Article: Get your act together: Seeney

[ozbob]

From the Sunshine Coast Daily click here!

Get your act together: Seeney

Get your act together: Seeney

Bill Hoffman | 25th June 2012 6:02 AM

MAJOR players in the development of Caloundra South have been ordered sit down together and negotiate whatever is necessary to make it a success.

The message has come from Deputy Premier Jeff Seeney who told developer Stockland, Sunshine Coast Council and the Urban Land Development Authority to work things out between themselves.

While he had the power under legislation to "call in" the project, it was only there as a fail-safe, he said.

Member for Caloundra Mark McArdle last week asked Mr Seeney to consider what authority he had to act, after being advised by Mayor Mark Jamieson that the infrastructure shortfall for Caloundra South would create long-term financial problems for council.

The massive 50,000 population development received development scheme approval from the ULDA a week ago.

However, it is yet to be tested against federal Environment Protection and Biodiversity Act legislation, relating to its impact on the RAMSAR-listed Pumicestone Passage wetlands.

Developer Stockland said last week it expected work to start on the northern boundary of the more than 2000ha development site by the end of next year.

Mr Seeney told the Daily he was concerned by the lack of negotiation between interested parties.

"I want them all to sit down and talk rather than rely on me," he said.

And he wants to see evidence from council of the financial burden it fears it will be left with.

Council is preparing a brief based on the provisions of the development scheme approved by the ULDA.

It is already receiving pressure from developers, including the Investa consortium at Palmview, to ease requirements for infrastructure provision to match those levied against Caloundra South.

At risk is an already-signed $600 million infrastructure agreement for the Palmview development area, which will eventually house more than 15,000 people.

Meanwhile, Premier Campbell Newman made clear last week that tackling the debt left by the Bligh government would take precedence over the provision of critical infrastructure.

Duplication of the north coast rail line has been identified as part of the LNP's audit of future infrastructure, but the Premier said the broken Labor 2009 election promise would have to wait.

"But we'd be happy to talk to Council about any proposals that they might wish to put forward, giving full consideration to the current status of the budget, and the economy as a whole," Mr Newman said.

But the government will not intervene to ensure Caloundra South is shielded from the Bruce Hwy by a considerable vegetation buffer.

The ULDA development scheme allows buildings to 15m in height on the boundary abutting the Bruce Hwy.

"The inter-urban break is not provided by Caloundra South's buffer but by non-urban green space between the southern edge of the urban footprint of Caloundra South and the northern edge at Caboolture," he said.

[Fares_Fair]

Meanwhile, Premier Campbell Newman made clear last week that tackling the debt left by the Bligh government would take precedence over the provision of critical infrastructure.
Duplication of the north coast rail line has been identified as part of the LNP's audit of future infrastructure, but the Premier said the broken Labor 2009 election promise would have to wait.

I now know where they stand on this, but until when?
The former Labor Government's 2021 to Landsborough, and 2031 to Nambour.

*sigh*

The long neglected Sunshine Coast, neglected again.

[somebody]

I expect that there will be no duplications of any sort on the Sunshine Coast until the state gets back to a AAA credit rating at a minimum.

[Fares_Fair]

Audit of future infrastructure ... has there been any other information on this audit?
What it contains, when commissioned?
when presented?

[Stillwater]

It may have been the Costello audit by the 'panel of experts'.

[Fares_Fair]

Nothing here, but an interesting read ... incidentally, a diagram (p167) clearly shows the TSC between TransLink and Queensland Rail.
from p165

