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Home , Ballarat, CountryLink, Dysons, El Zorro (railway), Jewell railway station, Kyneton railway station

V/LINE PASSENGER PTY LTD ABN 29 087 425 269 GPO Box 5343 VIC 3001

HEAD OFFICE/ADMINISTRATION Level 23, 570 Bourke Street Melbourne VIC 3000 Telephone (03) 9619 5900 Facsimile (03) 9619 5000 vline.com.au

CUSTOMER INFORMATION, RESERVATIONS AND SALES Telephone 136 196

CUSTOMER FEEDBACK Freecall 1800 800 120

All information correct at time of printing, October 2009. ANNUAL REPORT 2008–2009 V/Line is ’s largest regional public transport operator, serving with more than 1400 train and 600 coach services per week. In 2008–09, a record 13.17 million passenger trips were made on our services. This is the annual report of V/Line Passenger Corporation (VLPC) and its wholly owned subsidiary, V/Line Passenger We are also a major employer, with a workforce of 1382 employees – many of whom live in regional Victoria. Pty Ltd (VLPPL). V/Line complies with two sets of governance V/Line is a not-for-profi t operator, fully owned by the State of Victoria, with train services running between Melbourne requirements – those applying to VLPC as a statutory and the following townships: corporation and a state business corporation, and those • , South Geelong, Marshall and applying to VLPPL as an entity incorporated under the • Melton, , and Ararat Corporations Act. As a franchisee, V/Line must also fulfi ll • Sunbury, , , and its contractual obligations under the franchise agreement • Seymour, / and with the Victorian Department of Transport (Director of • , Sale and . Public Transport).

Coach services connect with the rail network and serve regional Victorian communities where trains do not operate. V/Line is responsible to the Victorian Minister for Public Some coach services run interstate, to , and . These coaches are operated by the Transport and the state’s Treasurer. private sector under contract to the Department of Transport. This report provides a summary of V/Line’s key activities We also operate and maintain 3770 kilometres of broad-gauge rail track used by the passenger and freight rail services and fi nancial performance for the period 1 July 2008 to Contents following the Victorian Government’s buy-back of the regional network and access business from Pacifi c National and 30 June 2009. transferral to V/Line in May 2007. VISION While V/Line is well known in regional Victoria as a passenger service operator, we are also an access provider to freight Connecting Victorian communities and . operators who use our rail network to transport goods across the state. In recognition of this important economic role, on MISSION 14 October 2008, V/Line Passenger Corporation was also declared a state business corporation under the State Owned To deliver safe, reliable, accessible and sustainable Letter to the Minister 02 Safety and security 20 Finance 60 Enterprises Act 1992. passenger and freight transport services. Key partnerships 04 Our customers 26 Corporate governance 64 Strategic agenda 05 , environment Executive team 68 VALUES Chairman’s report 06 and community 32 Financial statements 69 • Put our customers fi rst CEO’s report 10 Our people 40 Energy Effi ciency Opportunities • Be honest Year in review 14 Operations 44 Program – Public Report 93 • Take responsibility Passenger network map 16 Fleet 50 Disclosure index 97 • Strive for excellence Cover: Bendigo Station Offi cer David Neven and Kathryn Mackenzie, from the City of Greater Bendigo. • Treat people and the environment with respect Key results 17 Infrastructure 54 Opposite: Ballarat Area Services Manager Michael Richardson and ’s Director of Commercial Operations, Facts and fi gures 18 Victorian rail network map 59 Richard Berman-Hardman, at the award-winning tourist attraction. With SAFETY being paramount in all we do.

sectionsesecttion 01 13 October 2009 The Hon. Minister for Public Transport Level 16, 121 Exhibition Street Melbourne VIC 3000 Dear Minister It is with pleasure that I present the annual report for V/Line Passenger Corporation and V/Line Passenger Pty Ltd (V/Line) covering the fi nancial year 1 July 2008 to 30 June 2009. This period was the third consecutive year of considerable passenger growth for V/Line, with over 13 million trips made on our train and coach services – another record. Passenger trips on train services have increased by a remarkable 79 per cent in the four years since 2005–06, representing a major shift in the travel habits of regional Victorians. This growth in passenger numbers is a testament to the recent years of investment in regional rail infrastructure, rolling stock and staff – investment that is now enabling many people to live in the country and travel daily to Melbourne for work. A key focus of this report is V/Line’s partnerships with our many community, business and government stakeholders, which help us deliver our essential service to regional Victoria. It is through these partnerships that V/Line has grown so rapidly, and it is with our partners that we will continue to improve our services. V/Line again continued to make fi nancial effi ciencies during the year, and as a not-for-profi t business, our fi nancial result for 2008–09 was in line with expectations. The coming years present another exciting era for regional public transport, following government commitments to build the nation’s biggest ever rail project – . Again, I thank the state government for its ongoing partnership with V/Line, and on behalf of the board and management look forward to expanding the V/Line network further in 2009–10. Yours faithfully

Frank Tait Minister for Public Transport Lynne Kosky and Deputy Director of Public Transport, Bus and Regional Services, Sergio Lacchiana, at the completion of construction of Wendouree Station in Ballarat. Chairman

V/LINEVV/LV///LL IININENEN E ANAANNUALN NUANUN UAA LLR RREPORTEEPPOP O RTR T 2002022008-20090 0 8 -2- 2 009000090 9 LETTER TO THE MINISTER 2/3 key partnerships Strategic agenda

To deliver our regional transport services, V/Line partners – Infrastructure Projects Division (IPD) – • Transport Ticketing Authority (TTA) – responsible for V/Line’s strategic agenda with a range of stakeholders, including: implements government rail projects developing the new smartcard for Victoria with – Public Transport Safety Victoria (PTSV) – Kamco, the successful tenderer for the project. • Assetco Management Pty Ltd, trading as Southern V/LINE’S OBJECTIVES: Cross Station Pty Ltd (SCSPL) – manager of administers the rail safety accreditation system TTA also assumed responsibility for management SAFETY AND SECURITY Continuously improve safety and Southern Cross Station – Freight, Logistics and Marine (FLAM) – of V/Line’s ticket agents in 2008–09 security in all aspects of • Australian Rail Track Corporation (ARTC) – access provider administers government freight policy • rail freight operators, including Pacifi c National our operations and business. for the main interstate corridors. V/Line will require access • Downer EDI Rail (EDI) – maintains our locomotive-hauled and El Zorro – users of the regional network to provide the Albury service after the broad gauge line is and Sprinter fl eets and the VLocity fl eet as sub-contractors • Victorian Managed Insurance Authority (VMIA) – RETAIN AND GROW REPUTATION Be an integral and converted to standard gauge to Bombardier provides the majority of V/Line’s insurance requirements respected organisation in • Connex – metropolitan train operator and access provider • Essential Services Commission (ESC) – • Victorian Government – the Minister for Public the Victorian community. administers the Victorian Rail Access Regime Transport and the Treasurer to the metropolitan network SHAREHOLDER SATISFACTION Be recognised by the government • Independent Transport Safety and Reliability Regulator • VicRoads – major partner in our work to improve level • Bombardier – manufacturer and maintainer of our VLocity AND FINANCIAL RESPONSIBILITY as demonstrating strong (ITSRR) – administers rail safety regulation in New South crossing safety as the authority for main roads train fl eet governance, effi cient operations Wales (V/Line operates some broad gauge track in • VicTrack – owner of rail infrastructure which is leased • Councils – V/Line works with regional municipalities to and fi nancial responsibility. meet the transport needs of their communities southern NSW and will operate on the standard to V/Line and other operators either via the Director of GROW THE BUSINESS Sustainably grow patronage and • Department of Transport (DOT): gauge in Albury/Wodonga from 2010) Public Transport or directly. freight volumes year-on-year. – Public Transport Division (PTD) – administers V/Line’s • / Viclink – call centre and journey planner V/Line also partners with a wide range of suppliers who franchise agreement, regional infrastructure lease, subsidy provider as well as advocate for public transport deliver goods and services essential to our business. ‘ON-TIME’ AND ‘IN-FULL’ SERVICE DELIVERY Improve service delivery each year. payments, and V/Line branded coach contracts CUSTOMER SATISFACTION Ensure our reputation for excellent service stands out, with customer satisfaction the highest among transport operators and access managers. EMPLOYEE SATISFACTION Be recognised as an employer of choice in the Australian rail industry, with a positively motivated, engaged and skilled workforce. COMMUNITY AND ENVIRONMENTAL RESPONSIBILITY Contribute to the sustainability of Victorian communities and the environment.

V/LINE ANNUAL REPORT 2008-2009 STRATEGIC AGENDA 4/5 ‘Nation building’ has become a popular and bold term PATRONAGE GROWTH WELL MANAGED used to describe the major road and rail infrastructure In 2008–09, we recorded more than 13 million passenger projects which will shape Australia’s physical and trips – a 10 per cent increase on last year. While the term economic landscape. ‘unprecedented’ features regularly in this report, it is the During the year it was announced that Victoria will play a word that best describes this territory for V/Line, and major role in this vision, with unprecedented investment particularly our frontline staff who manage our growth from the federal and state governments for Regional Rail professionally on a day-to-day basis. Link. This $4.3 billion project is set to increase services This massive growth has it roots in the Regional Fast Rail across the V/Line and metropolitan rail networks and project that started in 2003 and resulted in vastly improved will be one of the biggest infrastructure projects Victoria services. This in turn led to patronage records being has ever seen. smashed every year since as more people saw the benefi ts This investment signals confi dence in the future of Victoria’s of country rail over the car. In 2006 we saw the introduction public transport system and recognises the challenges we of thousands of extra services and the roll-out of 40 new face as a result of our record patronage growth. VLocity trains. The following year, fares were cut by an average of 20 per cent at a time of rising petrol prices, On completion of Regional Rail Link, our Geelong, Ballarat giving people a major cost incentive to make the switch. Start of Regional Rail Link works at Southern Cross Station. v and Bendigo customers will experience improved reliability as a result of the construction of up to 50 kilometres of In this reporting year, we have seen the fi rst 14 of up to 74 new track in Melbourne’s western suburbs, avoiding the more V/Line carriages roll off the production line following bottleneck in the metropolitan network. For the fi rst time, an extension of the state government’s commitment to more V/Line’s regional trains will have their own track space and rolling stock. These carriages have been deployed across will not have to compete with busy metropolitan trains. In the network to services most in need, providing an extra practical terms, it is expected the project will provide the 76 seats per carriage on heavily patronised trains. In another capacity for more than 20 extra train services every hour fi rst, these extra carriages helped create our fi rst seven- across these three lines. carriage VLocity trains on the Geelong line – the largest passenger trains in Victoria.

Victorian Premier John Brumby and Federal Transport Minister Anthony Albanese welcome the start of works on the $4.3 billion Regional Rail Link project, which will boost capacity by separating regional and metropolitan trains in Melbourne’s west.

V/LINE ANNUAL REPORT 2008-2009 CHAIRMAN'S REPORT 6/7 I commend the government for its ongoing investment in The campaign in the metropolitan area started in November The project promises to stimulate the economy in the regional public transport. V/Line’s services have become 2008 and aimed to boost regional train through TV, long term and sustain jobs. It is also the biggest single V/LINE TRAIN AND COACH PASSENGER TRIPS vastly more attractive over the past few years following print, outdoor and online advertising. The campaign investment in the metropolitan rail network since > major spending on the Regional Fast Rail project and the objective was to get Melburnians to shift perceptions to Melbourne’s underground was built. HAVE INCREASED BY 82 PERCENT OVER FIVE YEARS initial purchase of new VLocity trains. However, we will showcase the ‘new V/Line’. THE V/LINE TEAM soon embark on the next new and exciting era in V/Line’s Our partnerships with the state government, regional The dedication of our staff and management team evolution with the latest round of fl eet purchases and councils, business and tourism operators will continue to has been outstanding during this very busy year and it the government’s commitment to Regional Rail Link. Our benefi t country Victoria and V/Line alike as we look for is our grass-roots customer focus that stands us apart. customers have welcomed this major investment through new ways to promote the regions and new-found I thank the entire V/Line team for another excellent year – the high satisfaction rating they continue to give V/Line and competitiveness and comfort of our services. through the record numbers in which they continue to use my sixth as chairman. 04–05: 7.25 million our services. TTHE H E FFUTURE U T U R E I would also like to thank my fellow board members for Our challenge is to keep pace with demand, and the their hard work in what has proven to be a challenging and ENCOURAGING FURTHER SUSTAINABLE GROWTH Regional Rail Link will allow us to do just that. But bold rewarding year, particularly the hard-working Catherine 05–06: 7.64 million V/Line has a close relationship with country Victoria and projects of this scale require considerable investment which, Scott who retires from the board after serving as deputy people in the regions can see for themselves the benefi ts in Australia, has traditionally been the sole domain of state chairperson. Welcome to Fiona Bennett and David and importance of our service. However, the Melbourne governments when it comes to public transport. Worth who joined us this year, bringing fresh ideas and 06–07: 9.72 million market has proven to be somewhat elusive and slower to While major new roads infrastructure has attracted massive contributions to the table. see the massive change for the better on regional trains. investment from the Commonwealth, federal spending I look forward to an exciting 2009–10 as we see projects It is a sign that our rapid growth in the regions has been so on rail transport has been previously limited to intrastate grow from seed and as we watch customers reap the 07–08: 11.96 million well managed by the government and V/Line that we have freight projects. For this reason, the $3.2 billion secured benefi ts of projects that have already begun. We have our the confi dence to stimulate new markets and continue to from the federal government is a landmark shift in transport challenges cut out for us granted, but the future is bright Frank Tait grow in a sustainable way. To this end, we have worked hard priorities (the remaining $1.1 billion for this project will be as we continue to provide regional Victoria with this vital to encourage Melburnians into regional Victoria through our Chairman 08–09: 13.17 million 10% met by the state). service. > See Things Differently marketing campaign, and in return we are beginning to see some good results.

* Includes Department of Transport privately marketed coaches. – Rail patronage by line detailed on pg 30.

V/LINE ANNUAL REPORT 2008-2009 CHAIRMAN'S REPORT 8/9 The 2008–09 year has seen the strengthening of This is an excellent result considering that three of our partnerships between V/Line, our staff and the many fi ve rail corridors were shut down by the 7 February ‘Black regional communities we serve. Saturday’ bushfi res. Fires swept through the township Track works at Maryborough Station. v Throughout the year we met with 34 regional councils, a of Wandong, destroying the station’s platform, pit, 1200 range of government departments, MPs, business groups sleepers and two rail bridges on the Seymour line. Fire also and community organisations to better understand the burned more than 3000 sleepers on the Warrnambool line changing transport needs of country Victoria. We also near Camperdown; and although the line was not continued our successful on-train consultations to give damaged, it closed for a day due to the proximity of fi res. our customers direct access to senior management, and More than $1 million worth of damage was caused to we continued to work with hundreds of local suppliers and V/Line infrastructure, and considering the scale of the service providers across the state to further spread the damage, the fact that Seymour and Warrnambool line economic benefi ts of our service. services were disrupted for just nine days was nothing These partnerships have not only helped us improve short of remarkable. Without our dedicated, in-house our service dramatically in recent years and facilitated infrastructure team (which has only been part of V/Line for CEO's report unprecedented growth, but they have also paved the the past two years), it is highly unlikely that such a quick way for us to continue to grow. recovery would have been possible. I am extremely proud of the response not only of our infrastructure workers, but MEETING THE CHALLENGE OF EXTREME WEATHER also our operations team who were constantly in touch with Perhaps the greatest test of our staff was the heat wave that emergency services to safely plan road coaches. swept Victoria during January and February, with several days above 40 degrees, power black-outs, heat-related train EXPANDING OUR SERVICES speed restrictions and the devastating impact of bushfi res. Customer confi dence is demonstrated not only in our high satisfaction rating of 78.4, but in our record patronage – A proactive, well-planned and coordinated response with the ultimate guide to how we’re performing as an operator. government agencies and other transport operators saw nearly all V/Line services run. All but 41 out of 11,834 Such massive support for regional train services has scheduled services over those two months either ran encouraged further state government investment in normally or were replaced with road coaches. Of this 20 of infrastructure, including the opening of Ballarat’s second those couldn’t be replaced as road access was cut off during railway station at Wendouree during the year. In December, the peak of the bushfi res. the government also made an unprecedented commitment V/Line CEO Rob Barnett and infrastructure worker Terry Pring at Maryborough Station. to public transport in its , which

V/LINE ANNUAL REPORT 2008-2009 CEO'S REPORT 10/11 includes a new Regional Rail Link to provide extra dedicated This project, which will be completed by the Australian Rail Our staff lost-time injury frequency rate and customer CONTINUING TO BREA K RRECORDS E C O R D S Total income for the V/Line business was up 13 per cent regional train tracks through Melbourne’s western suburbs. Track Corporation next year, will deliver a more reliable and incidents within our control were on par with last year at More than 13 million passenger trips were made on V/Line to $465.2 million. This included a 15 per cent increase While Regional Rail Link is expected to take fi ve years to comfortable service to our Albury / Wodonga line customers. 12.1 per million hours worked. While it is pleasing that there trains and coaches for the fi rst time in Victorian history – a in farebox revenue to $68.6 million, and a 12.7 per cent complete, within our sights is the return of train services to has been little change despite record patronage, this result massive endorsement of recent years of investment in regional increase in government subsidies to $255.6 million. OUR SAFETY FOCUS rail. This is a 10 per cent increase on last year’s patronage and Maryborough, which was also announced in the transport also demonstrates that we must remain vigilant to drive a However, expenses also rose 12 per cent to $471.6 million, As we grow at a rapid rate, so too must our systems, to extends the record–breaking era after a 27 per cent increase plan. This promises to be a boon to the V/Line business reduction in incidents. with cost increases in train maintenance and coaches as we ensure our excellent safety record is not compromised. in 2006–07 and a 23 per cent increase in 2007–08. because the reopening of the lines to Ararat and Bairnsdale travel further. Revenue from freight access fees continues Ongoing training and procedure improvements, as Another area of ongoing safety focus is level crossings. fi ve years ago have been strongly supported by communities At the same time, our infrastructure team delivered a major to be poor as a result of the drought’s impact on harvests. part of our Rail Resource Management pilot program, Our partnerships with VicTrack, the state government, in those regions and we expect the same from Maryborough. maintenance works program on our passenger network. In 2008–09, just $2.7 million was gained from access have contributed to the good safety results. This includes Department of Transport, VicRoads and regional councils This included platform and stabling extensions to cater for charges (down from $4.5 million in 2006–07) – well below Creswick Station will also be re-opened as part of this project, management programs to make sure staff have the right has seen many crossings upgraded throughout the year, longer trains with extra seating capacity, and the replacement the considerable cost to maintain the extensive freight rail with a daily return service to provide access to equipment to safely carry out their jobs and understand and direct V/Line maintenance work has been carried out of more than 114,000 sleepers across the state. network. and employment opportunities in Ballarat, as well as health the importance of reporting all issues regardless of how at many to improve sightlines. This work will intensify in and services in Ballarat and Melbourne. Passenger The ongoing maintenance program has continued to produce insignifi cant they may seem. the coming year as we work with road owners to implement As V/Line is a not-for-profi t business funded on a cash I also thank our many partners across regional Victoria for services are expected to return in the second half of 2010. tangible benefi ts for our customers as it has been a major Emergency and crisis management training continued to be safety interface agreements to continually improve safety at basis by the Department of Transport, accounting standards their support, whether for providing goods and services to factor in train punctuality on our regional network improving require a defi cit to be reported as asset depreciation and our business, for representing the transport needs of Nearing completion is the North East Rail Revitalisation a focus this year, with key staff tested in a range of scenarios road–rail intersections. for the third year in a row to 95.2 per cent on time, despite Project which is converting 200 kilometres of track between to ensure V/Line is well-prepared to help our customers and other non-cash expenses are not funded. As a result, V/Line their communities, or for travelling with us in record extreme weather challenges. This is an excellent result and Albury and Seymour from broad to standard gauge. emergency response agencies in the event of an incident. this year reports a consolidated loss before tax for the year numbers yet again. also demonstrates the success of our operations team in of $6.4 million (down from $9 million last year and It’s an exciting time for public transport in Victoria, managing patronage growth so well. $23.3 million in 2006–07). As a business charged with and V/Line is proud to be leading the switch back to Similarly, major maintenance was undertaken on the rail maintaining a currently under-utilised freight network, this train and coach travel. freight network with 59,000 sleepers replaced to improve fi nancial result is in line with expectations. However, a freight movements across Victoria. breaking of the drought and return to better freight traffi c may improve the fi nancial result in future years. FINANCIAL PERFORMANCE As more people travel by train and coach, V/Line becomes THE YEAR AHEAD more fi nancially effi cient and the benefi t of our service to the The past year is one of many accomplishments and I thank Rob Barnett Victorian economy more evident. The subsidy per passenger the entire V/Line team for an outstanding contribution. Chief Executive Offi cer trip dropped again this year to $19.42, from $19.88 last year However, the coming year promises to be equally busy In May 2009, the Bairnsdale community celebrated fi ve years since the return of their train services. > and $22.74 in 2006–07 – an ongoing improved return on as we prepare to return passenger trains to Maryborough the taxpayer’s investment. and works start on Regional Rail Link.

V/LINE ANNUAL REPORT 2008-2009 CEO'S REPORT 12/13 JANUARY V/Line boosts train maintenance MARCH APRIL AUGUST SEPTEMBER and readies a fl eet of 80 coaches Passengers made a record 1.097 V/Line’s support of the MAY Victorian Premier John Brumby Regional Victorian footy fans NOVEMBER to support trains as Victoria million trips on V/Line trains Castlemaine State Festival sees More than 400 Bairnsdale launches the fi rst of V/Line’s made a record quarter of a V/Line launches the See Things experiences one of its hottest during the month – boosted 28 per cent or 3570 people from residents welcome a special PUBLIC TRANSPORTthree-carriage OMBUDSMAN VLocity trains million trips onLorem V/Line ipsum trains dolor sit amet,Differently consectetuer campaign, adipiscing which elit, summers ever, including severalIMPROVING OURby about CUSTOMER 20,000 trips COMMUNICATION made to outside of the region catch the anniversary train to the station Lorem ipsum dolorinto service. sit amet, Every consectetuer month a new adipiscing elit,during the AFLsed home-and-away diam nonummy nibh euismodincludes tincidunt TV advertising, ut laoreet in adolore bid days above 40 degrees andLorem a ipsum dolorand from sit amet, the popular consectetuer Australian adipiscing elit,train to the event, helping to in celebration of fi ve years sed diam nonummycarriage nibh will euismod enter service tincidunt ut laoreet doloreseason, includingmagna 22,472 aliquam trips erat volutpat.to increaseUt wisi enim travel ad to minim regional veniam, major statewide power blackoutsed diam nonummyInternational nibh euismod Airshow tincidunt at Avalon ut laoreet doloreinject more than $480,000 into since trains returned to the magna aliquamuntil erat at volutpat. least 2012. Ut wisi enim ad minim veniam,during the Septemberquis nostrud fi nals. exerci tation ullamcorperVictoria by suscipitMelburnians. lobortis nisl disrupting services. magna aliquamnear erat Lara. volutpat. Ut wisi enim ad minim veniam,the local economy. Gippsland town.

