VICTOR lA

Report

of the

STATE TRANSPORT AUTHORITY

for the

Year ended 30 June 1985

Ordered by the Legislative Assembly to be printed

MELBOURNE F D ATKINSON GOVERNMENT PRINTER 1985

No. 51 1985 VICTORIA

REPORT

OF THE

STATE TRANSPORT AUTHORITY

FOR THE

YEAR ENDED 30 JUNE 1985

PRESENTED TO BOTH HOUSES OF PARLIAMENT PURSUANT TO SECTION 8(6) OF THE ANNUAL REPORTING ACT 1983. 30th SEPTEMBER 1985 The Honourable Tom Raper M.P.

Minister for Transport.

Dear Minister,

In accordance with Section 9 of the Annual Reporting Act 1983, the Report of the operations of the State Transport Authority for the year ended 30 June 1985 is submitted together with the financial statements for that year and of its financial position as at 30 June 1985.

Yours truly,

K.M. FITZMAURICE, Chairman and Managing Director.

CONTENTS PAGE YEAR OF PROGRESS 5 BOARD MEMBERS 6 CORPORATE MANAGEMENT GROUP MEMBERS 6 WORKSHOPS MANAGEMENT BOARD MEMBERS 7 INTERIM STANDING COMMITTEE ON CONSULTATION PROCEDURES 7 REGIONAL MANAGERS 7 REGIONAL ADVISORY BOARDS 7 MAIN CORPORATE ADDRESSES 8 WORKSHOPS ADDRESSES 8 CHAIRMAN AI\JD MANAGING DIRECTOR'S REPORT 9 FINANCE 10 FREIGHT SERVICES 12 PASSENGER SERVICES 19 TRANSPORT OPERATIONS 22 PERSONNEL AND EMPLOYEE RELATIONS 27 CORPORATE SERVICES 28 CORPORATE PLAI\INING AND DEVELOPMENT 29 WORKSHOPS 30 METRAIL 31 V/LINE INDUSTRIES PTY. LIMITED 31 MT. BUFFALO CHALET 32 FINANCIAL STATEMENTS Page Profit and Loss Statement 34 Balance Sheet 35 Statement of Source and Application of Funds 36

Notes to and Forming part of the Accounts

Note 1 Significant Accounting Policies (1) Basis of Accounting 37 (2) Fixed Assets 37 (3) Depreciation 37 (4) Vesting of Assets 37 (5) Capitalisation of Interest 37 (6) Stores 37 (7) Leasing 37 (8) Currency exchange variation 37 (9) Public Borrowings 37 (1 0) Employee leave entitlements 37 (11) Superannuation pensions 38 (12) Self Insurance 38 (13) Revenue recognition 38 (14) Provision of metropolitan rail service to MTA 38 Note 2 - Operating revenue 38 Note 3 - Operating expenses 39 Note 4 - Transactions with the Public Account 39 Note 5 - Finance charges 40 Note 6 - Extraordinary items 40 Note 7 - Debtors 40 Note 8 - Stores 40 Note 9 - Securities held in trust 41

Note 10 - Investment in Vfline Industries Pty. Ltd. 41

Note 11 - Short term deposits 41

Note 12 - Loans to employees 41

Note 13 - Fixed assets 41

2 Financial Statements (continued)

Page Note 14 Leases 42 (1) Leased assets 42 (2) Deferred gains/losses on sale of assets 42 (3) Lease liabilities 42 (4) Currency exchange variations 43 (5) Lease commitments 43 Note 15 Deferred expenses 43 Note 16 - Employee leave entitlements 43

Note 17 Provision for claims and compensation 43

Note 18 Provision for superannuation pensions 44

Note 19 - Public Borrowings 44 (1) Liabilities 44 (2) Discount on loans 44 (3) Currency exchange variation 44 Note 20 - Loans from State Government 45 Note 21 - Inter-authority account- MTA 45 Note 22 - Advances from State Government 45 Note 23 - Contributed capital 45 Note 24 - Assets vested in MT A 46 Note 25 - Capital commitments 46

Certification of Financial Statements 47 Auditor-Generals Report 48 ADDITIONAL STATUTORY INFORMATION 49

3 4 A Year of Progress Some noteable events were: A 8.6 per cent increase in patronage by country passengers during the year. • A $3.3 million increase in country passenger revenue in the last twelve months without an increase in fares. • V/Line Travel Centre, a fully accredited travel centre, opened in Head Office. Speedlink, a rail/road coach service connecting Adelaide, Albury and Sydney and incorporating the XPT, introduced. • Introduction of a series of V/Line road coach services in the south-west, west and south-east of Victoria. Commencement of a series of regional transport studies to identify passenger transport needs within Victoria. Increase in freight revenue over last two years from $161 million to $190 million with freight tonnage rising from 10.5 to 11.9 million tonnes. • Freightgate operation streamlined resulting in a saving of more than $5 million a year so far. • Steel tonnage increased by 48 per cent over 1982-83. A $1.1 million, state-of-the-art, computerised track monitoring machine intro­ duced. • Freight fleet upgraded by the introduction of seventy-one new bogie wagons. • Thirteen locomotives upgraded and five new locomotives purchased. • Planning completed for the construction of an additional thirty-five new locomo­ tives. Workshops have become a commercial operation actively seeking customers in the private sector. • Decentralisation of management by the creation of five regions for V/Line country operations centred in Ballarat, Bendigo, Geelong, Wodonga and Traralgon. V/Line's sixth region Central- is located in Melbourne Signing of the Occupational Health and Safety Agreement between ST A and the trade unions in the railway industry in Victoria. • Complete fit-out and occupation of the New Head Office building at 589 Collins Street. The building incorporates the latest principles of ergonomic design.

5 STATE TRANSPORT AUTHORITY

BOARD K.M. FITZMAURICE CHAIRMAN A.S. REIHER DEPUTY CHAIRMAN J.E. FARAGO MEMBER J.A. HEARSCH MEMBER K. IRVIN MEMBER C.L. JORDAN MEMBER K.T. MATTHEWS MEMBER L.T. MILES MEMBER S.J. PICKERING MEMBER L.A. STROUSE MEMBER

CORPORATE MANAGEMENT GROUP K.M. FITZMAURICE MANAGING DIRECTOR G.C. GLINSKI CHIEF GENERAL MANAGER, FINANCE AI\ID ACCOUNTING J.A. HEARSCH CHIEF GENERAL MANAGER, TRANSPORT OPERATIONS R.D. TERRELL CHIEF GENERAL MANAGER, WORKSHOPS * D.R. MLIRPHY GENERAL MANAGER, FREIGHT SERVICES J.C. BRENAN GENERAL MANAGER, CORPORATE PLANNING AND DEVELOPMENT L.J. HARPER GENERAL MANAGER, PASSENGER SERVICES I.J. REIHER GENERAL MANAGER, CORPORATE SERVICES D.R. WATT GENERAL MANAGER, PERSONNEL AND EMPLOYEE RELATIONS A.M. HURSE GROUP l\t1AI\lAGER, OPERATIONS CO-ORDINATION t G.P. DEUTSCH GROUP MANAGER, ENGINEERING AND DEVELOPMENT * P.M. FIELDS GROUP MANAGER, CORPORATE COMMUNICATIONS

*ACTING t APPOINTED SEPTEMBER 1985

6 WORKSHOPS MANAGEMENT BOARD K.M. FITZMAURICE CHAIRMAN J.BARRY MEMBER W. EDDY MEMBER J. GARRO MEMBER J.L. GRIGG MEMBER J.P. HALL MEMBER J.A. HEARSCH MEMBER R.D. TERRELL MEMBER D.V. VANDERHYDE MEMBER

INTERIM STANDING COMMITTEE ON CONSULTATION PROCEDURES D.R. WATT CHAIRMAN A.COLE MEMBER P.DYER MEMBER G.C. GLINSKI MEMBER L.J. HARPER MEMBER A.M. HURSE MEMBER B. KLEMM MEMBER K.T. MATTHEWS MEMBER G. NICHOLSON MEMBER B.G. SHAW MEMBER

REGIONAL MANAGERS D. WATSON CENTRAL REGION S.RODGERS SOUTH - WESTERN S. COLLINS WESTERN M. HOUSTON NORTHERN F. MORTON NORTH EASTERN R. CANNON EASTERN

REGIONAL ADVISORY BOARDS (Not yet appointed)

7 MAIN CORPORATE ADDRESSES

HEAD OFFICE:- 589 Collins Street, Melbourne. Vie. 3000. Telephone: (03) 619 1111

REGIONAL OFFICES:­ Central - 67 Spencer Street, Melbourne. 3000. Telephone: (03) 6 1001 South Western · - Geelong State Offices, Cnr Little Malop and Fenwick Streets, Geelong. 3220 Telephone: (052) 22 1833 Western - Ballarat Railway Station, Lydiard Street, Ballarat. 3350 Telephone: (053) 31 2400 Northern - Bendigo Railway Station, Railway Place, Bendigo. 3550 Telephone: (054) 43 9766 North Eastern - Astra House, Hovel! Street, Wodonga 3690 Telephone: (060) 24 7100 Eastern - Cnr Livingston and Hotham Streets, Traralgon 3844 Telephone: (051) 74 9277

WORKSHOPS:­ NEWPORT - Champion Road, Newport 3015 Telephone: (03) 397 2358 BALLARAT - Creswick Road, Ballarat 3350 Telephone: (053) 32 1744 BENDIGO Bob Street, Bendigo 3550 Telephone: (054) 43 0864 ELECTRICAL WORKSHOPS 'A' - 263-315 Spencer Street, Melbourne 3000 ELECTRICAL WORKSHOPS 'B' Telephone: (03) 654 2822

8 CHAIRMAN AND MANAGING DIRECTOR'S REPORT lt is with much pleasure that I am able to report to you a year of progress for the State Transport Authority. This report for the 1984-85 financial year, the second annual report of the Authority, comes at a time when many of the changes foreshadowed in our first report are coming to fruition. The year under review saw the reorganisation of the Authority virtually completed. We have been able to build on the solid foundation laid in our first year of operation. Our trading name Vfline- is now firmly established in the Victorian community. We are receiving increasing recognition as a provider of a comprehensive range of country and interstate passenger travel packages as well as a major carrier of Victorian and interstate freight.

Our upgraded pass~nger services continue to attract more travellers each year with passenger numbers up by 8.6 per cent in 1984-85. This builds on the increase of the previous year giving a growth over two years of 18 per cent. Freight revenue for the year rose by 18 per cent over our 1983-84 performance. This represents a 13 per cent increase in tonnage carried. With a harvest of approximately 3.5 million tonnes and a carryover from the previous year Vjline hauled more than four million tonnes of grain. Improvements to operational effi­ ciencies such as the greater use of block trains and central receival points contributed to this movement being achieved without fuss. Further plans in the coming year to build more grain wagons and the procurement of new locomotives will enhance our capacity. The Louis Alien system of corporate management adopted by the Authority continues to be developed through the various levels of management with position charters now pre­ pared for many officers down to the middle levels of the organisation. The move by Vjline's Head Office staff to new headquarters at Transport House, 589 Collins Street, Melbourne is now almost completed. The modern functional surroundings have provided a further boost to the morale of our personnel and to our public image as a modern transport operation. Vjline's draft five-year Corporate Plan, the first prepared by the organisation. was rel­ eased to the public in May. Consultations on the Plan with all interested parties ar· continuing into the new financial year. The Draft Plan points out the absolute need for significant change in orderto improve cost recovery and thus maintain and improve our competitive marketing positions. These changes will permeate every aspect of the organisation. We must not be diverted from an immediate start to this far reaching process of change. Deferral will make the task even more difficult. · Overall the Authority's financial performance was satisfactory with revenue increasing during a period when there was no change in passenger fares. Once again a comprehensive capital works program was carried out with major emphasis on upgrading rolling stock and infrastructure. The task of keeping V/Line's passenger and freight operations moving is the responsi­ bility either directly or indirectly of every person in the organisation. I am pleased to say that Vjline's workforce has responded well in 1984-85, sometimes in circumstances that have placed extraordinary demands on them. My personal thanks and the appreciation of the Board and the Corporate Group is extended to all members of staff for their contribution during the year.

K.M. FITZMAURICE, Chairman and Managing Director.

9 FINANCE Revenue earned of $270.3 million improved by $50.5 million over 1983-84 although passengers fares were not increased during the year. Expenditure of $623.7 million rose by $69.3 million over the previous year. Payment of interest on capital funds increased by $22.5 million and the anticipated growth in our debt financing commitment is of concern. Capital expenditure of $152.7 million, excluding work done by MetRail, was incurred during 1984-85. The major portion of this expenditure was used to update rolling stock and infrastructure facilities which contributed significantly to the continuing improvement of passenger and freight services. The Victoria Transport Borrowing Agency raised loans to the value of $133.5 million on behalf of the Authority. In addition a grant of $20 million was allocated from the Major Initiatives Fund. Management Information Services During the year considerable progress was made to further the Authority's plans to upgrade Management Information Services. Hardware was upgraded with the purchase of a Facom M360 mainframe and systems implemented included a general ledger package and an accounts payable package. The implementation of a payroll/personnel system was also initiated. Work also began on determining the feasibility of systems to improve freight billing, wagon and fleet management and timetabling. Work Integration In anticipation of major system changes and in a bid to achieve reduction in the instance of repetitive strain injury, a major project was undertaken to restructure the way in which data preparation or key punching is to be done. Essentially this involves integrating the data preparation activities with normal clerical activities. The project team formed to deal with the matter comprised representatives of clerks, the data preparation operators, the unions representing them and local area managers. They reported regularly and also to the workers in the respective areas to be affected. Although not yet fully implemented, the project is progressing successfully.

