Railcorp Annual Report 2005-2006

Head Ofﬁce Rail Corporation New South Wales 18 Lee Street Annual Report Chippendale NSW 2008 2005-06 Post Rail Corporation New South Wales PO Box K349 Haymarket NSW 1238

Phone (02) 8202 2000 (6am – 10pm 7 days)

Facsimile (02) 8202 2111

Website www.railcorp.info

Transport InfoLine 131 500 (6am – 10pm 7 days) www.131500.com.au Contents

Strategic Framework ...... 4

Performance Summary ...... 6

Message from the Chairman ...... 7

Message from the Chief Executive Ofﬁcer ...... 9

Spotlight – 150 Years of Rail in NSW ...... 14

Safety ...... 16

Managing our Assets ...... 21

Future Investment ...... 23

Customer Service ...... 26

Embracing our Social Responsibility ...... 30

Improving Access for Customers with a Disability ...... 32

Our People ...... 34

Value for Money ...... 38

Corporate Governance ...... 40 31 October 2006 About RailCorp

The Hon. Morris Iemma, MP Rail Corporation New South Wales is the merged entity of the functions of the State Rail Authority Premier of New South Wales and the metropolitan Minister for State Development, Minister for Citizenship functions of the Rail Infrastructure Corporation. Level 40, Governor Macquarie Tower, 1 Farrer Place, RailCorp was established as a corporation Sydney NSW 2000. on 1 January 2004 under the Transport Administration Amendment (Rail Agencies) Act The Hon. John Della Bosca, MLC 2003, with responsibility for the safe operation, Minister for Commerce, Minister for Finance, Minister for crewing and maintenance of passenger trains Industrial Relations, Minister for Ageing, Minister for and stations. It also owns and maintains the Disability Services, and Vice President of the Executive metropolitan rail network and provides access to Council, Leader of the Government in the Legislative Council, freight operators in the metropolitan area. Level 30, Governor Macquarie Tower, 1 Farrer Place, Sydney NSW 2000. Our Vision To deliver safe, clean, reliable passenger Dear Premier and Minister for Finance, services that are efﬁcient, sustainable and to We have pleasure in submitting, for your information and the satisfaction of our customers. To deliver our presentation to Parliament, the Rail Corporation vision, we share a common set of values that New South Wales Annual Report for the period 1 July 2005 provide a framework for everything we do. to 30 June 2006. Our Values The report has been prepared in accordance with the Annual Reports (Statutory Bodies) Regulation 2005, the Annual Safety We will put safety ﬁrst. Reports (Statutory Bodies) Act 1984, the Public Finance and Audit Act 1983, and exemptions under those acts. Customer service We will work hard to provide quality customer service. Yours sincerely Teamwork We will work together.

Integrity We will seek to establish a just culture and will be honest and ethical.

ROSS BUNYON VINCE GRAHAM Respect We will treat our customers and Chairman Chief Executive Ofﬁcer each other equitably, and with respect.

Continuous improvement We will encourage and support each other to improve the quality and productivity of our work, our systems and assets. Our Organisation

Strategic Framework The RailCorp strategic framework underpins all of our current and future plans. This annual report documents work towards our key performance outcomes since July 1 2005. The outcomes form part of our strategic framework, as deﬁned in the RailCorp Corporate Plan

VISION OUTCOME KEY RESULT AREAS (KRA)

• Passenger, workplace and public safety Safe Safe, clean and • Secure environment reliable passenger service Retaining and • Customer service and reliability Growing Patronage • Capacity – demand matching

Efﬁcient Value for Money • Financial efﬁciency Operations

Sustainability • Responsible asset management Sustainable Business and planning • Efﬁcient planning • Capable, positive and performance driven staff

4 Annual Report 2005-06 Rail Corporation New South Wales Our Structure*

THE BOARD Ross Bunyon, Chairman, BComm, CIE Aust Arthur Butler, Director, BEc, FCPA The Hon. Barrie Unsworth, Director Bob Plain, Director Liza Carver, Director, BEc, LLB, LLM Gordon Messiter, Director, BSc (Tech), MEngSc Vince Graham, Director, BE(Civil), Grad Dip Mgmt, FAICD

COMPANY GM INTERNAL SECRETARY AUDIT Irene Rusak John Holmes LLB FCA CHIEF EXECUTIVE OFFICER Vince Graham BE(CIVIL), GRAD DIP MGMT, FAICD

GROUP GM SERVICE GROUP GM ASSET GROUP GM CORPORATE DELIVERY MANAGEMENT SERVICES Robert Mason Gary Seabury Gary Pedersen MBA B.Sc (Hons) BE (Civil)(Hons), B.Ec, M.Comm FCPA MEng(Mgmnt)

A/CORPORATE GROUP GM FINANCE GROUP GM HUMAN GROUP GM SAFETY A/GROUP GM COUNSEL Richard Lumley RESOURCES & ENVIRONMENT COMMUNICATIONS Irene Rusak FCA, MAICD, MIMC Fran Simons Clare Kitcher Kim Bryan LLB BA(Hons), B.Sc (Hons), NEBOSH BA (Public Relations), Grad.Dip.Ed, ASCM MA (Comms)

GROUP GM STRATEGY GROUP GM PRODUCT GROUP GM ICT PROJECT DIRECTOR PERFORMANCE AND DEVELOPMENT ROLLINGSTOCK ACCESS Barry Garnham Vicki Coleman ACQUISITION STRATEGY Sharyn Gregory B.Comm, B.Sc(Econ) B.Sc IT Louise Hart M.Comm GDipAppFin BA LLB MBA C DipAF (Sec Inst)

* As at 30 June 2006

Annual Report 2005-06 Rail Corporation New South Wales 5 Our Organisation

Performance Summary

Service provision Notes 01–02 02–03 03–04 04–05 05–06 CityRail Passenger journeys (millions) 276.4 273.4 273.3 270.3 273.7 Suburban trains on time (%) 1,2 92.6 90.9 71.6 67.1 88.7 Intercity trains on time (%) 1,2 92.4 91.1 77.6 72.4 89.6 Total CityRail trains on time 12 92.6 90.9 72.5 67.8 88.8 CountryLink Passenger journeys (millions) 3 2.2 2.1 1.9 1.77 1.74 Trains on time (%) 4 80.4 79.3 74.6 71.2 75.9

Notes Finance 1. CityRail on-time running statistics for 2001–02, 2002–03, 2005-06 2004–05 2003–04 and 2004–05 are adjusted to exclude delays ($ Million) ($ Million) due to force majeur events. Passenger revenue 526.5 520.1 2. On 1 July 2005, the on-time running benchmark was Other revenue 244.8 200.6 altered to ﬁve minutes for Suburban services and six Income from Operating Activities 771.3 720.7 minutes for InterCity services to bring them in line with other rail organisations. Data before that date refers to Government subsidies 1,114.8 1,010.2 a benchmark of three minutes and 59 seconds while Government concessions 200.1 206.1 Intercity data before that date refers to a benchmark Capital and other of ﬁve minutes and 59 seconds. Data for 2004–05 has 474.2 424.8 Government contributions been adjusted to the current thresholds. Income from Government 1,789.1 1,641.1 3. CountryLink passenger journeys include all train, Contributions InterCity and feeder coach services. Total income 2,560.4 2361.8 4. CountryLink on-time running is reported for train services Operating expenditure 2,317.2 2,341.5 only. Coach services are excluded. Cost per passenger journey1 $8.41 $8.61

Notes

1. Costs per passenger journey includes both CityRail and CountryLink passenger journeys. Customer Satisfaction

In November 2005, the Independent Transport Safety and Reliability Regulator (ITSRR) conducted a mini survey of CityRail customers, supplementary to its usual annual summary which is carried out in June and July each year. It focused only on aspects of service likely to be affected by the September 2005 timetable. Respondents were asked to rate the importance and quality of each of these aspects of service. The table below shows these aspects with the largest statistical change.

Aspect of CityRail service Percentage of customers with expectations met 2005 Annual Survey 2005 Mini Survey Frequency 52% 75% Punctuality 38% 78% Journey time 69% 77% Delays and cancellations 38% 67%

6 Annual Report 2005-06 Rail Corporation New South Wales Message from the Chairman In this, our second full reporting year, I am therefore pleased to report a much improved performance in terms of safety RailCorp is responsible for a vital piece of the NSW and reliability. The new timetables, introduced in September infrastructure. Our brief from the NSW Government is to 2005 and May 2006, not only allowed us to improve on-time deliver, maintain and provide for the future safe and reliable running by 23 percentage points, but also delivered a 17.9% rail services throughout the Sydney metropolitan area and reduction in safety incidents in the first six months of 2006 rural New South Wales. compared to the last six months of 2005. At a time of rapid urbanisation and rising fuel prices, this Given the increase in passenger journeys between service has never been more critical. In Sydney, almost September 2005 and May 2006, compared with the 1 million passenger trips per day are made on our services. previous year, this was a solid achievement and a credit to We provide a safe, environmentally friendly and sustainable all RailCorp staff. alternative to private motor vehicles. Equally important, for some inhabitants of rural New South Wales, rail is a vital Of course, safety improvements don’t just stem from connection between remote communities and vital services. timetable changes: safety begins and ends with a culture where every individual takes responsibility for With forecasts predicting that the combined population their actions. During the year, RailCorp’s enterprise-wide of Sydney and the Central Coast could climb by another Safety Management System and its Just Culture initiative 900,000 to reach five million in the next 15 years, a key began the process of embedding a new safety focus into priority of the NSW State Plan is to increase the number our organisation. The Board believes this is a vital step in of people using public transport. To deliver the expansion sustaining RailCorp’s safety performance as the demand for in network capacity and capability required to meet this rail services increases. additional demand, during the year RailCorp made record investments in its infrastructure. With safety, reliability and future capacity plans firmly on track, in 2005-06 the Board began to drive programs This included completing two of the fifteen infrastructure to improve RailCorp’s service. During the year, RailCorp projects in the $1.5 billion Rail Clearways Plan: a new focused on improving customer service by making our train turnback at Bondi Junction and an extra platform at services more accessible to the elderly, people with prams Berowra which opened in September 2006. RailCorp also and the disabled and substantially improving the cleanliness progressed the Public-Private Partnership (PPP) tender to of our facilities. acquire more than 600 modern, air-conditioned rail carriages that will both replace all non air-conditioned carriages and To this end, in 2005-06 RailCorp invested over $15 million provide for future growth. on easy access upgrades to five stations, with a further $43.5 million committed for easy access planning, design In addition, the Board approved a $761 million investment in and construction works in 2006-07. keeping existing infrastructure safe and reliable, with RailCorp spending $488 million on track maintenance and a further Moreover, RailCorp’s drive to improve train and station $273 million on rollingstock maintenance during the year. cleanliness resulted in approximately 233 tonnes of litter being removed from trains – a 25.8% increase on 2004–05. When RailCorp was formed two and a half years ago in the At the same time, our staff removed graffiti from 420,000 wake of the Waterfall accident, the organisation’s immediate graffiti hits on trains, as well as over half a million square response was necessarily and properly to focus on safety. metres from RailCorp property. Unfortunately, some of the safety gains in the first year came at the expense of reliability, shaking the public’s faith in RailCorp’s ability to provide a quality service.

Annual Report 2005-06 Rail Corporation New South Wales 7 Our Organisation

In June 2006, the record investment RailCorp is making in all aspects of its services was recognised by the Independent Pricing and Regulator Tribunal, when it granted a 2.9% increase in fares and a nine percentage point reduction in off-peak discounts. The Board regards this as modest and welcomes the increase.

Outlook

In 2005-06, RailCorp staff clearly demonstrated their ability to deliver the Board’s ﬁve-year program for safer, more reliable services, with improvements in all key performance areas and infrastructure development continuing on plan. The next ﬁnancial year will see RailCorp build on these achievements.

One area of targeted change will be in our organisational culture. While RailCorp is already moving towards a safety culture, the Board believes quality customer service can only be sustained by reinstating pride in our workforce and instilling a culture of continuous improvement.

In the next ﬁnancial year, RailCorp will therefore commence a Customer Focus project to raise the levels of customer service and satisfaction and build continuous improvement into the fabric of the organisation, in the process starting to make RailCorp more customer-focused.

Having seen RailCorp’s staff meet their performance targets in the last year, the Board is conﬁdent they will rise to the challenge of new customer-focused targets and performance measures. On behalf of the Board I would like to thank all of our staff for their considerable efforts. They have made the NSW passenger rail services safer and more reliable, providing an increasingly vital and valuable public service.

8 Annual Report 2005-06 Rail Corporation New South Wales Message from the to address those areas such as mechanical problems Chief Executive Officer and infrastructure failures where RailCorp can improve performance. In 2005-06, RailCorp staff made substantial progress towards our vision of providing customers with a safer, To this end, in 2005-06 RailCorp began a $13 million cleaner and more reliable rail service. In line with our plan, program to replace the door motors on more than 900 we significantly improved our operational performance and of CityRail’s train carriages. Train doors open and close continued work on our long-term plan to upgrade, simplify around 600,000 times each day on the CityRail network, and expand Sydney’s complex rail network. and faults with doors are a significant cause of rail delays and cancellations. The 160 doors upgraded during the year During the year, milestones in delivering our customers a demonstrated about 10 times fewer mechanical failures. safer and more reliable rail service included successfully The full benefit of this program will be reduced mechanical implementing two new timetables, commissioning another failures and safer and more reliable services. two projects in the $1.5 billion Rail Clearways Plan, and upgrading five stations to be wheelchair accessible. These Problems with signalling equipment can cause lengthy achievements have delivered our customers tangible delays, particularly if they occur on sections of the network improvements in service reliability, capacity and accessibility. where there are multiple rail lines, or in peak times. That’s why RailCorp has launched a new program to improve RailCorp has staged and funded plans in place to provide both the components used in track circuits and points, and a better rail service and it is pleasing that even at this early the systems through which we monitor them. We are also stage, the plans are delivering benefits for our customers. looking at ways to minimise delays due to excessive dwell The two new timetables in September 2005 and May 2006 times at stations, implementing control measures to ensure improved the reliability of CityRail services, with more than trains depart their originating stations and stabling yards on 91 of every 100 peak trains now running within five minutes time, and improving supervision of afternoon peak services of timetable. With the introduction of these safer and more by station staff. reliable timetables, customer complaints fell 31% and customer satisfaction rose by up to 26%, according to a Improving Safety and Security survey conducted by the Independent Transport Safety and Reliability Regulator. There were two incidents this financial year where RailCorp took the precautionary measure of withdrawing parts Plans are well advanced to provide additional peak service of our train fleet due to safety concerns. In December capacity on high demand services and reduce congestion. 2005, we immediately removed 15 intercity carriages after Our proposed contract to replace all 498 non identifying corrosion that could affect the train’s integrity in air-conditioned carriages with modern air-conditioned the unlikely event of a collision. In February 2006, an axle services will further improve customer satisfaction in the fracture caused one wheel of an XPT power car to derail. medium term. We temporarily withdrew all XPT carriages from service so RailCorp has continuing challenges, however, we are that our maintenance staff could undertake comprehensive confident in the plans we have to meet those challenges inspections of the trains. Following an intensive inspection while continuing to provide our customers with a safe, clean program, we progressively cleared the fleet to return to and reliable passenger rail service: service. The events in Madrid, London and Mumbai show how Delivering Better Reliability important it is that RailCorp continues to work with Police, CityRail has a target to run 92 out of every 100 peak suburban Ambulance, Fire Brigade and emergency management trains on time and since introducing the new timetables, agencies to identify how we can make the rail network CityRail has averaged more than 91% of trains on time against more secure. So far RailCorp has committed $120 million a target of 92% – an improvement of about 23 percentage to rail emergency preparedness – and while RailCorp is a points compared to the same period before September 2005. recognised national leader in terms of transport capability in While these results are encouraging, we recognise there is still responding to an emergency incident, we continue to pursue more work to be done. new equipment, training and procedures that could further bolster our capabilities in this regard. There were 39 staff A number of factors can impact on RailCorp’s ability to emergency exercises this year, in addition to 12 which were provide our customers with reliable CityRail services – some held in conjunction with emergency services. such as sick passengers and people threatening self harm are not within the control of RailCorp, but we are working

Annual Report 2005-06 Rail Corporation New South Wales 9 Our Organisation

To support our emergency response to train incidents Expanding the Capacity and Reach of the Network in tunnels, during the year RailCorp started rolling out for Future Growth over $1 million worth of new train-to-track stairs, which Since September 2005, reliability improvements, coupled can detrain passengers in rail tunnels at a rate of around with an approximate 30% increase in fuel prices, 40 people per minute. We also committed $150,000 to encouraged another 118,000 passenger journeys per purchasing six Rapid Emergency Response Trolleys to week on the rail network. As both these trends continue, convey emergency services personnel and their equipment and as Sydney’s population grows, RailCorp is delivering to the site of an incident in the underground rail network, as plans to grow both our capacity and our reach. To meet well as evacuate seriously injured people. this increased demand, in 2005-06 RailCorp has continued Moreover, by year end we had almost finished a $1 million to implement our funded infrastructure investment and project to improve our security control centre in the rollingstock acquisition plans. Rail Management Centre. This, combined with a 5-year, $25 million upgrade to the network’s 6,200 CCTV cameras, Infrastructure Investment will improve the speed and quality of our response to During the year we completed one of the fifteen major security incidents on the rail network. infrastructure projects in the $1.5 billion Rail Clearways With 79 recommendations officially closed or awaiting Plan, with a second completed in September 2006. The verification by the Independent Transport Safety and Reliability Plan will both expand the capacity of the existing rail Regulator, RailCorp has now completed 90% of the 88 system as well as systematically remove bottlenecks and recommendations that relate to RailCorp from the Special complex junctions. RailCorp continues to work closely with Commission of Inquiry into the Waterfall train accident. This is the Transport Infrastructure Development Corporation in significant progress but there is more work to do – particularly delivering the Rail Clearways Plan. on some of the more complex recommendations like the The Bondi Junction Turnback was commissioned in April implementation of an Automatic Train Protection System, 2006, and in conjunction with the new Eastern Suburbs the replacement of the existing train radio system and train and Illawarra Timetable in May 2006, allowed RailCorp modifications to provide passenger-initiated egress from trains to introduce a new morning peak service as well as an in the event of a rail emergency. additional three services from Bondi Junction to the City.

10 Annual Report 2005-06 Rail Corporation New South Wales These immediate benefits will be added to when the In May 2006, the Government announced the short-list $231 million Cronulla Line Duplication is completed. This of tenderers for more than 600 new rail carriages under a will allow additional peak services to run to and from the Public Private Partnership – the most significant rollingstock Cronulla line and improve the reliability of train services to acquisition in NSW history. This project will see all 498 of Cronulla. the non air-conditioned train carriages which operate on the rail network replaced, as well as more than 100 new In September 2006, construction works for an additional carriages for further expanding fleet capacity. The short- platform at Berowra Station were completed. This $9 million listed tenderers have now been narrowed down to Reliance project, which also included upgrading the station’s Rail (a consortium including train manufacturer Downer-EDI) accessibility and security, will improve reliability on Central and Star Transit (a consortium including train manufacturer Coast, Newcastle and North Shore services by providing United Group). The new carriages are planned to be a ‘passing lane’ to allow Central Coast and Newcastle delivered by the end of 2013. services to stop at Berowra without impacting suburban services terminating at that station. Planning for the Future In addition to the Rail Clearways Plan to expand the RailCorp will continue to build on our plans for rail capacity of the existing metropolitan rail network, plans are improvement in 2006-07. Building a better rail service for also in place to expand the reach of the rail network. The our customers is a significant challenge – our plans to Transport Infrastructure Development Corporation continued achieve this have already delivered improvements, with to construct the 12.5 kilometres of tunnel and three new more to come in the following years, with particular focus on stations on the $2.23 billion Epping to Chatswood Rail increasing network capacity and reach and further improving Link. When this line is completed in 2008 direct rail services reliability. I would like to take this opportunity to thank all from the Central Coast to Macquarie University, and extra of RailCorp’s staff for their hard work so far on our plan to capacity on the Inner West Line will soon become available improve the rail system and I thank our customers for their by diverting some peak Main North services via the new patience as we work to deliver the rail services they deserve. route. This will enable additional Western Line services to reduce crowding.

Planning has continued this year on the Metropolitan Rail Expansion Program, which would see the creation of a new rail line from Rouse Hill in Sydney’s North West, through the City and on to Leppington in the South West – 13 kilometres of new surface track and 25 kilometres of tunnel. Technical studies and ﬁnalisation of the route for the rail expansion – including the North West and South West components of the rail link, is currently underway.

Rollingstock Investment

In the second half of 2006, RailCorp will receive the ﬁrst of $439 million worth of modern, air-conditioned and accessible Outer Suburban Carriages (OSCARS). The introduction of the OSCARS means new, more comfortable trains for outer suburban commuters, and will mean the Tangaras which currently provide services to areas such as Wyong and Kiama can be brought into the metropolitan area to provide additional peak hour suburban services.

Annual Report 2005-06 Rail Corporation New South Wales 11 Our Organisation

12 Annual Report 2005-06 Rail Corporation New South Wales Annual Report 2005-06 Rail Corporation New South Wales 13 Our Organisation

Spotlight – 150 Years of Rail in NSW RailCorp joined other rail organisations and railway heritage groups and museums to celebrate the 150th anniversary of rail in NSW, involving a year-long calendar of events around the state to promote the anniversary and maintain awareness of rail and its historic role in the growth and development of the state.

Recognising that 150 years of rail in NSW was a state-wide celebration, RailCorp funded, coordinated and hosted a metropolitan signature event at Central Station on 24-25 September, the re-enactment journey to Parramatta on 26 September and a regional signature event at Werris Creek on 1 October 2005.

The Minister for Transport ofﬁcially launched the 150th anniversary celebrations in July at the Powerhouse Museum. As well as having Locomotive No.1, the Museum is the oldest custodian of rail heritage and is located on what was once a major rail freight yard in NSW.

The signature weekend became a ‘rail trail’ event, linking Central Station with other historic locations such as St James and Mortuary stations and the Powerhouse Museum.

Two weeks out from the signature events, street banners appeared in Sydney linking the CBD to Central Station, which was then lit up each night in the green and red branding of 150 years of rail in NSW. The station concourse displayed banners and the clock tower was ﬂoodlit with a hologram of the ofﬁcial logo.

The re-enactment train involved the state’s oldest operating locomotives 1210 and 1709, as well as restored Pullman carriages. Guests included the NSW Governor, Deputy Premier and Minister for Transport, RailCorp’s Chief Executive Ofﬁcer, board members, executives and representatives of the rail organisations involved in the event. As well, guests included descendants of some of the ﬁrst people to work on rail in NSW.

Following the signature event in Sydney, the regional event at Werris Creek saw the unveiling of the Australian Railway Monument, dedicated to workers who died while working on the state’s rail system. The unveiling was attended by the Minister, local MPs and dignitaries, plus a large audience of relatives of these commemorated.

Rail Heritage

During the year the government approved the Sustainable Rail Heritage Management Strategy, which will ensure the preservation of the state’s core rail heritage collection. The establishment of an Ofﬁce of Rail Heritage (ORH) within RailCorp is a key element of the implementation of the Sustainable Rail Heritage Management Strategy. StateRail will transition a budget, personnel and some projects into the ORH during 2006-07.

14 Annual Report 2005-06 Rail Corporation New South Wales Annual Report 2005-06 Rail Corporation New South Wales 15 Our Performance

Safety

RailCorp’s priority is to deliver safe and reliable customer service. Improving the safety of the travelling public was a driving force behind our inception two years ago and it remains our top priority.

During the year RailCorp continued to implement our new Safety Management System and signiﬁcant progress has been made on implementing Waterfall inquiry recommendations.

We will continue to improve our safety performance by improving our safety systems and instilling a culture where every employee puts safety ﬁrst.

Safety Management System RailCorp remains committed to applying the lessons learnt from this accident, and from other local and international incidents, The requirement for a new RailCorp Safety Management to continuously improve our operational safety performance and System (SMS) resulted from the ﬁndings of the Waterfall risk management. Inquiry. Central to the philosophy of the SMS is the effective identiﬁcation, management and control of safety risk.

Implementation commenced in 2005 and in December 2005 our Safety Management System (SMS) was fully accredited under the Rail Safety Act 2002.

Safety Knowledge Management System

During the year, we completed phase three of a four-phase project to create a central Safety Knowledge Management system. The project will consolidate our multiple safety and environmental reporting databases into a single, highly structured repository with regulated accessibility and security. We expect all phases to be complete by the end of 2006.

Addressing the Outcomes of the Waterfall Inquiry

The ﬁnal report of the Special Commission of Inquiry into the January 2003 Waterfall train accident made 127 recommendations, 114 of which were accepted by the NSW Government, and 88 of which required action or review by RailCorp.

At 30 June 2006, 53 of the 88 Waterfall Enquiry recommendations requiring action by RailCorp had been closed and the action veriﬁed by Independent Transport Safety and Reliability Regulator (ITSRR). A further 26 were awaiting veriﬁcation by ITSRR. Action on the remaining nine RailCorp recommendations was formally reported as “On Target”.

16 Annual Report 2005-06 Rail Corporation New South Wales Safety Performance Indicators

Incident type 2005-06 2004–05

Reportable safety incidents* Collision† 0.26 0.156

Derailment†† 0.11 0.066

Fall 5.83 5.796

Strike 0.77 1.060

Fire or explosion 0.97 0.483

SPAD (Signal Passed at Danger) Low severity 297 279

Medium severity 3 0

High severity 1 0

Total SPADs 301 279**

Fatalities Accident due to train operations 0 0

Level crossing 3 0 Trespass, suicides, falls from train, 27 22 natural causes while travelling Total Fatalities 30 22

* Per million passenger journeys ** Incorrectly reported as 295 in the 2004-05 Annual Report † Definition of collision includes trains striking animals or other objects on the track, buffer stops at low speed, level crossings and incidents in yards and sidings. †† Derailment figures include freight and other rail operators, track machines and derailments in yards and sidings.

Lost Time Injury Frequency Rate (LTIFR) Customer Train Infrastructure RailCorp Corporate Services Services Group (with all RIC) 6.4 24.0 57.6 8.8 30.5 (end June 06) (end June 06) (end June 06) (end June 06) (end June 06)

Average Time Lost Rate (ATLR) Customer Train Infrastructure RailCorp Corporate Services Services Group (with all RIC) 5.31 6.04 4.11 5.9 5.17

Annual Report 2005-06 Rail Corporation New South Wales 17 Our Performance

Level Crossings In the next ﬁnancial year, we will augment this with a:

RailCorp advises on and oversees the NSW Level Crossing • Train Visibility System for the Glenlee area, due for Safety Improvement Program. This program is coordinated commissioning in March 2007; through the Level Crossing Strategy Council (LCSC), which • Metro Signalling Control System for the Rhodes to is chaired by the Director General, Ministry of Transport. The Normanhurst area, due for commissioning in November NSW Government has committed $23 million to fund the 2006; and program over four years (2003–07). • Trial of the Metronet Train Radio in the Central Coast In 2005-06, the LCSC coordinated the four level crossings area. for closure and spent over $6 million improving the safety Visual Aids for Guards of level crossings within NSW. Within RailCorp’s network, this included major safety improvement developments at During the year we developed a CCTV system to help Riverstone, Woonona, Blackheath and Faulconbridge, guards see the front and rear cars of a train while on a which are due for design and/or construction in 2006-2007. curved platform. The new system is being trialled at Windsor It also involved upgrading level crossings on RailCorp’s station and will be rolled out to other locations in 2007. CountryLink routes at Muswellbrook, Parkville, Islington Station Compliance and Consistency and Quirindi. In 2005-06 we continued to develop consistent safety Rail Management Centre manuals and ofﬁce administration systems for front line staff. In October 2005, RailCorp’s Rail Management Centre This included developing an Incident Management Plan, (RMC) – the nerve centre of the network – passed the aligned to the NSW Disaster Plan, that will create a uniform ISO9001:2000 quality certiﬁcation audit. approach to incident management at all stations. By year- end, key safety compliance procedures, aligned to the new Digital Train Radio Safety Management System, will be delivered to all stations During the year, RailCorp determined its technology and be published on the Station Operations intranet site. choice for a Digital Train Radio System (DTRS). The DTRS will address Glenbrook and Waterfall Recommendations for improved communications and meet our future communications requirements within a national framework of integrated rail communications. These initiatives included developing the safety, operational and business case requirements for acquiring an appropriate Digital Train Radio System (DTRS).

Train Visibility

In 2005-06, RailCorp improved our ability to monitor the position of trains, by including the North Sydney area, North Shore Line (Sep 2005) and the Sefton Park area (Jan 2006) in the Train Location System.

18 Annual Report 2005-06 Rail Corporation New South Wales Bureau of Crime Statistics and Research

The analysis of 48 month trends for recorded offences against the person on rail premises shows:

• A reduction in recorded assault of 8.5% from year 0 to year 3. • A reduction in recorded robberies of 41.7% from year 0 to year 3. • A reduction in recorded steal from the person of 50.4% year 0 to year 3. • No statistically signiﬁcant change in recorded sexual offences from year 0 to year 3. Overall, the reduction in the above recorded incidents is 32.9% from year 0 to year 3.

Trends in the number of recorded assaults, sexual offences, robbery steal from person and malicious damage recorded as occurring on Rail Premises (BOCSAR). 1 Offence Year 0 Jan Year 1 Jan 24 month Year 2 Jan 36 month Year 3 Jan 48 month Category 02 to Dec 02 03 to Dec 03 trend 2 Year 04 to Dec 04 trend 3 Year 05 to Dec 05 trend 4 Year 0 to Year 1 0 to Year 2 0 to Year 3 Assault 1436 1403 * 1335 * 1314 Down by 8.5% Robbery 6 743 526 Down by 409 Down 45.0% 433 Down by 29.2% 41.7% Sexual 139 145 * 167 * 109 * offences 5 Steal from 1731 1401 Down 19.1% 1075 Down by 859 Down by person 37.9% 50.4% Total 4049 3475 Down by 2986 Down by 2715 Down by 14.2% 26.3% 32.9% Malicious 1443 1184 Down by 1268 * 1487 * Damage 17.9%

* No statistically signiﬁcant change

Please note that where BOCSAR refers to figures listed as 3. In each offence category a statistical test for trend showing no statistically significant change, this refers to the was applied to the monthly number of recorded underlying trend. If, over any period of time, the upward offences against the person over the 36 month period movement generally cancels out the downward movement, from January 2002 to December 2004. Where a it is most likely that the trend will not be significant. statistically significant trend was found the extent of the trend is indicated by the percentage change. Note: The following Bureau of Crime Statistics and Research (BOCSAR) data uses 2002 as a baseline, since this was the 4. In each offence category a statistical test for trend was year the Transit Officer Program was introduced. applied to the monthly number of recorded offences against the person over the 48 month period from 1. Rail Premises includes railway stations, railway January 2002 to December 2005. Where a statistically sidings, railway terminals, rail buildings, significant trend was found the extent of the trend is railway car parks and trains. indicated by the percentage change.

2. In each offence category a statistical test for trend 5. Offence category includes sexual assault, indecent as applied to the monthly number of recorded offences assault, act of indecency and other sexual offences. against the person over the 24 month period from 6. Offence category includes robbery without a weapon, January 2002 to December 2003. Where a statistically robbery with a weapon not a firearm and robbery with a significant trend was found, the extent of the trend firearm. is indicated by the percentage change between the total recorded number of incidents in the 12 months from January 2002 to December 2002 and January 2003 to December 2003.

Annual Report 2005-06 Rail Corporation New South Wales 19 Our Performance

Transit Ofﬁcer Review CCTV

To address the recommendations of the NSW Ombudsman In September 2005, RailCorp began upgrading its CCTV following complaints against transit officers, on 18 March system with equipment that will further improve safety by 2005 the NSW Government announced a review of the giving us clearer, more precise images of the network. complaints, recruitment, training and policy and procedures The new system will also allow us to process and retrieve of RailCorp’s Transit Officer Program. CCTV image data more quickly. It is due to be completed in early 2008. Actions progressed to date include developing: • Policies on using minimum force and authorised Police and Rail Memorandum of Understanding discretion to be exercised by transit officers; On 11 November 2005, RailCorp and NSW Police entered • Improved recruitment and vetting process for into a Memorandum of Understanding (MOU) to work more prospective transit officers and candidates closely together in relation to policing and security issues for promotion; associated with the rail network.

