1. Developing Transport Service Contracts
AusRail Plus 2003
Wednesday 19th November
Robert Moffat
Manager Transport Service Contracts
Network Access, QR

2. Queensland Rail A GOC with a private sector board
Board reports to the QLD Govt Treasurer and Minister for Transport
Workforce 13,700
Assets valued at $7.7 billion
Revenue of over $2 billion
Approx 160 million tonnes of freight
Almost 50 million passenger journeys

3. Network Access Australia’s largest track manager
9,713 km narrow gauge track, plus 132 km standard & dual gauge track
$3.8 bn assets (50% QR’s total assets)
More than 900 train movements daily
38 billion net tonne kilometres per year
70% of network attracts direct Government support
75% of revenue from 2 sources
Access fees from rail operators hauling coal
Transport Service Contracts (TSCs)

4. QLD’s Competitive Environment
Govt Owned Corporations Act
ACCC & QCA Legislation
Undertaking accepted March 2001
Network Access Ringfenced from QR’s Operational Business Groups
Public Reporting of Information

5. Queensland Transport Three roles: Policy & Legislation
Joint Shareholder
Safety Regulator
Purchaser of Rail Transport Outcomes
Policy & Legislation
Increased Pressure for Treasury $’s against Competing Social Portfolios

6. QLD’s Government Supported & Regulated Framework
QUEENSLAND COMPETITION AUTHORITY
GOVERNMENT OBJECTIVES
QUEENSLAND TRANSPORT
RAIL NETWORK STRATEGY
TRANSPORT SERVICE CONTRACTS
QR PLANS

7. QR’s Historical Business Model
Vertically Integrated
Government Department of Railways
Social v Commercial Outcomes
Coal & Mt Isa Revenue Underpins Wider QR
Low Volume Traffics
Passenger Movements
No Transparency on Above & Below Rail Operations

8. The Need for Change Corporatisation Review 1997
CSO – A Policy Framework 1999
Competition Policy
Historical Model Not Repeatable
Managing for Outcomes

9. QLD’s Transport Service Contracts
Negotiations began with QT in 1997/98
Examples of Services Purchased to date – suburban passenger services, long distance passenger services and below rail asset manager services
Network Access Responsible for Below Rail Contract – Transport Service Contract (Rail Infrastructure)

10. Why Transport Service Contracts?
“Defined Service”
Budgetary Certainty
Environment for Targeted Investment to Meet Policy Outcomes
Supports Capital Value of Infrastructure Assets
Repeatable Framework
Transparency

11. Transport Service Contract (Rail Infrastructure)
Approx 70% of QR’s track network Serves Low Volume Markets
Annuity Funding for Efficient Full Economic Cost of Assets
Forecast model over 7 years
Capital Funding Framework
Significant Output Performance Regime with Financial Consequences

12. TSC(RI) – Performance Regime
Base Service Levels
Overall Track Condition Index
Temporary Speed Restrictions
Below Rail Delays
Below Rail Track Availability
Financial Consequences
Output Focus

13. TSC(RI) – Investment Framework
Annuity Funded & Asset Value Recognised
Projects Supported:
Regional Rerailing
Metropolitan Development
Signalling
Timber Bridge Elimination
Fencing
Noise Amelioration
Open Level Crossings
Electrical Distribution & Supply System
Repeatable & Sustainable

14. Track Access in Government Supported Networks
Competition Policy Principles Upheld
Funding support to attract new traffics and increase existing tonnages/journeys.
Access charged on competitive rates against alternative transport modes.
Future government support reduces as access increases and further efficiencies established.
Managing Track Access as a Business

15. Progress Update
Annual Base Service Level Targets are being met to QT’s satisfaction
Investment Program Providing Positive Outcomes
No Penalties Evoked
Continuous Improvement
Passenger Journeys Increasing
Safety Performance Continuing to Improve
Collaborative Relationship with QT
Preliminary work now underway to assess funding mechanisms beyond current contract

16. Thank You and Any Questions?