annual report 2008-2009 - V/Line

vline.com.au

annual report 2008-2009 - V/Line

V/LINE PASSENGER PTY LTD

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HEAD OFFICE/ADMINISTRATION

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Melbourne VIC 3000

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All information correct at time

of printing, October 2009.

ANNUAL REPORT

20082009


V/Line is Australia’s largest regional public transport operator, serving Victoria 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

We are also a major employer, with a workforce of 1382 employees – many of whom live in regional Victoria.

V/Line is a not-for-profit operator, fully owned by the State of Victoria, with train services running between Melbourne

and the following townships:

(VLPC) and its wholly owned subsidiary, V/Line Passenger

Pty Ltd (VLPPL). V/Line complies with two sets of governance

requirements – those applying to VLPC as a statutory

corporation and a state business corporation, and those

• Geelong, South Geelong, Marshall and Warrnambool

• Melton, Bacchus Marsh, Ballarat and Ararat

• Sunbury, Kyneton, Bendigo, Swan Hill and Echuca

• Seymour, Albury / Wodonga and Shepparton

• Traralgon, Sale and Bairnsdale.

applying to VLPPL as an entity incorporated under the

Corporations Act. As a franchisee, V/Line must also fulfill

its contractual obligations under the franchise agreement

with the Victorian Department of Transport (Director of

Public Transport).

Coach services connect with the rail network and serve regional Victorian communities where trains do not operate.

Some coach services run interstate, to South Australia, New South Wales and Canberra. These coaches are operated by the

V/Line is responsible to the Victorian Minister for Public

Transport and the state’s Treasurer.

private sector under contract to the Department of Transport.

We also operate and maintain 3770 kilometres of broad-gauge rail track used by the passenger and freight rail services

following the Victorian Government’s buy-back of the regional network and access business from Pacific National and

This report provides a summary of V/Line’s key activities

and financial performance for the period 1 July 2008 to

30 June 2009.

Contents

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 industry.

operators who use our rail network to transport goods across the state. In recognition of this important economic role, on

14 October 2008, V/Line Passenger Corporation was also declared a state business corporation under the State Owned

Enterprises Act 1992.

Cover: Bendigo Station Officer David Neven and Kathryn Mackenzie, from the City of Greater Bendigo.

Opposite: Ballarat Area Services Manager Michael Richardson and Sovereign Hill’s Director of Commercial Operations,

Richard Berman-Hardman, at the award-winning tourist attraction.

MISSION

To deliver safe, reliable, accessible and sustainable

passenger and freight transport services.

VALUES

• Put our customers first

• Be honest

• Take responsibility

• Strive for excellence

• Treat people and the environment with respect

With SAFETY being paramount in all we do.

Letter to the Minister 02

Key partnerships 04

Strategic agenda 05

Chairman’s report 06

CEO’s report 10

Year in review 14

Passenger network map 16

Key results 17

Facts and figures 18

Safety and security 20

Our customers 26

Sustainability, environment

and community 32

Our people 40

Operations 44

Fleet 50

Infrastructure 54

Victorian rail network map 59

Finance 60

Corporate governance 64

Executive team 68

Financial statements 69

Energy Efficiency Opportunities

Program – Public Report 93

Disclosure index 97

section

01


13 October 2009

The Hon. Lynne Kosky

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 financial 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 financial efficiencies during the year, and as a not-for-profit business, our financial 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 – Regional Rail Link.

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

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.

Frank Tait

Chairman

V/LINE ANNUAL NUA

REPORT RT

2008-2009

0 2 009

09

LETTER TO THE MINISTER 2/3


key partnerships

Strategic agenda

To deliver our regional transport services, V/Line partners

with a range of stakeholders, including:

• Assetco Management Pty Ltd, trading as Southern

Cross Station Pty Ltd (SCSPL) – manager of

Southern Cross Station

• Australian Rail Track Corporation (ARTC) – access provider

for the main interstate corridors. V/Line will require access

to provide the Albury service after the broad gauge line is

converted to standard gauge

• Connex – metropolitan train operator and access provider

to the metropolitan network

• Bombardier – manufacturer and maintainer of our VLocity

train fleet

• Councils – V/Line works with regional municipalities to

meet the transport needs of their communities

• Department of Transport (DOT):

– Public Transport Division (PTD) – administers V/Line’s

franchise agreement, regional infrastructure lease, subsidy

payments, and V/Line branded coach contracts

– Infrastructure Projects Division (IPD) –

implements government rail projects

– Public Transport Safety Victoria (PTSV) –

administers the rail safety accreditation system

– Freight, Logistics and Marine (FLAM) –

administers government freight policy

• Downer EDI Rail (EDI) – maintains our locomotive-hauled

and Sprinter fleets and the VLocity fleet as sub-contractors

to Bombardier

• Essential Services Commission (ESC) –

administers the Victorian Rail Access Regime

• Independent Transport Safety and Reliability Regulator

(ITSRR) – administers rail safety regulation in New South

Wales (V/Line operates some broad gauge track in

southern NSW and will operate on the standard

gauge in Albury/Wodonga from 2010)

• Metlink / Viclink – call centre and journey planner

provider as well as advocate for public transport

• Transport Ticketing Authority (TTA) – responsible for

developing the new myki smartcard for Victoria with

Kamco, the successful tenderer for the project.

TTA also assumed responsibility for management

of V/Line’s ticket agents in 2008–09

• rail freight operators, including Pacific National

and El Zorro – users of the regional network

• Victorian Managed Insurance Authority (VMIA) –

provides the majority of V/Line’s insurance requirements

• Victorian Government – the Minister for Public

Transport and the Treasurer

• VicRoads – major partner in our work to improve level

crossing safety as the authority for main roads

• VicTrack – owner of rail infrastructure which is leased

to V/Line and other operators either via the Director of

Public Transport or directly.

V/Line also partners with a wide range of suppliers who

deliver goods and services essential to our business.

V/Line’s strategic agenda

SAFETY AND SECURITY

RETAIN AND GROW REPUTATION

SHAREHOLDER SATISFACTION

AND FINANCIAL RESPONSIBILITY

GROW THE BUSINESS

‘ON-TIME’ AND ‘IN-FULL’ SERVICE DELIVERY

CUSTOMER SATISFACTION

V/LINE’S OBJECTIVES:

Continuously improve safety and

security in all aspects of

our operations and business.

Be an integral and

respected organisation in

the Victorian community.

Be recognised by the government

as demonstrating strong

governance, efficient operations

and financial responsibility.

Sustainably grow patronage and

freight volumes year-on-year.

Improve service delivery each year.

Ensure our reputation for excellent

service stands out, with customer

satisfaction the highest among

transport operators and access

managers.

Be recognised as an employer of

choice in the Australian rail

industry, with a positively

motivated, engaged and

skilled workforce.

Contribute to the sustainability

of Victorian communities and

the environment.

EMPLOYEE SATISFACTION

COMMUNITY AND ENVIRONMENTAL RESPONSIBILITY

V/LINE ANNUAL REPORT 2008-2009

STRATEGIC AGENDA 4/5


‘Nation building’ has become a popular and bold term

PATRONAGE A GROWTH WELL L MANAGED

A 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

major role in this vision, with unprecedented investment

from the federal and state governments for Regional Rail

word that best describes this territory for V/Line, and

particularly our frontline staff who manage our growth

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 benefits

This investment signals confidence in the future of Victoria’s

public transport system and recognises the challenges we

face as a result of our record patronage growth.

On completion of Regional Rail Link, our Geelong, Ballarat

and Bendigo customers will experience improved reliability

as a result of the construction of up to 50 kilometres of

new track in Melbourne’s western suburbs, avoiding the

bottleneck in the metropolitan network. For the first time,

V/Line’s regional trains will have their own track space and

will not have to compete with busy metropolitan trains. In

practical terms, it is expected the project will provide the

capacity for more than 20 extra train services every hour

across these three lines.

of country rail over the car. In 2006 we saw the introduction

of thousands of extra services and the roll-out of 40 new

VLocity trains. The following year, fares were cut by an

average of 20 per cent at a time of rising petrol prices,

giving people a major cost incentive to make the switch.

In this reporting year, we have seen the first 14 of up to 74

more V/Line carriages roll off the production line following

an extension of the state government’s commitment to more

rolling stock. These carriages have been deployed across

the network to services most in need, providing an extra

76 seats per carriage on heavily patronised trains. In another

first, these extra carriages helped create our first sevencarriage

VLocity trains on the Geelong line – the largest

passenger trains in Victoria.

Start of Regional Rail Link works at Southern Cross Station.

v

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 N A REPORT R 2008-2009

0 2 0 0 CHAIRMAN'S REPORT 6/7


I commend the government for its ongoing investment in

regional public transport. V/Line’s services have become

vastly more attractive over the past few years following

major spending on the Regional Fast Rail project and the

initial purchase of new VLocity trains. However, we will

soon embark on the next new and exciting era in V/Line’s

evolution with the latest round of fleet purchases and

the government’s commitment to Regional Rail Link. Our

customers have welcomed this major investment through

the high satisfaction rating they continue to give V/Line and

through the record numbers in which they continue to use

our services.

ENCOURAGING N G FURTHER R SUSTAINABLE S A GROWTH

V/Line has a close relationship with country Victoria and

people in the regions can see for themselves the benefits

and importance of our service. However, the Melbourne

market has proven to be somewhat elusive and slower to

see the massive change for the better on regional trains.

It is a sign that our rapid growth in the regions has been so

well managed by the government and V/Line that we have

the confidence to stimulate new markets and continue to

grow in a sustainable way. To this end, we have worked hard

to encourage Melburnians into regional Victoria through our

See Things Differently marketing campaign, and in return we

are beginning to see some good results.

The campaign in the metropolitan area started in November

2008 and aimed to boost regional train tourism through TV,

print, outdoor and online advertising. The campaign

objective was to get Melburnians to shift perceptions to

showcase the ‘new V/Line’.

Our partnerships with the state government, regional

councils, business and tourism operators will continue to

benefit country Victoria and V/Line alike as we look for

new ways to promote the regions and new-found

competitiveness and comfort of our services.

THE FUTURE

U Our challenge is to keep pace with demand, and the

Regional Rail Link will allow us to do just that. But bold

projects of this scale require considerable investment which,

in Australia, has traditionally been the sole domain of state

governments when it comes to public transport.

While major new roads infrastructure has attracted massive

investment from the Commonwealth, federal spending

on rail transport has been previously limited to intrastate

freight projects. For this reason, the $3.2 billion secured

from the federal government is a landmark shift in transport

priorities (the remaining $1.1 billion for this project will be

met by the state).

The project promises to stimulate the economy in the

long term and sustain jobs. It is also the biggest single

investment in the metropolitan rail network since

Melbourne’s underground City Loop was built.

THE V/LINE TEAM

The dedication of our staff and management team

has been outstanding during this very busy year and it

is our grass-roots customer focus that stands us apart.

I thank the entire V/Line team for another excellent year –

my sixth as chairman.

I would also like to thank my fellow board members for

their hard work in what has proven to be a challenging and

rewarding year, particularly the hard-working Catherine

Scott who retires from the board after serving as deputy

chairperson. Welcome to Fiona Bennett and David

Worth who joined us this year, bringing fresh ideas and

contributions to the table.

I look forward to an exciting 2009–10 as we see projects

grow from seed and as we watch customers reap the

benefits of projects that have already begun. We have our

challenges cut out for us granted, but the future is bright

as we continue to provide regional Victoria with this vital

service.

Frank Tait

Chairman

>

V/LINE TRAIN AND COACH C PASSENGER S E TRIPS

HAVE INCREASED E BY 82 PERCENT E OVER FIVE YEARS

04–05: 7.25 million

05–06: 7.64 million

06–07: 9.72 million

07–08: 11.96 million

>

08–09: 13.17 million 10%

* 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

five rail corridors were shut down by the 7 February ‘Black

regional communities we serve.

Throughout the year we met with 34 regional councils, a

range of government departments, MPs, business groups

and community organisations to better understand the

changing transport needs of country Victoria. We also

continued our successful on-train consultations to give

Saturday’ bushfires. Fires swept through the township

of Wandong, destroying the station’s platform, pit, 1200

sleepers and two rail bridges on the Seymour line. Fire also

burned more than 3000 sleepers on the Warrnambool line

near Camperdown; and although the Gippsland line was not

damaged, it closed for a day due to the proximity of fires.

Track works at Maryborough Station.

v

our customers direct access to senior management, and

we continued to work with hundreds of local suppliers and

service providers across the state to further spread the

economic benefits of our service.

More than $1 million worth of damage was caused to

V/Line infrastructure, and considering the scale of the

damage, the fact that Seymour and Warrnambool line

services were disrupted for just nine days was nothing

CEO's report

r V/Line CEO Rob Barnett and infrastructure worker Terry Pring at Maryborough Station.

These partnerships have not only helped us improve

our service dramatically in recent years and facilitated

unprecedented growth, but they have also paved the

way for us to continue to grow.

MEETING E THE CHALLENGE L E OF EXTREME E E WEATHER

E Perhaps the greatest test of our staff was the heat wave that

swept Victoria during January and February, with several

days above 40 degrees, power black-outs, heat-related train

speed restrictions and the devastating impact of bushfires.

A proactive, well-planned and coordinated response with

government agencies and other transport operators saw

nearly all V/Line services run. All but 41 out of 11,834

scheduled services over those two months either ran

normally or were replaced with road coaches. Of this 20 of

those couldn’t be replaced as road access was cut off during

the peak of the bushfires.

short of remarkable. Without our dedicated, in-house

infrastructure team (which has only been part of V/Line for

the past two years), it is highly unlikely that such a quick

recovery would have been possible. I am extremely proud

of the response not only of our infrastructure workers, but

also our operations team who were constantly in touch with

emergency services to safely plan road coaches.

EXPANDING N OUR SERVICES

E S

Customer confidence is demonstrated not only in our high

satisfaction rating of 78.4, but in our record patronage –

the ultimate guide to how we’re performing as an operator.

Such massive support for regional train services has

encouraged further state government investment in

infrastructure, including the opening of Ballarat’s second

railway station at Wendouree during the year. In December,

the government also made an unprecedented commitment

to public transport in its Victorian Transport Plan, which

V/LINE ANNUAL N A REPORT R 2008-2009

0 2 0 0 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 N I N TO BREAK RECORDS

R Total income for the V/Line business was up 13 per cent

regional train tracks through Melbourne’s western suburbs.

While Regional Rail Link is expected to take five years to

complete, within our sights is the return of train services to

Maryborough, which was also announced in the transport

plan. This promises to be a boon to the V/Line business

because the reopening of the lines to Ararat and Bairnsdale

five years ago have been strongly supported by communities

in those regions and we expect the same from Maryborough.

Creswick Station will also be re-opened as part of this project,

with a daily return service to provide access to education

and employment opportunities in Ballarat, as well as health

and retail services in Ballarat and Melbourne. Passenger

services are expected to return in the second half of 2010.

Nearing completion is the North East Rail Revitalisation

Project which is converting 200 kilometres of track between

Albury and Seymour from broad to standard gauge.

In May 2009, the Bairnsdale community celebrated five years

since the return of their train services. >

Track Corporation next year, will deliver a more reliable and

comfortable service to our Albury / Wodonga line customers.

OUR SAFETY FOCUS

As we grow at a rapid rate, so too must our systems, to

ensure our excellent safety record is not compromised.

Ongoing training and procedure improvements, as

part of our Rail Resource Management pilot program,

have contributed to the good safety results. This includes

management programs to make sure staff have the right

equipment to safely carry out their jobs and understand

the importance of reporting all issues regardless of how

insignificant they may seem.

Emergency and crisis management training continued to be

a focus this year, with key staff tested in a range of scenarios

to ensure V/Line is well-prepared to help our customers and

emergency response agencies in the event of an incident.

incidents within our control were on par with last year at

12.1 per million hours worked. While it is pleasing that there

has been little change despite record patronage, this result

also demonstrates that we must remain vigilant to drive a

reduction in incidents.

Another area of ongoing safety focus is level crossings.

Our partnerships with VicTrack, the state government,

Department of Transport, VicRoads and regional councils

has seen many crossings upgraded throughout the year,

and direct V/Line maintenance work has been carried out

at many to improve sightlines. This work will intensify in

the coming year as we work with road owners to implement

safety interface agreements to continually improve safety at

road–rail intersections.

More than 13 million passenger trips were made on V/Line

trains and coaches for the first time in Victorian history – a

massive endorsement of recent years of investment in regional

rail. This is a 10 per cent increase on last year’s patronage and

extends the record–breaking era after a 27 per cent increase

in 2006–07 and a 23 per cent increase in 2007–08.

At the same time, our infrastructure team delivered a major

maintenance works program on our passenger network.

This included platform and stabling extensions to cater for

longer trains with extra seating capacity, and the replacement

of more than 114,000 sleepers across the state.

The ongoing maintenance program has continued to produce

tangible benefits for our customers as it has been a major

factor in train punctuality on our regional network improving

for the third year in a row to 95.2 per cent on time, despite

extreme weather challenges. This is an excellent result and

also demonstrates the success of our operations team in

managing patronage growth so well.

Similarly, major maintenance was undertaken on the rail

freight network with 59,000 sleepers replaced to improve

freight movements across Victoria.

FINANCIAL N I A PERFORMANCE

R E

As more people travel by train and coach, V/Line becomes

more financially efficient and the benefit of our service to the

Victorian economy more evident. The subsidy per passenger

trip dropped again this year to $19.42, from $19.88 last year

and $22.74 in 2006–07 – an ongoing improved return on

the taxpayer’s investment.

to $465.2 million. This included a 15 per cent increase

in farebox revenue to $68.6 million, and a 12.7 per cent

increase in government subsidies to $255.6 million.

However, expenses also rose 12 per cent to $471.6 million,

with cost increases in train maintenance and coaches as we

travel further. Revenue from freight access fees continues

to be poor as a result of the drought’s impact on harvests.

In 2008–09, just $2.7 million was gained from access

charges (down from $4.5 million in 2006–07) – well below

the considerable cost to maintain the extensive freight rail

network.

As V/Line is a not-for-profit business funded on a cash

basis by the Department of Transport, accounting standards

require a deficit to be reported as asset depreciation and

other non-cash expenses are not funded. As a result, V/Line

this year reports a consolidated loss before tax for the year

of $6.4 million (down from $9 million last year and

$23.3 million in 2006–07). As a business charged with

maintaining a currently under-utilised freight network, this

financial result is in line with expectations. However, a

breaking of the drought and return to better freight traffic

may improve the financial result in future years.

THE YEAR AHEAD

A The past year is one of many accomplishments and I thank

the entire V/Line team for an outstanding contribution.

However, the coming year promises to be equally busy

as we prepare to return passenger trains to Maryborough

and works start on Regional Rail Link.

I also thank our many partners across regional Victoria for

their support, whether for providing goods and services to

our business, for representing the transport needs of

their communities, or for travelling with us in record

numbers yet again.

It’s an exciting time for public transport in Victoria,

and V/Line is proud to be leading the switch back to

train and coach travel.

Rob Barnett

Chief Executive Officer

V/LINE ANNUAL REPORT 2008-2009

CEO'S REPORT 12/13


JANUARY

Year in review

e AUGUST

SEPTEMBER

Victorian Premier John Brumby Regional Victorian footy fans

NOVEMBER

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2009

>

V/Line boosts train maintenance MARCH

APRIL

and readies a fleet of 80 coaches Passengers made a record 1.097 V/Line’s support of the

to support trains as Victoria

million trips on V/Line trains

Castlemaine State Festival sees

experiences one of its hottest

during the month – boosted

28 per cent or 3570 people from

summers ever, including several IMPROVING OUR by about CUSTOMER 20,000 trips COMMUNICATION

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MAY

More than 400 Bairnsdale

residents welcome a special

anniversary train to the station

in celebration of five years

since trains returned to the

Gippsland town.

AUGUST

Works start to lengthen

platforms on the Geelong line

to accommodate seven-carriage

VLocities – the longest

passenger trains in the state.

NOVEMBER

The last passenger train runs to

the old Wodonga Station ahead

of works to upgrade the line

and construct a new station in

Wodonga as part of the North

East Rail Revitalisation Project.

DECEMBER

The state government

announces its $38 billion

Victorian Transport Plan which

will deliver new V/Line trains,

station upgrades, return services

to Maryborough and dedicated

tracks for V/Line on part of the

metropolitan network.

FEBRUARY

Black Saturday bushfires

temporarily close the Gippsland

line and burn sections of track at

Wandong and Camperdown.