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AUGUST NOVEMBER DECEMBER FEBRUARY APRIL APRIL MAY Works start to lengthen The last passenger train runs to The state government Black Saturday bushfi res More than 7000 people and The V/Line Life Training program The Victorian and federal platforms on the Geelong line the old Wodonga Station ahead announces its $38 billion temporarily close the Gippsland businesses with land adjoining re-launches with a broader governments jointly announce to accommodate seven-carriage of works to upgrade the line Victorian Transport Plan which line and burn sections of track at V/Line’s tracks were contacted community focus to bring the biggest investment in VLocities – the longest and construct a new station in will deliver new V/Line trains, Wandong and Camperdown. as part of a special campaign information sessions about Victorian regional rail history, with passenger trains in the state. Wodonga as part of the North station upgrades, return services V/Line crews mobilise quickly to to encourage farmers to better depression, drugs and binge $4.3 billion committed to a new East Rail Revitalisation Project. to Maryborough and dedicated replace over 3000 sleepers and secure animals to prevent the drinking to teenagers in Regional Rail Link to give V/Line tracks for V/Line on part of the two bridge decks. deaths of sheep, cows and other 12 regional towns. trains on the Geelong, Ballarat metropolitan network. livestock on train lines. and Bendigo their own tracks through metropolitan Melbourne.

V/LINE ANNUAL REPORT 2008-2009 YEAR IN REVIEW 14/15 1 4 / 1 5 Passenger network map Key results CHANGE 2009 2008 2008 2007

Mildura

TO BENDIGO TO SEYMOUR

TO BALLARAT Sunbury

Watergardens Robinvale Melton Broadmeadows MELBOURNE Rockbank Essendon METRO Sunshine North Melbourne Footscray Flinders Street Newport Richmond Ouyen Werribee Caulfield Southern Piangil TO GEELONG Cross Clayton Manangatang Station (Spencer Street) Dandenong > > Pinnaroo Griffith Berwick Total customer trips (rail & coach) > 10% 13,169,434 11,960,167 Pakenham To Swan Hill TO GIPPSLAND

Sea Lake Rail passenger trips > 9.5% 12,050,176 11,008,229 Finley Barham

Kerang To Coach passenger trips* > 17.6% 1,119,258 951,938 Hopetoun Tocumwal Birchip Mulwala To Canberra

Cohuna Barmah Tickets sold > 18.2% 5,136,692 4,344,8816 Cobram Rutherglen Pyramid Nathalia Yarrawonga Echuca Albury Farebox revenue > 15% $68.6 million $59.6 million Numurkah Wodonga Warracknabeal To Adelaide Nhill Rochester Kyabram Springhurst Donald Shepparton Farebox (% breakdown) < 1% 71% full fare 72% full fare Stanhope Beechworth Dimboola Wedderburn Elmore Murtoa Rupanyup St Arnaud > 1% 29% concession 28% concession Murchison Mt Beauty Horsham Dunolly East Bendigo Bright

Subsidy per passenger trip < 2.3% $19.42 $19.88 Heathcote Mansfield Maryborough Stawell Castlemaine Seymour †

Mt Buller Short-distance services > 2.3% 61,882 60,510 Avoca Wallan To Narooma & Kyneton Batemans Bay Yea †

Ararat Daylesford Lancefield Long-distance services < 10.6% 11,238 12,568 Creswick Woodend Whittlesea To Canberra Glenthompson Sunbury Skipton Fleet: Ballarat Melton To Adelaide Hamilton Bacchus Maffra Marsh Ringwood Cann River Casterton Bairnsdale > VLocity carriages > 17.5% 94 80 Werribee Derrinallum Warragul Mortlake Geelong Melbourne (see inset) Dandenong Lakes Entrance > Locomotives – 41 41 Mt Gambier Heywood Lara Camperdown Sale Lang Lang Traralgon Koroit > Loco-hauled carriages – 138 138 Terang Korumburra Portland Port Fairy Colac Leongatha Anglesea Anderson Geelong line train service > Sprinters (single-unit) – 21 21 Lorne Wonthaggi Yarram Warrnambool Cowes Inverloch Ballarat line train service Stations > 1.2% 83 82 Cape Port Campbell Apollo Bay Paterson Bendigo line train service

Employees (total head count) > 4.7% 1382 1320 Seymour line train service

Gippsland line train service * Includes DOT privately-marketed coaches. † Short-distance services increased (and long-distance services decreased) as a result of Albury trains being stopped short at Seymour during track upgrade works. Coach service

V/LINE ANNUAL REPORT 2008-2009 KEY RESULTS 16/17 1 6 / 1 7 Facts and figures 2009 2008 2008 2007 2008 2007 2009 2008 2008 2007 2009 2008 2008 2007 2009 2008

> > > > > > > > CUSTOMERS SAFETY OPERATIONS FINANCE

Passenger trips (rail and coach)* >>>>>> 13.17 million 11.96 million All of V/Line lost-time injury frequency Reliability overall (short & long distance Revenue from < Customer satisfaction index rate (LTIFR) per million hours worked services, average monthly performance) 98.3% 98.7% operational activities >>>>> $381.2 million $328.3 million

(within V/Line’s control) > 12.1 12.03

(DOT target 68) – Trains 74.8 76.7 Reliability – short distance <<< 98.1% 98.5% Farebox $68.6 million $59.6 million Customer satisfaction index – Coaches 79.2 80.3 Above-rail LTIFR per million Reliability – long distance 99.4% 99.7% Government subsidies $255.6 million $226.7 million

hours worked (within V/Line’s control) >>>> 15.4 13.8

No. of customer information enquiries < 781,328 803,016 Punctuality overall outside metro network Other $57.0 million $42.0 million Above-rail LTIFR per million No. of customer feedback cases (short & long-distance services on time Revenue from hours worked – with stress & trauma 40.1 28.2 about V/Line 13,582 12,225 to 5 and 10 mins respectively, non-operational activities $84.0 million $83.6 million Below-rail LTIFR per million average monthly performance) 95.2% 94.5% No. of on-train consultation hours worked (within V/Line’s control) 5.2 8.1 sessions with customers 13 12 Punctuality Below-rail LTIFR per million – short distance on time to 5 minutes 85.5% 86.1% Compensation paid to customers

hours worked – with stress and trauma < 5.2 9.4 for V/Line not meeting on time targets Punctuality

(complimentary ticket value) $112,481 $67,140 Customer incidents within V/Line’s – long distance on time to 10 minutes >> 87.8% 86.5% control per million passengers No. of services run – short distance 61,882* 60,510 – requiring medical assistance 0.68 0.64

EMPLOYEES No. of services run – long distance <> 11,238* 12,568 Total customer incidents per million Total employees 1382 1320 passengers – requiring medical assistance 3.95 2.01 The reliability target is 96% and punctuality target is 92%. Full-time equivalent staff 1365.3 1291.6 Signals passed at danger * Short-distance services increased (and long-distance services decreased) as a result of Albury trains

Training attendance numbers >< 5312 4372 being stopped short at Seymour during track upgrade works.

(SPADS per million km) – human factor >< 0.72 0.14

Training sessions << 446 565

* Includes DOT privately-marketed coaches.

V/LINE ANNUAL REPORT 2008-2009 FACTS AND FIGURES 18/19 At Mitiamo, 70 kilometres north of Bendigo, teamwork between V/Line, VicRoads and Victoria Police saw the upgrade of a level crossing ahead of schedule. The site at Bendigo–Pyramid Hill Road was the scene of a fatal car accident in February 2008, which had a profound impact on all three organisations. The teams jointly undertook a site inspection to plan the road and rail upgrade, then partnered to source suppliers that could immediately deliver the upgrade work. Work began days later, and in January 2009 the $300,000 crossing was opened – helping to increase the safety of the hundreds of vehicles and V/Line trains that operate through this crossing each year. Victoria Police have also worked to enforce traffi c rules at the upgraded intersection to ensure motorists obey speed restrictions and crossing warnings. This enforcement activity is mirrored across the state, supporting the ongoing level crossing upgrade work undertaken by VicTrack on behalf of the state government, which saw safety improved at a further 45 crossings during the year.

Partnering with Victoria Police and VicRoads to make level crossings safer

Victoria Police Senior Constable Dale Lewis, V/Line’s Peter Upton, and VicRoad’s Jim Mensforth at the upgraded Mitiamo crossing in Victoria’s north-west. Opposite page: Enforcing speed limits at level crossings in the Colac area.

V/LINE ANNUAL REPORT 2008-2009 220/21 0 / 2 1 Despite the massive growth of V/Line over the past few The only statistically signifi cant shift in safety performance MANAGING A SAFE RAIL ENVIRONMENT To capitalise on the training and further improve internal 1992 (DDA) standards – well ahead of the required 50 per years, our safety performance remains generally on par was the staff lost-time injury frequency rate with stress and V/Line’s Rail Resource Management pilot program started in effi ciencies, V/Line also combined emergency management cent compliance by December 2012. with the pre-growth era of 2005–06. trauma. This rate increased to 40.1 per million hours worked 2008–09 to mitigate the potential for incidents in V/Line’s systems for its daily operations and track and civil Engineering improvements were also made to stations, Passenger trips have jumped by 79 per cent and staff in 2008–09 (up from 28.2 last year). Unfortunately, this area operation by promoting the optimal use of all available maintenance areas. The systems were separate following including the ongoing resurfacing of platforms to provide numbers have increased by 62 per cent over the past four of lost time is largely outside V/Line’s control, and refl ects resources – such as information, equipment, and people – V/Line’s acquisition of Pacifi c National’s ‘below rail’ network smoother surfaces, installation of tactile strips for the years. While there has been no major improvement in the the trauma experienced by train drivers in particular involved to achieve safe and effi cient operations. and access operations in 2007. This integration has also visually impaired, and installation of better signage. in near misses of pedestrians or vehicles, and trespassers included the addition of V/Line’s revised environmental safety statistics, it remains a signifi cant achievement that It encouraged teamwork within the train crew environment, During the year, four platforms were resurfaced and tactiles on the network. emergency management systems. such rapid growth has not had an adverse affect on the safe with a focus on threat and error management. Similar were installed at Gisborne, Riddells Creek, Lara, Shepparton, operation of the network. Another key safety performance measure is the number programs have proved successful in the airline industry, BETTER DISABILITY ACCESS Warrnambool and Ballarat. Better lighting was installed at of signals passed at danger (SPADs) by trains. No ‘human and V/Line piloted this program during the year, with a plan eight stations, along with several yards and shunting areas SAFETY PERFORMANCE In addition to system and training improvements made factor’ SPADs resulting in train-to-train collisions took place, to roll it out across the business in 2009–10. across Victoria. A major program to install hearing loops at For incidents within V/Line’s control, the staff lost-time in 2008–09, engineering modifi cations to our trains also with incidents involving human error at 0.72 per million During the year, V/Line also partnered with several key regional stations also started, with installations completed injury frequency rate (LTIFR) per million hours worked was helped make the network safer during the year. kilometres in 2008–09 – one of the lowest incident rates in emergency response agencies to conduct an emergency at 36 stations, with this program set to continue throughout maintained at 12.1 in 2008–09 (12.03 the previous year). Ongoing train improvements helped improve access for Australia. This is in line with the 2006–07 result of 0.8 but exercise, as part of the Terrorism & Community Protection 2009–10. Customer incidents within V/Line’s control also saw little mobility-impaired passengers, with new wheelchair ramps an increase on last year’s low rate of 0.14. Act 2003, to test its response to both a security incident and V/Line Risk and Safety Improvement Programs Manager change with 0.68 requiring medical assistance per million rolled out for all V/Line trains. Previous versions of the IMPROVING TRAIN SAFETY An internal SPAD working group started during the year to a major accident. Scott Ryan undertakes a routine inspection passengers (0.64 in 2007–08). ramps were only suitable for wheelchairs due to the way Almost half the fl eet now has high-visibility yellow refl ective at Southern Cross Station. v review individual incidents in signifi cant detail and make Held near Colac in October 2008, the exercise saw over Analysis of customer incidents shows most incidents relate they folded for storage. However the new model can now be strips added to the fronts of the vehicles to improve safety specifi c changes to V/Line’s infrastructure and operations 20 V/Line staff partnering with the Department of Transport’s to slips, trips and falls – particularly among the elderly. used by people with walking frames, or those unable to step at level crossings. As Sprinters and locomotive-hauled to reduce reoccurrences. Work has now been completed to Security and Emergency Management Division, Ambulance This will remain a focus in coming years as V/Line works to up onto vehicles. This was a signifi cant improvement which carriages undergo refurbishments and the VLocities enter improve signalling behaviour at locations where multiple Victoria, the , State Emergency continually improve access for people with special needs, successfully re-engineered the ramps, while still remaining their major maintenance cycles, the visibility enhancements incidents have occurred in recent years to complement the Service and Victoria Police to manage the response and to maintain or reduce the low level of incidents despite an lightweight and portable for conductors to use. are made. research and training undertaken by V/Line to determine recovery. The exercise scenario was complex and involved ageing population travelling more frequently. As V/Line continues to roll out a new VLocity carriage each contributing causes of SPADs. the temporary shutdown of a section of the Warrnambool Onboard the trains, every door on every carriage across the month, the quantity of fully accessible vehicles increases A detailed review of the cause of incidents involving staff line, but it provided signifi cant learning opportunities for all V/Line fl eet became fully automatic from March 2009 (and will do so until at least 2012). Additionally, is the current focus and the fi ndings will be incorporated agencies involved and helped to establish a number of key following the completion of an upgrade to our N-set refurbishments to the older Sprinters and locomotive-hauled into general awarness of the working environment training relationships that have the potential to prove critical in the carriages over the past few years. The automation of doors N- and H-Set carriages have resulted in better access to toilet in 2009–10 to further make staff conscious of potential event of a genuine emergency situation. prevents a passenger manually opening a door while the hazards and the need to report issues immediately. facilities and wheelchair-friendly facilities. At year’s end, train is moving. 88 per cent of the fl eet met Disability Discrimination Act

V/LINE ANNUAL REPORT 2008-2009 SAFETY AND SECURITY 22/23 THERE WERE FIVE SERIOUS LEVEL CROSSING INCIDENTS OTHER SIGNIFICANT INCIDENTS IN 2008–09 INCLUDED: ON V/LINE’S REGIONAL NETWORK DURING 2008–09: Kilmore East Station – 13 March 2009 Red Cliffs – 22 February 2009 A teenage pedestrian sustained non-life threatening injuries after being hit by a Pacifi c A Pacifi c National freight train clipped a car at Sunny Cliffs Avenue level crossing. National freight train at a pedestrian crossing. The pedestrian alighted from a V/Line service The motorist sustained minor injuries. at Kilmore East and crossed into the path of the freight train. Rosedale – 9 January 2009 Southern Cross Station yard – 6 March 2009 A V/Line Bairnsdale train collided with a ute which was allegedly stationary on a private Two V/Line VLocity trains were involved in a minor collision while shunting in the yard. Another notable onboard safety improvement was the LEVEL CROSSING SAFETY While V/Line’s core responsibility is the maintenance of level (occupational) crossing. The car occupant was injured in the incident. Both units sustained mirror and window damage. withdrawal of the sale of alcohol from on-train catering There were no fatalities on the V/Line regional network at crossings across regional Victoria, we have a range of active services in December 2008. This move won many customer level crossings as a result of accidents with trains during roles in advocating change. V/Line’s Chief Executive Offi cer Rochester – 21 September 2008 Camperdown, Longwarry and Kilmore East / Wandong areas – 7 February 2009 compliments and widespread community support as part of 2008–09. is now a member of the government’s Victorian Railway A V/Line train struck a car at the Northern Highway level crossing. It is alleged the car stopped Black Saturday bushfi res closed part of three of V/Line’s fi ve corridors. Fire destroyed 3000 work to strengthen the family-friendly environment on long Steering Committee on Level Crossings, which advises the on the crossing (which was fully operational), then reversed to clear the crossing as the train sleepers in the Camperdown area on the Warrnambool line. The damage was greater in the While this is excellent news after three fatalities the previous distance services. Minister for Public Transport on improving safety at crossings approached. The front bumper of the car scraped the train. No injuries. north-east, with 1200 sleepers, the Wandong Station platform and two rail bridges destroyed. year, the behaviour of some motorists at level crossings and makes recommendations to the Minister regarding Red Cliffs – 16 September 2008 The Gippsland line at Longwarry was not damaged, but closed on advice from emergency remains an ongoing concern. Five collisions involving AUTHORISED OFFICERS upgrades and closures throughout Victoria, which are state- services for 24 hours due to the proximity of the Bunyip State Forest fi re. V/Line or another operator on our network occurred during A Pacifi c National freight train collided with a ute at the Sunny Cliffs Avenue level crossing. Following a trial in 2008, a team of six authorised offi cers 2008–09. Complacency, lack of attention to warnings, funded. No injuries. Bacchus Marsh – 29 January 2009 were formally introduced onto V/Line services from January and risk-taking behaviour have been the key factors behind V/Line also has an internal level crossing committee Litchfi eld – 26 August 2008 Temporary suspension of Ballarat line trains on the advice of the CFA due to a grass fi re in the 2009. While authorised offi cers have the power under the near misses. which conducts a detailed review of site distance; a key Minor collision between a V/Line ballast regulator and a truck. No injuries. Bacchus Marsh area. No damage to track infrastructure. Transport Act 1983 to report fare evasion, they have been factor in establishing danger levels at each crossing site, primarily deployed for staff and passenger security, rather While engineering upgrades to crossings continue to INCIDENTS INVOLVING V/LINE ON THE CONNEX METROPOLITAN NETWORK: Malmsbury – 22 January 2009 be rolled out by VicTrack, with 45 crossings made safer and has started work on a vegetation removal program to Temporary suspension of Bendigo line trains on the advice of the CFA due to a large fi re in the than revenue protection. Hoppers Crossing Station – 6 March 2009 across Victoria in 2008–09, motorists must take shared improve sightlines. Malmsbury area. No damage to track infrastructure. While behaviour issues on V/Line’s network are statistically A pedestrian sustained non-life threatening injuries after being clipped by a responsibility for their safety by obeying the warnings and During 2008–09 V/Line also wrote to about 3500 Southern Cross Station Yard - 26 November 2008 low in comparison with the Melbourne network, the Geelong-bound V/Line train while crossing at the pedestrian crossing. road rules. landowners adjoining rail reserves to encourage animal A V/Line Sprinter train struck a ‘Vehicle Under Repair’ banner which had been left in place by response to the authorised offi cers’ presence on board North Melbourne Station – 17 November 2008 Mutual responsibility for level crossing safety is one of owners to cross the train lines safely with their stock and EDI fi tters who had completed work on the train. No injuries and no damage to the train. V/Line services has been very positive, with customer A cyclist accidentally fell off the platform at North Melbourne Station into the path equipment by providing contact details for the train control feedback supportive of expanding their presence. As well as the pillars of the , which legislates a of a V/Line train, sustaining fatal injuries. Pyramid – 11 October 2008 centre. The special campaign – a fi rst of its kind in Australia helping to reduce anti-social behaviour at stations and on requirement for all parties – such as rail operators, councils, Minor derailment of a V/Line ballast regulator during works. – also reminded farmers of their obligations to ensure their Oak Park – 22 October 2008 trains, the offi cers have also identifi ed the perpetrators of road authorities and local land owners – to have a Safety fences did not allow animals to stray onto railway lines. A V/Line Sprinter train and ute collided at the Devon Road level crossing. Lake Boga – 17 July 2008 repeated vandalism to rail infrastructure. Interface Agreement (SIA). SIAs set out an organisation’s Boom gates were operating correctly. No injuries. A V/Line train struck maintenance equipment left on the line. Minor damage to the train. responsibilities – both broadly across the whole state and ROAD COACH INCIDENT: No injuries. specifi cally at each crossing. In the long term it will help us take consistent and appropriate action to prevent accidents A V/Line branded coach, operated by South Western Roadways and under contract with the at level crossings. V/Line is working with councils and other Department of Transport, was involved in a tragic accident on 16 April 2009 at Heathmere authorities to establish agreements in regional Victoria, where three people died. No other vehicles were involved in the accident. • Incidents involving trespassers are not included above. and we expect the SIA process will be completed by mid- 2010 for public access road level crossings.

V/LINE ANNUAL REPORT 2008-2009 SAFETY AND SECURITY 24/25 Customer growth of 79 per cent over four years on our network is an excellent result which now makes V/Line Australia’s largest regional train operator. However, in a business reliant on infrastructure and heavy vehicles, such rapid growth also has potential to cause signifi cant growing pains in the form of overcrowding and reduced customer satisfaction. Gippsland provides just one example of how V/Line has expanded the service to cater for a growing population who are increasingly using country trains as a preferred mode of transport. Together with the Department of Transport, several stations on the line have been improved in recent years, including Drouin which has been benefi ted from a station upgrade and new parkway facility with 160 car spaces. The Gippsland region has embraced the upgraded train service, more than doubling its passenger numbers in just four years. As a result, the timetable has expanded in recent years to offer more services, and more carriages are regularly added to these services increase more seating during busy times.

Strong customer partnerships have helped us achieve the highest safisfaction rating in the Victorian transport industry Our customers

Gippsland-based Services Offi cer Charlie Grande and customers Sara and Luke at Drouin Station.