• New Standard Operating Procedures (SOPs) to The MOU provides a framework for both parties to combine provide clearer guidance on what conduct is resources and develop operational protocols for achieving required from transit officers; shared objectives. These operational protocols cover • Enhanced transit officer training, in accordance with Information Sharing and a Police Rail Vandalism Task Force. the new SOPs; Security Plan Upgrade • Submissions to Government seeking clarification of powers for transit officers to allow them to ‘better’ During the year we developed a Strategic Security Plan deal with offenders on the rail network; 2006-2007 with security strategies to protect RailCorp’s customers, staff and assets. Its objectives are to: • A model and procedure for handling complaints against transit officers; and • Improve security on trains, at stations and in the • A system for recognising transit officers’ workplace for our customers and employees; excellent conduct. • Contribute to the return of reliability to acceptable levels by reducing security incidents affecting By year end, safety refresher training was in progress, with reliability; in-house Standard Operating Procedures bridging training being piloted prior to roll-out in June 2006. • Have the capability to effectively respond to changing terrorism levels; Emergency Preparedness • Enhance the cleanliness of stations, trains and In 2005-06, RailCorp’s Emergency Preparedness division other facilities and improve customer satisfaction developed an Emergency Exercise Program. The aim of through a reduction in vandalism; the Program is to provide opportunities for emergency • Increase revenue through fare compliance activities; and management agencies and RailCorp to work together • Minimise fare evasion. towards a more effective and efficient response to emergencies in the rail environment. The Security Plan is comprised of two types of strategies: corporate-wide strategies that address security risk, and Twelve joint emergency exercises were conducted with risk-specific strategies to address particular key risk areas. Emergency Services across a range of locations during 2005-06, including six desktop, five field and one operations Crew Cab Locking Pilot centre exercise. The division also completed its second In April, RailCorp started a trial of a new electronic key/ annual revision of RailCorp’s Incident Management locking system for crew cabs on the Hunter Line, which will Framework Guide and coordinated a program for help improve security for crew cabs and address disruptions familiarising staff with the Framework. The Framework sets due to vandalism and reduce other risks associated with out the way RailCorp internally manages incidents and loss or theft of traditional keys. The trial has demonstrated works with Emergency Services. for the first time that a practical electro-mechanical solution can operate within the demanding and complex operating environment of the rail system.

RailCorp is now considering the feasibility of extending the pilot program to other rollingstock in the RailCorp ﬂeet.

20 Annual Report 2005-06 Rail Corporation New South Wales Managing our Assets

In 2005-06, RailCorp invested $761 million in maintaining and upgrading trains and tracks and $464 million in capital expenditure on improvements as part of our plan to progressively renew and rebuild the entire network and continue to provide our customers with a safe, more reliable rail service. Work completed this year means that the upgrading program is now almost two thirds complete, creating a more robust and reliable system that will support future increases in demand.

Work this year included installing over 85,000 new concrete sleepers and 30,000 new timber sleepers, reconstructing over 50 kilometres of track and resurfacing more than 650 kilometres of track. As a result, there has been a more than 50% drop in the number of times that RailCorp has had to implement speed restrictions on our network as well as a decline in the number of delays in peak periods because of infrastructure problems.

During the year, RailCorp developed detailed infrastructure plans for each rail line. These plans will require many lines to be upgraded before we introduce a new timetable in 2008. Work will include rebuilding the track, installing new overhead wiring and updating and modernising signalling and electricity supply systems. These will be our asset management priorities in the next ﬁnancial year.

Asset Conﬁguration Mapping Major developments over the last year include:

During the year, RailCorp developed a new tool to assist • Upgrading major plant maintenance facilities, in the planning of future asset management programs. Clyde – to be completed in 2006-2007; The tool uses a series of maps to describe the current • Delivering turnout handling equipment; configuration of RailCorp assets and how they will be • Refurbishing rail handling equipment; modified to meet the requirements of the 2008 and 2011 timetables. The maps detail such elements as capital • Upgrading/modifying existing tamping fleet; and improvements, planned rail corridor upgrading, traction • Developing and implementing an anti-collision system. power upgrades and signal upgrade plans. Wayside Protection Strategy

Asset Management Planning During 2005, RailCorp developed a five-year Wayside In 2005-06, RailCorp updated our Infrastructure Works Strategy to implement wayside protection devices for Ranking Process to accommodate Safety, Environmental, Rollingstock and Infrastructure. Wayside protection allows Cyclic and Upgrading projects developed by the: for remote monitoring of the condition of trains and is an important tool in prioritising maintenance and ensuring • Geographic regions; freight operators’ rollingstock comply with agreed standards. • Building and Sidings business unit; and The strategy included replacing life-expired equipment and • Communications and Control Systems division. implementing new predictive maintenance tools, such as This system has been ratified by the Corporate Safety and Acoustic Bearing Monitors. Environment Group and complies with the risk management Traction Supply Upgrade framework that has been introduced as part of the new RailCorp Safety Management System. It is envisaged As part of the plan to meet the rail system’s power demand that this process will be further improved following the to 2016, this year RailCorp continued to upgrade the development of the overall risk framework for RailCorp. traction power supply system that provides the power to run trains in the metropolitan area. The system consists of a Major Plant and Equipment Upgrade Program high voltage distribution network, substations that convert 2005-06 was the fifth year of a program to upgrade high voltage AC power to 1500 volts DC power, and the RailCorp’s track maintenance and construction plant overhead wiring system that delivers the traction power to program. As at 30 June 2006, program expenditure was the trains. approximately $76 million, with a further $7 million approved for additional rail train, tamper upgrades and completing the major plant facility.

Annual Report 2005-06 Rail Corporation New South Wales 21 Our Performance

The upgrade is being implemented in two parts: • Trialling a new “inbearer” turnout design (jointly developed by RailCorp, VAE Railway Systems and 1. Projects to enable the 2008 timetable, including Westinghouse Australia) to make turnouts easier to operation of the Epping Chatswood Rail Link. install and maintain; 2. To allow train operations with a 100% air-conditioned • Trialling rail grinding of turnouts (previously conducted fleet, including the proposed PPP fleet, which will be only on main line track) to extend asset life by reducing acquired by 2013. wheel/rail friction and removing surface defects; ICT Strategic Plan • Commissioning of two new points monitoring systems RailCorp’s business is underpinned by information, (Westwatch and POSS) and trialling of a third system, communication and technology infrastructure and systems. from CDS Rail, to provide advance warning of impending In February 2005, the RailCorp Board endorsed the ICT points failures; Strategic Plan to deliver a contemporary ICT environment • Installation of anti-throw screens, now routinely fitted over four years by: during all bridge upgrades, to reduce our vulnerability to • establishing ICT governance and controls; acts of vandalism and rock throwing; and • consolidating ICT responsibilities; • Expanding the trial of Mechanised Track Patrol from Central to St Marys to include Central to Waterfall and • strengthening ICT processes and practices; and Sutherland to Cronulla, reducing the need for track • increasing information systems support to the business. possessions which would otherwise be required to The plan includes implementing a new Information Security protect the safety of staff conducting foot patrols. Management System (ISMS) that, by March 2007, will certify Track Reconstruction and Upgrades RailCorp’s information security capability to internationally recognised levels. In 2005-06, RailCorp undertook a number of major rail upgrades under our Asset Management Plan and Annual Enterprise Content Management Works Program. This included:

In 2005-06, RailCorp introduced an Enterprise Content • One on the Bankstown Line; Management (ECM) system and a corporate search engine. • Four on the Main North Line; The ECM makes it easier for staff to capture, classify, store, publish and archive important information. The system not • One on the North Shore Line; only automates manual processes to improve efﬁciency, • Three on the Illawarra Line; and it also integrates currently disparate information stores, • Two on the Blue Mountains Line. providing a ‘single view’ of all operational information. In response to concerns by Blue Mountains commuters, Reliability Improvement Projects the Blacktown to Westmead closedown on the Western Line, scheduled for 8 – 26 May was deferred. It has been During the year, RailCorp progressed a range of targeted rescheduled for October 2007 and will be reduced from initiatives aimed at reducing the impact of infrastructure three weeks to two weeks. faults and their impact on services, including: Over the next three years, RailCorp will increase the number • Detailed investigation and analysis of infrastructure of track work weekends to allow RailCorp to complete the: reliability hotspots and replacement of low-reliability infrastructure components with more robust alternatives; • Sutherland Resignalling Project by 2008; • Preparations to reduce summer-related infrastructure • Sutherland to Cronulla Duplication by May 2008; problems such as temperature control devices for signal • Sutherland to Waterfall Track Reconstruction by mid locations, lightning and surge protection for areas prone 2008; to lightning strikes, substation enhancements to ensure • Traction supply upgrade; adequate power supply, vegetation control to reduce • Overhead wiring rebuild; and ﬁre risk and streamlining the process governing the application of train speed restrictions during heatwaves; • Track reconstruction between Sydenham and Cronulla/ Waterfall. • Inspection and maintenance of 2,064 turnouts across the network, which led to a 11.4% reduction in points failures due to track issues;

22 Annual Report 2005-06 Rail Corporation New South Wales Future Investment

As Sydney’s population and footprint grows we must continually invest in our rail system to meet the future demands of the travelling public. To this end, RailCorp has a funded, staged plan to progressively increase reliability, capacity and improve service frequency on the Sydney metropolitan network, which is recognised as one of the most complex in the world. This plan will deliver tangible beneﬁts to commuters at every stage.

For example, a major milestone this year was the Bondi Junction Turnback, which coincided with the introduction of a new timetable in May 2006. This project allows trains to turn around more quickly, increasing the capacity of the Eastern Suburbs and Illawarra line and allowing us to put on new peak services for commuters.

We also made good progress in other key projects to achieve the planned growth in capacity. These projects included the continued construction and testing of new outer suburban carriages (OSCARS), which will increase the number of train carriages available and allow us to add peak services to the timetable to serve busy suburban lines.

In May 2006 the NSW Government announced the shortlisted bidders for the new Public Private Partnership (PPP) carriages and increased the order by 20%. This means more than 600 new air-conditioned carriages will be progressively delivered until 2013.

In 2006-07 the introduction of new carriages will result in new services including a new service between Macarthur, Campbelltown and the City during the morning and evening peak periods, new services on the Western and South Coast lines and more eight-carriage trains across the network.

Rail Clearways Plan The feasibility of the Sydenham to Erskineville Track Ampliﬁcation project is being studied as part of the During the year, RailCorp progressed the Rail Clearways Metropolitan Rail Expansion Program. Plan, which comprises 15 key projects to strengthen reliability and increase capacity on the network. Three Metropolitan Rail Expansion Program of the 15 Rail Clearways projects are now complete and The Metropolitan Rail Expansion Program (MREP) involves operational including the Macdonaldtown Turnback, Bondi constructing a new line for the Sydney Rail Network running Junction Turnback and Berowra Platform. from Rouse Hill in Sydney’s North West, through the City In December 2005, the Government approved and on to Leppington in the South West. It requires 13 $538 million (in 2005, or $729 million in 2010 including kilometres of new surface track and 25 kilometres of tunnel. interest and escalation) for the Clearways projects for the New Rail Line Components 2011 timetable. 1. A new eight kilometre South West Rail Link from Construction Plan Glenﬁeld to Leppington by 2012, with long term plans to • Macdonaldtown Turnback – completed in May 2005 extend from Leppington to Bringelly by 2020.

• Bondi Turnback – completed in April 2006 2. A nine kilometre tunnel from Redfern to Chatswood • Berowra Platform – completed in 2006 Rail Link. This line would travel underground through the • Macdonaldtown Stabling – 2007 CBD and under the harbour to the North Shore Line at St Leonards, where it would continue onto Chatswood • Revesby Turnback – 2008 with ampliﬁcation of the existing corridor. This project is • Hornsby Platform 5 – 2008 expected to be operational by 2017. • Homebush Turnback – 2008 3. The North West Rail Link to Rouse Hill via Castle Hill from • Lidcombe Turnback – 2008 Cheltenham, including a 16 kilometre tunnel by 2017. • Cronulla Line Duplication – 2008 Long term plans include an extension to Vineyard by 2020. • Macarthur Fourth Platform – 2008 • Liverpool Turnback – 2010 • Kingsgrove to Revesby Quadruplication – 2010

Annual Report 2005-06 Rail Corporation New South Wales 23 Our Performance

In November 2005 the NSW Government engaged the The successful tenderer will be required to deliver 72 eight Transport Infrastructure Development Corporation (TIDC) car trains for service by the end of 2013. As part of the to begin technical studies and finalise the route for the rail project, they will also build additional trains as maintenance expansion. Their work will finalise the MREP corridors, and spares and construct a new maintenance facility at Auburn. produce applications for concept approval for the North Contracts are expected to be concluded towards the end West and South West components of the rail link. State of 2006. Environmental policy No. 63 has been revised to protect New Rollingstock – Hunter and OSCARS the CBD corridor from future building developments. This is expected to be expanded in the near future to include all of Manufacture of RailCorp’s 14 new Hunter Rail Cars the Metropolitan Rail Expansion projects. continued with the first two car set commencing main line testing in late 2005. Acceptance of the first set is planned Epping – Chatswood Rail Link for last quarter of 2006 with complete delivery in the first The scope of the Epping – Chatswood Rail Line Project quarter of 2007. involves constructing a rail line from Epping to Chatswood Manufacture of the 41 cars of stage 1 of the contract for the and three new underground stations at Macquarie Park, new Outer Suburban Cars (OSCARS) also continued with Macquarie University and North Ryde (formerly Delhi Road). the first four-car set commencing extensive on-track testing Also within the scope are major upgrades at Epping Station, in December 2005. Acceptance of the first set is planned Chatswood Transport Interchange and Parramatta Transport for the last quarter of 2006. Stage 2 delivery (81 Cars) will Interchange, of which the latter opened in February 2006. commence in the first half of 2007, and will be complete During the year, substantial progress was made fitting out during 2008. tunnels and new underground stations between Epping Redfern Redevelopment and Chatswood and constructing the Chatswood Transport Interchange. This interface construction work occurred On 5 April 2006 the Minister for Transport announced that without a lost time injury and with minimal disruption to $2 million would be spent on the concept design tenders for RailCorp operations. Redfern and Town Hall stations, to maximise the stations’ capacity to meet projected passenger growth over the next Construction Plan 15 years. Capital funding was allocated for planning work • Parramatta Transport Interchange – completed in for the Redfern Station upgrade and an external Project February 2006 Manager appointed.

• Epping Station – mid 2008 Consultants have been appointed to prepare a Concept • Macquarie Park Station – mid 2008 Design Study for the upgrade of Redfern Station. This study • Macquarie University Station – mid 2008 is being jointly managed and funded by RailCorp and the Redfern Waterloo Authority. The study will form a vital part • North Ryde Station at Delhi Road – mid 2008 of the anticipated urban renewal of the Redfern-Waterloo • Chatswood Transport Interchange – mid 2008 area. Redfern Station will act as a link between the key New Rollingstock – Public Private Partnership development areas of the Australian Technology Park, North Eveleigh Railway Yards, and the University of Sydney. On 4 May 2006, the Premier announced the Public It is anticipated that this study will be completed late Private Partnership (PPP) short-list for CityRail’s Rolling January 2007. Stock Replacement of 498 non-air-conditioned carriages. This was: Reliance Rail (a consortium including train Metropolitan Rail Corridor Strategy manufacturer Downer–EDI) and Star Transit (a consortium To help further improve timetable reliability, RailCorp has including train manufacturer United Group). The Premier also developed an infrastructure corridor strategy for each of the announced the order would increase by 20% to more than Metropolitan Corridors. The following projects are planned 600 carriages. for completion prior to the 2008 timetable to maximise the reliability of the Infrastructure:

24 Annual Report 2005-06 Rail Corporation New South Wales Track Reconstruction Station upgrades

• Main West (Westmead to Blacktown – Down Suburban) North Sydney – Complete 2007 Works commenced in 2006 on the new upgrade of North • Main West (Mt Victoria to Lithgow – Both tracks) Sydney Station which will provide reduced crowding, easier – Complete 2008 access for disabled and mobility-impaired passengers, • Illawarra (Sutherland to Waterfall) – complete 2008 and a more comfortable work environment for station staff. • Illawarra (Sutherland to Cronulla) – complete 2008 Completion date – 2008. • Bankstown (Sydenham to Sefton) Town Hall – complete January 2006 The Concept phase for the redevelopment of Town Hall • Main South (Lidcombe to Campbelltown) Station Project is almost complete. The aim of this stage of – commence 2006 (complete 2011) the project is to develop and evaluate options and determine • Main North (Gosford to Broadmeadow) a preferred option that enable the station to meet future – commence 2003 (complete 2009) demand. As part of early works identiﬁed, the relocation of station staff to newly constructed premises and the removal Overhead Wiring Rebuild of the concourse retail area has been completed. The • Redfern to Goulburn St – complete 2008 relocation and expansion of the northern ticket barriers is • North Shore – complete 2008 due for completion in early January 2007. • Strathﬁeld Junction – complete 2008 • Mortdale to Sutherland – complete 2008 • Westmead to St Marys – complete 2010

Resignalling

• Sefton – complete 2006 • Oatley to Sutherland – complete 2007 • Sutherland Junction – complete 2008 • Aurburn/Clyde – commence 2006 (complete 2011)

ATRICS Signal Control

During 2005-06 RailCorp extended the installation of its Signal Control system, ATRICS (Advanced Train Running Information Control System), which provides more accurate passenger information.

The system improves train management with daily, timetable-based, automatic route setting, visibility to the Rail Management Centre and a remote view of signalling to the Infrastructure Coordination Centre.

Since 2000, ATRICS has been commissioned on several sections of the network such as the Airport Line, Olympic Park Loop, East Hills Line (to East Hills), and sections of the Bankstown and Illawarra Lines. During 2005-06 further commissionings were completed on the North Shore Line, Eastern Suburbs Railway Line (including the Bondi Junction Turnback) and the Main South Line.

Annual Report 2005-06 Rail Corporation New South Wales 25 Our Performance

Customer Service

RailCorp’s priority is to provide our customers with safe and reliable passenger services and to progressively improve all aspects of customer service.

RailCorp considerably improved the reliability of the CityRail services this year, with the new September 2005 and May 2006 timetables increasing on-time running to 88.8% for the year, 21 percentage points higher than the previous year. Moreover, skipped stops decreased from 2.5% in 2004-05 to 1.0% in 2005-06, and instances of service cancellations more than halved from 1.3% to 0.5%.

RailCorp customers responded well to this increase in reliability, with an additional 3.4 million passenger journeys during the year. The improvement in customer service was formally recorded in a survey by the Independent Transport Safety and Reliability Regulator (ITSRR), that registered up to a 40% rise in customer satisfaction with CityRail since we introduced the September 2005 timetable.

Other customer service improvements since July 2005 included the upgrading of seven stations to be wheelchair accessible and a 26% increase in the amount of rubbish picked up by our roving cleaners to 233 tonnes. In 2006-07, RailCorp will continue its plans to improve the reliability, cleanliness and accessibility of services.

New CityRail Timetables Reliability and On-time Running (OTR)

RailCorp successfully introduced two new timetables in On-time running performance for the year finished at 88.8%, the 2005-06 financial year. In September 2005, RailCorp a significant improvement compared with 62.7% in 2004-05. introduced new CityRail timetables for all lines except the Service reliability improvements were clearly related to Illawarra and Eastern Suburbs and South Coast Lines. the new timetable introduced in September 2005 which These received their new timetables in May 2006 after the delivered more realistic running times given the heightened completion of the turnback at Bondi Junction which allows focus on safety. Also, there was an improved focus on our trains to turn around quickly and for the introduction of extra Reliability Improvement Programs. Before the timetable services during peak times. change. OTR for July and August 2005 was 77.3%. For The implementation of the new timetables represented the September 2005 to June 2006, OTR averaged 91%. first complete re-write of the CityRail timetable since 1992, XPT Refurbishment and delivered significant reliability improvements to rail customers. Since September 2005: In September 2005, the NSW Government announced a $32 million upgrade to the CountryLink fleet, including • Combined peak on-time running of CityRail services rose mechanical improvements and updating carriage interiors. 23.6% to over 91% at year end; As at June 2006, RailCorp had introduced 12 refurbished • Cancellations declined 1.5 percentage points to 1.0%; trailer cars into the service, all with interior and exterior • Instances of skipped stops declined from 1.3% to 0.5%; repaints, new carpet and curtains, and one with upgraded • Complaints from CityRail customers fell by 56%; toilets. RailCorp anticipates that all of the trailer cars will be refurbished by the end of mid 2008, and repainting and • Customer satisfaction according to Independent upgrading the cabs of the power cars by the end of 2009. Transport Safety and Reliability Regulator (ITSRR) rose by up to 40%; and • CityRail patronage rose by around 118,000 passenger journeys per week.

26 Annual Report 2005-06 Rail Corporation New South Wales Mystery Shopper Train Location Screens (TLS) advise station staff where trains are on the network and how close to timetable they In 2005-06, RailCorp conducted three CityRail and two are running so that staff can pass on better information to CountryLink Mystery Shopper Service Quality Audits to passengers. During the year, we installed TLS screens at a monitor service delivery standards where appropriate. further 22 stations. In addition, we installed Variable Message RailCorp also used independent ﬁeld workers to conduct Screens (VMS), which display real-time messages from the bi-monthly Cleanliness Surveys on CityRail train services Rail Management Centre, at a further 15 locations – bringing and stations. the total number of stations with VMS screens to 19.

Customer Management Response Plans RailCorp continued development of a Line Information Following the Auditor General’s performance audit Controller (LIC) pilot on the Bankstown Line, which provides report into how CityRail manages customers during single-point control of all passenger information on a line. It major disruptions, RailCorp implemented new Customer is due to be commissioned mid 2006-2007. East Hills and Management Response Plans to help operational staff Illawarra lines will follow shortly after. These lines will also provide better customer service at these times. pilot the new Station Passenger Information (SPI) systems with Liquid Crystal Display (LCD) platform indicators and Our Customer Management Response Plans, which are improved audio systems to improve compliance with the based on input from CityRail stations, bus companies and Disability Discrimination Act. other external agencies, helped staff to manage emergency alternate transport and communications Major upgrading works at stations were also supported on a line-by-line basis. with SPI systems. Customers have been provided temporary indicators at Chatswood station during the Areas the plan focus on include identiﬁcation of suitable major reconstruction works. Rhodes and Berowra will have emergency bus co-ordination locations, customer SPI systems installed shortly after the completion of the management/holding locations such as civic centres or upgrading works. service clubs and development of key communications to assist staff in relaying information relevant to the gravity of In Town Hall, RailCorp has completed the replacement of the situation. indicators with new displays that have clearer, crisper text. Central and Wynyard station will also receive these new, Customer Focus larger indicators during 2006-2007.

During the year, we established the Customer Focus project In 2005-06, RailCorp implemented the Long Line Public to develop RailCorp’s customer focus throughout the Address (LLPA) project throughout the network’s outer remainder of the decade. The project will: stations. All CityRail stations now have LLPA to enable staff • Establish an integrated research program and a in either the RMC or at local CCTV monitoring locations to customer satisfaction measurement regime to help us advise customers of network or safety issues. The outer better understand our customers; regions are also being equipped with the Long Line Digitised Voice Announcement (LLDVA) system. This system, which • Define projects to close service gaps; and provides automated information from central locations, has • Establish customer service standards. been in use on the Blue Mountains for some years with Customer Relations high customer acceptance. The Southern Highlands, South Coast, Central Coast and Hunter regions will have LLDVA by In 2005-06 RailCorp implemented an enhanced database late 2006. and new procedures to improve the organisation’s process for managing customer feedback. During the year, RailCorp Station staff are being empowered to provide better also benchmarked our customer handling performance passenger information through a series of training sessions against other organisations. targeting specific station information issues. The sessions are designed to teach microphone technique and to improve Passenger Information staff confidence to make appropriate announcements. The In 2005-06, RailCorp spent around $7 million on upgrading pilot training sessions have been completed. Rollout of the our passenger information systems. training sessions will continue throughout 2006-2007.

Annual Report 2005-06 Rail Corporation New South Wales 27 Our Performance

Easy Access

RailCorp is committed to making our services more accessible to the elderly, people with prams and the disabled, and in 2005-06 we spent over $15 million on easy access upgrades to our stations. Since July 2005, we completed easy access upgrades at Gymea, Blaxland, Kingsgrove, Thirroul, and Gordon Stations. In addition Rhodes, under a wider precinct upgrade and Chatswood were made accessible as part of the Epping to Chatswood interface works. In all a total of seven stations were upgraded through the year.

Cleaning Reform and Improvements

RailCorp is committed to providing our passengers with a clean service, and rail staff have continued their good work to achieve this throughout the year. The new rover cleaners removed approximately 233 tonnes of litter from trains in transit this year – a 25.8% increase on 2004-05, and as per the normal schedule – all train carriages were cleaned every night and intensively detailed every 30 days throughout the year.

In February 2006, RailCorp started an intensive campaign to maintain the cleanliness and presentation of Endeavour carriages. In addition, specialist cleaning contractors were deployed at Eveleigh, Moss Vale & Wollongong to complement the cleaning contract work performed at Broadmeadow.

In addition, staff at our passenger fleet maintenance centres cleaned 420,000 graffiti hits from trains and our infrastructure employees removed over half a million square metres of trackside graffiti.

During the year, customer complaints about station cleanliness rose by 32.5%. To improve performance in this area, we developed a concentrated program to ensure all major stations receive detailed cleaning.

28 Annual Report 2005-06 Rail Corporation New South Wales Annual Report 2005-06 Rail Corporation New South Wales 29 Our Performance

Embracing our Social Responsibility

RailCorp is committed to operating in a manner that respects the environment, the people we employ and the communities we serve. We recognise our responsibility to protect the environment while conducting our business and we are proud of the environmental beneﬁts public rail transport, our core business, delivers to the community.

During the year, RailCorp’s main focus was on improving track safety and taking a holistic approach to environmental management. By combining a number of communications and track improvement initiatives, we targeted trespass incidents at RailCorp’s 10 major station-based trespass hot spots and launched a new pram safety program.

We also implemented an Environmental Management System that sets organisation-wide environmental targets and established systems to meet and measure our performance against these targets.

Community Safety year, Jonathan visited 135 schools, in the process talking to 3,455 young people about the devastating consequences of unsafe Pram Safety behaviour on and near trains. Bookings are expected to double Following a number of pram incidents on our network, RailCorp in 2006-2007, when RailCorp will also specifically target schools developed a Pram Safety program. To support the campaign, in high-risk areas and expand our messages to include vandalism RailCorp implemented a community awareness campaign, with a reduction. DVD, letters, brochures and posters sent to childcare and health Level Crossings facilities for distribution to the community, as well as providing ‘baby bibs’ for the use of parents, carers and childcare and child In 2005-06 RailCorp part-funded the Level Crossing Safety health workers. Council’s (LCSC) annual motorist awareness campaign, which evaluation showed successfully increased rural motorists’ RailCorp has also informed pram manufacturers of these incidents. awareness of road rules. The Infant nursery Products Association of Australia is currently working with Australian Standards to ensure that all prams In February and March 2006, in conjunction with the RTA and distributed in Australia have appropriate warning messages and NSW Police, RailCorp ran a pilot safety campaign, targeting red coloured brakes to heighten awareness. motorists who queue on the Garfield Road Riverstone level crossing. During these months, we also funded and managed a Trespass Reduction Program pilot pedestrian level crossing awareness campaign in the Illawarra. In 2005-06, RailCorp trialled a Trespass Hot Spot Remediation The five-week campaign included local TV and radio advertising, campaign at Jannali station, with letterbox drops to houses, materials at local stations and a letterbox drop to over 50,000 local schools and educational facilities in the local area calling the residents. community to action to report trespass incidents. Local businesses In 2006-2007, in addition to overseeing the $7 million 2006-07 were approached to display posters warning of the dangers LCSC Safety Improvement Program, RailCorp will invest a further of trespassing and we implemented a program to improve the $1.5 million in its Pedestrian Level Crossing Safety Improvement fencing along the rail corridor as well as increasing the height of Program to improve pedestrian safety and provide better access some sections of the fencing on the station. for people with disabilities. RailCorp will be conducting similar campaigns at St Marys, Environment Blacktown, Doonside and Seven Hills where we also experienced trespassing. The campaign at these locations will commence in Environmental Management System the new year, and high security fencing, both on and around these In 2005-06, RailCorp implemented a new environmental stations fencing will be completed by late 2006, followed by Transit management system to provide a framework for continually Officer enforcement operations. improving environmental performance. The systems set Youth education environmental targets and established environmental improvement plans to achieve them. To help combat youth injuries through track trespassing RailCorp in conjunction with Youthsafe mounted a youth safety campaign with In 2006-2007, RailCorp will integrate environmental management an empowering youth spokesperson. At 19, Jonathan Beninca into our day-to-day operations, long term planning and business lost an arm and a leg through a track trespass accident. During the systems.

30 Annual Report 2005-06 Rail Corporation New South Wales For further information on RailCorp’s environmental performance, Vandalism please see Appendices 5 and 6 of this report. During the year, RailCorp and NSW Police agreed to use Ballast Recycling intelligence and a combined planning effort to target recidivist vandals on the rail network, with the Police Rail Vandalism Task In 2005-06, RailCorp’s Ballast Recycling Centre (BRC) at Chullora Force for a trial period of twelve months. had a record year for recovering spent ballast materials. The EPA- licensed waste transfer depot processed over 222,253 tonnes of The Rail Vandalism Task Force is managed by NSW Police and material – a 28% increase on 2004–05, with half the material being co-located with the Transit Officer function of the RailCorp Security reused as aggregates and road base. Moreover, only 0.54% of all Division to: spoil received from track work was sent to landfill. • Provide and maintain a team of 12 NSW Police Officers to The BRC’s recycling efforts saved RailCorp over $7 million per work in conjunction with Transit Officers to focus on vandalism annum by recycling material that would otherwise have been and graffiti matters on the rail network; sent to landfill. Its efforts were rewarded when the Manager of the • Cooperate in sharing intelligence information and data with Ballast Recycling Centre received a RailCorp Employee Excellence RailCorp; Award for continuous improvement in November 2005. • Perform high level investigative work relating to countering This increased level of recycling is in part due to a capital upgrade vandalism on the rail network; and in 2005, which included a new mobile screen and more track • Pursue targeted offenders off rail premises when necessary. reconstruction. It also reflects a stronger commitment across The Rail Vandalism Task Force was set-up on 8 May 2006 and the organisation to recycling and minimising the impact of rail began operations on 15 May 2006. Results since that time have operations on the environment. been positive with numerous arrests made. Graffiti and Vandalism Community relations Mural program Throughout the year, RailCorp continued to foster strong During the year, RailCorp’s mural painting program at graffiti relationships with community groups and stakeholders to improve hotspots reduced graffiti along the rail corridor. Our research safety awareness, reduce graffiti vandalism and enhance the shows that mural work is less likely to be “tagged” than a blank appearance of the CityRail network. wall or surface, meaning murals can reduce the cost of removing In May 2006, the community was engaged through a vast mail out graffiti and reduce trespassing. to residents, schools and community groups requesting feedback To increase our number of murals and perpetuate these on the new Eastern Suburbs and Illawarra and South Coast benefits, RailCorp worked closely with Blue Mountains, Holroyd, timetable. Prior to the timetable’s implementation, information was Parramatta, and Leichhardt Council’s on the planning and painting forwarded to schools and residents across the CityRail network of murals in those communities. We also held regular discussions on changes to services and stabling in their area and across the with Katoomba Police and with Youth Justice on graffiti abatement network. strategies. During the year, RailCorp supported and participated in Mural work completed in 2005-06 community events promoting rail services and safety. These • Signal hut at Medlow Bath in the Blue Mountains. events included the Teddy Bears’ Picnic at Rosehill and NAIDOC celebrations at Jameson Park in Penrith. We also supported • Section Hut at Springwood – mural painted by local youth. the NSW Railway Band at events such as the Royal Easter • Signal Hut at Bell show, Powerhouse Museum rail celebrations, Neutral Bay and • Signal hut at Woodcroft – mural painted as part of an Campbelltown street festivals and at city stations over Christmas. environmental project which included replanting the rail Macdonaldtown Stabling corridor to beautify the area and combat vandalism and graffiti • Retaining wall at Waverton – mural painted by local youths. During the year, RailCorp provided community information about the construction of the Macdonaldtown stabling facility with a • “Legal” graffiti wall at Katoomba – murals painted by local web page, 1800 number and combined monthly and quarterly youths. updates.

