Quarries and a Ballast Recycling Centre Business Services Group (shared services) Joint ventures 16

19 RAIL INFRASTRUCTURE CORPORATION Annual Report 2002 Goulburn Rolling Stock and Fabrication Highlights during the year included: Building of 25 new NDFF ballast wagons and an order placed for a further 25 wagons. Commencing the painting program for the fleet of 95 NDFF ballast wagons. Safety modifications to the existing ballast fleet. Renewals of lease agreements for surplus wagons. Surplus wagons have been converted into container-carrying wagons and are providing an alternate source of revenue. To enhance safety and improve capability, a new $500,000 painting booth was installed. Further equipment purchases are planned for 2002/03 including the acquisition of a large capacity band saw and new cranes for the facility. An increased focus on safety resulted in a significant reduction in Lost Time Injuries (LTI s). Quarries and Ballast Recycling Centre RIC s three quarries are located at Bombo, Ardglen and Martins Creek. They provide almost 60% of RIC s annual ballast requirements. A significant investment has been made to upgrade equipment at the quarries to enhance safety and productivity. RIC spent $6.4 million purchasing four front-end loaders and three dump trucks, which were delivered in April Through better coordination of transport and quarry operations, a substantial saving was achieved per trainload for delivery of ballast from quarry to worksite. All three quarries have maintained their outstanding safety records throughout the year. Over a six year period, the Ballast Recycling Centre at Chullora has been successful in reducing the volume of material requiring disposal from 40% to less than 1%. By converting used track ballast and other construction waste into reusable products, RIC has exceeded its obligations under the Waste Minimisation Act (1995). Business Services Group The Business Services Group (BSG) was established this year to manage a portfolio of RIC business functions and to implement a platform for the future incorporation of SRA business functions. BSG s key objectives are to enable business units to concentrate on core operations by taking over a range of administrative tasks; gain process efficiencies; improve customer satisfaction; achieve cost savings; and transform operations to a service excellence business. Current business services include recruitment, IT operations, selected financial operations, and administrative services. Business case studies are now being carried out on several other business services being considered for transition to BSG. Joint Ventures RIC is committed to extracting maximum benefit from its joint ventures and all businesses are closely monitored to ensure their strategic fit with RIC s objectives. These joint ventures were entered into by the former RSA and include: Track Australia, a joint venture with Plasser Australia Pty Ltd to provide tamping, dynamic track stabilising and ballast regulating services. The RIC/Thiess Victoria joint venture provides infrastructure maintenance services to Bayside Trains and Swanston Trams in Melbourne. Transfield/RIC provides electro mechanical services to the mining, power and rail industries. Rail Fleet Services, a joint venture with Alstom to maintain rolling stock. Both the Rail Fleet Services and Transfield/RIC joint ventures emerged from the restructure of the former Railways Workshop Division. 17

20 RAIL MAINTENANCE DEFINITIONS SUMMARY Concrete resleepering Concrete resleepering involves the full or partial replacement of timber sleepers with concrete. The benefits of concrete are that it lasts 30 years longer than timber, is environmentally friendly and costs the same to produce but requires less maintenance. Steel resleepering Steel sleepers are a less expensive option than concrete and are generally used to replace timber on tracks with light usage. Tamping Tamping is carried out by a machine which lifts track and sleepers while steel prongs vibrate the ballast to pack it down and increase stability. On branch lines, attachments are fitted to back-hoes (tamping heads). Resurfacing This involves tamping the track to ensure it is level. This results in a smoother ride for passengers and less wear and tear on rolling stock. Ballast The rocks underneath the sleepers and rails. Ballast cleaning A ballast cleaner is a machine that lifts the sleepers and rail, scoops up the rocks, cleans out the rubbish and re-lays the ballast. Clean ballast provides greater stability of track and aids drainage. 18

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