Outcome 2: Protection of the long-term functionality of the rail corridor and railway infrastructure

EFFECTIVENESS INDICATORS

The most significant issue for this outcome is the management of the long-term lease of the rail freight infrastructure to WestNet Rail Pty Ltd.

WestNet Rail manages and operates the rail freight infrastructure under the terms of the Railway Infrastructure Lease. Under the Lease, WestNet Rail is the ‘accredited owner’ of the infrastructure as defined in the Rail Safety Act 1998. WestNet Rail’s holding company Australian Railroad Group was acquired during the year by a Babcock and Brown Company. WestNet Rail retains all of its legal responsibilities under the lease agreement.

Under the terms and conditions of the Railway Infrastructure Lease, an independent inspection of the railway infrastructure is carried out every five years. The first independent inspection was completed in June 2005.

The results of this inspection did not indicate any cause for concern and confirmed that the rail corridor and infrastructure was being satisfactorily maintained.

Cost efficiency

The cost efficiency for the management of the long-term lease of the rail freight infrastructure to WestNet Rail is monitored using the total cost of managing the rail corridor and residual freight issues.

Cost of managing rail corridor and residual freight issues management $ 000's

The 2007/08 cost was marginally higher than target. The cost was higher compared to 2006/07 due to the following contributing factors:

  • the implementation of the Eastern Goldfields Railway project at a cost of $37.1 million;
  • higher interest charges due to increase in interest rates; and
  • higher depreciation charges as a result of assets revaluation.

    • These additional costs were partially offset by the abolition of the capital user charge in 2007/08. The amount spent on CUC in 2006/07 was $26.2 million.