Annual Report 2005-06 Rail Corporation New South Wales 31 Our Performance

Improving Access for Trains All metropolitan and outer suburban CityRail services are Customers with a Disability wheelchair accessible and 50% of non-metropolitan services are accessible with the deployment of boarding ramps. Initiatives to RailCorp is progressively improving the accessibility of stations, further improve the accessibility of the CityRail fleet included: trains, coaches and information for all passengers. • 141 accessible Millennium train carriages are in suburban Stations service; Improvements in access paths and safe boarding at • Ongoing planning, design, manufacturing and consultation for CityRail stations included: new accessible rail carriages; • All new stations are accessible – three new stations currently − 122 outer-suburban double-deck cars with accessible toilet under construction on the Epping–Chatswood line; (Stage 1 – 41 cars $171.5 million and Stage 2 – 81 cars • 87 CityRail stations (29% of all stations) are independently $267.9 million) wheelchair accessible, with an additional 65 stations (21%) − 14 single deck cars with accessible toilets to replace the wheelchair accessible with the help of a friend or carer; 620/720 class Hunter Valley cars ($102 million); • $372 million invested in Easy Access program since 1994 to − PPP tender evaluation and shortlist of proponents for improve station accessibility; approximately 600 suburban cars; and • $15.6 million spent in 2005-06: five Easy Access stations • Ongoing program to colour contrast the outside of suburban completed, nine stations are under construction and seven are carriage doors (55% complete). in design; RailCorp consults on an ongoing basis with peak disability • CityRail stations are also upgraded under other programs organisations and independent access consultants to maximise – one completed in 2005-06, two under construction and six the accessibility of all new rail cars. Access features on new cars in design; include designated wheelchair spaces and priority seating; flexible • Portable boarding ramps are available at 100% of CityRail access options for the elderly and passengers with disabilities; platforms. Ramps carried on-board Endeavours to Southern small children and luggage; audio and visual internal destination Highlands/South Coast and all Hunter and CountryLink information; highly visible safety features (eg hand/grabrails) and services; accessible help points for wheelchair boarding and emergencies. • $0.97 million invested in progressive platform-train gap Accessible toilets are included in the new Hunter and Outer- reduction; Suburban Cars. • $0.51 million invested in progressive program to improve CountryLink rail services have allocated wheelchair spaces for platform cross falls; and mobility aids up to 70cm wide by 130cm long, and priority seating • 93% of CountryLink stations are wheelchair accessible via level for passengers with disabilities. Attendants provide assistance access or ramps. to access services/facilities where wheelchair access is limited. All services carry a portable boarding ramp. All CountryLink rural coach services are wheelchair accessible.

Pedestrian level crossings

• $13 million invested over four years to 2006-2007 to improve the safety and accessibility of level crossings; • A purpose built accessible pedestrian level crossing, developed in consultation with NSW peak disability organisations and the Australian Standards Committee, is used as the design speciﬁcation for the improvement program; • RailCorp level crossing standard includes the requirements from the Disability Standards for Accessible Public Transport 2002 and meets or exceeds the requirements of the draft Australian Standard for level crossings.

32 Annual Report 2005-06 Rail Corporation New South Wales Communications − email: [email protected]

Planning your journey − websites: www.131500.com.au or www.cityrail.info − post: RailCorp Customer and Government Relations, Rail service/travel information is currently provided in a range of PO Box K349 Haymarket, NSW 1238 accessible formats: − CityRail website www.cityrail.info to register feedback • Four websites provide information about RailCorp services electronically on website accessibility. and facilities: www.cityrail.info (upgrade to W3C priorities in • CountryLink service complaints: planning stage); www.countrylink.info (upgraded to meet all − phone (02 9379 4850) or post to CountryLink Customer W3C level 1, 2 and most of level 3 accessibility checks); www. Relations Unit railcorp.info and www.131500.com.au − website: www.countrylink.info • Transport Infoline 131 500 provides phone access to: − email: [email protected] − rail service information • TTY service (ph: 1800 637 500) to register complaints/ − centralised complaint management feedback on CityRail and CountryLink services. − reporting of equipment faults Employment and training − tele-typewriter facility. • Accessing CityRail brochure available at major stations. 439 staff with disabilities • CountryLink’s brochure Travelling Made Easy available from 168 staff require work-related adjustments and/or special CountryLink Customer Relations (ph: 02 9379 4850). equipment.

• Information on altered service/trackwork is communicated Community relations prior to the service change via a range of media including a free subscription email advice service (register via www.cityrail. • Ongoing liaison and consultation with peak disability info). organisations and independent access consultants are integral to progressing key disability issues/projects including: • CityRail information available in accessible formats on request via the Information Centre on the main concourse at Central − the design and development of three new stations on the Station (ph: 02 9379 1977; TTY: 1800 637 500 and Epping –Chatswood– Rail Link fax: 02 8202 2855). − major station upgrades (Epping, Parramatta and Chatswood stations) Passenger information − new train design and development of suburban (PPP), • Accessible audio and visual passenger information is provided Hunter and outer-suburban cars on all new stations and trains. • Presentations at community access forums. • Passenger destination information is progressively being upgraded on CityRail stations: Disability Action Plan − 100% of passengers have access to audio announcements • The transport portfolio Accessible Transport Action Plan via DVA or long line PA documents the integrated planning of key public transport − 55% of passengers have access to electronic visual displays agencies including RailCorp: and 39% to manual visual displays − copies provided to NSW Department of Ageing, Disability − 81% of CityRail booking ofﬁces have hearing induction loops and Home Care and the Human Rights and Equal • Pilot trial installation of integrated audio and electronic visual Opportunity Commission (HREOC) information equipment commenced on Bankstown, East Hills, − regularly updated (Dec 2005) and released as a public Illawarra and North Shore lines for future network wide rollout. document on Ministry of Transport web site (link via www.cityrail.info) Complaints/feedback − regular consultation with peak disability organisations Access to centralised complaint management is available by regarding ongoing strategies, targets and actions. phone, website, email and post:

• CityRail services/information – register service/equipment complaints/feedback via: − phone: Transport Infoline (131 500 – option 5)

Annual Report 2005-06 Rail Corporation New South Wales 33 Our Performance

Our People

Skilled and properly equipped staff are essential for the delivery of safe, clean and reliable train services.

RailCorp’s 24-hour operation makes ensuring that we have the right resources in place at all times a challenge. During the year we met this challenge head on, reducing recruitment time frames, delivering operational and management training, continuing with our fatigue management and health and wellness initiatives, and improving workforce planning processes.

New Training Initiatives The key features of the new driver training program are:

In 2005-06 RailCorp Training introduced four key new initiatives • A focus on a training structure that sequences skills to significantly improve current training practices: acquisition and development through the increased use of simulators; Quality Training Management System (QTMS) • Inclusion and integration of identified Human Factors To provide and maintain quality training and assessment elements; services, RailCorp Training has undertaken the task of • A significant increase in the minimum number of driving designing a comprehensive Quality Training Management hours prior to final assessment; and System (QTMS). • An increase in the number of hours in all three automatic The QTMS ensures RailCorp will deliver best practice in brake systems. its training operations by maintaining compliance with the requirements of RailCorp, ITSRR, State & Industry legislation Workforce Planning and Recruitment and the Australian Quality Training Framework (AQTF). The During the year, business process re-engineering work QTMS is in its trial and implementation phase and due to be resulted in a reduction in recruitment campaign timeframes launched on 1 December 2006. from six months to eight weeks. Campaigns are run for Improved Professional Driving Skills recruitment of front-line staff such as transit officers, guards, drivers and customer service attendants. Similar work is now During the first half of 2006, all ETR drivers completed a round being undertaken to reduce timeframes for other types of of safety refresher training designed to specifically focus on recruitment. the practical application of driving competency in degraded situations. The three train simulators at Petersham operated Over the past year, our workforce planning capability has two shifts per day for over six months to ensure each driver been improved through the production of research reports, completed two drives that were specifically designed to reflect workforce models, and skill gap scenario forecasts. a range of operational conditions. The world-wide shortage of engineers and other industry Competence Management Model capability issues affect RailCorp and are factored into our forecasting work. A structure for a revised Competence Management Model has been developed. The premise for the model is based on Forecasting work is also used to timetable training courses, a Risk Based Training Needs Analysis that determines a range thus ensuring we have enough drivers, guards and customer of elements such as the technical and non-technical skills and service attendants to meet our operational needs. behaviours required to perform a role and the risk analysis that gives a priority weighting for those tasks.

New Driver Training Program

A revised driver training program is being piloted based on the ﬁndings of a Risk Based Training Needs Analysis. The training program will focus on the key skills and behaviours of the driving tasks.

34 Annual Report 2005-06 Rail Corporation New South Wales HR Policies and Procedures Industrial Relations

In the last year, progress has been made in developing a The combined rail entities Enterprise Bargaining Agreement suite of human resource policies and procedures that reflect was certified by the Australian Industrial Relations Commission RailCorp’s values and business objectives. with effect from 19 July 2005. Work then commenced on two major commitments resulting from the agreement, relating to a The Code of Conduct was rolled out to staff through a cascade new RailCorp Classification Structure for clerical, administrative, of team briefings starting with the CEO briefing the Executive technical and professional employees, and consolidating Management Team. Each employee received their own copy conditions of employment contained in the various agreements of the Code and a brochure summarising the Code was being subsumed into the 2005 EBA. We expect these translated into eight community languages aa well as being commitments to be finalised in 2006-07. made available to employees on the intranet. Health Services Program In 2006-07 RailCorp will finalise development of all HR procedures that are required to replace those of StateRail and In 2005-06, RailCorp’s Health Services Program comprised six RIC, and will implement a communications plan to improve initiatives to improve employee health and safety. employee awareness of the new policies and procedures. New health assessments for rail safety workers Just Culture By 30 June 2006, we had conducted some 4,000 periodic In 2005-06 we introduced our Just Culture program. The health assessments as part of the National Transport program allows RailCorp to better manage human error Commission’s new National Health Assessment Standard to reduce safety hazards and business risks by reinforcing for Rail Safety Workers. Train crew were the first group of behaviour around three duties: employees to be assessed under the new standard with drivers prioritised based on predictive health risk factors. The Standard 1. the duty to produce an outcome; was then progressively implemented across the rest of the 2. the duty to follow a procedural rule; and organisation. 3. the duty to avoid causing harm. Approximately 99% of safety critical employees successfully Implementing the program has involved developing new completed their assessment, allowing them to continue to investigation processes and safety systems, and integrating perform safety duties. the Just Culture concepts with existing work practices, staff Fatigue management competencies, performance management and assessment. To embed the concepts at management level, during the year In 2005-06, RailCorp continued to manage workplace fatigue in 600 managers attended three-day workshops and received accordance with the Rail Safety Act. subsequent on-the-job coaching in these areas. We also participated in further research on workplace fatigue Absenteeism and Overtime Management in conjunction with the Centre for Sleep Research (CFSR) of the University of South Australia. Two workplace studies were A priority in 2005-06 was to improve attendance management, conducted, one involving signallers and train controllers, and thus reducing the overtime costs of unplanned absences. the other, drivers and guards. In particular, we needed to build skills in middle and front line managers to help them manage the interrelated issues of absence, overtime, sickness and injury. To this end, we developed a management development course, focusing on managing staff in accordance with our absence management policies.

Annual Report 2005-06 Rail Corporation New South Wales 35 Our Performance

Health and wellness initiatives

• In October and November 2005, more than 800 employees took the opportunity to attend free health assessments at RailCorp health fairs, which tested for blood pressure, glucose blood levels and cholesterol. Information was also made available on nutrition and the health and safety implications of drug and alcohol abuse. • In April-May 2006, free flu vaccinations were offered at 33 RailCorp work locations, with some 4,000 employees taking advantage of this initiative, a 9% increase over the prior year’s program. Employees were given the opportunity to receive a subsidised vaccination from their own doctor if they were unable to attend. • RailCorp’s fitness incentive program continued to offer substantial discounts to employees who wish to take out gym memberships. These offers have attracted participation from over 140 fitness centres across NSW.

Random drug & alcohol testing

Since October 2003, under the Rail Safety (Drug and Alcohol Testing) Regulation, RailCorp has conducted over 60,000 random alcohol tests and approximately 7,000 drug tests on railway employees.

The majority of these employees tested were alcohol and drug free and compliant with the Regulation. Employees who do test positive to alcohol and/or drugs are immediately removed from safety duties, pending the outcome of a formal investigation.

Employees who self-identify as having drug and alcohol problems receiving conﬁdential counselling and rehabilitation to enable return to rail safety work.

Other initiatives

• Workers compensation and injury management services, which were audited during the year by the NSW WorkCover Authority and resulted in RailCorp renewing its Self Insurer Licence. • Employee assistance for employees experiencing personal issues receiving confidential counselling and, where required, referral for further support. • An injury notification 1800 Hot Line to provide early notification of incidents and injuries. • A health surveillance program for workers involved with hazardous substances for early detection of ill health.

36 Annual Report 2005-06 Rail Corporation New South Wales Annual Report 2005-06 Rail Corporation New South Wales 37 Our Performance

Value for Money

Like all other major rail systems in Australia, the State Government significantly contributes towards the cost of running the CityRail and CountryLink rail networks. RailCorp works to minimise the cost of our service to NSW taxpayers by operating efficiently and improving patronage, and we seek to provide value for money by allocating our resources to projects that will give the travelling public the greatest benefits.

During the year, two new timetables and a 21.0% increase in reliability in conjunction with rising fuel prices in the same period continued to increase passenger journey numbers by 110,000 a week – boosting RailCorp’s farebox revenue by $3.3 million.

Patronage and Sales CountryLink Reform

CityRail In 2005-06, RailCorp continued to implement reforms to CountryLink’s regional staffing levels in response to Factoring in Pensioner Excursion tickets, in 2005-06 CityRail the Ministerial Inquiry into Public Passenger Transport, patronage rose to 273.7 million, a 1.2% increase on the completed by Dr Tom Parry in December 2003. 270.3 million passengers in 2004–2005. The sale of longer- term tickets also increased. In November 2005, The CountryLink fare structure was revised to a market-based fare scale with seasonal There was no CityRail fare increase in the 2005-06 financial discounts, replacing the previous APEX fare structure. year. There were 94.7 million tickets issued in 2005–2006, From March 2006 a PTV booking fee of 15% or a minimum a decrease of 2.1% on the previous financial year. Most of of $10 was introduced for economy or first class tickets. the reduction in ticket sales can be attributed to two factors. The cost of Country Pensioner Excursion tickets also The first is changes to the Pensioner Excursion Tickets (PET) increased in March 2006, from $2.20 to $2.50, with some scheme. A new PET at a flat fare of $2.50, was introduced changed rules still allowing pensioners and seniors in in January 2005 as part of the NSW Government’s Fairer country areas access to public transport in their region at a Fares plan. This new type of ticket can be purchased from significantly reduced fare. outlets other than CityRail stations, such as on-board private buses – meaning a reduction in the number of these This year, RailCorp also relocated the CountryLink call centre tickets sold at CityRail stations. Secondly, there has been to Newcastle and relaunched a CountryLink website with an an increase to the sale of longer term tickets over daily or online booking facility – meaning customers can now pay for weekly ticket issues. their tickets by credit card online or at one of 972 Australia Post outlets, widening the distribution channels. CountryLink RailCorp also closed 11 CountryLink sales outlets at At the beginning of the year, CountryLink rail and coach Metropolitan locations, with CityRail taking on a limited sales services were forecast to continue their steady 10% function. year-on-year revenue decline. However, fare reforms and better advertising during the year raised farebox revenue to Customer response to the new payment system has been $35,987,078, an increase of $3 million or 9.2% compared positive, resulting in 11% of CountryLink tickets being to $32,950,220 in 2004–05. Passenger journeys to over purchased online. 350 destinations, both regionally and interstate, decreased IPART Fare Review slightly by 1.78% to 1,740,396. CityRail’s passenger fares are regulated by the Independent Pricing and Regulatory Tribunal (IPART), and remained unchanged since the last fare increase was granted on 31 August 2003. In March 2006, RailCorp sought a review of CityRail fares.

38 Annual Report 2005-06 Rail Corporation New South Wales Recognising that RailCorp’s farebox revenue has fallen in Property Management real terms since the last fare increase and that signiﬁcant RailCorp derives approximately $24 million in annual revenue service improvements have been achieved since this time, from the 900 retail leases that form part of railway stations. IPART recommended a 2.9% general increase to rail fares This year, RailCorp issued a Request for Tender to manage as well as a nine point reduction in off peak discounts from our complex and diverse property portfolio. A performance 39% to 30%, effective from 2 July 2006. management system, focusing on a robust set of key Integrated Ticketing performance indicators, was a key feature of the tender.

RailCorp continued planning throughout the year for the The outsourced manager will manage RailCorp’s properties integrated ticketing project, known as T-Card – a NSW and the relationship with RailCorp’s tenants on an ‘end- Government initiative managed by the NSW Ministry of to-end’ basis. RailCorp will provide direction on policy and Transport through its corporate arm, the Public Transport standards for the portfolio and manage the performance Ticketing Corporation (PTTC). The project is creating a of the contracted manager. The agreement will start in ticketing system based on a smartcard which is shared with July 2006. all other public transport operators. The system, which is Land Surplus similar to that used on the Hong Kong and London public transport networks, will make public transport ticketing On 12 October 2005, RailCorp sold 17.20 hectares of significantly more convenient for the public, and will be more RailCorp-owned land at Cooks River to Sydney Ports cost effective to operate. Corporation for $35 million. This sale was agreed by the Government Asset Management Committee (GAMC) in Since July 1 2006 the Public Transport Ticketing Corporation October 2003, prior to RailCorp’s establishment. was established to manage the intergrated ticketing project. The environmental report relating to this sale concluded that Enterprise Resource Planning the site is suitable for ongoing use as a rail freight transport In line with the NSW Government’s cost saving initiatives, facility (commercial/industrial uses) and that the site does in December 2005, RailCorp finished integrating the not pose an unacceptable risk to human health or the two legacy Enterprise Resource Planning applications environment. we inherited from StateRail and the Rail Infrastructure Budget Corporation. This project, which consolidated the systems onto an upgraded, common platform, was RailCorp achieved a surplus of $243.2 million which was introduced on time and within budget. The new system calculated under Australian equivalents to International has streamlined our business processes and improved Accounting Standards. efficiency in administering human resources, finance, The surplus, which was significantly higher than payroll, maintenance and supply. As a result, RailCorp was budget, included: nominated as the lead agency in this field across the NSW • A favourable actuarial assessment of $89.9 million Government. In 2006-07, RailCorp will work to optimise and in the superannuation position, i.e. an improvement extend the system within RailCorp. in the superannuation position (superannuation assets Bulk Electricity less liabilities) between 30 June 2005 and 30 June 2006, primarily due to favourable investment returns, and Bulk electricity feeds RailCorp’s electrical distribution • Capital related funding of $125 million in excess of network, constituting 95% of RailCorp’s total electricity depreciation and asset adjustments. consumption and 80% of its traction power. On 29 April 2005, RailCorp entered into a landmark four-year bulk electricity contract with EnergyAustralia. The contract to supply RailCorp with between 650 to 690 gigawatt hours per annum commenced on 1 July 2006.

This contracting strategy will give RailCorp four years of electricity security at very favourable rates in the face of rapidly rising world energy costs, and the ground breaking nature of the contract was recognised at the annual conference of the Energy Users Association of Australia EUAA.

Annual Report 2005-06 Rail Corporation New South Wales 39 Corporate Governance

Corporate Governance the shareholders’ objectives of ensuring the rail network enables safe and reliable passenger and freight services to be provided in Rail Corporation New South Wales (RailCorp) was formed on 19 an efficient, effective and financially responsible manner. December 2003 under the Transport Administration Act 1988 to give effect to the restructuring of the NSW rail industry. As part of The role of the Board is to set the strategic direction of the this process the Portfolio Minister made certain Vesting Orders Corporation and oversee its implementation, establish clear and gave Directions in relation to the transfer of assets, liabilities performance targets as set out in the Statement of Corporate and staff from the Rail Infrastructure Corporation and the State Rail Intent document that is negotiated annually between RailCorp and Authority of New South Wales. the Voting Shareholders, and monitor, at reasonable intervals, the Corporation’s progress in achieving its targets. The principal objectives of RailCorp are: The Board has a Corporate Governance Charter that reflects (a) to deliver safe and reliable railway passenger services in NSW current legislation and best practice principles. It provides in an efficient, effective and financially responsible manner; and a framework for the Board decision-making processes and (b) to ensure that the part of the NSW rail network vested in or addresses the key factors that affect Board effectiveness and owned by RailCorp enables safe and reliable railway passenger efficiency. The Board also has a Code of Conduct. and freight services to be provided in an efficient, effective and financially responsible manner. Board Membership The other objectives of RailCorp are: The Transport Administration Act 1988 and the State Owned (a) to maintain reasonable priority and certainty of access for Corporations Act 1989 allow for a minimum of three and a railway passenger services, maximum of seven Directors. The appointment and the term of each Director’s appointment is determined by the Voting (b) to promote and facilitate access to the part of the NSW rail Shareholders, following consultation with the Portfolio Minister, for network vested in or owned by RailCorp, a period not exceeding five years. Appointments may be renewed. (c) to be a successful business and, to that end: The remuneration of each non-executive Director is determined by (i) to operate at least as efficiently as any comparable the Voting Shareholders. business; and The Chief Executive Officer is appointed by the Board following the (ii) to maximise the net worth of the State’s investment in the concurrence of the Voting Shareholders and the Portfolio Minister. Corporation, Following appointment the Chief Executive Officer is an executive (d) to exhibit a sense of social responsibility by having regard to the Director of the Board. interests of the community in which it operates, The Board is required to meet at least 10 times per year, or (e) where its activities affect the environment, to conduct its additionally, as special circumstances require. operations in compliance with the principles of ecologically sustainable development contained in Section 6(2) of the Directors have access to management and to independent advice. Protection of the Environment Administration Act 1991, Such advice would normally be sought after consultation with the Chairman or Secretary. (f) to exhibit a sense of responsibility towards regional development and decentralisation in the way in which Directors’ Accountabilities it operates. Part 4 of the State Owned Corporations Act 1989 outlines the RailCorp has a Board of Directors responsible and accountable to accountabilities of Directors. the Voting Shareholders who each hold one share for and on behalf In summary, Directors must: of the New South Wales Government. • Supply to Voting Shareholders such information relating to The two Voting Shareholders representing the New South affairs of RailCorp as they may from time to time request. Government are the Premier, the Hon. M Iemma MP and the Minister for Finance the Hon. J Della Bosca. • Agree with the Voting Shareholders on the annual Statement of Corporate Intent. The Portfolio Minister is the Hon. John Watkins, Minister • Report to the Voting Shareholders on the operations of for Transport. RailCorp on a half yearly basis. The Board • Deliver an Annual Report, including audited financials, within The Board is accountable to the Voting Shareholders for ensuring four months of the end of the financial year. the long term success of the Corporation and for achievement of

40 Annual Report 2005-06 Rail Corporation New South Wales Board of Directors 2006 A summary of the RailCorp Directors for 2005-06 and their terms are summarised in the table below:

Director Term

Ross Bunyon 1 Jan 04 – 1 Jan 09 Non-Executive Director Chairman from 1 Jan 04

Arthur Butler 1 Jan 04 – 1 Jan 07 Non-Executive Director

Liza Carver 1 Jan 04 – 1 Jan 07 Non-Executive Director

Vince Graham 19 Dec 03 – 31 Dec 08 Executive Director CEO

Gordon Messiter 3 Apr 06 – 3 Apr 09 Non-Executive Director

Paul Moy 1 Jan 04 – 1 Jan 08 Non-Executive Director Resigned 31 Oct 05

Dean Pritchard 1 Jan 04 – 1 Jan 08 Non-Executive Director Resigned 19 Aug 05

Bob Plain 1 Jan 04 – 1 Jan 07 Non-Executive Director

Hon. Barrie Unsworth 21 Dec 05 – 21 Dec 08 Non-Executive Director

The remuneration of each non-executive director is determined by the voting shareholders. The CEO is not entitled to any additional remuneration for being an executive director.

Ross Bunyon, BComm (UNSW), CIE Aust Liza Carver, BEc, LLB, LLM Chairman Chair of the Human Resources & Remuneration Board Member of the Audit & Risk Board Committee and Human Committee Resources & Remuneration Board Committee Ms Carver was appointed a Non-Executive Director on Mr Bunyon was appointed as Non-Executive Director and 19 December 2003 to 1 January 2007. She is a Commissioner Chairman on 19 December 2003 to 1 January 2009. He is of the Australian Energy Market Commission. She is a former Chairman of Eraring Energy and Chairman of Turner & Townsend, Non-Executive Director of the Rail Infrastructure Corporation, a Rawlinsons Ltd. He is a former Chairman of the Rail Infrastructure former Non-Executive Director of State Rail Authority of NSW and Corporation, former Chairman of the State Rail Authority of NSW, a former Non-Executive Director of Rail Access Corporation. She is former Chairman and Director of Pacific Power and subsidiary a partner in the law firm Gilbert & Tobin and formerly an Associate companies, former Chairman of the Electricity Supply Association Commissioner with the Australian Competition and Consumer of Australia, and a former Chairman of Green’s Foods Ltd. He is a Commission, a member of the NSW Independent Pricing and former Non Executive Director of the Treasury Corporation of NSW Regulatory Tribunal, and a member of the NSW Premier’s Council and a former Commissioner of the Snowy Mountains Council. Mr for Women between 1995 and 1999. Bunyon is also the Principal of Murdoch Advisory Services. Vince Graham, BE(Civil), Grad Dip Mgmt, FAICD Arthur Butler, BEc, FCPA Chief Executive Officer Chair of the Audit & Risk Board Committee Mr Graham was appointed Chief Executive Officer on Mr Butler was appointed a Non-Executive Director on 19 December 2003 and is a Director. He is a Director of the 19 December 2003 to 1 January 2007. He is Chairman of the Transport Infrastructure Development Corporation and was Conservation and Compliance Committee of the National Parks appointed during January 2004. He is a former Executive Director and Wildlife Service, Department of Environment and Conservation and former Chief Executive Officer of the Rail Infrastructure and a Member, Internal Audit Committee, Department of Corporation. He is Acting Chief Executive of the State Rail Authority Environment and Conservation. He is a former Non-Executive of NSW. Mr Graham was previously Coordinator General of Rail, Director of the Rail Infrastructure Corporation and the State Rail Managing Director of the National Rail Corporation and the Grain Authority of NSW and a former independent Chairman of the Handling Authority of NSW, and the Chief Operating Officer of the State Rail Authority Audit Board Committee. Mr Butler has held State Rail Authority of NSW. He has over thirty years’ experience in executive positions within Sydney Water and has been a Non- the rail industry. Executive Director of Australian Water Technologies Pty Ltd, Water Ecoscience Pty Ltd and a Member of NSW Treasury Functions Advisory Committee and the NSW Investment Advisory Committee.

Annual Report 2005-06 Rail Corporation New South Wales 41 Corporate Governance

Gordon Messiter, BSc, MEngSc Audit and Risk Board Committee Chair of the Safety & Environment Board Committee, Member The Audit and Risk Board Committee supports the Board in of the Human Resource and Remuneration Board Committee discharging its Corporate Governance responsibilities in relation to: Mr Messiter was appointed a Non-Executive Director on 3 April • Assist the Board in discharging their oversight and corporate 2006. He is a former Chief Executive or Department Head of five governance charter relating to: NSW Government agencies including the Ministry of Transport and – financial reporting practices, including accounting policies the State Rail Authority. He was the General Manager Randwick City Council from 1996 to 2004. Mr Messiter is a professional – financial management engineer with a first degree in electrical engineering and a master’s – business policies and practices degree in transportation and traffic engineering. – business ethics and corruption prevention policies and Bob Plain practices Member of the Safety & Environment Board Committee – risk management and internal controls Mr Plain was appointed a Non-Executive Director on 19 December – compliance with laws, regulations, standards, and best 2003 to 1 January 2007. He is a former Non-Executive Director of practice guidelines the Rail Infrastructure Corporation and the State Rail Authority of • Provide a forum for communication between the NSW. He has over 40 years of railway experience. Mr Plain held Board, senior management and both the internal and external a number of union positions, including the National President of auditors. the Rail Tram & Bus Union and is a former member of the Labor • Fostering an ethical culture throughout the organisation. Council Executive. • Monitor and review the independence, integrity and objectivity The Hon. Barrie Unsworth of the internal audit function. Member of the Safety & Environment Board Committee and The Chief Executive Officer, Group General Manager Finance, the Audit & Risk Board Committee Manager Internal Audit and representatives from the Audit Office Mr Unsworth was appointed a Non-Executive Director on 21 of NSW have a standing invitation to attend meetings, but are not December 2005 to 21 December 2008. He is Chairman of the members of the Committee. Advisory Committee of the Ambulance Service of New South Safety and Environment Board Committee Wales and Chairman of the Board of the State Transit Authority, a former Minister for Transport, Minister for Health and Minister for The Safety and Environment Board Committee supports the Ethnic Affairs, Minister for State Development and Premier of New Board in discharging its responsibilities for the safety of the South Wales. rail network in NSW and of the passengers, employees, contractors and public who work on and use the network and for Board Committees environmental protection. The Board currently has three standing committees which assist The Safety and Environment Board Committee supports in the good governance of the Corporation, allow for detailed the board to: consideration of major issues, provide advice on sensitive matters to the Board and examine matters that may be referred to it by the • Review and monitor the strategic direction of safety and Board. Each Committee has a Charter, which was approved by environment at RailCorp. the Board and reviewed during the last year. One “Special • Monitor and review the effectiveness of safety and environment Purpose Expenditure Review” Board Committee was convened policies, systems and programs which are designed to meet with a one off meeting as requested by the Board at its legislative responsibilities. October 2005 meeting. • Promote a proactive safety and environment culture at During the Board’s annual review process it determined that RailCorp. two Board Committees were no longer required and they were disbanded following Board resolution in October 2005. They had originally been established in March 2005 to cover emerging issues and were the:

• Information Communications and Technology (ICT) Board Committee. • Transition and Expenditure Review Board Committee.

42 Annual Report 2005-06 Rail Corporation New South Wales • Monitor and review the performance of key programs In addition the Committee also undertakes a periodic review and which identify and manage safety and environment risks revision of the ICT Strategic Plan. across operations. The Chief Executive Officer, the Chief Information Officer, Group • Monitor and review key issues arising from the General Manager Finance and Group General Manager Human RailCorp Board. Resources had a standing invitation to attend meetings, but were • Provide advice to the RailCorp Board on key safety and not members of the Committee. environment issues. Transition and Expenditure Review Board Committee • Monitor and review performance through reporting relating to environmental management and the safety of infrastructure, The Transition and Expenditure Review Board Committee assisted train operations and OHS. the Board in discharging its responsibilities relating to: • Receive assurance that issues arising from relevant safety and • The transition of the remaining StateRail and Rail environment audit and investigation reports are being actioned. Infrastructure Corporation employees, assets and functions as • Take into account safety and environment objectives relating to required by RailCorp. RailCorp as it sees fit. • Monitoring the success of management’s strategic and tactical initiatives to achieve improved financial performance whilst The Chief Executive Officer and the Group General Manager Safety achieving other business objectives. & Environment have a standing invitation to attend meetings, but are not members of the Committee. • Overseeing reform of corporate business processes and structural reviews to improve organisational performance and Human Resource and Remuneration Board Committee efficiency.

The Human Resource and Remuneration Board Committee The Committee sought input from both RailCorp employees and supports the Board in discharging its responsibilities relating to: other relevant parties. These parties included the Chief Executive • Contractual, performance and remuneration arrangements for Officer, Group General Manager Finance, Group General Manager the Chief Executive Officer and senior management. Human Resources, Program Director Corporate Improvement and General Manager State Rail Authority. • The maintenance and growth of the Corporation’s workforce capability necessary to support the corporate objectives. Conflicts of Interest

• The promotion of an efﬁcient and effective workforce. A register of Directors’ interests is maintained and Directors • Staff wellbeing and sound corporate culture. disclose any material contract in which they have an interest. • Industrial Relations outcomes that support Directors do not take part in any discussions or decision-making Corporate objectives. processes considered by the Board if they have any personal interest in the matters. • Succession planning.

The Chief Executive Ofﬁcer and the Group General Manager Human Resources have a standing invitation to attend meetings, but are not members of the Committee.