V/Line crews mobilise quickly to

replace over 3000 sleepers and

two bridge decks.

APRIL

More than 7000 people and

businesses with land adjoining

V/Line’s tracks were contacted

as part of a special campaign

to encourage farmers to better

secure animals to prevent the

deaths of sheep, cows and other

livestock on train lines.

APRIL

The V/Line Life Training program

re-launches with a broader

community focus to bring

information sessions about

depression, drugs and binge

drinking to teenagers in

12 regional towns.

MAY

The Victorian and federal

governments jointly announce

the biggest investment in

Victorian regional rail history, with

$4.3 billion committed to a new

Regional Rail Link to give V/Line

trains on the Geelong, Ballarat

and Bendigo their own tracks

through metropolitan Melbourne.

V/LINE ANNUAL N A REPORT R 2008-2009 0 2 0 0 YEAR IN REVIEW E 14/15

1


Passenger s e network map

Pinnaroo

To Adelaide

To Adelaide

To Adelaide

Mt Gambier

Mildura

Ouyen

Robinvale

Manangatang

Piangil

Swan Hill

Sea Lake

Finley

Barham

Deniliquin

Hopetoun

Kerang

Tocumwal

To Sydney

Birchip

Mulwala

To Canberra

Cohuna

Barmah

Corowa

Pyramid

Moama

Cobram

Rutherglen

Echuca

Nathalia

Yarrawonga

Albury

Numurkah

Wodonga

Nhill

Warracknabeal

Rochester

Kyabram

Donald

Shepparton

Springhurst

Dimboola

Wedderburn

Stanhope

Wangaratta

Beechworth

Murtoa Rupanyup St Arnaud

Elmore

Benalla

Horsham

Dunolly Bendigo

Murchison

East

Bright

Mt Beauty

Heathcote

Mansfield

Stawell

Maryborough

Castlemaine

Seymour

Avoca

Wallan

Mt Buller

Halls Gap

Kyneton

Yea

Ararat

Daylesford

Lancefield

Creswick Woodend

Whittlesea

Glenthompson

Sunbury

Skipton

Ballarat

Melton

Hamilton

Bacchus

Ringwood

Maffra

Casterton

Marsh

Bairnsdale Orbost

Werribee

Mortlake

Derrinallum

Warragul

Geelong Melbourne

(see inset) Dandenong

Lakes Entrance

Heywood

Lara

Camperdown

Sale

Lang Lang

Traralgon

Koroit

Portland

Port Fairy

Terang

Korumburra

Colac

Leongatha

Anglesea

Anderson

Warrnambool

Lorne

Wonthaggi

Yarram

Cowes

Inverloch

Cape

Port Campbell

Apollo Bay

Paterson

Griffith

TO BALLARAT

Melton

TO GEELONG

TO BENDIGO

Sunbury

Watergardens

Cann River

To Canberra

TO SEYMOUR

Broadmeadows

Rockbank

Essendon

Sunshine North Melbourne

Footscray Flinders Street

Newport

Richmond

Werribee

Southern

Cross

Station

Caulfield

Clayton

(Spencer Street)

Geelong line train service

Ballarat line train service

Bendigo line train service

Seymour line train service

Gippsland line train service

Coach service

To Narooma &

Batemans Bay

MELBOURNE

METRO

Dandenong

Berwick

Pakenham

TO GIPPSLAND

Key results

CHANGE

2008

2009

>

2007

2008

Total customer trips (rail & coach) 10% 13,169,434 11,960,167

Rail passenger trips 9.5% 12,050,176 11,008,229

Coach passenger trips* 17.6% 1,119,258 951,938

Tickets sold 18.2% 5,136,692 4,344,8816

Farebox revenue 15% $68.6 million $59.6 million

Farebox (% breakdown) 1% 71% full fare 72% full fare

1% 29% concession 28% concession

Subsidy per passenger trip 2.3% $19.42 $19.88

Short-distance services 2.3% 61,882 † 60,510

Long-distance services 10.6% 11,238 † 12,568

Fleet:

>

>

>

>

>

<

>

<

>

<

> VLocity carriages 17.5% 94 80

>

> Locomotives – 41 41

> Loco-hauled carriages – 138 138

> Sprinters (single-unit) – 21 21

Stations 1.2% 83 82

>

Employees (total head count) 4.7% 1382 1320

>

* 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.

>

V/LINE ANNUAL REPORT 2008-2009 KEY RESULTS S 16/17

1


Facts and figures

2008

2009

>

2007

2008

>

2008

2009

>

2007

2008

>

2008

2009

>

2007

2008

>

2008

2009

>

2007

2008

>

CUSTOMERS

SAFETY

OPERATIONS

FINANCE

Passenger trips (rail and coach)* 13.17 million 11.96 million

>

Customer satisfaction index

(DOT target 68) – Trains 74.8 76.7

Customer satisfaction index – Coaches 79.2 80.3

No. of customer information enquiries 781,328 803,016

No. of customer feedback cases

about V/Line 13,582 12,225

No. of on-train consultation

sessions with customers 13 12

Compensation paid to customers

for V/Line not meeting on time targets

(complimentary ticket value) $112,481 $67,140

< > > > > > > < < <

EMPLOYEES

Total employees 1382 1320

Full-time equivalent staff 1365.3 1291.6

Training attendance numbers 5312 4372

Training sessions 446 565

All of V/Line lost-time injury frequency

rate (LTIFR) per million hours worked

(within V/Line’s control) 12.1 12.03

Above-rail LTIFR per million

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

Above-rail LTIFR per million

hours worked – with stress & trauma 40.1 28.2

Below-rail LTIFR per million

hours worked (within V/Line’s control) 5.2 8.1

Below-rail LTIFR per million

hours worked – with stress and trauma 5.2 9.4

Customer incidents within V/Line’s

control per million passengers

– requiring medical assistance 0.68 0.64

Total customer incidents per million

passengers – requiring medical assistance 3.95 2.01

Signals passed at danger

(SPADS per million km) – human factor 0.72 0.14

>

>

>

> > > < <

Reliability overall (short & long distance

services, average monthly performance) 98.3% 98.7%

Reliability – short distance 98.1% 98.5%

Reliability – long distance 99.4% 99.7%

Punctuality overall outside metro network

(short & long-distance services on time

to 5 and 10 mins respectively,

average monthly performance) 95.2% 94.5%

Punctuality

– short distance on time to 5 minutes 85.5% 86.1%

Punctuality

– long distance on time to 10 minutes 87.8% 86.5%

No. of services run – short distance 61,882* 60,510

No. of services run – long distance 11,238* 12,568

The reliability target is 96% and punctuality target is 92%.

<

<

<

< > > < >

* Short-distance services increased (and long-distance services decreased) as a result of Albury trains

being stopped short at Seymour during track upgrade works.

Revenue from

operational activities $381.2 million $328.3 million

>

Farebox $68.6 million $59.6 million

>

Government subsidies $255.6 million $226.7 million

>

Other $57.0 million $42.0 million

>

Revenue from

non-operational activities $84.0 million $83.6 million

>

* 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 traffic 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 r n with Victoria i Police and VicRoads

to make level e l crossings s s 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

20/21

2


Despite the massive growth of V/Line over the past few

The only statistically significant shift in safety performance

MANAGING A N G A SAFE RAIL ENVIRONMENT

N E N 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

efficiencies, V/Line also combined emergency management

cent compliance by December 2012.

with the pre-growth era of 2005–06.

Passenger trips have jumped by 79 per cent and staff

numbers have increased by 62 per cent over the past four

years. While there has been no major improvement in the

safety statistics, it remains a significant achievement that

such rapid growth has not had an adverse affect on the safe

operation of the network.

SAFETY PERFORMANCE

R E

For incidents within V/Line’s control, the staff lost-time

injury frequency rate (LTIFR) per million hours worked was

maintained at 12.1 in 2008–09 (12.03 the previous year).

Customer incidents within V/Line’s control also saw little

change with 0.68 requiring medical assistance per million

passengers (0.64 in 2007–08).

Analysis of customer incidents shows most incidents relate

to slips, trips and falls – particularly among the elderly.

This will remain a focus in coming years as V/Line works to

continually improve access for people with special needs,

to maintain or reduce the low level of incidents despite an

ageing population travelling more frequently.

A detailed review of the cause of incidents involving staff

is the current focus and the findings will be incorporated

into general awarness of the working environment training

in 2009–10 to further make staff conscious of potential

hazards and the need to report issues immediately.

trauma. This rate increased to 40.1 per million hours worked

in 2008–09 (up from 28.2 last year). Unfortunately, this area

of lost time is largely outside V/Line’s control, and reflects

the trauma experienced by train drivers in particular involved

in near misses of pedestrians or vehicles, and trespassers

on the network.

Another key safety performance measure is the number

of signals passed at danger (SPADs) by trains. No ‘human

factor’ SPADs resulting in train-to-train collisions took place,

with incidents involving human error at 0.72 per million

kilometres in 2008–09 – one of the lowest incident rates in

Australia. This is in line with the 2006–07 result of 0.8 but

an increase on last year’s low rate of 0.14.

An internal SPAD working group started during the year to

review individual incidents in significant detail and make

specific changes to V/Line’s infrastructure and operations

to reduce reoccurrences. Work has now been completed to

improve signalling behaviour at locations where multiple

incidents have occurred in recent years to complement the

research and training undertaken by V/Line to determine

contributing causes of SPADs.

2008–09 to mitigate the potential for incidents in V/Line’s

operation by promoting the optimal use of all available

resources – such as information, equipment, and people –

to achieve safe and efficient operations.

It encouraged teamwork within the train crew environment,

with a focus on threat and error management. Similar

programs have proved successful in the airline industry,

and V/Line piloted this program during the year, with a plan

to roll it out across the business in 2009–10.

During the year, V/Line also partnered with several key

emergency response agencies to conduct an emergency

exercise, as part of the Terrorism & Community Protection

Act 2003, to test its response to both a security incident and

a major accident.

Held near Colac in October 2008, the exercise saw over

20 V/Line staff partnering with the Department of Transport’s

Security and Emergency Management Division, Ambulance

Victoria, the Country Fire Authority, State Emergency

Service and Victoria Police to manage the response and

recovery. The exercise scenario was complex and involved

the temporary shutdown of a section of the Warrnambool

line, but it provided significant learning opportunities for all

agencies involved and helped to establish a number of key

relationships that have the potential to prove critical in the

event of a genuine emergency situation.

systems for its daily operations and track and civil

maintenance areas. The systems were separate following

V/Line’s acquisition of Pacific National’s ‘below rail’ network

and access operations in 2007. This integration has also

included the addition of V/Line’s revised environmental

emergency management systems.

BETTER T E DISABILITY I I ACCESS

C S

In addition to system and training improvements made

in 2008–09, engineering modifications to our trains also

helped make the network safer during the year.

Ongoing train improvements helped improve access for

mobility-impaired passengers, with new wheelchair ramps

rolled out for all V/Line trains. Previous versions of the

ramps were only suitable for wheelchairs due to the way

they folded for storage. However the new model can now be

used by people with walking frames, or those unable to step

up onto vehicles. This was a significant improvement which

successfully re-engineered the ramps, while still remaining

lightweight and portable for conductors to use.

As V/Line continues to roll out a new VLocity carriage each

month, the quantity of fully accessible vehicles increases

(and will do so until at least 2012). Additionally,

refurbishments to the older Sprinters and locomotive-hauled

N- and H-Set carriages have resulted in better access to toilet

facilities and wheelchair-friendly facilities. At year’s end,

88 per cent of the fleet met Disability Discrimination Act

Engineering improvements were also made to stations,

including the ongoing resurfacing of platforms to provide

smoother surfaces, installation of tactile strips for the

visually impaired, and installation of better signage.

During the year, four platforms were resurfaced and tactiles

were installed at Gisborne, Riddells Creek, Lara, Shepparton,

Warrnambool and Ballarat. Better lighting was installed at

eight stations, along with several yards and shunting areas

across Victoria. A major program to install hearing loops at

regional stations also started, with installations completed

at 36 stations, with this program set to continue throughout

2009–10.

IMPROVING I TRAIN SAFETY

Almost half the fleet now has high-visibility yellow reflective

strips added to the fronts of the vehicles to improve safety

at level crossings. As Sprinters and locomotive-hauled

carriages undergo refurbishments and the VLocities enter

their major maintenance cycles, the visibility enhancements

are made.

Onboard the trains, every door on every carriage across the

V/Line fleet became fully automatic from March 2009

following the completion of an upgrade to our N-set

carriages over the past few years. The automation of doors

prevents a passenger manually opening a door while the

train is moving.

V/Line Risk and Safety Improvement Programs Manager

Scott Ryan undertakes a routine inspection

at Southern Cross Station.

v

V/LINE ANNUAL REPORT 2008-2009

SAFETY AND SECURITY 22/23


THERE WERE FIVE SERIOUS LEVEL CROSSING INCIDENTS

ON V/LINE’S REGIONAL NETWORK DURING 2008–09:

Red Cliffs – 22 February 2009

A Pacific National freight train clipped a car at Sunny Cliffs Avenue level crossing.

The motorist sustained minor injuries.

OTHER SIGNIFICANT INCIDENTS IN 2008–09 INCLUDED:

Kilmore East Station – 13 March 2009

A teenage pedestrian sustained non-life threatening injuries after being hit by a Pacific

National freight train at a pedestrian crossing. The pedestrian alighted from a V/Line service

at Kilmore East and crossed into the path of the freight train.

Rosedale – 9 January 2009

A V/Line Bairnsdale train collided with a ute which was allegedly stationary on a private

(occupational) crossing. The car occupant was injured in the incident.

Rochester – 21 September 2008

A V/Line train struck a car at the Northern Highway level crossing. It is alleged the car stopped

on the crossing (which was fully operational), then reversed to clear the crossing as the train

approached. The front bumper of the car scraped the train. No injuries.

Red Cliffs – 16 September 2008

A Pacific National freight train collided with a ute at the Sunny Cliffs Avenue level crossing.

No injuries.

Litchfield – 26 August 2008

Minor collision between a V/Line ballast regulator and a truck. No injuries.

INCIDENTS INVOLVING V/LINE ON THE CONNEX METROPOLITAN NETWORK:

Hoppers Crossing Station – 6 March 2009

A pedestrian sustained non-life threatening injuries after being clipped by a

Geelong-bound V/Line train while crossing at the pedestrian crossing.

North Melbourne Station – 17 November 2008

A cyclist accidentally fell off the platform at North Melbourne Station into the path

of a V/Line train, sustaining fatal injuries.

Oak Park – 22 October 2008

A V/Line Sprinter train and ute collided at the Devon Road level crossing.

Boom gates were operating correctly. No injuries.

ROAD COACH INCIDENT:

A V/Line branded coach, operated by South Western Roadways and under contract with the

Department of Transport, was involved in a tragic accident on 16 April 2009 at Heathmere

where three people died. No other vehicles were involved in the accident.

Southern Cross Station yard – 6 March 2009

Two V/Line VLocity trains were involved in a minor collision while shunting in the yard.

Both units sustained mirror and window damage.

Camperdown, Longwarry and Kilmore East / Wandong areas – 7 February 2009

Black Saturday bushfires closed part of three of V/Line’s five corridors. Fire destroyed 3000

sleepers in the Camperdown area on the Warrnambool line. The damage was greater in the

north-east, with 1200 sleepers, the Wandong Station platform and two rail bridges destroyed.

The Gippsland line at Longwarry was not damaged, but closed on advice from emergency

services for 24 hours due to the proximity of the Bunyip State Forest fire.

Bacchus Marsh – 29 January 2009

Temporary suspension of Ballarat line trains on the advice of the CFA due to a grass fire in the

Bacchus Marsh area. No damage to track infrastructure.

Malmsbury – 22 January 2009

Temporary suspension of Bendigo line trains on the advice of the CFA due to a large fire in the

Malmsbury area. No damage to track infrastructure.

Southern Cross Station Yard - 26 November 2008

A V/Line Sprinter train struck a ‘Vehicle Under Repair’ banner which had been left in place by

EDI fitters who had completed work on the train. No injuries and no damage to the train.

Pyramid – 11 October 2008

Minor derailment of a V/Line ballast regulator during works.

Lake Boga – 17 July 2008

A V/Line train struck maintenance equipment left on the line. Minor damage to the train.

No injuries.

• Incidents involving trespassers are not included above.

Another notable onboard safety improvement was the

withdrawal of the sale of alcohol from on-train catering

services in December 2008. This move won many customer

compliments and widespread community support as part of

work to strengthen the family-friendly environment on long

distance services.

AUTHORISED OFFICERS

F Following a trial in 2008, a team of six authorised officers

were formally introduced onto V/Line services from January

2009. While authorised officers have the power under the

Transport Act 1983 to report fare evasion, they have been

primarily deployed for staff and passenger security, rather

than revenue protection.

While behaviour issues on V/Line’s network are statistically

low in comparison with the Melbourne network, the

response to the authorised officers’ presence on board

V/Line services has been very positive, with customer

feedback supportive of expanding their presence. As well as

helping to reduce anti-social behaviour at stations and on

trains, the officers have also identified the perpetrators of

repeated vandalism to rail infrastructure.

LEVEL E L CROSSING S SAFETY

There were no fatalities on the V/Line regional network at

level crossings as a result of accidents with trains during

2008–09.

While this is excellent news after three fatalities the previous

year, the behaviour of some motorists at level crossings

remains an ongoing concern. Five collisions involving

V/Line or another operator on our network occurred during

2008–09. Complacency, lack of attention to warnings,

and risk-taking behaviour have been the key factors behind

near misses.

While engineering upgrades to crossings continue to

be rolled out by VicTrack, with 45 crossings made safer

across Victoria in 2008–09, motorists must take shared

responsibility for their safety by obeying the warnings and

road rules.

Mutual responsibility for level crossing safety is one of

the pillars of the Rail Safety Act 2006, which legislates a

requirement for all parties – such as rail operators, councils,

road authorities and local land owners – to have a Safety

Interface Agreement (SIA). SIAs set out an organisation’s

responsibilities – both broadly across the whole state and

specifically at each crossing. In the long term it will help us

take consistent and appropriate action to prevent accidents

at level crossings. V/Line is working with councils and other

authorities to establish agreements in regional Victoria,

and we expect the SIA process will be completed by mid-

While V/Line’s core responsibility is the maintenance of level

crossings across regional Victoria, we have a range of active

roles in advocating change. V/Line’s Chief Executive Officer

is now a member of the government’s Victorian Railway

Steering Committee on Level Crossings, which advises the

Minister for Public Transport on improving safety at crossings

and makes recommendations to the Minister regarding

upgrades and closures throughout Victoria, which are statefunded.

V/Line also has an internal level crossing committee

which conducts a detailed review of site distance; a key

factor in establishing danger levels at each crossing site,

and has started work on a vegetation removal program to

improve sightlines.

During 2008–09 V/Line also wrote to about 3500

landowners adjoining rail reserves to encourage animal

owners to cross the train lines safely with their stock and

equipment by providing contact details for the train control

centre. The special campaign – a first of its kind in Australia

– also reminded farmers of their obligations to ensure their

fences did not allow animals to stray onto railway lines.

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 significant 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 benefited 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 r p s have helped e us achieve e the

highest h safisfaction s f a i rating in the Victorian i transport r t industry

Our customers

s

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

V/LINE ANNUAL REPORT 2008-2009

section

26/27

2


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 H CUSTOMER SATISFACTION S A T I RATING

KEEPING E CUSTOMERS S 'INFORMED'

'

PUTTING T GREATER E R VALUE INTO A V/LINE TICKET

T

and coaches around regional Victoria, with total patronage

any other regional operator in Australia. By comparison,

patronage up 15 per cent this financial 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 financial 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

increase in 2006–07 and 23 per cent increase in 2007–08

across V/Line’s train and coach services, the records

continue to be re-written as more people choose cheaper,

more comfortable and environmentally friendly public

transport over car use.

In 2008–09, a record 13.17 million passenger trips were

made on V/Line trains and coaches. Of this, 12.05 million

trips were made on trains – a 9.5 per cent increase, or

1.04 million more trips than the 11.01 million recorded the

previous year.

in NSW and 926,000 trips made on TravelTrain regional

services in Queensland in 2007–08.

However, V/Line coach trips increased more rapidly, rising

17.6 per cent to 1.12 million passenger trips (951,938 in

2007–08).

A NEW GOLDEN ERA OF RAIL

For the first time, rail patronage surpassed 1940s train

travel records when few owned cars and trains were the

main means of transport across regional Victoria.