V/LINE ANNUAL REPORT 2008-2009 sectionseseccttiioon 226/27 6 / 2 7 More people than ever before are catching V/Line trains This means more trips are made on V/Line’s trains than on The Gippsland line experienced the biggest increase, with HIGH CUSTOMER SATISFACTION RATING KEEPING CUSTOMERS 'INFORMED' PUTTING GREATER VALUE INTO A V/LINE TICKET and coaches around regional Victoria, with total patronage any other regional operator in Australia. By comparison, patronage up 15 per cent this fi nancial year. Passenger trips While the massive and rapid rise in customers would be As patronage grows to unprecedented numbers, so does our While the cost of V/Line travel has only risen by Consumer up 10 per cent on the previous fi nancial year. 1.6 million passenger trips were made on CountryLink trains have more than doubled on the Gippsland line, as they have the envy of most businesses, few in the transport sector need to get smarter in the way we communicate with our Price Index levels since 2007, the relative value regional While the rate of growth is slowing from the 27 per cent in NSW and 926,000 trips made on TravelTrain regional on the Bendigo line over the past four years. would be able to cope logistically with an almost doubling of customers. In 2008–09, two signifi cant innovations to customers can take from their ticket has increased increase in 2006–07 and 23 per cent increase in 2007–08 services in in 2007–08. In 2008–09, patronage on the Bendigo line was up passenger numbers over such a short period. V/Line’s business were rolled out to improve information dramatically in other ways. Not only was metropolitan across V/Line’s train and coach services, the records However, V/Line coach trips increased more rapidly, rising 9.8 per cent, the Geelong line was up 9.5 per cent and The Victorian Government’s commitment to up to 74 new provision to our passengers. train, tram and bus travel incorporated into the V/Line continue to be re-written as more people choose cheaper, 17.6 per cent to 1.12 million passenger trips (951,938 in the Ballarat line increased 12 per cent. carriages – 14 of which were delivered during the year – V/Line Inform allows passengers to register their details on ticket price in 2007, but a range of promotions were introduced in 2008–09 to deliver further ‘add-on’ value. more comfortable and environmentally friendly public 2007–08). The new record is all the more signifi cant because the is allowing V/Line to keep up with passenger growth, the V/Line website and indicate services that they usually transport over car use. Seymour line actually experienced a drop in patronage ensuring comfort is not compromised. While several peak travel on. In the event of a service delay or cancellation During the year V/Line established a wide range of A NEW GOLDEN ERA OF RAIL In 2008–09, a record 13.17 million passenger trips were (down 3.6 per cent) due to the temporary closure of the trains remained very busy, most previously crowded services V/Line Inform sends an SMS or email to individual relationships with major Melbourne cultural institutions For the fi rst time, rail patronage surpassed 1940s train made on V/Line trains and coaches. Of this, 12.05 million line between Seymour and Albury as part of the North East have benefi ted from extra seating as a new carriage enters passengers to let them know of the changes. and events – with the key emphasis on providing travel records when few owned cars and trains were the trips were made on trains – a 9.5 per cent increase, or Rail Revitalisation Project. the network each month. The response to V/Line Inform has been outstanding. Since additional value to V/Line customers as part of their ticket. main means of transport across regional Victoria. Partnerships established during the year included the 1.04 million more trips than the 11.01 million recorded the V/Line’s continued outstanding passenger growth can This ongoing expansion of the V/Line fl eet is a major factor – its introduction in December 2008, more than 3000 regular In the four years since 2005–06, there has been a Melbourne Aquarium, National Sports Museum, Melbourne previous year. be primarily attributed to the fact that regional Victorians along with affordability and frequency of commuter services travellers have signed up to the free service with thousands considerable shift in the way regional Victorians travel, International Comedy Festival, Melbourne Museum’s are, more than ever, choosing the train as their preferred – in V/Line’s high customer satisfaction rating. seeing its benefi ts during Victoria’s period of extreme heat and rail passenger numbers have risen 79 per cent. A Day In Pompeii exhibition and National Gallery of method of transport, particularly during times of economic Quarterly surveys undertaken by the Department of Transport in late January and early February 2009, which included the Victoria’s Salvador Dali: Liquid Desire exhibition. uncertainty and continued high fuel costs. continue to show V/Line train and coach passengers as the Black Saturday bushfi res. most satisfi ed of all public transport users in Victoria. The In October 2008, V/Line also launched online ticket sales With thousands of regional Victorians visiting Melbourne to satisfaction rating for V/Line trains was 74.8 in 2008–09 to allow customers to buy individual tickets as well as see the successful musical Wicked, V/Line partnered with (76.7 last year) and 79.2 for coaches (80.3 last year). Weekly, Monthly and Date-to-Date passes. The tickets are the show to offer a free souvenir show program to patrons then mailed out to the customer, saving them time waiting upon presentation of their V/Line tickets. Take-up was in queues at busy station ticket offi ces. The service has had strong, with hundreds making the most of this offer. a strong take-up, with over 8000 customers booking their tickets online in the fi rst six months despite no promotion during the early trial stages. The service will be heavily promoted in 2009–10 to encourage greater use by periodical ticket holders.

More than 20,000 trips were made to the Australian International Airshow on our trains in March 2009. >

V/LINE ANNUAL REPORT 2008-2009 OUR CUSTOMERS 28/29 PERCENTAGE OF ALL RAIL TRIPS BY LINE 0% 20% 40% 60% 80% 100%

08-09 9.7 14.7 22.2 25.4 28

07-08 11 14 22 25 28 PUBLIC TRANSPORT OMBUDSMAN During the year, compensation in the form of complimentary Victoria’s Public Transport Ombudsman gives customers tickets to the value of $112,481 was issued to customers for legend an independent body for the assessment of complaints. not achieving performance targets. While train performance V/Line partners with Travellers Aid – a service that seymour gippsland ballarat bendigo geelong If customers remain dissatisfi ed with the response they have is generally on par with last year, this is a considerable provides help and support to passengers to help them reach their destination. v received from a public transport operator, they have the increase on the $67,140 worth of tickets issued last year. PERCENTAGE OF ALL TRIPS BY COACH* opportunity to have their case reviewed by the Ombudsman. The rise is due in part to the rapid patronage increase, 0% 20% 40% 60% 80% 100% In 2008–09, V/Line helped promote the role of the as well as greater promotion of the compensation scheme Public Transport Ombudsman’s (PTO’s) offi ce through in the media. However, customer feedback about V/Line 1.8 7.1 8.7 10 9.6 11.7 16.5 15.8 18.7 08-09 customer materials, as well as the regular invitation to increased from 12,225 cases last year to 13,582 cases accompany V/Line management on their monthly on-train this year. 07-08 27 8 10 12 12 14 17 19 customer consultations. During the year, the Ombudsman Information queries through the V/Line call centre dropped independently reviewed 33 cases (out of 73 customer three per cent to 781,328 this year (803,016 in 2007–08), legend contacts with the PTO), compared with up to 64 cases (out of indicating a growing trend towards the V/Line website as a north-west goulburn east trans-regional south-east south-west north-east west north valley 100 contacts) last year. In 2008–09 one case resulted in a source of customer information. In 2008–09, website visitors

* Includes Department of Transport administered coaches. binding decision by the Ombudsman. increased 45 per cent to 3.7 million and page impressions grew 33 per cent to 44.4 million. Ongoing upgrades to the RAIL PATRONAGE BY LINE CUSTOMER CONSULTATION AND FEEDBACK V/Line website will see it continue to grow as an information Our customer consultation program is an important element geelong bendigo ballarat gippsland seymour source throughout 2009–10. of our operations. This process sees a team from across

> 83.6% over 5 years > 132.3% over 5 years > 98.8% over 5 years > 107.4% over 5 years > 17.7% over 5 years V/Line’s operations, including the CEO and senior executive team, meet with passengers on board services throughout 04–05: 1.84 million* 04–05: 1.32 million 04–05: 1.35 million 04–05: 0.85 million 04–05: 0.99 million Victoria. The process is designed to gauge the opinions of customers on the train service. Importantly, the customer 2.03 million* 1.47 million* 1.37 million* 0.82 million* 1.05 million 05–06: 05–06: 05–06: 05–06: 05–06: consultation program provides an opportunity for those who may not necessarily contact V/Line with a specifi c complaint 06–07: 2.57 million 06–07: 2.20 million 06–07: 1.88 million 06–07: 1.05 million 06–07: 1.15 million or compliment to have their say. Thirteen consultation 07–08: 3.08 million 07–08: 2.78 million 07–08: 2.39 million 07–08: 1.54 million 07–08: 1.21 million sessions were undertaken during 2008–09, with a stronger push to cover the entire V/Line network during both peak < 08–09: 3.38 million 9.5%> 08–09: 3.06 million 9.8%> 08–09: 2.68 million > 12% 08–09: 1.77 million > 15% 08–09: 1.17 million* 3.6% and off-peak times.

* Periods of major track upgrade works.

V/LINE ANNUAL REPORT 2008-2009 OUR CUSTOMERS 30/31 Working with regional councils and tourism operators, V/Line launched the award-winning See Things Differently campaign in November 2008 to encourage Melburnians to catch the train to some of country Victoria’s best attractions. Making better use of off-peak V/Line trains with spare capacity to create a sustainable economic contribution to regional Victoria was the aim of the campaign. One of the campaign’s target destinations was the Bendigo and Castemaine region. High-quality events and attractions, coupled with a high-quality train service, enticed people out of the city and into regional Victoria. Nearly 18,000 extra people caught the train to two major regional events between December and March alone, injecting up to $2.3 million into the local economy. The extra people travelled to the region by train to attend the Bendigo Art Gallery’s Golden Age of Couture exhibition and the Castlemaine State Festival. Figures released by the Bendigo Art Gallery show that of the 75,000 people who attended the exhibition, 19 per cent or 14,250 travelled to Bendigo on the train. The Castlemaine State Festival was another draw card, with a record 51,000 event tickets sold. Half of the estimated 25,000 patrons who attended the festival came from outside the immediate region and of those, 28 per cent or 3570 people, travelled to the event by train according to surveys undertaken by festival organisers.

Partnering with local councils to bring people from the city to the regions

Bendigo Station staff members David Neven and Max Diss join Kathryn Mackenzie, Executive Manager – Tourism from the City of Greater Bendigo to promote train travel to the northern Victorian city.

V/LINE ANNUAL REPORT 2008-2009 sectionsesectctiioon 332/33 2 / 3 3 V/Line’s trains and coaches provide a vital public service to representing something of a ‘front door’ to V/Line for advertising campaign to put V/Line – and regional Victoria – COMMUNITY SUPPORT TAKES accommodation and support for their time in Melbourne. regional Victoria, and the nature of our business means our each region. Each regional manager lives and works in into the minds of Melburnians. V/LINE TO NEW DESTINATIONS In 2008–09, V/Line established a partnership with Ronald Regional councils and community partners have welcomed social and economic footprint extends beyond just transport. the area they represent – and has a strong knowledge of The campaign was the fi rst time in 20 years that V/Line had McDonald House to provide guests with complimentary key community issues within the area. To a greater extent V/Line’s continued sponsorship of the Victorian Country As a major employer of country Victorians, manager of 3770 advertised on television. It also included promotion via travel for their journey to and from Melbourne. than ever before, the team of regional managers are now Football League (VCFL) and several other long-running kilometres of railway track and access provider to the freight radio, newspapers and billboards (and even a special tram) • Regional Achievement & Community Awards, which give considered the fi rst port of call for government and business commitments such as Travellers Aid – a service that provides sector, our stakeholders rightly expect V/Line to deliver more throughout Melbourne to showcase the vastly improved recognition to some of the ‘unsung heroes’ of regional representatives in their regions. travellers with assistance and support to get to where they than just a reliable public transport service. V/Line service and the best country Victoria has to offer. Victoria. V/Line supported both the V/Line Young are going. Our regional and executive managers have also engaged in People’s Community Involvement Award and the V/Line In 2008–09, we worked with councils, MPs, state and The pilot campaign encouraged Melburnians to make Our support of regional Victorian schools also continued, a program of local council consultations across the state. the most of travel opportunities to Geelong, Ballarat and Volunteering Award at the 2008 event. federal departments, industry groups and businesses to V/Line continued its sponsorship of the V/Line Cup under 15’s During 2008–09, V/Line conducted briefi ng sessions through the My Train program which reached record levels in better understand our broader role in regional Victoria. Bendigo in particular, and was the winner of the 2009 Additionally, on Saturday 2 May 2009, V/Line helped the football competition – won by Latrobe in 2009. v with 34 regional Victorian councils, where key issues of 2008–09 with 130 schools travelling free on V/Line services Australian Marketing Institute’s ‘Business to Consumer’ communities of Bairnsdale and Stratford celebrate fi ve And to ensure our impact is as positive as it can be, we service delivery, timetabling and level crossing safety, as as part of school excursions. This program provides free award in Victoria. Key to its success is that the campaign years since the return of V/Line services to the region at reviewed the way we approach sustainability, environmental travel to primary school students throughout Victoria and is well as regional events, investment and development were promoted use of off-peak, outbound train services during and community-related issues, and introduced a range of combined with the Train Training program – which provides a community event held at Bairnsdale Station, that was discussed. This program will continue to grow in 2009–10. quieter periods such as during the middle of the day, or on activity packs to schools to educate children about safety attended by more than 400 people. internal benchmarks to continually improve the value of weekends – making more effi cient use of existing services, the business to Victorians. SEE THINGS DIFFERENTLY : around trains and railway stations. crucial to our push to deliver a more sustainable operation. TACKLING TOUGH ISSUES, MARKETING V/LINE TO MELBURNIANS In 2008–09, V/Line also entered into a partnership with BEYOND THE FOOTY FIELD STRENGTHENING RELATIONSHIPS ACROSS VICTORIA Our meetings with regional councils and business partners A key element of the campaign was the Family Traveller Playgroup Victoria, a 50,000-member strong organisation Since 2002, one of V/Line’s most successful community Within all levels of V/Line, staff are encouraged to partner emphasised the view that while V/Line already has a major ticket, which allows each adult travelling during off-peak times to take up to two children free, making the potential that helps families join and organise play groups. This relationships has been its long-term partnership with the with other organisations to not only improve our own positive economic impact on regional Victoria, it could be for discovering Victoria more affordable. partnership provides families with group discounts for VCFL. This relationship has seen V/Line as the major sponsor effi ciencies but achieve better outcomes for our customers even greater. V/Line travel throughout the state – and provides groups and the broader community. Results from the campaign have been very strong. One in of the V/Line Cup – considered one of the integral steps in Working with councils, tourism operators, the Department with information to build safety awareness among children fi ve people (and one in three families) on target services the pathway for young country footballers towards AFL-level Our team of regional managers plays a leadership role in of Transport, Tourism Victoria and the Victorian Government, and parents. indicated they were travelling because of the campaign, football. The VCFL sponsorship also extends to V/Line Junior improving our connections with the community, essentially we launched a $1.3 million See Things Differently and 22 per cent of travellers on target services indicated During the year, we also supported a range of other Carnivals and the V/Line Umpire Development Program. community events and activities, including: they were travelling with V/Line for the fi rst time. Over However, V/Line’s relationship with the VCFL was taken 1000 new trips per week (12,000 in total) were directly • Mission Australia Family Day, which provides the to another level in 2008–09 with the evolution of the attributable to the pilot See Things Differently campaign – opportunity for over 3,000 migrants, refugees and V/Line Life Training program. The program aims to educate resulting in an estimated $780,000 of economic benefi ts disadvantaged Victorians with the opportunity to enjoy a teenagers and their families on important health topics to the target regions over the campaign’s three months, day at Melbourne Zoo – something they simply would not – and give them the skills to make positive choices when and an estimated $3 million in regional spend since the be able to afford. Guests at Family Day were provided with diffi cult issues arise. While this program had been delivered campaign was introduced. free travel by V/Line from around Victoria, and the day’s activities saw a dedicated team from V/Line volunteering in various forms to young footballers over the previous three V/Line also partnered with the Castlemaine State Festival in at the event. years, it has now been moved from the football fi eld to March, winning an Australia Business Arts Foundation award • Ronald McDonald House, whose Parkville residence encapsulate a wider audience, ensuring regional Victorian for the joint promotion. V/Line sponsored the Castlemaine State Festival in provides families of children who are undergoing teenagers, regardless of gender and whether they play sport March and April 2009. > medical treatment at the Royal Children’s Hospital with or otherwise, have the opportunity to take part.

V/LINE ANNUAL REPORT 2008-2009 SUSTAINABILITY, ENVIRONMENT AND COMMUNITY 34/35 The program sees V/Line ambassador and former AFL star Central to meeting these challenges was the maintenance FUELLING THE FUTURE Nathan Thompson, joining with industry leaders in the areas of our ISO14001 Environmental Management Systems The push to introduce bio-fuel is one of the key long-term V/LINE'S SUSTAINABILITY PRIORITIES 2009- 22012 0 1 2 of depression (Orygen Youth Health), illicit drugs (The accreditation for all 83 stations across Victoria, which is a plans for V/Line’s operation – with the ultimate objective to Victoria Police’s Purana Task Force) and binge drinking signifi cant achievement built on applying and monitoring a achieve a B20 (20 per cent blend of biodiesel with standard (Odyssey House) to provide frank, challenging and rewarding range of processes at each station. Additionally, certifi cation diesel) standard across V/Line’s entire fl eet. Green stations To save energy and water through improving environmental effi ciencies at V/Line train stations. opportunities for young people to openly discuss these often was also achieved for V/Line’s Head Offi ce and fuel point Initial planning undertaken in 2008–09 aimed to determine taboo topics. operations in 2008–09. a viable fuel source, before live train testing can commence Held at 12 locations throughout regional Victoria, the new- The Environmental Management System (EMS) puts in place in Ballarat during 2009–10. This testing will aim to confi rm VCFL / youth To increase the support of youth-related activities, events and look V/Line Life Training was attended by over 1200 regional the processes for managing the environmental impacts V/Line’s long-term bio-diesel supplier partner. However, sponsorship between V/Line and regional communities. Victorian young people in 2008/09 – and will continue to be of V/Line’s activities for staff and contractors. It provides introduction of the system would require a signifi cant a key element of V/Line’s community a structured approach to planning, implementing and infrastructure and fl eet investment, with bio-fuel use Rolling stock / locomotive service To reduce fuel consumption and corresponding greenhouse gas program during 2009–10. monitoring environmental protection measures – requiring modifi cations to refuelling points and vehicle emissions by improving the fuel effi ciency of V/Line’s fl eet of such as regular induction, training and assessment of fuel systems. rolling stock. The introduction of bio-fuel is a priority. ESTABLISHING A SUSTAINABILITY FRAMEWORK environmental awareness. V/Line approved the business’s fi rst sustainability CONTROLLING WEEDS AND PESTS In 2008–09, the process of adding the principles of the Green office To save energy and water through improving environmental effi ciencies framework, covering the four key pillars of our people, The vast nature of our rail reserves across country Victoria at V/Line’s offi ces. EMS to all contracts with major subcontractors started, environment, community, and our market / resources presents a challenge to controlling weeds and pests. with a view to ensuring all parties that act on V/Line’s to ensure V/Line, our customers, staff and stakeholders behalf share our commitment to the environment and Throughout 2008–09 V/Line worked closely with the Sustainable measurement To develop ongoing sustainability measurement, reporting and understand the need to take a proactive approach to understand their shared obligations. This is particularly Department of Primary Industries, Landcare and farming communication. sustainability issues. It also puts into action the individual, important as we work to improve our environmental groups to remove noxious weeds across our railway proactive objectives the business aims to meet to move credentials, after managing two legacy issues during the property. Recent projects included the removal of gorse – Rail reserves To improve management of reserve biodiversity assets in a manner V/Line from being a business that addresses sustainability year which pre-date our take-over of the regional rail network a dense, thorny bush – between Castlemaine and Chewton, that does not compromise ongoing operation and maintenance issues as they arise, to one where these steps are integral to in 2007, as well as a further three notable environmental management of serrated tussock on the Sunshine to Ballarat of rail assets. the business’s daily operation. incidents which occurred during the year – all of which corridor, as well as a rabbit control program in Kerang South and the . SETTING NEW ENVIRONMENTAL STANDARDS involve subcontractors. Green technology To save energy by improving the environmental effi ciency of FOR OUR RAILWAYS V/Line’s technology. RECYCLING ROLLS OUT V/Line makes a substantial environmental contribution by Initial planning in 2008–09 aimed to determine the encouraging tens of thousands of Victorians to catch more locations and type of recycling bins to be placed at stations. Industry round table To develop a program of consultation to explore regional public transport effi cient public transport rather than use cars for commuting. needs among various stakeholders. Installation of the recycling bins in 2009–10 will be However, with almost 3770 kilometres of railway track under established at Ararat, Ballan, Ballarat, Colac, Echuca, Lara, our control, including stations, rail yards and a fl eet of Marshall, Seymour, Shepparton, Swan Hill, Traralgon and Employee development To increase employee health and job satisfaction, 93 individual train sets, V/Line also has many environmental Warrnambool stations, ensuring V/Line meets its objective and career opportunities. challenges. Key challenges relate to management of of reducing station landfi ll by 10 per cent by 2010. signifi cant vegetation and our dependency on diesel fuel. Local sourcing To support our local communities, local products and services during ENERGY EFFICIENCIES OPPORTUNITIES PROGRAM the procurement process. – PUBLIC REPORT – pg 93.