10 REVENUE

151 182 LEGEND I Freight Property Rentals !Hi Parcels and Mail 1'!1 Trade and Catering

11111 Others • Passengers

1983/84 1984/85 Chart Units - $Millions Chart Units - $Millions

EXPENDITURE

LEGEND 0 Maintenance 79 102 98 Administration 16 Finance Charges 58 72 Superamua tion ~ Payroll Tax l!!ll Others 1983/84 1984/85 • Operating Costs Chart Units - $Millions Chart Units - $Millions

11 FREIGHT SERVICES Objectives The Freight Services Division is responsible for the establishment and achievement of tonnage and revenue budgets that reduce the deficit. This involves the identification, evaluation and service specification of market-based freight and parcel services within Victoria and between Victoria and other States. Overview The 1984-85 financial year was a year of improvement for Vfline Freight. Earnings reached $191.7 million, a result which was within 5 per cent of the Division's target and 18 per cent above the 1983-84 figure. Tonnage increased by 13 per cent, from 10.5 million to 11.9 million tonnes. This performance reflects the commitment to early achievement of the objectives of the Transport Act 1983. During the year V jline Freight improved its position in the transport industry and laid the basis for selective growth and continuing improvement in contributions from freight busi­ ness. The Division selectively pursued business with emphasis on commodities that contributed more to improving profitability. Many customer agreements were renegotiated which, in some cases, resulted ir:1 shedding of unprofitable business. The task of filling senior positions in the Division was completed during 1984-85. This enabled increased marketing and sales activity, backed by improved physical distribution, research and support services. In September 1984, the Division's General Manager visited the United States of America, Canada, Britain and France to review overseas trends in rail freight marketing and mar­ keting organisation structures and to investigate how rail and road operations are best integrated. All senior marketing staff commenced additional management training and action plans were prepared to enable other marketing/sales staff to commence further sales and cus­ tomer contact courses in 1985-86. A promotional program was launched to boost public awareness of V/Line strengths in the freight business. Research was also initiated to form the basis for market-based and market-tested promotional programs for 1985-86. Freightgates As reported in the 1983-84 Annual Report, a new approach was agreed to by the Government for the handling of general freight. By December 1984, V/Line had formalised a new country network of twenty-six freightgates with ancillary road services which offered general freight services to most major locations throughout country Victoria. Yearly cost savings of $5.1 million have been achieved, although this initial result is less than the Government's original objective of $10 million. Planning has since begun for more efficient use of the freight facilities at Shepparton, Mildura, the Latrobe Valley, Warrnambool and Melbourne Freight Terminal. The consolidation of small country consignments at the Melbourne Freight Terminal led to marked improvements in overall performance and favourable comments from customers. The implementation of necessary changes in the metropolitan area began and produced a further improvement in service. A major promotional program on freightgate services was initiated during 1984-85 with the theme linking V /Line and the various communities it serves. The promotion was supported by increased personal selling campaigns by both country and city-based sales staff. Additional business of 15,500 tonnes was generated initially by this program. The combination of these initiatives is expected to further improve cost recovery at freightgates next year.

12 Grain Grain handling, the Division's major freight task, involved moving 4.2 million tonnes during the year. However difficulties with shipping from Portland and Gee long made it impossible to catch up with planned grain movements deferred during an industrial dispute in August 1984. Greater use was made of larger block trains during the year which increased oper­ ational efficiency. Further improvements in handling were made by expanding the use of road contractors to consolidate specific grades and types of grain at silos. During the year, the Canadian Consultants Ltd. (CANAC) report was published and meetings were held with interested parties about the detailed recommendations involved. As part of the implementation process for -the CANAC recommendations, the number of Central Receival Points (CRPs) established for the 1984 crop was increased to twenty-one (fourteen for the 1983 crop) and a further increase is proposed. Further details are con­ tained in the Corporate Planning and Development section of this report (see page 29). Freight initiatives There is considerable evidence that Vfline's freight initiatives are showing positive results in both unregulated and regulated markets. Increased movements of slab steel from Port Kembla to Western port were successfully negotiated. By continuing operations during the normal Christmas shutdown increased tonnages of quarry products were moved on rail. There has been consolidation of fifteen metropolitan briquette handling stations at five locations and improved productivity generally by operating larger trains. Additional cement, bitumen, quarry, metals, motor vehicles and intermodal traffic was carried, with an increase in non-grain earnings of 7 per cent compared with 1983-84. The 'Superfreighter', an overnight service between Melbourne and Sydney which was introduced in September 1983, achieved further market support during the year. Thro1..1gh a link with the State Rail's Sydney-Brisbane 'Superfreighter' service, V/Line has been able to offer customers a two-day service to Brisbane. The feasibility of operating a similar overnight service between Adelaide and Melbourne is being examined. Commodity sector performance Vfline Freight marketing activity was managed in four commodity sectors: Rural and Extractive Heavy Freight Industries Shipping Industry, Forwarding Agents and Containers General Freight and Parcels Rural and Extractive The Rural and Extractive Sector finished the financial year strongly with revenue 30 per cent higher than in 1983-84. However the result was 5 per cent, or $6.8 million, below budget, which was acceptable considering the impact of several negative market forces during the year. Grain revenue was affected by the industrial strike during August 1984 which deferred $3.1 million in revenue and also by capacity limits at the Grain Elevators Board's terminals at Portland and Geelong during February and late June 1985. Approximately $2 million in grain revenue was deferred to the 1985-86 financial year. Bitumen traffic was 38 per cent above budget for the full year. The Bicentennial Road Construction Program and favourable weather conditions stimulated demand. An improved rail market share has been achieved for bitumen through aggressive marketing and improved service. Further expansion into the market is planned with the largest Victorian bitumen consumer, the Road Construction Authority. A significant operational target for stone was achieved with 600,000 tonnes hauled during 1984-85. Revenue was 19 per cent above buqget for the year and tonnage 38 per cent above budget. Discussions have been held with the customer involved to increase the number of trains from twelve to fourteen a week.

13 Gains have been made in attracting more powdered milk business with results of 5 per cent above budget for the full year. Negotiations are being conducted with two manufac­ turers to further increase the volume of powdered milk traffic. These gains are an encour­ aging sign of Vfline's competitiveness and service levels with the powdered milk industry, which is very cost conscious because of depressed export prices. The need to make up for the loss of income from the Approved Decentralisation Sec­ ondary Industries (ADSI) subsidy had an impact on the Rural and Extractive Sector. The generation of additional revenue required increased tonnages or rates. Making up lost revenue was not possible for some products causing revenue performance to fall below what would have been achieved. Heavy freight industries The Heavy Freight Industries Sector exceeded budget. The most significant growth was recorded in bulk cement traffic which was 20 per cent or $1.3 million, above budget. The growth in cement demand was 8.5 per cent above the industry forecast level. This is directly related to the upsurge in building activity and road construction. The current level of demand is forecast to continue for at least the next twelve months, the main constraint on growth revenue being the availability of wagons. Scrap metal was 82 per cent, or $300,000 above budget. The results reflect continuing high demand for scrap steel at Port Kembla. A 16 per cent, or $100,000 above-budget result was achieved for tin plate traffic. This is attributed to high industry demand and the regaining of business from road. A good result was also achieved in motor vehicle traffic which was 14 per cent, or $300,000 above budget. Further improvement is expected in 1985-86. Additional backload opportunities from Sydney are also under investigation. Iron and steel traffic was on target. However, occasional shortages of wagons and shifts in distribution patterns adversely affected results. Shipping industry, forwarding agents and containers This market sector achieved a 5 per cent above-budget result. Demand for container and Railways of Australia Container Express (RACE) business has been strong for most of the year and continued growth is expected. The number of RACE containers carried during 1984-85 was 15 per cent higher than in 1983-84. RACE containers were marketed as a railway-owned container hire service available for use on the 'Superfreighter' trains. A separate container hire structure was investigated and agreed to by the Railways of Australia Committee and will become effective from 1 October 1985. The structure provides for simpler rates and a clearer allocation of costs. Overseas shipping container traffic was the subject of considerable restructure on the eastern corridor, and an effort will now be directed towards achieving uniformity on the western corridor. Forwarding agents' van traffic continues to be attractive for price-sensitive cargo, par­ ticularly on the longer haul corridors (Perth and Brisbane). In this area, a rationalisation of the rate structure will seek to simplify costing procedures and eliminate procedural anomalies and artifical wagon shortages. General freight and parcels Victorian general freight was 13 per cent, or $800,000 above budget. The result was a combination of improved output by country-based industries and improved service performance at freightgates (see page 12). Feedback on customer attitudes to V /Line services from regional marketing staff proved to be positive. To capitalise on this, personal selling programs were developed for each region with the aim of taking V /Line freight services to more customers. The strategy is proving successful in holding and regaining business that previously displayed a downward trend.

14 Beer traffic on rail declined following the opening of a brewery at Ballarat. Changing social attitudes to drink driving also had an impact on beer sales and therefore the volume of beer transported. New business continued to be sought successfully. Parcels revenue continued to improve. Earnings were $9.4 million, 4 per cent above 1983-84. This improved trend is attributed to a regional and personalised sales campaign, complemented by an advertising program. Regions Regional freight marketing managers The appointment of regional freight marketing managers was completed during the year, except for the northern region. Physical distribution The Division was active in promoting reliability in freight train running. In November 1984, it began monitoring key freight trains which realised 60 per cent of revenue. As a result of the close attention, performance improved gradually but significantly over the remainder of the year. By June 72 per cent of interstate trains, 67 per cent of scheduled block trains and 87 per cent of freightgate trains arrived on time compared with 63 per cent, 49 per cent and 41 per cent of trains respectively in November 1984. Bogie exchange performance is now being reviewed regularly. An action plan for service planning of existing and new services commenced. The emphasis is on block trains which avoid marshalling areas. The Materials Handling Section has been fully manned, with staff aligned to product groups. The Department is heavily involved in logistical rationalisation of wagon traffic including fertiliser, bulk cement and sand. Customer service A total of 27,100 telephone inquiries were made about rates and services while a further 12,100 calls relating to claims were received. In January 1985, an insurance scheme for consignments was introduced. Freight or parcels consignments worth up to $300 are covered by free insurance when carried by Vfline in Victoria. lt covers any damage or loss while in transit. For a reasonable premium 2 per cent of the declared value- V /Line provides the same cover on most goods worth over $300. For example, a consignment worth $1000 attracts a premium of $20 to fully cover it against damage, theft or loss while it is in transit with Vfline by rail or road. The development of a data base for automated freight billing commenced and involved Management Information Systems staff. Freight rates Victorian parcel rates were increased on 2 September 1984. The rates for parcels weighing up to 5kg were increased by 4 per cent while the rates for parcels over 5kg by 10 per cent. Livestock rates were increased on 1 October 1984 by 25 per cent for twenty or more wagons and 40 per cent for other consignments. Grain rates were increased on 1 November 1984 by 6 per cent. and on 1 January 1985, fertiliser rates were increased by 6 per cent, produce rates by 7 per cent and both baled hay and Class M rates by 8 per cent. lntersystem rates rose twice, on 1 July 1984 and 1 April 1985, by 5 per cent each time. Contract rates were increased by varying percentages according to the route and the type of traffic with increases generally exceeding the CPl. Rates charged are designed to cover capital as well as operating costs.

15 Staff training and development Divisional managers commenced a Louis Alien management training system and the preparation of position charters. The fifteen-module program will be completed by December 1985. Divisional marketing personnel began a Scandanavian Training Systems program in sales techniques. The program included the training of a specialist group who will under­ take internal training of other V/Line staff in the different regions and within the Division. Others will be trained in customer contact techniques and, through an internal program, will pass this training on to staff in regular contact with customers. In summary Further traffic exists, and we are looking at winning an increase to improve Vjline's revenue contribution over the next five years. Marketing strategies are now more selective, with the emphasis being placed on com­ modities suitable for efficient and profitable transport by VJUne. There is greatly increased research and emphasis on what the customer wants. Much of the detailed research commenced in 1985 and forms the basis of formalised business planning in 1985-86. The management of V/Line's Freight Services Division is now structured in business sectors, ensuring that the future development of freight services is based on commercial considerations. PASSENGER SERVICES Objectives The role of the Passenger Services Division is to identify, specify, evaluate and pursue opportunities to improve the effectiveness and efficiency of a market-based passenger transport system in Victoria and between Victoria and other States. The Division pursued key corporate objectives directed towards achieving: • 50 per cent cost recovery for passenger business: • recovery of the full cost of services operated at Government direction; and the operation of cost effective and efficient travel services. Passenger Business Plan To achieve the corporate objectives a Passenger Business Plan was prepared which contained strategies to: • develop a totally multi-modal transport network. • develop the V/Line passenger business as part of the travel industry; and. undertake continuing market research to determine the appropriate service levels for passenger services. While the plan covers a five-year period, most of the strategies outlined will be implemented during the next two years. Passenger marketing strategies The business strategies were developed further into specific objectives, marketing strategies and programs for the year. The key elements of the marketing plan strategies were: • the involvement of V/Line in the total travel business; • the expansion of the patronage base by entering new markets; • the use of pricing and fare structures to increase revenue and patronage; • an extensive advertising and promotion program; and a comprehensive market research program.