In the four years since 2005–06, there has been a

considerable shift in the way regional Victorians travel,

and rail passenger numbers have risen 79 per cent.

on the Bendigo line over the past four years.

In 2008–09, patronage on the Bendigo line was up

9.8 per cent, the Geelong line was up 9.5 per cent and

the Ballarat line increased 12 per cent.

The new record is all the more significant because the

Seymour line actually experienced a drop in patronage

(down 3.6 per cent) due to the temporary closure of the

line between Seymour and Albury as part of the North East

Rail Revitalisation Project.

V/Line’s continued outstanding passenger growth can

be primarily attributed to the fact that regional Victorians

are, more than ever, choosing the train as their preferred

method of transport, particularly during times of economic

uncertainty and continued high fuel costs.

would be able to cope logistically with an almost doubling of

passenger numbers over such a short period.

The Victorian Government’s commitment to up to 74 new

carriages – 14 of which were delivered during the year –

is allowing V/Line to keep up with passenger growth,

ensuring comfort is not compromised. While several peak

trains remained very busy, most previously crowded services

have benefited from extra seating as a new carriage enters

the network each month.

This ongoing expansion of the V/Line fleet is a major factor –

along with affordability and frequency of commuter services

– in V/Line’s high customer satisfaction rating.

Quarterly surveys undertaken by the Department of Transport

continue to show V/Line train and coach passengers as the

most satisfied of all public transport users in Victoria. The

satisfaction rating for V/Line trains was 74.8 in 2008–09

(76.7 last year) and 79.2 for coaches (80.3 last year).

customers. In 2008–09, two significant innovations to

V/Line’s business were rolled out to improve information

provision to our passengers.

V/Line Inform allows passengers to register their details on

the V/Line website and indicate services that they usually

travel on. In the event of a service delay or cancellation

V/Line Inform sends an SMS or email to individual

passengers to let them know of the changes.

The response to V/Line Inform has been outstanding. Since

its introduction in December 2008, more than 3000 regular

travellers have signed up to the free service with thousands

seeing its benefits during Victoria’s period of extreme heat

in late January and early February 2009, which included the

Black Saturday bushfires.

In October 2008, V/Line also launched online ticket sales

to allow customers to buy individual tickets as well as

Weekly, Monthly and Date-to-Date passes. The tickets are

then mailed out to the customer, saving them time waiting

in queues at busy station ticket offices. The service has had

customers can take from their ticket has increased

dramatically in other ways. Not only was metropolitan

train, tram and bus travel incorporated into the V/Line

ticket price in 2007, but a range of promotions were

introduced in 2008–09 to deliver further ‘add-on’ value.

During the year V/Line established a wide range of

relationships with major Melbourne cultural institutions

and events – with the key emphasis on providing

additional value to V/Line customers as part of their ticket.

Partnerships established during the year included the

Melbourne Aquarium, National Sports Museum, Melbourne

International Comedy Festival, Melbourne Museum’s

A Day In Pompeii exhibition and National Gallery of

Victoria’s Salvador Dali: Liquid Desire exhibition.

With thousands of regional Victorians visiting Melbourne to

see the successful musical Wicked, V/Line partnered with

the show to offer a free souvenir show program to patrons

upon presentation of their V/Line tickets. Take-up was

strong, with hundreds making the most of this offer.

a strong take-up, with over 8000 customers booking their

tickets online in the first 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%

PERCENTAGE OF ALL TRIPS BY COACH*

RAIL PATRONAGE BY LINE

>

08-09

07-08

legend

08-09

07-08

legend

9.7 14.7 22.2 25.4 28

11

14 22 25 28

seymour gippsland ballarat bendigo geelong

0% 20% 40% 60% 80% 100%

1.8 7.1 8.7 10 9.6 11.7 16.5 15.8 18.7

2 7 8 10 12 12 14 17 19

north-west goulburn east trans-regional south-east south-west north-east west north

valley

* Includes Department of Transport administered coaches.

geelong bendigo ballarat gippsland seymour

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

04–05: 1.84 million*

05–06: 2.03 million*

06–07: 2.57 million

07–08: 3.08 million

08–09: 3.38 million 9.5%

>

>

04–05: 1.32 million

05–06: 1.47 million*

06–07: 2.20 million

07–08: 2.78 million

08–09: 3.06 million 9.8%

>

>

04–05: 1.35 million

05–06: 1.37 million*

06–07: 1.88 million

07–08: 2.39 million

08–09: 2.68 million 12%

>

>

04–05: 0.85 million

05–06: 0.82 million*

06–07: 1.05 million

07–08: 1.54 million

08–09: 1.77 million 15%

>

>

04–05: 0.99 million

05–06: 1.05 million

06–07: 1.15 million

07–08: 1.21 million

08–09: 1.17 million* 3.6%

<

PUBLIC TRANSPORT R T OMBUDSMAN

M Victoria’s Public Transport Ombudsman gives customers

an independent body for the assessment of complaints.

If customers remain dissatisfied with the response they have

received from a public transport operator, they have the

opportunity to have their case reviewed by the Ombudsman.

In 2008–09, V/Line helped promote the role of the

Public Transport Ombudsman’s (PTO’s) office through

customer materials, as well as the regular invitation to

accompany V/Line management on their monthly on-train

customer consultations. During the year, the Ombudsman

independently reviewed 33 cases (out of 73 customer

contacts with the PTO), compared with up to 64 cases (out of

100 contacts) last year. In 2008–09 one case resulted in a

binding decision by the Ombudsman.

CUSTOMER CONSULTATION T O N AND FEEDBACK

E Our customer consultation program is an important element

of our operations. This process sees a team from across

V/Line’s operations, including the CEO and senior executive

team, meet with passengers on board services throughout

Victoria. The process is designed to gauge the opinions of

customers on the train service. Importantly, the customer

consultation program provides an opportunity for those who

may not necessarily contact V/Line with a specific complaint

or compliment to have their say. Thirteen consultation

sessions were undertaken during 2008–09, with a stronger

push to cover the entire V/Line network during both peak

and off-peak times.

During the year, compensation in the form of complimentary

tickets to the value of $112,481 was issued to customers for

not achieving performance targets. While train performance

is generally on par with last year, this is a considerable

increase on the $67,140 worth of tickets issued last year.

The rise is due in part to the rapid patronage increase,

as well as greater promotion of the compensation scheme

in the media. However, customer feedback about V/Line

increased from 12,225 cases last year to 13,582 cases

this year.

Information queries through the V/Line call centre dropped

three per cent to 781,328 this year (803,016 in 2007–08),

indicating a growing trend towards the V/Line website as a

source of customer information. In 2008–09, website visitors

increased 45 per cent to 3.7 million and page impressions

grew 33 per cent to 44.4 million. Ongoing upgrades to the

V/Line website will see it continue to grow as an information

source throughout 2009–10.

V/Line partners with Travellers Aid – a service that

provides help and support to passengers to help them

reach their destination.

v

* 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 r n with local l councils c to

bring people p e 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

section

32/33

3 3


V/Line’s trains and coaches provide a vital public service to

regional Victoria, and the nature of our business means our

social and economic footprint extends beyond just transport.

As a major employer of country Victorians, manager of 3770

kilometres of railway track and access provider to the freight

sector, our stakeholders rightly expect V/Line to deliver more

than just a reliable public transport service.

In 2008–09, we worked with councils, MPs, state and

federal departments, industry groups and businesses to

better understand our broader role in regional Victoria.

And to ensure our impact is as positive as it can be, we

reviewed the way we approach sustainability, environmental

and community-related issues, and introduced a range of

internal benchmarks to continually improve the value of

the business to Victorians.

STRENGTHENING T E N N G RELATIONSHIPS I S ACROSS S VICTORIA

I Within all levels of V/Line, staff are encouraged to partner

with other organisations to not only improve our own

efficiencies but achieve better outcomes for our customers

and the broader community.

Our team of regional managers plays a leadership role in

improving our connections with the community, essentially

V/Line sponsored the Castlemaine State Festival in

March and April 2009. >

representing something of a ‘front door’ to V/Line for

each region. Each regional manager lives and works in

the area they represent – and has a strong knowledge of

key community issues within the area. To a greater extent

than ever before, the team of regional managers are now

considered the first port of call for government and business

representatives in their regions.

Our regional and executive managers have also engaged in

a program of local council consultations across the state.

During 2008–09, V/Line conducted briefing sessions

with 34 regional Victorian councils, where key issues of

service delivery, timetabling and level crossing safety, as

well as regional events, investment and development were

discussed. This program will continue to grow in 2009–10.

SEE E THINGS DIFFERENTLY:

F E MARKETING V/LINE TO MELBURNIANS

N Our meetings with regional councils and business partners

emphasised the view that while V/Line already has a major

positive economic impact on regional Victoria, it could be

even greater.

Working with councils, tourism operators, the Department

of Transport, Tourism Victoria and the Victorian Government,

we launched a $1.3 million See Things Differently

advertising campaign to put V/Line – and regional Victoria –

into the minds of Melburnians.

The campaign was the first time in 20 years that V/Line had

advertised on television. It also included promotion via

radio, newspapers and billboards (and even a special tram)

throughout Melbourne to showcase the vastly improved

V/Line service and the best country Victoria has to offer.

The pilot campaign encouraged Melburnians to make

the most of travel opportunities to Geelong, Ballarat and

Bendigo in particular, and was the winner of the 2009

Australian Marketing Institute’s ‘Business to Consumer’

award in Victoria. Key to its success is that the campaign

promoted use of off-peak, outbound train services during

quieter periods such as during the middle of the day, or on

weekends – making more efficient use of existing services,

crucial to our push to deliver a more sustainable operation.

A key element of the campaign was the Family Traveller

ticket, which allows each adult travelling during off-peak

times to take up to two children free, making the potential

for discovering Victoria more affordable.

Results from the campaign have been very strong. One in

five people (and one in three families) on target services

indicated they were travelling because of the campaign,

and 22 per cent of travellers on target services indicated

they were travelling with V/Line for the first time. Over

1000 new trips per week (12,000 in total) were directly

attributable to the pilot See Things Differently campaign –

resulting in an estimated $780,000 of economic benefits

to the target regions over the campaign’s three months,

and an estimated $3 million in regional spend since the

campaign was introduced.

V/Line also partnered with the Castlemaine State Festival in

March, winning an Australia Business Arts Foundation award

for the joint promotion.

COMMUNITY M SUPPORT P TAKES

V/LINE TO NEW DESTINATIONS

T I N S

Regional councils and community partners have welcomed

V/Line’s continued sponsorship of the Victorian Country

Football League (VCFL) and several other long-running

commitments such as Travellers Aid – a service that provides

travellers with assistance and support to get to where they

are going.

Our support of regional Victorian schools also continued,

through the My Train program which reached record levels in

2008–09 with 130 schools travelling free on V/Line services

as part of school excursions. This program provides free

travel to primary school students throughout Victoria and is

combined with the Train Training program – which provides

activity packs to schools to educate children about safety

around trains and railway stations.

In 2008–09, V/Line also entered into a partnership with

Playgroup Victoria, a 50,000-member strong organisation

that helps families join and organise play groups. This

partnership provides families with group discounts for

V/Line travel throughout the state – and provides groups

with information to build safety awareness among children

and parents.

During the year, we also supported a range of other

community events and activities, including:

• Mission Australia Family Day, which provides the

opportunity for over 3,000 migrants, refugees and

disadvantaged Victorians with the opportunity to enjoy a

day at Melbourne Zoo – something they simply would not

be able to afford. Guests at Family Day were provided with

free travel by V/Line from around Victoria, and the day’s

activities saw a dedicated team from V/Line volunteering

at the event.

• Ronald McDonald House, whose Parkville residence

provides families of children who are undergoing

medical treatment at the Royal Children’s Hospital with

accommodation and support for their time in Melbourne.

In 2008–09, V/Line established a partnership with Ronald

McDonald House to provide guests with complimentary

travel for their journey to and from Melbourne.

• Regional Achievement & Community Awards, which give

recognition to some of the ‘unsung heroes’ of regional

Victoria. V/Line supported both the V/Line Young

People’s Community Involvement Award and the V/Line

Volunteering Award at the 2008 event.

Additionally, on Saturday 2 May 2009, V/Line helped the

communities of Bairnsdale and Stratford celebrate five

years since the return of V/Line services to the region at

a community event held at Bairnsdale Station, that was

attended by more than 400 people.

TACKLING TOUGH ISSUES,

S S BEYOND THE FOOTY O FIELD

Since 2002, one of V/Line’s most successful community

relationships has been its long-term partnership with the

VCFL. This relationship has seen V/Line as the major sponsor

of the V/Line Cup – considered one of the integral steps in

the pathway for young country footballers towards AFL-level

football. The VCFL sponsorship also extends to V/Line Junior

Carnivals and the V/Line Umpire Development Program.

However, V/Line’s relationship with the VCFL was taken

to another level in 2008–09 with the evolution of the

V/Line Life Training program. The program aims to educate

teenagers and their families on important health topics

– and give them the skills to make positive choices when

difficult issues arise. While this program had been delivered

in various forms to young footballers over the previous three

years, it has now been moved from the football field to

encapsulate a wider audience, ensuring regional Victorian

teenagers, regardless of gender and whether they play sport

or otherwise, have the opportunity to take part.

V/Line continued its sponsorship of the V/Line Cup under 15’s

football competition – won by Latrobe in 2009.

v

V/LINE ANNUAL REPORT 2008-2009

SUSTAINABILITY, ENVIRONMENT AND COMMUNITY 34/35


The program sees V/Line ambassador and former AFL star

Nathan Thompson, joining with industry leaders in the areas

of depression (Orygen Youth Health), illicit drugs (The

Victoria Police’s Purana Task Force) and binge drinking

(Odyssey House) to provide frank, challenging and rewarding

opportunities for young people to openly discuss these often

taboo topics.

Held at 12 locations throughout regional Victoria, the newlook

V/Line Life Training was attended by over 1200 regional

Victorian young people in 2008/09 – and will continue to be

a key element of V/Line’s community

program during 2009–10.

ESTABLISHING S I A SUSTAINABILITY S A I I T FRAMEWORK

R V/Line approved the business’s first sustainability

framework, covering the four key pillars of our people,

environment, community, and our market / resources

to ensure V/Line, our customers, staff and stakeholders

understand the need to take a proactive approach to

sustainability issues. It also puts into action the individual,

proactive objectives the business aims to meet to move

V/Line from being a business that addresses sustainability

issues as they arise, to one where these steps are integral to

the business’s daily operation.

SETTING T NEW ENVIRONMENTAL N E N STANDARDS

A D S

FOR OUR RAILWAYS

A V/Line makes a substantial environmental contribution by

encouraging tens of thousands of Victorians to catch more

efficient public transport rather than use cars for commuting.

However, with almost 3770 kilometres of railway track under

our control, including stations, rail yards and a fleet of

93 individual train sets, V/Line also has many environmental

challenges. Key challenges relate to management of

significant vegetation and our dependency on diesel fuel.

Central to meeting these challenges was the maintenance

of our ISO14001 Environmental Management Systems

accreditation for all 83 stations across Victoria, which is a

significant achievement built on applying and monitoring a

range of processes at each station. Additionally, certification

was also achieved for V/Line’s Head Office and fuel point

operations in 2008–09.

The Environmental Management System (EMS) puts in place

the processes for managing the environmental impacts

of V/Line’s activities for staff and contractors. It provides

a structured approach to planning, implementing and

monitoring environmental protection measures –

such as regular induction, training and assessment of

environmental awareness.

In 2008–09, the process of adding the principles of the

EMS to all contracts with major subcontractors started,

with a view to ensuring all parties that act on V/Line’s

behalf share our commitment to the environment and

understand their shared obligations. This is particularly

important as we work to improve our environmental

credentials, after managing two legacy issues during the

year which pre-date our take-over of the regional rail network

in 2007, as well as a further three notable environmental

incidents which occurred during the year – all of which

involve subcontractors.

FUELLING L THE FUTURE

U The push to introduce bio-fuel is one of the key long-term

plans for V/Line’s operation – with the ultimate objective to

achieve a B20 (20 per cent blend of biodiesel with standard

diesel) standard across V/Line’s entire fleet.

Initial planning undertaken in 2008–09 aimed to determine

a viable fuel source, before live train testing can commence

in Ballarat during 2009–10. This testing will aim to confirm

V/Line’s long-term bio-diesel supplier partner. However,

introduction of the system would require a significant

infrastructure and fleet investment, with bio-fuel use

requiring modifications to refuelling points and vehicle

fuel systems.

CONTROLLING O L N WEEDS E AND PESTS

S

The vast nature of our rail reserves across country Victoria

presents a challenge to controlling weeds and pests.

Throughout 2008–09 V/Line worked closely with the

Department of Primary Industries, Landcare and farming

groups to remove noxious weeds across our railway

property. Recent projects included the removal of gorse –

a dense, thorny bush – between Castlemaine and Chewton,

management of serrated tussock on the Sunshine to Ballarat

corridor, as well as a rabbit control program in Kerang South

and the Wimmera.

RECYCLING C ROLLS L OUT

Initial planning in 2008–09 aimed to determine the

locations and type of recycling bins to be placed at stations.

Installation of the recycling bins in 2009–10 will be

established at Ararat, Ballan, Ballarat, Colac, Echuca, Lara,

Marshall, Seymour, Shepparton, Swan Hill, Traralgon and

Warrnambool stations, ensuring V/Line meets its objective

of reducing station landfill by 10 per cent by 2010.

ENERGY EFFICIENCIES OPPORTUNITIES PROGRAM

– PUBLIC REPORT – pg 93.

V/LINE'S SUSTAINABILITY S A I I T PRIORITIES R I I 2009- 0 2012

2

Green stations

VCFL / youth

Rolling stock / locomotive service

Green office

Sustainable measurement

Rail reserves

Green technology

Industry round table

Employee development

Local sourcing

To save energy and water through improving environmental efficiencies

at V/Line train stations.

To increase the support of youth-related activities, events and

sponsorship between V/Line and regional communities.

To reduce fuel consumption and corresponding greenhouse gas

emissions by improving the fuel efficiency of V/Line’s fleet of

rolling stock. The introduction of bio-fuel is a priority.

To save energy and water through improving environmental efficiencies

at V/Line’s offices.

To develop ongoing sustainability measurement, reporting and

communication.

To improve management of reserve biodiversity assets in a manner

that does not compromise ongoing operation and maintenance

of rail assets.

To save energy by improving the environmental efficiency of

V/Line’s technology.

To develop a program of consultation to explore regional public transport

needs among various stakeholders.

To increase employee health and job satisfaction,

and career opportunities.

To support our local communities, local products and services during

the procurement process.

V/LINE ANNUAL REPORT 2008-2009

SUSTAINABILITY, ENVIRONMENT AND COMMUNITY 36/37


ENVIRONMENTAL N E N ISSUES S S AND INCIDENTS

I N ISSUES S S INHERITED I E BY V/LINE PRIOR R TO REGIONAL RAIL TAKE-OVER E IN 2007

0 McLennan Street, Ararat

In mid-2008, the Environmental Protection Authority (EPA) issued a clean up notice for a rail

reserve in McLennan Street, Ararat. While the contamination was believed to have been

caused by previous owners of the site and potentially other parties, as the current lessee,

V/Line is responsible for the clean up. Assessments were undertaken to determine the toxicity

of the contaminants throughout the soil in this site, and at year’s end V/Line was working with

the EPA to determine the best treatment or removal options. Significant clean up costs are

expected to be incurred in 2009–10, and no determination has been made about whether

action will be sought to recover these costs from other parties.

Echuca–Serpentine Rd, Mitiamo

Following an accident between a freight train and truck on Echuca–Serpentine Road in 2004,

a number of contaminants, determined to be Category C (acceptable to be transported

to landfill) were found near the site. These contaminants had come from the contents of

one of the original freight train’s wagons. In January 2009, after testing had determined

this substance to be acceptable for landfill disposal without treatment, the material was

transported to an EPA licensed landfill in Eaglehawk.

INCIDENTS I N UNDER V/LINE CONTROL

O Queens Parade, Traralgon

In October 2008, the EPA issued a pollution abatement notice to V/Line following the detection

of fuel in a Traralgon creek, which it determined to be sourced from refuelling activities at

Traralgon Station. In accordance with the notice, V/Line appointed an environmental auditor

to review refuelling activities at this site, including procedural documentation, and has

undertaken a risk assessment of the activities. A series of recommendations has been made

and a preliminary audit report has been submitted to the EPA. V/Line is working to address

the recommendations made by the auditor.