V/LINE ANNUAL REPORT 2008-2009 SUSTAINABILITY, ENVIRONMENT AND COMMUNITY 36/37 ENVIRONMENTAL ISSUES AND INCIDENTS ENVIRONMENTAL TARGETS 2008–09 represented a major benchmarking year for V/Line as we worked towards becoming a more sustainable operation. During the year, monitoring systems were put in place across head offi ce, maintenance and station infrastructure to ensure we can now fully measure our environmental impact – including energy and water consumption, ISSUES INHERITED BY V/LINE PRIOR TO REGIONAL RAIL TAKE-OVER IN 2007 INCIDENTS UNDER V/LINE CONTROL waste generation and fuel consumption. Through these measurements, V/Line has set formal benchmarks, which now form the core McLennan Street, Ararat Queens Parade, Traralgon of the V/Line Sustainability Framework. Key objectives and targets include In mid-2008, the Environmental Protection Authority (EPA) issued a clean up notice for a rail In October 2008, the EPA issued a abatement notice to V/Line following the detection reserve in McLennan Street, Ararat. While the contamination was believed to have been of fuel in a Traralgon creek, which it determined to be sourced from refuelling activities at caused by previous owners of the site and potentially other parties, as the current lessee, Traralgon Station. In accordance with the notice, V/Line appointed an environmental auditor V/Line is responsible for the clean up. Assessments were undertaken to determine the toxicity to review refuelling activities at this site, including procedural documentation, and has OBJECTIVE TARGET OBJECTIVE TARGET of the contaminants throughout the soil in this site, and at year’s end V/Line was working with undertaken a risk assessment of the activities. A series of recommendations has been made Improve energy efficiency Purchase 15% of energy consumed at V/Line-controlled Reduce the volume of Introduce co-mingled recycling facilities to at least 50% the EPA to determine the best treatment or removal options. Signifi cant clean up costs are and a preliminary audit report has been submitted to the EPA. V/Line is working to address at V/Line-controlled passenger stations and head offi ce from renewable waste sent to landfill of V/Line controlled manned passenger stations by expected to be incurred in 2009–10, and no determination has been made about whether the recommendations made by the auditor. operations sources by June 2010. from V/Line controlled December 2011. action will be sought to recover these costs from other parties. operations Mitiamo Rail Reserve, Mitiamo Each corridor to reduce energy consumption by 5% Reduce waste to landfi ll by 5% from head offi ce Echuca–Serpentine Rd, Mitiamo In mid-2007, an independent contractor engaged by V/Line to undertake grading works per total passengers per corridor by July 2010. (per FTE) by June 2011. Following an accident between a freight train and truck on Echuca–Serpentine Road in 2004, associated with the maintenance of fi re breaks on a rail access track allegedly damaged Head offi ce to reduce energy consumption by 5% Reduce waste to landfi ll by 10% from stations (corridor a number of contaminants, determined to be Category C (acceptable to be transported between 23 and 38 protected spiny rice-fl owers within the Mitiamo Rail Reserve Biosite. per full time employee (FTE) by June 2010. per total passengers) by June 2011. to landfi ll) were found near the site. These contaminants had come from the contents of The Victorian Department of Sustainability and Environment (DSE) brought action against one of the original freight train’s wagons. In January 2009, after testing had determined V/Line, and the federal Department of Environment, Water, Heritage and the Arts (DEWHA) Improve water efficiency Reduce water consumption at V/Line-controlled Prevent pollution from Ensure all works that involve working with asbestos this substance to be acceptable for landfi ll disposal without treatment, the material was entered into discussions with V/Line. Post this reporting period (July 2009), V/Line voluntarily in all V/Line-controlled passenger stations by 5% per corridor per total occurring on sites and to containing material will result in no emission of asbestos operations and to reduce passengers by June 2011. ensure the responsible into the environment. transported to an EPA licensed landfi ll in Eaglehawk. entered into an enforceable undertaking with the federal Minister for the Environment, our impact on water management of substances Heritage and the Arts. V/Line has agreed to pay $25,000 to the spiny rice-fl ower national resources with the potential to cause Zero fuel spills to ground at fuel points by June 2011. recovery team for research and conservation of the species, and $26,510 will go towards environmental damage Stormwater management plans in place for signifi cant monitoring and recovery of the population and proper fencing of the biosite to prevent future Reduce the ecological Reduce paper consumption by 20% per FTE by sites (major stations and fuelling points) by June 2011. incursions. V/Line will also devote $136,500 to staff and contractor training to help ensure footprint of V/Line’s June 2011. future railway maintenance and upgrade works do not impact on protected species or other operations through matters of national environmental signifi cance. As a result of this undertaking, the Victorian the consideration of Review cleaning chemicals used at V/Line stations to DSE ceased its action against V/Line. environmental issues ensure the most eco-friendly products practicable are in purchasing and being purchased. Spotswood, Melbourne contractual decisions The fuel tank of a V/Line locomotive partially broke away from the vehicle on 11 May 2009, leaking diesel on the tracks. The clean-up was managed by Connex as the incident took place on their network.

V/LINE ANNUAL REPORT 2008-2009 SUSTAINABILITY, ENVIRONMENT AND COMMUNITY 38/39 3 8 / 3 9 V/Line is now training the next generation of leaders and working hard to attract new talent to the business to keep pace with our customers’ growing service demands. Our staff must also be well-equipped to manage a range of new projects that will see our rail network continue to expand in coming years, new technology rolled out, and more services delivered. This is why V/Line has partnered with several major TAFEs and universities, including the , Box Hill TAFE, Central Queensland University, RMIT University, and Swinburne University, to give staff specialist skills that will continue to improve the service for our customers. Rebecca Symington, who started with V/Line in 2005 as a conductor, has progressed her career to become a staff clerk and is now a Training and Compliance Offi cer where she oversees the rigorous training program that the conductor team members are required to complete before they start their duties. As part of her career development, Rebecca undertook a Certifi cate IV in Training and Assessment at Melbourne’s RMIT University where she learned valuable leadership and training skills that she now passes on to our new recruits.

Partnering with major universities to boost the skills of our staff OOur u r ppeople e o p l e

CEO Rob Barnett addresses graduates from the 2009 Diploma in Business course. > RMIT Project Manager – Global Business Development, Annmarie Carroll and V/Line Training and Compliance Offi cer Rebecca Symington.

V/LINE ANNUAL REPORT 2008-2009 sectionsseecttioon 440/41 0 / 4 1 9 0 0 2 2009 8 0 0 2 2008 8 0 0 2 2008 7 0 0 2 2007 The successful signing of a Heads of Agreement for the With an average employee age of approximately 45 years, TRAINING IMPROVEMENTS TO BOOST PERFORMANCE TERTIARY TRAINING PARTNERSHIPS 2009–12 Entreprise Agreement was a win-win for staff and V/Line is faced with the challenge of having a signifi cant V/Line’s training programs are central in ensuring all staff The majority of V/Line’s training courses are now aligned customers alike, with wage increases over the next three skills and knowledge base potentially retire from its are well equipped to excel in their roles. These programs with the Australian Qualifi cation Framework, which ensures years linked to better service delivery and ultimately funded business in the coming years. provide staff with the skills to adapt to innovations and that they are nationally recognised. through productivity gains. V/Line has now put in place a series of clear, achievable encourage diversity and career development within the In addition to existing relationships with Box Hill TAFE, The fact the agreements were achieved without any and diverse career paths designed to provide staff with many facets of V/Line’s business. Central Queensland University, RMIT University, and > > industrial issues or disruption is a testament to the the opportunity to grow their skill-set across the business. Staff participation in training has doubled over the past Swinburne University, V/Line recently confi rmed an cooperative approach of the V/Line team; the Department Conductors, for example, make up a large portion of the four years from a total staff training attendance of 2683 in agreement with Ballarat University that now ensures its of Transport; the Australian Rail, Tram and Bus Industry V/Line team, with the role generally considered to be entry 2005–06 to 5312 this year. Our employees participated internally run Certifi cates I, II, III and IV in Rail Operations Union; the Communications, Electrical, Electronic, Energy, level into the railway industry and a platform into many in 184 different training courses during 2008–09, with and Infrastructure are fully accredited. These partnerships V/Line staff promote rail careers at an expo in Melbourne. v Information, Postal, Plumbing and Allied Services Union other areas. During 2008–09 strong career paths were 446 sessions throughout the year. Programs included are fundamental in further developing V/Line’s credibility (Electrical Division); and the Association of Professional established that can take conductors from their entry into V/Line’s Management Development Program, delivered as an employer of choice. Engineers, Scientists and Managers Australia. the V/Line business right through to working as a train in conjunction with Swinburne University – which saw IMPROVING OUR PEOPLE MANAGEMENT SYSTEMS Collectively, the agreements allow for a greater level of driver, conductor services manager, or to other positions 19 managers and supervisors achieve a Diploma in With 1382 employees dispersed right across Victoria – fl exibility in V/Line’s operational planning, will deliver working within the operations area. Business, a critical qualifi cation for establishing our future managing core human resource functions such as leave improved productivity – and will ensure continued increases business leaders. Other programs included the Graduate DRIVING THE FUTURE management, recruitment and management of employee At 30 June At 30 June in patronage over the coming years can be confi dently Diploma in Rail Operations – a course delivered by Central V/Line introduced an internal driver trainee program during data provides a number of challenges. As a result of the 2009 2008 handled. Queensland University. the year to provide a new career path with V/Line. The staff business’s rapid expansion in recent years, V/Line’s Human During the year, a range of new training programs were response to this program was outstanding, with a high Resources Information System was introduced during the V/LINE SKILL GROUP BUILDING V/LINE'S NEXT GENERATION established, including a management skills and professional number of applicants. At year’s end, appointments were year in a bid to address these issues. (HEADCOUNT) Another achievement during the year was the establishment development program for many of V/Line’s operational being made. Executive 9 9 of new career path options and stronger partnerships with team, along with a Diploma of Signals and Communications This new system represented a signifi cant change for training organisations to retain talented people at V/Line. and a track inspection program. V/Line’s HR-related functions enabling a far greater analysis Operations 69 64 of employee data and movements throughout the business. Station staff 247 232 These changes have enabled a strong level of planning for Conductors 210 208 our workforce - and has already been put to Train drivers 328 318 use in the recent recruitment push to attract a new Authorised offi cers 6 4 generation to the V/Line team. Infrastructure maintenance 159 153 Signals and communications 54 54 Train controllers 42 41 Network services 64 69 Other staff 189 168 Past and present staff members farewell the old Wodonga Station in November 2008 before construction of a new station in 2010. > Total 1382 1320

V/LINE ANNUAL REPORT 2008-2009 OUR PEOPLE 42/43 To coin a phrase, V/Line is not an island. We rely on the services of many regional businesses to run our trains, and few functions are more vital than cleaning. Borg Corporate Property Services fi rst started as our train cleaning contractor at Southern Cross Station in 2004. In 2006 they were contracted to carry out the cleaning in the south-west, west and eastern regions, entrusted to make our trains clean and comfortable for passengers on departure. Based in Melbourne, Geelong, Warrnambool, Ballarat, Ararat, Traralgon and Bairnsdale, Borg staff are responsible for cleaning all aspects of the train’s interior windows, carpets, entryways, seats, the toilets as well as rubbish removal. The V/Line contract with Borg is worth some $2 million and they employ around 34 staff from regional locations and 25 staff at Southern Cross Station. Because fi rst impressions count, V/Line has recognised the need to work closely with Borg to get the best possible outcomes for customers. Recent joint project work has resulted in cleaner trains, an increase in customer and staff satisfaction, maintenance cost savings as well as procedures to be followed by Borg cleaners across the network. Ongoing meetings and a hands on relationship between V/Line staff and Borg have proven to be the key to a higher standard of cleaning and overall satisfaction with this business. Borg has proven to be a great example of how V/Line has partnered with local business to improve not just our train services, but our reputation for clean and comfortable trains in which our customers are happy to travel.

Partnering with regional businesses to improve customer services

Borg Corporate Property Client Services Manager Craig Reid and V/Line Regional Manager for the South-West and West, Peter Gibson, at Ballarat Station.

V/LINE ANNUAL REPORT 2008-2009 sectionsesectction 444/45 4 / 4 5 Train punctuality on V/Line’s regional network improved for continued to work with both the Department of Transport Our claim to be one of the most reliable public transport ON TIME PERFORMANCE OF TRAINS ON THE REGIONAL NETWORK UP TO THE METROPOLITAN BOUNDARIES* the third year in a row, despite the challenges of extreme and metropolitan operator Connex to improve planning, operators in Australia still holds true, with 98.3 per cent of weather, major track upgrade works and a rapid growth in timetabling and to manage the Melbourne network’s all scheduled trains running (98.7 per cent last year). In fact, 2008 > 2007 > 2008 > 2007 > Seven-carriage VLocities started running on passenger numbers. capacity. The recently announced $4.3 billion Regional Rail of 63,090 short-distance trains schedule, just 1208 were 2009 2008 2009 2008 some Geelong services to boost capacity. v short distance Regional on-time running of our trains provides the best Link project represents a landmark step in alleviating this cancelled (61,882 ran, or reliability of 98.1 per cent). 83% 82.3% pakenham 97.0% 92.7% traralgon gauge of our direct performance because that part of the congestion, particularly for passengers on the Geelong, Our long-distance trains performed even better, with 85.4% 88.7% broadmeadows 95.0% 97.1% seymour network is solely under V/Line’s control. In 2008–09, Ballarat and Bendigo lines. 99.4 per cent reliable, as just 66 out of 11,304 scheduled regional punctuality rose to 95.2 per cent on time for trains were cancelled (11,238 ran). Of those trains southern 85.5% 86.5% watergardens 93.9% 94.0% bendigo OUR PERFORMANCE cross all services, compared with 94.5 per cent last year and considered to be ‘cancelled’, most were replaced with station While our regional punctuality continues to improve as a result 87.8% 87.6% sunshine 95.0% 94.0% ballarat 93.5 per cent in 2006–07. road coaches. of ongoing better and integrated maintenance following Until new major metropolitan track infrastructure is delivered werribee geelong However, our punctuality in the metropolitan network – V/Line’s take over of the network in 2007, our total punctuality 85.1% 85.1% 97.0% 95.4% under Regional Rail Link, V/Line is limited in the amount of under the control of Connex – continued to be affected by – including both regional and metropolitan sections of the extra train services that can be offered during peak periods. railway congestion, with record numbers of country and journey – still has not met our target of 92 per cent on time. long distance pakenham bairnsdale suburban trains now running in the city area. Following a 30 per cent increase in services in 2006 and 81.5% 79.5% 93.6% 92.59 In 2008–09, our short-distance trains were a combined 85.5 minor timetable additions since, train service numbers Resolving these metropolitan congestion issues remains 91.8% 82.6% broadmeadows 96.5% 88.5% albury/wodonga† per cent on-time (down slightly from 86 per cent last year), remained on par with last year, with 73,120 trains running the key challenge to be addressed by all Victorian rail while long-distance trains were 87.8 per cent on time (up (just 42 more than 2007–08). 88.9% 89.7% 97.0% 97.4% shepparton stakeholders, including V/Line. In 2008–09 V/Line from 86.5 per cent in 2007–08). southern 92.9% 93.0% watergardens 96.3% 95.6% echuca cross station 81.7% 82.5% 92.6% 93.0% swan hill

92.8% 92.5% sunshine 96.2% 95.6% ararat

89.0% 88.1% werribee 96.0% 94.6% warrnambool

Total journey punctuality Regional area punctuality

* Regional area punctuality for Melbourne-bound trains is calculated before the train enters the metropolitan system. Out-bound train punctuality in the regional area is assessed by deducting its actual variance at the metropolitan boundary from its actual variance at its regional destination. Shunting in our rail yards at Southern Cross Station. > † Train services were replaced with road coaches between Seymour and Albury/Wodonga from November 2008 due to track upgrade works.

V/LINE ANNUAL REPORT 2008-2009 OPERATIONS 46/47 More short-distance trains ran this year (61,882 compared 84.3 per cent on time for February. However, of 11,834 Corporation, who will take on responsibility for the ongoing Geelong supporters have relied on V/Line to get them to the Our Geelong line also saw a boost during the year, with with 60,510 last year), but only because Albury / Wodonga scheduled services over these two months, 515 were operation of this stretch of line. V/Line will continue to big games more than ever before. During the 2008 season, longer opening hours at some existing stations. North trains terminated at Seymour – thus classifying them as technically ‘cancelled’ although all but 41 were replaced operate services on the line when work is complete. 254,224 passenger trips were made on trains to and from Geelong, Marshall and Lara stations were, until recently, ‘short’ – due to the North East Rail Revitalisation Project by road coaches (and 20 of those couldn’t be replaced as open only on weekdays, however with additional staff, are The works also presented V/Line with a signifi cant AFL games in Melbourne and Geelong (including fi nals), (NERRP) track upgrade works. Consequently, this temporary roads were cut off by bushfi res). This is an excellent outcome now also open on weekends. operational challenge to ensure customers could still travel and almost 80,000 passenger trips were made in the fi rst reclassifi cation meant that long-distance services dropped despite the extreme conditions, and the result of signifi cant between Seymour and Albury. A temporary timetable was 10 rounds of the 2009 season alone. to 11,238 (versus 12,568 services last year). planning by our operations department. MARYBOROUGH PASSENGER TRAINS TO RETURN introduced in November, which has involved the operation Extra V/Line services were also put in place for major Planning started for the return of passenger trains to COPING IN THE HEAT SIMULATING OPERATIONAL CHALLENGES of road coaches between Albury-Wodonga and Seymour, Melbourne-based events this year including Melbourne Maryborough Station, which was announced in December Over the fi rst two months of 2009 Victoria experienced the The year also saw the start of work on a new Rail Operations with trains connecting with coach timetables to allow Victory and Melbourne Storm matches, the World Cup 2008 as part of the government’s Victorian Transport most extraordinary heatwave in recorded history. In January, Management System (ROMS) – a major project that is passengers to get between Seymour and Melbourne without Soccer qualifi er, the AFL’s 2008 Final Series, 2009 NAB Cup Plan. The government has committed $50 million for the state experienced three of the four hottest days ever in expected to reap signifi cant rewards for V/Line’s operations major disruption. competition, matches including the Boxing Day Test, the project, including signalling, station upgrades and Victoria, a major power blackout and 22 days of heat-related systems. Through ROMS, we will have the ability to tri-nations one-day series and 20-20 cricket competitions, bus improvements to enable the return of services to DELIVERING PASSENGERS TO MAJOR EVENTS speed restrictions on at least one or more of V/Line’s routes. undertake simulations of a number of scenarios across our International Rules Football series, Sound Relief, as well Maryborough, with a daily return VLocity train via Ballarat. Victoria is a state renowned for its major events – and getting In February, V/Line was also signifi cantly affected by the network, including the loss of individual carriages and lines, as the Andrew Rieu and Victorian bushfi re ‘Sound Relief’ When these services commence, they will be the fi rst Victorians to these events is a key part of V/Line’s operation. impacts of this heat. staff changes and network failures. The system will then concerts and World Youth Day celebrations. passenger services to the area since 1993. V/Line CEO Rob Barnett presents Services Offi cer help to set in place, to a greater extent than ever before, the For a short period every two years, V/Line’s team shift the Kelly Westlake with a traditional station clock at the Black Saturday bushfi res on 7 February 2009 caused the The track between Melbourne and Maryborough is currently opening of the new Wendouree Station. v processes needed to manage these individual scenarios. WENDOUREE WELCOMED temporary closure of our Warrnambool, Seymour and focus of their passions from trains to aircraft, as part of the being upgraded as part of the overall upgrade of freight- The new system will deliver signifi cant benefi ts to V/Line On Sunday 14 June 2009 we opened our 83rd station – Gippsland lines. Fire destroyed 3000 sleepers in the Avalon International Airshow. This six-day event attracting focussed rail services to , and a $1.8 million heritage in the areas of fl eet management, timetabling and staff with the commencement of services to Wendouree, in Camperdown area on the Warrnambool line. About 1200 thousands of visitors from the Asia-Pacifi c, and V/Line’s role upgrade completed by VicTrack at Maryborough Station in management, and implementation will begin in late 2009. Ballarat’s west. The station is now served by 63 services sleepers, the Wandong Station platform and two rail bridges is critical to its success. In March 2009, we operated 59 mid-2008. every week and was opened to alleviate pressure on Ballarat were also destroyed on the Seymour line. The Gippsland line additional train services for the airshow, with over 18,000 KEEPING NORTH-EAST VICTORIA MOVING Station and give residents in a growing residential area of was closed as a precaution for 24 hours due to the proximity people travelling with V/Line to and from the event. Other November 2008 saw a major change to V/Line’s operations Ballarat an alternative transport option. of the Bunyip State Forest fi re but was not damaged. key regional events also saw V/Line adding additional in north-east Victoria, with the shut-down of train services services to its schedule, including the Hanging Rock and Work on the station was undertaken by the Department These extraordinary circumstances had a signifi cant impact between Seymour and Albury. The shut-down was a key Warrnambool race events, and the Castlemaine State Festival. of Transport from mid-2008 – and it now features a on V/Line, with short-distance trips to Geelong, Ballarat, part of the joint federal and Victorian government’s completely new station building, a 200-space car park, Bendigo, Seymour and Traralgon averaging 81.6 per cent $501 million project to upgrade Victoria’s freight corridor When it comes to the AFL, a very simple rule applies: when bike racks, lockers – and local bus timetables were on time in January, and 83.1 per cent on time February. between Melbourne and Albury-Wodonga. As part of the Geelong Football Club is playing well – V/Line is busy rescheduled to deliver a smooth transition for passengers. Long-distance trips to Warrnambool, Ararat, Swan Hill and the upgrade, 300 kilometres of track between Seymour on winter weekends. With Geelong following its 2007 AFL Bairnsdale averaged 78.5 per cent on time for January, and and Albury was handed over to the Australian Rail Track premiership with outstanding years in 2008 and 2009,

V/LINE ANNUAL REPORT 2008-2009 OPERATIONS 48/49 Together with the Victorian Government, international train manufacturer Bombardier has been a major partner in helping us to carry more passengers than ever before. The government’s fi rst order for new VLocity trains – capable of running at up to 160 kilometres per hour – dates back to 2001, with the fi rst of 38 two-carriage trains taking to the tracks in December 2005. All of these trains have been in operation since 2006, but as patronage grew at unprecedented rates, Bombardier’s factory in Dandenong was commissioned to expand most into three-carriage trains as well as construct more new vehicles. Since August 2008, an average of one new carriage per month takes to the tracks – a rate expected to continue until at least 2012. By fi nancial year’s end, Bombardier had rolled out 14 of up to 74 more carriages – adding more than 1000 extra seats to the fl eet. The government also announced in its Victorian Transport Plan in December that a further 20 V/Line carriages will be added to the regional fl eet, on top of the 54 carriages already on order. With Bombardier’s factory located in Melbourne’s outer east, these locally made trains are great for local employment. V/Line also partners with Bombardier to maintain our fl eet of VLocity trains, achieving one of the best reliability rates in the industry, with vehicles travelling over 83,000 kilometres between faults.

Partnering with leading manufacturers to create local jobs and more trains for our customers FFleet l e e t

V/Line Fleet Engineer John Baldi and Bombardier Project Manager John Doddrell at the Dandenong factory where our new VLocity carriages are under construction.