16 Regional transport studies Vfline's Passenger Services Division is conducting a program of studies aimed at improving public transport in the non-metropolitan areas of Victoria. As V/Line is respon­ sible for all public passenger services in the Victorian non-metropolitan area, the studies will enable the development of integrated and co-ordinated public transport systems. The studies will identify ways of improving passenger services in different areas of the State and will help to provide the most effective and efficient public transport network throughout Victoria. The first study, in the Goulburn Valley, has been completed and recommendations are about to be implemented. A second study of the Gippsland area is nearing completion and a third study of the north-west areas has commenced. Three more studies of the west, north and north-east areas of the State will be undertaken to complete this comprehensive investigation of public transport in country Victoria. Service developments Road A return road coach service, called Speedlink, was introduced between Albury and Adelaide providing a link with the XPT train service from Sydney to Albury. Speedlink provides a new fast rail/coach service between Sydney and Adelaide which is considerably faster than existing coach services. lt also links major towns in northern Victoria with each other and with Adelaide and Sydney. The service provides a further link between major tourist areas opening up opportunities for future packaging of V /Line rail/coach tours. Additional service is provided in the snow season and tours are provided to Falls Creek and Mt Buffalo enabling V/Line to cater for ski traffic from South Australia and northern Victorian towns. The daytime road coach service introduced between Melbourne and Mildura to comple­ ment the existing night rail service was very popular during its first full year of operation and provided a reasonable profit. Road passenger services in the south-western region of Victoria were reorganised fol­ lowing detailed examination of the network of coach services provided. The major change was the introduction of a V/Line coach service operating between Warrnambool, Portland, Heywood and Mt Gambier. The service, previously an independent unco-ordinated service, has generated additional patronage particularly from Mt Gambier, Portland and Port Fairy and is co-ordinated with the Warrnambool - Melbourne train service. Other service changes implemented to improve public transport in the area were: a revised timetable between Warrnambool and Geelong on Sundays co-ordinated with trains to and from Melbourne; • a revised service from Port Fairy to Warrnambool co-ordinated with Melbourne trains; a revised timetable between Warrnambool and Ballarat on weekdays co­ -ordinated with Melbourne trains; and a new return service between Geelong and Ballarat on Sundays. With the reinstatement of passenger trains to Leongatha, the road coach network in South Gippsland was restructured to provide an integrated and co-ordinated train and bus system in the region. The road coach services operating to lnverloch and Yarram were altered to improve the public transport system for South Gippsland residents.

17 Rail Intrastate A major improvement in services during the financial year was the introduction of a new timetable on April14. A number of changes were made including extra services to Gee long and Bacchus Marsh. Timetables were based on market research of the preferences of both users and non-users. Passenger rail services were reinstated to Leongatha on Sunday 9 December, and the service operated with new 'H' car sets. Many commuter services were upgraded as new air-conditioned sets were placed on routes previously operated by old rail motors and wooden-bodied carriages. Compartment carriages were eliminated from the Vinelander and the train now largely comprises saloon cars and sleepers. The new air-conditioned tangerine cars were introduced on the Swan Hill and AI bury corridors while a progressive witharawal of the remaining wooden-bodied rolling stock was achieved as further 'H' sets were introduced. Interstate During. the year, a number of pricing initiatives and promotions were taken to arrest the decline i:1 interstate patronage. In general interstate rail services are suffering intense competii-ion from other transport modes, in particular from the road coach services. During 1984-85, studies were undertaken into the feasibility of operating XPT trains between Melbourne and Sydney in addition to running a touristfsleeper service. A pro­ motional visit to Melbourne by the XPT in February gave users and potential customers a preview of the regular weekend service which is expected to commence in 1985-86. See page 20. Travel packages Total rail revenue received from package tours for the financial year was $1 ,528,000, an increase of $248,000 over 1983-84. Increases in this market segment of 31 per cent in passenger numbers and 19.4 per cent in rail revenue were experienced for the year and can be attributed to the following: • Releasing an extensive range of holiday packages ranging from day tours in Victoria to seventeen-day all-inclusive holidays throughout Australia. Increased sales activity among the agents and stations, which includes training of staff. • Development of the Time Traveller school holiday program. Extensive advertising campaigns. Increased promotional activity by the sales area. Development of sales aids, such as the Agents Manual, which have improved the efficiency of the sales team. Trading and catering During the year, revised menus featuring a wider selection of items were introduced on Melbourne - Sydney services while credit card facilities were extended to all interstate rail services. New and brighter uniforms for Trading and Catering staff on trains were introduced in June 1985. The new outfits were designed with the assistance of catering staff.

18 Retail trading Redevelopment of retail outlets at Flinders Street Station was completed and the current operations consist of a take-away food and drinks shop, a bookstall and a florist. Spencer Street Station upgrade Plans are being prepared for upgrading the Spencer Street Passenger terminal. The upgrading will include provision of bar facilities and a bistro, improved waiting and booking areas and modern signage. These improvements will provide better and more comfortable facilities for Vfline pass­ engers. V/Line Travel Centre Vfline Travel Centre commenced operation on Tuesday 11 June, with the official opening conducted by the Chairman and Managing Director, Mr Keith Fitzmaurice, on 17 June. The opening coincided with the promotion of the centre on the Ernie Sigley Show before and after the official opening. Mr Ernie Sigley hosted the opening in the foyer of Transport House. Sales of V/Line travel for the period 11 to 30 June reached $90,000 and the total number of customers booked for the period was 222 with the most popular product being the Aussie Made holiday packages. MotoRail MotoRail usage for the year rose by 14 per cent over 1983-84. Total vehicles carried numbered 14,800 compared to 13,000 for the previous year. Significantly, an 11 per cent increase occurred in the number of interstate MotoRail movements from 10,300 in 1983-84 to 11 ,400 in 1984-85. A promotional campaign for the MotoRail services was also carried out during the year. Passenger fares Caper Fares Caper fares, which were first introduced to Sydney and Adelaide during February 1984, were extended to Perth and Brisbane during the year. The fares also became available between Adelaide and Alice Springs on the Ghan from November. The total number of users of Caper fares for 1984-85 was 39,900 with 19,100 sales on the Sydney corridor and 20,800 on the Adelaide Corridor. Super Savers A number of changes and improvements to the fare structure were made, the major one being the rationalisation of Super Saver fares. On interurban services, the changes meant that the fares apply at all times except during weekday peak hours and at weekends. On intercity services they apply on the usually lightly loaded days- Tuesday, Wednesday and Thursday. The results of the changes were an increase in revenue, changes in load patterns and a more efficient utilisation of rolling stock. lntersystem fares increases There have been two variations to the intersystem fares during the financial year- the average 6 per cent adjustment in September 1984 and the subsequent average adjustment of 5. 7 per cent effective from 1 March 1985. Adult economy fares to Sydney increased during the year from $53 to $59. Similarly, Adelaide adult economy fares increased from $42 to $44. The cost of a sleeping berth on the Melbourne to Sydney corridor increased from $20 to $28 for the year, while or the Melbourne to Adelaide corridor the charge rose from $23 to $28.

19 Sixty Saver concession card The Sixty Saver concession card, introduced on 4 March 1985, is available to Victorian residents, aged 60 years and over, who do not receive any other transport concession card. They may purchase a half-yearly for $25 or a yearly card for $50. The card enables the holder to travel at the prevailing published concession fares on all MT A services, both Government and privately operated. and at ordinary concession rates on all V /Line off-peak services. Special promotions Military Tattoo V/Line sponsored the Military Tattoo at the Melbourne Cricket Ground from 14 March to 19 March. A total of 68,000 people attended the performances making the Tattoo a resounding success for V /Line in terms of financial return and publicity. Vfline was fully reimbursed for the sponsorship of $322,000 while the organisation received concentrated publicity. As well, the Vfline travel packages to the Tattoo returned an estimated $15,000 in nett revenue. XPT promotion A promotional tour by the XPT to Melbourne was held on 17 February 1985, and free trips were offered to the public between Spencer Street and Tullamarine Loop. An estimated 1 ,500 people took advantage of the offer. Vfline is working with State Rail, NSW to extend XPT services to Victoria in the near future. Great Victorian Bike Ride V /Line provided four special trains as well as extra cars on regular scheduled services to carry approximately 2,000 riders and their bicycles to Wodonga on 1 December for the Great Victorian Bike Ride. Following its success, a meeting was held with organisers to begin planning a similar operation for November 1985. Shows and trade fairs V/Line services were promoted through displays and exhibitions at several country shows and trade fairs. Vfline also provided displays at the Royal Melbourne Show. Victoria Day The Victorian Government declared 31 December 1984 the Victoria Day public holiday to celebrate the State's 150th Anniversary and offered free public transport as part of the celebrations. Most services were booked out early by people taking advantage of the offer. A total of 21 ,000 people travelled as opposed to a usual patronage level of 9,000 persons. Of these passengers, 11 per cent had never used V /Line services before and 64 per cent were infrequent users.

20 Advertising During the year, passenger services were advertised through all forms of media in the metropolitan and country areas with the objective of positioning V/Line travel in the market place as a part of the travel industry. Major activities included the production of a television advertisement featuring Vfline's services, as well as special promotions such as Time Travellers, Aussie Made Holidays and Rail/Drive. Customer Relations From April 1, 1985 the V/Line service enquiries previously undertaken by the Transport Information Centre were taken over by V/Line Access. This created a centralised information and selling centre. As from this date, V/Line Access extended its operation to 365 days per year. The section now operates to the following hours: Monday Saturday 8.00 a.m. - 8.00 p.m. Sunday 10.00 a. m. - 6.00 p.m. Over the period 1984/85, the section has received a total of 111,000 calls with the centre now receiving 25,000 calls a month. Country callers have had the benefit of a toll free (008) telephone connection to V/Line Access since October, 1984. Patronage ('000 passenger journeys) 1984-85 1983-84 VARIANCE Country 4293 3952 +341 (8.6%) Interstate 458 463 - 5 (1.1%) 4751 4415 +336 (7.6%)

Revenue ($'000) 1984-85 1983-84 VARIANCE Country 24488 21196 +3292 (15.5%) Interstate (1) 10086 7294 +2792 (38.3%) 34574 28490 +6084 (21.3%) Benders Bus Lines (2) 780 N/A + 780 35354 28490 +6864

Note (1) Passenger revenue figures for 1984/85 include additional receipts of $2.9M above 1983/84 for pensioner concessional travel. (2) Revenue from Benders Bus Lines credited to V/Line accounts since 1984/85 year.

21 TRANSPORT OPERATIONS Objectives The primary objective of the Transport Operations Division is the provision of reliable, safe and efficient freight and passenger services, both rail and road, which meet the requirements of the Freight and Passenger Services Divisions. In meeting its objectives the Division provides country and interstate passenger services, parcels delivery, general freight and wagonload services, and services for bulk traffic, in particular, grain, cement, superphosphate, quarry and petroleum products. The Division is also required to provide engineering, scientific and technical services to support these objectives and to assist other divisions as required. The Transport Operations Division was responsible for expenditure of more than $300 million during the year of which about two-thirds was for labour-related payments. A review of the main activities of the Division for 1984-85 follows.

OPERATIONS REVIEW Freight services Considerable efforts were made during the year to improve freight train reliability and punctuality. Freight schedules were rationalised and some trains were combined to min­ imise the effects of a shortage of enginemen caused by the Early Retirement Scheme. Progressive delivery of rebuilt and new locomotives partly overcame the locomotive shortage which affected operations in 1983-84. Although grain harvest demands returned to normal levels following the record wheat harvest of 1983-84 approximately 4.5 million tonnes of grain has been transported in the past twelve months. A shortage of shipping led to some under utilisation of resources for grain at various times of the year which in turn reduced by 300,000 tonnes, the amount of grain carried to Geelong and Portland during 1984-85. This represents a revenue lag of approximately $6.5 million in 1984-85, which will be received when grain currently in storage is cleared. Compared with 1983-84 significant increases in traffic in 1984-85 were recorded in cement (15 per cent increase), containers (17 per cent), motor car traffic (11 per cent) and quarry products (30 per cent). Slight decreases were recorded in petroleum and briquette traffic with a more significant decline in superphosphate and livestock traffic. Significant measures have been taken to reduce the cost of providing services for superphosphate traffic. The first step, taken during 1984-85, was to limit to 1 ,500 the number of GY wagons available for superphosphate traffic. During 1985-86 the GY com­ mitment to this traffic will be further reduced by the injection of VOCX bogie open wagons into superphosphate traffic during the peak season. The use of VOCX bogie open wagons will allow the adoption of block trains on major corridors. Tonnage figures for major commodities during the past twelve months are set out below: Amount Carried Commodity {OOO's tonnes) Grain products 4.200 Container 1.031 Cement .757 Quarry products .748 Steel .659 Petroleum products .480 Briquettes .379 Superphosphate .350 These commodities represent approximately 72 per cent of traffiC:.