Mitiamo Rail Reserve, Mitiamo

In mid-2007, an independent contractor engaged by V/Line to undertake grading works

associated with the maintenance of fire breaks on a rail access track allegedly damaged

between 23 and 38 protected spiny rice-flowers within the Mitiamo Rail Reserve Biosite.

The Victorian Department of Sustainability and Environment (DSE) brought action against

V/Line, and the federal Department of Environment, Water, Heritage and the Arts (DEWHA)

entered into discussions with V/Line. Post this reporting period (July 2009), V/Line voluntarily

entered into an enforceable undertaking with the federal Minister for the Environment,

Heritage and the Arts. V/Line has agreed to pay $25,000 to the spiny rice-flower national

recovery team for research and conservation of the species, and $26,510 will go towards

monitoring and recovery of the population and proper fencing of the biosite to prevent future

incursions. V/Line will also devote $136,500 to staff and contractor training to help ensure

future railway maintenance and upgrade works do not impact on protected species or other

matters of national environmental significance. As a result of this undertaking, the Victorian

DSE ceased its action against V/Line.

Spotswood, Melbourne

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.

ENVIRONMENTAL N E N TARGETS

T 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 office, maintenance and station infrastructure to ensure we can

now fully measure our environmental impact – including energy and water consumption,

waste generation and fuel consumption.

Through these measurements, V/Line has set formal benchmarks, which now form the core

of the V/Line Sustainability Framework. Key objectives and targets include

OBJECTIVE TARGET OBJECTIVE TARGET

Improve energy efficiency

at V/Line-controlled

operations

Improve water efficiency

in all V/Line-controlled

operations and to reduce

our impact on water

resources

Reduce the ecological

footprint of V/Line’s

operations through

the consideration of

environmental issues

in purchasing and

contractual decisions

Purchase 15% of energy consumed at V/Line-controlled

passenger stations and head office from renewable

sources by June 2010.

Each corridor to reduce energy consumption by 5%

per total passengers per corridor by July 2010.

Head office to reduce energy consumption by 5%

per full time employee (FTE) by June 2010.

Reduce water consumption at V/Line-controlled

passenger stations by 5% per corridor per total

passengers by June 2011.

Reduce paper consumption by 20% per FTE by

June 2011.

Review cleaning chemicals used at V/Line stations to

ensure the most eco-friendly products practicable are

being purchased.

Reduce the volume of

waste sent to landfill

from V/Line controlled

operations

Prevent pollution from

occurring on sites and to

ensure the responsible

management of substances

with the potential to cause

environmental damage

Introduce co-mingled recycling facilities to at least 50%

of V/Line controlled manned passenger stations by

December 2011.

Reduce waste to landfill by 5% from head office

(per FTE) by June 2011.

Reduce waste to landfill by 10% from stations (corridor

per total passengers) by June 2011.

Ensure all works that involve working with asbestos

containing material will result in no emission of asbestos

into the environment.

Zero fuel spills to ground at fuel points by June 2011.

Stormwater management plans in place for significant

sites (major stations and fuelling points) by June 2011.

V/LINE ANNUAL REPORT 2008-2009

SUSTAINABILITY, S A I I T ENVIRONMENT N E N AND COMMUNITY M 38/39

3


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 University of Ballarat,

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 Officer 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 Certificate 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 r n with major universities

i i e s

to boost o the skills l s of our staff

f

Our people

p e

CEO Rob Barnett addresses graduates from the

2009 Diploma in Business course. >

V/LINE ANNUAL REPORT 2008-2009

RMIT Project Manager – Global Business Development, Annmarie Carroll and V/Line Training and Compliance Officer Rebecca Symington.

section

40/41

4


The successful signing of a Heads of Agreement for the

2009–12 Entreprise Agreement was a win-win for staff and

customers alike, with wage increases over the next three

years linked to better service delivery and ultimately funded

through productivity gains.

The fact the agreements were achieved without any

With an average employee age of approximately 45 years,

V/Line is faced with the challenge of having a significant

skills and knowledge base potentially retire from its

business in the coming years.

V/Line has now put in place a series of clear, achievable

and diverse career paths designed to provide staff with

TRAINING I N IMPROVEMENTS M E TO BOOST O PERFORMANCE

R E

V/Line’s training programs are central in ensuring all staff

are well equipped to excel in their roles. These programs

provide staff with the skills to adapt to innovations and

encourage diversity and career development within the

many facets of V/Line’s business.

TERTIARY T R TRAINING I N PARTNERSHIPS

R P S

The majority of V/Line’s training courses are now aligned

with the Australian Qualification Framework, which ensures

that they are nationally recognised.

In addition to existing relationships with Box Hill TAFE,

Central Queensland University, RMIT University, and

2007

0 2008

0 2008

0 2009

0 >

>

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 confirmed 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

Union; the Communications, Electrical, Electronic, Energy,

V/Line team, with the role generally considered to be entry

level into the railway industry and a platform into many

2005–06 to 5312 this year. Our employees participated

in 184 different training courses during 2008–09, with

internally run Certificates I, II, III and IV in Rail Operations

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.

Collectively, the agreements allow for a greater level of

flexibility in V/Line’s operational planning, will deliver

improved productivity – and will ensure continued increases

in patronage over the coming years can be confidently

handled.

BUILDING I V/LINE'S NEXT GENERATION

E N

Another achievement during the year was the establishment

of new career path options and stronger partnerships with

training organisations to retain talented people at V/Line.

the V/Line business right through to working as a train

driver, conductor services manager, or to other positions

working within the operations area.

DRIVING I THE FUTURE

U V/Line introduced an internal driver trainee program during

the year to provide a new career path with V/Line. The staff

response to this program was outstanding, with a high

number of applicants. At year’s end, appointments were

being made.

in conjunction with Swinburne University – which saw

19 managers and supervisors achieve a Diploma in

Business, a critical qualification for establishing our future

business leaders. Other programs included the Graduate

Diploma in Rail Operations – a course delivered by Central

Queensland University.

During the year, a range of new training programs were

established, including a management skills and professional

development program for many of V/Line’s operational

team, along with a Diploma of Signals and Communications

and a track inspection program.

IMPROVING I OUR PEOPLE P E MANAGEMENT A M E N SYSTEMS

S S

With 1382 employees dispersed right across Victoria –

managing core human resource functions such as leave

management, recruitment and management of employee

data provides a number of challenges. As a result of the

business’s rapid expansion in recent years, V/Line’s Human

Resources Information System was introduced during the

year in a bid to address these issues.

This new system represented a significant change for

V/Line’s HR-related functions enabling a far greater analysis

of employee data and movements throughout the business.

These changes have enabled a strong level of planning for

our workforce - and has already been put to

use in the recent recruitment push to attract a new

generation to the V/Line team.

At 30 June At 30 June

2009 2008

V/LINE SKILL GROUP

(HEADCOUNT)

Executive 9 9

Operations 69 64

Station staff 247 232

Conductors 210 208

Train drivers 328 318

Authorised officers 6 4

Infrastructure

maintenance 159 153

Signals and

communications 54 54

Train controllers 42 41

Network services 64 69

Past and present staff members farewell the old Wodonga Station

in November 2008 before construction of a new station in 2010. >

Other staff 189 168

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 first 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 first 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 r n with regional businesses

s s e s

to improve customer services

e s

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

section

44/454 4


Train punctuality on V/Line’s regional network improved for

the third year in a row, despite the challenges of extreme

weather, major track upgrade works and a rapid growth in

passenger numbers.

Regional on-time running of our trains provides the best

gauge of our direct performance because that part of the

network is solely under V/Line’s control. In 2008–09,

regional punctuality rose to 95.2 per cent on time for

all services, compared with 94.5 per cent last year and

93.5 per cent in 2006–07.

However, our punctuality in the metropolitan network –

under the control of Connex – continued to be affected by

railway congestion, with record numbers of country and

suburban trains now running in the city area.

Resolving these metropolitan congestion issues remains

the key challenge to be addressed by all Victorian rail

stakeholders, including V/Line. In 2008–09 V/Line

continued to work with both the Department of Transport

and metropolitan operator Connex to improve planning,

timetabling and to manage the Melbourne network’s

capacity. The recently announced $4.3 billion Regional Rail

Link project represents a landmark step in alleviating this

congestion, particularly for passengers on the Geelong,

Ballarat and Bendigo lines.

OUR PERFORMANCE

R E

While our regional punctuality continues to improve as a result

of ongoing better and integrated maintenance following

V/Line’s take over of the network in 2007, our total punctuality

– including both regional and metropolitan sections of the

journey – still has not met our target of 92 per cent on time.

In 2008–09, our short-distance trains were a combined 85.5

per cent on-time (down slightly from 86 per cent last year),

while long-distance trains were 87.8 per cent on time (up

from 86.5 per cent in 2007–08).

Our claim to be one of the most reliable public transport

operators in Australia still holds true, with 98.3 per cent of

all scheduled trains running (98.7 per cent last year). In fact,

of 63,090 short-distance trains schedule, just 1208 were

cancelled (61,882 ran, or reliability of 98.1 per cent).

Our long-distance trains performed even better, with

99.4 per cent reliable, as just 66 out of 11,304 scheduled

trains were cancelled (11,238 ran). Of those trains

considered to be ‘cancelled’, most were replaced with

road coaches.

Until new major metropolitan track infrastructure is delivered

under Regional Rail Link, V/Line is limited in the amount of

extra train services that can be offered during peak periods.

Following a 30 per cent increase in services in 2006 and

minor timetable additions since, train service numbers

remained on par with last year, with 73,120 trains running

(just 42 more than 2007–08).

ON TIME PERFORMANCE OF TRAINS ON THE REGIONAL NETWORK UP TO THE METROPOLITAN BOUNDARIES*

southern

cross

station

short distance

long distance

2008

2009

83%

85.4%

85.5%

87.8%

85.1%

81.5%

91.8%

88.9%

>

2007

2008

82.3%

88.7%

86.5%

87.6%

85.1%

79.5%

82.6%

89.7%

>

pakenham

broadmeadows

watergardens

sunshine

werribee

pakenham

broadmeadows

2008

2009

97.0%

95.0%

93.9%

95.0%

97.0%

93.6%

96.5%

97.0%

>

2007

2008 Seven-carriage VLocities started running on

some Geelong services to boost capacity.

92.7%

97.1%

94.0%

94.0%

95.4%

92.59

88.5%

97.4%

>

traralgon

seymour

bendigo

ballarat

geelong

bairnsdale

albury/wodonga †

shepparton

v

southern

cross

station

92.9%

81.7%

93.0%

82.5%

watergardens

96.3%

92.6%

95.6%

93.0%

echuca

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

Shunting in our rail yards at Southern Cross Station. >

* 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.


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

trains terminated at Seymour – thus classifying them as

‘short’ – due to the North East Rail Revitalisation Project

(NERRP) track upgrade works. Consequently, this temporary

reclassification meant that long-distance services dropped

to 11,238 (versus 12,568 services last year).

COPING IN THE HEAT

Over the first two months of 2009 Victoria experienced the

most extraordinary heatwave in recorded history. In January,

the state experienced three of the four hottest days ever in

Victoria, a major power blackout and 22 days of heat-related

speed restrictions on at least one or more of V/Line’s routes.

In February, V/Line was also significantly affected by the

impacts of this heat.

Black Saturday bushfires on 7 February 2009 caused the

temporary closure of our Warrnambool, Seymour and

Gippsland lines. Fire destroyed 3000 sleepers in the

Camperdown area on the Warrnambool line. About 1200

sleepers, the Wandong Station platform and two rail bridges

were also destroyed on the Seymour line. The Gippsland line

was closed as a precaution for 24 hours due to the proximity

of the Bunyip State Forest fire but was not damaged.

These extraordinary circumstances had a significant impact

on V/Line, with short-distance trips to Geelong, Ballarat,

Bendigo, Seymour and Traralgon averaging 81.6 per cent

on time in January, and 83.1 per cent on time February.

Long-distance trips to Warrnambool, Ararat, Swan Hill and

scheduled services over these two months, 515 were

technically ‘cancelled’ although all but 41 were replaced

by road coaches (and 20 of those couldn’t be replaced as

roads were cut off by bushfires). This is an excellent outcome

despite the extreme conditions, and the result of significant

planning by our operations department.

SIMULATING I OPERATIONAL O A CHALLENGES

L E The year also saw the start of work on a new Rail Operations

Management System (ROMS) – a major project that is

expected to reap significant rewards for V/Line’s operations

systems. Through ROMS, we will have the ability to

undertake simulations of a number of scenarios across our

network, including the loss of individual carriages and lines,

staff changes and network failures. The system will then

help to set in place, to a greater extent than ever before, the

processes needed to manage these individual scenarios.

The new system will deliver significant benefits to V/Line

in the areas of fleet management, timetabling and staff

management, and implementation will begin in late 2009.

KEEPING E NORTH-EAST T VICTORIA I MOVING

November 2008 saw a major change to V/Line’s operations

in north-east Victoria, with the shut-down of train services

between Seymour and Albury. The shut-down was a key

part of the joint federal and Victorian government’s

$501 million project to upgrade Victoria’s freight corridor

between Melbourne and Albury-Wodonga. As part of

the upgrade, 300 kilometres of track between Seymour

operation of this stretch of line. V/Line will continue to

operate services on the line when work is complete.

The works also presented V/Line with a significant

operational challenge to ensure customers could still travel

between Seymour and Albury. A temporary timetable was

introduced in November, which has involved the operation

of road coaches between Albury-Wodonga and Seymour,

with trains connecting with coach timetables to allow

passengers to get between Seymour and Melbourne without

major disruption.

DELIVERING E I PASSENGERS S E S TO MAJOR EVENTS

E Victoria is a state renowned for its major events – and getting

Victorians to these events is a key part of V/Line’s operation.

For a short period every two years, V/Line’s team shift the

focus of their passions from trains to aircraft, as part of the

Avalon International Airshow. This six-day event attracting

thousands of visitors from the Asia-Pacific, and V/Line’s role

is critical to its success. In March 2009, we operated 59

additional train services for the airshow, with over 18,000

people travelling with V/Line to and from the event. Other

key regional events also saw V/Line adding additional

services to its schedule, including the Hanging Rock and

Warrnambool race events, and the Castlemaine State Festival.

When it comes to the AFL, a very simple rule applies: when

the Geelong Football Club is playing well – V/Line is busy

on winter weekends. With Geelong following its 2007 AFL

big games more than ever before. During the 2008 season,

254,224 passenger trips were made on trains to and from

AFL games in Melbourne and Geelong (including finals),

and almost 80,000 passenger trips were made in the first

10 rounds of the 2009 season alone.

Extra V/Line services were also put in place for major

Melbourne-based events this year including Melbourne

Victory and Melbourne Storm matches, the World Cup

Soccer qualifier, the AFL’s 2008 Final Series, 2009 NAB Cup

competition, cricket matches including the Boxing Day Test,

tri-nations one-day series and 20-20 cricket competitions,

International Rules Football series, Sound Relief, as well

as the Andrew Rieu and Victorian bushfire ‘Sound Relief’

concerts and World Youth Day celebrations.

WENDOUREE E E WELCOMED

E On Sunday 14 June 2009 we opened our 83rd station –

with the commencement of services to Wendouree, in

Ballarat’s west. The station is now served by 63 services

every week and was opened to alleviate pressure on Ballarat

Station and give residents in a growing residential area of

Ballarat an alternative transport option.

Work on the station was undertaken by the Department

of Transport from mid-2008 – and it now features a

completely new station building, a 200-space car park,

bike racks, lockers – and local bus timetables were

rescheduled to deliver a smooth transition for passengers.

longer opening hours at some existing stations. North

Geelong, Marshall and Lara stations were, until recently,

open only on weekdays, however with additional staff, are

now also open on weekends.

MARYBOROUGH R O PASSENGER S E TRAINS TO RETURN

R Planning started for the return of passenger trains to

Maryborough Station, which was announced in December

2008 as part of the government’s Victorian Transport

Plan. The government has committed $50 million for

the project, including signalling, station upgrades and

bus improvements to enable the return of services to

Maryborough, with a daily return VLocity train via Ballarat.

When these services commence, they will be the first

passenger services to the area since 1993.

The track between Melbourne and Maryborough is currently

being upgraded as part of the overall upgrade of freightfocussed

rail services to Mildura, and a $1.8 million heritage

upgrade completed by VicTrack at Maryborough Station in

mid-2008.

V/Line CEO Rob Barnett presents Services Officer

Kelly Westlake with a traditional station clock at the

opening of the new Wendouree Station.

v

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 first order for new VLocity trains – capable of running at up to 160 kilometres per hour –

dates back to 2001, with the first 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 financial year’s end, Bombardier had rolled out 14 of up to 74 more carriages –

adding more than 1000 extra seats to the fleet. The government also announced in its Victorian Transport Plan

in December that a further 20 V/Line carriages will be added to the regional fleet, 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 fleet of VLocity trains, achieving one of the best reliability rates

in the industry, with vehicles travelling over 83,000 kilometres between faults.

Partnering r n with leading manufacturers a u r to create

e

local l jobs and more trains for our customers

s

Fleet

e 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 I 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

trains to regional Victoria.

However the benefit to passengers is a few times greater,

with each extra carriage running on four to six services

per day.

Prior to 2005, there were 11,062 physical seats available

on locomotive-hauled and Sprinter carriages. Now, 17,886

seats are available – 1064 of which were added during

2008–09 alone as a result of 14 new VLocity carriages

rolling out.

This ongoing expansion of the fleet has allowed for

sustainable patronage growth and means V/Line is

now Australia’s largest regional train operator.

During the year, V/Line gained the flexibility to run our

very popular VLocity trains in the original two-carriage

configuration, or as a three-carriage vehicle when a new

middle carriage had been added. This means we can now

more precisely match train capacity to the passenger

volumes recorded by our conductors.

By adding an additional VLocity car to a two-car train, an

additional 76 seats are added to each service, along with

room for an additional two wheelchair passengers (total of

six) and an additional luggage and bicycle storage area. As

part of the expansion, carriages were also fitted (following

passenger feedback) with 32 seats in each new carriage now

including seat trays, along with a number of adjustments to

seat-back angles throughout the new carriages.

The ability to run VLocities as a combination of two or threecarriage

sets saw V/Line start operating the largest regular

running on four peak Geelong services each weekday from

November 2008.

As the fleet grows, our stabling and maintenance facilities

across the state also expanded. Platforms were also

lengthened at Marshall, South Geelong, Geelong and

North Melbourne stations to allow the semi-express

seven-carriage trains to run safely on the Geelong line.

In 2009–10, platforms will also be extended at some

Bendigo and Ballarat line stations where five to six

carriage trains will operate.

TRAIN REFURBISHMENTS

R E S

While new VLocity trains set new comfort standards, our

older trains are also being progressively refurbished.

In addition to our standard maintenance program,

a $13 million state government program of improvements

continued during the year. In addition to new interior

seating covers, carpeting and curtains, the vehicles

benefitted from new interior and exterior paint colour

schemes. Key among the exterior changes were

improvements to the visibility of locomotives, Sprinters

and VLocities with yellow and white fronts as part of the

refurbishment or major maintenance cycle.

As of March 2009, every door on every carriage across the

entire V/Line fleet is now automatic. This positive milestone

is the result of an upgrade to our N-set fleet undertaken

over a number of years. It is now impossible for a door on

an N-set to be opened without the complete consent of

the train’s crew, a critical safety feature for all passengers

travelling with V/Line.

A DEDICATED D E D STANDARD-GAUGE A D A G FLEET

E The joint Victorian and federal government-funded

Dynon, in Melbourne’s inner west, started to allow for the

long-term upkeep of these three dedicated vehicles.

IMPROVING I RELIABILITY

I L I Ensuring V/Line’s entire fleet is on the tracks to meet

continued strong passenger growth is a complex task.

Maintenance processes must be strict and rigorous – with

absolutely no compromises on safety – while ensuring the

most efficient use of every carriage across Victoria.

Since their introduction in late 2005, the performance of

V/Line’s VLocity fleet has been excellent. The kilometres

travelled between faults improved markedly during 2008–09

to 83,570 kilometres (up from 75,692 kilometres last year).