Information Communications and Technology Board Committee

The ICT Board Committee assisted the Board in discharging its responsibilities relating to:

The development and implementation of ICT Strategies focused on:

• ICT governance and controls. • Consolidation of enterprise ICT responsibilities. • Strengthened ICT processes. • Information systems support.

Annual Report 2005-06 Rail Corporation New South Wales 43

Contents

Independent Audit Report ...... 45 Note 10 Intangible Assets ...... 68

Start of Audited Financial Report ...... 47 Note 11 Other Assets ...... 69

Income Statement Note 12 Payables ...... 69 for the Year Ended 30 June 2006 ...... 47 Note 13 Borrowings ...... 70 Balance Sheet as at 30 June 2006 ...... 48 Note 14 Provisions ...... 71 Statement of Changes in Equity for the Year Ended 30 June 2006 ...... 49 Note 15 Contributed Equity ...... 78

Cash Flow Statement Note 16 Reserves ...... 79 for the Year Ended 30 June 2006 ...... 50 Note 17 Retained Earnings ...... 79

Note 1 Reporting Entity and Financial Report . 51 Note 18 Expenditure Commitments ...... 80

Note 2 Summary of Accounting Policies ...... 51 Note 19 Contingent liabilities Note 3 Capital and Other Government and contingent assets ...... 82 Contributions ...... 61 Note 20 Financial instruments ...... 83

Note 4 Expenses ...... 61 Note 21 Joint venture ...... 87

Note 5 Cash and Cash Equivalents ...... 63 Note 22 Transition to New Accounting Note 6 Receivables ...... 64 Standards ...... 88

Note 7 Inventories ...... 65 Statement by Directors ...... 89

Note 8 Assets Held for Sale ...... 65

Note 9 Property, Plant and Equipment ...... 66

44 Annual Report 2005-06 Rail Corporation New South Wales Independent Audit Report

Annual Report 2005-06 Rail Corporation New South Wales 45 Independent Audit Report (continued)

46 Annual Report 2005-06 Rail Corporation New South Wales Start of Audited Financial Report

Income Statement for the Year Ended 30 June 2006

2005-06 2004-05 Note $000 $000 Income

Passenger services 526 501 520 105

Interest 15 819 6 939

Rental income 30 759 27 663

Access fees 32 312 32 590

Construction contract revenue 49 738 49 705

Other revenue 109 109 82 769

Cross-border lease participation fee 6 217 -

Operating lease contingent rents 835 838

Foreign exchange gains - 54

Income from Operating Activities 771 290 720 663

Government subsidies 2.7 1 114 815 1 010 159

Government concessions 2.7 200 112 206 146

Capital and other Government contributions 3 474 170 424 822

Income from Government Contributions 1 789 097 1 641 127

Total income 2 560 387 2 361 790

Expenses

Contract and general expenses 4.3 892 975 1 134 307

Payroll costs and other employee beneﬁts 4.1, 4.2 829 470 646 034

Depreciation and amortisation 9.2, 10.2 458 491 431 356

Operating lease non-contingent rents (inc rail access fees) 88 597 83 641

Operating lease contingent rents 4 878 2 801

Workers’ compensation 25 682 22 636

Loss on asset disposals and write off of retired assets 17 139 20 740

Total expenses 2 317 232 2 341 515 Surplus for the year 243 155 20 275

The income statement should be read in conjunction with the accompanying notes.

Annual Report 2005-06 Rail Corporation New South Wales 47 Balance Sheet as at 30 June 2006

30.6.2006 30.6.2005 Note $000 $000 Current assets

Cash and cash equivalents 5 335 985 274 576

Receivables 6 103 276 170 444

Derivative ﬁnancial instruments 20 2 178 -

Security deposits 187 487

Inventories 7 27 301 21 175

Assets held for sale 8 - 33 075

Total current assets 468 927 499 757

Non-current assets

Inventories 7 19 754 19 254

Property, plant and equipment 9 11 908 451 11 526 150

Intangible assets 10 57 299 57 290

Other 11 92 734 22 714

Total non-current assets 12 078 238 11 625 408

Total assets 12 547 165 12 125 165

Current liabilities

Payables 12 392 221 466 459

Borrowings 13 5 785 -

Derivative ﬁnancial instruments 20 75 -

Provisions 14 306 896 230 112

Total current liabilities 704 977 696 571

Non-current liabilities

Payables 12 60 265 61 745

Borrowings 13 10 311 -

Provisions 14 53 931 65 426

Total non-current liabilities 124 507 127 171

Total liabilities 829 484 823 742

Net assets 11 717 681 11 301 423

Equity

Contributed equity 15 11 531 476 11 360 476

Reserves 16 (35) -

Retained earnings 17 186 240 (59 053)

Total equity 11 717 681 11 301 423

The balance sheet should be read in conjunction with the accompanying notes.

48 Annual Report 2005-06 Rail Corporation New South Wales Statement of Changes in Equity for the Year Ended 30 June 2006

2005-06 2004-05 Note $000 $000 Total equity at the beginning of the ﬁnancial year 11 301 423 10 923 956

Decrease in Hedging Reserve 16 (35) -

Adjustments arising from introducing new standards 2.3(v), 17, 20 2 138 -

Net income recognised directly in equity 2 103 -

Surplus for the year 17 243 155 20 275

Total recognised income and expense for the year 245 258 20 275

Transactions with equity holders in their capacity as equity holders Net Assets contributed by Government 15.3 171 000 357 192

Total equity at end of the ﬁnancial year 11 717 681 11 301 423

The statement of changes in equity should be read in conjunction with the accompanying notes.

Annual Report 2005-06 Rail Corporation New South Wales 49 Cash Flow Statement for the Year Ended 30 June 2006

2005-06 2004-05 Note $000 $000 Cash ﬂows from operating activities

Cash received

Passenger services 526 501 520 105

Other receipts from customers and others 388 710 280 757

Government reimbursements for services 1 314 927 1 216 305

Government contributions received 2 296 2 330

Interest received 15 819 6 939

Total cash received 2 248 253 2 026 436

Cash used

Payments to suppliers, employees and others (2 121 705) (1 754 155)

Interest paid (812) -

Total cash used (2 122 517) (1 754 155)

Net cash from operating activities 5.2 125 736 272 281

Cash ﬂows from investing activities

Cash received

Capital grants 466 517 422 147 Property, plant and equipment and intangible assets 37 747 2 212 disposals Investments redeemed 300 298

Total cash received 504 564 424 657

Cash used Property, plant and equipment and intangible assets (568 891) (526 106) acquisitions Total cash used (568 891) (526 106)

Net cash used in investing activities (64 327) (101 449)

Net increase in cash and cash equivalents 61 409 170 832

Cash and cash equivalents at the beginning of the year 274 576 103 713

Cash received as a result of rail industry restructuring - 31

Cash and cash equivalents at the end of the year 2.9 335 985 274 576

The cash ﬂow statement should be read in conjunction with the accompanying notes.

50 Annual Report 2005-06 Rail Corporation New South Wales Notes to the Financial Statements for the year ended 30 June 2006

Note 1 Reporting Entity and Financial Report RailCorp is a not-for-profit entity for accounting purposes. Rail Corporation New South Wales (RailCorp) is a statutory The financial report has been prepared on a going concern State owned corporation constituted under the Transport basis which assumes that RailCorp is expected to be able Administration Act 1988. It is domiciled in Australia and to pay its debts as and when they fall due and continue in its principal office is at 18 Lee Street, Chippendale, NSW, operation without any intention or necessity to liquidate or 2008. Its principal objectives are: otherwise wind up its operations. Despite current liabilities • to deliver safe and reliable railway passenger services exceeding current assets at year end, RailCorp’s continued in New South Wales in an efficient, effective and operation and ability to pay its debts are assured because financially responsible manner, and the annual Appropriation Act (given assent in June 2006) • to ensure that the part of the NSW rail network has allocated funds by the Government to support RailCorp vested in or owned by it enables safe and reliable in delivering services, offering fare concessions and railway passenger and freight services to be undertaking capital works during the ensuing year. provided in an efficient, effective and financially responsible manner. All amounts are rounded to the nearest one thousand dollars and are expressed in Australian currency. The financial report was authorised for issue by the Board on the date on which the accompanying Statement by 2.2 Consistency Directors was signed. The report will not be amended and Australian equivalents to International Financial Reporting reissued as it has been audited. Standards (AIFRS) were adopted in 2005-06 and this is the first financial report under the new standards. Generally, the RailCorp commenced operations on 1 January 2004 and accounting policies have been applied consistently to all various assets, rights and liabilities of Rail Infrastructure years presented and comparative information for 2004- Corporation and the State Rail Authority of NSW were 05 has been adjusted where necessary to conform with transferred to it progressively during the requirements of AIFRS. However, the new accounting 2003-04, 2004-05 and 2005-06. The transactions and cash standards on financial instruments (AASB 132 and AASB flows for 2005-06 and the assets, liabilities and equity items 139) have only been applied as from 1 July 2005 and at 30 June 2006 are therefore not directly comparable with comparative information is presented on the superseded those of the previous year. See note 15. basis in accordance with the exemption given in AASB 1 and NSW Treasury mandates. The financial impact of the Note 2 Summary of Accounting transition to AIFRS is set out in note 22. Further information Policies on the basis used to present the comparative information for 2.1 Bases of accounting financial instruments and the main adjustments that would This is a general purpose financial report prepared in be necessary for it to comply with AASB 132 and 139 is accordance with Australian Accounting Standards, the given in note 2.3(v). Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2005, and specific directions issued by the Treasurer.

Generally, the historical cost basis of accounting has been adopted and the ﬁnancial report does not take into account changing money values or current valuations. However, property, plant and equipment, certain provisions, and derivative assets and liabilities are measured at fair value. See notes 2.3(ii), 2.13(ii), and 2.18.

The accrual basis of accounting has been adopted in the preparation of the ﬁnancial report, except for cash ﬂow information.

Annual Report 2005-06 Rail Corporation New South Wales 51 Notes to the Financial Statements for the year ended 30 June 2006

Note 2 Summary of accounting policies (continued) 2.1 Bases of accounting (continued) Australian Accounting Standards that have recently been issued or amended, but are not yet effective, have not been adopted for the annual reporting period ended 30 June 2006:

AASB Amendment Affected Standard(s) Application date of Standard*

2005-1 AASB 139 Financial Instruments: Recognition and Measurement 1 January 2006

2005-5 AASB 1 First-time adoption of AIFRS 1 January 2006 AASB 139 Financial Instruments: Recognition and Measurement 2005-10 Various standards 1 January 2007

New Standard AASB 7 Financial Instruments: Disclosures 1 January 2007

AASB 119 AASB 119 Employee Beneﬁts ( Version issued April 2006) 1 January 2006

*Application date is for the annual reporting periods beginning on or after the date shown in the above table.

When adopted, the impact of those standards on the Financial assets are derecognised when the contractual Corporation’s financial position, surplus or loss for the year, rights to the associated cash flows expire, are effectively and cash flows, will not be material. transferred, or are otherwise lost. Financial liabilities are derecognised when the contractual obligation is discharged, The requirements of AASB 1004 Contributions have is cancelled, or expires. been applied when accounting for contributions of assets (including grants). There are no differences in the recognition Any applicable amortisation, impairment loss (or reversal), or requirements between the new AASB 1004 and the previous fair value adjustment is recognised in the income statement. AASB 1004. However, the new standard may be amended by proposals in Exposure Draft ED 125 Financial Reporting On derecognition, any difference between the item’s carrying by Local Governments. If the ED 125 approach is applied, amount and the consideration received or paid is recognised revenue and/or expense recognition will not occur until in the income statement. the related goods and services are supplied (where grants are in-substance agreements for the provision of goods (ii) Measurement and services) or until conditions are satisfied. ED 125 On initial recognition, a financial asset or financial liability is may therefore delay revenue recognition compared with measured at its fair value (which is usually its cost) plus any AASB 1004, where grants are recognised when controlled. directly-attributable transaction costs. However, at this stage, the timing, applicability and impact of these amendments are uncertain. After initial recognition, receivables and payables are carried in the balance sheet at amortised cost, which is a 2.3 Financial instruments reasonable approximation of their fair value. Borrowings Financial instruments are contracts that give rise to both are carried at amortised cost. Their fair value at year end is a financial asset of one entity and a financial liability (or disclosed in note 13.2. Derivatives are carried at fair value. equity instrument) of another entity. They include cash and cash equivalents, receivables, payables, borrowings and The fair value of borrowings and derivatives is determined at derivatives (forward foreign exchange contracts, foreign year end on the following basis: currency option contracts, and commodity swap contracts). • A borrowing is valued at the quoted offer price or the risk-adjusted market price of the instrument. (i) Recognition • A forward foreign exchange contract, foreign A financial asset or financial liability is recognised when currency option contract, or commodity swap RailCorp becomes a party to the contractual provisions of contract is valued at the amount quoted by a bank or the instrument. the NSW Treasury Corporation to realise the contract (if it is favourable) or to settle it (if it is unfavourable).

52 Annual Report 2005-06 Rail Corporation New South Wales (iii) Hedging Hedge accounting is discontinued when the hedging Derivative financial instruments are used to hedge against instrument expires, is sold, is terminated, is exercised, exposures to foreign currency risk on overseas purchase no longer meets the hedge accounting criteria, has its commitments and on commodity price risk on forecast designation revoked, or if the hedged forecast transaction purchases of distillate inventories. is no longer expected to occur. Generally, any associated cumulative gain or loss in the Hedging Reserve is only Forward foreign exchange contracts and foreign currency transferred out when the hedged cash flow eventually option contracts are used to hedge against currency risk occurs. However, if the hedged transaction is no longer on firm commitments for the purchase of equipment from expected to occur, the gain or loss is immediately overseas suppliers. All such commitments over $100 000 transferred to the income statement. are hedged in this manner. These contracts entail a right to receive a fixed amount of foreign currency at a specified (v) Change in accounting policy for derivative future date, which is offset by an obligation to pay a fixed financial instruments amount of domestic currency at that time. The accounting policy in relation to derivative financial instruments has changed as a result of the adoption of Commodity swap contracts are used to hedge against Accounting Standards AASB 132 Financial Instruments: commodity price risk on forecast purchases of distillate Disclosure and Presentation and AASB 139 Financial inventories from domestic suppliers. All such purchases Instruments: Recognition and Measurement. are hedged in this manner. These contracts are treated as financial instruments because, despite their requiring In accordance with the new requirements, derivatives are physical delivery of distillate, they are intended to be settled formally recognised on the balance sheet and measured other than by physical delivery in accordance with general at their fair value. Changes in fair value are recognised in market practice. The contracts effectively entail a right to the income statement. However, where hedge accounting buy a specified quantity of distillate at a fixed price on a is adopted, the portion of the gain or loss on the hedging future date, which is offset by an obligation to sell a similar instrument that is determined to be an effective hedge is quantity at its prevailing market price at that time. held in the Hedging Reserve until the hedged cash flows occur. The gain or loss is then released from the Hedging (iv) Hedge accounting Reserve and adjusts the cost of the hedged item. Cash flow hedge accounting is adopted for all hedging relationships involving forward foreign exchange contracts, The following items were recognised as at 1 July 2005: foreign currency option contracts or commodity swap • Forward foreign exchange contracts and foreign contracts. The portion of the gain or loss on the hedging currency options were recognised as derivative instrument that is determined to be an effective hedge is assets of $0.682m (where favourable) or derivative initially recognised directly in the Hedging Reserve. When liabilities of $1.876m (where unfavourable). the cash flow in relation to the hedged item eventually • Commodity swap contracts were recognised as occurs, the gain or loss is transferred from the Reserve to derivative assets of $3.354m (where favourable) or property, plant and equipment (in the case of equipment derivative liabilities of $0.022m (where unfavourable). purchases) or to inventories (in the case of distillate • The difference of $2.138m between the assets and purchases) where it is included in the cost of the hedged the liabilities was recognised as an adjustment to item. The portion of the gain or loss on the ineffective retained earnings. (Note 17) portion of the hedging instrument is recognised immediately in the income statement. The application of AASB 132 and AASB 139 was deferred until 1 July 2005, in accordance with the exemption Hedge accounting is used only if the hedging relationship available under Accounting Standard AASB 1 First-time is formally designated and documented at the inception Adoption of Australian Equivalents to International Financial of the hedge; the hedge is expected to be highly effective; Reporting Standards and NSW Treasury mandates. In this the effectiveness is measurable, assessed on a continuing financial report, the comparative information for 2004-05 in basis and is actually achieved; and the hedged forecast relation to derivative financial instruments and associated transaction remains highly probable. gains and losses is presented on the superseded basis, in accordance with AASB 1.

Annual Report 2005-06 Rail Corporation New South Wales 53 Notes to the Financial Statements for the year ended 30 June 2006

Note 2 Summary of accounting policies (continued) Certain Victorian and Queensland railways and stations are For the 2004-05 comparative information to comply with used by RailCorp as lessee under informal non-exclusive AASB 132 and AASB 139 (i) the fair value of derivative operating leases (access agreements). ﬁnancial instruments would have to be recognised on the balance sheet and (ii) the cumulative gain or loss on any Coaches for rural passenger services and buses for use such instrument that was not part of a designated and during service disruptions are obtained under various effective hedging relationship would have to be recognised operating leases. The rural coaches are obtained under in the income statement immediately. three- year non-cancellable leases, renewable at RailCorp’s option for up to two years. Such adjustments were made on 1 July 2005 when AASB 132 and AASB 139 were adopted. Motor vehicles are obtained under two- or three-year operating leases. Rentals are all contingent, being based on See note 20. ﬂoating interest rates.

2.4 Taxes Some office accommodation is obtained under operating (i) Income tax equivalents leases. Some leases are renewable at RailCorp’s option for In previous years RailCorp was subject to the Tax Equivalent periods up to five years. Regime (TER) in accordance with Section 20T of the State Owned Corporations Act 1989, under which it is required to Some telecommunications facilities in the country rail area pay a taxation equivalent to the NSW Government based on are obtained under a non-cancellable operating lease. the accounting results in accordance with a methodology agreed with Treasury. Some items of office equipment and plant are also obtained under operating leases. From the 2005/06 year RailCorp is exempt from the TER. RailCorp has granted various operating leases (access (ii) Goods and services tax agreements) to other rail operators giving them non- Revenues, expenses and assets are generally recognised exclusive access to the metropolitan rail network or stations. net of the amount of goods and services tax (GST). Such leases generally cover a five year period. However, receivables and payables are stated with the amount of GST included, and GST that is not recoverable Various real estate operating leases have also been granted from the Australian Taxation Office (ATO) is recognised as (including air space and advertising rights), sometimes part of the relevant asset or expense. covering long periods (up to 99 years). A few of the longer leases are non-cancellable. In most cases RailCorp retains The net amount of GST recoverable from (or payable to) the legal title to the leased property. ATO is recognised as part of receivables (or payables) in the balance sheet. Cash flows are included in the Cash Flow (ii) Accounting treatment Statement on a gross basis and the GST component of any Lease rentals under an operating lease are recognised as cash flow that is recoverable from (or payable to) the ATO is income (or expense) on a straight-line basis over the lease classified as an operating cash flow. term unless another systematic basis is more representative of the time pattern of the user’s benefit. 2.5 Leases (i) Details of leasing arrangements Initial direct costs incurred, as lessor, in negotiating and Various operating leases are in place. arranging an operating lease are added to the carrying amount of the leased asset and recognised as an expense The NSW rail network in the country rail area is used by over the lease term on the same basis as the lease income. RailCorp as lessee under ten or fifteen year, non-exclusive, non-cancellable operating lease (access agreement). The An asset leased to a lessee is presented in the balance lease rental (access fee) is reviewed annually. sheet according to the nature of the asset and is subject to the depreciation policy for similar but non-leased assets.

See notes 2.15 and 11.

54 Annual Report 2005-06 Rail Corporation New South Wales (iii) Arrangements in the form but not the The stage of completion of a construction contract is substance of a lease determined by comparing the cost incurred to date with the An arrangement comprising a series of transactions estimated total cost of the contract. involving the legal form, but not the economic substance, of a lease is accounted for as one linked transaction rather Contributions are received from the NSW Government to than as a lease. Any fee resulting from the arrangement is reimburse the cost of providing certain agreed services recognised as income in the year it is received. See notes and concessions. The passenger revenue covers only 2.7 and 9.3. a part of operating expenses and the shortfall is met by those contributions by the NSW Government (refer Income (iv) Change in accounting treatment for prepaid rentals Statement). In accordance with NSW Treasury policy to implement an AIFRS standard (AASB 117 Leases) from 1 July 2004, Contributions are recognised when control of the cash or prepaid rentals where the lease term exceeds 50 years other asset (or the right to receive it) is obtained. are allocated on a straight line basis over the entire lease. This required an adjustment of $64.135 million to retained Interest revenue is recognised using the effective interest earnings and deferred revenue at 1 July 2004 and increased method, which uses a rate that exactly discounts a financial the operating surplus for 2004/05 by $1.716 million (Notes instrument’s expected future cash receipts through the 12 and 22 refer). expected life of the financial instrument (or shorter period) to the net carrying amount of the instrument. 2.6 Foreign currency translation Operating lease income is recognised on a straight-line A foreign currency transaction is recognised and initially basis over the lease term. translated into Australian currency using the spot rate at the date of the transaction. A monetary item outstanding at any Revenue from the sale of assets or other goods is subsequent reporting date is translated at the spot rate at recognised when control and the significant risks and that date. rewards of ownership have passed to the buyer and the past and prospective transaction costs are reliably Exchange differences on monetary items that qualify as measurable. hedging instruments in a cash flow hedge are recognised initially in equity to the extent that the hedge is effective. Fees received under an arrangement that is in the legal form Exchange differences on other monetary items are of a lease but that is not, in substance, a lease under AASB recognised as income or expense. 117, are recognised as revenue and disclosed as a cross- border lease participation fee in the income statement. 2.7 Income Income is measured at the fair value of the consideration or 2.8 Borrowing Costs contributions received or receivable. In most cases this is Borrowing costs are capitalised in respect of constructed the value of the cash exchanged or exchangeable. Income property, plant and equipment that meet the criteria of is only recognised if its receipt is probable and the amount is qualifying assets. Other borrowing costs are recognised as reliably measurable. an expense in the period in which they are incurred.

Revenue from the rendering of a service is recognised by 2.9 Cash and cash equivalents reference to the stage of completion of the transaction, Cash and cash equivalents includes cash on hand, at call provided that the transaction’s outcome, stage of deposits, and short-term, highly liquid investments that are completion, and the past and prospective costs are readily convertible into known amounts of cash and which all reliably measurable. Otherwise such revenue is only are subject to an insigniﬁcant risk of changes in value. See recognised to the extent of the associated recognised note 5. recoverable expenses.

Annual Report 2005-06 Rail Corporation New South Wales 55 Notes to the Financial Statements for the year ended 30 June 2006

Note 2 Summary of accounting policies (continued) The carrying amount of inventories sold is recognised as 2.10 Receivables an expense when the related revenue is recognised. The A receivable is recognised when it is probable that the future amount of any write-down of inventories to net realisable cash inflows associated with it will be realised and it has a value and any loss relating to inventories is recognised as an value that can be measured reliably. It is derecognised when expense in the year in which the write-down or loss occurs. the contractual rights to future cash inflows from it expire or The amount of any reversal of any write-down of inventories, are transferred. arising from an increase in net realisable value, is recognised as a reduction of the expense relating to inventories in the An expected reimbursement of expenditure required to year in which the reversal occurs. settle a provision is only recognised as a receivable when it See note 7. is virtually certain that the reimbursement will be received. Such reimbursement is treated separately from the related 2.12 Assets held for sale provision and its amount does not exceed the amount of A non-current asset is classified as held for sale, and that provision. measured at the lower of its carrying amount and fair value less costs to sell, if its carrying amount will be recovered A receivable is measured initially at fair value and principally through a sale transaction rather than through subsequently at amortised cost, less any allowance continuing use. Such assets are presented separately from for doubtful debts. A trade receivable is usually due for other assets in the balance sheet and are not depreciated or settlement within thirty days of invoicing. amortised while they are classified as held for sale.

If there is objective evidence at year end that a receivable 2.13 Property, plant and equipment may not be collectable, its carrying amount is reduced by (i) Recognition means of an allowance for doubtful debts and the resulting An item of property, plant and equipment is recognised as loss is recognised in the income statement. Receivables an asset if it has service potential controlled by RailCorp, are monitored during the year and bad debts are written is expected at acquisition to be used for more than one off against the allowance when they are determined to year, has a cost or value that can be measured reliably and be irrecoverable. Any other loss or gain arising when a exceeds the capitalisation threshold. receivable is derecognised is also recognised in the income statement. A component is accounted for separately if it (i) has a useful life materially different from that of the prime asset and See note 6. therefore requires separate replacement during the life of the prime asset, (ii) is material enough to justify separate 2.11 Inventories tracking, and (iii) is capable of having a reliable value Inventories comprise materials and supplies to be consumed attributed to it. A dedicated spare part does not normally in operations and construction works in progress for have a useful life of its own. customers. They are measured at the lower of cost and net realisable value. Dedicated spares purchased specifically for a particular asset, or class of assets, and which would become The cost of inventories comprises all costs of purchase, redundant if that asset or class were retired or use of that costs of conversion and other costs incurred in bringing asset or class were discontinued, are considered to form them to their present location and condition. This includes part of the historical cost of that asset or class. material, labour and attributable fixed and variable overhead costs. Expenditure on the acquisition, replacement or enhancement of property, plant and equipment is capitalised, provided The cost of inventories of items that are not ordinarily it exceeds the capitalisation threshold or qualifies for interchangeable and goods or services produced and recognition as a capital spare. segregated for specific projects is assigned by using specific identification of their individual costs. The cost of remaining The capitalisation threshold for a network of property, plant inventories is assigned by using the weighted average and equipment items or for an individual (non-networked) cost formula. Cost formulae are applied consistently to all item (other than a capital spare) is $5000. A capital spare inventories having a similar nature and use to the entity. is only capitalised if it is part of a pool of rotable spares,

56 Annual Report 2005-06 Rail Corporation New South Wales primarily held for the overhaul of the asset to which it relates, Revaluation Reserve for that class and a net revaluation and signiﬁcant enough to warrant being individually tracked. decrease is recognised in the income statement, except Expenditure below the capitalisation threshold or not that to the extent it reverses a previous increase or decrease qualifying for recognition as a capital spare is charged to the for the same class, it is debited to the Asset Revaluation income statement. Reserve or recognised in the income statement respectively.

An item of property, plant and equipment in the course of (iii) Depreciation construction is classified as capital work in progress. Each item of property, plant and equipment (except land) is depreciated on a straight-line basis over its estimated useful An item leased to a lessee under an operating leases life commencing when the item is available for use. A capital continues to be recognised as property, plant and spare is depreciated over the useful life of the asset or class equipment and to be classified according to the nature of of assets to which it relates. the asset. Each part of an item of property, plant and equipment with a (ii) Measurement cost that is significant in relation to the total cost of the item An item of property, plant and equipment purchased or is depreciated separately. constructed is initially measured at its cost, which is its fair value on acquisition. This includes the purchase price and The depreciation charge for each period is recognised as any costs directly attributable to bringing it to the location an expense unless it is included in the carrying amount of and condition necessary for it to be capable of operating as another asset. intended. An item of property, plant and equipment acquired at no cost, or for a nominal cost, is initially measured at its In determining an asset’s useful life consideration is given fair value. to its expected usage, its expected wear and tear, technical or commercial obsolescence; and legal or similar limits on Property, plant and equipment is revalued, at least once its use. every five years, to fair value having regard to its highest and best use. As existing natural, legal, financial or socio-political The expected useful lives of items of property, plant and restrictions on asset use or disposal generally prevent any equipment are as follows: alternative use being feasible within the next five years, highest and best use is taken to be existing use. Fair value is Years an asset’s market price or, if such a price is not observable or estimable from market evidence, its replacement cost, Stations and buildings 33 - 200 being the written-down cost of an optimised modern Track 8 - 63 equivalent asset. Turnouts 2 - 40

An impairment loss is unlikely to arise on any item of Sidings 20 property, plant and equipment because the carrying amount Bridges and tunnels 1 - 100 (usually depreciated replacement cost) is unlikely to ever exceed the recoverable amount. Electrical overhead wiring and structures 2 - 52 Substations 2 - 50 If an item of property, plant and equipment is revalued, Signalling equipment 1 - 32 the entire class to which it belongs is revalued. Fences 2 - 50 Any accumulated depreciation at the date of a revaluation Rollingstock 20 - 35 is restated proportionately with the change in the gross carrying amount of the related asset so that the carrying Plant and machinery 2 - 30 amount of the asset after revaluation equals its revalued amount. Each asset’s useful life, residual value and depreciation method are reviewed each year and any resulting Upon revaluation of a class of property plant and equipment, adjustments are accounted for as a change in accounting a net revaluation increase is credited directly to the Asset estimate.

Annual Report 2005-06 Rail Corporation New South Wales 57 Notes to the Financial Statements for the year ended 30 June 2006

Note 2 Summary of accounting policies (continued) Due to the absence of active markets for intangible assets, (iv) Derecognition they are not subsequently revalued but continue to be carried An item of property, plant and equipment is derecognised at cost less any accumulated amortisation. either on disposal or when its service potential ceases and it is An impairment loss is unlikely to arise on any intangible asset not expected to have any disposal value. because the carrying amount (usually amortised cost) is unlikely to ever exceed the recoverable amount. On derecognition of an item of property, plant and equipment, any gain or loss or any related compensation receivable is (iii) Amortisation recognised in the income statement. Any revaluation increase Each intangible asset is amortised on a straight-line basis over remaining in the Asset Revaluation Reserve in respect of a its estimated useful life commencing when the item is available derecognised asset is transferred to retained earnings. for use. Useful lives are all ﬁnite. Residual values are assumed to be zero, due to the absence of active markets for disposing See note 9. of the assets.

2.14 Intangible assets In determining an asset’s useful life, consideration is given to its (i) Recognition expected usage; technical, technological, commercial or other An identiﬁable, non-monetary asset without physical types of obsolescence; legal or similar limits on its use; and substance (such as computer software that is not integral to whether its life is dependent on the useful life of other assets. the related hardware) is recognised as an intangible asset if it has service potential controlled by RailCorp, is expected The expected useful life of an item of software ranges between at acquisition to be used for more than one year, and has a two and four years. cost or value that (i) can be measured reliably, (ii) exceeds the capitalisation threshold of $5000 and (iii) has not previously Each intangible asset’s useful life and amortisation method been expensed. are reviewed each year and any resulting adjustments are The service potential is assessed using reasonable and accounted for as a change in accounting estimate. supportable assumptions relating to the estimated conditions likely to exist over the useful life of the asset. The amortisation charge for each year is recognised in the income statement as depreciation and amortisation expense An intangible asset arising from development (or from unless it is included in the carrying amount of another asset. the development phase of an internal project) is only recognised if it is likely to be completed and actually used (iv) Derecognition and the development expenditure can be measured reliably. An intangible asset is derecognised either on disposal or Expenditure on research (or on the research phase of an when its service potential ceases and it is not expected to internal project) is not recognised as an intangible asset. have any disposal value. On derecognition, any gain or loss is recognised in the income statement. An intangible asset in the course of development is classiﬁed as intangible capital work in progress. See note 10.