22 Passenger services Major passenger service developments in 1984-85 included the restoration of passenger services between Melbourne and Leongatha and between Frankston and Stony Point - the latter service being operated for MetRail. Further improvements have been made to the central reservation systems for both country and interstate services and additional visual display terminals have been estab­ lished at country centres. A number of country passenger stations have been upgraded as detailed in the Capital Investment Program. See Page 25. During the year a number of adjustments were made to timetables, in conjunction with the Passenger Services Division, to provide schedules to meet market requirements. The more important of these changes related to the reintroduction of passenger services to Leon­ gatha (December 1984), acceleration of Vinelander schedules to and from Mildura and an additional commuter service to Bacchus Marsh. In April1985 a major timetable change was·introduced to coincide with the rescheduling of MetRail's Werribee services via Westona and the opening of the Northern Loop. A number of additional road services were also introduced during the past year. These included weekday coach services between Ballarat and Warrnambool, weekend coach services between Geelong and Warrnambool and the Albury-Adelaide service connecting with NSW State Rail Authority's XPT services to Sydney. Considerable effort has been diverted during the year towards achieving an overall improvement in both punctuality and equipment reliability and results towards the end of the year showed encouraging trends with more than 80 per cent of trains meeting 'on time' targets. Regionalisation While regionalisation had been planned as part of the organisation of V/Line from July 1983, acceleration of its implementation did not occur until October 1984, when the head office reorganisation had been virtually completed. At that stage it was decided that all the necessary steps should be taken to establish a viable, operating, regional organisation. The last of the management team positions were filled in June 1985 and each of the five country regions has now been fully established. Accommodation has been obtained or is planned for each of the regional headquarters and operational plans formulated for inter­ action between the regions and head office. Implementation of regionalisation has involved the relocation of existing regional offices at Seymour and Dandenong to Wodonga and Traralgon respectively. Other country regional offices were established at existing administrative centres in Ballarat, Bendigo and Geelong. Priority projects control department Considerable efforts have been made in the past twelve months to contain cost increases and operating deficits. Major changes in work practices are the responsibility of a new department - Priority Projects Control which has been established to co-ordinate and implement these changes. A total of ten major change projects has been identified. They are: Shunting Operations Review. Engineman's Corridor Rostering Review. Two-man Crewing. Interstate Passenger Train Manning. Station Management and Supervision Review. Review of Specified Lines. Manning of Catering on Country Passenger Trains. • Dudley Street Carriage Maintenance Depot Operational Procedures. Grain Handling Review (CANAC Study Implementation). • Wagon Maintenance Procedures and Facilities.

23 Project managers have been appointed to manage each of these projects in conjunction with line management. Their responsibilities include all aspects of the planning and man­ agement of each project. Extensive consultation and negotiation with the unions is also in progress.

CAPITAL INVESTMENT PROGRAM Locomotive construction and rebuilding Five new 3000 hp, G Class freight locomotives and thirteen rebuilt locomotives were delivered during the year. The latter group consists of five 2,200 hp A Class and eight 1000 hp P Class locomotives which are used on intercity and interurban services respectively. The G Class locomotives are based at Ararat and are used mainly for Portland line grain traffic. Only three locomotives (one A Class and two P Class) remain to be delivered under existing rebuilding contracts. Thirty-five new locomotives are under construction by Clyde Engineering at plants in both South Australia and Victoria. These orders consist of twenty-five 2,200 hp N Class pass­ enger locomotives and a further ten G Class locomotives. Delivery of these new locomo­ tives will commence early in the new financial year. Three obsolete shunting locomotives and one mainline electric locomotive were with­ drawn from service during 1984-85. Passenger vehicle construction A total of twenty-two refurbished passenger carriages were delivered during the year completing the order of forty-three interurban passenger carriages converted from Harris suburban vehicles. Delivery of these carriages has allowed the progressive withdrawal of almost all wooden-bodied carriages. A total of fifty-one such carriages were withdrawn during the year and only one set remains in regular operation. Freight vehicle construction During 1984-85 more than 400 obsolete four-wheel wagons and brakevans were removed from service. Several hundred four-wheel GY wagons have also been placed in long-term storage. Fifty-five VHGY bogie grain wagons and sixteen VQDW container wagons were constructed and delivered during the past twelve months. Major infrastructure program Non-urban train radio Installation of the train-to-base radio system has continued throughout the year. All base stations have been established and Statewide coverage is available with the exception of a few minor branch lines. All mainline locomotives have now been fitted with train radio equipment. Western line signalling upgrading Major modernisation and upgrading of signalling between Ararat and Wolseley on the Adelaide line is near completion. The project involved the provision of new longer crossing loops and remote controlled power signalling. The remaining work is centred on the section between Ararat and Murtoa, most of which will be completed in July 1985. Industrial disputes in 1983-84 had caused major delays to the commissioning of the new signalling system although most of these disputes have been resolved. Some additional delay was experienced in the early part of 1985 due to the original contractor going into liquidation. However, an alternative contractor was engaged to complete the project. In March a new crossing loop was commissioned at Bungaree between Ballan and Ballarat. Coupled with the previously opened loop at Parwan, improved route capacity is now available on the Melbourne-Ballarat section of the Adelaide line.

24 Other signalling and communications projects During the year work continued on the replacement of field stations and train control equipment for the Melbourne-Aibury standard gauge line. The new equipment, which will be incorporated into the new train control centre in Transport House replaces the original centralised traffic control system installed more then twenty years ago. The program which provides boom barriers and flashing lights at level crossings con­ tinued during 1984-85 with three new boom barrier and fourteen flashing light installations. Bridge reconstruction program A summary of major bridge reconstruction works commenced or completed during 1984- 85 is listed below: Moorabool Viaduct (North Geelong-Gheringhap) This work consists of strengthening and painting the bridge structure and is substantially completed. Glenelg River (Mt Gambier line) Earthworks for this project have been completed but further work has been deferred pending completion of a review to determine the future of the Heywood-Mt Gambier line. Creswick Creek (Creswick-Ciunes) A new bridge of prestressed concrete superstructure with concrete columns should be completed by September 1985. Moonee Ponds Creek (Aibion-Broadmeadows) Redecking of this bridge, which carries both broad and standard gauge tracks, com­ menced in 1983 and has now been completed. Country station upgrading A total of seven country stations were upgraded during 1984-85. The work generally improved passenger facilities such as booking offices, toilets and waiting areas. The seven stations upgraded were Wangaratta, Castlemaine, South Geelong, Morwell, Camperdown, Warrnambool and Kerang. Work is also in progress at Ararat, Colac, Kyneton, Terang and Bacchus Marsh. Major renovation and restoration was approved following a serious fire in 1981 at Ballarat Station. The main station buildings have been reopened and refurbishment of the buildings on the north side of the station is due to commence early in 1985-86. Upgrading of grain handling facilities Provision of upgraded grain handling facilities in conjunction with the Grain Elevators Board has continued during 1984-85. Eight Central Receival Points at Elmore, Jeparit, Manangatang, Woomelang, Speed, Nhill, Warracknabeal and Dunolly were upgraded. Works are planned at several other locations during 1985-86. Track upgrading A major catch-up program of track upgrading has been in progress during 1984-85. More than $7 million has been spent on renewal of crossing work, siding reconditioning, tie renewal and ballast cleaning. This work has taken place in all regions and has also involved the purchase of additional mechanical plant and facilities for the upgrading gangs. A number of major track relaying programs have been completed in the past twelve months allowing the operation of heavier and more powerful locomotives at higher speeds. The major areas relaid include the Gheringhap-Maroona and Ararat-Serviceton lines. A program of renewal and upgrading of points and crossings using heavier material has commenced on the Melbourne-Aibury standard gauge line.

25 Ararat-Portland upgrading project Work was increased on a major project designed to increase line speed and capacity between Ararat and Portland. The more significant parts of the scheme include: • construction of new crossing loops and extension of existing loops; • thermit welding; • bridge upgrading: • provision of heavier points and crossing work; and • provision of upgraded safeworking systems Some earthworks have been completed at Portland and some of the new crossing loops are now in use. Much of the work associated with the scheme will be completed during 1985-86.

PERSONNEL AND REORGANISATION MATTERS The Transport Operations Division was formally established on 1 July 1984 with a total staff of 9,848. At the end of the 1984-85 financial year the Division's staff totalled 9,967, an increase of 119 employees. The increase was mainly due to the splitting of functions between Transport Operations Division and MetRail, establishment of the regional organ­ isational structure and a need to recruit enginemen to replace staff lost due to the Early Retirement Scheme. · The principal activities during the 1984-85 year have been concerned with finalising the reorganisation of the Division establishing and staffing positions and completing the split of activities between MetRail and the Transport Operations Division. With the completion of the regional organisational structure, processes are now being implemented to decentralise the day-to- day administration of personnel within the different regions. Recruitment Recruitment activities have concentrated on completing the Division's organisational structure and implementing regionalisation. With the exception of part of the head office Engineering and Development Group and the splitting of signal and other infrastructure maintenance activities between MetRail and Transport Operations Division the organis­ ational restructure has been completed. Staff redeployment As a result of the reorganisation, the extension of the centralised traffic control system in the western region and the introduction of freightgates, more than 150 staff have been redeployed throughout the organisation. This rationalisation process will continue as change projects such as the Shunting Operations Review and Two man Crewing are implemented. Occupational health and safety The Authority has reached agreement with the rail industry unions on an Occupational Health and Safety Agreement. To manage and implement the agreement the Transport Operations Division has established an Occupational Health and Safety Section. Industrial relations The Industrial Relations Department has been established to provide advice and assis­ tance to the regions within the Division in relation to matters that have led to, or may lead to, industrial disputes. An industrial relations function has been established also in each of the regions in an effort to settle industrial disputes at a local level. lt is recognised that potential sources of trouble need to be identified before they develop into disputes, and issues resolved at the lowest possible level of the organisation. Manpower development The manpower development function within the Division has been heavily involved in establishing a manpower planning information base to enable management to carry out organisational and manpower reviews, and process establishment and classification issues. A library of organisation charts and position descriptions has also been developed. 26 Training Extensive training activities have been undertaken within the Division over the past twelve months. These programs have been conducted to ensure that human resources within the Division are developed. The training courses have aimed at increasing the skills and knowledge of staff to ensure optimum performance. In addition to technical skills training, such as safe-working classes, a number of management development courses have been introduced such as the Louis Alien Management Program, Kepner Tregoe Problem Solving and a number of human relations courses. PERSONNEL AND EMPLOYEE RELATIONS By the end of June 1985, the reorganisation of the State Transport Authority had almost been completed with only a few minor organisational changes to be implemented. At 30 June 1985, the Authority employed 21,573 staff of whom 7,294 worked with MetRail. Salaries and wages The average annual payment to employees, including overtime penalty payments and loadings to all staff was $21 ,309 compared to $19,669 in the previous year. Personnel administration Work is progressing on the introduction of a computerised payroll system which will be extended in the near future to include a computerised personnel information system. During the year a computerised system for generating position descriptions was devel­ oped in conjunction with a consulting firm, Control Data. The system should be introduced in 1985-86. Industrial relations As a result of only two major disputes (two-man crewing and shunting operations) occurring during the year a limited number of days were lost due to stoppages. Both issues have been the subject of continuing consultation. The Authority is continuing to pursue good relations with its employees through consul­ tation with the relevant unions. This has been particularly effective in alleviating concerns over the effects of restructuring the Authority. In spite of the limited time lost due to stoppages and the processes of consultation, bans and limitations imposed by unions still affected a number of areas of the Authority's oper­ ations. Overall, however, industrial relations throughout the Authority continue to improve as all parties realise how severely disputes can damage the viability of the organisation and services to our customers. The number of working days lost by staff directly involved in strikes/stoppages since 1979-80 is as follows: 1979-80 82,308 1980-81 11 ,291 1981-82 2,268 1982-83 790 1983-84 39,123 1984-85 4,358 Training and development The management training courses introduced last year continued to be conducted during 1984-85 and a new course in industrial relations for managers and supervisors was intro­ duced in the second half of the year. Training courses in sales techniques and effective customer contact were developed in conjunction with STS Pty. Ltd., consultants in sales training. These programs will be launched early in 1985-86.

27 Occupational health, welfare and safety The impact of impending legislation in Occupational health and safety and in workers' compensation generated a significant workload. The negotiation and signing of the Occu­ pational Health and Safety Agreement with the trade unions in the railway industry and the implementation strategy required major input from the Division. At the same time the introduction of Workcare, a risk management/accident compensation/rehabilitation pack­ age proposed by the Victorian Government, required the setting up of a comprehensive electronic data-base of accident and injury experience and associated costs. Some emphasis was placed on the office environment particularly in relation to preven­ tion of Repetition Strain Injuries (RSI). A joint consultative committee defined ergonomic guidelines for furniture, equipment, spatial requirements and any other aspect of the office which affects employees' health. The guidelines were implemented with the transfer of Head Office staff to Transport House. Health surveillance has been covered by a number of specific policies relating to periodic medical examination of people at risk, ranging from Authority's executives and microwave oven operators to users of chemicals. Special work is being undertaken to provide first aid instruction, in non-technical, easily understood language to all employees particularly those who use English as a second language. Accident data was as follows: 1984-85 1983-84 Average number of employees 21 '190 20,675 Number of Accidents 2,991 2,322 Frequency Rate (LTIFR) 70 57 (L TIIR) 14.1 11.2 The LTIFR is the number of lost time injuries per million worker hours, that is: No. of lost time accidents X 1 million hours Number of-employees X 2000 hours per year The LTIIR is the number of lost time injuries per hundred employees in the work­ force. A lost time accident is an accident where the injured person lost at least one shift from work. CORPORATE SERVICES The Corporate Services Division is responsible for the provision of administrative, legal, property and corporate communications services to the Authority. Moving Vjline headquarters from 67 Spencer Street to 589 Collins Street was a major project for the Division during the year. The Division was responsible for the total organ­ isation of the move and the complete reorganisation of many of the services it provides to the Authority such as cleaning, switchboard, telegraphic services, dispatch and records storage. During the year the restructuring of the single ST A Supply Department into three auton­ omous supply areas serving the individual requirements of Vfline, Workshops and the MetRail Division was substantially implemented. An efficient supply function was main­ tained to all areas dur"ing the restructuring process. The Supply Department ended the year with its stock accour.t standing at $18 million against the previous year's total of $14 million. The annual turnover rate was 6.49 times compared with 6.03 for the previous year. Reclamation sales fer the year were $1.15 million ($1.36 million in 1983-84) and lost property sales of $27,097 ($38,683 in 1983-84) were recorded. The Property Group was restructured and revitalised during the year with an objective being to maximise t\oth the utilisation and return from property assets.

