The issue of the capping layer being damaged as part of the Side insertion technique adopted for replacing timber sleepers with concrete is still going to be the big, big fix needed to fully overcome the problems with mudholes. All of the remedial works of ballast cleaning, drainage improvements and lifting the track are all essential but if and the evidence is there that the capping layer has been damaged will mean there is still a major headache for ARTC. Much has been said about the state of the track prior to the upgrade and lack of investment all of which is true. But when mudholes appear on sections of railway that never had problems before then you have a fundamental problem. The new piece of kit will help but it won't fix the root cause which the ATSB report when released will no doubt raise.
Side insertion wasn't the only thing happening over this period. It did rain big time following an 8 year drought. You can run anything on compacted dry dirt but add water and it's a different story. Much of the ballast and drainage systems (just like the sleepers) was at or near the end of its economic life - there's no getting away from that legacy of three decades of underinvestment.
Fact most of the Eastern network needed rebuilding from the ground up but no one was putting up the $$$ for that - sleepers, ballast, drainage, culverts/bridges etc. The situation when ARTC took up the NSW Lease seemed anyone's guess...
"...the condition of main-line routes reflected the maintenance of rail corridors that were "typically designed and constructed before 1960 (and frequently before 1930)". The report also observed that "In each state where ARTC had assumed control of the rail asset, substantial deficiencies in safety critical components had been identified. It is likely NSW will also contain undetected infrastructure flaws which impact on rail safety." http://www.otsi.nsw.gov.au/rail/IR-Bethungra-final.pdf