This is an outstanding result in comparison to other rail

providers who operate similar types of vehicles. Availability

of these trains, however, dropped slightly from 91.1 per cent

last year to 88.2 per cent this year, as a result of the need to

Our train refurbishment program at Newport.

v

$501.3 million North-East Rail Revitalisation Project,

temporarily remove a train from service to allow a new third

2008

2009

2007

2008

VLOCITIES

Rolling stock availability

(% fleet avail)

> VLocities 88.2% 91.1%

Rolling stock reliability

(3-month mean km

between faults)

> VLocities 83,570 75,692

2008

2009

2007

2008

SPRINTERS

Rolling stock availability

(% fleet avail)

> Sprinters 88.1% 88.6%

Rolling stock reliability

(3-month mean km

between faults)

> Sprinters 19,884 22.992

2008

2009

2007

2008

LOCOMOTIVES

Rolling stock availability

(% fleet avail)

> Locomotives 82.0% 81.7%

Rolling stock reliability

(3-month mean km

between faults)

> Locomotives 23,506 21,866

2008

2009

2007

2008

LOCO-HAULED CARRIAGES

Rolling stock availability

(% fleet avail)

> Loco-hauled carriages 88.1% 88.6%

Rolling stock reliability

(3-month mean km

between faults)

> Loco-hauled carriages 93,052 128,359

which involves the conversion of track to a standard-gauge

width, will be a major benefit in enabling a better flow of

passenger and freight rail traffic between Victoria, New

South Wales and Queensland.

However, this track conversion requires modification of the

broad-gauge wheel sets used on trains throughout most of

Victoria to the standard-gauge model used in NSW on three

of our N-Set trains. As part of the conversion, 15 carriages,

carriage to be inserted into the configuration.

Our older fleet of Sprinters and locomotive-hauled trains still

provide capacity to our customers, but require more regular

maintenance due to their age. Sprinters travelled an average

19,884 kilometres between faults (down from 22,992

kilometres last year). Locomotive-hauled carriages travelled

93,052 kilometres between faults – down considerably from

the 128,359 kilometres per fault in 2007–08, mainly due to

three locomotives and three power vans will make up

issues with the modified power doors on N-Set carriages to

VLOCITIES

I SPRINTERS

R S

LOCOMOTIVES

O O LOCO-HAULED O L CARRIAGES

R A the three special N-Set vehicles. In addition to the undercarriage

work, an interior and exterior refurbishment will

improve passenger safety. However, locomotive reliability

improved for the second consecutive year to 23,506

also improve customer comfort. This fleet will be dedicated

kilometres between faults (21,866 kilometres last year).

purely to V/Line’s Melbourne–Albury services, with services

expected to return to Albury on completion of track and

signalling upgrades in 2010.

Maintenance programs will expand throughout 2009 to meet

the challenges of a growing fleet that continues to travel

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 r n with industry to

upgrade and maintain a i n our tracks

Infrastructure

r t u r 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 manufacturing plant in Lara.

V/LINE ANNUAL REPORT 2008-2009

54/55

5 5


Safe, effective and efficient 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 G OUR STATIONS

T S

INNOVATIONS N I O N IN EXTREME E E CONDITIONS

I O N A strong example of this approach has been in the

of our rail operations. Beyond our statutory and regulatory

obligations, V/Line has an outstanding culture focussed on

achieving best-practice standards and innovations that are

designed to improve operational efficiencies and the overall

customer experience.

LAYING THE FOUNDATIONS

O N A targeted, customer-oriented approach to maintenance of

our track, signalling and other infrastructure is the key to our

trains becoming more punctual and reliable on the regional

network under our control since 2007.

Excluding major projects, 2008–09 saw a record sleeper

maintenance program across regional Victoria. More than

173,000 sleepers were laid throughout the state during the

year – an investment in Victoria’s core rail infrastructure of

over $32 million, with projects taking place in every part of

the state.

the upgrade of track between Sunshine, in Melbourne’s

western suburbs, and Ballarat. This major works program

saw V/Line’s team replace more than 50,000 older timber

sleepers with concrete sleepers. This entire section is now

concrete, ensuring maintenance will be required less, and

customers will notice an ongoing improvement in reliability

along this line. Similar works were undertaken along the

freight-only line between Murtoa to Hopetoun in the state’s

west. More than 40,000 timber sleepers were replaced in

this area where the rail line plays a critical importance in the

movement of grain and other crops.

Important stretches between Kerang and Swan Hill, and

Strathallan and Echuca saw works undertaken to weld

joins in the track, in addition to the replacement of over

20,000 sleepers. Works to both of these sections of line

will see a notable difference to passenger comfort in this

region – reducing bumps as the train moves along the line.

maintenance to renew the track and road surfaces.

Crossing loops were also upgraded across the state.

Sites in Barwon, Boxbank, Melton and Rockbank were all

converted from timber sleepers to concrete during 2008–09.

Additionally, station pits at Ardeer, Deer Park, Melton

and Rockbank were re-formed with concrete sleepers.

Nine key bridges throughout Victoria were also strengthened

– and Bendigo station’s stabling yard was given a

$300,000 upgrade.

Additionally, during 2008–09, Department of Transportappointed

contractor John Holland started work on a

$60 million upgrade of stretches of freight line between

Ballarat and Mildura on the V/Line network. This upgrade

involves replacing sleepers, welding of rail joints and a

range of other works along this stretch of rail that is vital

to Victoria’s agricultural industry.

V/Line also embarked on a significant program of station

improvements during 2008–09. Station redevelopments

were undertaken at Lara and Echuca stations, with Lara

Station seeing a complete rebuild of the station building,

platform resurfacing and an upgrade of lighting. Works at

Echuca, in the state’s north, involved a major refurbishment

of the internal waiting and staffing areas. New larger shelters

were also installed during the year at Bunyip Station.

With V/Line’s fleet expanding in length – including regular

VLocity services with seven-carriages along the Geelong line,

work has occurred at a number of stations to accommodate

these extra long trains. Platform extensions were undertaken

during the year at North Melbourne, Geelong, South Geelong

and Marshall stations – ensuring as our trains grow in

length, so does the infrastructure to accommodate them.

During 2008–09, a major program to install more

de-watering points at a number of stations throughout the

V/Line network began. De-watering points allow the removal

of waste from trains – and until recently, this work was

only able to be carried out at Melbourne’s Southern Cross

Station. New points were installed at Ballarat, Bendigo,

Echuca, Shepparton, Swan Hill and Warrnambool stations,

with installations soon to be completed at

Kyneton and Albury.

2008–09 saw parts of V/Line’s passenger network placed

under heat speed restrictions for 49 days. This safety policy

sees trains operated at slower speeds when the forecast for

the day is forecast to reach 36 degrees or more between

Melbourne and Bendigo, Ararat, Warrnambool, Bairnsdale,

Seymour and Shepparton, or 33 degrees or more at Swan

Hill and Echuca. The policy is implemented in response to

the potential for steel railway track to bend and buckle in

extreme heat.

With planning undertaken in 2007–08, this year saw the

commencement of a pilot project to potentially reduce the

need for these restrictions. This involved measuring the

temperature – and the direct stress it puts on our railway

lines – at 22 individual sites along the Geelong, Ballarat,

Bendigo, Swan Hill and Echuca lines. Data from this study

will be analysed to determine the potential for a shift in heat

speed restriction policy in the future.

IMPROVING I THE WAY WE BUILD

A more streamlined approach to maintenance work since

V/Line took control of the regional network two years ago has

created cost savings in the purchase of materials that have

allowed us to undertake more work with the same budget.

This better coordinated approach has also resulted in more

materials V/Line is now using for infrastructure building

and maintenance. While timber still remains the most

predominant material used as railway sleepers, V/Line

has confirmed its push towards the use of concrete for this

purpose, with almost 30 per cent of all 173,000 sleepers

laid during 2008–09 being made from concrete. While more

expensive, concrete sleepers have a notably longer lifespan

and require less maintenance. A similar shift has been also

undertaken for the maintenance of bridges across the state,

with timber being replaced by steel.

A notably streamlined approach is also taking place with

V/Line’s innovative approach to its maintenance equipment.

A number of key pieces of on-track machinery – including

rail lifters, scarifiers, cranes and loaders – have undergone

V/Line-designed modifications to suit operation-specific

needs. Among many modifications; cranes have been

mounted onto excavators, loaders have been fitted with

railway fittings – with each modification allowing V/Line to

work on-track, and then take this machinery off-track within

30 seconds to allow a train to pass along the railway line.

This approach provides significant increases in work speeds

and efficiencies, ensuring new records are being set in

V/Line’s worksite productivity.

consistent, safer work practices for our team in the field.

Thermal welding as part of line restoration works at Wandong

following the February 2009 bushfires. >

V/LINE ANNUAL REPORT 2008-2009

INFRASTRUCTURE 56/57


Yelta

Victorian rail network map

Mildura

Red Cliffs

Robinvale

Hattah

The opposite approach is also assisting in enhancing

V/Line’s worksite efficiency. Machinery that is traditionally

rail-bound has been replaced with machinery that can also

serve other purposes off the rails, such as drainage and

rail bank maintenance. This approach has ensured that

when the laying of sleepers cannot be undertaken due to

train operations, for example, the V/Line team can still

work on-site.

TECHNOLOGICAL O C L INNOVATION

N I O N

Key planning was undertaken in 2008–09 for the

introduction of several technological innovations

that are expected to make strong improvements to

V/Line’s operations.

Laser-based surveying systems will soon be used as part of

V/Line’s track inspection program – with the planned focus

on identifying bumps and measuring directional changes in

portions of V/Line’s track. This work, the planning for which

has been undertaken throughout 2008–09, will then help to

form the basis of V/Line’s maintenance program, enabling a

smoother journey for thousands of passengers each year.

Planning was also undertaken during the year for the

introduction of a new hand-held maintenance system

across V/Line’s maintenance team. Handheld devices will

be used to enable V/Line’s team to enter upgrade/change

information as they do this work – making a significant

reduction to paperwork. This will ensure our team can

spend more time out in the field undertaking the core

of their responsibilities, and less time with paperwork

and administration.

During the year, V/Line introduced a new Maximo database

system for managing the maintenance and upgrade of

assets across Victoria. This new system is central to the

management of our extensive works schedule by allowing

better organisation of equipment and materials, allowing the

better transfer of surplus goods from one part of the state to

another to reduce project costs.

The new system is also central to V/Line’s safety

management system, as it provides an automated process

for issuing of works orders. For example, if one of the

hundreds of V/Line-maintained bridges across Victoria

is soon requiring an inspection, V/Line’s new Maximo

database system automatically issues works orders to

ensure this happens.

Platform extension works at Geelong Station

to cater for longer trains.

v

Adelaide

Panitya

Serviceton

Diapur

Linga

Heywood

Portland

Yaapeet

Jeparit

Dimboola

Branxholme

Ouyen

Mittyack

Hopetoun

Horsham

Woomelang

Warracknabeal

Murtoa

Glenthompson

Hamilton

Dennington

Manangatang

Sea Lake

Glenorchy

Stawell

Ararat

Maroona Yard

Warrnambool

Nyah West

Birchip

St Arnaud

Tatyoon

Westmere

Terang

Piangil

Ultima

Wycheproof

Korong Vale

Swan Hill

Maryborough

Beaufort

Berrybank

Camperdown

South Kerang

Ballarat

Colac

Moulamein

Kerang

Inglewood

Dunolly

Moolort

Clunes

Inverleigh

Marong

Gheringhap

Pyramid

Eaglehawk

Ballan

Dingee

Wakool

Bendigo

Castlemaine

Echuca

Malmsbury

Kyneton

Woodend

Sunbury

Diggers Rest

Bacchus Marsh Melton

Werribee

Little River

North

Geelong

Winchelsea

Huntly

Lara

Geelong

Rochester

Murchison East

Nagambie

Seymour

Deniliquin

Strathmerton

Kyabram

Tallarook

Broadford

Wallan

Craigeburn

Somerton

Toolamba

Mangalore

Tocumwal Yard

Dookie

Shepparton

Euroa

Benalla

Oaklands

Wangaratta

Glenrowan

Wodonga

Springhurst Bandiana

Nar Nar Goon

Longwarry

Pakenham Warragul Moe Traralgon

Drouin

Rosedale

Trafalgar Morwell

Albury

Sale

Bairnsdale

Ballarat

Geelong

Bendigo

Sydenham

St Albans

Albion

Broadmeadows

Tottenham

Yard Flemington

Racecourse

Deer Park

Ardeer

Sunshine

Newmarket

Brooklyn

Spotswood

Newport

Seaholme

MELBOURNE METRO AREA

Craigieburn

Oak Park

Strathmore

Port

Melbourne

Jacana

Glenroy

North Dynon

South Dynon

Jewell

Southern Cross

Upfield

Flinders Street

Williamstown Pier

LEGEND

Fawkner

Merri

North

Melbourne

Elsternwick

Brighton Beach

Sandringham

Clifton Hill

Victoria Park

Richmond

S. Yarra

Caulfield

Epping

Reservoir

Glenferrie

Kooyong

Darling

Bentleigh

Rosanna

Camberwell

Alamein

Cheltenham

Mount Waverley

Huntingdale

Mordiallic

Hurstbridge

Blackburn

Glen Waverley

Westall Yard

Stony Point

Ringwood

Dandenong

Bayswater

Lyndhurst

Boronia

Cranbourne

Lilydale

Belgrave

Traralgon

Passenger and freight services (V/Line broad gauge)

Passenger and freight services (ARTC standard gauge)

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)

Note: Map reflects the rail environment at 30 June 2009.

Victorian Rail Track Corporation (VicTack)

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 bushfires.

V/Line has a pool of around 30 coach companies across Victoria at our disposal in the event of disruptions,

and Dysons 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 fleet 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 m partnerships r p s with

other transport r t providers

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

V/LINE ANNUAL REPORT 2008-2009

section

60/61

6


2007

2008

2008

2009

FINANCIAL SUMMARY: $M $M

Revenue

Operational 381.2 328.3

Non-operational 84.0 83.6

Expenditure 471.6 420.9

Loss before income

tax expenses 6.4 9.0

Net cash inflow from

operating activities 21.0 20.9

Total assets 169.7 173.0

Total liabilities 108.4 105.3

Net assets 61.3 67.7

>

>

Record patronage saw our farebox revenue increase

15 per cent to $68.6 million. This is the second year of

strong farebox growth, and represents a 39 per cent

increase on the $49.3 million collected in ticket sales

back in 2005–06.

Total income for the V/Line business was up 13 per cent to

$465.2 million ($411.9 million last year). This included a

$28.9 million increase in government subsidies to

$255.6 million (a 12.7 per cent increase from last year’s

$226.7 million).

Importantly, the subsidy per passenger trip continued to

decrease this year to $19.42 as more people travel with

V/Line. This key efficiency measure has seen the rate drop

from $19.88 last year and $22.74 in 2006–07.

Revenue from access charges to other operators remains

flat – up just $188,000 on last year to $2.7 million.

The impact of the drought on harvest outcomes means this

is still down almost $2 million on access fees in 2006–07

and does not reflect the considerable costs of maintaining

the freight rail infrastructure.

However, total expenses also increased with the growing

business – up 12 per cent to $471.6 million ($420.9 million

in 2007–08). Major expenses included $58.9 million in

fleet maintenance ($47.8 million in 2007–08) as our trains

continue to travel further. With the demands of extreme

weather, particularly over summer, road coach costs also

increased to $6.8 million ($4.5 million last year). There was

only a modest increase in staff: labour costs increased to

$121.3 million ($107.2 million in 2007–08).

While fuel remains a major cost to our business

($24.4 million this year), efficiencies were realised as part

new commercial arrangements with our supplier which saw

savings of $626,000 in the first year of the new deal.

The business reported a consolidated loss before tax for

the year of $6.4 million. While this is an improvement on the

$9 million loss (before income tax expense) reported last

year and $23.4 million loss in 2006–07, it is important to

note that this is not a cash loss.

As a not-for-profit entity whose primary obligation is the

delivery of subsidised passenger transport services to

regional Victoria, neither V/Line’s Franchise Agreement

with the Director of Public Transport nor V/Line’s Corporate

Business Plan is based on the corporation making a profit.

GREENHOUSE E E CHALLENGE L E PLUS

Greenhouse Challenge Plus began as a voluntary program

for companies wanting to boost their green credentials.

To strengthen the program, the Commonwealth introduced

a mandatory category of membership for those companies

claiming more than $3 million in fuel tax credits per annum.

With a fuel usage of 26.5 million litres and a rebate of

$0.38143 per litre, membership of the program was worth

about $7 million per annum for V/Line.

Following new legislation recently passed by the

Commonwealth, the Greenhouse Challenge Plus

program ceased on 30 June 2009 and has not been

replaced by an alternative scheme.

ENGAGEMENT G E E N OF CONSULTANTS N T S PAID OVER $100,000

0 0 0 0

SUPPLIER/VENDOR DESCRIPTION $'000

Alphawest Information technology services 2,224

McCann Erickson Melbourne Marketing advertising services, including outbound growth campaign 1,830

Worley Parsons Engineering services 955

Corrs Chambers Westgarth Legal advice 899

Fujitsu Australia BMS implementation 358

Oakton Services Information technology services, including BMS implementation 314

Dimension Data Australia Information technology services 302

Barrington Centre Critical incident management and employee assistance program 215

Willis Australia Workcover administration, case management and insurance brokerage 199

Ernst & Young Taxation and internal audit services 173

Initiate Action Materials management improvements 155

Critical Risk Pty Ltd Risk management / security 128

Battiston Consulting Business management system consulting 92

Under $100,000 16 consultancies 605

V/LINE ANNUAL REPORT 2008-2009 FINANCE 62/63


Corporate o r governance

n e

BOARD COMPOSITION

Ms Catherine Scott

(October 2003 to 30 June 2009)

Ms Scott is an experienced board

member and has held senior executive

positions in the investment banking

and airline industries. In addition to

finance expertise she brought to

V/Line a thorough understanding of

infrastructure projects and regional

development. Ms Scott is the deputy

chairperson of Goulburn Valley Water

and also serves on the board of

Goulburn Murray Water.

Ms Scott was the deputy chair of V/Line

and did not seek reappointment to VLPC

when her term expired on 30 June 2009

and resigned effective 1 July 2009.

Mr David Worth

(since December 2008)

Mr Worth is a chartered accountant and

an experienced director and adviser

in the transport and logistics industry

and the property industry. He has had

senior executive experience in corporate

finance, supply chain management,

property development, corporate

strategy and IT. He is a director of two

property investment funds associated

with Marks Henderson Funds

Management, several development

trusts established by Dacland

Management for Sophisticated

Investors and Lowell Capital Limited,

a small resources fund manager.

Mr Frank Tait

(since October 2003)

Mr Tait is the chair of the boards of

VLPC and V/Line. His career spans

government as well as the rail transport

and defence industries. Along with

his role on the V/Line boards,

Mr Tait is executive director of the

Infrastructure Projects Division within

the Department of Transport. He also

has a consulting business, advising

boards, executive management and

entrepreneurs on business strategy,

organisational development and

recruitment strategies.

Ms Fiona Bennett

(since December 2008)

Ms Bennett has held senior executive

positions in leading listed companies

and has experience in commercial and

financial management, governance, risk

management and audit across a range

of industries, including retail, resources,

manufacturing and health. She has held

a number of government, public and

not-for profit board positions and is

currently a director of Alfred Health,

the Institute of Chartered Accountants

in Australia, Legal Services Board,

WPC Group Limited and Heide Museum

of Modern Art.

Mr Michael Tilley

(since July 2006)

Mr Tilley is the chairman of Terrain

Capital. He has worked in the accounting

and finance industries for more than

25 years and has broad senior advisory

and project management experience in

all facets of corporate finance. Mr Tilley

is also chairman of Lower Murray Water

Authority and Free Eyre Limited and

a director of Vision Super Pty Ltd and

North Queensland Metals Limited.

V/LINE PASSENGER S E CORPORATION

O R O AND V/LINE PASSENGER S E PTY LTD

V/Line Passenger Corporation (VLPC) was established

on 15 July 2003 as a statutory rail corporation under the

Rail Corporations Act 1996. On 14 October 2008 VLPC

was also declared a state business corporation pursuant

to the State Owned Enterprises Act 1992. VLPC is the sole

shareholder of the main operating entity, V/Line Passenger

Pty Limited (V/Line).

In 2003 V/Line entered into a franchise agreement with

the Director of Public Transport (Director), representing

the State Government of Victoria, to operate regional rail

throughout Victoria. The current franchise agreement will

expire on 31 December 2009.

In July 2004, the Director directed V/Line to facilitate the

operation of heritage rail (i.e. steam) services on behalf

of identified rail heritage groups.

In April 2007, the Director directed V/Line to execute

documents and operate the regional below-rail business,

following the state’s buy-back of the infrastructure from

Pacific National, to facilitate track access for the operation of

both passenger and freight rail services from 7 May 2007.