28 Rationalisation and upgrading of the Authority's employee housing stock continued during the year. At 30 June 1985 the Authority owned 1 ,206 houses after selling 168 houses during the year for a total of $3.05 million. The houses were either obsolete or no longer required. The Authority bought ten new houses and plans are in hand to further rationalise and upgrade the housing stock. Upgrading of the road motor fleet continued during the year with the addition of 122 new vehicles. In accordance with Board policy a number of these vehicles replaced vehicles which were on lease. A total of 201 Freedom of Information requests were received and processed during the year- ten from Members of Parliament, 152 from members of staff, 3 from the media and 36 from the public. Access, some with and some without deletions, was approved for all but five of the requests. At the end of the year, only one request received during June had not been finalised. The Corporate Communications Group was restructured to include Public Relations, Advertising, Internal Communications, Photography, Graphic Design and Display and had a very active year covering the achievements and activities of the Authority. Highlights included the naming of Transport House, the opening of the VJUne Travel Centre and the Rail Fan Shop and the launching of new uniforms for Trading and Catering on-train staff. Media liaison was conducted on new passenger and freight business initiatives and the Authority's publications Vjline News, Update and the Weekly Notice were produced to program. With the implementation of the Authority's corporate identity program major initiatives were taken which ranged from obvious changes in livery through to changes in typography. The Group also promoted the Authority's new identity in the public arena. Extensive management training has continued in the Division during the year resulting in the majority of the divisional managers having now completed the Professional Manage­ ment Program. Full implementation of the program is now well advanced. CORPORATE PLANNING AND DEVELOPMENT The Corporate Planning and Development Division has the principal functions of devel­ oping and maintaining Vjline's five-year Corporate Plan, ensuring that all proposals for new investment are adequately assessed and monitoring the strategic performance of the organisation. The 1984-85 financial year was the first full year of the Division's operation. Highlights of the year included the development and implementation of VJLine's investment appraisal process, the establishment of the Rail Business Analysis costing system, the review of the grain handling network and the publication of the draft 1985 Corporate Plan. Investment appraisal The investment appraisal process, implemented in November was designed to ensure that capital projects will move V/Line towards its financial objectives under the Transport Act. Under the process, investments must not only achieve benefits greater than costs, but must meet the more stringent requirement of being specifically related to business sectors with adequate cost recovery. The procedure ensures the divisions sponsoring or imple­ menting projects are accountable for the benefits they return. Rail business analysis The establishment of the Rail Business Analysis costing systems provides V/Line with an extremely powerful tool for assessing the financial contribution made by any part of the business. lt has been used in the preparation of the Draft Corporate Plan, forms the basis for investment analysis and has provided castings for a range of strategic initiatives. In the coming financial year, it will be developed further to increase its strategic capability.

29 Draft Corporate Plan The Draft Corporate Plan was released for discussion in May 1985. it includes strategic assessment of V/Line's direction relative to its charter, projects the situation over the five year time-frame of the plan, establishes the framework for development of the business, and incorporates a range of initiatives to improve cost recovery. Review of grain handling and transportation The review of the grain network was designed to identify V /Line's position on the CANAC consultants' recommendations .. Particular emphasis has been placed on resolution of the future of light lines, and the design of the Central Receival Point system. In addition to these key strategic exercises, the division has responded to several developments of major consequence to V /Line's future. These included various policy initiatives, standardisation of the Melbourne-Adelaide corridor, and the Webb Dock line. WORKSHOPS The Workshops Board of Management met monthly during the year and developed into an effective working group. Board members from outside the organisation have widened the scope of work being undertaken by the Workshops as well as making the Board aware of business opportunities outside the Authority. Employee representatives also made a significant contribution to the work of the Board. The Workshops organisation is almost fully staffed with final recruitment to Levels 4 and 5 taking place. Staff have been recruited both externally and internally and they have settled down into a progressive and effective team. The introduction of staff ceilings will slow development, but alternative methods of achieving results are being examined. The Commercial Department operated from March and is taking a new competitive approach to all orders and negotiations. A complete transfer of pricing is expected to be achieved by June 1986. The Division met the demands of all its customers this year for plant and equipment while exceeding its budget due to an increased work load in N cars, locomotive overhaul and wagon repair. The Manufacturing Account reached a peak of $17 million, a significant increase compared with 1983-84. The major activities for the year were: Completion of eleven S and Z cars and the last of the Tulloch rail cars which finalised the Workshops involvement in the Country Carriage Upgrade Program. Construction of twenty-five 80' VQDW wagons. Construction of eighty-five VHGY grain hopper wagons. • Manufacture of forty VHMY ballast discharge wagons was commenced. • The overhaul of twenty-six locomotives- the Workshop's best performance to date. • Restoration of a Tait train for Victoria's 150th Anniversary celebrations. • The achievement of schedules in the wagon and carriage overhaul program. • The provision of structural steel and reinforcement bar for Dudley Street Carriage Maintenance Depot. • The manufacture of headstock bolster assemblies and LHB bogies for the new Comeng suburban trains. Excellent results were achieved. The introduction of work practice cards and quality audits contributed to a significant improvement in the standard of workmanship during the year. Faults reported in locomo­ tives and carriages following major overhaul have shown a marked reduction. Conclusions drawn from the analysis of service problems by both MetRail and the Transport Operations Division have led to the installation of brake test facilities, compressor test bays and clearly defined quality standards for the overhaul and testing of pantographs. As a result, premature failure in operation has been virtually eliminated.

30 In addition, significant capital investment programs have been undertaken successfully during the year with the result that: The foundry has been completely refurbished and modern equipment is produc­ ing brake blocks of excellent quality. Progress has been made on upgrading locomotive repair facilities during the year and will be completed with the installation of the amenities and engine test facilities. New amenities and staff foremen's offices were completed at Ballarat, bringing them up to a modern standard. A new under floor wheel lathe will be delivered in October. Work is progressing satisfactorily for the installation of this machine which will enable train wheel sets to be machined without being taken off the locomotive or carriages. Offices and amenities were upgraded in all workshops. New machinery from heavy presses to new welding machines has been installed in all workshops. Significant improvements in capability have resulted. Recommendations for new machine tools to be installed at Ballarat, Bendigo and Newport have been completed and await capital fund allocation. Design briefs for the relocation of the Electrical Workshops have been completed. The relocation will greatly improve manufacturing facilities and amenities. Relations between staff and management have been excellent during the year. Although there were some disputes these were resolved with good will on both sides. The Asbestos Control Unit was set up during the year and is contributing to the control and safe removal of asbestos. Upgrading and training of staff is proceeding and the staffing of the Training Section will add significantly to the effectiveness of the Division. METRAIL The MetRail Division operated Melbourne metropolitan rail services during the year reporting to the Board of the Authority on matters of safety. The Chief General Manager of the MetRail Division is also required to report to the Managing Director of the Metropolitan Transit Authority to ensure satisfactory co­ -ordination of overall metropolitan transport servic,9s. The detailed operational report of the MetRail Division is contained in the Metropolitan Transit Authority Annual Report. V/LINE INDUSTRIES PTY. LTD. V/Line Industries Pty Ltd formerly known as VicRail Pipelines Pty Ltd, is wholly owned by the State Transport Authority. The Directors of the Company are K.M. Fitzmaurice --(Chairman), A.S. Rei her and K.A.J. Cahill. The Company is involved in a joint venture with Mobil Oil Australia Ltd, Esso Australia Ltd, The Shell Co. of Australia Ltd and BP Australia Ltd in the Altona to Somerton oil pipeline. The pipeline is currently being used to convey jet fuel from Altona to Somerton. The accounts of the Company are on a calendar year basis in line with the accounting year of the joint venture. The Company's share of the profits from the operation of the pipeline for 1984 amounted to $206,396 compared to $209,726 for 1983. The audited net loss for the 1984 year was $10,349. The accumulated losses carried forward by the Company now amount to $1 ,082,965. No interest payments were made to the State Transport Authority during 1984 and the Authority agreed not to require payment of interest during 1985.

31 In the 1984 Annual Report of the Company the Directors have reported that: 'Commercial operation of the Altona Somerton pipeline supplying jet fuel to Tulla­ marine continued throughout the year. The joint venture participants agreed to increase the pipeline throughput tariffs by 20 per cent from 1 January 1985. The new tariff rate is estimated to return 7.5 per cent on the Company's original capital investment in the pipeline or 13.5 per cent on its written down value. On 16 November 1984, the State Transport Authority agreed to waive interest pay­ ment on the Mortgage Debenture for the current year enabling the Company to again continue trading with adequate income to meet its debts. Since the close of the year the Company has changed its name to V/Line Industries Pty. Ltd., to more closely recognise its relationship to the State Transport Authority which operates under its business name Vfline. The Registered Office has also been changed to Level 15, 589 Collins Street, Melbourne. The Company's Memorandum and Articles of Association have been widened to enable it to broaden its business interests. Since balance date the Company has completed negotiations with A.R.E. (Retail) Pty. Ltd. in regard to entering an equal partnership for the operation of the Rail Fan Shop at 589 Collins Street, Melbourne.' MT. BUFFALO CHALET The operations of the Chalet, which is situated in one of Victoria's most attractive tourist areas, continued satisfactorily during the year. The occupancy rate during 1984-85 was 66 per cent compared with 78 per cent for 1983-84. The modern new staff quarters were completed during the year. lt was expected that the transfer of the management of the Chalet to the Victorian Tourism Commission would take place during the year in accordance with an earlier Government decision. This did not eventuate and further directions are awaited from government.

32 STATE TRANSPORT AUTHORITY

FINANCIAL STATEMENTS

FOR THE

YEAR ENDED 30 JUNE 1985

33 STATE TRANSPORT AUTHORITY

PROFIT AND LOSS STATEMENT

FOR THE YEAR ENDED 30 JUNE 1985

Note 1984/85 1983/84 $M $M

Operating revenue 2 270355 219 898 Less operating expenses 3 (565.485) (498.759) -···---

Operating deficit before abnormal items (295.130) (278.861) Add abnormal items • (122.284)

Operating deficit before finance charges and government subsidies (295.130) (401.145) Less Government subsidies 4 191.773 216.953

Operating deficit before finance charges (1 03.357) (184.192) Add finance charges 5 (44.389) ( 21.801)

Operating deficit before extraordinary items (147.746) (205.993) Add extraordinary items 6 (13.81 0) ( 33.840) --·- --··--

Net deficit for the year (161.556) (239.833) Deficit brought forward (1 ,589.211) (1 ,349.378)

Deficit carried forward (1 ,750.767) (1 ,589.211)

The notes on pages 37 to 46 form part of these accounts.

34 STATE TRANSPORT AUTHORITY

BALANCE SHEET AS AT 30 JUNE 1985

Note 1985 1984 $M $M Current assets Cash on hand and at bank 14.547 Debtors 7 38.934 34.408 Prepayments .349 Stores 8 22.971 18.381 Securities held in trust 9 .281 .235

62.535 67.571

Investments Investment in Vfline Industries Pty. Ltd. 10 1.833 1.833 Short term deposits 11 .200 20.255 Loans to employees 12 12.497 11.510

14.530 33.598

Non-current assets Fixed assets 13 694.673 835.348 Leased assets 14(1) 264.463 272.647 Inter-authority account Metropolitan Transit Authority 21 87.420 Deferred expenses 15 34.891 1.883

1,081.447 1 '1 09.878

TOTAL ASSETS 1 '158.512 1,211.047

Current liabilities Bank overdraft 3.993 Creditors and accrued expenses 91.479 82.431 Employee leave entitlements 16 46.128 145.226 Provision for claims and compensation 17 31.786 14.373 Provision for superannuation pensions 18 50.000 48.000 Public borrowings 19 51.123 23.546 Loans from State Government 20 .731 .644 Lease liabilities 14(3) 8.557 4.486 Monies and securities held in trust 9 .342 .259

284.139 318.965

Non-current liabilities Employee leave entitlements 16 144.309 20.336 Provision for superannuation pensions 18 1,170.000 1,093.475 Public borrowings 19 221.923 100.666 Loans from State Government 20 26.381 27.113 Lease liabilities 14(3) 295.249 275.534 Deferred revenue 14(2) 74.071 77.121 Inter-authority account - Metropolitan Transit Authority 21 90.182 1,931 .933 1.684.427

~~-·-

Equity Advances from State Government 22 748.744 720.482 Contributed capital 23 187.982 167.982 Value of assets vested in Metropolitan Transit Authority 24 (243.519) (91.598) Accumulated deficit (1 ,750.767) (1 .589.211)

~~------~ (1 ,057 560) (792.345)

TOTAL LIABILITIES AND EQUITY 1.158 512 1,211.047

The notes on pages 37 to 46 form part of these accounts.

