ARTC Annual Report 2015-16

 
  cootanee Chief Commissioner

Location: Waiting for the sky to fall, the seas to rise... and seeing a train on the SSFL!
Investment in the interstate network $74m down $14m
Dividend paid to the guvmnt $91.3m up $33.9m

http://www.artc.com.au/uploads/AR_2016_FINAL_Spreads_LR.pdf

Imagine if the national highways were funded on that basis Surprised

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  james.au Chief Commissioner

Location: Sydney, NSW
Interestingly enough - check out recommendation 6.13 of the Australian Infrastructure Plan (download from here).  Government response here.

IA has basically floated the idea of corporatised ownership of roads much like the ARTC is corporatised.



Regarding the dividend to the government, this is a good thing.  Ill tell you why.

ARTC is set up as a government owned business.  This means that any funding provided to ARTC is an equity injection, which means that it is not an expenditure for budget purposes.  So amounts paid to the ARTC don't increase the deficit.  They increase the governments investment balances on balance sheet.  Politically this is a good outcome, especially given Inland Rail is coming.

A condition of this is that the business must be a business, it can't be just another cost centre for government.  So paying dividends back shows that the ARTC operating as a business.  Im pretty sure the Corporations Act would apply and they couldn't pay dividends if they didn't have them.  So these are real dividends from real profits.


In the long run this should make it easier for the investment to Inland Rail (and other ARTC projects) that bit much easier to achieve in an environment where deficit reduction is going to be more and more the focus.

Thats how I understand it anyway.
  bevans Site Admin

Location: Melbourne, Australia
Turnbull must be getting desperate as the above highlights a shift from rail maintenance to dragging money out of the corporation in terms of a dividend.  Now I "could" say a few things

1. The dividend was raised to create a history of increasing dividends for a future sell-off.
2. Turnbull is becoming sooooo desperate for cash he is hitting up all the government enterprises.
3. The government has invested and is quite in their rights to expect a return.
  bingley hall Minister for Railways

Location: Last train to Skaville
Turnbull must be getting desperate as the above highlights a shift from rail maintenance to dragging money out of the corporation in terms of a dividend.  Now I "could" say a few things

1. The dividend was raised to create a history of increasing dividends for a future sell-off.
2. Turnbull is becoming sooooo desperate for cash he is hitting up all the government enterprises.
3. The government has invested and is quite in their rights to expect a return.
bevans
Apart from no.3 - absolute bollocks Brian.

Do some research.

Since its inception in 1998 has often provided a dividend to the Federal Government. On other occasions the Feds have waived the need for a dividend and allowed ARTC to reinvest it in the network.  

You're looking for something that isn't there.
  Just The Tip Junior Train Controller

Location: Danger zone
Turnbull must be getting desperate as the above highlights a shift from rail maintenance to dragging money out of the corporation in terms of a dividend.  Now I "could" say a few things

1. The dividend was raised to create a history of increasing dividends for a future sell-off.
2. Turnbull is becoming sooooo desperate for cash he is hitting up all the government enterprises.
3. The government has invested and is quite in their rights to expect a return.
Apart from no.3 - absolute bollocks Brian.

Do some research.

Since its inception in 1998 has often provided a dividend to the Federal Government. On other occasions the Feds have waived the need for a dividend and allowed ARTC to reinvest it in the network.  

You're looking for something that isn't there.
bingley hall
So, what you are trying to say is, it hasn't turned up on the Railpage radar or trackside cams yet?
  cootanee Chief Commissioner

Location: Waiting for the sky to fall, the seas to rise... and seeing a train on the SSFL!
...Regarding the dividend to the government, this is a good thing.  Ill tell you why.

ARTC is set up as a government owned business.  This means that any funding provided to ARTC is an equity injection, which means that it is not an expenditure for budget purposes.  So amounts paid to the ARTC don't increase the deficit.  They increase the governments investment balances on balance sheet.  Politically this is a good outcome, especially given Inland Rail is coming.

A condition of this is that the business must be a business, it can't be just another cost centre for government.  So paying dividends back shows that the ARTC operating as a business.  Im pretty sure the Corporations Act would apply and they couldn't pay dividends if they didn't have them.  So these are real dividends from real profits.