(ii) Measurement 2.15 Service concession arrangements An intangible asset that is purchased or internally-developed is Airport Link Company has a concession to build and operate initially measured at its cost. This includes the purchase price four stations on the Airport Line until 2030. Under the and any costs directly attributable to preparing the asset for its concession arrangement, RailCorp is to provide train services intended use. An intangible asset acquired at no cost, or for to the stations. RailCorp has an option, exercisable in 2030, to a nominal cost, because it is transferred by the government take over the four stations. is initially measured at its fair value, which is based on its amortised cost as recognised by the transferor. After initial This right to receive the four stations is accounted for as recognition, such software is accounted for under the cost a premium on the ground lease of the station premises, model. which is a non-cancellable operating lease. The premium is recognised as rent revenue and a non-current asset (earned portion of right to receive Airport Line stations). It is measured as the estimated written down replacement cost of the

58 Annual Report 2005-06 Rail Corporation New South Wales stations in 2030 and the value of the emerging asset 2.17 Borrowings is calculated by use of an annuity formula whereby the A borrowing is recognised when a present obligation ultimate value of the right to receive the property is treated arises under a debt instrument. It is classified as a current as the compound value of an annuity that accumulates as liability if settlement is due within twelve months after the a series of equal annual receipts together with a notional reporting date. Otherwise it is classified as non-current. It is compound interest thereon. The discount rate used is the derecognised when the obligation expires or is discharged, NSW Government bond rate applicable to the purchaser at cancelled or substituted. the commencement of the concession period — in this case A borrowing is initially measured at its fair value and 7%. The present value of the written down replacement subsequently measured at amortised cost, being its face cost of the stations in 2030 is allocated over the term of the value less unamortised discount or plus unamortised lease on the basis of a formula provided by NSW Treasury premium. which calculates the annual annuity sum. The formula for this calculation was changed by NSW Treasury Direction Discount or premium is amortised over the term of the in 2005/06 and the effect of the revised formula was to borrowing on a straight-line basis and recognised as a loss decrease the accumulated value of the emerging asset as at or gain in the income statement. Any difference between the 30 June 2006 from $15.63 million to $12.93 million. carrying amount and the consideration paid on repayment or transfer of a borrowing is also recognised as a gain See note 11, Other Assets for the cumulative value as at 30 or loss. June 2006. See note 13. In October 2005 RailCorp and the Airport Link Company (ALC) entered into a Restated Stations Agreement as part of 2.18 Provisions the overall restructuring of the ALC operations and related (i) Provisions generally debt. The revised agreement included amended terms Provisions are made for liabilities of uncertain amount in respect of various matters including revenue sharing, or uncertain timing of settlement, eg employee benefits, fee arrangements and RailCorp’s various performance workers’ compensation claims, public liability claims, obligations. Additionally, ALC in consideration of the legal claims, Airport Line asset replacement, quarry site amounts payable under the Settlement Deed released restoration, buildings remediation and ballast disposal. RailCorp from all claims and actions in connection with the disputes under the Original Stations Agreement. A provision is recognised when (a) there is a likely present legal or constructive obligation as a result of a past event; 2.16 Payables (b) it is probable that an outflow of resources embodying A payable is recognised on the balance sheet when a economic benefits will be required to settle the obligation; present obligation arises under a contract. It is derecognised and (c) a reliable estimate can be made of the amount of the when the obligation expires or is discharged, cancelled or obligation. substituted. The amount recognised is the best estimate of the A payable is measured at amortised cost. expenditure required to settle the likely present obligation Any gain or loss arising when a payable is settled or as at reporting date, taking into account the risks and transferred is recognised in the income statement. uncertainties that surround the events and circumstances that affect the provision. Where the effect of the time value Trade payables are unsecured and, unless otherwise agreed of money is material, a provision is measured using the with the creditor, are due for settlement by the end of the present value of the expenditures expected to be required month following the month in which the invoice is received. to settle the obligation and using a discount rate that reflects current market assessments of the time value of money and See note 12. the risks specific to the liability.

Each provision is reviewed as at each reporting date and adjusted to reﬂect the current best estimate. If it is no longer probable that a settlement will be required, the provision is reversed. A provision is only used for its intended purpose.

Annual Report 2005-06 Rail Corporation New South Wales 59 Notes to the Financial Statements for the year ended 30 June 2006

Note 2 Summary of accounting policies (continued) The actuarial assessment of superannuation and long (ii) Employee benefits service leave provisions uses the Projected Unit Credit Employee benefit provisions represent the expected Method and reflects estimated future salary increases and amounts payable in the future in respect of unused the benefits set out in the terms of the plan. The liabilities entitlements accumulated as at the reporting date. are discounted using the market yield rate on government bonds of similar maturity to those obligations. Actuarial Superannuation, long service leave, annual leave, and assumptions are unbiased and mutually compatible and award leave liabilities are recognised as provisions when the financial assumptions are based on market expectations for obligations arise, which is usually through the rendering of the period over which the obligations are to be settled. service by employees. Expenditure creating such provisions is either expensed or capitalised, depending on its nature. An asset relating to one superannuation plan is not offset Severance liabilities are recognised as a provision (and against a liability relating to another plan because there is no an expense) when a voluntary redundancy agreement is legally enforceable right to do so. reached or when there is a demonstrable commitment to the termination of employees’ services. See notes 11 and 14.

Provisions are not recognised for employee benefits that 2.19 Equity adjustments due to industry restructuring have already been settled (eg payments to First State A transfer of assets (or liabilities) from (or to) another NSW Super, a fully funded superannuation scheme); that do not public sector entity as a result of a Ministerial order to give accumulate (eg allowances, non-monetary benefits, parental effect to industry restructuring is treated as a contribution leave), that are unlikely to be settled beyond the current by (or distribution to) the Government and recognised as a year’s entitlement (eg sick leave), or that have little or no direct adjustment to contributed equity. marginal cost (eg post-employment travel passes). See note 15. Costs associated with, but that are not, employee benefits (such as payroll tax) are recognised separately. 2.20 Significant accounting judgements, estimates and assumptions Superannuation and long service leave provisions are In the application of AIFRS, management is required to actuarially assessed prior to each reporting date and are make judgements, estimates and assumptions about measured at the present value of the estimated future carrying values of assets and liabilities that are not readily payments. All other employee benefit provisions (ie for apparent from other sources. The estimates and associated benefits falling due within twelve months after reporting date) assumptions are based on historical experience and are assessed by management and are measured at the various factors that are believed to be reasonable under undiscounted amount of the estimated future payments. the circumstances, the results of which form the basis of making the judgements. Actual results may differ from The amount recognised for the superannuation provision these estimates. The estimates and underlying assumptions is the net total of the present value of the defined benefit are reviewed on an ongoing basis. Revision to accounting obligation at the reporting date, minus the fair value at that estimates are recognised in the period in which the date of any plan assets out of which the obligations are to estimates are revised if the revision affects only that period, be settled directly. or in the period of the revision and future periods if the revision affects both current and future period. The amount recognised in the income statement (or capitalised) for superannuation and long service leave is the net total of current service cost, interest cost, the expected return on any plan assets, and actuarial gains and losses. Actuarial gains or losses are recognised as income or expense in the year they occur.

60 Annual Report 2005-06 Rail Corporation New South Wales Note 3 Capital and Other Government Contributions

2005-06 2004-05 Note $000 $000 Capital grants from NSW Government

Funding for capital works 466 517 422 147

Transfer of assets from Ministry of Transport 5 357 345

Total capital grants 471 874 422 492

Operating subsidies from NSW Government

Training schemes 955 1 388

Total NSW Government operating subsidies 955 1 388

Operating subsidies from Commonwealth Government

Training schemes 1 341 942

Total Commonwealth Government operating subsidies 1 341 942

Total Government contributions 474 170 424 822

Note 4 Expenses

2005-06 2004-05 Note $000 $000 4.1 Defined benefit superannuation plan expense (within other employee benefits expense) Current service cost 22 898 8 480

Interest cost 51 833 20 158

Expected return on plan assets (65 629) (25 245)

Actuarial gains and losses (98 992) 60 383

Total deﬁned beneﬁt superannuation expense (89 890) 63 776

4.2 Deﬁned contribution superannuation plan expense (within other employee beneﬁts expense) Contributions to First State Super and other schemes 41 141 30 763

Annual Report 2005-06 Rail Corporation New South Wales 61 Notes to the Financial Statements for the year ended 30 June 2006

Note 4 Expenses (continued)

2005-06 2004-05 Note $000 $000 4.3 Contract and general expenses The following items are included within contract and general expenses in the income statement: Subcontractors 193 123 204 382

Materials 141 372 107 778

Inter — entity charges 131 384 480 686

External maintenance costs 108 879 109 887

Plant and equipment hire 69 291 50 240

Commercial compensation – Airport Line Company Ltd 18.3 31 733 -

Bulk electricity 43 081 35 875

Security costs 22 760 18 460

Insurance costs 21 117 15 964

Traction motor fuel costs 15 616 13 593

Telecommunications expenses 15 585 19 377

Asbestos rectiﬁcation 4 120 -

Consultants 1 970 1 888

Doubtful debts 621 1 283

Audit fees for auditing 610 595

Non executive Board Members Emoluments 421 515

Bad debts 298 -

Finance costs 2 324 251

Other 88 670 73 533

Total Contract and General Expenses 892 975 1 134 307

4.4 Maintenance expenses Included in total expenses are maintenance expenses consisting of: Labour 235 366 171 633

Contracted and non labour expenditure 395 085 355 327

630 451 526 960

In addition to the above, a further $130.8 million of major periodic maintenance was capitalised during the year ended 30 June 2006 (2004-05: $81.5 million).

62 Annual Report 2005-06 Rail Corporation New South Wales Note 5 Cash and Cash Equivalents

30.06.2006 30.06.2005 Note $000 $000 5.1 Cash and cash equivalents

Cash at bank 1 952 2 026

Cash in hand 5 655 6 031

Cash deposits with NSW Treasury Corporation 328 378 266 519

Total cash and cash equivalents 335 985 274 576

5.2 Reconciliation of surplus for the year with net cash from operating activities Surplus for the year 243 155 20 275

Cash capital grants (466 517) (422 147)

Non-cash capital grants (5 357) (345)

Loss on asset disposals and write off of retired assets 17 139 20 740

Airport line lease premium (1 181) (3 700)

Prepaid lease rental (1 716) (1 716)

Capital WIP expensed - 21 185

Depreciation and amortisation 458 491 431 356

Doubtful debts expense 920 1 283

Amortisation of borrowings premium (173) -

Finance costs 1 360 251

Net movements in assets and liabilities applicable to operating activities: (Increase)/decrease in receivables 15 521 (82 981)

(Increase)/decrease in inventories (5 014) 1 623

(Increase)/decrease in other assets (68 839) (12 078)

Increase/(decrease) in payables & provisions (62 053) 298 535

Net cash from operating activities 125 736 272 281

Annual Report 2005-06 Rail Corporation New South Wales 63 Notes to the Financial Statements for the year ended 30 June 2006

Note 5 Cash and Cash Equivalents (continued)

30.06.2006 30.06.2005 Note $000 $000 5.3 Credit standby arrangements and loan facilities The credit standby arrangements and unused amounts available on each are: Tape negotiation authority (Limit $70m) 70 000 160 000

Westpac Visa Purchasing Card (Limit $17.195m) - -

Bank guarantee – TCorp (Limit $30.472m) - 42 827

Come and Go facility — TCorp 80 000 80 000

Total unused credit limits 150 000 282 827

An unused NSW Treasury Corporation “Come and Go” loan facility of $80m [2005: $80m] is in place and will remain available until June 2007.

5.4 Non-cash investing activities During 2005-06 the Minister for Transport transferred assets and liabilities from Rail Infrastructure Corporation, State Rail Authority and Transport Infrastructure Development Corporation to RailCorp. The net transfer represents a non-cash contribution of $171.0m [2004-05: $357.161m] by the Government. See note 15.3.

Note 6 Receivables

30.6.2006 30.6.2005 Note $000 $000 6.1 Analysis of receivables

Current receivables

Trade and other debtors* 99 833 164 005

Prepayments 5 722 8 081

105 555 172 086

Less allowance for doubtful debts 2 279 1 642

Total receivables 103 276 170 444 * Includes $1.84m [2005: $52.732m] receivable from Rail Infrastructure Corporation and State Rail Authority.

6.2 Minimum lease rentals receivable under non-cancellable operating leases Not later than 1 year 26 058 21 455

Later than 1 year and not later than 5 years 56 739 49 609

Later than 5 years 148 424 203 149

Total non-cancellable lease rentals receivable 231 221 274 213

64 Annual Report 2005-06 Rail Corporation New South Wales Note 7 Inventories

30.6.2006 30.6.2005 Note $000 $000 Current inventories

Materials and supplies, at cost 26 013 20 068

Work in progress 1 288 1 107

Total current inventories 27 301 21 175

Non-current inventories

Materials and supplies, at cost 19 655 19 155

Materials and supplies, at net realisable value 99 99

Total non-current inventories 19 754 19 254

Total inventories 47 055 40 429

Note 8 Assets Held for Sale

Property at Cook’s River goods yard was sold during 2005-06 due to its being surplus to requirements. The gain of $1.562 million on the sale is included in the Income Statement under loss on asset disposals and write off of retired assets.

Annual Report 2005-06 Rail Corporation New South Wales 65 Notes to the Financial Statements for the year ended 30 June 2006

Note 9 Property, Plant and Equipment

30.6.2006 30.6.2005 Note $000 $000 9.1 Classes

Land

Gross amount 2 916 144 2 876 974

Buildings

Gross amount 2 364 853 2 115 024

Less accumulated depreciation 66 409 39 193

Total buildings 2 298 444 2 075 831

Rollingstock

Gross amount 2 935 094 2 911 275

Less accumulated depreciation 448 902 267 090

Total rollingstock 2 486 192 2 644 185

Plant and machinery

Gross amount 332 754 302 521

Less accumulated depreciation 104 008 58 414

Total plant and machinery 228 746 244 107

Trackwork and infrastructure

Gross amount 3 696 590 3 358 312

Less accumulated depreciation 431 235 246 108

Total trackwork and infrastructure 3 265 355 3 112 204

Capital works in progress

Trackwork and infrastructure work in progress 307 131 315 941

Other work in progress 406 439 256 908

Total capital works in progress 713 570 572 849

Total property, plant and equipment * 11 908 451 11 526 150

* Includes quarry assets of $9.552 m (2005: $6.832 m).

66 Annual Report 2005-06 Rail Corporation New South Wales Note 9 Property, Plant and Equipment (continued)

Land Buildings Rollingstock Plant and Trackwork & Capital works Total machinery infrastructure in progress $000 $000 $000 $000 $000 $000 $000 9.2 Asset class movements

2005-06

Carrying amount 2 876 974 2 075 831 2 644 185 244 107 3 112 204 572 849 11 526 150 at start of year Additions 1 959 61 113 25 334 38 061 321 324 142 141 589 932

Disposals/write-offs (277) (551) (1 064) (2 166) (12 498) (2 502) (19 058)

Transfers from TIDC* - 192 224 - - - - 192 224

Transfers from RIC 34 788 (2 610) (25) (1 108) 32 824 (6) 63 863 or StateRail Depreciation expense - (27 946) (182 238) (46 625) (188 904) - (445 713)

Other movements 2 700 383 - (3 523) 405 1 088 1 053

Carrying amount 2 916 144 2 298 444 2 486 192 228 746 3 265 355 713 570 11 908 451 at end of year

2004-05

Gross carrying 2 730 794 1 938 169 2 732 221 172 531 3 236 931 353 685 11 164 331 amount at 01.07.04 Less accumulated - 11 067 87 165 14 052 80 190 - 192 474 depreciation Carrying amount 2 730 794 1 927 102 2 645 056 158 479 3 156 741 353 685 10 971 857 at start of year Additions 38 37 317 138 982 73 526 145 571 126 832 522 266

Disposals/write-offs (145) (283) - (2 606) (19 276) - (22 310)

Transfers from RIC 179 838 138 982 36 964 62 745 (2 282) 116 433 532 680 or StateRail Depreciation expense - (27 281) (179 850) (45 004) (169 609) - (421 744)

Other movements (476) (6) 3 033 (3 033) 1 059 (24 101) (23 524)

Classify to assets held (33 075) - - - - - (33 075) for sale Carrying amount 2 876 974 2 075 831 2 644 185 244 107 3 112 204 572 849 11 526 150 at end of year

* TIDC Transit Infrastructure Development Corporation

9.3 Rollingstock leasing arrangements Some rollingstock is subject to a leasing arrangement, involving a series of lease, prepayment and deposit transactions. The arrangement is accounted for as a single linked transaction in accordance with its economic substance. The arrangement (i) does not restrict RailCorp’s use of the rollingstock in normal operations, (ii) has a term of between 18 and 36 years, and (iii) includes options allowing RailCorp to purchase the rollingstock on certain speciﬁed future dates. See note 2.5(iii).

Annual Report 2005-06 Rail Corporation New South Wales 67 Notes to the Financial Statements for the year ended 30 June 2006

Note 10 Intangible Assets

30.6.2006 30.6.2005 Note $000 $000 10.1 Class

Software

Gross carrying amount 65 950 47 176

Less accumulated amortisation 23 907 13 306

Net carrying amount of software 42 043 33 870

Software works in progress 15 256 23 420

Total intangible assets 57 299 57 290

Software Works in progress Total

$000 $000 $000

10.2 Movements during the year

2005-06

Carrying amount at start of year 33 870 23 420 57 290

Additions 23 839 (8 164) 15 675

Disposals/write-offs (2 753) - (2 753)

Amortisation expense (12 778) - (12 778)

Other movements (135) - (135)

Carrying amount at end of year 42 043 15 256 57 299

2004-05

Gross carrying amount at 1 July 2004 32 723 8 776 41 499

Less accumulated amortisation 4 159 - 4 159

Carrying amount at start of year 28 564 8 776 37 340

Additions 5 999 14 644 20 643

Transfers from RIC 9 561 - 9 561

Disposals/write-offs (642) - (642)

Amortisation expense (9 612) - (9 612)

Carrying amount at end of year 33 870 23 420 57 290

68 Annual Report 2005-06 Rail Corporation New South Wales Note 11 Other Assets

30.6.2006 30.6.2005 Note $000 $000 Earned portion of right to receive Airport Line stations 2.15 12 931 11 750

Net superannuation asset 14.2 79 803 10 964

Total other assets 92 734 22 714

Note 12 Payables

30.6.2006 30.6.2005 Note $000 $000 Current payables

Trade payables 55 334 42 136

Capital works accruals 101 577 69 300

Accrued salaries and wages 45 540 77 116

Other payables and accruals* 188 054 276 191

Deferred revenue – long term leases of land 1 716 1 716

Total current payables 392 221 466 459

Non-current payables

Accrued salaries and wages oncosts 1 277 1 041

Deferred revenue – long term leases of land 58 988 60 704

Total non-current payables 60 265 61 745

Total payables 452 486 528 204

* Includes $12.611m [2005: $99.251m] payable to Rail Infrastructure Corporation and State Rail Authority.

Annual Report 2005-06 Rail Corporation New South Wales 69 Notes to the Financial Statements for the year ended 30 June 2006

Note 13 Borrowings

Note 30.6.2006 30.6.2005 $000 $000 13.1 Maturity proﬁle

Not later than 1 year 5 785 -

Later than 1 year and not later than 2 years - -

Later than 2 years and not later than 5 years 10 311 -

Later than 5 years - -

Total borrowings 16 096 -

13.2 Fair value of borrowings at year end

Current borrowings 5 843 -

Non-current borrowings 10 560 -

Fair value of total borrowings 16 403 -

70 Annual Report 2005-06 Rail Corporation New South Wales Note 14 Provisions

30.6.2006 30.6.2005 Note $000 $000 14.1 Provisions

Current provisions

Annual leave (see note (a) below) 92 629 72 426

Long service leave (see note (a) below) 14.3 172 216 127 517

Pay in lieu of certain holidays worked (see note (a) below). 12 042 8 853

Total current employee beneﬁts 276 887 208 796

Workers’ compensation 14.5 6 277 3 380

Public liability claims 14.6 899 430

Legal claims 14.7 1 016 1 016

Airport Line asset replacement 14.8 16 490 16 490

Buildings Remediation Provision 14.10 4 120 -

Ballast Disposal 14.11 1 207 -

Total Current Provisions 306 896 230 112

Non-current provisions

Superannuation 14.2 1 675 31 677

Long service leave (see note (a) below) 14.3 11 978 9 404

Total non-current employee beneﬁts 13 653 41 081

Workers’ compensation 14.5 35 438 20 047

Public liability claims 14.6 437 70 Quarry restoration 14.9 4 403 4 228 Total non current provisions 53 931 65 426

Annual Report 2005-06 Rail Corporation New South Wales 71 Notes to the Financial Statements for the year ended 30 June 2006

Note 14 Provisions (continued)

30.6.2006 30.6.2005 Note $000 $000 Total provisions

Superannuation 14.2 1 675 31 677

Annual leave 92 629 72 426

Long service leave 14.3 184 194 136 921

Pay in lieu of certain holidays worked 12 042 8 853

Total employee beneﬁts 290 540 249 877

Workers’ compensation 14.5 41 715 23 427

Public liability claims 14.6 1 336 500

Legal claims 14.7 1 016 1 016

Airport Line asset replacement 14.8 16 490 16 490

Quarry restoration 14.9 4 403 4 228

Buildings Remediation Provision 14.10 4 120 -

Ballast Disposal 14.11 1 207 -

Total provisions 360 827 295 538

(a) In accordance with AIFRS accounting standards all annual leave and unconditional long service leave is classiﬁed as a current liability in the Balance Sheet because RailCorp does not have an unconditional right to defer settlement. Only conditional long service leave is shown as a non current liability. However, on the basis of past payment experience, leave is expected to be settled in the following pattern:

Within 12 months Later than 12 months Total $000 $000 $000 Long Service Leave 13 484 170 710 184 194

Annual Leave 54 316 38 313 92 629

Pay in lieu of certain holidays worked 12 042 - 12 042

79 842 209 023 288 865

72 Annual Report 2005-06 Rail Corporation New South Wales 14.2 Superannuation Employer contributions are made to three defined-benefit superannuation schemes administered by the SAS Trustee Corporation: the State Authorities Superannuation Scheme (SASS), the State Authorities Non-Contributory Superannuation Scheme (SANCSS) and the State Superannuation Scheme (SSS), which together form the Pooled Fund. Each scheme is closed to new members and its investments are held in trust by the Pooled Fund. At least a component of the final benefit is derived from a multiple of member salary and years of membership.

All fund assets are invested by SAS Trustee Corporation at arm’s length through independent fund managers.

An underfunded scheme is recognised as a provision and an overfunded scheme is recognised as an asset. Details of both provisions and assets are given below.

The recognised liability or asset at reporting date comprises:

SASS SANCSS SSS Total $000 $000 $000 $000 30.6.2006

Underfunded schemes Present value of deﬁned beneﬁt obligations - - 16 590 16 590 Fair value of plan assets (investment reserve) - - (14 915) (14 915) Net liability recognised in balance sheet - - 1 675 1 675

Overfunded schemes Present value of deﬁned beneﬁt obligations 1 156 538 108 147 - 1 264 685 Fair value of plan assets (investment reserve) (1 209 477) (135 011) - (1 344 488) Net asset recognised in balance sheet (52 939) (26 864) - (79 803) Aggregate liability/(asset) for all schemes (52 939) (26 864) 1 675 (78 128)

30.6.2005

Underfunded schemes Present value of deﬁned beneﬁt obligations 812 571 - 8 527 821 098 Fair value of plan assets (investment reserve) (781 582) - (7 839) (789 421) Net liability recognised in balance sheet 30 989 - 688 31 677

Overfunded schemes Present value of deﬁned beneﬁt obligations - 79 321 - 79 321 Fair value of plan assets (investment reserve) - (90 285) - (90 285) Net asset recognised in balance sheet - (10 964) - (10 964) Aggregate liability/(asset) for all schemes 30 989 (10 964) 688 20 713

Annual Report 2005-06 Rail Corporation New South Wales 73 Notes to the Financial Statements for the year ended 30 June 2006

Note 14 Provisions (continued)

14.2 Superannuation (continued) The movement in the recognised liability or asset during the year was as follows: SASS SANCSS SSS Total $000 $000 $000 $000 30.6.2006

Underfunded schemes

Net liability at start of year - - 688 688

Net expense recognised in income statement - - 1 345 1 345

Contributions - - (358) (358)

Net liability at end of year - - 1 675 1 675

Overfunded schemes

Net liability/(asset) at start of year 30 989 (10 964) - 20 025

Net expense recognised in income statement (56 081) (9 752) - (65 833)

Contributions (27 847) (6 148) - (33 995)

Net asset recognised in balance sheet (52 939) (26 864) - (79 803)

Aggregate liability/(asset) for all schemes (52 939) (26 864) 1 675 (78 128)

30.6.2005

Underfunded schemes

Net liability/(asset) at start of year (20 763) - - (20 763)

Net expense recognised in income statement 65 776 - 754 66 530

Contributions (14 024) - (66) (14 090)

Net liability at end of year 30 989 - 688 31 677

Overfunded schemes

Net (asset) at start of year - (4 962) - (4 962)

Net expense recognised in income statement - (2 755) - (2 755)

Contributions - (3 247) - (3 247)

Net (asset) recognised in balance sheet - (10 964) - (10 964)

Aggregate liability/(asset) for all schemes 30 989 (10 964) 688 20 713

74 Annual Report 2005-06 Rail Corporation New South Wales The actual return on plan assets during the year was as follows: SASS SANCSS SSS Total $000 $000 $000 $000 2005-06 127 320 15 619 1 455 144 394

2004-05 48 899 6 208 286 55 393

The deﬁned beneﬁt obligations for each scheme as at reporting date were assessed by a consulting actuary, William Mercer Pty Limited, using membership databases as at 30 April 2006. The actuary used a discount rate of 5.9% (2005: 5.2%) and assumed a return on plan assets of 7.6% (2005: 7.3%) per annum, a salary growth rate of 4% p.a to 2008 and 3.5% thereafter (2005: 4%) per annum, and a Consumer Price Index increase of 2.5% (2005: 2.5%) per annum.

The ﬁnancial position of the schemes at reporting date, in accordance with AAS25, Financial Reporting by Superannuation Plans, is as follows: SASS SANCSS SSS Total $000 $000 $000 $000 30.6.2006

Accrued beneﬁts 1 104 003 101 673 14 034 1 219 710

Net market value of Fund assets (1 209 477) (135 011) (14 915) (1 359 403)

Net surplus (105 474) (33 338) (881) (139 693)

30.6.2005

Accrued beneﬁts 732 327 67 519 6 405 806 251

Net market value of Fund assets (781 582) (90 285) (7 839) (879 706)

Net surplus (49 255) (22 766) (1 434) (73 455)

The recommended employer contribution rates for each scheme are 1.9 times member contributions (for SASS), 2.5% of member salary (for SANCSS) and 1.6 times member contributions (for SSS). The method used to determine the employer contribution recommendations at the last actuarial review was the aggregate funding method. The method adopted affects the timing of the cost to the employer. Under the aggregate funding method, the employer contribution rate is determined so that sufﬁcient assets will be available to meet beneﬁt payments to existing members, taking into account the current value of assets and future contributions.

Where a deficiency exists in a superannuation fund, the employer is responsible for any difference between the employer’s share of the plan assets and the defined benefit obligation. Where a surplus exists, the employer may benefit from a reduced contribution rate in future, depending on the advice of the Fund’s actuary.

The economic assumptions adopted for the actuarial review of the funds as at 30 June 2006 were: Weighted Average Assumptions Expected rate of return on fund assets : 7.3% (2005: 7.0%) Expected salary increase rate: 4.0% (2005: 4.0% ) Expected rate of CPI increase : 2.5%(2005: 2.5%)

Annual Report 2005-06 Rail Corporation New South Wales 75 Notes to the Financial Statements for the year ended 30 June 2006

Note 14 Provisions (continued)

14.3 Long service leave Long service leave is provided to employees after ten years’ service.

The liability for long service leave was assessed in May 2006 by a consulting actuary, Mr G. Holley FIAA of Mercer Human Resource Consulting. The actuary assumed an interest rate of 5.6% (2005: 5.1%) per annum and a salary growth rate of 4% (2005: 4%) per annum.

14.4 Movements in provisions (other than employee beneﬁt provisions)

Workers’ Public Legal Airport Quarry Buildings Ballast Compensation liability claims Line asset restoration Remediation Disposal $000 claims $000 replacement $000 $000 $000 $000 $000

2005-06

Carrying amount at 23 427 500 1 016 16 490 4 228 - - start of year Increases in provision 26 467 1 161 - - 175 4 120 1 207

Discounting adjustment 1 360 ------

Subtotal 51 254 1 661 1 016 16 490 4 403 4 120 1 207

Payment of claims 9 158 325 - - - - -

Unused amounts reversed 381 ------

Carrying amount at 41 715 1 336 1 016 16 490 4 403 4 120 1 207 end of year

2004-05

Carrying amount at 4 331 996 70 - - - - start of year Transfers from RIC - - - 15 175 3 954 - -

Increases in provision 24 738 - 1 068 1 315 274 - -

Discounting adjustment 251 ------

Subtotal 29 320 996 1 138 16 490 4 228 - -

Payment of claims 6 849 422 122 - - - -

Unused amounts reversed (956) 74 - - - - -

Carrying amount at 23 427 500 1 016 16 490 4 228 - - end of year

76 Annual Report 2005-06 Rail Corporation New South Wales 14.5 Workers’ compensation The liability at year end is the unused portion of the Workers’ compensation insurance is in place to cover any contractually-speciﬁed maximum sum to be provided. The claim exceeding $1m and the workers’ compensation quantum and timing of payments are inherently uncertain provision is maintained for smaller claims, for which RailCorp as they are based on unpredictable future claims by the is a licenced self-insurer. maintenance contractor.

The workers’ compensation liability at year end was 14.9 Quarry restoration assessed by McMahon Actuarial Services using a “central” The Quarry Restoration Provision recognises RailCorp’s legal estimate and assuming an interest rate of 5.9% (2005: 5.8%) obligation to restore quarry sites when operations cease. per annum and a future wage inﬂation rate of 4% (2005: 4%) per annum. A superimposed inﬂation rate of nil (2005: 2%) The liability at year end was assessed by management has been allowed for asbestos related claims. The liabilities undertaking site investigations and estimating the cost of are inherently uncertain due to doubts over the existence the necessary restoration work. The liability is inherently and quantum of individual claims and due to time lags uncertain due to the time likely to elapse before the between reporting date and settlement date. restoration is required.

14.6 Public liability claims 14.10 Buildings Remediation Provision The Public Liability Claims Provision recognises claims In response to the identification of asbestos contamination against RailCorp that arise from personal injuries or property in a railway station in March 2006 RailCorp has initiated damage occurring on its premises or involving its assets. a program of hazardous materials surveys to identify the full extent of contamination and remedial action required. Any claim recoverable from RailCorp’s insurer is also During 2005/06 initial surveys of 65 stations were completed recognised as a receivable or disclosed as a contingent on the basis that those stations were involved in a works asset, depending on its probability of settlement. See notes project which necessitated some building works (whereas 6 and 19. undisturbed asbestos does not present a risk). Twelve asbestos contaminated rooms were cleaned and then The liability at year end was assessed by management. reopened. The likely amount to be settled was assessed on the basis of a past experience. The likely timing of settlement was Ongoing investigations and remediation work under an assessed by reviewing individual claims. The liability is Asbestos Management Plan including a full audit of 358 inherently uncertain due to disputes over the existence or stations has been provided under a Building Remediation quantum of individual claims. Provision covering project management costs, establishment of a hotline with specialist operations to answer queries, 14.7 Legal claims incident management and cleanup costs, asset audits, and The Legal Claims Provision recognises claims against health surveillance and management costs. RailCorp arising from prosecutions or fines in relation to legislative or contractual breaches or other matters. Pending the conclusion of the full audit of stations the total future remediation liability cannot accurately be calculated as The liability at year end was assessed by management by at 30 June 2006. reviewing individual claims. The liability is inherently uncertain due to the existence or quantum of individual claims being in 14.11 Ballast Disposal Provision dispute. The Ballast Disposal Provision recognises RailCorp’s legal obligation in relation to the disposal of non-recyclable landfill 14.8 Airport line asset replacement and materials arising from its ballast recycling operations. The Airport Line Asset Replacement Provision recognises RailCorp’s contractual obligation to fund the replacement The liability was assessed at 31 May 2006 by management of major track and tunnel assets on the Airport Line, by the after investigation of stockpiles of the Chullora site. The line’s maintenance contractor during the term of the contract liability is inherently uncertain due to the quantum and timing to 2030. Any unused balance of the provision remaining in of future disposal. 2030 will be shared equally with the maintenance contractor.

Annual Report 2005-06 Rail Corporation New South Wales 77 Notes to the Financial Statements for the year ended 30 June 2006

Note 15 Contributed Equity

15.1 Share capital RailCorp is a statutory State owned corporation having a share capital of $2. The Premier and the Minister for Finance are the voting shareholders and each holds a $1 share.

15.2 Contributed equity 30.6.2006 30.6.2005 Note $000 $000

Contributed equity at start of year 11 360 476 11 003 284

Net assets contributed by Government 15.3 171 000 357 192

Contributed equity at end of year 11 531 476 11 360 476

15.3 Net assets contributed by the Government As part of the restructuring of the NSW rail industry, the Minister for Transport ordered the transfer of the following assets and liabilities from Rail Infrastructure Corporation or State Rail Authority to RailCorp during the year. The net transfers have been treated as equity contributions by the Government and recognised as direct adjustments to contributed equity.