35 STATE TRANSPORT AUTHORITY

STATEMENT OF SOURCE AND APPLICATION OF FUNDS FOR THE YEAR ENDED 30 JUNE 1985

1984/85 1983/84 $M $M Source of funds Recurrent appropriation - Revenue supplement 141.820 171.097 Special appropriation - Superannuation pensions 49.953 45.856 191.773 216.953

Capital appropriation 154.800 189.407 Borrowings 147.713 73.465 Proceeds from sale of assets 6.442 124.701

154.155 198.166 Less:- Payments into the Public Account 125.538 191.893 28.617 6.273

Inter-authority account - MT A 90.182 Redemption of V/Line Industries debentures .310 Grant under the Major Initiative Program 20.000

395.190 503.125

Application of funds Operating expenditure 565.485 498.759 Abnormal items 122.284 Finance charges 44.389 21.801 Extraordinary items 13.810 33.840

623.684 676.684 Less Operating revenue 270.355 219.898

353.329 456.786 Less adjustment for non cash items 146.582 216.128 206.747 240.658

Capital expenditure 152.662 225.538 Inter-authority account - MTA 58.762 Repayment of borrowings 8.051 21.724 Repayment of lease liabilities 4.765 .858 Repayment of advance from State Government 1.000 Other 1.343

431.987 490.121

Net (outflow)jinflow (36.797) 13.004

Represented by:- (Decrease)jlncrease in working capital (36.797) 13.004

36 STATE TRANSPORT AUTHORITY NOTES TO AND FORMING PART OF THE ACCOUNTS The accounts of the State Transport Authority (The Authority) have been prepared in accordance with the Annual Reporting Act 1983 and the Annual Reporting (Large Trading and Rating Public Bodies) Regulations 1984. Note 1 - Significant accounting policies (1) Basis of accounting The accounts have been prepared on an accrual basis under the historical cost convention. (2) Fixed assets Fixed assets are valued at historical cost as per accounting records. Additions to fixed assets include capital work in progress. Track withdrawn from service is carried at the recorded historic cost until disposed of. The written down value of assets sold is written off in the year of sale. (3) Depreciation Depreciation is charged on fixed assets (other than track and land) at annual rates based on the estimated working life of each type of asset. Depreciation is not charged on track, the policy being to maintain track at a level required for operations. Depreciation is not charged on fixed assets in the year of acquisition. The policy for the .depreciation of fixed assets is currently under review. (4) Vesting of assets Assets vested in the Metropolitan Transit Authority (MTA) are effected at agreed values at the date of vesting.

(5) Capitalisation of interest Interest on borrowings used to finance major capital works is capitalised as part of the cost of such works. An average interest rate based on the total borrowing cost incurred for the year has been used as the basis for capitalisation. (6) Stores Stores consist of materials and supplies held for construction, maintenance and operations and are valued at the lower of average cost or net realisable value, using the average cost method. Work in progress for manufactured stores is valued at cost. Catering stock is valued at cost less allowance for obsolescence. (7) Leasing The leasing agreements entered into by the Authority are of a financial nature and are capitalised in line with current accounting practice. Leased assets are amortised over their remaining useful life. Profits realised or losses incurred on sale of assets associated with leasing agreements are treated as deferred revenue or expenditure and are amortised over the remaining useful life of the assets. (8) Currency exchange variations (a) Gains or losses on foreign currency transactions which have a life of less than 12 months are treated as revenue or expenditure in the year.

(b) Ga1ns or losses on foreign currency transactions which have a life of over 12 months are treated as deferred revenue or expenditure and are amortised over the life of the transactions. (9) Public borrowings (a) Indexed loan Where public borrowings are subject to indexation agreements, the outstanding capital value of the loan is adjusted progressively throughout the term of the transaction in accordance with either a schedule agreed with the lender or movements in an agreed index, whichever is relevant. The amount of the indexation adjustment is treated as a finance expense within the year. (b) Discounted loans Where any securities are issued at a price below face value, such variation is treated as a deferred interest charge and is amortised over the life of the security and classified as a finance expense. (10) Employee leave entitlements The Authority recognises long service leave entitlements for employees with service of 3 years or more and retinng gratuity entitlements for employees who are not members of the State Superannuation Board scheme and have more than 3 years adult service. No accrual is made for s1ck leave as it is treated as an expense when payment 1s made.

37 i 1 1 ' Superannuation pensions Tne Au:hority maintains a provision for the employer portion of superannuation benefits payable under the State Superannuation Board scheme to retired and exist1ng employees. (12) Self insurance ''le Authority carries its own insurance nsk except in special circumstances. All claims for damages or workers compensation are treated as a general expense when the value of the claims are determined and paid. No reserve fund is maintained to meet potential claims. (13) Revenue recognition Revenue is recognised and taken to account when the service to which the revenue relates is provided. (14) Proviston of metropolitan rail service to MT A The metropolitan passenger service is provided by Metrail. a division of this Authority. By agreement with the MTA, revenue earned by Metrail is remitted to that Authority and does not form part of these accounts. The MTA reimburses this Authority the cost of operating Metrail. This Authority regards the amount received from the MT A as a recoup of expenditure and not a revenue item.

Note 2 - Operating revenue 1984/85 1983/84 $M $M Passenger services 41.446 28.490 Parcels and mail 9.412 9.042 Freight services 182.259 151.799 Property rentals 4.100 3.882 Agency works (includmg intersystem charges) 1.091 5 942 Trading and catering services 13.448 13.000 Interest on short term investments 3.801 2.816 Profit on dtsposal of fixed assets 2201 3.165 Profit on sale of assets under leasing agreements (note 14(2)) 3.050 .669 Profit realised on foreign currency transactions 2.348 Other 1.199 1.093

270.355 219.898

Included in the revenue for passenger services were subsidies received from:- Education Department Student travel .067 .258 Department of Community Services Pensioners fare concessions 2.718 1.476 Pensioners free holiday travel 4.441 2.567 Ministry of Transport - Private bus subsidies 6.092

13.318 4.301

Included in the revenue for freight servtces were subsidies received from:­ Mintstry of Industry. Technology and Resources Decentralised Industries .275 1.655 Ministry of Transport - Subsidy in lieu of freight rate increases 5.721 3.954

5.996 5.609 Note 3 - Operating expenses 1984/85 1983/84 $M $M Operations Trains and buses 151.512 138.351 Stations 58.597 54.470 - Yards 26.820 25.002 - Freight depots 30.676 30860 - Trading and catering services 16.879 16.056 284.484 264.739

Signalling and safeworking 43.997 41.589

--~·- Maintenance, repairs and renewals - Rolling stock 81.651 72.298 - Infrastructure, track, bridges, buildings, stations and structures 89369 74.114 - Plant and equipment 3.040 4.340 ---- 174.060 150.752 ----

Administration 79.264 63.410 Superannuation pensions 128.478 126.066 Payroll tax 27.464 24.405 Insurance and claims for compensation 34.941 16.655 Ancillary services 19.415 6.487 Agency works 6.827 5.522 Depreciation of assets 18.683 20.625 Amortisation of leased assets 9.636 5.587 Bad debts .048 068 Employee leave entitlements 24.875 18.768 Auditors remuneration .098 .098 Fees and expenses paid to Board Members .050 .033

Total costs incurred 852 320 744.804

Recovery of overhead on cap1tal works (29.975) (27.357) Cost recoverable from MT A (256.860) (218.688) ---·- 565.485 498.759

Recovery of overhead on capital works represents expenses absorbed in the cost of capital works undertaken by the Authority. This amount is shown as a total recoup as the Authority cannot apportion the recoup against the various expenditure items. Note 4 - Transactions with the Public Account 1984/85 1983/84 Operating Operating Capital $M $M revenue subsidies Grant Works Total Total

Recurrent appropriations 1. Private bus subsidies 4.700 4.700 2. Freight subsidies 5.721 5.721 3.954 3. Revenue supplement 141.820 141.820 171.097 ····--- Total 10.421 141.820 152.241 175.051

4. Special appropriation- Superannuation pensions 49953 49.953 45856 5. Monies paid into the Public Account (125.538) {12!:.538) (191 .893) 6. Monies appropriated for capital works 154.800 154.800 189.407 7. Grant - Major mitiative program 20.000 20.000

10.421 191.773 20.000 29.262 251.456 218.421

1. Pnvate bus subs1dres represent funds prov1ded by the Ministry of Transport to finance the use of privately owned buses on certam routes Funds received for that purpose have been treated as passenger revenue. In the prev•ous year. th1s was treated as a recoup of expenditure. consequently no comparative figure is prov1ded.

39 2. Freight subsidies represent funds provided by the Ministry of Transport to compensate for the loss of revenue resulting from freight rate concessions granted to certain freight customers. Funds received for that purpose have been treated as freight revenue. 3. Revenue supplement represents funds provided by the State Government to finance the shortfall between the Authority's operating expenditure and revenue. 4. The special appropriation represents funds provided by the State Government to finance the employer portion of pensions paid to retired employees during the year. 5. In accordance with the requirements of the Transport Act 1983, all monies raised by the Authority from sale of assets and borrowings have been paid into the Public Account (Note 22). 6. Monies drawn from Works and Services Account (a component of the Public Account) represent appropri­ ations made to the Authority to finance capital works projects (Note 22). 7. During the year the State Government made a grant of $20 million to the Authority under the Major Initiative Program. Th1s grant has been treated as contributed capital (Note 23).

Note 5 - Finance charges 1984/85 1983/84 $M $M Leasing charges 36.430 20 730 Less recoup from MT A 12.396 10.241 ---- 24.034 10.489

Interest on public borrowings 24.089 11.773 Less recoup from MT A 7.715 6.616 16.374 5.157

Discount on loans 1.020 .490 Less recoup from MT A 111 .909 .490

Indexation of loan 099 1.455 Capitalisation of interest 1.785 Interest on loans from State Government 3.905 2.222 Bank charges .440 .376 Amortisation of currency exchange variations 2.700 (.173)

48.461 21.801 Less capitalisation of finance charges on capital projects (4.072)

44.389 21.801

Note 6 - Extraordinary items 1984/85 1983/84 $M $M Payment to former employees under the Early Ret1rement scheme 13.810 33.840

Note 7 - Debtors 1985 1984 $M $M Operating debtors 29.272 24.259 Other debtors 9.942 10.405 39.214 34.664 Less estimated doubtful debts .280 .256 38.934 34.408

Note 8 - Stores 1985 1984 $M $M Stores and matenals 18 331 14.002 Manufacturing work in progress 3654 3.649 Cater1ng service stock 986 .730 ----- 22.971 18.381

40 Note 9 - Securities held in trust Securities held in trust represent deposits held on behalf of contractors. A liability is also shown for monies and securities held in trust. In addition bank guarantees of $21.404 million (1983/84 - $15.196 million) are held as security against default by freight debtors and contractors.

Note 10- Investment in Vfline Industries Pty. Ltd. 1985 1984 $M $M Shares at cost .001 .001 Debentures at cost (secured by a floating charge over the assets of the company) 2.875 2.875 ----- 2.876 2.876 Less diminution in the value of the investment 1.043 1.043

1.833 1.833

Vfline Industries Pty. Ltd .. a wholly owned subsidiary of the Authority, has a balance date which does not align with that of the Authority. For this reason it was not practical to consolidate the financial accounts of that company with those of the Authority. The Treasurer has granted an exemption under the Annual Reporting Act from the requirement to consolidate the accounts of this company.

Note 11 - Short term deposits 1985 1984 $M $M Funds invested in Commonwealth Government Inscribed Stock and the Victorian Development Fund. valued at cost. .200 20.255

Note 12 - Loans to employees 1985 1984 $M $M Loans made to employees to purchase railway houses 11.988 10.891 Loans made to former employees under the Early Retirement Program .509 .619

12.497 11.510

( 1) The loans associated with the sale of railway houses to employees are repayable over a penod of up to 20 years. (2) The loans made to former employees under the Early Retirement Program are repayable when the former employee reaches the age of 60. The loan is expunged if the former employee dies prior to reaching age 60

Note 13 - Fixed assets 1985 1984 $M $M Depreciation Accumulated Written Written Class of Assets this year Cost depreciation down value down value

Infrastructure (including track) 1.291 364.136 64 220 299.916 405.471 Rolling stock 9.797 391.190 172.794 218 396 187.225 Plant & machinery 2.314 55 427 17.222 38205 31.380 Land 6250 6.250 10.736 Buildings and leasehold improvP.ments 3 758 127 212 19.271 107.941 155 667 Development projects 1n progress 16 848 16.848 40900 Other 1.523 13.206 6.089 7.117 3.969

18.683 974.269 279 596 694.673 835.348

(1) lt was not possible to align the fixed asset accounting records with physical assets held by the Authority. However. the computerised fixed asset recording system has been completed and a physical stocktake of fixed assets is now in progress. To date. the stocktake of roll1ng stock has been completed. Stocktakes of infrastructure (Including track) and buildings are scheduled to be completed in 1985/86.

41 The Authority did not proceed with the proposed revaluation of fixed assets. Consequently, historical cost disclosed 1n the accounts is per accounting records. A review of the components of each class of assets necessitated a reclassification of several types of assets. The values associated with each class of asset for the previous financial year have been amended to reflect the results of the review. (2) During the year, assets valued at $151 .921 million were transferred to the MTA in accordance with directions issued by the Minister for Transport (See Note 24).