In the long run this should make it easier for the investment to Inland Rail (and other ARTC projects) that bit much easier to achieve in an environment where deficit reduction is going to be more and more the focus.

Thats how I understand it anyway.
james.au
For a number of years the Feds allowed ARTC to reinvest these dividends. Realistically these dividends will do SFA for the budget bottom line but reinvested over time might allow ARTC to slowly improve the network to build on its catch up work over the past decade.

If ARTC does not have the funds to bring the network into the late 20th (forget 21st) century through realignments and deviations (well documented), it can't hope to offer rail operators the sort of productivity gains Guvmnt funded road projects provide interstate road freight competitors.

These dividends are pennies compared to the mega billions the Feds plow into the national highway network year in year out, however in the absence of any similar interest in the rail network it's funds the DIRN can ill afford to payout.
  Trainplanner Chief Commissioner

Location: Along the Line
Totally agree with you Cootanee.   While we have full concrete sleepered Brisbane to Melbourne and through to Adelaide, there are still significant deficiencies in track condition even after ballast remediation etc.   You don't have to watch too many Youtube clips to see lots of poorly compacted ballast that without a train may look nicely maintained but run an intermodal over it at 100km/hr plus or especially a loaded steel train and you see wagons and locos bouncing everywhere.   That $40m to $50m dividend won't sadly buy the deviations and other alignment improvements but it could be used to do see serious ballast compaction using stone blowers and other machines than just a simple pass with a tamper.

I think (whilst there was no other cheap, quick fix), the "spot" mudhole remediation program that continues has generated the problem of differential settling/compaction of the track.   There is no doubt the teams who do the mudhole remediation have got the technique to address these pretty well covered, but it is unreasonable to expect that they can compact and tamp ballast under live traffic conditions to a level to enable complete uniformity with the rest of the track even though I strees again they have become pretty expert at it.

To really expose how much differential settling has taken place ARTC need to fully instrument some loaded wagons of various types that do accurately simulate the impact and ride quality of a 23/25 tonne axleload vehicles at track speed that really shows up these poorly compacted sections.   (I do recall something similar to this was done some years ago but for me it should be done as a permanent feature of the AK Test train).

The other thing for me is the sleeper spacing. ARTC has the sleepers fairly widely spaced compared to other railroads.   It seems we are going to have to operate on relatively old light to medium weight 47kg/m and 50kg/m rail for a number of years to come and better supporting that with slightly closer spaced sleepers would make a significant difference in better supporting track for both the short term and then when you subsequently rerail, the longer term.   We now have even in Australia concrete sleeper installations approaching 40 years so the cost relative to the increased life and better performance of the track you get from inserting a couple of dozen additional sleepers every kilometre at a time when you are resurfacing the track or doing a renewal of any sort just makes good sense.

There are ways to prioritize how such a program could be undertaken and it doesn't necessarily have to been in a massive renewal program.
  james.au Chief Commissioner

Location: Sydney, NSW
We must remember that the ARTC is essentially operating on the basis of financial sustainability.  That is, it converts what benefits it provides that it can to financial revenues and then manages the costs to be profitable.  There are significant economic benefits that it cannot convert to financial benefits and accordingly can't appropriately lever to make further investment in the lines.
  cootanee Chief Commissioner

Location: Waiting for the sky to fall, the seas to rise... and seeing a train on the SSFL!
We must remember that the ARTC is essentially operating on the basis of financial sustainability.  That is, it converts what benefits it provides that it can to financial revenues and then manages the costs to be profitable.  There are significant economic benefits that it cannot convert to financial benefits and accordingly can't appropriately lever to make further investment in the lines.
james.au
Yes we all know the theory. Under this model, in the absence of significant ongoing investment, rail will remain the poor cousin to road.
As an aside, the Inland Railway is a political animal ARTC inherited. There is no indication ARTC or its owner will fund the actual construction regardless of how much dividend ARTC returns.
  don_dunstan Minister for Railways

Location: Adelaide proud
As an aside, the Inland Railway is a political animal ARTC inherited. There is no indication ARTC or its owner will fund the actual construction regardless of how much dividend ARTC returns.
cootanee
There is simply no political will to commit to to it despite repeated promises and various studies telling them that it would be viable. Much more likely that the Newell Hwy will get big $$$ thrown at it instead.

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