Hi everyone, it’s great to be with you this morning.
It’s a privilege to be CEO and lead the ARTC team, although along with that comes a compelling responsibility of the role.
I’d like to start by acknowledging the land and traditional families of the Yugambeh region of south-east Queensland, and offer my respects to all First Nations people, including those here today.
At ARTC, our 8,500km rail network crosses the lands of more than 50 First Peoples communities, so recognising the continuing connection to land that Aboriginal and Torres Strait Islander people have is important to us as we progress our efforts to closing the gap.
From the outset, I’d also like to thank Caroline Wilkie and the rest of the ARA team for hosting us this week – a fantastic job as always – and for the opportunity to speak today.
I’d also like to thank Deb Spring as outgoing Chair or RISSB, and Danny Broad, the outgoing Chair of the ARA for their positive contribution and legacies.
Twelve months ago, at last year’s AusRAIL, I spoke about “ARTC’s agenda”, focusing on the things that are important to:
- Our customers
- Communities where we operate
- The rail industry
- Our Shareholder
- And ultimately, our country.
… in short, the collective agendas of these stakeholders form our agenda at ARTC.
Since then, nothing has changed as far as “who” we’re striving to deliver for. We’re still driven by the need to serve those I just mentioned.
Nor has anything changed regarding “why” our work is so important to help keep Australia moving.
What has changed is “how” we’re going about it.
So today, I’d like to give you an update on the “how”, including some of the key aspects of our plan to better deliver on what’s needed. And to be clear, what’s needed is a safe and effective rail network operation that connects the nation, now and into the future.
Firstly, an underlying reality – the rail network is only 50% of the rail operation. Our customers in train operations, are the other 50% and we must operate as one.
At ARTC, our plan highlights three things we need to deliver on:
- Firstly, provide a safe, resilient and reliable network and be known as one of the best-in-class at doing so.
- Secondly, grow rail’s market share, including working with customers – as well as freight owners and forwarders – on adaptations to enable growth.
- And thirdly, be a trusted partner of the community and supply chain, because if our partners are succeeding, we’re succeeding.
These are our strategic goals as an organisation, although to be blunt, they’re actually three imperatives if we’re to grow and prosper with our customers.
If we don’t deliver on them, arguably, we won’t have a long-term viable business. It’s as simple as that.
So we need to keep stepping things up.
Not just for our sake, but to enable our customers to run and grow their businesses, and to support broader efforts to improve freight productivity by leveraging the economies of scale that rail has to offer in this country.
So, how are we doing things differently at ARTC, and what are we doing to address our three imperatives?
At the start of the year, we embarked on a refreshed organisational direction to strengthen our foundations as a business.
We did this after determining that we had to make changes to evolve … changes that would set us up so that our operations, infrastructure and financial performance are sustainable into the future.
I’ll say openly, it hasn’t been easy for leaders or the wider team.
But we’ve been able to implement functional and leadership changes, including aligning our internal business areas and streamline our processes.
To borrow a sporting analogy, we’ve made some tough calls, sharpened our focus, and got ourselves ‘match-fit’ to be in the game.
We’re now looking to deliver more effectively ‘on the ground’ so to speak by being more disciplined and ‘on point’, so we can help our customers, Shareholder and other key stakeholders get more wins on the board.
Importantly, the organisational changes were and continue to be driven by the need to improve efficiency and our overall performance in support of our strategic aims.
Whilst it’s an ongoing process, we’re building momentum towards an improved service for those we partner with … including many of you here today.
And it’s leading to substantial focus on service performance levels and investment in rail infrastructure … all in support of that first goal I mentioned to facilitate a safe, resilient and reliable network, in line with our Shareholder’s expectations.
Delivering safely, in particular, is so crucial in the service we provide. It sits at the heart of our values and our reliability as a business.
If the rate of incidents, injuries and near misses continue across our operation, it means we’re not doing our job properly.
In recent years, we’ve seen too many incidents, which we can’t accept as being ‘part of the job’ or ‘part of managing a railway’.
To be frank, that’s a cop out, and relative to other industry sectors and businesses, we’ve a way to go. Not wanting to directly conflict with industry peers’ views offered yesterday, although it strikes me that an opportunity exists for leaders across our sector to take a closer look at the safety maturity, journeys and systems for other sectors – oil and gas, aviation, mining but to name a few – to enable a grounded reference point.
So we’ve done our fair share of soul-searching, and continue to increase our emphasis on strengthening our standards, procedures and training.
We’re making progress, but we’ve work ahead to embed sturdier operational controls to better protect our people, customers and communities.
To that end, we’ve unified our Operations team and we’ve unified our national Safety Expectations across ARTC.
This isn’t anything extraordinary or ground-breaking, although it is unifying the approach nationally.
We are working to evolve the authority and accountability for delivering safely, regardless of the person’s role, involving our wider team and those who work closely with us in helping this improvement.