Note 14 - Leases 1 ' Leased assets 1985 1984 $M $M Amortisation Capitalised Accumulated Unamortised Unamortised Class of assets for year cost amortisation value value

Suburban carriages 3.864 123.644 9.031 114.613 118.478 Country carriages .967 32.680 2.316 30.364 31.331 Locomotives .925 25.225 .944 24.281 23.754 Freight wagons 3880 100.181 4.976 95.205 99.084 __.. __, 9.636 281.730 17.267 264.463 272.647

2. Deferred gains/losses on sale of assets Profits realised or losses incurred on sale of assets associated with leasing agreements are treated as deferred revenue or expenditure and are amortised over the remaining useful life of the assets. (a) Gains 1985 1984 $M $M Unamortised profit brought forward 77.121 17.879 Profit realised during year 59.911

77.121 77.790 Less amortisation for year 3.050 .669

~···--···- Unamortised profit carried forward 74.071 77.121 ----~ ....---

(b) Losses 1985 1984 $M $M Loss incurred during year .084 Less amortisation for year .002 ---- Unamortised loss carried forward (note 15) 082

3 Lease liabilities 1985 1984 $M $M Liability in Australian dollars 177.432 179.239 Liability in Dutch Guilders 75.225 million Dutch Guilders converted to Australian Dollars at the rate of exchange at balance date 33.001 27.923 Liability in US dollars $US 62.000 million converted to Australian Dollars at the rate of exchange at balance date 93.373 72.858 -·--- Outstanding liabilities 303806 280.020. Imputed interest payable !hereon 308.570 391.320

Outstandmg commitment 612.376 671.340

Repayable in 1984/85 40.916 1985/86 43.517 42.405 1986/87 43.619 42390 1987/88 43.753 42.387 1988/89 43902 42.380 1989/90 44.022 Repayable thereafter 393.563 460.862

Outstanding commitment 612.376 671.340

42 The imputed interest is based on interest rates applicable at balance date. Drawdown for the year amounted to $1 .452 million 4. Currency exchange variations 1985 1984 $M $M Lease in Dutch Guilders Unamortised profit brought forward (1.904) Loss on conversion at balance date 5.077 (2.077)

3.173 (2.077) Amortisation for year .288 .173

Unamortised loss carried forward 2.885 (1.904)

Lease in US Dollars Unamortised loss brought forward 2.186 Loss on conversion at balance date 22.021 2.186

24.207 2.186 Amortisation for year 2.184 ------Unamortised loss carried forward 22.023 2.186

Total unamortised losses on leases (Note 13) 24.908 .282 __.. _____

Note 15 - Deferred expenses 1985 1984 $M $M Unamortised losses on sale of assets assoc1ated w1th leases (note 14(2)) .082 Unamortised losses on leases (note 14(4)) 24.908 .282 Unamortised loss on loans (note 19(3)) 5.499 Unamortised discount on loans (note 19(2) ) 4.402 1.601

34.891 1.883

Note 16 - Employee leave entitlements 1985 1984 Non- $M $M Current Current Total Total Provision for long service leave and retinng gratuity 4.605 116.428 121 033 105.902 Accrued annual leave 32.500 27.881 60.381 50.970 Accrued leave as a result of the 38 hour week agreement 9.023 9.023 8.690

46.128 144.309 190.437 165.562

The employee leave entitlements for long service leave. annual leave and public holidays were calculated by use of statistical sampling techniques. The liability is not funded by the Authority until such time as the entitlements are taken. Current liability is based on actual experience. Th1s represents a change in treatment from the previous year and comparative figures could not be provided $166.230 million represents the estimated legal liability of the Authority at balance date.

Note 17 - Provision for claims and compensation The provision for claims and compensation relates to the estimated value of claims held by the Authority at balance date.

43 Note 18 Provision for superannuation pensions 1985 1984 Non­ $M $M Current Current Total Total Liability relating to retired employees 50.000 610.000 660.000 610.000 Provision relating to existing employees 560.000 560000 531.475

50.000 1,170.000 1.220.000 1,141.475 ------

The above provision is based on an actuarial assessment of the liability as determined by the Government Statist and Actuary. The Authority reimburses the State Superannuation Board the employer portion of pensions paid to retired employees. The current liability is based on an assessment performed by the Government Statist and Actu­ ary.

Note 19 - Public borrowings Liability 1985 1984 $M $M The liability comprises:­ Transport Inscribed Stock (Note a) 177.267 98.718 Victorian Transport Borrowing Agency (Note b) 71.865 16.581 State Development Fund 18.114 8.913 Ministry of Transport 5.000 Albury-Wodonga Development Corporation (Note 22) .800

273.046 124.212

Repayable in 1984/85 23.546 1985/86 51.123 28.628 1986/87 31 803 19.224 1987/88 13.245 11.669 1988/89 20.722 2.149 1989/90 9.343 Repayable thereafter 146.810 38.996

273.046 124.212

Note: (a) Loans are guaranteed by the State Government (b) Included in this figure is an overseas loan of 5,000 million yen which has been converted to Australian dollars at the rate of exchange at balance date. and a loan subject to indexation. 2. Discount on loans 1985 1984 $M $M Unamortised discount brought forward 1.601 Discount on loans for year 3.821 2 091

5.422 2.091 Less amortisation for year 1.020 .490 ---- Unamortised discount carried forward (Note 15) 4.402 1.601

3. Currency exchange variation 1985 1984 $M $M Loan in Japanese Yen Loss on conversion at balance date 5.726 Amortisation for year .227

Unamortised loss earned forward (note 15) 5.499

44 Note 20 - Loans from State Government 1985 1984 $M $M National Railway Network (Financial Assistance) Act 24.628 25.178 Uniform Railway Gauge Act 2.484 2.579 27.112 27.757

Repayable in 1984/85 .644 1985/86 .731 .731 1986/87 .828 .828 1987/88 .942 .942 1988/89 1.072 1.072 1989/90 1.225 Repayable thereafter 22.314 23540

27.112 27.757

The above borrowings were made pursuant to Commonwealth Government legislation under which funds were made available to the State Government for specific capital projects.

Note 21 - Inter-authority account - MTA During the year the MTA provided funds to the Authority to operate Metrail and for capital projects relating to Metrail. The Authority has offset the cost of providing the Metraii service against the funds provided for that purpose. During the year capital expenditure on Metrail assets has been offset against the funds provided for that purpose. The balance on the Inter-authority includes certain costs of operating Metrail which have not been funded by MTA.

Note 22 - Advances from State Government 1985 1984 SM $M Balance brought forward 720.482 722.968 Add appropriation for capital works (note 4) 154.800 189.407 Less payments into the Public Account (note 4) (125.538) (191.893) Less loan from Albury-Wodonga Corporation ( 1.000)

Balance carried forward 748.744 720.482

In accordance with the requirements of the Transport Act 1983 the Authority paid to the Public Account all monies raised from borrowings and sale of assets. During the year the Authority received by way of appropriation from the Public Account monies to finance capital works. The Annual Reporting (Large Trading and Rating Public Bodies) Regulations 1984 require such transactions to be reported in accordance with their nature. Neither the Appropriation Act 1984 nor the Transport Act 1983 indicate the nature of the transactions. The Department of Management and Budget has been unable to determine the nature of the transactions or any conditions of repayment of advances made to predecessor Authorities. Pending resolution of the above problems the Authority has adopted the following treatment: 1. funds made available to predecessor Authorities are treated as an advance, 2. monies appropriated for capital works are treated as an advance, 3. monies paid into the Public Account are treated as repayment of the advance, and 4. the outstanding advance at balance date is treated as equity. The Authority has recognised a loan from the Albury-Wodonga Development Corporation which was paid directly into the Public Account it has now been reclassified as a loan (note 19).

Note 23 - Contributed capital During the year, the State Government made a grant of $20 million to this Authority under the Major Initiative Program (note 4).

45 Note 24- Assets vested in MTA 1985 1984 $M $M Suburban carriages 39.581 87' 121 Land 5.441 .952 Debtors 3.956 3.525 Infrastructure 99.914 Buildings 58.336 Property development 36.291 243.519 91.598

The only assets vested during the year were those subject to a vesting order passed by the Minister for Transport on 8 August 1984. Funds provided by MT A for expenditure on assets which were vested in 1983/84 have been offset against the value of assets vested.

Note 25 - Capital Commitments As at 30 June 1985, the Authority has entered into contracts for the supr:;ly of cOHlponents :::tnd capital equipment for an estimated value of $156 million.

46 STATE TRANSPORT AUTHORITY CERTIFICATION OF FINANCIAL STATEMENTS We certify that the financial statements set out in this Annual Report have been prepared in accordance with Section 11 of the Annual Reporting Act 1983, and the Annual Reporting (Large Trading and Rating Public Bodies) Regulations 1984. In our opinion the financial statements present fairly the financial transactions during the year and the financial position of the State Transport Authority at the end of the year. At the date of signing this certification we are not aware of any circumstances which would render any of the particulars included in the statements to be misleading or inaccurate.

K.M. FITZMAURICE, Chairman and Managing Director.

G.C. GLINSKI, Chief General Manager, Finance and Accounting.

C.L. JORDAN, Board Member.

DATED 24th September 1985.

47 AUDITOR-GENERAL'S REPORT The accompanying financial statements comprising the balance sheet, profit and loss statement, statement of source and application of funds and notes to and forming part of the accounts of the State Transport Authority have been audited as required by Section 12 of the Annual Reporting Act 1983 and in accordance with Australian Auditing Standards. As stated in Note 13 to the accounts the Authority has been unable to align its fixed asset accounting records with the physical assets. Due to the methods used by the predecessor Authorities to the State Transport Authority to record in the accounting records the acqui­ sition, retirement, sale or write off of fixed assets, I am unable to determine the costs or existence of all fixed assets included in the amount of $97 4.269 million shown in the financial statements. Likewise the adequacy of the depreciation charge for the year of $18.683 million and the accumulated depreciation of $279.596 million could not be determined. As stated in Note 22 moneys appropriated to the Authority from the Public Account for capital works, together with amounts made available to predecessor Authorities, have been treated as advances from State Government and moneys paid to the Public Account have been treated as repayment of such advances. Further, the balance of the outstanding advance has been treated as equity. As neither the Transport Act 1983 nor the Appropri­ ation (1984-85, No. 1) Act 1984, under whose provisions the transactions occur, indicate whether the transactions represer:~t advances by State Government and repayment of such advances and whether the outstanding balance represents equity of the State Transport Authority, I am unable to form an opinion as to whether the transactions have been treated in the appropriate manner. In my opinion, the financial statements have been properly drawn up in accordance with the Annual Reporting (Large Trading and Rating Public Bodies) Regulations 1984, as prescribed under the Annual Reporting Act 1983 and, subject to the effect on the financial statements of the matters referred to above, present fairly the state of affairs of the State Transport Authority as at 30 June 1985 and its financial transactions during the year ended on that date.

B. J. WALDRON Auditor-General

DATED AT MELBOURNE ON 30th September 1985

48 ADDITIONAL STATUTORY INFORMATION • The State Transport Authority was established pursuant to Section 13 of the Transport Act 1983. • Tha relevant Minister is the Minister for Transport (Hon. Tom Roper M.P.). • The functions and objects of the Authority are as follows:- Section 14 of the Act states that the functions of the State Transport Authority are: • to provide, manage and operate transport services and facilities for passengers and freight; • to arrange with the Metropolitan Transit Authority, transport operators or other persons and bodies for the provision of transport services and facilities; • to operate as employing authority for all officers engaged in the provision of railway and railway ancillary services in the State of Victoria; • to control and maintain all railway and railway ancillary equipment and facilities in the State of Victoria; • to co-ordinate transport services; • to develop new modes of transport; • to investigate and to promote and undertake research into any matter related to the performance of its functions, powers or duties; • to provide, manage and operate tourist and recreational facilities; and • to compete for work on the open market.

In the exercise of these functions the State Tr~mspnrt Authority shall have regard to the achievement of the following objects: to make use of available transport resources in ways which are most beneficial to the community; to operate within Government policy and other parameters determined by the Victorian Transport Directorate; to develop integrated freight handling systems and improve and develop stan­ dards of services for freight; • to effectively market integrated freight services and country passenger services and increase the use of these services; to improve standards of integrated acces~ible transport service and comfort for country passengers; • to improve and develop transport facilities: • to improve productivity; • to manage and operate freight services at a profit so as to phase out freight subsidies and to provide funds for capital works; • to establish, manage and operate without cross subsidisation through the Work­ shops Management Board, efficient reliable and technologically up to date work­ shops with a heavy engineering capacity and compete for work outside the Authority; to achieve a rapid, reliable, efficient, courteous and effective level of service; • to provide a competitive and efficient public freight and passenger transport alternative to private transport; to establish and maintain a satisfying work environment which ensures the broadest range of opportunity for career development and job enrichment; to achieve an efficient and dynamic organisation by implementing appropriate technological and other changes through a process of consultation beginning at the contemplative stage; • to delegate decision making to appropriate levels in the Authority; • to maintain harmonious relations between management, staff and employee organisations through processes of effectivR consultation and participation in decision making; to develop and train all personnel to carry out their duties and responsibilities effectively and efficiently to interact wittl the public in a helpful and courteous manner and to enhance their workskills;

49 to maintain a high level of motivation, performance, team work and safe working practices and develop a sense of commitment to the organisation with employ­ ment conditions in keeping with community standards; to facilitate accountability at all levels within the Authority by maintaining suitable information and reporting systems: • to effectively manage its assets, including real estate, to protect future options and to provide for the planning, design, construction and management of new infrastructure and facilities as required; • to minimise interference to the community arising from the construction and maintenance activities of the Authority; to identify the transport needs of disadvantaged groups, particularly the disabled and implement appropriate services within the level of funds specifically provided for this purpose by Government; · • to provide mechanisms and full information to enable effective and timely par­ ticipation by the community in decision making about facilities and services; and to encourage and facilitate cycling as an access mode for public transport. The range of activities undertaken by the Authority are: - Provision of rail and .ancillary services for freight and passengers Provision of contract road freight services Provision of contract passenger road coach services Operation of Engineering Workshops Co-ordination of commercial road coach and urban bus services in Victoria out­ side the metropolitan area - Licensing of ferry services in Victoria outside the metropolitan area - Operation of Mt. Buffalo Chalet The persons or sections of the community served by the Authority are all those persons or bodies requiring any of the above services. The names of Board members of the Authority are set out on page 6 of this report. The names of the Chief General Managers and General Managers of the Authority are set out on page 6 of this report. A brief description of the areas of the respon­ sibilities of these officers are as follows:- Freight Services Division D.R. Murphy, Acting General Manager. To identify, evaluate, specify and pursue opportunities to improve the effec­ tiveness and efficiency of a market-based freight and parcels transport service in Victoria and between Victoria and other States. Pursue market-based policies directed towards achieving: • Cost recovery as determined by Vfline and the Government, Return on investment as determined by Vfline and the Government, • Co-ordination and integration of transport modes to provide total physical distribution systems, • Integrated National freight marketing. Passenger Services Division L. J. Harper, General Manager. To identify, specify, evaluate and pursue opportunities to improve the effec­ tiveness and efficiency of a market-based passenger transport system in Victoria and between Victoria and other States. Pursue marketing policies directed towards achieving: Cost recovery as determined by Vfline and the Government, • Return on investment as determined by Vfline and the Government, Co-ordination and integration of rail, road and other modes of passenger services.