Queensland Commission of Audit
Interim Report June 2012

10.4. QUEENSLAND RAIL LIMITED

10.4.1. Structure and funding arrangements

Queensland Rail Limited (QR) is a GOC that delivers Citytrain passenger rail
services in south east Queensland and intercity and regional passenger transport
services through Traveltrain, heritage rail services and specialist tourist rail services.
It also operates some regional freight lines. QR must also comply with the
Corporations Act 2001(Cth), and the NTER.
In accordance with the GOC capital structure policy, QR's capital structure is
determined having regard to the achievement of a notional standalone credit rating of
BBB- or better.
In 2010, the Government sold the coal network business, leaving the passenger
transport business in a newly formed GOC, QR. The company has substantial
legacy issues remaining following this separation, including dependence on service
level agreements, the separation of IT systems and restrictive workforce
arrangements. There is also $3 billion of debt allocated to QR, following its
separation from QR National, with limited capacity to service that debt on a standalone
basis.
QR is funded primarily through three Transport Service Contracts (TSCs) in the
General Government sector which in 2010-11 totalled $1.4 billion. These TSCs
represents a government contribution of 78% of total QR revenue, with the balance
of its income being rental income and network access revenue. The TSCs include:
 Rail Infrastructure
 Citytrain (paid by Translink)
 Traveltrain.
Separately, Government fare concession revenue is paid on a predetermined formula
as agreed with the local authority.
10. Risks of Government Commercial Businesses

Page 166 Queensland Commission of Audit Interim Report June 2012
Page 12

TSCs are structured on a cost recovery basis for delivery of a service, which is either
based on a rate of return on the capital spend and/or the actual operational
expenditure. As shown in Chart 10.4, there are significant increases in the actual
and projected CSO payments to QR, from $1.1 billion in 2006-07, to a projected
$1.9 billion in 2015-16, an increase of over 75%.
Chart 10.4
QR – Actual and projected CSO payments
Source: Treasury
As with Ergon, this CSO represents a significant funding risk to the State. In the
absence of competitive market pressures, it is important to ensure that there are
appropriate incentives for QR to contain costs and manage its business appropriately
in order to limit the State's financial commitment.
There is a complex set of cash flows which support the capital structure and
operations of QR, as illustrated in Chart 10.5 below. In particular, there is a
circularity of cash flow, with dividend and tax equivalent payments by QR back to the
General Government sector being made possible largely by the General Government
sector subsidising its operations through debt, equity injections and grants through
the TSC. In this process, there is a leakage of funds due to the costs of
administering this structure.
1,000
1,100
1,200
1,300
1,400
1,500
1,600
1,700
1,800
1,900
2,000
2008-09 2010-11 2012-13 2014-15
$ millions
Actual Projection
Risks of Government Commercial Businesses 10.

Queensland Commission of Audit Interim Report June 2012 Page 167
Page 13

Chart 10.5
QR cash flows
Source: Commission of Audit
QR has a high dependence on the General Government sector for operating
revenue, a capital structure that is not self-supporting, and a limited capacity to
operate on a commercial basis. In these circumstances, there is a case to review the
best structure to deliver passenger rail services, including the continuation of a GOC
structure, use of a statutory body, or other corporate structure. As part of any such
review, the role of Translink and its relationship with QR also warrants attention.
10.4.2. Capital program
QR has a capital program currently underway to expand the network, improve
stations and increase or replace rolling stock. However, there are a number of other
outstanding issues which pose significant funding risks for the State.
10.4.2.1. Disability standards compliance
The Disability Standards for Accessible Public Transport, which are detailed
standards attaching to the Disability Discrimination Act 2002 (Cth), require that the
providers of public transport have fully complaint transport systems for use by
disabled passengers by 2022. There are also key interim milestones for progress
towards full compliance.
QR has disabled spaces on trains and is compliant with the standards at newly
constructed stations. However, some of the older stations (40%) have stairs or steep
ramps, which deny independent access for the disabled. There are currently claims
being considered by the Anti-Discrimination Commission that QR has ignored the
needs of people with disabilities.
Translink Transit
Authority
Queensland Rail
Debt
Grant
TSC
Equity
Suppliers
TSC
Suppliers
Dividends and
tax
Fares
Rent /
Fares
State of Queensland
QTC
Interest
10. Risks of Government Commercial Businesses

Page 168 Queensland Commission of Audit Interim Report June 2012
Page 14

To date, an amount of $82.8 million has been committed for 2007 Disability
Standards Compliance at stations together with over $100 million for station
upgrades which include upgrades for disability access. A further $48 million is
committed for rolling stock upgrades, which also include disability access. QR has
advised that it plans to be compliant with the disability standards by 2022, but it has
estimated that additional investment of approximately $2 billion will be required over
the next 10 years to achieve full compliance. Best practice application could result in
a lower cost.

