42 Explanatory Statement
a) Significant variations between estimates and actual results for the financial year
Details and reasons for significant variations between estimates and actual results are detailed below. Significant variations are considered to be those greater than 10% or $1 million.
|
2009 |
2009 |
Variance |
|
|---|---|---|---|
|
Income |
186,390 |
162,600 |
23,790 |
|
Cost of Services |
839,818 |
789,683 |
(50,135) |
|
Net Cost of Services |
653,428 |
627,083 |
(26,345) |
Revenue
Revenue was $23.8 million (14.6%) above the estimate. The positive variations include the following significant items:
- Increased revenue from fares of $8.4 million;
- Increased revenue from External works recoveries of $4.7 million;
- Increase in rental revenue of $2.1 million;
- Foreign exchange gain on the appreciation of the Australian currency of $1.6 million;
- Increased service contribution revenue of $1.3 million due to joint ticketing of various sporting and entertainment events;
- Increase in infringement revenue of $1.2 million;
- Increase in interest revenue of $1.1 million;
- Smartcard sales of $0.9 million; and
- Increased revenue recouped from Department of Education and Training of $0.7 million.
Total cost of services
Cost of services for the year was $50.1 million (6.3%) above the estimate.
There were several significant positive and negative variations that contributed to this overall variation. These variations include:
- Increased depreciation of $27.3 million mainly due to a full year depreciation of the Mandurah line and revaluation of rail infrastructure assets;
- Increased Transperth bus costs of $18.8 million mainly due to increased fuel costs and bus contractor wages, security, depot maintenance (AS1940 compliance and CNG workshop upgrade to comply with Australian and International Standards), increased bus insurance and maintenance costs, SmartRider costs (partially offset by SmartRider card sale);
- Increased grant to Local Government of $5.7 million due to transfer of roads and associated infrastructure controlled by local government;
- Increased costs of $4.6 million related to railcar maintenance of the Australind and Prospector and provision of coach replacements during track works;
- Increased costs related to external works $4.4 million;
- Increased maintenance costs of ‘A’ series railcars of $3.8 million;
- Increased provision for remedial works related to contaminated sites $3.1 million;
- Increased station structures maintenance $2.1 million;
- Increased costs related to land management $2.2 million;
- Write off of discontinued capital projects $2.2 million;
- Notional charge for land valuation provided by Landgate $0.7 million;
Offset by:
- Reduced interest of $23.3 million due to lower than budgeted interest rate and the timing of the Capital works program.
b) Significant variations between actual revenues and expenditures for the financial year and revenues and expenditures for the immediately preceding financial year
Details and reasons for significant variations between actual results with the corresponding items of the preceding year are detailed below. Significant variations are considered to be those greater than 10% or $1 million.
|
2009 |
2008 |
Variance |
|
|---|---|---|---|
|
Employee benefits expense |
110,226 |
97,228 |
12,998 |
|
Supplies and Services |
176,295 |
154,827 |
21,468 |
|
Depreciation and amortisation expense |
156,128 |
114,600 |
41,528 |
|
Grants and subsidies expense |
313,610 |
332,086 |
(18,476) |
|
Energy and fuel |
13,835 |
11,420 |
2,415 |
|
Other expenses |
10,549 |
8,579 |
1,970 |
|
User charges and fees |
149,200 |
129,994 |
19,206 |
|
Other revenue |
29,603 |
26,279 |
3,324 |
|
Commonwealth grants and contributions |
286 |
28,112 |
(27,826) |
Employee benefit expense
Increase in employee benefit expense due to a full year impact of the hiring of transit guards, train drivers and other personnel supporting the operation of the Mandurah line and the impact of new Enterprise Bargaining Agreements.
Supplies and Services
- Increased maintenance costs of ‘B’ series railcars and security costs for the full year of operations of the Mandurah line $4.8 million;
- Increased maintenance costs of ‘A’ series railcars of $3.8 million;
- Increased provision for remedial works related to contaminated sites $3.1 million;
- Increased bus fleet insurance and maintenance $2.5 million;
- Increased maintenance of road coaches to extend its useful life $2.3 million;
- Write off of discontinued capital projects $2.2 million;
- Increased cost of sales of $2.0 million due to increase in External works (this is offset by revenue).
- Increased security costs of $1.0 million for Transperth Bus services; and
- Notional charge for land valuation provided by Landgate $0.7 million.
Depreciation and amortisation expense
Increase in depreciation of $41.5 million is mainly due to the full year of Mandurah line including infrastructure and train stations and increased depreciation as a result of revaluation of assets to fair value.
Grants and subsidies expense
Decreased Grants and subsidies expense of $18.5 million are mainly due to:
- A one-off $37.1million expenditure for the concrete sleepering and loop extensions of the Eastern Goldfields Railway line last year; and
- Decrease of $2.6 million in grants for road infrastructure transferred to local government.
Offset by:
- $15 million increase for the Transperth bus operators mainly due to the full year operations of the Mandurah line including the increase in Bus contract cost as a result of feeder services connecting to the Mandurah line, increase in fuel and labour costs.
- $7 million increase in School bus services mainly due to increase in fuel and labour costs and additional costs of providing seatbelts.
Energy and fuel
Increase in energy cost mainly due to the full year operations of the Mandurah line and an increase in Electricity tariffs.
Other expenses
Increase mainly due to an increase in Workers compensation claims including mesothelioma disease.
User charges and fees
Increase due to fare increase and increased patronage on the Transperth system mainly due to the full year impact of the Mandurah line.
Other revenue
Increase in other revenue mainly due to the foreign exchange gain on the appreciation of the Australian currency, parking, infringements, external works and rental income.
Commonwealth Grants and contributions
In 2008/09, the PTA received $0.3 million from the national partnership agreement on certain concessions for pensioners and senior card holders, and in 2007/08, a one-off Commonwealth Grant of $28.1 million was received for the concrete re sleepering and loop extensions of the Eastern Goldfields Railway line.