V/LINE ANNUAL REPORT 2008-2009 50/51 Physical seating capacity on V/Line’s trains has grown VLOCITIES EXPAND passenger trains in Victoria, with seven-carriage trains to H-Set locomotive-hauled carriages and Sprinter trains During the year, planning for a new maintenance facility at 62 per cent since 2005 with the introduction of new VLocity During the year, V/Line gained the fl exibility to run our running on four peak Geelong services each weekday from continued during the year. In addition to new interior Dynon, in Melbourne’s inner west, started to allow for the trains to regional Victoria. very popular VLocity trains in the original two-carriage November 2008. seating covers, carpeting and curtains, the vehicles long-term upkeep of these three dedicated vehicles. However the benefi t to passengers is a few times greater, confi guration, or as a three-carriage vehicle when a new benefi tted from new interior and exterior paint colour As the fl eet grows, our stabling and maintenance facilities IMPROVING RELIABILITY with each extra carriage running on four to six services middle carriage had been added. This means we can now schemes. Key among the exterior changes were across the state also expanded. Platforms were also Ensuring V/Line’s entire fl eet is on the tracks to meet per day. more precisely match train capacity to the passenger improvements to the visibility of locomotives, Sprinters lengthened at Marshall, South Geelong, Geelong and continued strong passenger growth is a complex task. volumes recorded by our conductors. and VLocities with yellow and white fronts as part of the Prior to 2005, there were 11,062 physical seats available North Melbourne stations to allow the semi-express refurbishment or major maintenance cycle. Maintenance processes must be strict and rigorous – with By adding an additional VLocity car to a two-car train, an on locomotive-hauled and Sprinter carriages. Now, 17,886 seven-carriage trains to run safely on the Geelong line. absolutely no compromises on safety – while ensuring the As of March 2009, every door on every carriage across the seats are available – 1064 of which were added during additional 76 seats are added to each service, along with In 2009–10, platforms will also be extended at some most effi cient use of every carriage across Victoria. Our train refurbishment program at Newport. v 2008–09 alone as a result of 14 new VLocity carriages room for an additional two wheelchair passengers (total of Bendigo and Ballarat line stations where fi ve to six entire V/Line fl eet is now automatic. This positive milestone Since their introduction in late 2005, the performance of rolling out. six) and an additional luggage and bicycle storage area. As carriage trains will operate. is the result of an upgrade to our N-set fl eet undertaken V/Line’s VLocity fl eet has been excellent. The kilometres part of the expansion, carriages were also fi tted (following over a number of years. It is now impossible for a door on This ongoing expansion of the fl eet has allowed for travelled between faults improved markedly during 2008–09 passenger feedback) with 32 seats in each new carriage now TRAIN REFURBISHMENTS an N-set to be opened without the complete consent of sustainable patronage growth and means V/Line is to 83,570 kilometres (up from 75,692 kilometres last year). including seat trays, along with a number of adjustments to While new VLocity trains set new comfort standards, our the train’s crew, a critical safety feature for all passengers now Australia’s largest regional train operator. This is an outstanding result in comparison to other rail seat-back angles throughout the new carriages. older trains are also being progressively refurbished. travelling with V/Line. providers who operate similar types of vehicles. Availability The ability to run VLocities as a combination of two or three- In addition to our standard maintenance program, A DEDICATED STANDARD-GAUGE FLEET of these trains, however, dropped slightly from 91.1 per cent carriage sets saw V/Line start operating the largest regular a $13 million state government program of improvements The joint Victorian and federal government-funded last year to 88.2 per cent this year, as a result of the need to $501.3 million North-East Rail Revitalisation Project, temporarily remove a train from service to allow a new third 2008 2007 2008 2007 2008 2007 2008 2007 which involves the conversion of track to a standard-gauge carriage to be inserted into the confi guration. VLOCITIES 2009 2008 SPRINTERS 2009 2008 LOCOMOTIVES 2009 2008 LOCO-HAULED CARRIAGES 2009 2008 width, will be a major benefi t in enabling a better fl ow of Our older fl eet of Sprinters and locomotive-hauled trains still Rolling stock availability Rolling stock availability Rolling stock availability Rolling stock availability passenger and freight rail traffi c between Victoria, New provide capacity to our customers, but require more regular (% fleet avail) (% fleet avail) (% fleet avail) (% fleet avail) South Wales and Queensland. > VLocities 88.2% 91.1% > Sprinters 88.1% 88.6% > Locomotives 82.0% 81.7% > Loco-hauled carriages 88.1% 88.6% maintenance due to their age. Sprinters travelled an average Rolling stock reliability Rolling stock reliability Rolling stock reliability Rolling stock reliability However, this track conversion requires modifi cation of the 19,884 kilometres between faults (down from 22,992 (3-month mean km (3-month mean km (3-month mean km (3-month mean km broad-gauge wheel sets used on trains throughout most of kilometres last year). Locomotive-hauled carriages travelled between faults) between faults) between faults) between faults) Victoria to the standard-gauge model used in NSW on three 93,052 kilometres between faults – down considerably from > VLocities 83,570 75,692 > Sprinters 19,884 22.992 > Locomotives 23,506 21,866 > Loco-hauled carriages 93,052 128,359 of our N-Set trains. As part of the conversion, 15 carriages, the 128,359 kilometres per fault in 2007–08, mainly due to three locomotives and three power vans will make up issues with the modifi ed power doors on N-Set carriages to the three special N-Set vehicles. In addition to the under- improve passenger safety. However, locomotive reliability VLOCITIES SPRINTERS LOCOMOTIVES LOCO-HAULED CARRIAGES carriage work, an interior and exterior refurbishment will improved for the second consecutive year to 23,506 also improve customer comfort. This fl eet will be dedicated kilometres between faults (21,866 kilometres last year). purely to V/Line’s Melbourne–Albury services, with services Maintenance programs will expand throughout 2009 to meet expected to return to Albury on completion of track and the challenges of a growing fl eet that continues to travel signalling upgrades in 2010. further across regional Victoria.

V/LINE ANNUAL REPORT 2008-2009 FLEET 52/53 Timber sleepers have served the Victorian railway industry well for more than 150 years and still have a major part to play across our network. However, the durability and stability offered by concrete sleepers, as part of the Regional Fast Rail (RFR) project, have helped establish V/Line as a business with modern and reliable infrastructure able to run trains at a speeds of up to 160 kilometres per hour. Starting with the four RFR lines to Ballarat, Geelong, Traralgon and Bendigo, V/Line will progressively replace all timber sleepers on passenger lines with concrete. This means our partnering with industries such as Austrak, based in Geelong, is imperative to our upgrade and maintenance programs. Austrak has been operating since 1980 and employs people from the south-west region. The Geelong factory has been operating since 1994, and they produce more than two million sleepers each year for rail and tram industries across Australia. In 2008–09 more than 50,000 concrete sleepers were laid on the Ballarat line as part of the passenger line renewal program. The Geelong line was upgraded with 28,000 concrete sleepers in early 2008 and as a consequence this line now consists solely of concrete sleepers between Werribee and Geelong. The Traralgon line will see up to 80,000 concrete sleepers laid in 2010 with Bendigo line sleeper replacement works expected to start in 2012. The vision is to eventually phase out timber sleepers on the regional passenger lines and transfer the reusable ones to the lower-use freight rail network. As we continue to partner with industries such as Austrak we continue to grow our reputation as a business of the future.

Partnering with industry to upgrade and maintain our tracks Infrastructure

V/Line’s Major Periodical Maintenance Track and Civil Manager, Jason Arklay, and Austrak’s Product Design Manager, Dr Jason Nairn, at the concrete sleeper plant in Lara.

V/LINE ANNUAL REPORT 2008-2009 554/55 4 / 5 5 Safe, effective and effi cient infrastructure is the back bone One of the largest projects undertaken during the year was Most crossings along this line section also underwent major UPGRADING OUR STATIONS INNOVATIONS IN EXTREME CONDITIONS A strong example of this approach has been in the of our rail operations. Beyond our statutory and regulatory the upgrade of track between Sunshine, in Melbourne’s maintenance to renew the track and road surfaces. V/Line also embarked on a signifi cant program of station 2008–09 saw parts of V/Line’s passenger network placed materials V/Line is now using for infrastructure building obligations, V/Line has an outstanding culture focussed on western suburbs, and Ballarat. This major works program Crossing loops were also upgraded across the state. improvements during 2008–09. Station redevelopments under heat speed restrictions for 49 days. This safety policy and maintenance. While timber still remains the most achieving best-practice standards and innovations that are saw V/Line’s team replace more than 50,000 older timber Sites in Barwon, Boxbank, Melton and Rockbank were all were undertaken at Lara and Echuca stations, with Lara sees trains operated at slower speeds when the forecast for predominant material used as railway sleepers, V/Line designed to improve operational effi ciencies and the overall sleepers with concrete sleepers. This entire section is now converted from timber sleepers to concrete during 2008–09. Station seeing a complete rebuild of the station building, the day is forecast to reach 36 degrees or more between has confi rmed its push towards the use of concrete for this platform resurfacing and an upgrade of lighting. Works at customer experience. concrete, ensuring maintenance will be required less, and Additionally, station pits at Ardeer, Deer Park, Melton Melbourne and Bendigo, Ararat, Warrnambool, Bairnsdale, purpose, with almost 30 per cent of all 173,000 sleepers customers will notice an ongoing improvement in reliability Echuca, in the state’s north, involved a major refurbishment and Rockbank were re-formed with concrete sleepers. Seymour and Shepparton, or 33 degrees or more at Swan laid during 2008–09 being made from concrete. While more LAYING THE FOUNDATIONS along this line. Similar works were undertaken along the of the internal waiting and staffi ng areas. New larger shelters Hill and Echuca. The policy is implemented in response to Nine key bridges throughout Victoria were also strengthened expensive, concrete sleepers have a notably longer lifespan A targeted, customer-oriented approach to maintenance of freight-only line between Murtoa to Hopetoun in the state’s were also installed during the year at Bunyip Station. the potential for steel railway track to bend and buckle in – and Bendigo station’s stabling yard was given a and require less maintenance. A similar shift has been also our track, signalling and other infrastructure is the key to our west. More than 40,000 timber sleepers were replaced in extreme heat. $300,000 upgrade. With V/Line’s fl eet expanding in length – including regular undertaken for the maintenance of bridges across the state, trains becoming more punctual and reliable on the regional this area where the rail line plays a critical importance in the VLocity services with seven-carriages along the Geelong line, Additionally, during 2008–09, Department of Transport- With planning undertaken in 2007–08, this year saw the with timber being replaced by steel. network under our control since 2007. movement of grain and other crops. appointed contractor John Holland started work on a work has occurred at a number of stations to accommodate commencement of a pilot project to potentially reduce the A notably streamlined approach is also taking place with Excluding major projects, 2008–09 saw a record sleeper Important stretches between Kerang and Swan Hill, and $60 million upgrade of stretches of freight line between these extra long trains. Platform extensions were undertaken need for these restrictions. This involved measuring the V/Line’s innovative approach to its maintenance equipment. maintenance program across regional Victoria. More than Strathallan and Echuca saw works undertaken to weld Ballarat and Mildura on the V/Line network. This upgrade during the year at North Melbourne, Geelong, South Geelong temperature – and the direct stress it puts on our railway A number of key pieces of on-track machinery – including 173,000 sleepers were laid throughout the state during the joins in the track, in addition to the replacement of over involves replacing sleepers, welding of rail joints and a and Marshall stations – ensuring as our trains grow in lines – at 22 individual sites along the Geelong, Ballarat, rail lifters, scarifi ers, cranes and loaders – have undergone year – an investment in Victoria’s core rail infrastructure of 20,000 sleepers. Works to both of these sections of line range of other works along this stretch of rail that is vital length, so does the infrastructure to accommodate them. Bendigo, Swan Hill and Echuca lines. Data from this study over $32 million, with projects taking place in every part of will see a notable difference to passenger comfort in this to Victoria’s agricultural industry. During 2008–09, a major program to install more will be analysed to determine the potential for a shift in heat V/Line-designed modifi cations to suit operation-specifi c the state. region – reducing bumps as the train moves along the line. de-watering points at a number of stations throughout the speed restriction policy in the future. needs. Among many modifi cations; cranes have been V/Line network began. De-watering points allow the removal mounted onto excavators, loaders have been fi tted with of waste from trains – and until recently, this work was IMPROVING THE WAY WE BUILD railway fi ttings – with each modifi cation allowing V/Line to only able to be carried out at Melbourne’s Southern Cross A more streamlined approach to maintenance work since work on-track, and then take this machinery off-track within Station. New points were installed at Ballarat, Bendigo, V/Line took control of the regional network two years ago has 30 seconds to allow a train to pass along the railway line. Echuca, Shepparton, Swan Hill and Warrnambool stations, created cost savings in the purchase of materials that have This approach provides signifi cant increases in work speeds with installations soon to be completed at allowed us to undertake more work with the same budget. and effi ciencies, ensuring new records are being set in Kyneton and Albury. This better coordinated approach has also resulted in more V/Line’s worksite productivity. consistent, safer work practices for our team in the fi eld.

Thermal welding as part of line restoration works at Wandong following the February 2009 bushfi res. >

V/LINE ANNUAL REPORT 2008-2009 INFRASTRUCTURE 56/57 Victorian rail network map Yelta

Mildura

Red Cliffs

Robinvale

Hattah The opposite approach is also assisting in enhancing Planning was also undertaken during the year for the Manangatang Moulamein V/Line’s worksite effi ciency. Machinery that is traditionally introduction of a new hand-held maintenance system Ouyen Piangil Mittyack Nyah West rail-bound has been replaced with machinery that can also across V/Line’s maintenance team. Handheld devices will MELBOURNE METRO AREA Panitya Linga Swan Hill Craigieburn serve other purposes off the rails, such as drainage and be used to enable V/Line’s team to enter upgrade/change Bendigo Hurstbridge Oaklands Epping Sydenham Ultima Upfield Sea Lake Wakool rail bank maintenance. This approach has ensured that information as they do this work – making a signifi cant Deniliquin Broadmeadows St Albans Jacana Glenroy Fawkner Reservoir when the laying of sleepers cannot be undertaken due to reduction to paperwork. This will ensure our team can Oak Park Woomelang Strathmore Rosanna Kerang Ballarat Lilydale Yaapeet Hopetoun Albion Tocumwal Yard Tottenham South Kerang Yard Flemington Jewell Merri Racecourse train operations, for example, the V/Line team can still spend more time out in the fi eld undertaking the core Deer Park Clifton Hill Sunshine Ardeer Newmarket Victoria Park North ie Melbourne gwood Rin Strathmerton Brooklyn Port enferr Melbourne Gl Blackburn Spotswood Richmond Camberwell work on-site. of their responsibilities, and less time with paperwork rth Dynon Bayswater Newport No S. Yarra Kooyong Birchip Albury South Dynon uthern Cross So Flinders Street Boronia Wycheproof Darling Alamein Pyramid Mount Waverley and administration. Seaholme Williamstown Pier Glen Waverley Caulfield Jeparit Echuca Wodonga Geelong Elsternwick Huntingdale TECHNOLOGICAL INNOVATION Springhurst Bandiana Belgrave Warracknabeal Kyabram Dookie Bentleigh During the year, V/Line introduced a new Maximo database Diapur Brighton Beach Westall Yard Key planning was undertaken in 2008–09 for the Korong Vale Dingee Sandringham Rochester Shepparton Wangaratta Cheltenham Dimboola system for managing the maintenance and upgrade of Dandenong Adelaide Serviceton Glenrowan introduction of several technological innovations Inglewood Toolamba Mordiallic assets across Victoria. This new system is central to the Murchison East Benalla Murtoa St Arnaud Traralgon that are expected to make strong improvements to Eaglehawk Lyndhurst management of our extensive works schedule by allowing Huntly Horsham Marong Euroa V/Line’s operations. Bendigo Nagambie Cranbourne Dunolly better organisation of equipment and materials, allowing the Glenorchy Mangalore Stony Point Laser-based surveying systems will soon be used as part of Maryborough Seymour better transfer of surplus goods from one part of the state to Castlemaine Stawell V/Line’s track inspection program – with the planned focus Moolort Tallarook another to reduce project costs. Platform extension works at Geelong Station Malmsbury on identifying bumps and measuring directional changes in Kyneton Broadford to cater for longer trains. v Ararat Clunes Woodend The new system is also central to V/Line’s safety Beaufort portions of V/Line’s track. This work, the planning for which Maroona Yard Wallan management system, as it provides an automated process has been undertaken throughout 2008–09, will then help to Tatyoon Ballan Sunbury Craigeburn Glenthompson Ballarat for issuing of works orders. For example, if one of the Diggers Rest Somerton form the basis of V/Line’s maintenance program, enabling a Westmere hundreds of V/Line-maintained bridges across Victoria Hamilton Bacchus Marsh Melton smoother journey for thousands of passengers each year. Werribee Bairnsdale is soon requiring an inspection, V/Line’s new Maximo Branxholme Berrybank Little River Nar Nar Goon Gheringhap Lara LEGEND database system automatically issues works orders to Longwarry North Warragul Heywood Camperdown Inverleigh Pakenham Moe Traralgon Sale Geelong Geelong Drouin ensure this happens. Rosedale Passenger and freight services (V/Line broad gauge) Trafalgar Dennington Terang Winchelsea Portland Colac Passenger and freight services (ARTC standard gauge) Warrnambool Freight only (V/Line broad gauge)

Freight only (V/Line standard gauge)

ARTC (standard gauge) including dual gauge North Geelong – Gheringhap and Geelong grain loop

Connex Melbourne (broad gauge)

Victorian Rail Track Corporation (VicTack) Note: Map refl ects the rail environment at 30 June 2009.

V/LINE ANNUAL REPORT 2008-2009 INFRASTRUCTURE 58/59 Sometimes disruptions to our train service occur due to incidents beyond our control, but our customers judge us on the speed of our response and ability to keep them moving – no matter what. Unlike the metropolitan train network, V/Line trains travel much greater distances and do not have the same service regularity, which is why catching the next train is not an option for many people. To ensure that our customers are not left waiting for unreasonable amounts of time, a cancelled train on the V/Line network needs to be replaced by a road coach in most instances. Our commercial partnerships with coach companies in Melbourne and regional Victoria are pivotal to ensuring customers are provided with an alternative. Coach companies are also called upon by V/Line for planned track works or prolonged train disruptions such as during the February 2009 bushfi res. V/Line has a pool of around 30 coach companies across Victoria at our disposal in the event of disruptions, and is a good example of the way V/Line has partnered with a commercial transport provider. Dysons has many depots across regional Victoria and runs a large fl eet of modern and well-equipped buses and coaches which, when necessary, jump into action to keep our customers moving. V/Line’s aim is to get our customers to their destinations, and without these commercial partnerships, this could not happen. In addition to the train-support role contracts that V/Line manages with coach operators, the Department of Transport has contracts with coach companies which provide regular timetabled services to our passengers. This part of the business is also important as it accounts for just over eight per cent of our patronage.

Commercial partnerships with other transport providers

Dysons Bus Service Managing Director Jamie Dyson and V/Line Coach Manager, Andrew Berry at Sunbury Station.

V/LINE ANNUAL REPORT 2008-2009 sectionsesectction 660/61 0 / 6 1 Record patronage saw our farebox revenue increase While fuel remains a major cost to our business ENGAGEMENT OF CONSULTANTS PAID OVER $100,000 15 per cent to $68.6 million. This is the second year of ($24.4 million this year), effi ciencies were realised as part strong farebox growth, and represents a 39 per cent new commercial arrangements with our supplier which saw increase on the $49.3 million collected in ticket sales savings of $626,000 in the fi rst year of the . back in 2005–06. The business reported a consolidated loss before tax for Total income for the V/Line business was up 13 per cent to the year of $6.4 million. While this is an improvement on the $465.2 million ($411.9 million last year). This included a $9 million loss (before income tax expense) reported last $28.9 million increase in government subsidies to year and $23.4 million loss in 2006–07, it is important to $255.6 million (a 12.7 per cent increase from last year’s note that this is not a cash loss. $226.7 million). As a not-for-profi t entity whose primary obligation is the

2009 2008 2008 2007 Importantly, the subsidy per passenger trip continued to delivery of subsidised passenger transport services to SUPPLIER/VENDOR DESCRIPTION $'000 decrease this year to $19.42 as more people travel with regional Victoria, neither V/Line’s Franchise Agreement Alphawest Information technology services 2,224 V/Line. This key effi ciency measure has seen the rate drop with the Director of Public Transport nor V/Line’s Corporate from $19.88 last year and $22.74 in 2006–07. Business Plan is based on the corporation making a profi t. McCann Erickson Melbourne Marketing advertising services, including outbound growth campaign 1,830 Revenue from access charges to other operators remains Worley Parsons Engineering services 955 GREENHOUSE CHALLENGE PLUS fl at – up just $188,000 on last year to $2.7 million. Corrs Chambers Westgarth Legal advice 899 > > Greenhouse Challenge Plus began as a voluntary program The impact of the drought on harvest outcomes means this FINANCIAL SUMMARY: $M $M for companies wanting to boost their green credentials. Fujitsu Australia BMS implementation 358 is still down almost $2 million on access fees in 2006–07 Revenue To strengthen the program, the Commonwealth introduced and does not refl ect the considerable costs of maintaining Oakton Services Information technology services, including BMS implementation 314 Operational 381.2 328.3 a mandatory category of membership for those companies the freight rail infrastructure. Dimension Data Australia Information technology services 302 Non-operational 84.0 83.6 claiming more than $3 million in fuel tax credits per annum. However, total expenses also increased with the growing Barrington Centre Critical incident management and employee assistance program 215 Expenditure 471.6 420.9 With a fuel usage of 26.5 million litres and a rebate of business – up 12 per cent to $471.6 million ($420.9 million Loss before income $0.38143 per litre, membership of the program was worth Willis Australia Workcover administration, case management and insurance brokerage 199 in 2007–08). Major expenses included $58.9 million in tax expenses 6.4 9.0 about $7 million per annum for V/Line. Ernst & Young Taxation and internal audit services 173 Net cash infl ow from fl eet maintenance ($47.8 million in 2007–08) as our trains Following new legislation recently passed by the Initiate Action Materials management improvements 155 operating activities 21.0 20.9 continue to travel further. With the demands of extreme Commonwealth, the Greenhouse Challenge Plus weather, particularly over summer, road coach costs also Total assets 169.7 173.0 Critical Risk Pty Ltd Risk management / security 128 increased to $6.8 million ($4.5 million last year). There was program ceased on 30 June 2009 and has not been Total liabilities 108.4 105.3 Battiston Consulting Business management system consulting 92 only a modest increase in staff: labour costs increased to replaced by an alternative scheme. Net assets 61.3 67.7 Under $100,000 16 consultancies 605 $121.3 million ($107.2 million in 2007–08).