The bottom line being: if the expectations can’t be met, work must stop until it’s safer to proceed.
Getting our plans, tools and leadership right all leads to a more proactive organisation, which is fundamental if we’re to improve the resilience and reliability of the network.
Indeed, nothing else matters as much to our customers as keeping their teams and their trains moving safely, seamlessly and efficiently across the nation.
Earlier, Caroline Walsh, the Chair of the National Transport Commission, showed a slide of the national network. To be clear, more than 80% of that network is under ARTC’s management.
As we’ve discussed previously, in recent years, our performance hasn’t been at the level we want it to be. So we’ve had to lift our game.
We’ve made reliability improvements – with much more to come in this space – and in the last financial year were able to start turning things around by improving network availability by around 10%. This reflected our growing emphasis in this area and a slight abatement in extreme weather events.
We’ve completed further assessment of our network vulnerabilities. And we know things can change quickly, particularly in relation to extreme weather.
Recognising weather patterns as an increasing risk, we’re working to be better prepared … whether it be widescale flooding or extended periods of extreme heat. Both scenarios have the ability to disrupt and delay operations, and impact our customers and supply chains.
That’s why we’re increasing our investment in network resilience to provide more effective and reliable infrastructure.
So, how are we boosting resilience in order to boost network performance and availability?
Firstly, we continue to focus on what and where our network vulnerabilities are.
We’ve completed a comprehensive condition and risk review of our entire national network – extending on the prior extensive hydrology review – to plan future works based on criticality and risk to the network.
We’ve analysed and identified the most pressing risks across the North-South, East-West and heavy haul corridors, and prioritised areas requiring urgent attention.
It’s worth noting a lot of the infrastructure assets we have in our management are between 80-100 years old … a time when engineering standards were vastly different.
The combined infrastructure plan to keep improving reliability in order to improve baseline performance and grow confidence in the national rail service is pivotal.
Taking what we’ve learnt, we’ve expanded our track infrastructure investment.
Specifically, we’ve matured a Network Investment Program in collaboration with our Shareholder, the Australian Government, industry and customers, which focuses on new capital investments and accelerated asset replacement.
To help fund the program, more than $1 billion has been committed in additional capital investment over the next six years, having commenced this year.
It includes $540 million in support from our Shareholder for the industry by way of Commonwealth funding, accompanied by ARTC’s own commitment of $500 million, which is on top of our existing investment in capital, asset renewal and maintenance activities.
In fact, we achieved successful bond issuance on the back of support from our Shareholder, in effect topping up our mortgage to achieve the investment required of us.
For those here who believe that’s not enough, you may be correct. Although again to be clear, the first six years of the program are shaped around the amount and localities of where the work can be delivered whilst we still maintain busy train operations.
Our Network Investment Program includes:
- Culvert and track upgrades that will reduce the risk of lengthy network outages due to flooding.
- Track rehabilitation between Sydney and Albury that will reduce transit times and improve ride quality.
- Crossing loop extensions and new passing loops that will enable longer trains to operate between the east and west coasts.
- Signalling upgrades between Melbourne and Adelaide to address the most prominent cause of operational delays on one of the country’s busiest rail freight corridors; and
- An upgrade of the Portland Line in Victoria to help facilitate the growth of the critical minerals sector.
Our ability to deliver these projects and realise the desired benefits requires close collaboration with our partners. And I’m pleased to say we’re well underway establishing the necessary arrangements to support planning and delivery of benefits.
By bolstering our rail infrastructure, we’re positioning ARTC to better contribute to industry efforts to address Australia’s growing freight task, which – as you probably know – is projected to grow by circa 25% between 2020 and 2050 … and possibly double this growth again in the decade beyond.
Ultimately, our Network Investment Program provides a plan for mitigating increasing climate risk, replacing legacy assets, and harmonising performance standards across the network.
We’re confident this work will help deliver a significant uplift in performance standards, and in turn, deliver gains in rail productivity and confidence across the freight sector.
This of course feeds into our second key aim to grow rail’s market share.
We have an obligation to improve the efficiency, effectiveness and productivity of rail transport in Australia, and we’ve got a great opportunity to do so if we truly work together in the same direction.
That’s why amongst a more integrated rail service offering, the National Rail Action Plan – through the NTC – is so important.
It highlights the industry-wide need for greater consistency and compatibility of technologies and systems, so that trains run seamlessly across Australia’s different networks … achieving economies of scale and a continuous flow of rail transport to the advantage of an aligned and integrated rail industry.
As one of the many stakeholders involved, ARTC is committed to improving the ability of trains to operate across multiple networks.
It’s an extremely complex challenge. And large-scale.
Just think: a train from Fremantle to Port Botany travels 4,000km – roughly the width of Europe – navigating multiple networks and systems along the way.
So we’re unabashed in our view, in concert with the NTC, that interoperability and harmonisation demands a committed and integrated approach.