Effective from March 2009, V/Line is no longer subject to the

Deed of Company Arrangement that had been entered into

by V/Line and its creditors in 2003 following the insolvency

of the National Express Group of companies.

BOARD OF DIRECTORS

R As at 30 June 2009, the boards of VLPC and V/Line consisted

of the same five non-executive directors, with the board of

the parent entity, VLPC, reporting to the Minister for Public

Transport and to the Treasurer.

Each board has established protocols and procedures to

ensure that corporate governance is maintained at the

highest levels and that the strategic direction and overall

performance of the respective business entities can be

developed and monitored diligently. The board of V/Line

has also delegated certain functions to board committees

which focus on relevant important areas of operations.

Further details regarding these board committees are

set out later in this section.

BOARD MEETINGS E ATTENDANCE

T A N E

The boards of VLPC and V/Line generally hold bi-monthly

meetings and additional meetings as required.

V/Line Passenger Corporation

Director No. eligible to attend No. attended

Mr Frank Tait (Chair) 6 6

Ms Catherine Scott 6 6

Mr Michael Tilley 6 5

Ms Fiona Bennett 4 4

Mr David Worth 4 4

V/Line Passenger Pty Ltd

Director No. eligible to attend No. attended

Mr Frank Tait (Chair) 6 6

Ms Catherine Scott 6 6

Mr Michael Tilley 6 5

Ms Fiona Bennett 4 4

Mr David Worth 4 4

ACCESS C S TO INFORMATION

I O N

Directors of VLPC and V/Line are allowed full access

to information required in order to discharge their

responsibilities. Directors of both entities may obtain

independent professional advice on matters arising in the

course of board duties. The board of VLPC receives written

reports from the CEO of VLPC at each board meeting on

compliance by V/Line of its ongoing obligations under

Ministerial directions. Directors also have access to senior

managers and/or officers of the entity on whose board they

serve and, on request, to documents held by the entity.

INDEMNIFICATION N I I I N OF OFFICERS

F VLPC and V/Line have entered separately into deeds of

indemnity and access with each current and former

director and the corporation/company secretary.

Prior to its deregistration on 4 February 2008,

Victorian Rail Heritage Operations Pty Limited (VRHO)

entered into a deed of indemnity and access with its sole

director, Mr Rob Barnett. These deeds of VLPC, V/Line

and VRHO provide for indemnification against liabilities

V/LINE ANNUAL REPORT 2008-2009

CORPORATE GOVERNANCE 64/65


arising from the conduct of the business or from the

discharge of directors’ and officers’ duties (other than any

liability relating to a wilful breach of duty or trust) and the

maintenance of directors’ and officers’ insurance. These

deeds remain operational in respect of the current directors

and secretary of VLPC and V/Line, and also the following

former directors of VLPC and V/Line: Ms Catherine Scott;

Ms Alice Williams; Ms Meredith Doig; Mr Andrew Neal and

Mr Colin Nicol, former director of VRHO: Mr Rob Barnett and

former corporation/company secretaries: Mr Anthony Day

and Mr David Chapman-Kelly.

During the financial year, V/Line insured all directors

and officers of VLPC and V/Line against certain liabilities

incurred by them in that capacity. In accordance with normal

commercial practices, the terms of the insurance contract

prohibit disclosure of details of the nature of the liabilities

covered by the insurance contract and the amount of the

premium paid under the contract.

BOARD COMMITTEES

M T E The board of V/Line has established three board committees

– the remuneration; finance, audit and risk; and safety,

security and environment committees.

The Remuneration Committee:

• The function of the committee includes assisting the

board in the appointment, review and succession of

the chief executive officer and reviewing remuneration

policy of staff.

• Members as at 30 June 2009: Catherine Scott (Chair)

and Frank Tait.

• Number of meetings held during the year: two.

The Finance, Audit and Risk Committee:

• The function of the committee is to assist the board to

oversee the financial and commercial risk management

framework, including to review and monitor accounting

policies and practices, and to evaluate and develop

financial and commercial risk management systems.

• Members as at 30 June 2009: Michael Tilley (Chair),

Catherine Scott and Fiona Bennett.

• Nunmber of meetings held during the year: four.

The Safety, Security and Environment Committee:

• The function of the committee is to assist the board in

discharging its obligations in relation to V/Line’s health,

safety, security and environment practices, and providing

an overview mechanism for examining the management

of operational risk management in V/Line.

• Members as at 30 June 2009: David Worth (Chair),

Fiona Bennett and Frank Tait

• Number of meetings held during the year: four.

CORPORATE O R PLAN

In accordance with the Rail Corporations Act, VLPC prepared

its corporate plan, including its statement of corporate

intent. The corporate plan is prepared annually and covers a

three-year period starting from the current financial year.

MINISTERIAL I I DIRECTIONS

I VLPC received no ministerial directions for the period

ending 30 June 2009.

FREEDOM E OF INFORMATION

I O N

VLPC is subject to the provisions of the Freedom of

Information Act 1982. For the year ended 30 June 2009,

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.

BUILDING I ACT 1993

9 It is V/Line’s policy to ensure that new buildings and works

to existing buildings carried out for and on its behalf comply

with the Building Act 1993.

NATIONAL N A COMPETITION T I O POLICY

VLPC continues to comply with the requirements of the

National Competition Policy, including compliance with the

requirements of the Victoran Competitive Neutrality Policy,

as applicable.

WHISTLEBLOWERS L W E S PROTECTION T O ACT

VLPC and V/Line are subject to the provisions of the

Whistleblowers Protection Act 2001. In the past year, one

disclosure has been received and referred to the Victorian

Ombudsman. It is currently undergoing investigation.

IMPLEMENTATION M E T I N OF THE VICTORIAN I INDUSTRY

PARTICIPATION I P A T I POLICY (VIPP)

P VLPC and V/Line have not entered into any contracts for the

year ended 30 June 2009 to which VIPP thresholds applied.

VLPC’s and V/Line’s standard tendering procedures include

compliance with VIPP as and when required.

RISK MANAGEMENT

A M E N A process is in place for V/Line and VLPC to meet their

obligations under the Victorian Managed Insurance Authority

Act 1996. The risk management processes in place are

consistent with the AS/NZS 4360 standard. The board of

V/Line, as the significant operating entity, considers risk

management issues regularly as part of its bi-monthly

board meetings, through the activities of both the Safety,

Security and Environment Committee and the Finance, Audit

and Risk Committee, as well as through a robust process

known as the Enterprise Wide Risk Management System.

V/Line also has in place other policies and management

systems to ensure that operational and compliance

matters are efficiently and effectively addressed. V/Line

has a Management System Manual which provides a

comprehensive overview of these policies and management

systems, including the Enterprise Wide Risk Management

System, legislative compliance policies, an environment

management system, and an audit framework for safety,

security and environmental matters.

VICTORIAN I GOVERNMENT E N RISK MANAGEMENT

A M E N FRAMEWORK R ATTESTATION

T T A T I, Frank Tait certify that V/Line Passenger Corporation

through its wholly owned subsidiary and operating

company, V/Line Passenger Pty Ltd, has risk management

processes in place consistent with the Australian / New

Zealand Risk Management Standard AS/NZS 4360 and

an internal control system is in place that enables the

executive to understand, manage and satisfactorily control

risk exposures. The board verifies that this assurance and

the risk profiles of V/Line Passenger Corporation and

V/Line Passenger Pty Ltd have been critically reviewed

within the last 12 months.

Frank Tait

Chairman

26 August 2009

V/LINE ANNUAL REPORT 2008-2009

CORPORATE GOVERNANCE 66/67


1 2 3 4 5 6 7 8 9 10

Left to right:

1. Geoff Arthur

General Manager, Operations

Delivery, planning and

development of our train and

coach services.

2. Wayne Walsh

General Manager,

Network Services

Provision of access for projects

and works for freight and

passenger train operators.

3. Laurie Foley

General Manager, Safety,

Security & Environment

Incident management and

safe-working, security, risk and

safety improvement programs,

OH&S, DDA and environment.

4. Rebecca Northeast

Company (Corporation)

Secretary

Legal services, company /

corporation administration.

5. Ursula McGinnes

General Manager,

Stakeholder Relations

Customer relations, marketing

and business development,

communications and media,

and community relations.

6. Rob Barnett

Chief Executive Officer

Executive team leader,

management representative on

the V/Line Board, and member

of the government’s Victorian

Railway Steering Committee on

Level Crossings.

7. Jenny Kelman

General Manager,

Human Resources

Recruitment, training and HR

services. Industrial relations and

organisational development.

8. Ross Pedley

General Manager,

Corporate and Finance

Corporate and financial

management services, including

IT, contracts and procurement.

9. Graham Perry

General Manager, Engineering

Rolling stock engineering

services, including maintenance

of the current fleet and

development of new trains.

10. Mike Sutcliffe

General Manager,

Infrastructure

Maintenance and upgrade

of rail, signalling and other

infrastructure.

Statutory statement 70

Operating statement 70

Balance sheet 71

Statement of changes

in equity 72

Cash flow statement 72

Notes to the

Financial Statements 73

Audit report 92

Disclosure index 97

V/LINE ANNUAL N A REPORT R 2008-2009

0 2 0 0 68/69


Statutory Statement

We certify that the attached financial statements for V/Line Passenger Corporation and

its subsidiary have been prepared in accordance with Standing Direction 4.2 of the

Financial Management Act 1994, applicable financial reporting directions, Australian

Accounting Standards and other mandatory professional reporting requirements.

We further state that, in our opinion, the information set out in the Operating Statement,

Balance Sheet, Statement of Changes in Equity, Cash Flow Statement and Notes to the

Financial Statements presents fairly the financial transactions during the year ended

30 June 2009 and the financial position of the consolidated entity at this date.

We are not aware of any circumstance which would render any particulars included

in the financial statements to be misleading or inaccurate.

The Accountable Officer and the Chief Financial Accounting Officer have, within the

last 12 months, made formal statements to the board that:

• the Corporation’s financial reports present fairly, in all material respects, the

Corporation’s financial condition and operational results in accordance with the

requirements of the Financial Management Act 1994 including the Directions;

• the financial report is founded on a sound system of risk management and internal

compliance and control which implements the policies adopted by the Board;

• the Corporation’s risk management and internal compliance and control system is

operating efficiently and effectively in all material respects.

Frank Tait, Chairman

Michael D Tilley, Director

OPERATING STATEMENT FOR THE YEAR ENDED 30 JUNE 2009

Notes 2009 2008

$’000 $’000

INCOME

Revenue 2(a) 381,289 328,326

Other income 2(b) 83,965 83,573

Total income 465,254 411,899

EXPENSES

Operational expenses 3 (a) 250,069 218,729

Depreciation 3 (b) 18,961 20,391

Administrative expenses 56,673 49,969

Selling expenses 2,188 2,258

Marketing and communication 3,684 3,905

Customer service expenses 3,434 2,652

Project expenses 20,694 15,957

Infrastructure maintenance 82,624 77,818

Trains provided free of charge 1 (f) 33,349 29,225

Total expenses 471,676 420,904

Loss before income tax expense (6,422) (9,005)

Income tax expense 4 – (6,290)

Net loss for the period 13 (6,422) (15,295)

The above Operating Statement should be read in conjunction with the accompanying notes.

BALANCE SHEET AS AT 30 JUNE 2009

Notes 2009 2008

$’000 $’000

ASSETS

Current assets

Cash and cash equivalents 5 2,785 2,664

Receivables 6 24,354 21,378

Inventories 7 4,772 5,296

Other current assets 8 684 330

Total current assets 32,595 29,668

Non-current assets

Investments 1(l), 9 – –

Property, plant and equipment 10 137,073 143,302

Total non-current assets 137,073 143,302

Total assets 169,668 172,970

LIABILITIES

Current liabilities

Payables 1(o),11 55,718 58,544

Provisions 1(x),12 48,933 44,503

Total current liabilities 104,651 103,047

Non-current liabilities

Provisions 1(x),12 3,726 2,210

Total non-current liabilities 3,726 2,210

Total liabilities 108,377 105,257

Net assets 61,291 67,713

Notes 2009 2008

$’000 $’000

EQUITY

Asset revaluation reserve 13 104,913 104,913

Accumulated surplus/(losses) 13 (43,622) (37,200)

Total equity 61,291 67,713

Commitments for expenditure 23 25,879 11,564

Contingent assets and liabilities 22 – –

The above Balance Sheet should be read in conjunction with the accompanying notes.

Rob Barnett, Chief Executive Officer

Melbourne, 12 August 2009

Ross Pedley, General Manager

– Corporate & Finance

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

$’000 $’000

TOTAL EQUITY AT THE BEGINNING OF THE FINANCIAL YEAR 67,713 97,683

Net loss for the period (6,422) (15,295)

Revaluation decrement to rolling stock – (14,675)

Total equity at the end of the financial year 61,291 67,713

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

Notes 2009 2008

$’000 $’000

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from government (GST inclusive) 377,128 340,691

Receipts from other entities (GST inclusive) 101,815 77,313

Payments to suppliers and employees (GST inclusive) (448,823) (389,742)

GST payments to the Australian Taxation Office (9,453) (7,933)

Interest received 307 557

Net cash flows from operating activities 26 20,974 20,886

CASH FLOWS FROM INVESTING ACTIVITIES

Payment for plant and equipment (20,853) (19,081)

Net cash flows used in investing activities (20,853) (19,081)

Net increase/(decrease) in cash and cash equivalents 121 1,805

CASH AND CASH EQUIVALENTS AT THE

BEGINNING OF THE FINANCIAL YEAR 2,664 859

Cash and cash equivalents at the end

of the financial year 5 2,785 2,664

The above Cash Flow Statement should be read in conjunction with the accompanying notes.

Note 1

Note 2

Note 3

Note 4

Note 5

Note 6

Note 7

Note 8

Note 9

Note 10

Note 11

Note 12

Note 13

Note 14

Note 15

Note 16

Note 17

Note 18

Note 19

Note 20

Note 21

Note 22

Note 23

Note 24

Note 25

Note 26

Summary of significant accounting policies

Income

Operational expenses

Income tax expense

Cash and cash equivalents

Receivables

Inventories

Other current assets

Investments

Property, plant and equipment

Payables

Provisions

Equity

Financial instruments

Controlled entities

Ministers and accountable officers

Remuneration of executives

Remuneration of directors and accountable officer

Remuneration of auditors

Directors disclosures

Related party disclosures

Contingent assets and liabilities

Operating leases and expenditure commitments

Employee benefits and superannuation commitments

Subsequent events

Cash flow statement

NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of accounting

This is a general purpose financial report, which has been prepared in accordance with the

requirements of the Financial Management Act 1994 and Accounting Standards, including

Australian accounting interpretations and authoritative pronouncements of the Australian

Accounting Standards Board.

The Corporation is in compliance with the requirements of Australian Accounting Standards

as issued by the AASB and International Financial Reporting Standards as issued by the

IASB. V/Line has applied the AIFRS to all Financial Reports and appropriate notes contained

in these statements.

V/Line Passenger Corporation is a Victorian Statutory Corporation established in Australia

under the Rail Corporations Act 1996.

The financial report has been prepared on an accruals basis and is based on historical cost,

except for the revaluation of certain non-current assets and financial instruments. Cost is

based on the fair values of the consideration given in exchange for assets. Accounting policies

applied are consistent between current and prior year.

The financial statements were authorised for issue by the board on 12 August 2009.

(b) Principles of consolidation of controlled entities

The financial report comprises the consolidated financial statements of V/Line Passenger

Corporation and its subsidiary. The effects of all transactions between entities in the

consolidated entity are eliminated in full.

Where control of an entity is obtained during a financial year, its results are included in the

consolidated operating statement from the date on which control commences. Where control

of an entity ceases during a financial year its results are included for that part of the year during

which control exists.

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:

Investment in subsidiary $1

Contributed equity $1

The corporation has no other assets or liabilities.

Given the immaterial nature of the investment by the parent entity it has not been

reported separately.

The controlled entities consolidated within the V/Line Passenger Corporation group are:

Country of Equity 2009 2008

Name incorporation interest $’000 $’000

V/Line Passenger Pty Ltd Australia 100% – –

On 1 October 2003, the corporation purchased one ordinary share in V/Line Passenger Pty Ltd.

This represents 100% of the company’s issued capital. V/Line Passenger Pty. Ltd. forms part of

the consolidated entity.

(c) Not for profit

The Board is of the view that the consolidated entity qualifies as a not-for-profit entity since

the primary obligation of the corporation is the delivery of subsidised public transportation

services to regional Victoria. The entity has signed a Franchise Agreement with the Director

of Public Transport which determines the services that the corporation provides and the

payments received for those services. As such the entity’s funding is based on achieving a

small loss before interest, depreciation and tax and neither the mission nor corporate strategy

of the corporation reflect achieving profit. The entity has been deemed to have a not-for-profit

status and accordingly complies with accounting standards set for not for profit entities

including AIFRS requirements.

The entity is a not for profit entity for Federal Income Tax purposes and is therefore exempt from

income tax.

(d) Going concern

Notwithstanding the deficiency in net current assets of $72.1 million (2008: $73.4 million)

this financial report has been prepared on a going concern basis. The consolidated entity

is subsidised by its ultimate parent entity, the State Government of Victoria, pursuant to

a Franchise Agreement with the Director of Public Transport.

The funding requirements for the year ended 30 June 2010 have been agreed by the Director

of Public Transport under an approved budget allocation pursuant to the Franchise Agreement.

The Franchise Agreement contains provisions for the funding requirements to be met by the

State Government of Victoria throughout the franchise period. The directors expect that a new

Franchise Agreement will be executed before the end of 2009 and that this new agreement will

extend the franchise period out until 2017.

The Director of Public Transport acknowledges and agrees that, for the benefit of the directors

of the consolidated entity and without limiting the level of financial support, the Director of

Public Transport has agreed to provide the consolidated entity funding to a level sufficient for

it to comply with the solvency requirements under the Corporations Act 2001.

The Director of Public Transport has also agreed that, while the consolidated entity is under

state ownership, the Department of Transport will meet all of the consolidated entity’s

employee entitlements as and when those amounts fall due in the event the consolidated

entity is not able to meet these financial obligations.

The financial report does not include any adjustments relating to the recoverability and

classification of recorded asset amounts, nor to the amounts and classification of liabilities

that might be necessary should the consolidated entity not continue as a going concern.

Refer to note 27 for further details of the consolidated entity’s economic dependency

on the State Government of Victoria.

(e) Comparatives

When the presentation or classification of items in the financial report is amended,

comparative amounts have been reclassified unless the reclassification is impractical.

(f) Revenue

Revenue is recognised and measured at the fair value of the consideration received or

receivable to the extent it is probable that the economic benefits will flow to the corporation

and the revenue can be reliably measured.

VALUE IN KIND

Use of VLocity, Diesel Multiple Unit Trains are leased or owned by Rolling Stock Holdings Pty Ltd

and received free of charge (’Value in Kind’;’VIK’). The VIK measurement is based on the value

of the lease payments or the notional lease value based on the capital cost per unit of rolling

stock purchased outright.

CONTRIBUTIONS

Government provides subsidies that are recognised as revenue when they are controlled

by the corporation, which is generally upon receipt of the subsidy.

TICKET SALES

Fare box revenue (ticket sales) is recognised on an accrual basis. Sales of tickets that relate

to passenger trips to be taken after the reporting date are not recognised as income but as

a liability.

(g) Cash

Cash and cash equivalents comprise cash on hand and cash at bank, deposits at call and

highly liquid investments with an original maturity of three months or less, which are readily

convertible to known amounts of cash and are subject to insignificant risk of changes in value.

(h) Trade and other receivables

Trade receivables representing passenger, inter-operator and other revenues receivable are

carried at nominal amounts due less any allowance for uncollectible amounts. A provision for

impairment is recognised when collection of the full amount is no longer probable (> 90 days).

For trade receivables, normal terms are 30 days and 7 days for agency accounts.

(i) Related party receivables

Receivables from related parties are recognised and carried at fair value. There is no interest

charged on related party receivables.

(j) Inventories

V/Line has a supplier arrangement with EDI Rail Pty Ltd for the supply of spare parts. These

spares are available on a “just in time” basis. This practice is considered by industry to be

best practice as it has the lowest storage costs. V/Line has a contract for these spares to

be available upon request. These items are valued at cost on a first in first out basis.

(k) Revaluations of non-current assets

Rolling stock is measured at fair value and all other non-current assets are measured at cost.