V/LINE ANNUAL REPORT 2008-2009 FINANCE 62/63 V/LINE PASSENGER CORPORATION BOARD OF DIRECTORS V/Line Passenger Pty Ltd AND V/LINE PASSENGER PTY LTD As at 30 June 2009, the boards of VLPC and V/Line consisted Director No. eligible to attend No. attended V/Line Passenger Corporation (VLPC) was established of the same fi ve non-executive directors, with the board of Mr Frank Tait (Chair) 6 6 on 15 July 2003 as a statutory rail corporation under the the parent entity, VLPC, reporting to the Minister for Public Ms Catherine Scott 6 6 Rail Corporations Act 1996. On 14 October 2008 VLPC Transport and to the Treasurer. Mr Michael Tilley 6 5 was also declared a state business corporation pursuant Each board has established protocols and procedures to Ms Fiona Bennett 4 4 to the State Owned Enterprises Act 1992. VLPC is the sole ensure that corporate governance is maintained at the Mr David Worth 4 4 shareholder of the main operating entity, V/Line Passenger highest levels and that the strategic direction and overall Pty Limited (V/Line). Corporate governance performance of the respective business entities can be ACCESS TO INFORMATION In 2003 V/Line entered into a franchise agreement with developed and monitored diligently. The board of V/Line Directors of VLPC and V/Line are allowed full access the Director of Public Transport (Director), representing has also delegated certain functions to board committees to information required in order to discharge their the State Government of Victoria, to operate regional rail which focus on relevant important areas of operations. responsibilities. Directors of both entities may obtain throughout Victoria. The current franchise agreement will Further details regarding these board committees are independent professional advice on matters arising in the expire on 31 December 2009. set out later in this section. course of board duties. The board of VLPC receives written BOARD COMPOSITION reports from the CEO of VLPC at each board meeting on In July 2004, the Director directed V/Line to facilitate the BOARD MEETINGS ATTENDANCE compliance by V/Line of its ongoing obligations under Ms Catherine Scott Mr David Worth Mr Frank Tait Ms Fiona Bennett Mr Michael Tilley operation of heritage rail (i.e. steam) services on behalf The boards of VLPC and V/Line generally hold bi-monthly Ministerial directions. Directors also have access to senior (October 2003 to 30 June 2009) (since December 2008) (since October 2003) (since December 2008) (since July 2006) of identifi ed rail heritage groups. meetings and additional meetings as required. managers and/or offi cers of the entity on whose board they Ms Scott is an experienced board Mr Worth is a chartered accountant and Mr Tait is the chair of the boards of Ms Bennett has held senior executive Mr Tilley is the chairman of Terrain In April 2007, the Director directed V/Line to execute member and has held senior executive an experienced director and adviser VLPC and V/Line. His career spans positions in leading listed companies Capital. He has worked in the accounting V/Line Passenger Corporation serve and, on request, to documents held by the entity. documents and operate the regional below-rail business, positions in the investment banking in the transport and logistics industry government as well as the rail transport and has experience in commercial and and fi nance industries for more than Director No. eligible to attend No. attended and airline industries. In addition to and the property industry. He has had and defence industries. Along with fi nancial management, governance, risk 25 years and has broad senior advisory following the state’s buy-back of the infrastructure from INDEMNIFICATION OF OFFICERS Mr Frank Tait (Chair) 6 6 fi nance expertise she brought to senior executive experience in corporate his role on the V/Line boards, management and audit across a range and project management experience in Pacifi c National, to facilitate track access for the operation of VLPC and V/Line have entered separately into deeds of Ms Catherine Scott 6 6 V/Line a thorough understanding of fi nance, supply chain management, Mr Tait is executive director of the of industries, including retail, resources, all facets of corporate fi nance. Mr Tilley both passenger and freight rail services from 7 May 2007. indemnity and access with each current and former infrastructure projects and regional property development, corporate Infrastructure Projects Division within manufacturing and health. She has held is also chairman of Lower Murray Water Mr Michael Tilley 6 5 Effective from March 2009, V/Line is no longer subject to the director and the corporation/company secretary. development. Ms Scott is the deputy strategy and IT. He is a director of two the Department of Transport. He also a number of government, public and Authority and Free Eyre Limited and Ms Fiona Bennett 4 4 Prior to its deregistration on 4 February 2008, chairperson of Goulburn Valley Water property investment funds associated has a consulting business, advising not-for profi t board positions and is a director of Vision Super Pty Ltd and Deed of Company Arrangement that had been entered into Mr David Worth 4 4 Victorian Rail Heritage Operations Pty Limited (VRHO) and also serves on the board of with Marks Henderson Funds boards, executive management and currently a director of Alfred Health, North Queensland Metals Limited. by V/Line and its creditors in 2003 following the insolvency Goulburn Murray Water. Management, several development entrepreneurs on business strategy, the Institute of Chartered Accountants of the National Express Group of companies. entered into a deed of indemnity and access with its sole Ms Scott was the deputy chair of V/Line trusts established by Dacland organisational development and in Australia, Legal Services Board, director, Mr Rob Barnett. These deeds of VLPC, V/Line and did not seek reappointment to VLPC Management for Sophisticated recruitment strategies. WPC Group Limited and Heide Museum and VRHO provide for indemnifi cation against liabilities when her term expired on 30 June 2009 Investors and Lowell Capital Limited, of Modern Art. and resigned effective 1 July 2009. a small resources fund manager.

V/LINEV /LINE ANNUAL REPORT 2008-2002008-20099 CORPORATE GOVERNANCE 64/65 arising from the conduct of the business or from the BOARD COMMITTEES The Safety, Security and Environment Committee: BUILDING ACT 1993 RISK MANAGEMENT VICTORIAN GOVERNMENT RISK MANAGEMENT discharge of directors’ and offi cers’ duties (other than any The board of V/Line has established three board committees • The function of the committee is to assist the board in It is V/Line’s policy to ensure that new buildings and works A process is in place for V/Line and VLPC to meet their FRAMEWORK ATTESTATION liability relating to a wilful breach of duty or trust) and the – the remuneration; fi nance, audit and risk; and safety, discharging its obligations in relation to V/Line’s health, to existing buildings carried out for and on its behalf comply obligations under the Victorian Managed Insurance Authority I, Frank Tait certify that V/Line Passenger Corporation maintenance of directors’ and offi cers’ insurance. These security and environment committees. safety, security and environment practices, and providing with the Building Act 1993. Act 1996. The risk management processes in place are through its wholly owned subsidiary and operating company, V/Line Passenger Pty Ltd, has risk management deeds remain operational in respect of the current directors The Remuneration Committee: an overview mechanism for examining the management consistent with the AS/NZS 4360 standard. The board of NATIONAL COMPETITION POLICY processes in place consistent with the Australian / New and secretary of VLPC and V/Line, and also the following • The function of the committee includes assisting the of operational risk management in V/Line. V/Line, as the signifi cant operating entity, considers risk VLPC continues to comply with the requirements of the Zealand Risk Management Standard AS/NZS 4360 and former directors of VLPC and V/Line: Ms Catherine Scott; board in the appointment, review and succession of • Members as at 30 June 2009: David Worth (Chair), management issues regularly as part of its bi-monthly National Competition Policy, including compliance with the an internal control system is in place that enables the Ms Alice Williams; Ms Meredith Doig; Mr Andrew Neal and the chief executive offi cer and reviewing remuneration Fiona Bennett and Frank Tait board meetings, through the activities of both the Safety, requirements of the Victoran Competitive Neutrality Policy, executive to understand, manage and satisfactorily control Mr Colin Nicol, former director of VRHO: Mr Rob Barnett and policy of staff. • Number of meetings held during the year: four. Security and Environment Committee and the Finance, Audit as applicable. risk exposures. The board verifi es that this assurance and former corporation/company secretaries: Mr Anthony Day • Members as at 30 June 2009: Catherine Scott (Chair) and Risk Committee, as well as through a robust process and Mr David Chapman-Kelly. CORPORATE PLAN known as the Enterprise Wide Risk Management System. the risk profi les of V/Line Passenger Corporation and and Frank Tait. WHISTLEBLOWERS PROTECTION ACT In accordance with the Rail Corporations Act, VLPC prepared V/Line also has in place other policies and management V/Line Passenger Pty Ltd have been critically reviewed During the fi nancial year, V/Line insured all directors • Number of meetings held during the year: two. VLPC and V/Line are subject to the provisions of the its corporate plan, including its statement of corporate systems to ensure that operational and compliance within the last 12 months. and offi cers of VLPC and V/Line against certain liabilities The Finance, Audit and Risk Committee: Whistleblowers Protection Act 2001. In the past year, one intent. The corporate plan is prepared annually and covers a matters are effi ciently and effectively addressed. V/Line incurred by them in that capacity. In accordance with normal • The function of the committee is to assist the board to disclosure has been received and referred to the Victorian three-year period starting from the current fi nancial year. has a Management System Manual which provides a commercial practices, the terms of the insurance contract oversee the fi nancial and commercial risk management Ombudsman. It is currently undergoing investigation. prohibit disclosure of details of the nature of the liabilities comprehensive overview of these policies and management framework, including to review and monitor accounting MINISTERIAL DIRECTIONS Frank Tait IMPLEMENTATION OF THE VICTORIAN INDUSTRY systems, including the Enterprise Wide Risk Management covered by the insurance contract and the amount of the policies and practices, and to evaluate and develop VLPC received no ministerial directions for the period PARTICIPATION POLICY (VIPP) System, legislative compliance policies, an environment Chairman premium paid under the contract. fi nancial and commercial risk management systems. ending 30 June 2009. VLPC and V/Line have not entered into any contracts for the management system, and an audit framework for safety, 26 August 2009 • Members as at 30 June 2009: Michael Tilley (Chair), FREEDOM OF INFORMATION year ended 30 June 2009 to which VIPP thresholds applied. security and environmental matters. Catherine Scott and Fiona Bennett. VLPC is subject to the provisions of the Freedom of VLPC’s and V/Line’s standard tendering procedures include • Nunmber of meetings held during the year: four. Information Act 1982. For the year ended 30 June 2009, compliance with VIPP as and when required. VLPC received four requests for access to information. Of these requests, three were from a Member of Parliament and one was from a member of the public.

V/LINE ANNUAL REPORT 2008-2009 CORPORATE GOVERNANCE 66/67 12345 67 8910

Left to right:

1. Geoff Arthur 3. Laurie Foley 5. Ursula McGinnes 7. Jenny Kelman 9. Graham Perry General Manager, Operations General Manager, Safety, General Manager, General Manager, General Manager, Engineering Statutory statement 70 Delivery, planning and Security & Environment Stakeholder Relations Human Resources Rolling stock engineering Operating statement 70 development of our train and Incident management and Customer relations, marketing Recruitment, training and HR services, including maintenance Balance sheet 71 coach services. safe-working, security, risk and and business development, services. Industrial relations and of the current fl eet and Statement of changes safety improvement programs, communications and media, organisational development. development of new trains. in equity 72 2. Wayne Walsh OH&S, DDA and environment. and community relations. Cash fl ow statement 72 8. Ross Pedley 10. Mike Sutcliffe General Manager, 4. Rebecca Northeast 6. Rob Barnett Notes to the Network Services General Manager, General Manager, Financial Statements 73 Company (Corporation) Chief Executive Offi cer Corporate and Finance Infrastructure Provision of access for projects Audit report 92 and works for freight and Secretary Executive team leader, Corporate and fi nancial Maintenance and upgrade passenger train operators. Legal services, company / management representative on management services, including of rail, signalling and other Disclosure index 97 corporation administration. the V/Line Board, and member IT, contracts and procurement. infrastructure. of the government’s Victorian Railway Steering Committee on Level Crossings.

V/LINE ANNUAL REPORT 2008-2009 68/69 Statutory Statement

OPERATING STATEMENT FOR THE YEAR ENDED 30 JUNE 2009 BALANCE SHEET AS AT 30 JUNE 2009 We certify that the attached fi nancial statements for V/Line Passenger Corporation and its subsidiary have been prepared in accordance with Standing Direction 4.2 of the Notes 2009 2008 Notes 2009 2008 Notes 2009 2008 Financial Management Act 1994, applicable fi nancial reporting directions, Australian $’000 $’000 $’000 $’000 $’000 $’000 Accounting Standards and other mandatory professional reporting requirements. INCOME ASSETS EQUITY We further state that, in our opinion, the information set out in the Operating Statement, Revenue 2(a) 381,289 328,326 Current assets Asset revaluation reserve 13 104,913 104,913 Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the Other income 2(b) 83,965 83,573 Cash and cash equivalents 5 2,785 2,664 Accumulated surplus/(losses) 13 (43,622) (37,200) Financial Statements presents fairly the fi nancial transactions during the year ended Total income 465,254 411,899 Receivables 6 24,354 21,378 Total equity 61,291 67,713 30 June 2009 and the fi nancial position of the consolidated entity at this date. Inventories 7 4,772 5,296 We are not aware of any circumstance which would render any particulars included EXPENSES Other current assets 8 684 330 Commitments for expenditure 23 25,879 11,564 in the fi nancial statements to be misleading or inaccurate. Operational expenses 3 (a) 250,069 218,729 Total current assets 32,595 29,668 Contingent assets and liabilities 22 – – Depreciation 3 (b) 18,961 20,391 Non-current assets The Accountable Offi cer and the Chief Financial Accounting Offi cer have, within the Administrative expenses 56,673 49,969 Investments 1(l), 9 – – The above Balance Sheet should be read in conjunction with the accompanying notes. last 12 months, made formal statements to the board that: Selling expenses 2,188 2,258 Property, plant and equipment 10 137,073 143,302 • the Corporation’s fi nancial reports present fairly, in all material respects, the Marketing and communication 3,684 3,905 Total non-current assets 137,073 143,302 Corporation’s fi nancial condition and operational results in accordance with the Customer service expenses 3,434 2,652 Total assets 169,668 172,970 requirements of the Financial Management Act 1994 including the Directions; Project expenses 20,694 15,957 • the fi nancial report is founded on a sound system of risk management and internal Infrastructure maintenance 82,624 77,818 LIABILITIES compliance and control which implements the policies adopted by the Board; Trains provided free of charge 1 (f) 33,349 29,225 Current liabilities Total expenses 471,676 420,904 Payables 1(o),11 55,718 58,544 • the Corporation’s risk management and internal compliance and control system is Provisions 1(x),12 48,933 44,503 operating effi ciently and effectively in all material respects. Loss before income tax expense (6,422) (9,005) Total current liabilities 104,651 103,047 Income tax expense 4 – (6,290) Non-current liabilities Provisions 1(x),12 3,726 2,210 Net loss for the period 13 (6,422) (15,295) Total non-current liabilities 3,726 2,210 Frank Tait, Chairman Michael D Tilley, Director Total liabilities 108,377 105,257 The above Operating Statement should be read in conjunction with the accompanying notes. Net assets 61,291 67,713

Rob Barnett, Chief Executive Offi cer Ross Pedley, General Manager – Corporate & Finance Melbourne, 12 August 2009

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 70/71 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2009 CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2009 NOTES TO THE FINANCIAL STATEMENTS

Notes 2009 2008 Note 1 Summary of signifi cant accounting policies NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Notes 2009 2008 $’000 $’000 Note 2 Income (a) Basis of accounting $’000 $’000 CASH FLOWS FROM OPERATING ACTIVITIES Note 3 Operational expenses This is a general purpose fi nancial report, which has been prepared in accordance with the TOTAL EQUITY AT THE BEGINNING OF THE FINANCIAL YEAR 67,713 97,683 Receipts from government (GST inclusive) 377,128 340,691 Note 4 Income tax expense requirements of the Financial Management Act 1994 and Accounting Standards, including Net loss for the period (6,422) (15,295) Receipts from other entities (GST inclusive) 101,815 77,313 Note 5 Cash and cash equivalents Australian accounting interpretations and authoritative pronouncements of the Australian Revaluation decrement to rolling stock – (14,675) Payments to suppliers and employees (GST inclusive) (448,823) (389,742) Note 6 Receivables Accounting Standards Board. Total equity at the end of the fi nancial year 61,291 67,713 GST payments to the Australian Taxation Offi ce (9,453) (7,933) Note 7 Inventories The Corporation is in compliance with the requirements of Australian Accounting Standards Interest received 307 557 Note 8 Other current assets as issued by the AASB and International Financial Reporting Standards as issued by the The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. Net cash fl ows from operating activities 26 20,974 20,886 Note 9 Investments IASB. V/Line has applied the AIFRS to all Financial Reports and appropriate notes contained Note 10 Property, plant and equipment in these statements. CASH FLOWS FROM INVESTING ACTIVITIES Note 11 Payables Payment for plant and equipment (20,853) (19,081) V/Line Passenger Corporation is a Victorian Statutory Corporation established in Australia Net cash fl ows used in investing activities (20,853) (19,081) Note 12 Provisions under the Rail Corporations Act 1996. Net increase/(decrease) in cash and cash equivalents 121 1,805 Note 13 Equity The fi nancial report has been prepared on an accruals basis and is based on historical cost, Note 14 Financial instruments except for the revaluation of certain non-current assets and fi nancial instruments. Cost is CASH AND CASH EQUIVALENTS AT THE Note 15 Controlled entities based on the fair values of the consideration given in exchange for assets. Accounting policies BEGINNING OF THE FINANCIAL YEAR 2,664 859 Note 16 Ministers and accountable offi cers applied are consistent between current and prior year. Cash and cash equivalents at the end Note 17 Remuneration of executives The fi nancial statements were authorised for issue by the board on 12 August 2009. of the fi nancial year 5 2,785 2,664 Note 18 Remuneration of directors and accountable offi cer Note 19 Remuneration of auditors (b) Principles of consolidation of controlled entities The above Cash Flow Statement should be read in conjunction with the accompanying notes. The fi nancial report comprises the consolidated fi nancial statements of V/Line Passenger Note 20 Directors disclosures Corporation and its subsidiary. The effects of all transactions between entities in the Note 21 Related party disclosures consolidated entity are eliminated in full. Note 22 Contingent assets and liabilities Note 23 Operating leases and expenditure commitments Where control of an entity is obtained during a fi nancial year, its results are included in the consolidated operating statement from the date on which control commences. Where control Note 24 Employee benefi ts and superannuation commitments of an entity ceases during a fi nancial year its results are included for that part of the year during Note 25 Subsequent events which control exists. Note 26 Cash fl ow statement Note 27 Economic dependency Note 28 Dividends

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 72/73 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

V/Line Passenger Corporation is represented by: (d) Going concern (f) Revenue (j) Inventories Investment in subsidiary $1 Notwithstanding the defi ciency in net current assets of $72.1 million (2008: $73.4 million) Revenue is recognised and measured at the fair value of the consideration received or V/Line has a supplier arrangement with EDI Rail Pty Ltd for the supply of spare parts. These Contributed equity $1 this fi nancial report has been prepared on a going concern basis. The consolidated entity receivable to the extent it is probable that the economic benefi ts will fl ow to the corporation spares are available on a “just in time” basis. This practice is considered by industry to be is subsidised by its ultimate parent entity, the State Government of Victoria, pursuant to and the revenue can be reliably measured. best practice as it has the lowest storage costs. V/Line has a contract for these spares to The corporation has no other assets or liabilities. a Franchise Agreement with the Director of Public Transport. be available upon request. These items are valued at cost on a fi rst in fi rst out basis. VALUE IN KIND Given the immaterial nature of the investment by the parent entity it has not been The funding requirements for the year ended 30 June 2010 have been agreed by the Director Use of VLocity, Diesel Multiple Unit Trains are leased or owned by Rolling Stock Holdings Pty Ltd (k) Revaluations of non-current assets reported separately. of Public Transport under an approved budget allocation pursuant to the Franchise Agreement. and received free of charge (’Value in Kind’;’VIK’). The VIK measurement is based on the value Rolling stock is measured at fair value and all other non-current assets are measured at cost. The Franchise Agreement contains provisions for the funding requirements to be met by the of the lease payments or the notional lease value based on the capital cost per unit of rolling The controlled entities consolidated within the V/Line Passenger Corporation group are: Revaluations are made with suffi cient regularity to ensure that the carrying amount of each State Government of Victoria throughout the franchise period. The directors expect that a new stock purchased outright. asset does not differ materially from its fair value at the reporting date. Country of Equity 2009 2008 Franchise Agreement will be executed before the end of 2009 and that this new agreement will CONTRIBUTIONS Name incorporation interest $’000 $’000 extend the franchise period out until 2017. Revaluations are assessed annually and supplemented by independent assessments every Government provides subsidies that are recognised as revenue when they are controlled V/Line Passenger Pty Ltd Australia 100% – – three or four years. Revaluations are conducted in accordance with the Victorian Government The Director of Public Transport acknowledges and agrees that, for the benefi t of the directors by the corporation, which is generally upon receipt of the subsidy. Policy – FRD 6A Application of Victorian Government Policy ‘Revaluation of Non-Current of the consolidated entity and without limiting the level of fi nancial support, the Director of On 1 October 2003, the corporation purchased one ordinary share in V/Line Passenger Pty Ltd. Physical Assets’. Public Transport has agreed to provide the consolidated entity funding to a level suffi cient for TICKET SALES This represents 100% of the company’s issued capital. V/Line Passenger Pty. Ltd. forms part of Fare box revenue (ticket sales) is recognised on an accrual basis. Sales of tickets that relate it to comply with the solvency requirements under the Corporations Act 2001. (l) Investment in Subsidiaries the consolidated entity. to passenger trips to be taken after the reporting date are not recognised as income but as Investments in subsidiaries are carried at cost. The Director of Public Transport has also agreed that, while the consolidated entity is under (c) Not for profi t a liability. state ownership, the Department of Transport will meet all of the consolidated entity’s The Board is of the view that the consolidated entity qualifi es as a not-for-profi t entity since (m) Cost and valuation of property, plant and equipment employee entitlements as and when those amounts fall due in the event the consolidated (g) Cash the primary obligation of the corporation is the delivery of subsidised public transportation entity is not able to meet these fi nancial obligations. Cash and cash equivalents comprise cash on hand and cash at bank, deposits at call and i Valuation of rolling stock and rotables services to regional Victoria. The entity has signed a Franchise Agreement with the Director highly liquid investments with an original maturity of three months or less, which are readily V/Line Passenger Pty. Ltd undertook an independent revaluation of its rolling stock as at 31 March of Public Transport which determines the services that the corporation provides and the The fi nancial report does not include any adjustments relating to the recoverability and convertible to known amounts of cash and are subject to insignifi cant risk of changes in value. payments received for those services. As such the entity’s funding is based on achieving a classifi cation of recorded asset amounts, nor to the amounts and classifi cation of liabilities 2008. The 2008 valuation was performed by rolling stock specialists and reviewed by a qualifi ed small loss before interest, depreciation and tax and neither the mission nor corporate strategy that might be necessary should the consolidated entity not continue as a going concern. (h) Trade and other receivables valuer. Although valuation of assets is typically based on the net recoverable amount, the of the corporation refl ect achieving profi t. The entity has been deemed to have a not-for-profi t Trade receivables representing passenger, inter-operator and other revenues receivable are corporation has used depreciable replacement cost as a valuation basis. This valuation is in Refer to note 27 for further details of the consolidated entity’s economic dependency status and accordingly complies with accounting standards set for not for profi t entities carried at nominal amounts due less any allowance for uncollectible amounts. A provision for keeping with FRD 6A, which states the net recoverable test does not apply to a not-for-profi t on the State Government of Victoria. including AIFRS requirements. impairment is recognised when collection of the full amount is no longer probable (> 90 days). entity since there is no dependence on its assets abilities to generate cash infl ows. (e) Comparatives For trade receivables, normal terms are 30 days and 7 days for agency accounts. The entity is a not for profi t entity for Federal Income Tax purposes and is therefore exempt from Any revaluation increment or decrement is brought to account in the asset revaluation reserve, When the presentation or classifi cation of items in the fi nancial report is amended, income tax. (i) Related party receivables except to the extent that it reverses a revaluation decrease of the same asset previously comparative amounts have been reclassifi ed unless the reclassifi cation is impractical. Receivables from related parties are recognised and carried at fair value. There is no interest recognised in profi t or loss, in which case the increase is recognised in profi t or loss. charged on related party receivables.

