Protection of the long-term functionality of the rail corridor and railway infrastructure
EFFECTIVENESS INDICATOR
The most significant issue for this outcome is the management of the long-term lease of the rail freight infrastructure to WestNet Rail Pty Ltd.
WestNet Rail manages and operates the rail freight infrastructure under the terms of the Railway Infrastructure Lease. Under the Lease, WestNet Rail is the ‘accredited owner’ of the infrastructure as defined in the Rail Safety Act 1998. WestNet Rail’s holding company Australian Railroad Group was acquired during the year by a Babcock and Brown Company. WestNet Rail retains all of its legal responsibilities under the lease agreement.
Under the terms and conditions of the Railway Infrastructure Lease, an independent inspection of the railway infrastructure is carried out every five years. The first independent inspection was completed in June 2005.
The results of this inspection did not indicate any cause for concern and confirmed that the rail corridor and infrastructure was being satisfactorily maintained.
COST EFFICIENCY
The cost efficiency for the management of the long-term lease of the rail freight infrastructure to WestNet Rail is monitored using the total cost of managing the rail corridor and residual freight issues.
Compared to 2005/06, the total costs in 2006/07 increased as a result of an increased equity position which resulted in a higher capital user charge offset by a reduction of interest due to the repayment of the freight debt.
The 2006/07 cost was lower compared to target due to a change in accounting policy for recognising the Freight Network lease income on a straight line basis rather than on a schedule recognising the present value principles.