10.4.2.2. Automatic train protection

TMR has undertaken a rail safety systems assessment of the south east Queensland
rail network following the introduction of the Transport (Rail Safety) Act 2010, to
assess the cost/benefit of implementing safety improvement-related engineering
systems (such as an automatic train protection system) and administrative processes
to manage and mitigate specifically identified risks in compliance with prevailing
legislation.
The conclusion of this review was that, based on the costs to implement such a
system, European Train Control System Level 2 was the preferred rail safety system
for the south east Queensland rail network. An amount of $25 million has been
allocated for QR to undertake a detailed study of feasibility, planning and
implementation issues. Current estimates from QR indicate that the cost of such a
system is expected to exceed $1.6 billion.

10.4.2.3. Moreton Bay Rail Link project

During the 2010 Federal election, funding was announced for the Moreton Bay Rail
Link Project. The cost of $1.1 billion was to be funded by the Federal Government
($742 million), Moreton Bay Regional Council (Council) ($120 million) with the
balance funded by the Queensland Government through a contribution of land
($120 million) and cash ($300 million). The business case was approved in
December 2011, with an indicative cost of $1.2 billion, with the increase being
attributed to additional risk and contingency escalations.
The Australian Government and Council contributions are capped at $742 million and
$120 million respectively, meaning that the State will have to bear the risk of any cost
overruns. Furthermore, no provision has been made for:
 connection of the rail spur to the existing network line, requiring grade separation,
which would cost an additional $300 million, or
 the estimated annual operating cost of $50 million per annum (beyond the
forward estimates period).
While the Australian Government has approved funding for this infrastructure project,
its contribution will be subject to assessment by the Commonwealth Grants
Commission and will result in a reduction of Queensland's share of GST funding. As
such, in overall terms, there is a risk that a major portion of the Australian
Government's share will in fact be met by the State.
Risks of Government Commercial Businesses 10.

Queensland Commission of Audit Interim Report June 2012 Page 169
Page 15

10.5. TRANSLINK TRANSIT AUTHORITY (TRANSLINK)
Translink (previously part of Queensland Transport) is a tax exempt statutory body
that was formed in 2008 to improve and expand public transport services across
South East Queensland. In this role, it co-ordinates and delivers bus, train and ferry
services in SEQ. Translink receives grant funding from TMR to cover the shortfall
between the ticket revenue earned, the cost of services it purchases from QR,
Brisbane City Council and other providers, and its overhead costs.
As shown in Chart 10.6, grant revenue has increased from $790 million when
Translink was first established in 2008-09 to $1.0 billion in 2010-11, an increase of
almost 29%. It is projected to increase to $1.3 billion by 2015-16, a total increase of
almost 65% since inception.
Chart 10.6
Translink grant revenue
Source: Treasury
The Translink grants in 2010-11 were used to fund:
 QR Citytrain TSC (54%)
 the SEQ bus and ferry services subsidy (36%)
 other networks (4%)
 Translink's operating costs (6%), including the administration of the GoCard
ticketing system.
Translink's longer term objective is increase the proportion of ticket revenue from
24% to 30% of total revenue by 2015. However, with the proposed reduction of
expected fare increases, this will be more difficult to achieve.
Chart 10.7 shows patronage levels for the main modes of public transport which form
part of Translink's jurisdiction. Whilst bus patronage has increased between 2007
and 2011, train patronage has remained constant over the period, despite substantial
investment in rail infrastructure and an increase in population in south east
Queensland.
0
200
400
600
800
1000
1200
1400
2008-09 2010-11 2012-13 2014-15
$ million
10. Risks of Government Commercial Businesses