The Parramatta Transport Interchange was also transferred from the Transport Infrastructure Development Corporation upon completion at a value of $192.224 million. Note 30.6.2006 30.6.2005 $000 $000 Assets transferred

Cash and cash equivalents - 31

Receivables 821 1 825

Inventories 1 612 39 832

Property, plant and equipment 256 087 532 680

Other non-current assets - (70 700)

Intangible assets - 9 561

Total assets 258 520 513 229

Liabilities transferred

Payables 3 068 21 744

Provisions 68 183 134 293

Borrowings 16 269 -

Total liabilities 87 520 156 037

Net assets contributed 171 000 357 192

78 Annual Report 2005-06 Rail Corporation New South Wales Note 16 Reserves

The Hedging Reserve recognises the cumulative gains or losses on hedging instruments used for existing cash ﬂow hedges. The movements during the year were: 30.6.2006 30.6.2005 Note $000 $000 Balance at start of year - -

Net losses in cash ﬂow hedges (35) -

Balance at end of year (35) -

Note 17 Retained Earnings

30.6.2006 30.6.2005 Note $000 $000 Accumulated losses at start of year (59 053) (79 328)

Surplus for the year 243 155 20 275

Increase in retained earnings from changes in accounting standards 2 138 -

Retained earnings / (Accumulated losses) at end of year 186 240 (59 053)

Annual Report 2005-06 Rail Corporation New South Wales 79 Notes to the Financial Statements for the year ended 30 June 2006

Note 18 Expenditure Commitments

30.6.2006 30.6.2005 Note $000 $000 18.1 Expenditure commitments

Operating leases

Within 12 months 71 149 34 192

12 months or longer but not longer than 5 years 125 961 99 597

Longer than 5 years 12 014 21 309

Total operating leases 209 124 155 098

Property, plant and equipment (including intangible assets)

Within 12 months 269 598 323 708

12 months or longer but not longer than 5 years 61 223 73 529

Total property, plant and equipment 330 821 397 237

Other (excluding inventories)

Within 12 months 384 660 256 177

12 months or longer but not longer than 5 years 486 348 482 135

Longer than 5 years 31 020 31 345

Total other (excluding inventories) 902 028 769 657

Total

Within 12 months 725 407 614 077

12 months or longer but not longer than 5 years 673 532 655 261

Longer than 5 years 43 034 52 654

Total expenditure commitments 1 441 973 1 321 992

The expenditure commitments include any associated Goods and Services Tax. Related input tax credits of $131.088m (2005: $120.181m) are expected to be recoverable from the Australian Taxation Ofﬁce.

80 Annual Report 2005-06 Rail Corporation New South Wales Note 18 Expenditure Commitments (continued)

30.6.2006 30.6.2005 Note $000 $000 18.2 Minimum lease payments committed under non-cancellable operating leases

Not later than 1 year 61 036 19 203

Later than one year and not later than 5 years 114 774 59 451

Longer than 5 years 12 014 345

Total committed 187 824 78 999

Minimum lease payment commitments include any associated Goods and Services Tax. Related input tax credits of $17.075m (2005: $7.182m) are expected to be recoverable from the Australian Taxation Ofﬁce.

18.3 Restated Stations Agreement Claims made against RailCorp and State Rail Authority by the Airport Link Company Limited (ALC) were settled in October 2005 when RailCorp and ALC entered into a Restated Stations Agreement. That agreement included an initial payment of $31.73 million under a Settlement Deed and a subsequent payment of $3.192 million train fare revenue in full settlement of those claims and disputes which payment was primarily calculated on the basis of a revised revenue sharing agreement. RailCorp has a commitment to pay a Capped Amount on the basis of an agreed proportion of train fares generated by the Airport Line stations business. As at 30 June 2006 the outstanding commitment due to be paid from the Capped Amount is $73.160 million the timing of which is contingent upon revenue earned and, therefore, cannot accurately be predicted.

Annual Report 2005-06 Rail Corporation New South Wales 81 Notes to the Financial Statements for the year ended 30 June 2006

Note 19 Contingent liabilities and contingent assets

30.6.2006 30.6.2005 Note $000 $000 Contingent liabilities

Infrastructure borrowings 1 429 000 1 336 700

Contractual and other claims: Airport Link Company Ltd 18.3 - 105 857

Public liability claims 943 361

Total contingent liabilities 1 429 943 1 442 918

Contingent assets

Infrastructure assets 2 228 419 1 940 300

Contractual and other recoveries 5 830 500

Total contingent assets 2 234 249 1 940 800

Contingent liabilities and contingent assets represent matters that are unconﬁrmed (pending the occurrence or non- occurrence of an uncertain future event), or not reliably measurable or unlikely to be settled. However, their probability of settlement is not remote.

Contractual and other claims against RailCorp arise from contractual matters or from prosecutions. The existence or quantum of each claim is usually in dispute. The amount of $105.857 million as at 30 June 2005 related to an amount in dispute with the Airport Link Company Limited which has since been settled – Note 18.3 refers.

Contractual and other recoveries represent claims made by RailCorp against others in relation to contractual breaches or prosecutions in relation to other matters. The existence or quantum of each claim is usually in dispute.

The Minister for Transport Services vested the Parramatta Rail Link Project land, rights and contractual obligations in the Transport Infrastructure Development Corporation (TIDC) effective 1 January 2004. RailCorp has acquired from TIDC the completed Parramatta Transport Interchange in 2006 and will acquire the Epping to Chatswood railway in 2008. The contingent assets are estimated to be $2,228.419m for the railway. The contingent liabilities (borrowings) for the railway are estimated to be $1,429.000m and are supported by a NSW Government guarantee.

In accordance with section 40 of the Transport Administration (General) Regulation 2005, RailCorp holds an exemption (until December 2006) for land tax in relation to land that is owned & operated primarily for railway purpose. This exemption does not apply to land subject to a lease or licence by RailCorp to another person. Therefore, RailCorp has a contingent liability for land tax on leased properties, the amount of which can not be determined because RailCorp do not currently hold valuations for the relevant leased property. RailCorp are currently liaising with the Valuer General and the Ofﬁce of State Revenue to determine a means of assessment.

82 Annual Report 2005-06 Rail Corporation New South Wales Note 20 Financial instruments

30.6.2006 30.6.2005 Note $000 $000 20.1 Derivative ﬁnancial instruments

Derivative assets

Foreign currency forwards and options 233 -

Commodity swaps 1 945 -

Total derivative assets 2 178 -

Derivative liabilities

Foreign currency forwards and options 74 -

Commodity swaps 1 -

Total derivative liabilities 75 -

Net derivative assets 2 103 -

20.2 Credit risk Receivables, forward foreign exchange contracts, foreign currency option contracts, and commodity swap contracts are exposed to the risk of ﬁnancial loss due to the other party to the contract failing to discharge a ﬁnancial obligation thereunder.

The maximum credit risk exposure in relation to receivables is the carrying amount, less the allowance for doubtful debts, as set out in note 6.

The maximum credit risk in relation to forward foreign exchange contracts, foreign currency option contracts and commodity swap contracts is the fair value of the contracts as recognised in the balance sheet. See note 20.1.

Annual Report 2005-06 Rail Corporation New South Wales 83 Notes to the Financial Statements for the year ended 30 June 2006

Note 20 Financial instruments (continued)

20.3 Interest rate risk Cash and borrowings are exposed to cash flow risk as their associated cash flows may fluctuate due to changes in market interest rates.

The maturity (or, if earlier, contractual repricing) dates and weighted average effective interest rates of ﬁnancial instruments exposed to interest rate risk at year end are:

Average interest rate Principal amount 2006 2005 30.6.2006 30.6.2005 Timing of exposure % % $000 $000

Not later than 1 year

Cash and cash equivalents 5.80 5.7 335 985 274 576

Borrowings* 5.89 - 5 785 -

341 770 274 576

Later than 1 year and not later than 5 years

Borrowings* 6.01 - 10 311 -

10 311 -

Total principal exposed 352 081 274 576

* Borrowings are net of any unamortised discounts or premiums.

84 Annual Report 2005-06 Rail Corporation New South Wales Note 20 Financial instruments (continued)

20.4 Hedging of foreign currency risk Overseas purchase orders for property, plant and equipment are exposed to fluctuations in foreign exchange rates. The currency risk on these firm commitments is hedged using forward foreign exchange contracts or foreign currency option contracts, timed to mature when the purchase orders are due for payment. The cash flows are expected to occur within twelve months. Details of outstanding contacts at year end are:

Weighted average Contract value exchange rate 30.6.2006 30.6.2005 Maturity proﬁles 30.6.2006 30.6.2005 A$000 A$000 Contracts denominated in Euros

Not later than 3 months 0.6067 0.5911 4 328 8 690

Later than 3 months and not later than 12 months 0.5993 0.5791 251 8 942

Total hedged Euro contracts 4 579 17 632

Contracts denominated in US dollars

Not later than 3 months 0.7446 0.6884 2 490 2 903

Later than 3 months and not later than 12 months 0.7348 0.7461 7 324 8 404

Total hedged US dollar contracts 9 814 11 307

Contracts denominated in Japanese yen

Not later than 3 months 83.32 75.44 337 6 323

Later than 3 months and not later than 12 months - 77.51 - 4 103

Total hedged Japanese yen contracts 337 10 426

Contracts denominated in Swiss francs

Not later than 3 months - 0.9619 - 90

Total hedged Swiss franc contracts - 90

Contracts denominated in pounds sterling

Not later than 3 months 0.4039 0.4025 185 1 828

Total hedged pounds sterling contracts 185 1 828

Total hedged purchases 14 915 41 283

At year end these forward and option contracts were net assets of $4.379m (2005: net liabilities of $3.771m), not recognised in the balance sheet.

In the year ended 30 June 2006, there was a loss of $1.194m on initial recognition of the forwards and options on transition to AASB 132 and AASB 139 on 1 July 2005 and a gain of $1.354m from the decrease in their fair value during the year.

Annual Report 2005-06 Rail Corporation New South Wales 85 Notes to the Financial Statements for the year ended 30 June 2006

Note 20 Financial instruments (continued)

20.5 Hedging of commodity price risk Forecast distillate purchases under supply agreements are exposed to ﬂuctuations in commodity prices. The commodity price risk on these highly probable forecast transactions is hedged using commodity swap contracts, timed to mature when the distillate is likely to be purchased. The cash ﬂows are expected to occur within twelve months. Details of outstanding contacts at year end are:

Notional contract value 30.6.2006 30.6.2005 Maturity proﬁles $000 $000 Not later than 1 year 17 354 12 903

Total commodity swap contracts 17 354 12 903

At year end these commodity swap contracts were net assets of $16.025m (2005: $13.687m), not recognised in the balance sheet.

In the year ended 30 June 2006, there was a gain of $3.332m on initial recognition of the swaps on transition to AASB 132 and AASB 139 on 1 July 2005 and a loss of $1.388m from the decrease in their fair value during the year.

20.6 Financial Risk and Management Policy statement Objectives and Policies The RailCorp Board has approved the Treasury Management RailCorp Treasury Management Policy is to ensure that Policy (which is summarised here) covering: risk associated with Treasury management functions are — Foreign currency risk comprehensively managed. — Commodity risk

The primary objective of this policy is to achieve financial — Debt management and interest rate risk management of all financial risks in strict compliance with — Credit risk internal policies and guidelines within the broad framework — Liquidity risk of the NSW Government Treasury Management Policy. — Operational risk including credit risk, market risk, staffing, systems etc.

Treasury instruments approved for the management of ﬁnancial risk are in accordance with the Public Authorities (Financial Arrangements) Act 1987 Section 5 for effecting ﬁnancial adjustments.

86 Annual Report 2005-06 Rail Corporation New South Wales RailCorp’s Treasury unit implements these policies within the Debt Management and Interest Rate Risk following framework: - The debt portfolio is managed through a restructuring facility offered by TCorp. No more than 70% of the portfolio Foreign Exchange Risk can be fixed rate debt or floating rate debt while the The RailCorp Board has approved the RailCorp Treasury modified duration of the long-term debt must be between Management Policy covering all elements of financial risk 2 and 6 points. including Foreign Exchange Risk. The policy requires 100% hedging of all foreign exchange exposures. Credit Risk Foreign exchange may only be transacted with an Eligible RailCorp has substantial dealings with overseas suppliers Counterparty, which is defined as follows: and is exposed to adverse movements in exchange rates. • Maximum $20m total exposure in an ‘A+’ or better The currency risk must be managed and minimised through Standard and Poor’s rated institution, hedging strategies implemented by the RailCorp Treasury Unit. • Maximum $10m total exposure in an ‘A’ Standard and Poor’s rated institution. A purchase from a supplier may require payment in (or by reference to) a foreign currency. In this instruction, foreign Liquidity Risk currency payment means either: Managed through TCorp’s facilities with surplus funds • A direct payment in a foreign currency or, invested in the overnight cash market, term deposits up to • A payment in Australian dollars, which is derived from six months maturity and the TCorp Hourglass Cash Facility. (directly or implied) a foreign currency exchange rate or Shortfalls in funding are managed through TCorp’s “Come & variation formula. Go Facility”.

The Treasury unit is to be consulted for all contracts that Operational Risk have foreign currency content. Professionally qualified personnel staff Treasury Operations. Treasury systems, policies and procedures are in place to Where a project’s foreign currency risk exposure exceeds ensure risks are adequately managed. an A$150,000 aggregate, the contracts are to be reviewed in advance of signing by the Treasury unit to assess the All day-to-day transactional banking facilities and services treasury risk and formulate strategies to minimise the risk. are provisioned through the contracted bank, Westpac The Treasury unit will confirm a budget rate with project Banking Corporation. managers based on current spot prices and hedging strategies implemented. Officers authorised to undertake the necessary transactions are contained in a Delegations Manual. Counterparty risk is minimised by conducting all foreign exchange transactions with eligible counterparties (defined below under Credit risk).

Commodity Risk Commodity price exposure for diesel fuel is managed through TCorp. The related foreign currency and commodity price exposures are hedged 100% on a rolling 12-month basis.

Note 21 Joint venture

RailCorp has a participating 50% interest in the AK Car Joint Venture which operates an inspection railcar as a jointly controlled asset. The venture commenced on 1 February 2006. The aggregate amount of RailCorp’s assets employed in the joint venture is $878,000 at 30 June 2006 (2005: nil).

Annual Report 2005-06 Rail Corporation New South Wales 87 Notes to the Financial Statements for the year ended 30 June 2006

Note 22 Transition to New Accounting Standards

Australian equivalents to International Financial Reporting Standards (AIFRS) have been applied for the ﬁrst time in the 2005- 06 ﬁnancial report.

The key areas where resulting changes in accounting policies have impacted on the ﬁnancial report are disclosed below. Some of these impacts arise because AIFRS requirements differ from those of the superseded standards (AGAAP). Other impacts arise from options in AIFRS. To ensure consistency at the whole of government level, NSW Treasury has mandated the options that must be applied by NSW public sector agencies. The impacts below reﬂect Treasury’s mandates and policy decisions.

The impact of adopting AIFRS on the total equity and operating result (surplus) as reported under the superseded standards is shown below. There is no impact on cash ﬂows.

Reconciliation of equity

Note 30.6.2005 1.7.2004 $000 $000

Total equity under the superseded standards 11 458 009 11 008 236

Conversion of superannuation asset into a liability A (94 167) (20 145)

Recognition of prepaid leases 2.5 (iv) (62 419) (64 135)

Total equity under AIFRS 11 301 423 10 923 956

Reconciliation of operating result (surplus)

Note 2004-05 $000 Surplus under the superseded standards 92 581

Increase in employee beneﬁts expense A (74 022)

Lease Revenue 2004/05 2.5(iv) 1 716

Surplus under AIFRS 20 275

Note A: AASB 119 Employee Benefits requires defined benefit obligations to be discounted using the government bond rate as at each reporting date rather than the long-term expected rate of return on plan assets. This change increased the amount of the unfunded superannuation liability and employee benefits expense.

The adoption of AIFRS also necessitated reclassifying a number of items on the face of the income statement or balance sheet and making certain changes to disclosures in the ﬁnancial report.

End of Audited Financial Report.

88 Annual Report 2005-06 Rail Corporation New South Wales Statement by Directors

Statement by Directors In relation to the ﬁnancial report for the year ended 30 June 2006

Pursuant to section 41C(1B) of the Public Finance and Audit Act 1983 and clause 11 of the Public Finance and Audit Regulation 2005 and in accordance with a resolution of the Board of RailCorp, we state that:

(a) In our opinion, the accompanying financial report, read in conjunction with the notes thereto, exhibit a true and fair view of the financial position as at 30 June 2006 and of the financial performance of the year ended 30 June 2006 of RailCorp.

(b) The ﬁnancial report has been prepared in accordance with the provisions of the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2005, the Australian Accounting Standards and Treasurer’s directions.

(c) We are not aware, as at the date of this statement, of any circumstances which would render any particulars included in the ﬁnancial report to be misleading or inaccurate.

Signed in accordance with a resolution of the Board.

Ross Bunyon Vince Graham Chairman Chief Executive Ofﬁcer

27 September 2006 27 September 2006

Annual Report 2005-06 Rail Corporation New South Wales 89

Appendices Contents

Appendix 1 Customer Service Commitment . 91 Appendix 17 Funds Granted to non-government agencies ...... 107 Appendix 2 Electronic Service Delivery ...... 93 Appendix 18 Exemptions from the reporting Appendix 3 Research & Development ...... 93 provisions ...... 107

Appendix 4 Environmental Performance ...... 94 Appendix 19 Consultants ...... 108

Appendix 5 Heritage Management ...... 96 Appendix 20 Major works in progress ...... 110

Appendix 6 Waste Reduction and Purchasing Appendix 21 Land values and land disposal . 110 Policy ...... 97 Appendix 22 Human Resources ...... 111 Appendix 7 Government Energy Management Program ...... 97 Appendix 23 Executive Performance and Remuneration ...... 112 Appendix 8 Statement on Business Ethics .... 98 Appendix 24 Equal Employment Opportunity 117 Appendix 9 Employee Code of Conduct ...... 99 Appendix 25 Ethnic Affairs Priority Statement 118 Appendix 10 Board Code of Conduct ...... 100 Appendix 26 Government Action Plan Appendix 11 Meetings of the Board ...... 101 for Women ...... 119

Appendix 12 Internal Audit ...... 102 Appendix 27 Price Determination ...... 119

Appendix 13 Changes in Acts and Subordinate Appendix 28 Overseas Travel ...... 120 Legislation ...... 102 Appendix 29 Investment Management Appendix 14 Freedom of Information ...... 104 Performance ...... 122

Appendix 15 Publications ...... 106 Appendix 30 Cost of producing this report .... 122 Appendix 16 Risk Management and Insurance Activities ...... 107

90 Annual Report 2005-06 Rail Corporation New South Wales Appendices

Appendix 1 Customer Service Commitment CityRail plans to upgrade its train ﬂeet over the next ﬁve years. Orders have been placed for 122 new outer suburban carriages About CityRail and 14 diesel rail cars and will progressively be introduced into CityRail, part of the Rail Corporation New South Wales service from late 2006. (RailCorp), is the principal urban public transport provider in Sydney and the surrounding regions in NSW. It delivers All trains receive regular routine maintenance and major periodic suburban and intercity passenger train services in the Sydney, maintenance and there is a refurbishment program resulting in Hunter Valley, Central Coast, Blue Mountains, Southern train interiors being upgraded at least every six years. Highlands and South Coast areas. Our stations Statistics on rail usage are published on the CityRail website CityRail is aware of customers’ requirements for a clean and - www.cityrail.info - and in RailCorp’s Annual Report. safe environment and aims to: • Clean all attended stations daily; Our staff • Conduct cleaning inspections at unattended stations on a CityRail staff are provided to make sure your journey is safe, regular basis; comfortable and enjoyable. • Maintain bright lighting;

CityRail staff will: • Fix equipment failures promptly and when lifts or escalators • Be safety conscious at all times; are expected to be out of service for a considerable time, provide advice on expected restoration time and alternative • Make appropriate announcements at stations and on trains; arrangements. Our target is to have 98 per cent of lifts • Tell you about delays or alterations to services; and escalators in working order when train services are • Wear a clean and full uniform when on duty at stations or on operating; and trains; and • Ensure toilets at stations are clean and unlocked wherever • Be knowledgable, courteous and helpful. possible. If toilets are closed for security reasons, staff will unlock them on request. Service reliability CityRail is committed to providing safe, reliable and punctual During 2006/07 station upgrading will begin at Belmore, Bowral, train services. Carlton, Eastwood, Seven Hills, Turramurra and Werrington Our targets are: stations. • At least 99 out of every 100 peak services to operate; • At least 92 out of every 100 peak services to arrive at their Work will continue at the following stations under the Easy terminus within ﬁve minutes of their scheduled arrival time Access program: (six minutes for intercity services); and • Auburn • Less than 1% of stations per day to be skipped during peak • Bulli service provision to maintain on-time running. • Helensburgh • CityRail’s performance is closely monitored and reported on • Lakemba the CityRail website - www.cityrail.info. CityRail will continue • Meadowbank to display performance data on this website. On-time running statistics are published for each line. • Merrylands • Mortdale Our trains • North Wollongong CityRail is committed to providing you with clean, reliable and • Penshurst accessible trains. We aim to: Work will continue on the Town Hall Station upgrade and begin • Clean train interiors daily and exteriors fortnightly; at Woonona. • Remove litter from trains in service during off-peak day-time periods; and • Reduce vandalism and remove grafﬁti as quickly as possible

Annual Report 2005-06 Rail Corporation New South Wales 91 Appendices

Station upgrades make the rail system accessible for Passengers with special needs people with disabilities and provide a range of beneﬁts for all CityRail welcomes customers with special needs and is passengers. Improvements may include lifts, ramps, overhead committed to providing a service which everyone can use. footbridges, wider stairs, street level concourses, family accessible toilets, tactile tiles, hearing loops, improved lighting At this stage 29 per cent of CityRail stations are wheelchair and closed circuit television (CCTV). 99 per cent of operational accessible. We are continuing to upgrade stations to CityRail platforms have a portable boarding ramp available on improve access. All new stations and trains are designed request to assist passengers with disabilities to board and alight to maximise functional accessibility for passengers with from trains safely. The accessible features of our stations are disabilities. The accessible features of our stations are listed listed in the Accessing CityRail brochure, which is available on in the brochure Accessing CityRail, which is available at our website and at staffed stations. staffed stations and on our website.

CityRail is progressively introducing electronic signage and If you intend to travel by train and require assistance to digitised voice announcements at its stations. In 2005-06, board safely, we recommend you telephone the station you RailCorp implemented the Long Line Public Address (LLPA) wish to depart from prior to your journey so we can: project throughout the network’s outer stations. All CityRail • inform you if the stations you wish to travel to and from stations now have LLPA to enable staff in either the RMC or at are accessible local CCTV monitoring locations to advise customers of network • advise the train guard of your destination or safety issues. The outer regions are also being equipped with • arrange for staff to assist you. the Long Line Digitised Voice Announcement (LLDVA) system.

Fares and tickets Security CityRail’s fares are distance based and are reviewed by the Recent world events have highlighted the need for CityRail Independent Pricing and Regulatory Tribunal. to be prepared and alert. We have implemented various safety measures such as specialist training of staff, including We offer a large range of ticket products. Details can be conducting full-scale emergency evacuation simulations in found on the CityRail website and in the brochure Tickets to cooperation with emergency services and other agencies. Ride, which is available from staffed CityRail stations. CityRail works closely with the NSW Police and is investing in people and equipment to ensure travel on our system is secure. CityRail staff in ticket ofﬁces are happy to provide you with At CityRail we provide the following security measures for information regarding fares and ticketing. customers:

Tickets are available from ticket offices at busier stations • 600 Transit Officers to provide customer service, check and at ticket vending machines throughout the CityRail tickets and patrol stations and trains; network. • security resources, including Police and Transit Officers, are tactically deployed across the CityRail network; CityRail aims to have at least 98.5 per cent of ticketing • closed circuit television cameras monitor every station; devices in operating order at all times. • staff in control rooms monitoring the cameras have direct contact with Police; Customer information • all new trains have CCTV cameras and accessible CityRail provides you with information about services Emergency Help Points fitted; through the Transport Infoline telephone service (131 500) and website (www.131500.com.au), the CityRail website • more than 700 accessible Emergency Help Points are (www.cityrail.info) and our station staff. installed on stations. Our target is to have 99 per cent of The Transport Infoline, which operates from 6.00am until Help Points in working order at all times; 10.00pm daily, aims to answer 80 per cent of calls within 20 • our security staff and the Police conduct joint exercises seconds. aimed at reducing crime on the CityRail network; and Our timetables, fares brochures and network maps are • frequent audits of safety and security are conducted and published annually and are available free of charge at staffed assessed with the aim of identifying areas for improvement. stations.

92 Annual Report 2005-06 Rail Corporation New South Wales The relevant timetables are displayed at all stations. • Respond to correspondence within 21 days; Real-time information about service disruptions is displayed • Audit and research customer satisfaction with feedback on www.cityrail.info and recorded information is available on processes; and 131 500 for 24 hours per day. • Analyse your feedback and provide a summary of customer feedback on the CityRail website and in Our target is to have 99 per cent of PA systems working at RailCorp’s annual report. all times.

Advice concerning service changes Appendix 2 Electronic Service Delivery Advising customers about trackwork and service changes RailCorp recognises the importance of the internet as a is a priority. CityRail displays posters at stations to advise communications channel and source of information about its passengers of maintenance work that will require trains services and performance. to be replaced by buses. This information is also available from the Transport Infoline, the CityRail website and in local Our CityRail website provides access to information such newspapers. as timetables, trackwork, special events, service disruption, ticketing information and key performance indicators. CityRail will publish a twelve-month calendar of all planned weekend track closures. RailCorp - www.railcorp.info 538,219 visits (+22.8% over 2005-05), 2.4 million page You can subscribe to CityRail’s trackwork information views (+19.7%). service and have details of track closures e-mailed to you each week by registering your details on www.cityrail.info. CityRail - www.cityrail.info 6.6 million visits (+43%), 51.9 million page views (+42.4%). When major works are planned requiring large scale bus operations, CityRail will conduct a communications CountryLink - www.countrylink.info campaign to ensure the community is aware of service 1.5 million visits (+48.6%), 14.9 million page views (+68.9%). changes such as advertisements placed in the media, leaflets distributed to stations and posters displayed at Appendix 3 Research & Development stations. The attention of the Product and Research unit was been on a range of customer research initiatives with a focus in When unplanned disruptions occur, we aim to respond contributing to RailCorp being better informed by customer quickly and will make every effort to keep you informed. needs and insights. Staff will make announcements and the Transport Infoline and radio stations will be notified of the disruption and the Customer Focus Project alternative transport arrangements. As part of the Customer Focus project, the Product and Research unit conducted a needs-based segmentation study of CityRail customers. The research involved a survey Feedback We welcome any comments and suggestions you might of CityRail customers and non-users as well as a number of have on improving our services. You can provide feedback focus groups by contacting the Transport Infoline by telephone or e-mail or by writing to RailCorp’s Customer Relations Unit. The objective of the research is to provide a base from which to identify and prioritise service improvements to To ensure your feedback is captured and used to plan • Raise customer satisfaction levels service improvements, CityRail will: • Grow patronage; and • provide customer service staff at the Transport Infoline • Increase farebox revenue (telephone 131 500) to receive, record and answer your feedback between 6.00am and 10.00pm daily; The outputs of the research will be used to augment • Provide electronic feedback forms on the CityRail and existing research that will facilitate the development of a Transport Infoline web sites; more comprehensive ‘needs-based’ profile of the CityRail • When required follow-up customer complaints by phone market (ie. provide guidelines on how to categorise users within five days; and potential users). It will therefore address at the segment level:

Annual Report 2005-06 Rail Corporation New South Wales 93 Appendices

• The transport modes people consider and use Appendix 4 Environmental Performance • The factors that impact on choice decisions Contamination management In accordance with RailCorp’s Contamination Management • Key factors in choosing one transport mode over Policy, the Environmental Projects Unit (“EPU”) is responsible another for managing contamination matters on behalf of RailCorp’s • The level of awareness, use and satisfaction of the operating divisions. CityRail information channels - www.cityrail.info, announcements (trains, stations), brochures, station In 2005-2006, the EPU received approximately 35 new posters, station signs, newspaper ads, TV/Radio requests for advice with respect to the contamination status advertising of railway owned property and assets. Requests were • The factors (within control of RailCorp) that could make generated from a variety of divisions including RailCorp the CityRail product more attractive Property, StateRail Property, Major Projects, Commercial, Engineering and the Service Delivery Group. Timetable research In 2005-2006, a number of research projects were In responding to these requests, the EPU provided detailed conducted before and after the implementation of both advice, commissioned a range of preliminary and detailed the September 2005 and the May 2006 timetables to environmental investigations and completed a number of assess the overall communication strategy. As this was challenging and sensitive remediation projects. the first major change in the timetable since 1992, there was a concerted effort put in to make sure that customers The completion of these projects allowed property and staff were adequately informed and prepared for the development feasibility studies to be undertaken, facilitated changes. commercial lease negotiations and assisted with the divestment of surplus railway land. In particular, the EPU CountryLink worked closely with the StateRail Property team to facilitate • CountryLink website feedback survey - The new the divestment of surplus land held within the metropolitan CountryLink website was launched in May 2005 and portfolio. visitors to the site were asked for their feedback on its various aspects. Due diligence monitoring and remediation programs for • CountryLink travel bag survey - CountryLink customers ‘Significant Risk of Harm’ sites were also completed, to travelling in sleeper cars were asked for their feedback ensure RailCorp’s compliance with the Contaminated Land on the travel kit provided. Management Act, 1997. • Elvis express survey - The Parkes Elvis festival has been running for 14 years and has attracted a growing Approximately $3.48m was spent on all environmental number of people in each successive year. For the last investigations and remediation programs undertaken in four years, CountryLink has added the Elvis express 2005/2006. to the tradition – a train set up specifically for those travelling to the Parkes festival. Last year, the train It is noted that the staff and functions of the Environmental proved to be so popular that this year an additional Projects Unit were transferred from Corporate Counsel to carriage was added to accommodate more passengers. the Safety and Environment Group on 1 May 2006. The All seats on this year’s 4-car train were booked out well structural realignment has assisted with the consolidation of in advance. With 233 people on board, it was the most responsibilities for environmental policy and coordination. successful Elvis express to date. Graffiti reduction To further improve the level of service and develop other The Graffiti abatement program has continued with the revenue streams from the Elvis express, CountryLink practise of using murals to reduce the levels of graffiti on the conducted a survey of customers to evaluate the service CityRail network. Murals have been painted on a range of and amenities provided. structures along the rail corridor, particularly structures near stations. A total of 12 have been completed in 2004-05 and include bridge abutments, signal locations, retaining walls and miscellaneous buildings and structures.

94 Annual Report 2005-06 Rail Corporation New South Wales Pollution Reduction Programs The licence required the implementation of Noise Pollution At the end of the 2001 to 2006 Line Based PRP Reduction Programs (PRPs) on five priority lines, over five implementation period 79% of the actions were complete. years between July 2001 and July 2006. In accordance These programs have resulted in a worthwhile noise benefit with the EPL RailCorp is required to provided six-monthly to the community and will continue to do so do through written reports to the DEC detailing implementation of their ongoing implementation via routine operations and the PRP actions. Implementation is reported against the maintenance activities and their incorporation into future RailCorp Line-Based Noise Pollution Reduction Programs RailCorp noise management strategies. Implementation Plans. The implementation period for these plans ended on 30 June 2006. RailCorp currently operates under Environment Protection Licence (EPL) 12208 for the operation of the railway At the end of the 2001 to 2006 implementation period system (RailCorp network), administratively issued by the 79% of the actions were complete. These programs have Department of Environment and Conservation (DEC). Prior resulted in a worthwhile noise benefit to the community and to January 2004 Rail Infrastructure Corporation was the will continue to do so through their ongoing implementation licensee of the railway system and subject to Licence 3142. via routine operations and maintenance activities and their incorporation into future noise management strategies.

The table below provides a summary of the indicative ongoing noise beneﬁts delivered to the community as a result of the 2001 to 2006 PRPs.

