Changing the Driver in RailCorp
Yesterday, NSW Premier Nathan Rees has decided to abolish RailCorp and legislation will be introduced in Parliament when it resumes later this month to abolish RailCorp’s four-year experiment as a corporate entity. The legislation will remove the commercial board of RailCorp and return the organisation to a statutory authority under the direct control of the Transport Minister, David Campbell. That may sound plausible until you remember how miserably direct ministerial responsibility works for our State’s hospitals, schools, roads, and other basic services.
The NSW rail sector has changed extensively over the past decade, following the break up of the former State Rail Authority. The corporatisation of NSW railways were heralded as the key to reform. RailCorp was established as a statutory State owned corporation on 1 January 2004 under the Transport Administration Amendment (Rail Agencies) Act 2003.
The aim was to improve “safety, cleanliness and reliability”. That hasn’t worked, as commuters daily complain. As Premier Rees said, “It was an experiment that failed…The decision has been taken to restore accountability and improve service…For too long RailCorp has been a law unto itself.” Rail Tram and Bus Union boss Nick Lewocki, who has clashed repeatedly with RailCorp management, welcomed the change. He said that RailCorp was “more focused on cost-cutting and handing money back to the Government than service delivery”.
Back in April 2008, Boston Consulting Group released a report (commissioned by the State Government) recommending RailCorp to implement tougher industrial reforms. The report was meant to provide the direction for CityRail and urged the retrenchment of more than 1,100 employees. The savings were to be spent on security, including specialised police to patrol trains and stations. The report went further and recommended that all maintenance of carriages be outsourced, following the collapse of an agreement between RailCorp and the unions to reform CityRail’s maintenance depots by October last year.
But the Government has baulked at implementing the report’s difficult front-line reforms, and instead, it has moved to shake up RailCorp’s management. But it is unclear whether the shake-up is a first step towards establishing the difficult industrial reforms recommended in the Government’s own report and echoed by IPART (Independent Pricing and Regulatory Tribunal) – or whether the structure is aimed at avoiding what would be a damaging war with the unions.
Just last week IPART revealed it was still “awaiting further advice on the detail and early results of the (Boston) program”, and the Government has refused to release the report made by the Boston Consulting Group. However, the tribunal had independently discovered $480 million every year could be carved from the bloated RailCorp bureaucracy by 2012. In its latest report, IPART calculated the reforms would save NSW $1 billion over the next four years.
Ask the daily commuters of City Rail and they will clearly tell you that they are fed up with late trains, cancelled train services, unsafe train stations, and dirty carriages. RailCorp provides 2,300 services daily which carry almost a million passengers to and from 302 stations. To achieve this, RailCorp operates a fleet of more than 1,500 carriages over more than 2,000 kilometres of track.
A report conducted by the Auditor General in 2007 found that almost all trains experienced more failures than in the previous year and more than 90 percent of City Rail’s electric fleet is more than 10 years old, with 58 percent more than 20 years old, and 33 percent of the fleet is 30 years old. The report also found that a shortage of engineers threatens to derail major upgrade projects to Sydney’s City Rail networks, causing delays and cost blowouts, as well as risking the $1.8 billion Clearways project.
More recently, RailCorp has been investigated by ICAC (Independent Commission Against Corruption) inquiries exposing a seemingly endless string of rorts. Just last month, ICAC handed down its third and fourth reports from its lengthy inquiry into bribery and fraud within RailCorp which investigated how $19 million worth of corrupt contracts had riddled RailCorp and provided the funds to pay millions more in kickbacks. ICAC has asked prosecutors to pursue 22 rail employees and private contractors after the biggest investigation in the agency’s history. ICAC would canvass all the corruption issues in its final report which will be released later this year.
News of a change of management will not reassure commuters that their trains will run on time, their carriages cleaner and their stations safer. With this Government’s track record of poor performance in our hospitals, schools and public transport as well the endemic and systemic corruption in Wollongong City Council, the Premier has to make hard decisions or the long-suffering passengers will give their verdict in 2011.
References: Signal Failures on the Metropolitan Rail Network RailCorp, Auditor General’s Performance Audit, August 2007; Rail Corp, Auditor General’s Financial Audit, November 2007; and Investigation into Bribery and Fraud at RailCorp, August and September 2008.