Revaluations are made with sufficient regularity to ensure that the carrying amount of each

asset does not differ materially from its fair value at the reporting date.

Revaluations are assessed annually and supplemented by independent assessments every

three or four years. Revaluations are conducted in accordance with the Victorian Government

Policy – FRD 6A Application of Victorian Government Policy ‘Revaluation of Non-Current

Physical Assets’.

(l) Investment in Subsidiaries

Investments in subsidiaries are carried at cost.

(m) Cost and valuation of property, plant and equipment

i Valuation of rolling stock and rotables

V/Line Passenger Pty. Ltd undertook an independent revaluation of its rolling stock as at 31 March

2008. The 2008 valuation was performed by rolling stock specialists and reviewed by a qualified

valuer. Although valuation of assets is typically based on the net recoverable amount, the

corporation has used depreciable replacement cost as a valuation basis. This valuation is in

keeping with FRD 6A, which states the net recoverable test does not apply to a not-for-profit

entity since there is no dependence on its assets abilities to generate cash inflows.

Any revaluation increment or decrement is brought to account in the asset revaluation reserve,

except to the extent that it reverses a revaluation decrease of the same asset previously

recognised in profit or loss, in which case the increase is recognised in profit or loss.

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 profit or loss, except to the extent that it offsets a

previous revaluation increase for the same asset, in which case the decrease is debited directly

to the asset revaluation reserve to the extent the credit balance existing in the revaluation

reserve for that asset.

Revaluation increases and revaluation decreases relating to individual assets within an

asset class are offset against one another within that asset class but are not offset in respect

of assets in different classes.

ii Depreciation of property, plant and equipment

Depreciation is provided on a straight-line basis on all plant and equipment, including rolling

stock and buildings. Rolling stock comprises locomotives, carriages, diesel multiple units

(known as Sprinters) and vans. Any refurbishments or conversions are depreciated over the

remaining useful life of the refurbishment.

iii.Estimated useful lives of property, plant and equipment are set out below:

Leasehold improvements

Plant and equipment

Rolling stock

3 to 10 years

3 to 10 years

4 to 17 years

The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted

if appropriate, at each financial year end.

iv.Leasehold improvements

The cost of improvements to leasehold properties is amortised over the unexpired period of

the lease or the estimated useful life of the improvement, whichever is the shorter. Leasehold

improvements held at the reporting date are being amortised over 3 to 10 years (2008 – 3 to

10 years).

v.Leased non-current assets

Leases of property, plant and equipment are classified as finance leases whenever the terms

of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other

leases are classified as operating leases.

(n) Leases

i.Finance leases

Leases of property, plant and equipment are classified as finance leases whenever the terms

of the lease transfer substantially all the risks and rewards of ownership to the lessee. All

other leases are classified as operating leases. The entity does not have any finance leases.

ii.Operating leases

Operating lease payments are recognised as an expense in the operating statement on a

straight-line basis over the lease term, except where another systematic basis is more

representative of the time pattern of the benefits derived from the use of the leased asset.

iii.Lease incentives

Incentives received on entering into operating leases are recognised as liabilities. The incentive

of the lease is amortised over the remaining life of the lease.

(o) Trade and other payables

i.Payables consist predominantly of creditors and other sundry liabilities.

Payables are carried at amortised cost and represent liabilities for goods and services provided

proir to the end of the financial year which remain unpaid. These amounts are brought to

account when the obligation to make future payments in respect of the purchase of the goods

and services arises.

ii.Related party payables

Payables to related parties are carried at amortised cost. No interest is charged by the lender.

(p) Repairs and maintenance

Repairs and maintenance work on rolling stock are scheduled in accordance with V/Line’s

rolling stock management plan and the rail safety management standards. Scheduled

maintenance examinations on rolling stock are determined at set intervals depending on

the type of rolling stock.

The refurbishment program included in the rolling stock management plan includes major

examinations and overhauls of rolling stock. The consolidated entity treats these examinations

as significant upgrades, which extend the useful life of the rolling stock. Included in the

refurbishment program is the replacement of major units such as traction and locomotive

motors, generators, wheel sets and bogies. These items are capitalised and amortised over

their useful life.

All other maintenance examinations and minor work are treated as repairs and maintenance

and expensed when incurred.

(q) Goods and Services Tax

Revenues, expenses, assets and liabilities are recognised net of the amount of associated

GST unless the GST incurred is not recoverable from the taxation authority, in which case

it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable.

The net amount of GST recoverable from, or payable to, the taxation authority is included

with other receivables or payables in the balance sheet.

Cash flows are presented on a gross basis. The GST components of cash flows arising

from investing or financing activities which are recoverable from, or payable to the taxation

authority, are presented as operating cash flows.

(r) National Tax Equivalent Regime (NTER)

By direction of the Treasurer of Victoria, under the State Owned Enterprise Act 1992, the

consolidated entity entered into the NTER on 1 October 2003. Any NTER expense payable is

calculated on operating profit or loss adjusted for permanent and timing differences between

NTER income and accounting income.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary

differences arising between the tax bases of assets and liabilities and their carrying amounts in

the financial statements. No deferred income tax will be recognised from the initial recognition

of an asset or liability, excluding a business combination, where there is no effect on

accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the

asset is realised or liability is settled. Deferred tax is credited in the operating statement except

where it relates to items that may be credited directly to equity, in which case the deferred tax

is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax

profits will be available against which deductible temporary differences can be utilised.

The amount of benefits brought to account or which may be realised in the future is based

on the assumption that no adverse change will occur in income taxation legislation and the

anticipation that the economic entity will derive sufficient future assessable income to enable

the benefit to be realised and comply with the conditions of deductibility imposed by the law.

V/Line and its wholly owned Australian subsidiary have formed an income tax consolidated

group under the Tax Consolidation Regime. Each entity in the group recognises its own current

and deferred tax liabilities, except for any deferred tax liabilities resulting from unused tax

losses and tax credits which are immediately assumed by the parent entity. The current tax

liability of each group is then subsequently assumed by the parent entity. The group notified

the ATO that it had formed an income tax consolidated group to apply from 1 October 2003.

The tax consolidated group has entered a tax sharing agreement whereby each corporation

in the group contributes to the income tax payable in proportion to their contribution to profit

before tax.

(s) Employee benefits

Provision is made for employee benefits accumulated as a result of employees rendering

services up to the reporting date. These benefits include annual leave and long service leave.

Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other

employee benefits expected to be settled within 12 months of the reporting date are measured

at their nominal amounts based on remuneration rates which are expected to be paid when

the liability is settled, including related on-costs.

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


NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

All other employee benefit liabilities are measured at the present value of the estimated

future cash outflows to be made in respect of services provided by employees up to the

reporting date.

In determining the present value of future cash outflows, the interest rates relating to

government guaranteed securities are used, which have terms to maturity approximating

the terms of the related liability.

The determination of the current portion of employee benefits is based upon benefits which

are expected to be settled within 12 months of the reporting date and are measured at their

nominal values.

Employee benefit expenses arising in respect of salaries and wages, annual leave, long service

leave, sick leave, other leave benefits and other employee benefits are charged against the

Operating Statement.

The contributions made to superannuation funds by the consolidated entity are charged

against the Operating Statement when due.

(t) Rounding of amounts

The corporation is of a kind referred to in Class Order 98/100, issued by the Australian

Securities and Investments commission, relating to the ‘rounding off’ of amounts in the

financial report. Amounts in the financial report have been rounded off in accordance with

that Class Order to the nearest thousand dollars, or in certain cases, to the nearest dollar.

(u) Functional and presentation currency

The functional currency of the consolidated entity is the Australian dollar, which has been

identified as the presentation currency for the consolidated entity.

(v) Impairment of assets

At each reporting date, the group reviews the carrying values of its assets to determine whether

there is any indication that those assets have been impaired. If such an indication exists, the

recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and

depreciated replacement cost, is compared to the asset’s carrying value. Any excess of the

asset’s carrying value over its recoverable amount is expensed to the Operating Statement,

except to the extent the write-down is to be brought to account in the asset revaluation reserve.

(w) Provisions

Provisions are recognised when there is a present obligation, the future sacrifice of economic

benefits is probable, and the amount of the provision can be reliably measured.

The amount recognised as a provision is the best estimate of the consideration required to

settle the present obligation at reporting date, taking into account the risks and uncertainties

surrounding the obligation. Where a provision is measured using the cash flows estimated to

settle the present obligation, its carrying amount is the present value of those cash flows using

market yields at the reporting date on national government bonds with terms to maturity that

match, as close as possible, the estimated future cash flows.

(x) Significant accounting estimates and judgments

Management evaluates estimates and judgments incorporated into the financial report based

on historical knowledge and best available current information. Estimates assume a

reasonable expectation of future events and are based on current trends and economic data,

obtained both externally and within the group.

i. Key estimates — Impairment

The group assesses impairment at each reporting date by evaluating conditions specific

to the group that may lead to impairment of assets. Where an impairment trigger exists, the

recoverable amount of the asset is determined. Depreciated replacement cost calculations

performed in assessing recoverable amounts incorporate a number of key estimates.

ii.Key judgments — Allowance for impairment loss on trade receivables

There has been a $80,072 decrease to the provision in 2009 based on a detailed analysis

of the recoverability of individual accounts.

iii. Key judgments — Timing of employment provisions

All employment provisions are classified according to whether the entity has an unconditional

right to defer settlement beyond 12 months.

iv. Key judgments — Useful lives of property, plant & equipment

Property, plant & equipment useful lives are reviewed on an annual basis to ensure their

contribution is realistically based on their useful economic life.

(y) New accounting standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory

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 financial year ending 30 June 2009.

V/Line has not, and does not intend to adopt these standards early.

Standard/Interpretation Summary Applicable for annual

reporting periods beginning

or ending on

Impact on financial

statements

AASB 8 Operating Segments Supersedes AASB 114 Segment Reporting Beginning 1 Jan 2009 Not applicable

AASB 2007-3 Amendments to Australian Accounting Standards

arising from AASB 8 [AASB 5, AASB 6, AASB 102, AASB 107,

AASB 119, AASB 127, AASB 134, AASB 136, AASB 1023 and

AASB 1038]

AASB 123 Borrowing Costs

AASB 2007-6 Amendments to Australian Accounting Standards

arising from AASB 123 [AASB 1, AASB 101, AASB 107, AASB 111,

AASB 116, AASB 138 and Interpretations 1 & 12]

AASB 2008-3 Amendments to Australian Accounting Standards

arising from AASB 3 & AASB 127 [AASB 1, 2, 4, 7, 101, 107,

112, 114, 116, 121, 128, 131, 132, 133, 134, 136, 137,

138 & 139 and Interpretations 9 & 107]

An accompanying amending standard also introduced

consequential amendments into other standards

Option to expense borrowing costs related to a qualifying

asset has been removed. Entities are now required to

capitalise borrowing costs relevant to qualifying assets

An accompanying amending standard also introduced

consequential amendments into other standards

This standard gives effect to consequential changes arising

from revised AASB 3 and amended AASB 127. The preface

to those standards summarise the main requirements of

those standards

Beginning 1 Jan 2009

Beginning 1 Jan 2009

Beginning 1 Jan 2009

Beginning 1 Jul 2009

Impact expected to

be insignificant

Not applicable

Impact expected to

be insignificant

Impact expected to

be insignificant

continued next page

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


NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

Standard/Interpretation Summary Applicable for annual

reporting periods beginning

or ending on

AASB 2008-5 Amendments to Australian Accounting Standards

arising from the Annual Improvements project [AASB 5, 7, 101,

102, 107, 108, 110, 116, 118, 119, 120, 123, 127, 128, 129,

131, 132, 134, 136, 138, 139, 140, 141, 1023 & 1038]

AASB 2008-6 Further Amendments to Australian Accounting

Standards arising from the Annual Improvements project

[AASB 1 & AASB 5]

AASB 2008-7 Amendments to Australian Accounting Standards –

Cost of an Investment in a Subsidiary, Jointly Controlled Entity or

Associate [AASB 1, AASB 118, AASB 121, AASB 127 & AASB 136]

AASB 2008-8 Amendments to Australian Accounting Standards –

Eligible hedged Items [AASB 139]

AASB 2008-9 Amendments to AASB 1049 for Consistency with

AASB 101

A suite of amendments to existing standards following issuance

of IASB standard improvements to IFRSs in May 2008. Some

amendments result in accounting changes for presentation,

recognition and measurement purposes

The amendment requires all the assets and liabilities of a for

sale subsidiary to be classified as held for sale and clarify the

disclosures required when a subsidiary is part of a disposal

group that meets the definition of a discontinued operation

Changes mainly relate to treatment of dividends from subsidiaries

of controlled entities

The amendments to AASB 139 clarify how the principles that

determine whether a hedged risk or portion of cash flows is

eligible for designation as a hedged item should be applied

in particular situations

Amendments to AASB 1049 for consistency with AASB 101

(September 2007) version

Beginning 1 Jan 2009

Beginning 1 Jul 2009

Beginning 1 Jan 2009

Beginning 1 Jul 2009

Beginning 1 Jan 2009

Impact on financial

statements

Impact is being evaluated

Not applicable

Not applicable

Not applicable

Not applicable to public

sector entities except for

certain presentation formats

2009 2008

$’000 $’000

NOTE 2 INCOME

(a) Revenue

Fare box revenue 68,648 59,641

Inter-operator income 1,086 787

Franchise subsidy 234,000 218,703

State subsidy 21,600 8,000

Access charges 2,708 2,520

Other income 19,898 9,450

Trains received free of charge 33,349 29,225

381,289 328,326

(b) Other income

Interest – other persons/corporation 307 557

Government project reimbursement revenue 83,215 75,768

Capital transfer reallocation (554) 7,248

Other Income 997 –

83,965 83,573

Total income 465,254 411,899

NOTE 3 (A) OPERATIONAL EXPENSES

2009 2008

$’000 $’000

Franchise performance penalty 3,242 4,922

Other direct costs 15,981 10,927

Fleet maintenance 58,866 47,820

Fuel costs 24,398 25,024

Road coach services 6,760 4,539

Access charges 17,062 15,845

Repairs & maintenance 2,469 2,470

128,778 111,547

Direct labour costs

Salaries and wages 100,779 87,191

Superannuation 8,948 8,402

Annual leave/long service leave expense 5,945 3,670

Other on-costs (fringe benefits tax, payroll tax and work cover levy) 5,619 7,919

121,291 107,182

Total operational expenses 250,069 218,729

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


NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

2009 2008

$’000 $’000

2009 2008

$’000 $’000

2009 2008

$’000 $’000

2009 2008

$’000 $’000

NOTE 3 (B) DEPRECIATION OF NON-CURRENT ASSETS

Depreciation of non-current assets

Plant and equipment 3,728 1,677

Leasehold improvements 348 287

Rolling stock 12,520 12,384

Rolling stock – capitalised improvements 2,365 6,043

18,961 20,391

NOTE 4 (A) INCOME TAX EXPENSE

The components of tax expense comprise:

Current tax – –

The prima facie tax on profit from ordinary activities before

income tax is as follows:

Prima facie tax payable on profit from ordinary activities

before income tax at 30% (2008: 30%) (1,927) (2,702)

Tax effect of permanent differences and tax losses

not brought to account 1,927 2,702

Write off deferred tax asset arising from the revaluation

decrement to rolling stock – 6,290

– 6,290

The deferred tax asset arising from the revaluation decrement has been written off

as an expense because it is not probable that it will be realised.

NOTE 4 (B) DEFERRED TAX ASSETS

Gross deferred tax assets – temporary differences

Accruals 211 399

Provision for employee entitlements 15,376 13,604

Other provisions 913 952

Aggregate 16,500 14,955

Carried forward tax losses 27,945 25,170

Deferred tax assets 44,445 40,125

Deferred tax liabilities

Accelerated depreciation for taxation purposes 35,786 33,387

Other 48 51

Aggregate deferred tax liabilities 35,834 33,438

Deferred tax assets not recognised 8,611 6,687

The company has substantial prior year tax losses which began, and continue to accumulate

since, the year ended 30 June 2004. The aggregate carried forward loss and deferred tax assets

due to timing differences is $44.445m. This offsets the deferred tax liability of $35.834m. As

such, the deferred tax assets have not been brought to account in the financial statements.

NOTE 5 CASH AND CASH EQUIVALENTS

Cash at bank 2,708 2,560

Cash on hand 77 104

2,785 2,664

NOTE 6 RECEIVABLES

Trade receivables 22,377 20,037

Less: provision for impairment (73) (153)

22,304 19,884

Fuel rebate receivables 1,634 818

Other receivables 416 676

24,354 21,378

Related party receivables

Trade receivables include the following receivables

from related parties:

Department of Transport 18,673 17,174

Other related parties 15 502

18,688 17,676

Terms and conditions relating to the above financial instruments:

Credit Sales are on 30 day terms. Details of the terms and conditions of related parties’ receivables

are set out in Note 21.

NOTE 7 INVENTORIES

Spares and materials at cost 4,772 5,296

NOTE 8 OTHER CURRENT ASSETS

Prepayments 684 330

NOTE 9 INVESTMENTS

V/Line Passenger Corporation does not own any investments with the exception of controlled

ownership of V/Line Passenger Pty Ltd as detailed in Note 1(b).

NOTE 10 PROPERTY, PLANT AND EQUIPMENT

Plant and equipment

At cost 32,643 27,529

Accumulated depreciation (24,068) (20,349)

8,575 7,180

Rolling stock

At independent valuation – 31 March 2008 114,116 114,116

Accumulated depreciation (15,665) (3,146)

Impairment – –

98,451 110,970

Leasehold improvements

At cost 5,095 3,851

Accumulated amortisation (1,449) (1,101)

3,646 2,750

Rolling stock – capitalised improvements

Cost 16,355 3,527

Rotables 906 928

Accumulated depreciation (2,518) (153)

14,743 4,302

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

Valuation of rolling stock

An independent valuation of all rolling stock was conducted by rolling stock specialists

with an effective date of 31 March 2008.

As the market for the rolling stock lacks sufficient depth due to the specialised nature of the

assets and the small population and volume traded, other indirect methods have been used.

The depreciated replacement cost method has been used as the primary method of valuation

and has provided a fair value for the V/Line Passenger Pty Ltd rolling stock fleet as at 31 March

2008 of $114.1 million.

Movement in carrying amounts

The movement in the carrying amounts for each class of property,

plant and equipment between the beginning and the end of the

year is as follows:

2009 2008

$’000 $’000

Plant and equipment

Carrying amount at beginning of year 7,180 7,856

Additions 5,116 1,001

Disposals (2) –

Depreciation expense (3,719) (1,677)

Carrying amount at end of year 8,575 7,180

Rolling stock at valuation

Carrying amount at beginning of year 110,970 118,924

Additions – –

Impairment – –

Disposals – –

Depreciation expense (12,519) (12,384)

Revaluation transfer from rolling stock at cost –

capitalised improvements – 25,395

Revaluation decrement – (20,965)

Carrying amount at end of year 98,451 110,970

2009 2008

$’000 $’000

Leasehold improvements

Carrying amount at beginning of year 2,750 2,775

Additions 1,244 262

Depreciation expense (348) (287)

Carrying amount at end of year 3,646 2,750

Rolling stock at cost – capitalised improvements

Carrying amount at beginning of year 4,302 21,841

Additions 12,806 13,899

Disposals – –

Depreciation expense (2,365) (6,043)

Revaluation transfer to rolling stock at valuation – (25,395)

Carrying amount at end of year 14,743 4,302

Capital works in progress

Carrying amount at beginning of year 18,100 13,357

Additions 7,743 10,976

Transfers to fixed assets (5,870) (6,233)

Reversals from fixed assets

(project expenses capitalised by VicTrack) (8,315) –

Carrying amount at end of year 11,658 18,100

Total property, plant and equipment

Carrying amount at beginning of year 143,302 164,753

Additions 26,909 26,138

Disposals (2) –

Depreciation expense (18,951) (20,391)

Transfers to fixed assets (5,870) (6,233)

Reversal from fixed assets

(project expenses capitalised by VicTrack) (8,315) –

Impairment – –

Rolling Stock revaluation net decrement – (20,965)

Carrying amount at end of year 137,073 143,302

2009 2008

$’000 $’000

NOTE 11 PAYABLES

Trade payables 32,887 25,275

Accruals 15,281 26,036

Deferred income 932 638

Other payables 6,618 6,595

Total payables 55,718 58,544

Amounts payable to related parties are as follows:

Other related parties 2,601 3,040

2,601 3,040

NOTE 12 PROVISIONS

Current provisions

Employee benefits 47,528 43,136

Other provisions (employee related) 1,405 1,367

48,933 44,503

Movement in other provisions:

Opening balance 1,367 1,394

Additional provisions raised during the year 53 –

Amounts used (15) (27)

Closing balance 1,405 1,367

Non-current provisions

Employee benefits 3,726 2,210

NOTE 13 EQUITY

2009 2008

$’000 $’000

Asset revaluation reserve 104,913 119,588

Revaluation decrement (net of tax effect of $6,290) – (14,675)

104,913 104,913

Accumulated Losses

Balance at the beginning of the year (37,200) (21,905)

Net profit/(loss) (6,422) (15,295)

Balance at the end of the year (43,622) (37,200)

NOTE 14 FINANCIAL INSTRUMENTS

(a) Financial risk management

The corporation’s financial instruments consist mainly of deposits with banks, local money

market instruments, short-term investments, accounts receivable and payable, loans to and

from subsidiaries, bills and leases. The main purpose of non-derivative financial instruments

is to raise finance for group operations.