PRP Action Noise Beneﬁt

Originally Estimated Indicative Outcome

Rail Grinding ≤10dBA (at joints) Inconclusive ≥ 2dBA (elsewhere) Higher Performance Gauge Face Lubrication Reduced ﬂanging (tonal) noise Approximately 1 – 6 dBA

Continuously Welded Rail Reduced impact (impulsive) noise Up to 14.5dBA

Rail Lubrication for Control of Curve Squeal Reduced curve squeal (tonal) Reduced curve squeal (tonal) noise noise

Increased Maintenance Turnouts and Diamond Reduced impulsive noise Approximately 1 – 5 dBA Crossings

Review of operational requirements for 1-3dBLAeq 1-3dBLAeq in speciﬁc locations crossovers and Removal (if possible)

Noise Barriers 5-10dBA Nil

Improved wheel condition - value management ≤3dBA (linked to wheel Unmeasurable noise beneﬁt study with SRA and Wheel impact detection maintenance)

Land use planning 100% noise reduction possible Unmeasurable noise beneﬁt if new residential properties are separated from existing lines

Review of electric locomotive potential ≤ 10dBA (at steep grades) Nil Design of future bridges 4-10dBA 2 to 8dB(A)

On vehicle track noise monitoring. Difficult to determine noise Noise benefit not yet quantified reduction but will improve identification of locations with high noise levels.

Annual Report 2005-06 Rail Corporation New South Wales 95 Appendices

Vegetation management • Metropolitan South Region have this year undertaken RailCorp has developed a Biodiversity Management all management recommendations including Bush Framework as part of its EMS. The Framework calls for the regeneration at 11 of the 16 sites. asset management regions to prepare individual Biodiversity Management Plans that map vegetation along the rail Metropolitan Corridor Clean Up Project corridors to ensure it is kept clear of the track and trackside As infrastructure maintenance “windows” become shorter, structures (eg overhead wiring) and does not impact the there is less time to dispose of surplus materials after safe operation of trains. Qualified staff survey vegetation renewal works are completed. Consequently, used rail, and identify the required management for each area. This sleepers, ballast and track products build up over time along information is converted by Geospatial Services into maps. the rail corridor. This project aims to clean up the corridor In 2005-06, the whole of Metro South region was mapped and, at the same time, capture unrecorded infrastructure in this way, resulting in four of the five regions now having materials in the inventory database for re-use, recycling or such plans available to allow Operational Divisions to sale as scrap. manage vegetation in a more efficient and environmentally sustainable manner. In February 2005, a special clean up team was formed to locate, photograph and record an inventory of a range of Threatened Species Management Plans materials deposited along the rail corridor, at depots and The Department of Environment and Conservation, National at work sites. The project was completed by February Parks and Wildlife Service Division (NPWS) has prepared 2006, by which time: a Recovery Plan for the protection of Acacia pubescens • 1,084 tonnes of scrap steel and 1,220 used timber (Downy Wattle), a species listed as vulnerable on Schedule sleepers were recovered and sold; 2 of the Threatened Species Conservation Act, 1995 (TSC • 142 tonnes of rubbish and 90 cubic metres of spent Act). ballast that was unsuitable for recycling was disposed of in an environmentally friendly manner. As stated in section 70 of the TSC Act, “A public authority (including the Director-General but not including a • 75 crossings and a range of signalling equipment was council) identified in a recovery plan as responsible for the recycled or refurbished for re-use. implementation of measures included in the plan must In addition, $2.941m of track products were returned to report on action taken by it to implement those measures in inventory for use on new projects or to replenish inventories its annual report to Parliament”. of critical spares at emergency response locations around the network. RailCorp have been identified as one of the parties with management responsibility for sites identified in the Appendix 5 Heritage Management Recovery Plan, and as such, report that the following RailCorp met its obligations under the Heritage Act and actions have been completed for July 2005/June 2006 various guidelines issued by the Heritage Council of NSW. Financial Year. • Annual monitoring of each of the sites in Metropolitan Strategic Review South, West and City Regions and the review of A key element of RailCorp’s review of its heritage management tasks incorporated in the RailCorp management strategy was the establishment of the Heritage Threatened Species Management Plans for Acacia Asset Management Strategy Steering Committee. The pubescens (August 2000). objective of the Committee was to develop a draft strategy • All management recommendations have been actioned for the viable, sustainable governance of the NSW railway for City Region Plan including signage and altered heritage assets. slashing regime, no bush regeneration was undertaken this year, as this was a low priority at the Padstow Site. Following the submission of the Committee’s report, the • All management recommendations have been actioned NSW Government endorsed the establishment of an Office for Metropolitan West Region Plan site at Rosehill of Rail Heritage. One of the main functions of the office was including bush regeneration. Signage and fencing is to manage RailCorp’s collection of heritage rollingstock already in place. and other items of moveable heritage. Other details of the functions of the Office were being developed during the year. A formal announcement is to be made.

96 Annual Report 2005-06 Rail Corporation New South Wales A review was undertaken on all moveable heritage items, Appendix 6 Waste Reduction and Purchasing Policy apart from rollingstock, to establish their significance so as The NSW Government’s Waste Reduction and Purchasing to arrive at decisions on what items should be transferred to Policy (WRAPP) 1997, requires all state government and the proposed Office of Rail Heritage. A Selection Committee state-owned agencies to develop and implement a WRAPP was established to review the existing assessments of Plan that will reduce waste and increase the purchase of each item and make recommendations on the retention materials with recycled content in four areas: or disposal of the various moveable heritage assets. The • Paper products; committee included representatives from the NSW Heritage • Office equipment and consumables such as toner Office, Powerhouse Museum and the National Trust (NSW). cartridges and pen’s; By the 30th June, the Committee had concluded its review • Vegetation and landscaping material; and but its recommendations had not been considered by • Construction and demolition material. RailCorp.

With the merger of Rail Infrastructure Corporation (RIC) Running parallel with the review of moveable heritage, and State Rail Authority (SRA) on the January 1, 2004, RailCorp continued to undertake an assessment of all items RailCorp prepared a WRAPP Progress Report & Plan that on the Section 170 Heritage and Conservation Registers of encompasses the adopted programs from both SRA and both State Rail and the Rail Infrastructure Corporation. The RIC during July 1, 2004-June 30, 2005. This report aims objective of the review was to consider the significance of to establish the basis for future performance reporting and items that should be placed on the RailCorp Section 170 the development of RailCorp’s plan to ensure continual Register. improvement during the 2005 – 2006 reporting period. The 2007 Annual Return will provide an update on 150TH Anniversary celebrations RailCorp’s performance with regards to the reduction of On 26th September 2005, RailCorp celebrated 150 years waste and quantity of materials purchased with recycled of public rail services in NSW. The major initiative for the content in the above mentioned four areas. celebrations was the opening of the Australian Railway Monument at Werris Creek in October 2005. This project commemorates the work performed by employees and Appendix 7 Government Energy Management Program The NSW Government introduced the Government Energy contractors who lost their lives working for the Government Management Policy (GEMP) in 1998 to reduce greenhouse railways in NSW. Major celebrations were undertaken also at gas emissions and provide significant energy cost savings Central and Olympic Park stations. for NSW government agencies. RailCorp continues to report details on our energy and utilities usage under GEMP. In General the last year RailCorp has been working to improve our Advice was provided to staff, contractors and the general understanding of energy usage across our organisation public on a wide range of matters. This included the and has started a program to identify opportunities for impact of different technology, such as platform train energy efficiency improvements. A number of technical indicators, on heritage buildings. Advice on topics such investigations have been initiated to determine technical as the identification of stolen property, the location of and commercially viable opportunities for improving energy archaeological relics, the extent of use of asbestos in performance at stations. buildings and paint schemes was also provided.

With the proposed transfer of land at Eveleigh to the Redfern-Waterloo Authority, RailCorp continued work on the relocation of heritage assets from Eveleigh to other locations, particularly Thirlmere.

Annual Report 2005-06 Rail Corporation New South Wales 97 Appendices

Appendix 8 Statement on Business Ethics • not offer RailCorp employees or contract staff any financial Our key business principles or other inducements which may lead to, or be seen as The principle of best value for money is at the core of all of leading to, an unfair advantage in dealings with RailCorp RailCorp’s business relationships with private sector suppliers • comply with RailCorp guidelines on contracting RailCorp of goods and services. Best value for money does not employees to work for you. automatically mean the lowest price. RailCorp will balance all relevant factors including initial cost, whole of life costs, quality, Some practical guidelines reliability and timeliness to determine actual value for money. Entertainment Part of obtaining best value for money also involves ensuring Suppliers should not pay for any form of entertainment for all our business relationships are ethical ie honest, fair and RailCorp employees. Likewise, RailCorp employees are consistent. generally not entitled to use government funds to pay for entertainment. What you can expect from us We will: Lunches etc • comply with RailCorp and government policies/ RailCorp employees are expected to pay for all their procedures own meals. • show fairness in our treatment of all individuals or organisations that supply goods or services to RailCorp discourages external parties from providing RailCorp • encourage fair and open competition while seeking value employees with benefits such as social lunches. for money Employee participation is permitted only if a clear underlying • try to minimise costs to suppliers participating in the business purpose exists and the value and frequency of such procurement process functions is not excessive. • protect commercial-in-confidence information • deal honestly with suppliers and pay accounts on time Gifts • always be accountable and act in the public interest RailCorp discourages external parties from offering or giving • avoid situations where private interests conflict gifts to RailCorp staff or its agencies and there should be no with public duty expectation that any gifts will be provided. • not solicit or accept financial or other benefits from a supplier for performing official duties Travel and accommodation • respond to reasonable requests for advice and information RailCorp meets all business travel and accommodation costs without delay. for its employees. Any variation to this policy must first be agreed with RailCorp, not the individual employee affected, What we ask of you and approved by a senior employee. Public liability and We require all private sector providers of goods insurance requirements must also be considered. and services to: • respect the conditions and requirements stated in Confidentiality documents supplied by RailCorp Information which is marked confidential, or which a • comply with any codes of tendering and practice that reasonable person would expect to be confidential, apply should be treated as such. The information could be in various • respect the obligation of RailCorp staff to comply with formats such as hard copy documents or electronically stored. government procurement policies Contractors should not assume they have a claim to • not act fraudulently or secretively intellectual property unless their contract has been specifically • prevent the unauthorised release of privileged or negotiated to address the issue. confidential information such as commercial-inconfidence information • not discuss RailCorp dealings with the media without first obtaining RailCorp approval • respond to reasonable requests for advice and information

98 Annual Report 2005-06 Rail Corporation New South Wales Communication between parties Appendix 9 Employee Code of Conduct All communication should be clear and direct with decisions The following is a summary of RailCorp’s Code of Conduct. As explained if required and where appropriate. All contracted and such, it is to be used as a guide only. subcontracted employees are expected to comply with this statement. If you employ subcontractors in your work for The Code of Conduct outlines the minimum acceptable RailCorp you must make them aware of this statement and behaviour required of RailCorp employees, including permanent, ensure they comply with it. temporary and casual staff, consultants and contractors.

Use of RailCorp equipment or resources 1. Acceptable behaviour and responsibilities Where suppliers to RailCorp are required and authorised to • Behave ethically, honestly, safely, courteously and fairly. use RailCorp equipment or resources, such use must only • Act in the best interests of RailCorp and its customers. be to conduct RailCorp work. Such work must be carried • Work in a safe, healthy and efficient manner. out in an efficient, effective and economical manner. • Follow legislation, policies, procedures and job requirements. Contracting former RailCorp employees 2. Safety Former public sector employees who have taken voluntary At RailCorp we put safety first in everything we do. redundancy are generally required to refund some or all of their severance payment, if it covers a period for which they 3. Occupational health and safety are engaged as a contractor to RailCorp, whether directly or Promote a safe and healthy work environment. Smoking is not through a company. permitted in any RailCorp workplace. Any organisation intending to use a current or former 4. Alcohol and drug free workplace RailCorp employee for contract work with RailCorp should RailCorp maintains an alcohol and drug free workplace. first discuss this with RailCorp. This policy protects RailCorp, individuals and your organisation from any potential 5. Sustainability and the environment accusations of impropriety, using undue influence or conflict Environmental responsibility is encouraged. of interest.

6. A discrimination, harassment and bullying free workplace Who to contact for more information You must not discriminate against, victimise, intimidate, harass Contact the Corruption Prevention Line for: or bully other staff members or members of the public. • Advice on any related issues • If you are concerned that a breach of the law or 7. Fairness and equity unethical conduct may have occurred. This could Issues are to be dealt with consistently, promptly, fairly, and in include fraud, corrupt conduct, maladministration, or accordance with procedures. They are to be dealt with in a serious and substantial waste. non-discriminatory manner, and are to conform to procedural fairness. 1 800 629 826 (free call)

8. Use of resources RailCorp property and equipment is for ofﬁcial purposes, and should be managed efﬁciently and economically.

9. Gifts, benefits or favours You must not accept gifts, benefits or favours that are intended to, or may be seen to compromise the manner in which you carry out your RailCorp duties. Under certain circumstances, your manager may approve the acceptance of token gifts or benefits. You must immediately report any bribes or offers of substantial gifts, favours or benefits.

Annual Report 2005-06 Rail Corporation New South Wales 99 Appendices

10. Use of information and Intellectual Property To obtain a full version of RailCorp’s Code of Conduct, please RailCorp information must only be used for the work-related call (02) 8202 2000 or visit purposes intended and not for personal benefit. Confidential http://www.railcorp.info/about_railcorp/code_of_conduct information can only be disclosed with official approval. Appendix 10 Board Code of Conduct 11. Conflict of Interest 1. A director must act honestly, in good faith and in the A conflict of interest exists where you could be influenced, or best interests of the company as a whole. seen to be influenced, by a personal interest when carrying out your duties as a RailCorp employee. 2. A director has a duty to use due care and diligence in fulfilling the functions of office and exercising the powers 12. Secondary employment and voluntary work attached to that office. You must obtain the written permission of your manager before undertaking secondary or voluntary work. 3. A director must use the powers of office for a proper purpose, and in the best interests of the company 13. Public comment as a whole. Only authorised employees are permitted to make public comment on behalf of RailCorp or claim to represent RailCorp 4. A director must recognise that the primary responsibility on any issues. is to the company’s shareholders as a whole but should, where appropriate, have regard for the interests of all 14. Reporting corrupt conduct, maladministration or serious stakeholders of the company. and substantial waste If you suspect or are aware of any corrupt conduct, 5. A director must not make improper use of information maladministration or serious and substantial waste, you must acquired as a director. report it to your supervisor, manager, other designated person, or an external body. 6. A director must not take improper advantage of the position of director. 15. Employment after leaving RailCorp If you get another job outside of RailCorp you must maintain 7. A director must not allow personal interests, or the confidentiality on information gained during your employment interests of any associated person, to conflict with the with RailCorp. You must return all property, equipment and pay interests of the company. all outstanding bills. 8. A director has an obligation to be independent in 16. Dealing with breaches of the Code judgement and actions and to take all reasonable steps If you believe another employee has breached the Code of to be satisfied as to the soundness of all decisions taken Conduct you must report it to your manager. RailCorp will act by the Board. fairly and objectively in responding to any report of a breach of the Code. 9. Confidential information received by a director in the course of the exercise of directors’ duties remains the 17. Applicable legislation property of the company from which it was obtained and You are to be aware of - and comply with - the Code and it is improper to disclose it, or allow it to be disclosed, relevant legislation, policies, procedures and instructions. unless that disclosure has been authorised by that company, or the person from whom the information is 18. Policies and procedures provided, or is required by law. Updated versions are located on the RailCorp Intranet site. 10. A director should not engage in conduct likely to bring 19. Assistance discredit upon the company. No employee is expected to deal with ethical dilemmas without help. In the first instance, go to your manager, supervisor or 11. A director has an obligation, at all times, to comply human resource manager. The Code also identifies other with the spirit, as well as the letter, of the law and with people who can provide information and assistance. There will the principles of this Code. always be someone to advise you.

100 Annual Report 2005-06 Rail Corporation New South Wales Appendix 11 Meetings of the Board Meetings of the RailCorp Board are held monthly or more often if special circumstances require. Board Committee Meetings are generally held on a quarterly basis.

Human Resource & Safety & Environment Audit & Risk Board Board Meetings Remuneration Board Board Committee Committee Meetings Committee Meetings Meetings Board Member Eligible* Attended Eligible* Attended Eligible* Attended Eligible* Attended

Ross Bunyon 17 17 6 6 4 4 1 1

Arthur Butler 17 17 6 6 - - 1 1

Liza Carver 17 13 - - 4 4 4 2

Vince Graham# 17 16^ ------

Gordon Messiter 5 5 ------

Paul Moy 6 6 3 3 - - - -

Bob Plain 17 17 - - - - 4 4

Dean Pritchard 2 1 - - 1 1 - -

Hon. Barrie Unsworth 8 8 - - - - 2 2

Transition & Expenditure Special Purpose ICT Board Committee Review Board Committee Expenditure Review Board Meetings Meetings Committee Meeting Board Member Eligible* Attended Eligible* Attended Eligible* Attended

Ross Bunyon - - 1 1 1 1

Arthur Butler - - - - 1 1

Liza Carver - - 1 1 - -

Vince Graham# ------

Gordon Messiter ------

Paul Moy - - 1 1 - -

Bob Plain ------

Dean Pritchard ------

Hon. Barrie Unsworth ------

Notes * Reﬂects the maximum number of meetings the Directors were eligible to attend. # Mr Graham attends all Board Committee meetings in his capacity of Chief Executive Ofﬁcer and is therefore not a member of the Board Committees. ^ Mr Graham was on leave for one meeting and the Acting Chief Executive attended the meeting.

Annual Report 2005-06 Rail Corporation New South Wales 101 Appendices

Appendix 12 Internal Audit Appendix 13 Changes in Acts and Subordinate RailCorp maintains an independent internal audit service Legislation to help the Corporation meet its objectives by applying The Transport Legislation (Waterfall Rail Inquiry a systematic, disciplined approach to evaluating and Recommendations) Act 2005 commenced on 1 July 2005. improving the effectiveness of internal controls and The Act amends the Transport Administration Act 1988, the governance processes. The Internal Audit function is Passenger Transport Act 1990 and the Rail Safety Act 2002. authorised by the Board to direct a comprehensive Changes include: program of internal auditing within the Corporation with full and unrestricted access to all functions, property, Safety Management Systems (SMS) personnel records, accounts, ﬁles and other documentation. • Requirements relating to SMS are now contained in new The function also provided corruption prevention and provisions in the Rail Safety Act 2002: ss 48A and 48B. investigation services focused on building RailCorp’s • New regulations and guidelines regarding SMS will be resistance to fraud and corruption. made by ITSRR.

The internal audit work program is subject to annual Accreditation endorsement by the Audit and Risk Board Committee, with • ITSRR can now make new regulations to prescribe types the results, progress and performance of Internal Audit of variations to railway operations or SMS that will no regularly reviewed by both the Committee and external longer require ITSRR approval: s 27(3A). auditors. • New powers for ITSRR in relation to conditions and restrictions applying to accreditation: s 18(3A). New Investigations regulations can be made by ITSRR in respect to All reported allegations of corrupt conduct committed by prescribing conditions that apply to an accreditation. staff members were investigated. Where appropriate, ﬁnal investigation reports were referred to senior management Rail Investigations, accidents and incidents for information and/or action and disciplinary investigations • New arrangements relating to the investigations of rail were referred to the Disciplinary Review Panel for accidents and incidents by the Chief Investigator of the determination. Ofﬁce of Transport Safety Investigations: ss 67-67F.

All matters of possible corrupt conduct were reported to • New protection relating to accidents and incidents reports the Independent Commission Against Corruption under prepared by a rail operator: ss 66-66A. section 11 of the Act, to comply with statutory reporting The Dangerous Goods Act Explosives requirements. Matters involving criminal conduct were amended by the Regulation referred to the NSW Police for investigation and potential 2005 commenced on 1 September 2005. It prosecution. allows a member of staff of a rail authority in relation to railway track signals to carry explosives on public passenger vehicles. Corruption Prevention RailCorp Corruption Prevention provided ethics advice, The Public Authorities (Financial Arrangements) Regulation conducted ethics awareness activities and implemented or reinforced initiatives to help build a corruption resistant 2005 commenced on 1 September 2005 and allows organisation. Advice was provided on issues such as public authorities including State Owned Corporations to contracting, gifts and benefits, conflicts of interest, have investment powers. Confers investment powers of a secondary employment, sponsorship etc. Newsletter articles particular kind on RailCorp. were developed and seminars for new staff were conducted Transport Administration (General) Amendment (State as part of their induction or for existing staff in response to The Taxes) Regulation identified needs. Minor revisions were made to the RailCorp 2005 commenced on 18 December Transport Administration Statement of Business Ethics which was then printed and 2005. The Regulation amends the (General) Regulation loaded on to the RailCorp Intranet site. 2005 and extends until 18 December 2006 the period for which land owned by, or leased to A corruption prevention strategy was developed during the RailCorp, and used for railway purposes is exempt from year in accordance with NSW Government requirements. state taxes (other than land subject to a lease or licence by RailCorp) or payment of the parking space levy.

102 Annual Report 2005-06 Rail Corporation New South Wales The Rail Safety (Drug and Alcohol Testing) Amendment (b) to enable an operator of a railway to authorise its (Authorised Ofﬁcers) Regulation 2005 commenced on employees to receive and deal with lost property found 23 September 2005. The object of this Regulation is to on a train, railway land or part of monorail works. amend the Rail Safety (Drug and Alcohol Testing) Regulation 2003 as a consequence of changes to the designation The Infrastructure Implementation Act 2006 commenced of persons who may carry out drug and alcohol testing, on 24 February 2006. The Act constitutes the Infrastructure being changes resulting from the commencement of the Implementation Corporation, a statutory corporation Transport Legislation Amendment (Waterfall Rail Inquiry established to carry out or take over major infrastructure Recommendations) Act 2005. projects.

The Civil Procedure Act 2005 commenced in part on 24 The Rail Safety (General) Amendment (Miscellaneous) June 2005 and finally on 1 October 2005. Regulation 2006 commenced on 31 March 2006. The The Act repeals and replaces, amongst other things, the object of this Regulation is to amend the Rail Safety Attachment of Wages (Limitation) Act 1957 that allows the (General) Regulation 2003: attachment of judgment debt to the wages of government employees. (a) to increase penalties for offences relating to interference with train doors and unauthorised use of certain The Workplace Surveillance Act 2005 commenced on 7 equipment such as communication equipment; October 2005. The Act repeals and replaces the Workplace (b) to require trains to have a radio communications system Video Surveillance Act 1998 with respect to surveillance of and a back up system for communications; employees at work. (c) to permit certain offences to be dealt with by way of a penalty notice (on-the-spot fine); The Statute Law (Miscellaneous Provisions) Act (No 2) (d) to require railway operators to develop and implement 2005 which commenced from 24 November 2005 replaced procedures for dealing with lost property; and legislation including: (e) to make other minor amendments. • The Occupational Health and Safety Amendment (Workplace Deaths) Act 2005 amended the Occupational The Transport Administration (General) Amendment Health and Safety Act 2000 to make it an offence for (RailCorp) Regulation 2006 commenced on 19 May 2006. a person who owes a duty under Part 2 of that Act The object of the Regulation is to prescribe officers of to engage in reckless conduct that causes death at a RailCorp as authorised persons and that the Director- workplace. General’s functions may be delegated to the CEO of RailCorp. • The Anti-Discrimination Amendment (Miscellaneous Provisions) Act 2004 amended the Anti-Discrimination The Transport Administration Amendment (Public Transport Act 1977 concerning complaints and other miscellaneous Ticketing Corporation) Act 2006 commenced on 1 July provisions. 2006. The Act allows the Minister for Transport to direct • The State Records Amendment Act 2005 amended that the assets, rights and liabilities of RailCorp, that relate the State Records Act 1988 to make further provision to or are connected with the operation of a ticketing and in relation to public access to State records, normal fare payment system, be transferred to the Public Transport administrative practice, prosecutions and other matters. Ticketing Corporation.

The Rail Safety (General) Amendment (Authorised Ofﬁcers) Regulation 2005 commenced on 1 December 2005. It amended the Rail Safety (General) Regulation 2003:

(a) to enable certain classes of employees of Rail Corporation New South Wales to be appointed as authorised ofﬁcers under the Rail Safety Act 2002,

Annual Report 2005-06 Rail Corporation New South Wales 103 Appendices

The Rail Safety (General) Further Amendment Appendix 14 Freedom of Information (Miscellaneous) Regulation 2006 commenced on 1 July Section A Number of new FOI requests 2006. The object of the Regulation is to amend the Rail FOI Requests Personal Other Total Safety (General) Regulation 2003 as follows: New (including A1 117 82 199 (a) to exempt certain railway operators from the requirement transferred in) to be accredited under the Rail Safety Act 2002 (the A2 Brought Forward 12 17 29 Act), and Total to be A3 129 99 228 (b) to exempt certain changes to an accredited person’s processed railway operations or safety management system from A4 Completed 108 74 182 the requirement to apply to the Independent Transport Safety and Reliability Regulator (the ITSRR) for a A5 Transferred out 0 1 1 variation of the person’s accreditation and to require A6 Withdrawn 0 1 1 applications for a variation of a person’s accreditation to A7 Total processed 108 74 182 be accompanied by certain information, and Unfinished (carried (c) to require certain changes to an accredited person’s A8 21 25 46 forward) railway operations to be notified to the ITSRR, and (d) to provide for the notification to the Chief Investigator Section B What happened to completed requests? and the ITSRR of certain occurrences involving railway operations, and Results of FOI Request Personal Other Total (e) to make provision for safety interface agreements in B1 Granted in full 87 49 136 relation to private sidings where the owner of the private B2 Granted in part 12 10 22 siding has entered an agreement with a third person, and (f) to prescribe certain offences as offences that may be B3 Refused 9 14 23 dealt with by way of a penalty notice (that is by an on-the- B4 Deferred 0 1 1 spot fine), and B5 Completed 108 74 182 (g) to permit the ITSRR to exempt the operator of a heritage railway from some or all of the provisions of Part 2 and Section C Ministerial Certificates section 48A of the Act, and (h) to make other minor amendments. Personal Other Total Ministerial C1 0 0 0 The Rail Safety (Drug and Alcohol Testing) Amendment Certificates issued (Samples) Regulation 2006 commenced on 4 August 2006. The object of this Regulation is to amend the Rail Safety Section D Formal Consultations (Drug and Alcohol Testing) Regulation 2003 to change the Personal Other Total way that urine samples are dealt with for the purposes of testing for alcohol or other drugs. The new provisions ensure No. of requests that urine will undergo initial testing and confirmatory testing D1 requiring formal 0 0 0 for the presence of a drug or drugs in urine in accordance consultations with AS/NZS 4308:2001, Procedures for the collection, detection and quantitation of drugs of abuse in urine. Section E Amendments of personal records Result of amended request Total This Regulation also provides for: E1 Result of amendment – agreed 0 (a) the authorisation and functions of testing officers, and (b) the provision of information relating to drug and alcohol E2 Result of amendment – refused 1 testing activities by operators of rail services. E3 Total 1

The Public Finance & Audit Regulation 2005 and the Annual Reports (Statutory Bodies) Regulation 2005, both of which commenced 1 September 2005

104 Annual Report 2005-06 Rail Corporation New South Wales Section F Notation of personal records Section I Discounts allowed

Total Type of discount Personal Total allowed F1 No. of requests for notation 1 I1 Public interest 0 0 Section G FOI request granted in part or refused Financial hardship I2 92 92 – Pensioner/Child Basis of disallowing or Personal Other Total Financial hardship restricting access I3 1 1 – non profit Section 19 application I4 Totals 93 93 G1 20 3 23 incomplete, Significant wrongly directed I5 correction of 0 0 Section 22 deposit personal records G2 0 6 6 not paid G3 Section 25 (1) (a1) 0 7 7 Section J Days to process Section 25 (1) (a) Elapsed time Personal Other Total G4 17 25 42 Exempt J1 0-21 days 112 32 144 Section 25 J2 22-35 days 19 18 37 (1) (a), (b), (c), G5 0 1 1 (d) Otherwise J3 Over 35 days 21 27 48 available J4 totals 152 77 229 Section 28 (1) (b) G6 documents not 27 12 39 Section K Processing time held Processing Hours Personal Other Total Section 24 (2) G7 Deemed refused, 5 4 9 K1 0-10 hours 161 5 166 over 21 days K2 11-20 hours 26 12 38 Section 31 K3 21-40 hours 9 17 26 (4) Released G8 0 0 0 to Medical K4 Over 40 hours 1 2 3 Practitioner K5 Totals 197 36 233 G9 Totals 69 58 127 Section L Reviews and Appeals Section H Costs and fees of requests processed Number finalised during period Total Assessed FOI fees costs received L1 Number of internal reviews finalised 7 All completed L2 Number of ombudsman reviews finalised 1 H1 $10,840 $6,265 requests L3 Number of ADT appeals finalised 0

Annual Report 2005-06 Rail Corporation New South Wales 105 Appendices

Details of internal reviews Bankstown line back on track Bankstown upgrade Basis of internal Personal Non-Personal Blue Mountains 6pp DL brochure review Blue Mountains poster Grounds upon Blue Mountains poster which internal Varied Upheld Varied Upheld CountryLink Sydney summer review requested CBD closedown Oct. 05 - 8pp brochure Access L4 4 0 0 3 CBD closure Nov. 2005 posters refused CBD operations L5 Deferred 0 0 0 0 CBD operations 10pp dl Exempt CD wallet for Pram Safety L6 0 0 0 3 matter Christmas cards Christmas poster Unreasonable L7 0 0 0 0 CountryLink Destination 4pp x 6 kinds brochures charges CountryLink ticket wallets Charge CountryLink Coach posters L8 unreasonable 0 0 0 0 CountryLink Coach Station incurred CountryLink Timetable Posters (A4) L9 Withdrawn 0 0 0 0 CountryLink Coach Tickets CountryLink Flyer L10 Totals 4 0 0 6 CountryLink Letterbox DL Postcard Seat Sales CountryLink North Coast Timetable Appendix 15 Publications CountryLink North West Timetable 150 year poster CountryLink Parkes Elvis Festival Flyers 150 year special wallets CountryLink save 50% poster 150 Years “Thank-you Cards” Personalised A6 x 4pp Folder CountryLink save 60% Melbourne, Brisbane 150 Years “Thank-you Cards” Personalised A6 x 4pp Folder CountryLink Safety Cards 150 Years Celebration posters CountryLink Safety cards 150 Years Celebration tattoos CountryLink safety cards (coach) 150 Years certificates A4 CountryLink Safety cards 150 Years Historic Day Balloons & T-Shirts CountryLink Sales Agent Pad 150 Years of rail card Staff Card CountryLink Sales Agent Pad 150 Years or rail Oct. 05 poster CountryLink Seasonal calendar A4 150 Years Re-Enactment Journey Ticket Wallet CountryLink Senior Citizen inserts A5 150 Years Re-Enactment Tickets x 2 kinds CountryLink Southern Timetable 150 Years station posters CountryLink special posters 150 Years Celebration CountryLink Summer seat sale 150 Yrs of rail CountryLink Summer seat sale 150 Yrs of Rail in NSW Postcards - CountryLink CountryLink summer seat sale letterbox drop flyer 150 yrs station posters CountryLink Sydney poster 2005 timetable - Times are changes poster CountryLink Ticket Wallets 2006 Time table presentation folders CountryLink Ticket Wallets 4pp x 6 kinds 50 x 2 CountryLink timetables CountryLink Timetable poster A4 Environmental Policy CountryLink Timetable Poster Asbestos hand books 12pp CountryLink Timetable Poster - North Coast & Southern Asbestos posters A3 CountryLink Timetable posters Backpacker DL flyer CountryLink Timetable posters 4 kinds Backpacker poster CountryLink Timetable posters x 4 Backpackers banner CountryLink Victoria poster - summer seat sale Backtracker Expo A4 flyers CountryLink Welcome aboard 4pp Backtracker tickets CountryLink Western Timetable

106 Annual Report 2005-06 Rail Corporation New South Wales CountryLink Western timetables 24pp Insurance activities Clear window stickers RailCorp maintained a comprehensive insurance program Code of Conduct booklet commensurate with its risks and commercial arrangements. Conference campaign brochure CountryLink A3 Map pads reprint As part of its renewal strategy, presentations were made to Customer brochure 12 pp dl both local and overseas based property and liability insurers Customer Commitment Brochure on RailCorp’s approach, performance and initiatives on risk Customer Feedback Card management and other activities. Daytripper 10pp Dusty On Board poster No major insurance claims were received or made during the Dusty station poster financial year. Eastern suburbs station poster East Hills flyer Appendix 17 Funds Granted to East Hills poster x 2 non-government agencies Elvis Parkes flyer Name of Organisation Receiving the Grant - NSW Railway and Elvis poster Tramway Ex-services’ Association Employee handbook Food for thought 20 pp Purpose of Grant - Annual contribution Getting home brochure Girls day out poster, Target Group of Clients Benefiting From the Grant - Ex railway Group safety 16pp brochure employees Group Safety Booklet A5 Group Safety Poster Amount : $750.00 Illawarra Timetable books 80pp Level Crossing poster Appendix 18 Exemptions from the reporting provisions Ministerial manual The Treasurer has exempted RailCorp on the following matters NAIDOC posters otherwise required by Schedule 1 to the Annual Reports Newcastle mini poster (Statutory Bodies) Regulation 2005 Newcastle Timetable Posters (4 change) Newcastle Timetable 52pp • Performance in paying accounts, including action to improve Newcastle Timetable flyer payment performance North Coast flyer • Time for Payment of Accounts North Coast Timetables - reasons for late payments - interest paid due to late payments Appendix 16 Risk Management and Insurance Activities Risk Management RailCorp’s approach to risk management is aimed at the proactive identification of hazards associated with its business, assessment of their risks, and implementation of controls to protect the public, customers, contractors, staff and assets.