We are strongly advocating, through and with the NTC, the adoption of a clear set of operational or guiding principles as fundamental to enabling the industry to take alignment steps through various means or tools, to play the coordinated role.
By working together to unify and streamline consistent tools, standards, systems and equipment across Australia, we’ll collectively position our industry to improve productivity and innovation to further drive safety and efficiency.
Delivering on this work will contribute to our third and final strategic aim to be a trusted partner of the wider supply chain and community.
This includes our ongoing work with the industry to integrate intermodal precincts and terminals – including Moorebank in Sydney and future terminals at Somerton and Beveridge in Victoria – which will continue to be a focus in 2025 and beyond.
These facilities provide a great opportunity for us to improve our service offering for customers and increase freight on rail.
We’re also working with ports including Melbourne, Botany and Newcastle – as well as Arc Infrastructure – to develop the most aligned service and freight system possible.
That is, rather than a ‘network pathing’ view, we’ve adopted an end-to-end view of freight needs, which we believe is essential to positive customer outcomes.
As Lucio (Di Bartolomeo), the incoming Chair of the ARA has indicated, the low percentage of rail freight between Sydney and Melbourne is concerning.
To be specific about the market though, over that 20-year period where rail freight share has been relatively flat, there are lessons for us. Bulk carriage is more likely around 1,000% growth, and passenger has kept pace with population – there are lessons in there and globally for us.
Being a trusted partner also includes our commitment to decarbonisation.
With electricity generation transitioning to more renewable sources, the transport sector is set to become Australia’s highest source of greenhouse gas emissions by 2030.
Whilst we have a mature ESG plan, to reduce the sector’s carbon footprint – and given the ability of trains to move freight in a relatively low emissions-intensive way – the single biggest thing we can do as a nation is grow rail’s market share. ARTC’s capability is central to this given operation of over 80% of the national network.
Decarbonisation is a massive challenge for the entire industry, and is going to take transformation at pace if we’re to maximise rail’s growth in this country.
I’ll also add that ARTC has been busy on several major construction projects this year.
Most notably, we recently finalised the Botany Rail Duplication and Cabramatta Loop Project to improve freight capacity and meet rising demand between Port Botany and metropolitan intermodal terminals.
We’ve also just completed construction of the Narrabri to Turrawan Line Upgrade, delivering consistent tonne axle load for trains between our Hunter Valley network and the future interface with Inland Rail.
We’re completing a culvert upgrade project in remote South Australia to reduce the risk of flooding and underpin the vital East-West rail corridor.
We’ve also commenced major works on the Southern Highlands Overtaking Opportunities project, which will ease congestion for freight and passenger trains between Sydney and Melbourne.
And of course, the most significant rail infrastructure project of them all, Inland Rail, now a fully owned subsidiary of ARTC, is progressing well under the direction of the Inland Rail Board and CEO Nick Miller.
Inland Rail remains critical to enhancing the long-term productivity and competitiveness of rail in Australia … in essence, they are building part of Australia’s transport future to help us achieve a more modern and connected freight rail network.
But we can’t wait for Inland Rail to be completed to leverage the relative strengths of rail and road to achieve the modal shift on longer haul transit and grow the Melbourne to Brisbane share to closer to 20%.
For example, with the M1 motorway extension nearing completion, B-double trucks will soon be able to travel from Melbourne to Brisbane without a traffic light. Arguably, there is a more balanced equation that plays to the relative strength of both trucking and rail.
So we need to push ahead now with an increasingly integrated rail service offering.
To sum up, as the Australian rail industry, we have a sliding doors moment … right here, right now.
Society is shifting. Demand for service levels for freight transfer via rail is changing in line with this, and so for our customers and their customers to have confidence in rail as the mode of choice, we must adapt.
Safety, efficiency and sustainability are being increasingly prioritised. Rail is uniquely positioned to take a lead role in an integrated transport network which co-exists with other modes and plays to relative strengths.
So at ARTC, we don’t want to let the moment pass.
We’re making our move. And we hope others across the industry feel the same.
Because we need to work together – in a way we haven’t before – as pieces of the same puzzle.
Working as a rail team is a common discussion, although the litmus test is the preparedness to stop doing something or adapt what you were doing to align with the industry and national interest.
I can assure you for example, pausing progress this year on ATMS to align with the national plan hasn’t been an easy decision. Taking learnings from across the world, in various transport systems globally, the genesis of working together and the related benefits are clear. And, as is the case in many places, there’s a fundamental requirement to do so.
We need to focus on the critical matters and make collective decisions that lead to collective actions and growth opportunities.
Because if we can do that, we’ll unlock the growth opportunity that rail has and seize on our sliding doors moment to improve transport for the good of the country.
Thank you to our customers and industry partners for your ongoing support of ARTC, and the momentum we’re building together. It’s an exciting phase ahead.
Thanks everyone.