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 74/75 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

Any revaluation decrease is recognised in profi t or loss, except to the extent that it offsets a (n) Leases The refurbishment program included in the rolling stock management plan includes major Deferred tax is calculated at the tax rates that are expected to apply to the period when the previous revaluation increase for the same asset, in which case the decrease is debited directly examinations and overhauls of rolling stock. The consolidated entity treats these examinations asset is realised or liability is settled. Deferred tax is credited in the operating statement except i.Finance leases to the asset revaluation reserve to the extent the credit balance existing in the revaluation as signifi cant upgrades, which extend the useful life of the rolling stock. Included in the where it relates to items that may be credited directly to equity, in which case the deferred tax reserve for that asset. Leases of property, plant and equipment are classifi ed as fi nance leases whenever the terms refurbishment program is the replacement of major units such as traction and locomotive is adjusted directly against equity. of the lease transfer substantially all the risks and rewards of ownership to the lessee. All motors, generators, wheel sets and bogies. These items are capitalised and amortised over Revaluation increases and revaluation decreases relating to individual assets within an Deferred income tax assets are recognised to the extent that it is probable that future tax other leases are classifi ed as operating leases. The entity does not have any fi nance leases. their useful life. asset class are offset against one another within that asset class but are not offset in respect profi ts will be available against which deductible temporary differences can be utilised. of assets in different classes. ii.Operating leases All other maintenance examinations and minor work are treated as repairs and maintenance The amount of benefi ts brought to account or which may be realised in the future is based and expensed when incurred. ii Depreciation of property, plant and equipment Operating lease payments are recognised as an expense in the operating statement on a on the assumption that no adverse change will occur in income taxation legislation and the straight-line basis over the lease term, except where another systematic basis is more (q) Goods and Services Tax anticipation that the economic entity will derive suffi cient future assessable income to enable Depreciation is provided on a straight-line basis on all plant and equipment, including rolling representative of the time pattern of the benefi ts derived from the use of the leased asset. Revenues, expenses, assets and liabilities are recognised net of the amount of associated the benefi t to be realised and comply with the conditions of deductibility imposed by the law. stock and buildings. Rolling stock comprises locomotives, carriages, diesel multiple units GST unless the GST incurred is not recoverable from the taxation authority, in which case (known as Sprinters) and vans. Any refurbishments or conversions are depreciated over the iii.Lease incentives V/Line and its wholly owned Australian subsidiary have formed an income tax consolidated it is recognised as part of the cost of acquisition of the asset or as part of the expense. remaining useful life of the refurbishment. group under the Tax Consolidation Regime. Each entity in the group recognises its own current Incentives received on entering into operating leases are recognised as liabilities. The incentive Receivables and payables are stated inclusive of the amount of GST receivable or payable. and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax iii.Estimated useful lives of property, plant and equipment are set out below: of the lease is amortised over the remaining life of the lease. The net amount of GST recoverable from, or payable to, the taxation authority is included losses and tax credits which are immediately assumed by the parent entity. The current tax Leasehold improvements 3 to 10 years (o) Trade and other payables with other receivables or payables in the balance sheet. liability of each group is then subsequently assumed by the parent entity. The group notifi ed Plant and equipment 3 to 10 years the ATO that it had formed an income tax consolidated group to apply from 1 October 2003. i.Payables consist predominantly of creditors and other sundry liabilities. Cash fl ows are presented on a gross basis. The GST components of cash fl ows arising Rolling stock 4 to 17 years The tax consolidated group has entered a tax sharing agreement whereby each corporation from investing or fi nancing activities which are recoverable from, or payable to the taxation Payables are carried at amortised cost and represent liabilities for goods and services provided in the group contributes to the income tax payable in proportion to their contribution to profi t The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted authority, are presented as operating cash fl ows. proir to the end of the fi nancial year which remain unpaid. These amounts are brought to before tax. if appropriate, at each fi nancial year end. account when the obligation to make future payments in respect of the purchase of the goods (r) National Tax Equivalent Regime (NTER) (s) Employee benefi ts iv.Leasehold improvements and services arises. By direction of the Treasurer of Victoria, under the State Owned Enterprise Act 1992, the Provision is made for employee benefi ts accumulated as a result of employees rendering consolidated entity entered into the NTER on 1 October 2003. Any NTER expense payable is The cost of improvements to leasehold properties is amortised over the unexpired period of ii.Related party payables services up to the reporting date. These benefi ts include annual leave and long service leave. the lease or the estimated useful life of the improvement, whichever is the shorter. Leasehold calculated on operating profi t or loss adjusted for permanent and timing differences between Payables to related parties are carried at amortised cost. No interest is charged by the lender. Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other improvements held at the reporting date are being amortised over 3 to 10 years (2008 – 3 to NTER income and accounting income. employee benefi ts expected to be settled within 12 months of the reporting date are measured 10 years). (p) Repairs and maintenance Deferred tax is accounted for using the balance sheet liability method in respect of temporary at their nominal amounts based on remuneration rates which are expected to be paid when Repairs and maintenance work on rolling stock are scheduled in accordance with V/Line’s differences arising between the tax bases of assets and liabilities and their carrying amounts in v.Leased non-current assets the liability is settled, including related on-costs. rolling stock management plan and the rail safety management standards. Scheduled the fi nancial statements. No deferred income tax will be recognised from the initial recognition Leases of property, plant and equipment are classifi ed as fi nance leases whenever the terms maintenance examinations on rolling stock are determined at set intervals depending on of an asset or liability, excluding a business combination, where there is no effect on of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other the type of rolling stock. accounting or taxable profi t or loss. leases are classifi ed as operating leases.

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 76/77 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

All other employee benefi t liabilities are measured at the present value of the estimated (w) Provisions (y) New accounting standards and interpretations future cash outfl ows to be made in respect of services provided by employees up to the Provisions are recognised when there is a present obligation, the future sacrifi ce of economic Certain new accounting standards and interpretations have been published that are not mandatory reporting date. benefi ts is probable, and the amount of the provision can be reliably measured. for the reporting period ending 30 June 2009. As at 30 June 2009, the following standards and interpretations had been issued but were not mandatory for the fi nancial year ending 30 June 2009. In determining the present value of future cash outfl ows, the interest rates relating to The amount recognised as a provision is the best estimate of the consideration required to V/Line has not, and does not intend to adopt these standards early. government guaranteed securities are used, which have terms to maturity approximating settle the present obligation at reporting date, taking into account the risks and uncertainties the terms of the related liability. surrounding the obligation. Where a provision is measured using the cash fl ows estimated to Standard/Interpretation Summary Applicable for annual Impact on fi nancial settle the present obligation, its carrying amount is the present value of those cash fl ows using The determination of the current portion of employee benefi ts is based upon benefi ts which reporting periods beginning statements market yields at the reporting date on national government bonds with terms to maturity that are expected to be settled within 12 months of the reporting date and are measured at their or ending on match, as close as possible, the estimated future cash fl ows. nominal values. (x) Signifi cant accounting estimates and judgments AASB 8 Operating Segments Supersedes AASB 114 Segment Reporting Beginning 1 Jan 2009 Not applicable Employee benefi t expenses arising in respect of salaries and wages, annual leave, long service Management evaluates estimates and judgments incorporated into the fi nancial report based leave, sick leave, other leave benefi ts and other employee benefi ts are charged against the AASB 2007-3 Amendments to Australian Accounting Standards An accompanying amending standard also introduced Beginning 1 Jan 2009 Impact expected to on historical knowledge and best available current information. Estimates assume a Operating Statement. arising from AASB 8 [AASB 5, AASB 6, AASB 102, AASB 107, consequential amendments into other standards be insignifi cant reasonable expectation of future events and are based on current trends and economic data, AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 and The contributions made to superannuation funds by the consolidated entity are charged obtained both externally and within the group. AASB 1038] against the Operating Statement when due. i. Key estimates — Impairment (t) Rounding of amounts AASB 123 Borrowing Costs Option to expense borrowing costs related to a qualifying Beginning 1 Jan 2009 Not applicable The group assesses impairment at each reporting date by evaluating conditions specifi c The corporation is of a kind referred to in Class Order 98/100, issued by the Australian asset has been removed. Entities are now required to to the group that may lead to impairment of assets. Where an impairment trigger exists, the Securities and Investments commission, relating to the ‘rounding off’ of amounts in the capitalise borrowing costs relevant to qualifying assets recoverable amount of the asset is determined. Depreciated replacement cost calculations fi nancial report. Amounts in the fi nancial report have been rounded off in accordance with performed in assessing recoverable amounts incorporate a number of key estimates. AASB 2007-6 Amendments to Australian Accounting Standards An accompanying amending standard also introduced Beginning 1 Jan 2009 Impact expected to that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar. arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111, consequential amendments into other standards be insignifi cant ii.Key judgments — Allowance for impairment loss on trade receivables (u) Functional and presentation currency AASB 116, AASB 138 and Interpretations 1 & 12] The functional currency of the consolidated entity is the , which has been There has been a $80,072 decrease to the provision in 2009 based on a detailed analysis identifi ed as the presentation currency for the consolidated entity. of the recoverability of individual accounts. AASB 2008-3 Amendments to Australian Accounting Standards This standard gives effect to consequential changes arising Beginning 1 Jul 2009 Impact expected to arising from AASB 3 & AASB 127 [AASB 1, 2, 4, 7, 101, 107, from revised AASB 3 and amended AASB 127. The preface be insignifi cant (v) Impairment of assets iii. Key judgments — Timing of employment provisions 112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137, to those standards summarise the main requirements of At each reporting date, the group reviews the carrying values of its assets to determine whether All employment provisions are classifi ed according to whether the entity has an unconditional 138 & 139 and Interpretations 9 & 107] those standards there is any indication that those assets have been impaired. If such an indication exists, the right to defer settlement beyond 12 months. recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and continued next page depreciated replacement cost, is compared to the asset’s carrying value. Any excess of the iv. Key judgments — Useful lives of property, plant & equipment asset’s carrying value over its recoverable amount is expensed to the Operating Statement, Property, plant & equipment useful lives are reviewed on an annual basis to ensure their except to the extent the write-down is to be brought to account in the asset revaluation reserve. contribution is realistically based on their useful economic life.

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 78/79 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

2009 2008 2009 2008 Standard/Interpretation Summary Applicable for annual Impact on fi nancial $’000 $’000 $’000 $’000 reporting periods beginning statements or ending on NOTE 2 INCOME NOTE 3 (A) OPERATIONAL EXPENSES AASB 2008-5 Amendments to Australian Accounting Standards A suite of amendments to existing standards following issuance Beginning 1 Jan 2009 Impact is being evaluated (a) Revenue Franchise performance penalty 3,242 4,922 arising from the Annual Improvements project [AASB 5, 7, 101, of IASB standard improvements to IFRSs in May 2008. Some Fare box revenue 68,648 59,641 Other direct costs 15,981 10,927 102, 107, 108, 110, 116, 118, 119, 120, 123, 127, 128, 129, amendments result in accounting changes for presentation, Inter-operator income 1,086 787 Fleet maintenance 58,866 47,820 131, 132, 134, 136, 138, 139, 140, 141, 1023 & 1038] recognition and measurement purposes Franchise subsidy 234,000 218,703 Fuel costs 24,398 25,024 State subsidy 21,600 8,000 Road coach services 6,760 4,539 AASB 2008-6 Further Amendments to Australian Accounting The amendment requires all the assets and liabilities of a for Beginning 1 Jul 2009 Not applicable Access charges 2,708 2,520 Access charges 17,062 15,845 Standards arising from the Annual Improvements project sale subsidiary to be classifi ed as held for sale and clarify the Other income 19,898 9,450 Repairs & maintenance 2,469 2,470 [AASB 1 & AASB 5] disclosures required when a subsidiary is part of a disposal Trains received free of charge 33,349 29,225 128,778 111,547 group that meets the defi nition of a discontinued operation 381,289 328,326 AASB 2008-7 Amendments to Australian Accounting Standards – Changes mainly relate to treatment of dividends from subsidiaries Beginning 1 Jan 2009 Not applicable Direct labour costs Cost of an Investment in a Subsidiary, Jointly Controlled Entity or of controlled entities (b) Other income Salaries and wages 100,779 87,191 Associate [AASB 1, AASB 118, AASB 121, AASB 127 & AASB 136] Interest – other persons/corporation 307 557 Superannuation 8,948 8,402 Government project reimbursement revenue 83,215 75,768 Annual leave/long service leave expense 5,945 3,670 AASB 2008-8 Amendments to Australian Accounting Standards – The amendments to AASB 139 clarify how the principles that Beginning 1 Jul 2009 Not applicable Capital transfer reallocation (554) 7,248 Other on-costs (fringe benefi ts tax, payroll tax and work cover levy) 5,619 7,919 Eligible hedged Items [AASB 139] determine whether a hedged risk or portion of cash fl ows is Other Income 997 – 121,291 107,182 eligible for designation as a hedged item should be applied 83,965 83,573 in particular situations Total operational expenses 250,069 218,729 AASB 2008-9 Amendments to AASB 1049 for Consistency with Amendments to AASB 1049 for consistency with AASB 101 Beginning 1 Jan 2009 Not applicable to public Total income 465,254 411,899 AASB 101 (September 2007) version sector entities except for certain presentation formats

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 80/81 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

2009 2008 2009 2008 2009 2008 2009 2008 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000

NOTE 3 (B) DEPRECIATION OF NON-CURRENT ASSETS NOTE 4 (B) DEFERRED TAX ASSETS NOTE 6 RECEIVABLES NOTE 9 INVESTMENTS Depreciation of non-current assets Gross deferred tax assets – temporary differences Trade receivables 22,377 20,037 V/Line Passenger Corporation does not own any investments with the exception of controlled Plant and equipment 3,728 1,677 Accruals 211 399 Less: provision for impairment (73) (153) ownership of V/Line Passenger Pty Ltd as detailed in Note 1(b). Leasehold improvements 348 287 Provision for employee entitlements 15,376 13,604 22,304 19,884 Rolling stock 12,520 12,384 Other provisions 913 952 Fuel rebate receivables 1,634 818 NOTE 10 PROPERTY, PLANT AND EQUIPMENT Rolling stock – capitalised improvements 2,365 6,043 Aggregate 16,500 14,955 Other receivables 416 676 Plant and equipment 18,961 20,391 24,354 21,378 At cost 32,643 27,529 Carried forward tax losses 27,945 25,170 Accumulated depreciation (24,068) (20,349) NOTE 4 (A) INCOME TAX EXPENSE Deferred tax assets 44,445 40,125 Related party receivables 8,575 7,180 The components of tax expense comprise: Trade receivables include the following receivables Current tax – – Deferred tax liabilities from related parties: Rolling stock The prima facie tax on profi t from ordinary activities before Accelerated depreciation for taxation purposes 35,786 33,387 Department of Transport 18,673 17,174 At independent valuation – 31 March 2008 114,116 114,116 income tax is as follows: Other 48 51 Other related parties 15 502 Accumulated depreciation (15,665) (3,146) Prima facie tax payable on profi t from ordinary activities Aggregate deferred tax liabilities 35,834 33,438 18,688 17,676 Impairment – – 98,451 110,970 before income tax at 30% (2008: 30%) (1,927) (2,702) Deferred tax assets not recognised 8,611 6,687 Terms and conditions relating to the above fi nancial instruments: Leasehold improvements Tax effect of permanent differences and tax losses The company has substantial prior year tax losses which began, and continue to accumulate not brought to account 1,927 2,702 Credit Sales are on 30 day terms. Details of the terms and conditions of related parties’ receiv- At cost 5,095 3,851 since, the year ended 30 June 2004. The aggregate carried forward loss and deferred tax assets ables are set out in Note 21. Write off deferred tax asset arising from the revaluation due to timing differences is $44.445m. This offsets the deferred tax liability of $35.834m. As Accumulated amortisation (1,449) (1,101) decrement to rolling stock – 6,290 such, the deferred tax assets have not been brought to account in the fi nancial statements. 3,646 2,750 – 6,290 NOTE 7 INVENTORIES Rolling stock – capitalised improvements Cost 16,355 3,527 The deferred tax asset arising from the revaluation decrement has been written off NOTE 5 CASH AND CASH EQUIVALENTS Spares and materials at cost 4,772 5,296 as an expense because it is not probable that it will be realised. Rotables 906 928 Cash at bank 2,708 2,560 NOTE 8 OTHER CURRENT ASSETS Accumulated depreciation (2,518) (153) Cash on hand 77 104 Prepayments 684 330 14,743 4,302 2,785 2,664 Capital works in progress 11,658 18,100 Total property, plant and equipment 137,073 143,302

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 82/83 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

NOTE 10 PROPERTY, PLANT AND EQUIPMENT CONTINUED 2009 2008 2009 2008 2009 2008 Valuation of rolling stock $’000 $’000 $’000 $’000 $’000 $’000 An independent valuation of all rolling stock was conducted by rolling stock specialists Leasehold improvements NOTE 11 PAYABLES NOTE 13 EQUITY with an effective date of 31 March 2008. Carrying amount at beginning of year 2,750 2,775 Additions 1,244 262 Trade payables 32,887 25,275 Asset revaluation reserve 104,913 119,588 As the market for the rolling stock lacks suffi cient depth due to the specialised nature of the Accruals 15,281 26,036 Revaluation decrement (net of tax effect of $6,290) – (14,675) assets and the small population and volume traded, other indirect methods have been used. Depreciation expense (348) (287) Carrying amount at end of year 3,646 2,750 Deferred income 932 638 104,913 104,913 Other payables 6,618 6,595 The depreciated replacement cost method has been used as the primary method of valuation Accumulated Losses and has provided a fair value for the V/Line Passenger Pty Ltd rolling stock fl eet as at 31 March Rolling stock at cost – capitalised improvements Total payables 55,718 58,544 Balance at the beginning of the year (37,200) (21,905) 2008 of $114.1 million. Carrying amount at beginning of year 4,302 21,841 Net profi t/(loss) (6,422) (15,295) Additions 12,806 13,899 Amounts payable to related parties are as follows: 2009 2008 Balance at the end of the year (43,622) (37,200) Disposals – – Other related parties 2,601 3,040 $’000 $’000 Depreciation expense (2,365) (6,043) 2,601 3,040 Movement in carrying amounts Revaluation transfer to rolling stock at valuation – (25,395) NOTE 14 FINANCIAL INSTRUMENTS The movement in the carrying amounts for each class of property, Carrying amount at end of year 14,743 4,302 NOTE 12 PROVISIONS (a) Financial risk management plant and equipment between the beginning and the end of the The corporation’s fi nancial instruments consist mainly of deposits with banks, local money Current provisions year is as follows: Capital works in progress market instruments, short-term investments, accounts receivable and payable, loans to and Carrying amount at beginning of year 18,100 13,357 Employee benefi ts 47,528 43,136 from subsidiaries, bills and leases. The main purpose of non-derivative fi nancial instruments Plant and equipment Additions 7,743 10,976 Other provisions (employee related) 1,405 1,367 is to raise fi nance for group operations. Carrying amount at beginning of year 7,180 7,856 Transfers to fi xed assets (5,870) (6,233) 48,933 44,503 Additions 5,116 1,001 Reversals from fi xed assets Movement in other provisions: The group does not have any derivative instruments at 30 June 2009. Disposals (2) – (project expenses capitalised by VicTrack) (8,315) – Opening balance 1,367 1,394 i.Treasury risk management Depreciation expense (3,719) (1,677) Carrying amount at end of year 11,658 18,100 Additional provisions raised during the year 53 – A fi nance committee consisting of senior executives of the group meet on a regular basis to Carrying amount at end of year 8,575 7,180 Amounts used (15) (27) Total property, plant and equipment consider currency and interest rate exposure and to evaluate treasury management strategies in Closing balance 1,405 1,367 Rolling stock at valuation Carrying amount at beginning of year 143,302 164,753 the context of the most recent economic conditions and forecasts. Carrying amount at beginning of year 110,970 118,924 Additions 26,909 26,138 Non-current provisions ii.Financial Risks Additions – – Disposals (2) – Employee benefi ts 3,726 2,210 Impairment – – Depreciation expense (18,951) (20,391) The main risks the corporation is exposed to through its fi nancial instruments are interest rate Disposals – – Transfers to fi xed assets (5,870) (6,233) risk, liquidity risk and credit risk. Depreciation expense (12,519) (12,384) Reversal from fi xed assets Revaluation transfer from rolling stock at cost – (project expenses capitalised by VicTrack) (8,315) – capitalised improvements – 25,395 Impairment – – Revaluation decrement – (20,965) Rolling Stock revaluation net decrement – (20,965) Carrying amount at end of year 98,451 110,970 Carrying amount at end of year 137,073 143,302

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 84/85 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

NOTE 14 FINANCIAL INSTRUMENTS CONTINUED 2009 2008 NOTE 15 CONTROLLED ENTITIES NOTE 17 REMUNERATION OF EXECUTIVES INTEREST RATE RISK $’000 $’000 V/Line Corporation did not purchase any other entities during the year. In 2004, V/Line Executive Offi cers (other than the Accountable Offi cer) remuneration during the reporting period At 30 June 2009 the corporation had no debt. Financial assets Corporation purchased 100% of the shares of V/Line Passenger Pty. Ltd for $1. is shown in the table below. Base remuneration is exclusive of bonus payments, long-service Cash and cash equivalents 2,785 2,664 leave payments, redundancy payments, retirement benefi ts and fringe benefi ts tax. FOREIGN CURRENCY RISK The following entities are 100% controlled by V/Line Passenger Corporation as Trade and other receivables 24,354 21,378 The corporation is not exposed to fl uctuations in foreign currencies. at 30 June 2009: Total Remuneration Base remuneration 27,139 24,042 2009 2008 2009 2008 LIQUIDITY RISK V/Line Passenger Pty. Limited. Financial Liabilities The corporation manages liquidity risk by monitoring forecast cash fl ows and ensuring $100,000 – $109,999 1 – 1 – Trade and other payables (55,718) (58,544) $110,000 – $119,999 – – – – that adequate funding is maintained. NOTE 16 MINISTERS AND ACCOUNTABLE OFFICERS Net fi nancial assets (28,579) (34,502) $120,000 – $129,999 – – – – CREDIT RISK In accordance with the Ministerial Directions issued by the Minister for Finance under the $130,000 – $139,999 – – – – The maximum exposure to credit risk, excluding the value of any collateral or other (c) Credit risk exposures Financial Management Act 1994, the following disclosures are made regarding responsible $140,000 – $149,999 – – – – security, at balance date to recognised fi nancial assets, is the carrying amount, net The corporation’s maximum exposures to credit risk at balance date in relation to each class persons for the reporting period. $150,000 – $159,999 – – 2 1 of any provisions for impairment of those assets, as disclosed in the balance sheet of recognised fi nancial asset is the carrying amount of those assets as indicated in the balance The names of persons who were responsible persons at any time during the fi nancial $160,000 – $169,999 – – 1 – and notes to the fi nancial statements. sheet. year were: $170,000 – $179,999 2 – – 2 The economic entity does not have any material credit risk exposure to any single receivable The main exposure to credit risk arises as it operates in the public transport fi eld and $180,000 – $189,999 1 – 1 3 Responsible Minister: or group of receivables under fi nancial instruments entered into by the economic entity with relies on the credit worthiness of the State Government of Victoria. $190,000 – $199,999 – 1 2 – The Honourable Lynne Kosky MP, Minister for Public Transport. the exception of the Department of Transport for $18.7 million. $200,000 – $209,999 – – 1 – Other credit risk in trade receivables is managed in the following way: PRICE RISK Directors of the Board: $210,000 – $219,999 1 2 – 2 The corporation is not exposed to any material commodity price risk. – enforcing disclosed payment terms Mr Frank A. Tait $220,000 – $229,999 2 3 1 – – debt collection policies and procedures Ms Catherine L. Scott (Resigned 30th June 2009) $230,000 – $239,999 1 – – – (b) Net fair values The maximum credit risk exposure does not take into account the value of any collateral Mr Michael D. Tilley $240,000 – $249,999 1 1 – – The carrying amounts of fi nancial assets and liabilities approximate their fair values. or other security held in the event other entities/parties fail to perform their obligations Ms Fiona Bennett (Appointed 1st December 2008) $250,000 – $259,999 – 1 – – The aggregate net fair values of fi nancial assets and liabilities are equal to their carrying under the fi nancial instruments in question. Mr David Worth (Appointed 1st December 2008) Total numbers 9 8 9 8 amount. (d) Market risk Remuneration 2009 2008 Total amount 1,792,484 1,809,880 1,611,072 1,505,649 The corporation’s exposure to market risk sensitivities at balance date is not considered Accountable Offi cer $360,000–$369,999 $330,000 – 339,999 to be material.