The integrated approach to safety, environmental and business risk management constitutes RailCorp’s enterprise wide risk management (EWRM) framework. This framework, modelled on the Australian Standard, follows national and international best practice and is being established across the different levels and groups of RailCorp to ensure consistent and effective management of all types of imminent and potential risks threatening the organisation’s business.

Annual Report 2005-06 Rail Corporation New South Wales 107 Appendices

Appendix 19 Consultants

Consultant Projects Costs ($)

Contracts of $30 000 or more

Management Services

TCorp Advice on Cross Border Lease Costs - TCorp 260 000

IBM Consulting Enterprise business intelligence strategy 170 000

Lloyds Register Rail Develop a safety/environmental risk management framework 140 468

Arnold Dix – Consultant Development of the likely performance of RailCorp’s incident 68 138 response and provide advice on the management of major chemical and biological incidents Simply Blue Determine the optimal ﬂeet capacity and identify the improvement 37 087 opportunities ARUP Feasibility study for Fire Hydrant System in Sydney Underground 33 785 Rail Tunnel Network

Organisational Review

IBM Consulting Undertake an enterprise-wide review of RailCorp’s workforce 546 717 management practices and technology support PA Consulting Perform a strategic communication review 408 000

IBM Consulting Strategic Plan for Finance 215 400

Total contracts of $30 000 or more (9 contracts) 1 879 595

Contracts under $30 000 or less

Environmental

Maunsell Australia Pty Ltd Noise pollution reduction program feasibility study 11 572

Management Services

Australian Institute of Management Development of training courses for frontline and middle 21 503 management Kathy Jones and Associates Development of communication strategy re. Macdonaldtown 19576 Precinct communications with public Bull Head Services Identify the available commercial options for contact/catenary 17 915 replacement and maintenance machinery McLachlan Lister Pty Ltd Management approach to sectorisation 12 337

Blueﬁeld Consulting Review of corporate risk register and hazard action planning support 4 300

John Owens Pty Ltd Development of depot OHS and injury management manual for 2 800 Fleet Maintenance Centre

Total contracts of $30 000 or less (7 contracts) 90 003

Total expenditure in 2005-06 (16 contracts) 1 969 598

108 Annual Report 2005-06 Rail Corporation New South Wales Appendix 20 Major works in progress

Description for Annual Report WIP as at 30-6-06 ($m) Forecast Completion

New Outer Suburban Cars 202.9 Jun-2008

Hunter Rail Cars 88.0 Feb-2007

New Suburban Cars 28.6 Jun-2013

Upgrade of Maintenance Facilities 8.8 Jun-2007

Refurbishment of XPTs 8.3 Dec-2009

Vigilance Control on Suburban, Outer Suburban and Diesel Fleet 7.5 Apr-2007

Upgrade of Double Decked Suburban Cars 7.3 Mar-2007

Reality Centre Simulations 3.7 Jun-2007

Business Systems Upgrades 3.6 Mar-2007

Appendix 21 Land values and land disposal Value at 30 June 2006 Value at 30 June 2005 Land use $’000 $’000 Land under Stations and Infrastructure 2,960,591 2,847,678

Strata (airspace) leased to tenants 10,020 9,490

Residential & Occupied Land 18,822 5,881

Surplus Land 24,300 47,000 Total land owned or occupied - based on values adjusted 3,013,733 2,910,049 by State Valuation Ofﬁce indices

Total book value as per Financial Report 2,916,144 2,876,974

Note: The total value of land owned or occupied includes some land vested to RailCorp for which the land title is still registered in the name of State Rail Authority.

During 2005-06, 5 property sales were completed, yielding gross proceeds of $35,843,500.

Of the 5 properties sold 2 were by private treaty to adjoining landowners and 3 were to government bodies. Included in the last 3 was the Cooks River Goods Yard, which was sold by Ministerial Approval.

All the properties were surplus to operational requirements and were sold to raise funds for RailCorp.

There was no family connection or business association between any property purchaser and the person responsible for approving the disposal of the property.

Applications for access to documents concerning the details of properties disposed of during the year may be made in accordance with the Freedom of Information Act 1989.

Annual Report 2005-06 Rail Corporation New South Wales 109 Appendices

Appendix 22 Human Resources Staff numbers by level

People from Racial, People Aboriginal Ethnic, Whose People with Staff or Torres Ethno- First a Disability Responded Strait Religious Language People Requiring Total to EEO Islander Minority is not with a Adjustment Level Staff Survey* Male Female Background Groups English Disability at Work

< $31,352 145 50 139 6 0 13 6 1 1

$31,352 - $41,177 3,078 1,438 2,308 770 58 510 474 85 41

$41,178 - $46,035 2,599 1,117 2,137 462 38 344 309 90 38

$46,036 - $58,253 4,226 1,821 3,716 510 29 510 423 140 42

$58,254 - $75,331 1,599 882 1,352 247 10 238 203 67 32

$75,332 - $94,165 918 552 785 133 4 178 159 37 12

> $94,165 691 490 600 91 3 116 98 19 2

> $94,165 5 4 5 0 0 0 0 0 0

Total 13,261 6,354 11,042 2,219 142 1,909 1,672 439 168

Percentage of total staff by level

People People from Whose People Racial, Language with a Aboriginal Ethnic, First Disability People Ethno- Spoken Requiring & Torres Religious as a Child People Work- Total Strait Minority was not with a related Level Staff Respondents Men Women Islanders Groups English Disability Adjustment

< $31,352 145 34% 96% 4% 26% 12% 2% 2.0%

$31,352 - $41,177 3,078 47% 75% 25% 4.0% 35% 33% 6% 2.9%

$41,178 - $46,035 2,599 43% 82% 18% 3.4% 31% 28% 8% 3.4%

$46,036 - $58,253 4,226 43% 88% 12% 1.6% 28% 23% 8% 2.3%

$58,254 - $75,331 1,599 55% 85% 15% 1.1% 27% 23% 8% 3.6%

$75,332 - $94,165 918 60% 86% 14% 0.7% 32% 29% 7% 2.2%

> $94,165 691 71% 87% 13% 0.6% 24% 20% 4% 0.4%

> $94,165 5 80% 100%

Total 13,261 48% 83% 17% 2.3% 30% 26% 7% 2.7%

110 Annual Report 2005-06 Rail Corporation New South Wales Appendix 23 Executive Performance and Remuneration In accordance with legislative requirements, the following table contains the remuneration packages of executive ofﬁcers who earn over $206,101 per annum. No performance bonuses were paid to executive ofﬁcers from 1 July 2005 to 30 June 2006.

Total remuneration Position title Ofﬁcer package Performance review summary

Chief Executive Vince Graham* $447,200 • Delivered improved organisational performance in the areas of safety, Ofﬁcer reliability, and cleanliness and customer satisfaction. • Delivered new timetables in September 2005 and May 2006. • Progressed reforms in the areas of ﬁnancial management and budget. • Realigned the structure of RailCorp to promote a greater emphasis on customer service and asset management. • Improved executive governance for RailCorp. • Introduced a new Code of Conduct for all RailCorp staff. • Delivered key strategic improvement initiatives in accordance with the Corporate Plan.

Group General Rob Mason $374,400 • Led the successful implementation of new CityRail timetables Manager, in September 2005 and May 2006 resulting in on time running Service Delivery improvements to 91.8% for full year. • Led signiﬁcant improvements to all key performance indicators of customer satisfaction, punctuality, delays, journey time and staff customer service. • Successfully delivered rail services to Sydney’s major events through the year. • Achieved 17% reduction in Lost Time Injuries. • Established Service Delivery Group through merger of Train Services and Customer Service divisions. • Implemented control measures to achieve budget outcomes.

Group General Gary Seabury $301,600 • Reduced the number of Lost Time Injuries (LTI) by 25%. Manager, Asset • Reduced the number of infrastructure incidents causing peak hour Management delays by 18%. • Prepared a 5-year Whole of Rail Asset Plan. • Major projects commissioned on time included Sefton Resignalling, Bankstown Corridor Upgrade and Train Control systems for North Sydney and ESR. • Achieved revenue growth of $23.5m. • Established Asset Management Group through merger of Infrastructure and RollingStock organisations. • Produced sixth consecutive year of improvement in track condition and reduction in track defects.

Annual Report 2005-06 Rail Corporation New South Wales 111 Appendices

Total remuneration Position title Ofﬁcer package Performance review summary

Group General Richard Lumley $291,200 • Achieved an unqualified Audit report for the year ended 30 June Manager, Finance 2005. • Progressed development of enhanced budgeting and financial reporting systems. • Introduced an enterprise wide Portfolio Project Management Office. • Completed a strategic review of the Finance function. • Managed the provision of financial information to both internal and external uses. • Progressed further development of the enterprise wide risk management system.

Group General Clare Kitcher $280,800 • Facilitated the achievement of full Rail Safety Accreditation. Manager, Safety & • Developed Safety Management System to better reﬂect the Environment requirements of both WorkCover Authority and Independent Transport Safety and Reliability Regulator. • Implemented Hazard Action Planning process. • Updated the Safety Strategic Plan. • Introduced an Environmental Strategic Plan and commenced development of a RailCorp Environmental Management System. • Coordinated and monitored the organisation’s response to the recommendations of the Waterfall Special Commission of Inquiry and other signiﬁcant incidents. • Provided input to the development of national rail safety legislative reform.

Group General Barry Garnham $265,000 • Developed 2006 Timetable. Manager, Product • Established Program Coordination Unit for the development and Development implementation of the 2008 Timetable. • Progressed the development of the Digital Train Radio and Train Overspeed Protection projects. • Developed operational requirements for Metropolitan Rail Expansion Program. • Established Product Development Group.

Group General Fran Simons $228,800 • Improved HR administrative functions with introduction of the Manager, Human centralised HR Service Centre. Resources & • Achieved recruitment and training targets of 1,350 drivers by Industrial Relations December 2005. • Developed new driver training program. • Established Employee Excellence awards. • Improved bulk recruitment time frames from 9 months to 12 weeks. • Delivered 21,585 alcohol and 4,520 drug tests. • Commenced work on new classiﬁcation structure and consolidated employment conditions documents.

112 Annual Report 2005-06 Rail Corporation New South Wales Total remuneration Position title Ofﬁcer package Performance review summary

Group General Vicki Coleman $218,400 • Established new ICT structure and service model. Manager, • Led tender process to select outsourced provider for ICT operations. Information • Led successful upgrade and merger of SRA & RIC ERP systems into Communications & a single RailCorp function. Technology • Established a major four year technology reform program to improve business capacity to support Passenger Information and service disruption. • Successfully completed migration of all former SRA & RIC users and information to a single RailCorp technical environment.

Group General Sharyn Gregory $213,200 • Led the Strategy, Performance and Access functions. Manager, Strategy, • Led the development and implementation of key strategic projects to Performance and drive performance improvement. Access • Developed the Corporate Plan. • Coordinated RailCorp’s freight strategy. • Improved the performance reporting framework for the Corporation.

Project Director, Louise Hart $275,000 • Established ﬁnal shortlist of tenderers for the replacement of 498 Rollingstock non-air-conditioned carriages. Acquisition Strategy • Secured increased scope of procurement to include 13 additional trains for passenger growth. • Developed and issued Request for Final Committed Proposals, including contract terms and detailed speciﬁcations for the new rolling stock and associated maintenance facility. • Planned and commenced implementation of enabling works for new maintenance facility.

Deputy Project Fred Paton $270,000 • Managed the PPP Speciﬁcation development and ﬁnalisation Director, including RailCorp stakeholder sign off. Rollingstock • Managed the technical evaluation of six tenders across two train Acquisition Strategy types. • Established project delivery structures, project baseline programme and resourcing strategy. Commenced recruitment of key resources and development of project plans and management systems. • Commenced roll out of enabling works projects to facilitate the transition into service of PPP trains.

General Manager Kevin Wright $234,000 • Led the Operations Division’s contribution to the successful Operations introduction of the September 2005 & May 2006 timetables. • Reduced LTIFR for Operations Division by 34%. • Streamlined the Daily Timetable processes. • Successful consolidated several signal boxes and signalling panels into the major signalling complexes including Sefton, North Shore, North Sydney and ESR. • Improved ﬁnancial results for 2005/06 for Operations Division.

Annual Report 2005-06 Rail Corporation New South Wales 113 Appendices

Total remuneration Position title Ofﬁcer package Performance review summary

General Manager Ian Hill $234,000 • Reduced Train Crewing peak delay incidents from 58 per week to 13 Train Crewing per week. • Introduced “Just Culture” principles to the post incident management of train crew to improve safety outcomes. • Introduced rigorous crew attesting procedures, especially at stations. • With crew input, developed and introduced practical fatigue management principles. • Reviewed train crew communication effectiveness with crew and jointly introduced monthly depot meetings, performance feedback and more opportunities for crew to contribute suggestions for improvement.

General Manager John Minchin $234,000 • Reduced lost time injuries by 20% in a division of 1400 staff. Metropolitan • Met budget of $165 million for Routine Maintenance activities. Infrastructure • Completed reliability improvement program. • Led the asbestos control project. • Reduced the number of peak hour incidents caused by failed infrastructure from 35 incidents per month to 26 incidents per month.

General Manager David Foldi $234,000 • Delivered program of work within budget and an overall saving of Engineering $7.8m. Standards and • Supported Asset Management Group Annual Works Program Service through design and technical services on critical projects of Epping Chatswood Rail Link, Rail Clearways, Traction Supply Upgrade, Station Easy Access, Sefton Park Area Resignalling, Automatic Train Protection comprehensive review and Rolling Stock acquisition. • Delivered Annual Asset Integrity Reports for key asset classes. • Represented RailCorp in key industry forums, including the Code Management Company and Rail Cooperative Research Centre.

General Manager Ron Creighton $225,790 • Developed and implemented the RailCorp Incident Management Emergency Framework. Preparedness • Reviewed and actioned recommendations from Waterfall SCOI Report regarding emergency response capability. • Reviewed and actioned recommendations from Waterfall SCOI Report regarding passenger safety, in particular the Passenger Containment Policy. • Developed and implemented RailCorp’s Emergency Exercise Program.

Chief Health Ofﬁcer Armand Casolin $218,000 • Designed and implemented practical hearing, colour vision and mobility tests. • Developed a training package for Authorised Health Professionals under the National Standard for Health Assessment of Rail Safety Workers and reaccredited all existing RailCorp Authorised Health Professionals. • Developed a health package for rail safety work comprising guidelines for supervisors, HR ofﬁcers, examining doctors and psychologists.

114 Annual Report 2005-06 Rail Corporation New South Wales Total remuneration Position title Ofﬁcer package Performance review summary

Track Works Max Croucher $210,045 • Delivered the track infrastructure major periodic maintenance Annual Manager Works Program. • Delivered the non-Infrastructure capital program including the 2005/06 component of the 5-year major plant upgrade, depot facilities upgrade and minor plan acquisition programs. • Successfully delivered target outcomes of the assigned Personal Safety Action Plan.

Project Director, Bruce Jackson $210,000 • Completed an extensive Request for Market Information (RMI) Train Radio exercise and led the evaluation and determination of a GSM-R technology choice for a future Digital Train Radio System. • Gained industry support for Digital Train Radio System (DTRS). Functional requirements to be adopted for all metropolitan railway networks throughout Australia. • Completed and tested system design and operational requirements proposal for Train to Train and Crew Incapacitation Communications using current analogue communications technology.

* Chief Executive Officer remuneration contract Vince Graham was appointed on 19 December 2003 for a period until December 2008. His remuneration is fixed at $447,200 per annum and was determined by the Board and the Voting Shareholders. The decision on remuneration amount was based on the complexity and magnitude of the organisation’s operations and comparable State Owned Corporations Chief Executive Officer salaries.

CEO Termination Beneﬁt As well as the payment of statutory entitlements and superannuation, the contract provides for the payment of one month’s remuneration in the event that the contract is terminated. It also provides for an additional payment of eight months or less if date of termination is less than eight months prior to contract end date of 31 December 2008.

Executive Officers Profile The total number of executive officer positions with remuneration equal to or exceeding Senior Executive Service Level 1 was 212. Women held 37 of the positions. Comparative information is not available as this was not reported in the 2004-05 Annual Report.

Annual Report 2005-06 Rail Corporation New South Wales 115 Appendices

Appendix 24 Equal Employment Opportunity • Support for monthly meetings of the ATSI Network Committee HR policies and procedures and Spokeswomen’s Group. In the last year progress has been made in developing a suite of • Introduction of a new Equity and Diversity Governance human resource policies and procedures that reflect RailCorp’s framework to improve employee participation and values and business objectives. When completed, these policies consultation. The new framework consists of a Steering and procedures will replace existing State Rail and RIC policies Committee and five supporting Diversity Networks for RailCorp employees. representing the interests of women, Aboriginal people & Torres Strait Islanders, people with a disability, people from Seven HR policies and five procedures including the Code of racial, ethnic and ethno-religious minority groups and people Conduct, Just Culture, Drug and Alcohol, Fatigue Management with carer responsibilities. and Medical Standards have been finalised. • Ongoing support for Aboriginal & Torres Strait Islander staff including conduct of NAIDOC day celebrations at Penrith in The Code of Conduct was rolled out to staff through a cascade July 2005 and the provision of an ATSI Employee Conference of team briefings starting with the CEO briefing the Executive in November 2005. Management Team. Each employee received their own copy of the Code and a brochure summarising the Code was translated • Delivery of Leading Diversity Workshops for over 100 senior into eight community languages and was made available to managers in the Train Crewing Division employees on the intranet. • conduct of employee focus groups to inform development of the Grievance Procedures. In 2006/07 RailCorp will finalise development of all HR • Conduct of an ATSI Employment and Career Development procedures that are required to replace those of SRA and RIC workshop where HR practitioners and ATSI staff worked and will implement a communications plan to improve employee together to identify priorities for future strategies. awareness of the new policies and procedures. • EEO re-survey which resulted in an improvement in reliability of data (an increase in response rate from 23% to 48.3% of all In 2005/06, RailCorp’s Equity and Diversity Program focused employees). on initiatives designed to establish a good foundation for a review and update, in 2006/07, of our Equity and Diversity Our priorities in 2006-07 include: Management Plan. • Improving the range of EEO data collected and establish regular reporting on key indicators. Key achievements in 2005/06 included: • Inclusion of leadership behaviours and subject to performance • Building skills and consult employees about needs and review. priorities through the Equity and Diversity Steering Committee and Diversity networks. • For senior managers: ‘create and promote an organisational and team environment that embraces diversity’ (linked to • Developing and implementing a new Three Year (2006-09) ‘respect’ value). Equity and Diversity Management Plan in consultation with employees. • Middle managers: ‘foster a just culture where staff are treated in a fair and just manner...’ (linked to ‘safety’ value). • Developing and implementing an Indigenous Pre-Employment Program in association with TAFE NSW. • Creation and filling of a senior level Equity and Diversity Coordinator position. • Finalising and informing all employees of new HR policies and procedures including Discrimination, Harassment & Bullying • Inclusion, in the new RailCorp Code of Conduct, of workplace Free Workplace, EEO, Grievance and Flexible Work Practices standards regarding a discrimination/harassment and bullying- Procedures. free workplace, and the promotion of fairness and equity. Each employee attended a briefing by their manager about the • Developing and commencing roll out of an equity and diversity Code and received their own copy. A brochure summarising awareness program including, workshops and training the Code was also translated into eight community languages sessions for HR and key RailCorp personnel, publishing and was made available from the intranet. regular fact sheets, posters, and establishment of an equity & diversity website. • Review and redrafting of twenty HR policies and procedures to ensure, amongst other things, they promoted equity and diversity outcomes.

116 Annual Report 2005-06 Rail Corporation New South Wales • continuing to integrate equity and diversity objectives into HR Achievements which beneﬁt RailCorp employees with a procedures, processes and programs including induction, disability include: supervisor and management development programs, • improvements in access to rail transport and facilities performance development and reviews. • continuing to make reasonable adjustments to accommodate The EEO data displayed below is in accordance with Treasury employees with a disability (through work and job redesign Circular 02/17, which requires that the EEO section of the and provision of equipment) Annual Report is to include benchmarks or targets and a • ongoing rehabilitation programs for employees who have distribution index. become disabled in the workplace.

DISABILITY PLAN – Employee focus Key strategies planned for 2006/07 that speciﬁcally relate RailCorp has a responsibility under the Disability Services Act to employees with a disability include: 1993 to ensure the provision of services that enable people with • establishment of a Disability Network to: disabilities to achieve their maximum potential as members of • improve communication and consultation with employees the community through increased independence, employment with a disability opportunities and integration into the community. RailCorp is • provide a forum for employees with a disability to identify also require under this Act to prepare and implement a Disability barriers to, and strategies to improve, participation in the Plan and report on progress in implementing the Plan. workforce and career development • develop and implement initiatives and/or events that RailCorp’s achievements and plans in relation to improving promote and facilitate employment equity development access for customers with a disability are reported on page 32. of a strategy to promote employment equity and career Strategies to ensure that people with disabilities participate fully development for employees with a disability, for inclusion in the RailCorp workforce at all levels and are supported in their in the 2006-09 Equity and Diversity Management Plan career development objectives are incorporated in the RailCorp Equity and Diversity Management Plan 2006-09.

Annual Report 2005-06 Rail Corporation New South Wales 117 Appendices

Trends in the representation of EEO groups (See notes below)

EEO group Benchmark or target 2005 2006 Women 50% 14.6% 17.0% Aboriginal people and Torres Strait Islanders 2% 3.0% 2.3% People whose ﬁrst language was not English 20% 23.8% 26% People with a disability 12% 7.5% 7% People with a disability requiring work-related 7% 2.4% 2.7% adjustment Notes: 1. The EEO data in the above table are estimates based on the responses received from those employees who completed an EEO survey in June 2006. In 2005, 22.9% of employees had completed the survey and in June 2006, 48.3% had completed the survey. The estimate is calculated using a formula provided by the Premiers’ Department. 2. RailCorp was established on 1 January 2004. Since that date the total number of employees in RailCorp has progressively increased as employees from the State Rail Authority and the Rail Infrastructure Corporation were vested across.

Trends in the Distribution of EEO groups (See notes below)

EEO group Benchmark or target 2005 2006 Women 100 88 91 Aboriginal people and Torres Strait Islanders 100 88 82 People whose ﬁrst language was not English 100 98 95 People with a disability 100 98 100 People with a disability requiring work-related 100 100 95 adjustment Notes: The Distribution index is based and calculated on data collected through an EEO survey on 30 June 2006. The index is automatically calculated by software provided by the Premier’s Department. • A Distribution index of 100 indicates that the centre of the distribution of the EEO group across salary levels is equivalent to that of other staff. • Values less than 100 indicate that the EEO group tends to be more concentrated at lower salary levels than is the case for other staff. The more pronounced this tendency is, the lower the index will be. • In some cases the index may be more than 100, indicating that the EEO group is less concentrated at lower salary levels. • The Distribution index is not calculated where EEO group or non-EEO group numbers are less than 20.

118 Annual Report 2005-06 Rail Corporation New South Wales Appendix 25 Ethnic Affairs Priority Statement Appendix 26 Government Action Plan for Women RailCorp runs a mass transit operation and recognises that RailCorp is actively committed to developing and implementing some of our customers do not speak English. For this reason strategies aimed at improving the welfare of female employees we are committed to: and customers. RailCorp also has a strong commitment to • Providing passenger information that is clear, accessible improving service delivery for customers. and has low levels of language dependent information. This includes system maps which are displayed at stations Progress in this area includes: and in all train carriages, way finding signage using • Improved safety measures across the City Rail and pictograms which meet international standards and easy CountryLink networks including improved lighting, security, to use ticketing machines. There is an ongoing program to lifts and escalators for all customers, specifically maintain and upgrade these services. for women using the networks. • Implementing programs to target women in recruitment • Providing passenger information in various community and to retain women in its workforce, particularly in languages. non-traditional roles such as Transit Officers and Train In 2005- 2006 we developed and distributed brochures Crewing. describing our services and continued to update the web • Barrier-free entry option and the promotion of the site providing information on rail services. In addition, improved access for pregnant and elderly passengers when timetable and other major changes occurred we across the City Rail network. placed advertisements and media releases in community newspapers and media outlets. Similarly, during trackwork • Promotion of the CountryLink services for women when we bussed passengers publicity material relevant to travelling with young children or others who may be less the demographics of areas affected was published. These mobile. This includes sleeping compartments, initiatives will continue into 2006-2007. Finally, our multi- wheelchair access, baby change tables and a mobile cultural workforce assists us in serving our multi-cultural buffet service to passengers in their seats. community. • Ongoing development and implementation of procedures and practices that provide flexible work • Providing passenger audio-visual information that is clear, options and improve RailCorp’s performance as a family if language-dependent. This includes ensuring that all friendly workplace. new rollingstock has digitised audio-visual communication systems for clear presentation of stopping patterns and Appendix 27 Price Determination ensuring that new passenger information systems at See IPART Fare determination, page 38. stations are clear and provide audio and visual messages. The introduction of new rollingstock during 2006-2007 and the replacement of a third of our fleet by 2010 will have a significant impact in terms of better passenger information delivered through new technology. In addition, train crew and station staff receive training to improve the clarity of their announcements where this is required.

• Raising awareness of our staff to issues of cultural diversity. Transit Ofﬁcers standard operating procedures and training deals with cultural sensitivity. Station and Duty Managers receive training on matters such as EEO, diversity and anti-discrimination legislation. All RailCorp employees are required to treat each other and members of the public with respect under the Code of Conduct. These programs were rolled out during 2005-2006 and will continue into 2006- 2007.

Annual Report 2005-06 Rail Corporation New South Wales 119 Appendices

Appendix 28 Overseas Travel Annual leave Ofﬁcer and Class of or private Expenditure Actual Report position Travel details Dates travel travel taken estimate expenditure submitted? Colin Lay Travelled to France to 18 Economy Nil $18,613.00 $13,215 Yes attend International Rail September Signals Engineering (IRSE) 2005 to 5 Conference in Strasbourg October and to inspect Electric 2005 Train Management System (ETRMS) sites in France and UK. Anthony Lennon Travelled to France to 18 Business Nil $18,613.00 $20,156 Yes attend International Rail September Signals Engineering (IRSE) 2005 to 5 Conference in Strasbourg October and to inspect Electric 2005 Train Management System (ETRMS) sites in France and UK. Peter McGregor Travelled to France to 18 Business Nil $18,613.00 $18,244 Yes attend International Rail September Signals Engineering (IRSE) 2005 to 5 Conference in Strasbourg October and to inspect Electric 2005 Train Management System (ETRMS) sites in France and UK. Louise Raggett Travelled to UK to attend 18 Business 2 days $9906.62 $8326.13 Yes and to present at Second November European Conference on 2005 to 27 Rail Human Factors and November additional meetings with UK 2005 Rail operators Derek Williams Travelled to Canada to 14 Business Nil $13,846.00 $12,411.65 Yes attend 7th Annual Workshop November on Highway-Railway 2005 to 24 Grade Crossing Research November in Montreal and to meet 2005 with Transport Canada representatives regarding Level Crossings. Helen Fullarton Travelled to Germany at the 9 March Nil Nil All costs paid by Yes invitation of DeutscheBahn 2006 to DeutscheBahn to attend the Transport 18 March Safety Conference 2006 2006 in Frankfurt and to make a presentation on Risk Based Training Needs Analysis and the RailCorp Context

120 Annual Report 2005-06 Rail Corporation New South Wales Annual leave Ofﬁcer and Class of or private Expenditure Actual Report position Travel details Dates travel travel taken estimate expenditure submitted? Peter Kellaway Travelled to the UK to 5 May 2006 Business Nil $18,865.52 $18,849.36 Drafted manage the administration to 23 May of the psychometric testing 2006 for the Signal and Electrical Engineers being recruited from the UK. Paul Grifﬁths Travelled to Germany to 10 May Business Nil $15,560.00 $18,085.50 Drafted attend the VDEI Equipment 2006 to 4 Exhibition. Visit other June 2006 overhead wiring facilities in Netherlands, Denmark, Sweden, Italy, France & Switzerland Graham Leader Travelled to Germany to 10 May Business Nil $15,560.00 $18,085.50 Drafted attend the VDEI Equipment 2006 to 4 Exhibition. Visit other June 2006 overhead wiring facilities in Netherlands, Denmark, Sweden, Italy, France & Switzerland Gabriel Fantin Travelled to UK to conduct 19 May Business Nil $21,615.52 $21,720.82 Drafted interviews for the recruitment 2006 to 9 of Signal and Electrical June 2006 Engineers from the UK Christopher Travelled to UK to conduct 19 May Business Nil $21,615.52 $16,613* Drafted Fitzgerald interviews for the recruitment 2006 to 9 (Contractor) of Signal and Electrical June 2006 Engineers from the UK Dilip Goyal Travelled to UK to conduct 19 May Business Nil $21,615.52 $23,934.00 Drafted interviews for the recruitment 2006 to 9 of Signal and Electrical June 2006 Engineers from the UK Nigel Howlett Travelled to Germany to 25 May Business Nil $15,705.00 $16,370.00 Drafted attend VDEI Equipment 2006 to 6 Exhibition in Germany. Visit June 2006 2 key European Renewals contractors Jarvis in UK and Comsa, Spain to review new technologies, processes & methods for track based products

Annual Report 2005-06 Rail Corporation New South Wales 121 Appendices

Annual leave Ofﬁcer and Class of or private Expenditure Actual Report position Travel details Dates travel travel taken estimate expenditure submitted? Max Croucher Travelled to Germany to 25 May Business Nil $15,705.00 $16,370.00 Drafted attend VDEI Equipment 2006 to 6 Exhibition in Germany. Visit June 2006 2 key European Renewals contractors Jarvis in UK and Comsa, Spain to review new technologies, processes & methods for track based products Armand Casolin Travelled to Italy to attend 4 June Business 2 days $16,233.00 $16,100.69 Yes International Commission 2006 to 18 on Occupational Health June 2006 2006 World Congress in Milan and provide training to authorised health professionals in UK who will be involved in UK Recruitment Project. Michael Little Travelled to Hong Kong to 21 June Economy Nil $2862.00 $2411.45 Drafted visit Mass Transit Railway to 2006 to 24 compare door maintenance June 2006 and overhaul activities to improve skills and knowledge of door system design and maintenance for RailCorp staff Russell Scott Travelled to Hong Kong to 21 June Economy Nil $2862.00 $2411.45 Drafted visit Mass Transit Railway to 2006 to 24 compare door maintenance June 2006 and overhaul activities to improve skills and knowledge of door system design and maintenance for RailCorp staff

Appendix 29 Investment Management Performance In the year ended 30 June 2006, RailCorp earned 5.69% on surplus funds invested. During the same period the comparable Treasury Corporation ‘hour-glass’ cash Facility earned 5.69%.

Appendix 30 Cost of producing this report A total of 200 RailCorp Annual Reports were produced. The total cost was $8,506 (excluding GST).

122 Annual Report 2005-06 Rail Corporation New South Wales Contact us Rail Corporation New South Wales

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