The group does not have any derivative instruments at 30 June 2009.

i.Treasury risk management

A finance committee consisting of senior executives of the group meet on a regular basis to

consider currency and interest rate exposure and to evaluate treasury management strategies in

the context of the most recent economic conditions and forecasts.

ii.Financial Risks

The main risks the corporation is exposed to through its financial instruments are interest rate

risk, liquidity risk and credit risk.

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

INTEREST RATE RISK

At 30 June 2009 the corporation had no debt.

FOREIGN CURRENCY RISK

The corporation is not exposed to fluctuations in foreign currencies.

LIQUIDITY RISK

The corporation manages liquidity risk by monitoring forecast cash flows and ensuring

that adequate funding is maintained.

CREDIT RISK

The maximum exposure to credit risk, excluding the value of any collateral or other

security, at balance date to recognised financial assets, is the carrying amount, net

of any provisions for impairment of those assets, as disclosed in the balance sheet

and notes to the financial statements.

The economic entity does not have any material credit risk exposure to any single receivable

or group of receivables under financial instruments entered into by the economic entity with

the exception of the Department of Transport for $18.7 million.

PRICE RISK

The corporation is not exposed to any material commodity price risk.

(b) Net fair values

The carrying amounts of financial assets and liabilities approximate their fair values.

The aggregate net fair values of financial assets and liabilities are equal to their carrying

amount.

2009 2008

$’000 $’000

Financial assets

Cash and cash equivalents 2,785 2,664

Trade and other receivables 24,354 21,378

27,139 24,042

Financial Liabilities

Trade and other payables (55,718) (58,544)

Net financial assets (28,579) (34,502)

(c) Credit risk exposures

The corporation’s maximum exposures to credit risk at balance date in relation to each class

of recognised financial asset is the carrying amount of those assets as indicated in the balance

sheet.

The main exposure to credit risk arises as it operates in the public transport field and

relies on the credit worthiness of the State Government of Victoria.

Other credit risk in trade receivables is managed in the following way:

– enforcing disclosed payment terms

– debt collection policies and procedures

The maximum credit risk exposure does not take into account the value of any collateral

or other security held in the event other entities/parties fail to perform their obligations

under the financial instruments in question.

(d) Market risk

The corporation’s exposure to market risk sensitivities at balance date is not considered

to be material.

NOTE 15 CONTROLLED ENTITIES

V/Line Corporation did not purchase any other entities during the year. In 2004, V/Line

Corporation purchased 100% of the shares of V/Line Passenger Pty. Ltd for $1.

The following entities are 100% controlled by V/Line Passenger Corporation as

at 30 June 2009:

V/Line Passenger Pty. Limited.

NOTE 16 MINISTERS AND ACCOUNTABLE OFFICERS

In accordance with the Ministerial Directions issued by the Minister for Finance under the

Financial Management Act 1994, the following disclosures are made regarding responsible

persons for the reporting period.

The names of persons who were responsible persons at any time during the financial

year were:

Responsible Minister:

The Honourable Lynne Kosky MP, Minister for Public Transport.

Directors of the Board:

Mr Frank A. Tait

Ms Catherine L. Scott (Resigned 30th June 2009)

Mr Michael D. Tilley

Ms Fiona Bennett (Appointed 1st December 2008)

Mr David Worth (Appointed 1st December 2008)

Remuneration 2009 2008

Accountable Officer $360,000–$369,999 $330,000 – 339,999

NOTE 17 REMUNERATION OF EXECUTIVES

Executive Officers (other than the Accountable Officer) remuneration during the reporting period

is shown in the table below. Base remuneration is exclusive of bonus payments, long-service

leave payments, redundancy payments, retirement benefits and fringe benefits tax.

Total Remuneration

Base remuneration

2009 2008 2009 2008

$100,000 – $109,999 1 – 1 –

$110,000 – $119,999 – – – –

$120,000 – $129,999 – – – –

$130,000 – $139,999 – – – –

$140,000 – $149,999 – – – –

$150,000 – $159,999 – – 2 1

$160,000 – $169,999 – – 1 –

$170,000 – $179,999 2 – – 2

$180,000 – $189,999 1 – 1 3

$190,000 – $199,999 – 1 2 –

$200,000 – $209,999 – – 1 –

$210,000 – $219,999 1 2 – 2

$220,000 – $229,999 2 3 1 –

$230,000 – $239,999 1 – – –

$240,000 – $249,999 1 1 – –

$250,000 – $259,999 – 1 – –

Total numbers 9 8 9 8

Total amount 1,792,484 1,809,880 1,611,072 1,505,649

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


NOTES TO THE FINANCIAL STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS

2009 2008

$’000 $’000

NOTE 18 REMUNERATION OF DIRECTORS

AND ACCOUNTABLE OFFICER

Income paid or payable, or otherwise made available,

in respect of the financial year, to all Directors and the

Accountable Officer, directly or indirectly, from the

entity or any related party.

520 512

The number of Directors and the Accountable Officer

whose income (including superannuation contribution)

falls within the following bands:

$10,000 – $19,999 2 –

$20,000 – $29,999 2 4

$30,000 – $39,999 – –

$40,000 – $49,999 – –

$50,000 – $59,999 – –

$60,000 – $69,999 1 1

$330,000 – $339,999 – 1

$340,000 – $349,999 – –

$350,000 – $359,999 – –

$360,000 – $369,999 1 –

6 6

NOTE 19 REMUNERATION OF AUDITORS

Amounts received or due and receivable by the auditors:

2009 2008

$’000 $’000

– audit of the financial statements 82 78

– other services – –

82 78

NOTE 20 DIRECTORS DISCLOSURES

The directors of the parent entity during the year ending 30 June 2009 were:

Frank A. Tait (Appointed 1 October 2003)

Catherine L. Scott (Appointed 1 October 2003 – Resigned 30th June 2009)

Michael D. Tilley (Appointed 1 July 2006)

Fiona Bennett (Appointed 1st December 2008)

David Worth (Appointed 1st December 2008)

All directors are directors of V/Line Passenger Pty Ltd which forms part of the consolidated entity.

NOTE 21 RELATED PARTY DISCLOSURES

Related

party

Nature of

transaction

Payments to related parties

Metlink

Victoria

Pty Ltd

VicTrack

Access

Southern

Cross

Station

Authority

Department

of Transport

Transport

Ticketing

Authority

Provision of services

for V/Line customers

to access suburban

network

Provision of

communication

services

Rental

payments

Miscellaneous

payments made

under the Franchise

Agreement

Reimbursement of

accounts receivable

staff salary and wages

Receipts from related parties

Department

of Transport

VicTrack

Access

VicTrack

Access

Provides funding

to the corporation

Management fee

for rent collection

Network access

charges

Terms and

conditions

The entity was

charged services

on a cost basis

only

Normal

commercial terms

and conditions

Normal commercial

terms and

conditions

In accordance

with the Franchise

Agreement

In accordance

with agreement

between the

parties

In accordance

with the Franchise

Agreement

In accordance

with agreement

In accordance

with agreement

2009

$’000

2008

$’000

3,160,733 2,196,000

10,820,985 8,852,152

1,116,336 874,887

3,241,608 4,922,211

80,169 –

255,600,000 226,703,236

– 62,949

NOTE 22 CONTINGENT ASSETS AND LIABILITIES

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,

damage has been sustained to rolling stock that has or will necessitate repairs as well as other

operational costs incurred from the incidents in question. V/Line is pursuing the owners and/or

operators of the vehicles in question from these incidents (either in person or through their

insurers) for the costs of the repairs and other expenses incurred. The amount of contingent

assets in relation to these incidents is uncertain. In addition, there may be contingent liabilities

in relation to these incidents.

On 28 May 2008 the EPA issued V/Line a Clean Up Notice in relation to contamination on

railway land in Ararat that is adjacent to a former gasworks site. A Clean Up Plan is currently

being developed for the site which will determine the remediation strategy that is required.

If full remediation is required to be undertaken, costs of up to $1 million may be incurred.

V/Line acknowledges that there are potential contingent liabilities relating to this incident.

While V/Line as the occupier of the land is managing the remediation, the contamination is

pre-existing so V/Line will be pursuing reimbursement for these expenses from relevant third

parties. As such, there is a potential contingent asset for close to the same amount.

On 18 November 2008 the EPA issued V/Line a Pollution Abatement Notice in relation to an

oily sheen in Traralgon Creek. The source of the material was traced back to a storm water drain

discharging from railway land. The EPA determined that activities on the site are likely to cause

pollution and issued the notice. V/Line is exploring whether there is a defect and whether there

is a warranty claim against the manufacturer. The more extensive works required by the

pollution abatement notice may reveal pre-existing contamination. If remediation works are

required, V/Line will pursue relevant third parties for recoveries or up front expenses. V/Line

acknowledges contingent liabilities with respect to any environmental costs relating to this

incident but, at the same time, there is a potential for contingent assets arising out of warranty

claims or claims against pre-existing contamination.

474,338 –

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

Operating lease commitments

Operating lease commitments primarily relate to commercial lease agreements in relation to

tenancy at 570 Bourke Street, and 628 Bourke Street, Melbourne. The leases expire in 2014

and 2015 respectively which include fixed rate increases of between 3% and 5% or market rent

reviews at dates specified in the agreements.

Commitments for minimum contractual payments in relation to non-cancellable operating

leases are payable as follows:

2009 2008

$’000 $’000

Within one year 4,523 2,967

Later than one year but not later than 5 years 12,919 9,151

Later than 5 years 1,059 2,774

18,501 14,892

Expenditure commitments

Expenditure commitments primarily relate to station access charges.

Commitments in relation to operating expenditure are shown below:

2009 2008

$’000 $’000

Within one year 25,573 10,312

Later than one year but not later than 5 years 306 1,252

Later than 5 years – –

25,879 11,564

NOTE 24 EMPLOYEE BENEFITS AND SUPERANNUATION COMMITMENTS

(a) Employee benefits

The aggregate employee benefit liability is comprised of:

2009 2008

$’000 $’000

Accrued wages, salaries and on-costs 4,060 4,460

Short term provisions (current) 48,933 44,503

Long term provisions (non-current) 3,726 2,210

56,719 51,173

(b) Superannuation

Prior to the original Franchise Agreement, the majority of the consolidated entity’s staff

were members of government superannuation funds.

The state-organised funds include the Revised Scheme, New Scheme and the Transport

Superannuation Fund, which are all defined benefits schemes. These schemes are ‘master

funds’ comprising a large number of participating members, therefore, are not controlled

by the consolidated entity.

With effect from 29 August 1999, employees were given the opportunity to remain in the

government superannuation funds or to change to a private superannuation fund. The private

funds joined by employees of the consolidated entity since 29 August 1999 are VicSuper or

Superannuation Trust of Australia. These funds are both accumulation funds.

The consolidated entity has not recognised any unfunded superannuation liabilities as the

State Government has guaranteed to undertake this liability from the commencement of the

original franchise in 1999. Any unfunded liabilities that may arise subsequent to the new

franchise are calculated annually by the Government Superannuation Office and paid by V/Line

at the end of the financial year.

(c) Superannuation schemes contributions and liabilities

NOTE 25 SUBSEQUENT EVENTS

There are no events subsequent to balance date.

NOTE 26 CASH FLOW STATEMENT

2009 2008

$’000 $’000

A) RECONCILIATION OF OPERATING PROFIT/(LOSS)

AFTER TAX TO NET CASH FLOWS FROM OPERATIONS

Operating profit/(loss) after tax (6,422) (15,295)

Non-cash flows in profit /(loss)

Depreciation 18,961 20,391

Assets capitalised by VicTrack 8,315 –

Tax expense – 6,290

Change in operating assets and liabilities

(Increase)/decrease in trade and other receivables (2,976) (8,874)

(Increase)/decrease in inventories 524 (811)

(Increase)/decrease in prepayments (354) 47

(Decrease)/increase in trade and other payables (3,019) 21,037

(Decrease)/increase in employee benefits 5,945 (1,899)

Net cash from /(used in) operating activities 20,974 20,886

(b) Reconciliation of cash

Cash balance comprises:

– Cash at bank 2,708 2,560

– Cash on hand 77 104

2,785 2,664

NOTE 27 ECONOMIC DEPENDENCY.

The consolidated entity provides public transport services to rural and regional Victoria and

is also responsible for the management and maintenance of the rail network. The provision

of these services is subsidised by the State Government of Victoria. Without the provision

of that subsidy the consolidated entity could not continue as a going concern. The subsidy

requirements for the year ending 30 June 2010 have been approved by the state. The

consolidated entity’s three year business plan has also been approved by the Director of

Public Transport pursuant to the Franchise Agreement.

NOTE 28 DIVIDENDS

No dividends were paid, declared or recommended during the year, or subsequent to the

year end.

Contribution

for the year

2009

Contribution

for the year

2008

Contribution

outstanding

at year end

2009

Contribution

outstanding

at year end

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 efficiency. 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 identified 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 Pacific 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 refine, it was decided that it would be more beneficial to undertake the assessment for RNA during 2009–10.

V/Line’s fleet 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 significant 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 specific benefit has not been quantified, as more people switch from cars to the train, the energy efficiency 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/

or site that has had an assessment completed by the end of

this reporting period

V/Line Passenger

Period over which assessment was undertaken 1

March – June 2008

Energy use per annum in GJ 2 in the current reporting year

1,064,240

Total energy assessed

Total energy use of the group in the current reporting year

Total energy assessed expressed as a percentage of total current energy use

1. This should be the start and finish 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.

1,064,240

1,126,190

94.5%

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)

TABLE 1.3 – Accuracy of energy use data

Entity % achieved Reasons for not achieving data accuracy to within ±5%

V/Line Passenger ± 5%

PART 2 - ENERGY EFFICIENCY OPPORTUNITIES THAT HAVE BEEN IDENTIFIED AND EVALUATED

Part 2A - New assessments completed during the reporting period

No new assessments were undertaken during the current reporting period.

Part 2B - Update of assessments originally reported in previous reporting periods

Name of group member or business unit or key activity or site:

V/Line Passenger

Energy use of the entity during the current reporting period 1,064,240 GJ

TABLE 2.3 - Opportunities assessed to an accuracy of ±30% or better

Status of opportunities identified Number of opportunities Estimated energy savings per annum by payback period (GJ) Total estimated energy

savings per annum (GJ)

0 – < 2 years 2 – ≤ 4 years > 4 years

Outcomes of assessment Total identified 2 0.3 1770 1770.3

Business response Under investigation 1 1770 1770

To be implemented

Implementation commenced 1 0.3 0.3

Implemented

Not to be implemented

Opportunity 2

A review was undertaken of the pool of V/Line road vehicles. The light motor vehicle fleet consists of several different types of sedans and station wagons as well as Toyota Hilux 2WD and 4WD

utility vehicles. Research was undertaken to determine the greenhouse gas emissions of vehicles in our current fleet and those of alternative vehicles which would also meet the requirement of

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 fleet and 12 per cent lower than station wagons in the fleet. A reduction in

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

reduction in energy use estimated to be five 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

vehicles will occur as leases expire on older vehicles.

PART 3 - VOLUNTARY CONTEXTUAL INFORMATION

Table 3.1 – Contextual Information

V/Line operates an ageing fleet of diesel-powered rolling stock. The average age of the V/Line fleet is about 25 years, although excluding the newest vehicles from that analysis pushes the average

up to about 35 years. The capacity to make significant improvements in fuel efficiency is therefore limited. V/Line is currently taking delivery of additional new motorised carriages however these will

be used to provide additional capacity rather than allowing older vehicles to be retired.

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

encouraged a large increase in patronage meaning that V/Line’s energy indicators have moved in a positive direction. While the specific benefit has not been quantified, as more people switch from

cars to the train, the energy efficiency of the transport system as a whole improves.

While V/Line is somewhat limited in the efficiency improvements it can make because of the age of the rolling stock and the long life of the assets, we recognise that we need to improve performance

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 efficiency, it

will improve performance in terms of greenhouse gas emissions.

Part 2C - Details of significant opportunities found through EEO assessments

TABLE 2.5 – Description of significant 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 first improvement was through the refurbishment of light fittings.

This involved among other things the replacement of fluorescent tubes with more efficient types and the installation of high performance reflectors. The second improvement identified was through

the installation of voltage reduction units for fluorescent 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 s index

ENERGY EFFICIENCIES OPPORTUNITIES PROGRAM – PUBLIC REPORT

Table 3.2 – Energy use expressed in greenhouse gas emissions and as an energy use indicator

Period of energy use 1 July 2008 to 30 June 2009

Name of group member/ business unit/ key activity/site Energy use pa (GJ) Energy use pa (GGE) Energy use as an indicator*

V/Line Passenger 1,064,240 82,700 t CO 2

-e 1.12 MJ / passenger km

Table 3.4 – Changes in energy use as an indicator

Name of group member/ business unit/ key activity/site Current energy use as an indicator Previous energy use as an indicator Reasons for change

V/Line Passenger 1.12 MJ / pass km 1.20 MJ / pass km Increase in patronage

PART 4 - DECLARATION

Table 4.1 - Declaration of accuracy and compliance (mandatory information)

The information included in this report has been reviewed and noted

by the board of directors and is to the best of my knowledge, correct

and in accordance with the Energy Efficiency Opportunities Act 2006

and Energy Efficiency Opportunities Regulations 2006.

V/LINE ANNUAL REPORT 2008-2009

Chief Executive Officer

The annual report of the V/Line Passenger Corporation is prepared in accordance with all

relevant Victorian legislation.

This index has been prepared to identify compliance with statutory disclosure requirements.

MINISTERIAL DIRECTIONS

Report of Operations

Charter and purpose

FRD 22B Manner of establishment and the relevant Ministers Inside cover, 3, 65, 87

FRD 22B Objectives, functions, powers and duties Inside cover, 5, 17-19, 65

FRD 22B Nature and range of services provided Inside cover - 19

Management and structure

FRD 22B Organisational structure 68

Financial and other information

FRD 29 Workforce data disclosures 42-43

FRD 22B Occupational health and safety 18, 22-25

FRD 15B Executive officer disclosures 87-88

FRD 21A Responsible person and executive officer

disclosures in the Financial Report 87-88

FRD 22B Summary of the financial results for the year 62-63

FRD 22B Significant changes in financial position during the year 62-63

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

FRD 22B Details of consultancies under $100,000 63

FRD 12A Disclosure of major contracts N/A

FRD 24C Reporting of office-based environmental impacts 36-39, 93-96

FRD 22B Statement of availability of other information Back cover

FRD 10 Disclosure index 97

Financial Statements

Financial statements required under Part 7 of the FMA

SD 4.2(f) Financial report 69

SD 4.2(b) Operating statement 70

SD 4.2(b) Balance sheet 71

SD 4.2(a) Statement of changes in equity 72

SD 4.2(b) Cash flow statement 72

SD 4.2(c) Accountable officer’s declaration 70

SD 4.2(c) Compliance with Australian accounting

standards and other authoritative pronouncements 73

SD 4.2(c) Compliance with Ministerial directions 66

SD 4.2(d) Rounding of amounts 78

SD 4.5.5 Risk management compliance attestation 67

LEGISLATION

Freedom of Information Act 1982 66

Whistleblowers Protection Act 2001 67

Victorian Industry Participation Policy Act 2003 67

Building Act 1983 67

Financial Management Act 1994 70, 92

Audit Act 1994 92

Project Team

Daniel Moloney, Tom Perry, Clare Steele

Design

Nuttshell Graphics

Print

GEON Impact

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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