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 86/87 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

2009 2008 2009 2008 NOTE 21 RELATED PARTY DISCLOSURES $’000 $’000 $’000 $’000 Related Nature of Terms and 2009 2008 NOTE 22 CONTINGENT ASSETS AND LIABILITIES NOTE 18 REMUNERATION OF DIRECTORS NOTE 19 REMUNERATION OF AUDITORS party transaction conditions $’000 $’000 Prior to 30 June 2009 there had been a number of incidents involving rolling stock and either motor vehicles or trucks at level crossings throughout Victoria. As a result of these incidents, AND ACCOUNTABLE OFFICER Amounts received or due and receivable by the auditors: Payments to related parties damage has been sustained to rolling stock that has or will necessitate repairs as well as other Income paid or payable, or otherwise made available, – audit of the fi nancial statements 82 78 Metlink Provision of services The entity was 3,160,733 2,196,000 operational costs incurred from the incidents in question. V/Line is pursuing the owners and/or in respect of the fi nancial year, to all Directors and the Victoria for V/Line customers charged services – other services – – operators of the vehicles in question from these incidents (either in person or through their Accountable Offi cer, directly or indirectly, from the Pty Ltd to access suburban on a cost basis 82 78 insurers) for the costs of the repairs and other expenses incurred. The amount of contingent entity or any related party. network only assets in relation to these incidents is uncertain. In addition, there may be contingent liabilities VicTrack Provision of Normal 10,820,985 8,852,152 520 512 NOTE 20 DIRECTORS DISCLOSURES in relation to these incidents. The number of Directors and the Accountable Offi cer Access communication commercial terms The directors of the parent entity during the year ending 30 June 2009 were: whose income (including superannuation contribution) services and conditions On 28 May 2008 the EPA issued V/Line a Clean Up Notice in relation to contamination on falls within the following bands: Frank A. Tait (Appointed 1 October 2003) Southern Rental Normal commercial 1,116,336 874,887 railway land in Ararat that is adjacent to a former gasworks site. A Clean Up Plan is currently Cross payments terms and being developed for the site which will determine the remediation strategy that is required. $10,000 – $19,999 2 – Catherine L. Scott (Appointed 1 October 2003 – Resigned 30th June 2009) Station conditions $20,000 – $29,999 2 4 If full remediation is required to be undertaken, costs of up to $1 million may be incurred. Michael D. Tilley (Appointed 1 July 2006) Authority $30,000 – $39,999 – – V/Line acknowledges that there are potential contingent liabilities relating to this incident. Fiona Bennett (Appointed 1st December 2008) 3,241,608 4,922,211 While V/Line as the occupier of the land is managing the remediation, the contamination is $40,000 – $49,999 – – Department Miscellaneous In accordance of Transport payments made with the Franchise pre-existing so V/Line will be pursuing reimbursement for these expenses from relevant third $50,000 – $59,999 – – David Worth (Appointed 1st December 2008) under the Franchise Agreement parties. As such, there is a potential contingent asset for close to the same amount. $60,000 – $69,999 1 1 All directors are directors of V/Line Passenger Pty Ltd which forms part of the consolidated entity. Agreement $330,000 – $339,999 – 1 On 18 November 2008 the EPA issued V/Line a Pollution Abatement Notice in relation to an Transport Reimbursement of In accordance 80,169 – $340,000 – $349,999 – – Ticketing accounts receivable with agreement oily sheen in Traralgon Creek. The source of the material was traced back to a storm water drain $350,000 – $359,999 – – Authority staff salary and wages between the discharging from railway land. The EPA determined that activities on the site are likely to cause $360,000 – $369,999 1 – parties pollution and issued the notice. V/Line is exploring whether there is a defect and whether there 6 6 is a warranty claim against the manufacturer. The more extensive works required by the Receipts from related parties pollution abatement notice may reveal pre-existing contamination. If remediation works are Department Provides funding In accordance 255,600,000 226,703,236 required, V/Line will pursue relevant third parties for recoveries or up front expenses. V/Line of Transport to the corporation with the Franchise acknowledges contingent liabilities with respect to any environmental costs relating to this Agreement incident but, at the same time, there is a potential for contingent assets arising out of warranty VicTrack Management fee In accordance – 62,949 claims or claims against pre-existing contamination. Access for rent collection with agreement VicTrack Network access In accordance 474,338 – Access charges with agreement

The parent company did not have any related party transactions within the wholly-owned group.

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 88/89 NOTES TO THE FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS

NOTE 23 OPERATING LEASES AND EXPENDITURE COMMITMENTS NOTE 24 EMPLOYEE BENEFITS AND SUPERANNUATION COMMITMENTS NOTE 25 SUBSEQUENT EVENTS NOTE 27 ECONOMIC DEPENDENCY. Operating lease commitments (a) Employee benefi ts There are no events subsequent to balance date. The consolidated entity provides public transport services to rural and regional Victoria and Operating lease commitments primarily relate to commercial lease agreements in relation to The aggregate employee benefi t liability is comprised of: is also responsible for the management and maintenance of the rail network. The provision tenancy at 570 Bourke Street, and 628 Bourke Street, Melbourne. The leases expire in 2014 of these services is subsidised by the State Government of Victoria. Without the provision 2009 2008 NOTE 26 CASH FLOW STATEMENT and 2015 respectively which include fi xed rate increases of between 3% and 5% or market rent of that subsidy the consolidated entity could not continue as a going concern. The subsidy $’000 $’000 reviews at dates specifi ed in the agreements. 2009 2008 requirements for the year ending 30 June 2010 have been approved by the state. The Accrued wages, salaries and on-costs 4,060 4,460 $’000 $’000 consolidated entity’s three year business plan has also been approved by the Director of Commitments for minimum contractual payments in relation to non-cancellable operating Short term provisions (current) 48,933 44,503 Public Transport pursuant to the Franchise Agreement. leases are payable as follows: A) RECONCILIATION OF OPERATING PROFIT/(LOSS) Long term provisions (non-current) 3,726 2,210 AFTER TAX TO NET CASH FLOWS FROM OPERATIONS 56,719 51,173 2009 2008 Operating profi t/(loss) after tax (6,422) (15,295) NOTE 28 DIVIDENDS $’000 $’000 (b) Superannuation Non-cash fl ows in profi t /(loss) No dividends were paid, declared or recommended during the year, or subsequent to the Within one year 4,523 2,967 Prior to the original Franchise Agreement, the majority of the consolidated entity’s staff Depreciation 18,961 20,391 year end. Later than one year but not later than 5 years 12,919 9,151 were members of government superannuation funds. Assets capitalised by VicTrack 8,315 – Later than 5 years 1,059 2,774 The state-organised funds include the Revised Scheme, New Scheme and the Transport Tax expense – 6,290 18,501 14,892 Superannuation Fund, which are all defi ned benefi ts schemes. These schemes are ‘master Change in operating assets and liabilities funds’ comprising a large number of participating members, therefore, are not controlled Expenditure commitments (Increase)/decrease in trade and other receivables (2,976) (8,874) by the consolidated entity. Expenditure commitments primarily relate to station access charges. (Increase)/decrease in inventories 524 (811) Commitments in relation to operating expenditure are shown below: With effect from 29 August 1999, employees were given the opportunity to remain in the (Increase)/decrease in prepayments (354) 47 government superannuation funds or to change to a private superannuation fund. The private (Decrease)/increase in trade and other payables (3,019) 21,037 2009 2008 funds joined by employees of the consolidated entity since 29 August 1999 are VicSuper or (Decrease)/increase in employee benefi ts 5,945 (1,899) $’000 $’000 Superannuation Trust of Australia. These funds are both accumulation funds. Net cash from /(used in) operating activities 20,974 20,886 Within one year 25,573 10,312 The consolidated entity has not recognised any unfunded superannuation liabilities as the Later than one year but not later than 5 years 306 1,252 (b) Reconciliation of cash State Government has guaranteed to undertake this liability from the commencement of the Later than 5 years – – Cash balance comprises: original franchise in 1999. Any unfunded liabilities that may arise subsequent to the new 25,879 11,564 – Cash at bank 2,708 2,560 franchise are calculated annually by the Government Superannuation Offi ce and paid by V/Line – Cash on hand 77 104 at the end of the fi nancial year. 2,785 2,664 (c) Superannuation schemes contributions and liabilities Contribution Contribution Contribution Contribution outstanding outstanding for the year for the year at year end at year end 2009 2008 2009 2008 Total Superannuation Contributions 10,388 9,311 – –

V/LINE ANNUAL REPORT 2008-2009 FINANCIAL STATEMENTS 90/91 INDEPENDENT AUDITOR’S REPORT ENERGY EFFICIENCIES OPPORTUNITIES PROGRAM – PUBLIC REPORT

SECOND PUBLIC REPORT CONTROLLING CORPORATION V/Line Passenger Pty Ltd

PERIOD TO WHICH THIS REPORT RELATES Start 1 July 2008 End 30 June 2009

PART 1 – INFORMATION ON ASSESSMENTS COMPLETED TO DATE TABLE 1.1 – Description of the way in which the Corporate Group (or part of it) has carried out its assessments An assessment of energy use for the above rail division of the business was undertaken between March and June 2008. A cross-functional business improvement project team was formed to analyse the data and identify opportunities to improve V/Line’s energy effi ciency. The assessment looked at data for 2005–06 and 2006–07, with energy use increasing across these two years because of an increase in the number of services being run. A number of potential opportunities were identifi ed and evaluated with the outcome of the assessment documented in an information paper that was reviewed and noted by the board. According to V/Line’s original Assessment and Reporting Schedule, an assessment of the Regional Network and Access (RNA) division of the business was supposed to be undertaken during 2008–09. A decision has been made to defer this assessment for one year. Control of the RNA division of the business was passed to V/Line in May 2007 when the state government bought back the lease of the intrastate regional rail network from Pacifi c National. If the assessment had been undertaken as scheduled, only one full year’s worth of data would have been available. As the data collection process takes time to refi ne, it was decided that it would be more benefi cial to undertake the assessment for RNA during 2009–10. V/Line’s fl eet of trains are all diesel powered. While most energy sources are increasing in price, the cost of diesel actually fell during the year. It is expected that the price will eventually rise again as oil supply begins to diminish. V/Line’s energy use continues to increase as more capacity is added to meet surging patronage growth. V/Line’s diesel use in 2008–09 was slightly higher than in 2007–08 despite not running the long-distance services to Albury for a signifi cant portion of the year due to the conversion of that track to standard gauge. Despite the increase in total energy use, V/Line’s performance per passenger kilometre continues to improve. Although the specifi c benefi t has not been quantifi ed, as more people switch from cars to the train, the energy effi ciency of the transport system as a whole improves.

TABLE 1.2 – Energy use assessed Group member and/or business unit and/or key activity and/ Period over which assessment was undertaken1 Energy use per annum in GJ2 in the current reporting year or site that has had an assessment completed by the end of this reporting period V/Line Passenger March – June 2008 1,064,240

Total energy assessed 1,064,240 Total energy use of the group in the current reporting year 1,126,190 Total energy assessed expressed as a percentage of total current energy use 94.5% 1. This should be the start and fi nish date (month and year) for the assessment (planned assessment dates were nominated in Table 3.1 of the approved ARS). 2. Energy Bandwidth may only be used if approved in the Assessment and Reporting Schedule.

V/LINE ANNUAL REPORT 2008-2009 ENERGY EFFICIENCEIES OPPORTUNITIES PROGRAM REPORT 92/93 ENERGY EFFICIENCIES OPPORTUNITIES PROGRAM – PUBLIC REPORT ENERGY EFFICIENCIES OPPORTUNITIES PROGRAM – PUBLIC REPORT

PART 1 – INFORMATION ON ASSESSMENTS COMPLETED TO DATE (CONTINUED) Opportunity 2 TABLE 1.3 – Accuracy of energy use data A review was undertaken of the pool of V/Line road vehicles. The light motor vehicle fl eet consists of several different types of sedans and station wagons as well as Toyota Hilux 2WD and 4WD Entity % achieved Reasons for not achieving data accuracy to within ±5% utility vehicles. Research was undertaken to determine the greenhouse gas emissions of vehicles in our current fl eet and those of alternative vehicles which would also meet the requirement of V/Line Passenger ± 5% the business. The research determined that the Toyota Hilux 2WD and 4WD had the lowest emissions when compared with other vehicles in their respective classes. The research also determined that the Toyota Aurion had greenhouse gas emissions that were on average 10 per cent lower than other sedans in the fl eet and 12 per cent lower than station wagons in the fl eet. A reduction in PART 2 - ENERGY EFFICIENCY OPPORTUNITIES THAT HAVE BEEN IDENTIFIED AND EVALUATED greenhouse gas emissions would therefore be achieved if the company standardised on the Toyota Aurion when replacing existing sedans or acquiring new sedans. There will be a corresponding Part 2A - New assessments completed during the reporting period reduction in energy use estimated to be fi ve per cent of total road vehicle energy use. A revised Motor Vehicle Policy incorporating these changes has been approved by the board. The change in No new assessments were undertaken during the current reporting period. vehicles will occur as leases expire on older vehicles.

Part 2B - Update of assessments originally reported in previous reporting periods PART 3 - VOLUNTARY CONTEXTUAL INFORMATION Name of group member or business unit or key activity or site: V/Line Passenger Table 3.1 – Contextual Information Energy use of the entity during the current reporting period 1,064,240 GJ V/Line operates an ageing fl eet of diesel-powered rolling stock. The average age of the V/Line fl eet is about 25 years, although excluding the newest vehicles from that analysis pushes the average up to about 35 years. The capacity to make signifi cant improvements in fuel effi ciency is therefore limited. V/Line is currently taking delivery of additional new motorised carriages however these will TABLE 2.3 - Opportunities assessed to an accuracy of ±30% or better be used to provide additional capacity rather than allowing older vehicles to be retired. Status of opportunities identifi ed Number of opportunities Estimated energy savings per annum by payback period (GJ) Total estimated energy Although V/Line’s gross energy use has increased over recent years, this has been due to an increase in the number of services provided. The increase in service provision, among other factors, has savings per annum (GJ) encouraged a large increase in patronage meaning that V/Line’s energy indicators have moved in a positive direction. While the specifi c benefi t has not been quantifi ed, as more people switch from 0 – < 2 years 2 – ≤ 4 years > 4 years cars to the train, the energy effi ciency of the transport system as a whole improves. Outcomes of assessment Total identifi ed 2 0.3 1770 1770.3 While V/Line is somewhat limited in the effi ciency improvements it can make because of of the rolling stock and the long life of the assets, we recognise that we need to improve performance Business response Under investigation 1 1770 1770 where possible. To that end we are currently seeking funding to undertake a limited trial of a biodiesel blend in a small number of our newer vehicles. While this will not improve energy effi ciency, it To be implemented will improve performance in terms of greenhouse gas emissions. Implementation commenced 1 0.3 0.3 Implemented Not to be implemented

Part 2C - Details of signifi cant opportunities found through EEO assessments TABLE 2.5 – Description of signifi cant opportunities Opportunity 1 A review was undertaken of lighting at the West Melbourne depot. The review found that energy could be saved in two ways. The fi rst improvement was through the refurbishment of light fi ttings. This involved among other things the replacement of fl uorescent tubes with more effi cient types and the installation of high performance refl ectors. The second improvement identifi ed was through the installation of voltage reduction units for fl uorescent lights. These units would reduce the voltage of the lights when full power is not required (i.e. after a warm-up period). The annual savings generated through these improvements, inclusive of energy savings and maintenance savings, was calculated to be approximately $60,000 p.a. The investment required to implement these improvements is approximately $208,000. This represents a payback period of 3.4 years. These improvements would also generate a greenhouse gas emission reduction of approximately 650 tonnes p.a. There are currently no funds available to implement these improvements.

V/LINE ANNUAL REPORT 2008-2009 ENERGY EFFICIENCEIES OPPORTUNITIES PROGRAM REPORT 94/95 Disclosure index

The annual report of the V/Line Passenger Corporation is prepared in accordance with all Financial Statements ENERGY EFFICIENCIES OPPORTUNITIES PROGRAM – PUBLIC REPORT relevant Victorian legislation. This index has been prepared to identify compliance with statutory disclosure requirements. Financial statements required under Part 7 of the FMA Table 3.2 – Energy use expressed in greenhouse gas emissions and as an energy use indicator SD 4.2(f) Financial report 69 Period of energy use 1 July 2008 to 30 June 2009 MINISTERIAL DIRECTIONS SD 4.2(b) Operating statement 70 Name of group member/ business unit/ key activity/site Energy use pa (GJ) Energy use pa (GGE) Energy use as an indicator* Report of Operations SD 4.2(b) Balance sheet 71 SD 4.2(a) Statement of changes in equity 72 V/Line Passenger 1,064,240 82,700 t CO2-e 1.12 MJ / passenger km Charter and purpose SD 4.2(b) Cash fl ow statement 72 FRD 22B Manner of establishment and the relevant Ministers Inside cover, 3, 65, 87 SD 4.2(c) Accountable offi cer’s declaration 70 Table 3.4 – Changes in energy use as an indicator FRD 22B Objectives, functions, powers and duties Inside cover, 5, 17-19, 65 SD 4.2(c) Compliance with Australian accounting standards and other authoritative pronouncements 73 Name of group member/ business unit/ key activity/site Current energy use as an indicator Previous energy use as an indicator Reasons for change FRD 22B Nature and range of services provided Inside cover - 19 SD 4.2(c) Compliance with Ministerial directions 66 V/Line Passenger 1.12 MJ / pass km 1.20 MJ / pass km Increase in patronage Management and structure SD 4.2(d) Rounding of amounts 78 SD 4.5.5 Risk management compliance attestation 67 FRD 22B Organisational structure 68 PART 4 - DECLARATION LEGISLATION Table 4.1 - Declaration of accuracy and compliance (mandatory information) Financial and other information FRD 29 Workforce data disclosures 42-43 The information included in this report has been reviewed and noted FRD 22B Occupational health and safety 18, 22-25 Freedom of Information Act 1982 66 by the board of directors and is to the best of my knowledge, correct FRD 15B Executive offi cer disclosures 87-88 Whistleblowers Protection Act 2001 67 and in accordance with the Energy Effi ciency Opportunities Act 2006 FRD 21A Responsible person and executive offi cer Victorian Industry Participation Policy Act 2003 67 and Energy Effi ciency Opportunities Regulations 2006. disclosures in the Financial Report 87-88 Building Act 1983 67 Chief Executive Offi cer FRD 22B Summary of the fi nancial results for the year 62-63 Financial Management Act 1994 70, 92 FRD 22B Signifi cant changes in fi nancial position during the year 62-63 Audit Act 1994 92 FRD 22B Major changes or factors affecting performance 6-13 FRD 22B Subsequent events 91 FRD 22B Application and operation of Freedom of Information Act 1982 66 FRD 22B Compliance with building and maintenance provisions of Building Act 1993 67 FRD 25 Victorian Industry Participation Policy disclosures 67 FRD 22B Statement on National Competition Policy 67 FRD 22B Application and operation of the Whistleblowers Protection Act 2001 67 FRD 22B Details of consultancies over $100,000 63 Project Team FRD 22B Details of consultancies under $100,000 63 Daniel Moloney, Tom Perry, Clare Steele FRD 12A Disclosure of major contracts N/A Design FRD 24C Reporting of offi ce-based environmental impacts 36-39, 93-96 Nuttshell Graphics Print FRD 22B Statement of availability of other information Back cover GEON Impact FRD 10 Disclosure index 97 At V/Line we work to reduce our footprint where we can. In the interests of sustainability, this report has been printed using waterless technology on Australian-made recycled paper. To help reduce paper usage, this report may be viewed online at vline.com.au

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