Page 170 Queensland Commission of Audit Interim Report June 2012
Page 16

Chart 10.7
Train, bus and ferry patronage
Source Translink Financial Statements 2007-08 to 2010-2011, Translink Train Patronage correction December 2011
Chart 10.8 shows the cost per trip for rail and bus/ferry, paid to the providers
(primarily QR and Brisbane Transport). Rail transport costs significantly more than
bus transport per average trip, highlighting the need to consider enhanced mode
contestability. The payments contracted by Translink with the operators are to
provide the service, but do not appear to have the appropriate incentives to increase
patronage and thereby reduce the overall cost per trip.
Chart 10.8
Passenger cost per trip
Source: Derived data Translink Financial Statements 2008-09, 2009-10,2010-11
0
20
40
60
80
100
120
140
2007-08 2008-09 2009-10 2010-11
million trips per annum
Ferry patronage
Train Patronage revised
Bus Patronage
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
2008-09 2009-10 2010-11
$ per trip
Cost per trip bus/ferry
Cost per trip rail
Risks of Government Commercial Businesses 10.

Queensland Commission of Audit Interim Report June 2012 Page 171
Page 17

As highlighted earlier in this Section, the Commission considers there is a need to
review the roles of both Translink and QR in determining an appropriate structure
and funding arrangements for the efficient delivery of public transport services by the
State.

[Fares_Fair]

and then there's this ...

p149
The Commission notes that there is a further debt of $3 billion in Queensland Rail
(QR) that remained after separation of the passenger business from the coal
network. This will need to be repaid from earnings generated in QR.

[ozbob]

If you"ve been searching for a way to look like an idiot, your quest is over. Meet.... Basket Case. Basket Case is basically a basketball hoop hat. The goal of the game is to toss red and white balls into the air and catch them in the net on top of your head.

There''s no way you can avoid looking like an imbecile as you play this game. Just pray that nobody has a camera when it''s your turn to play it.

http://www.blueday.org/?p=17

[Fares_Fair]

It may have been the Costello audit by the 'panel of experts'.

I checked, it's not mentioned in the Costello Audit. 

Time for Captain Google!

[Fares_Fair]

From the Sunshine Coast Daily click here!

Get your act together: Seeney

Get your act together: Seeney

Bill Hoffman | 25th June 2012 6:02 AM

MAJOR players in the development of Caloundra South have been ordered sit down together and negotiate whatever is necessary to make it a success.

The message has come from Deputy Premier Jeff Seeney who told developer Stockland, Sunshine Coast Council and the Urban Land Development Authority to work things out between themselves.

While he had the power under legislation to "call in" the project, it was only there as a fail-safe, he said.

Member for Caloundra Mark McArdle last week asked Mr Seeney to consider what authority he had to act, after being advised by Mayor Mark Jamieson that the infrastructure shortfall for Caloundra South would create long-term financial problems for council.

The massive 50,000 population development received development scheme approval from the ULDA a week ago.

However, it is yet to be tested against federal Environment Protection and Biodiversity Act legislation, relating to its impact on the RAMSAR-listed Pumicestone Passage wetlands.

Developer Stockland said last week it expected work to start on the northern boundary of the more than 2000ha development site by the end of next year.

Mr Seeney told the Daily he was concerned by the lack of negotiation between interested parties.

"I want them all to sit down and talk rather than rely on me," he said.

And he wants to see evidence from council of the financial burden it fears it will be left with.

Council is preparing a brief based on the provisions of the development scheme approved by the ULDA.

It is already receiving pressure from developers, including the Investa consortium at Palmview, to ease requirements for infrastructure provision to match those levied against Caloundra South.

At risk is an already-signed $600 million infrastructure agreement for the Palmview development area, which will eventually house more than 15,000 people.

Meanwhile, Premier Campbell Newman made clear last week that tackling the debt left by the Bligh government would take precedence over the provision of critical infrastructure.

Duplication of the north coast rail line has been identified as part of the LNP's audit of future infrastructure, but the Premier said the broken Labor 2009 election promise would have to wait.

"But we'd be happy to talk to Council about any proposals that they might wish to put forward, giving full consideration to the current status of the budget, and the economy as a whole," Mr Newman said.