50 Transport Operations Division J. A. Hearsch, Chief General Manager. To ensure the provision of safe and reliable public transport and related services which meet agreed requirements of the Freight and Passenger Ser­ vices Divisions to pre-determined standards of quality, cost and efficiency. Responsibilities include the provision of engineering, scientific and technical support services, and the planning and implementation of improvements and alterations to vehicles, infrastructure, plant and physical facilities operated and maintained by the Division. Finance and Accounting Division G.C. Glinski, Chief General Manager. To ensure that V/Line is paid for the goods and services it sells, that Vfline in turn pay only for what it buys, and that these transactions and their settle­ ment are recorded in a way which fulfils the requirements of Vfline, the Ministry of Transport and the Law. Responsibilities include the provision of Financial and Accounting services, Internal Auditing and Management Information systems. Personnel and Employee Relations Division D. R. Watt, General Manager. To develop and monitor policies and procedures which ensure that agreed numbers of suitable people are employed and which create physical, econ­ omic and emotional work environments which maximise the return to the organisation and its employees. Corporate Services Division I. J. Reiher, General Manager. To ensure the provision to Vfline of effective, prompt and reliable admin­ istrative, legal, property and communication services. Corporate Planning and Development Division J. C. Brenan, General Manager. In consultation with other divisions to develop and maintain a 5 Year Cor­ porate Plan which is an effective working document for the organisation as a whole and which constitutes a logical, accepted and consolidated basis for future V /Line activities. To ensure that investment and dis-investment proposals are adequately assessed and to monitor the strategic performance of the organisation as a whole in line with directions established in the Corporate Plan. Workshops Division R. D. Terrell, Chief General Manager. To undertake major maintenance and repair of rolling stock and other equipment used in the operation of the Authority's systems, and to manufac­ ture new rolling stock and arrange the manufacture of other items of equip­ ment in the most cost effective manner. The administration and management of the Authority's railway workshops is the responsibility of the Workshops Management Board. The Board is appointed by the Minister and may regulate its own procedure. MetRail Division J. L. Grigg, Chief General Manager. As a free standing Division responsible also to the Metropolitan Transit Authority, MetRail is required to provide safe, reliable rail passenger public transport service in the Melbourne metropolitan area. 51 The addresses and telephone numbers of the principal office and regional offices of the Authority are set out on page 8 of the report. • The office of V/Line Industries Pty. Limited is situated at 589 Coli ins Street, Melbourne, 3000, Telephone (03) 6191177. • The types of publications and other information with respect to the functions and activities of the Authority published during the financial year were as follows: - V/Line Update ~ A regular newsheet of internal information -~ V/Line News - A quarterly corporate magazine ·- Weekly Notice --- A weekly booklet of operational and staff notices Schedule of rates, charges and conditions for the carriage of freight and parcels. Timetables for country and interstate serv1ces as required. - Promotional literature for specific traffic segments as required. Publications of the Authority and information regarding the Authority can be obtained by applying to the Manager, Public Relations, Corpor­ ate Communications Group, V /Line, 589 Coli ins Street, Melbourne, 3000 (03) 619 4151 . • Paragraph 3 of this Additional Statutory Information sets out the oper­ ating objectives of the Authority. The Authority had regard to all of these objectives in carrying out its functions during the financial year and the general text of the report points up the achievement or partial achievement of a number of the objectives. Legislative, economic or other factors which affected the achievement of the operational objectives of the body during the financial year are as follows:- Ministerial Directives Responsibilities/operation of S.T.A./M.T.A. This direction required the Authority take all actions necessary to structure the Authority in a manner to have a free standing Metropolitan Rail Division, and provided that the General Man­ ager report to the Managing Director of Metropolitan Transit Authority. The direction also provided for certain approvals, agreements and reimbursements between the Authority and the Metropolitan Transit Authority. • Approval of levels for contracts, appointment of consultants and staff This direction requires the Authority to adopt the financial levels set out in the direction for the letting of contracts, appointment of consultants and the organisational level for the appointment of staff. • Research grants and contributions Requires Ministerial approval for contributions and grants to bodies for purposes of supporting research. Grain Rates From 1 December 1983, tt1e charges then currently being made by the Authority for the transport of grain to be increased by 13.8 per cent and no concessions to be allowed by the Authonty in respect of grain delivered to the designated Central Receival Points (C.R.P's). Implementation of Early Retirement Plan Authority to offer all eligible persons over 50 years of age the Early Retirement Plan attached to the direction and on accept­ ance of offers to implement the plan. Box Hill Transport Centre Agreement Direction to execute the Building Agreement and Agreement for lease in respect of the project

52 Replacement of Personnel Retiring Under Early Retirement Plan. Specific ministerial approval required to replace staff. Transfers of Staff Transfer or promotions of staff between transport Authorities or between Ministry and Authorities to be made within six weeks of selection. Major works undertaken or completed by or for the Authority are listed in the Transport Operations and Workshops Sections of this report. Major research or development activities undertaken or completed by the Authority are set out in the various Divisional reports. Major initiatives undertaken and operational achievements by the Authority are set out under the heading 'A Year of Progress' at the commencement of this Report. • Major works or activities of the Authority for which the period of implementation has been revised and the reasons are as follows: • Centralised Traffic Control Western line completion. Industrial Action • Refurbished 'H' cars. • Rebuilt ~p· Class locomotives. , , • Dudley Street maintenance depot. Awaiting Appraisal. • Professional and consultancy services were used during the year. The major types of services used related to design, surveys, analysis, corporate identity, computer services, marketing studies, workshops studies and Head Office re­ establishment. The resources devoted to these services was approximately $1.5 million. • The product advertising, promotional, public relations and marketing activities undertaken by the Authority during the financial year to develop community awareness of the Authority and the services it provides are set out in the Freight Services, Passenger Services and Corporate Services reports. The resources devoted were approximately $2.6 million the great majority of this expenditure being for normal commercial advertising and promotion of Vfline's products and services. There were no Acts of Parliament passed during the financial year for which the Authority was responsible for administering. • A list of all regulations made or administered by the Authority which were made, amended or revoked during the financial year are as follows:- • Transport Passenger Ferries Regulations 1985 No. 14. • Transport (Public Road and Rail) Regulations 1985 No. 194. Staff figures by category as reported to the Australian Bureau of Statistics in its survey of Employment and Earnings are as follows:- Category 30 June Additions Deletions Variance 30 June 1984 1985

Railway 17,696 3,634 2, Transport Railway 2,831 281 206 + 75 2,456 Transport Equipment Electrical 236 20 25 -5 231 Machinery

Catering and 534 141 244 103 431 Accommodation Services ····--···---···--····----- TOTAL 20,847 4,076 3,350 +726 21,573

53 Staffing policies - the staffing policies followed by the Authority are similar to those followed by most Victorian public sector authorities and instrumentalities. That is, the Authority is an equal opportunity employer, with all recruitment, and most promotions (with the exception of certain weekly paid grades, and special­ ised grades, where selection is on senior suitable grounds), being based on merit/suitability. Consequently, promotion opportunities are advertised widely throughout the Authority and the resultant selections are subject to appeal, by unsuccessful applicants, to an independent appeal board. In addition, most decisions of an administrative nature which have an impact on an employee's conditions or career can be reviewed upon application. In this respect, a new Appeals Tribunal is being established to further secure the rights of employees to fair and equitable treatment. All officers and employees of the Authority required to have completed a decla­ ration of pecuniary interest during the year in respect of their offices or employ­ ment with the Authority have completed such declarations. Changes to the Corpmate Group of the Authority during the year were as follows: R.T. Barden Group Manager Operations Co-ordination transferred to other duties - 14th January 1985. A. M. Hurse Group Manager Engineering and Development transferred to the position of Group Manager Operations Co-ordination - 14th January 1985. A.C. Park appointed to act as Group Manager Engineering and Development - 14th January 1985. S.R. Beevor General Manager Freight Services resigned - 22nd March 1985. D.J. Jones Group Manager Corporate Communications resigned - 19th April 1985. P.M. Fields appointed to act as Group Manager Corporate Communi­ cations - 22nd April 1985. D.R. Murphy appointed to act as General Manager Freight Services- 6th May 1985. Overseas tours for and on behalf of the Authority were undertaken as follows: In September 1984 Mr. S.R. Beevor General Manager Freight Services visited the U.S.A., Canada, Britain and France to obtain an indication of world trends in rail freight marketing, marketing organisation structures and to investigate how road and rail operations are best integrated. Four Workshops employees visited Denmark and Sweden in May 1985 to be trained in, and observe practical demonstrating of, the new Dis­ amatic Foundry Installation, one of which has subsequently been intro­ duced at the Newport Workshops. Mr. K.M. Fitzmaurice, Chairman and Managing Director, travelled to Europe in May 1985 to attend the International Union of Railways Congress in Brussels in his capacity as Chairman of the Railways of Australia Committee. A post conference tour of French Railway instal­ lations was arranged, and Mr. Fitzmaurice then visited the United Kingdom for inspections and consultations with officials of British Rail­ ways. General statements regarding occupational health and safety and industrial relations are contained in the Personnel and Employee Relations section of the report. Freedom of Information details are contained in the Corporate Services section of the report. The following table sets out the nature and extent of inquiries from the Authority's passenger customers during the financial year. Where practicable remedial action was taken when the inquiry related to a matter of complaint.

54 NO. OF NATURE OF INQUIRY INQUIRIES per cent Service Problems overcrowding/late running 1192 1.0% Fares/Schedules Country 64012 53.7% Interstate 46344 38.9% Industrial Issues 573 0.5% Package Tours 6316 5.3% M.T.A. and Others 727 0.6% TOTAL: 119,164 100%

• Section 51 of the Transport Act 1983 sets out how Authority charges will be set • Details of price changes during the year are set out in the Freight Services and Passenger Services sections of the report. • Future Proposals - Although overall funding for capital works is subject to annual budgeting review by Government, Ministerial approval has been given for a large number of individual projects. Major elements of the currently approved investment program are listed below:- $M Additional Grain Wagons 7 Relocation Electrical Workshops 1 Upgrade Melbourne Works depot 1.6 Upgrade Country Works depots and Mobile Gangs 1.75 • The quantitative targets set by the Minister pursuant to Section 58 of the Trans­ port Act and a statement as to the extent to which those quantitative targets were attained by the Authority are set out on the following Table 1. STATE TRANSPORT AUTHORITY TABLE 1 1984-85 1984-85 ACTUAL CATEGORY INDICATOR TARGET ACHIEVE- MENT System Usage Freight carried - Tonne/Kilometres 3,505M 3.543M Passenger Journeys (1) 4.72M 4.90M Passenger Kilometres 699M 716M Financial (2) Total Recurrent Expenditure (2) $447.9M $449.8 Transfer to Grain Equal. Reserve $ 12.4M Revenue - Freight (3) $200.0M $191.7M Revenue- Passenger (4) $ 33.4M $ 35.3M Revenue - Corporate Services $ 24.4M $ 26.1 M Total Deficit (5) $202.5M $196.7M Capital Expenditure (6) $193.0M $189.1M Service Quality On time Running (9) Country Passenger trains -lnterurban 90% 74% -InterCity 90% 82% -InterState 90% 69% Employees (7) Total Employment (full time equivalent - year average) 13,630 14,204 Lost time injuriesfmilli~n worked hours 57.0 10 (11) Productivity (8) Expenditure/Employee $32,861 $31,667 Revenue/Employee $18,914 $17,819 Cost Recovery Ratio- Passenger (12) 28.8% 29.2% Cost Recovery Ratio - Freight (12) (1 0) 76.0% 74.3% Cost Recovery Ratio - Corp. Ser. (12) 45.6% 45.7% Total Cost Recovery Ratio (12) (1 0) 59.6% 58.0%

55 NOTES - S.T.A. 1. Figures exclude private subsidised bus services, but include V/Line contract ser­ vices. 2. Includes all operating expenditure except bus subsidies, depreciation of fixed assets, amortisation of leased assets and non-cash provisions. 3. Includes parcels and mail. 4. Excludes trading and catering. 5. Total Deficit includes all operating expenses and revenue but excludes depreciation of fixed assets, amortisation of leased assets, profit realised on sale of assets and non­ cash provisions. 6. Includes interest on leasing and borrowing charges. 7. Includes M.R.D. 8. Based on allocation of S.T.A. employees across Passenger, Freight and Corporate Services. 9. lnterUrban Peak less than 5 minutes late; all others less than 10 minutes late. 10. Excludes any transfer to Grain Equalisation Reserve. 11 . 1983-84 used as a base. 12. Excluding Finance Charges.

56