But the government will not intervene to ensure Caloundra South is shielded from the Bruce Hwy by a considerable vegetation buffer.

The ULDA development scheme allows buildings to 15m in height on the boundary abutting the Bruce Hwy.

"The inter-urban break is not provided by Caloundra South's buffer but by non-urban green space between the southern edge of the urban footprint of Caloundra South and the northern edge at Caboolture," he said.

Policy change perhaps ...

THE 'CANDO' LNP
Building Queensland's Future Together

The LNP will forward plan for
Queensland's future

The LNP's Building Queensland's Future – Together Discussion Paper paints the way
forward and invites all Queenslanders to contribute.
The LNP will focus on the Four Pillars of our economy to make sure Queensland once
again becomes the leading Australian state to do business, get a job, raise a family and
buy a house.
The LNP believes delivering infrastructure to drive economic growth and deliver services
should be a primary policy objective of our State Government.
We understand that driving economic growth is ultimately the only way to regain
our financial strength needed to generate the revenue required to provide the social
infrastructure and services Queenslanders deserve.

[somebody]

TSCs are structured on a cost recovery basis for delivery of a service, which is either
based on a rate of return on the capital spend and/or the actual operational
expenditure. As shown in Chart 10.4, there are significant increases in the actual
and projected CSO payments to QR, from $1.1 billion in 2006-07, to a projected
$1.9 billion in 2015-16, an increase of over 75%.

That is far worse than Cityrail on a per passenger basis, and worse than BT on a per passenger-km basis.

It seems that QR's current performance is in the toilet.  I think that puts the cost about the same as Melbourne Metro, for under 1/4 the patronage.  Bummer!

[SurfRail]

TSCs are structured on a cost recovery basis for delivery of a service, which is either
based on a rate of return on the capital spend and/or the actual operational
expenditure. As shown in Chart 10.4, there are significant increases in the actual
and projected CSO payments to QR, from $1.1 billion in 2006-07, to a projected
$1.9 billion in 2015-16, an increase of over 75%.

That is far worse than Cityrail on a per passenger basis, and worse than BT on a per passenger-km basis.

It seems that QR's current performance is in the toilet.  I think that puts the cost about the same as Melbourne Metro, for under 1/4 the patronage.  Bummer!

I'm utterly unsurprised.  QR only mouths platitudes when it comes to "customer service" or being "passenger-focused".  The best customer service is a train when you need it, and the best way to be passenger focused is to have a strategy to grow their patronage.  They have neither.

[ozbob]

Just be a little circumspect with those figures.  Projections not actual, and probably includes long distance as well.

[somebody]

Just be a little circumspect with those figures.  Projections not actual, and probably includes long distance as well.

Reading off the graph shows about $1.3bn in the current year.  Fair point on the long distance.  This article shows $130m p.a. for that, unless it's blown out.

I suspect a lot of the costs are capex in QR's case. To do no more with more generally.

[Fares_Fair]

Interesting ... didn't read that in the Translink Tracker. 

Chart 10.7 shows patronage levels for the main modes of public transport which form
part of Translink's jurisdiction. Whilst bus patronage has increased between 2007
and 2011, train patronage has remained constant over the period, despite substantial
investment in rail infrastructure and an increase in population in south east
Queensland.

[SurfRail]

Interesting ... didn't read that in the Translink Tracker. 

Chart 10.7 shows patronage levels for the main modes of public transport which form
part of Translink's jurisdiction. Whilst bus patronage has increased between 2007
and 2011, train patronage has remained constant over the period, despite substantial
investment in rail infrastructure and an increase in population in south east
Queensland.

Spending on buses and ferries has translated into new routes, more services and better connectivity.

Spending on the railways has largely been about providing marginal capacity enhancements which sit fallow for most of the day with no significant frequency upgrade anywhere except for Oxley and Darra 7 days and the rest of the inner Ipswich on weekends. 

In the same period of time, Brisbane has gone from having 0 BUZ routes to around 20.  Do the maths...