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Rural and Regional Affairs and Transport Legislation Committee


In Attendance

Senator Carr, Minister for Manufacturing and Minister for Defence Materiel

Department of Infrastructure and Transport


Mr Mike Mrdak, Secretary

Mr Andrew Wilson, Deputy Secretary

Ms Lyn O'Connell, Deputy Secretary

Corporate Services

Mr David Banham, Chief Operating Officer

Ms Marilyn Prothero, Chief Financial Officer

Australian Rail Track Corporation

Mr John Fullerton, Chief Executive Officer

Infrastructure Australia

Mr Michael Deegan, Infrastructure Coordinator

Nation Building-Infrastructure Investment

Mr Andrew Jaggers, Executive Director

Mr Richard Wood, General Manager, Rail and Intermodal

Mr Andrew Danks, Acting General Manager, Infrastructure Policy

Mr Roland Pittar, General Manager, North West Roads

Mr Alex Foulds, General Manager, South East Roads

Mr Troy Sloan, General Manager, Major Infrastructure Projects Office

Surface Transport Policy

Mr Michael Sutton, Acting Executive Director

Mr Robert Hogan, General Manager, Vehicle Safety Standards

Ms Philippa Power, General Manager, Maritime Policy Reform

Mr Joe Motha, General Manager, Road Safety and Programs

Ms Donna Wieland, General Manager, Surface Transport Regulation Taskforce

Ms Pauline Sullivan, General Manager, Shipping Policy Reform

Mr Jon Real, Special Adviser-Vehicle Emissions, Land Transport Reform

Australian Maritime Safety Authority

Mr Graham Peachey, Chief Executive Officer

Mr Mick Kinley, Deputy Chief Executive Officer

Mr Allan Schwartz, General Manager, Maritime Operations Division

Mr Yew Weng Ho, General Manager, Corporate Services Division

Mr John Young, General Manager, Emergency Response Division

Mr Brad Groves, General Manager, Maritime Standards Division

Mr Toby Stone, General Manager, Marine Environment Division

Mr John Fladun, General Manager, Regulatory Affairs and Reform

Policy and Research, incorporating the Bureau of Infrastructure, Transport and Regional Economics

Mr David Williamson, Executive Director

Mr Brendan McRandle, General Manager, Policy Development Unit

Dr Gary Dolman, Head of Bureau, BITRE

Mr Stuart Sargent, General Manager, Policy and Research Division

Mr Richard Farmer, General Manager, High Speed Rail

Major Cities Unit

Ms Dorte Ekelund, Executive Director

Office of Transport Security

Mr Paul Retter, Executive Director

Mr David Nockels, General Manager, Analysis and Operational Support

Mr George Brenan, General Manager, Transport Security Operations

Mr Steve Dreezer, General Manager, Maritime, Identity and Surface Security

Mr Peter Robertson, General Manager, Aviation Security

Mr George Thomas, Acting General Manager, Supply Chain and Technology

Aviation and Airports

Mr John Doherty, Executive Director

Mr Scott Stone, General Manager, Aviation Environment

Ms Leonie Horrocks, General Manager, Airports

Mr Jim Wolfe, General Manager, Air Traffic Policy

Mr Marcus James, General Manager, Airport Economic Regulation

Airservices Australia

Mr Greg Russell, Chief Executive Officer

Mr Jason Harfield, General Manager, Air Traffic Control

Mr Unni Menon, General Manager, Corporate and International Affairs

Civil Aviation Safety Authority

Mr John McCormick, Director of Aviation Safety

Dr Jonathan Aleck, Associate Director of Aviation Safety

Mr Terry Farquharson, Deputy Director of Aviation Safety

Mr Peter Cromarty, Executive Manager, Airspace and Aerodrome Regulation

Mr Rick Leeds, Manager, Airworthiness and Engineering

Mr Greg Hood, Executive Manager, Operations

Mr Mark Sinclair, Executive Manager, Safety Education and Promotion

Mr Peter Fereday, Executive Manager, Industry Permissions

Mr Adam Anastasi, Executive Manager, Legal Services

Ms Elizabeth Hampton, Industry Complaints Commissioner

Mr Craig Jordan, Chief Finance Officer

Mr Brian Keech, Head, People and Performance

Dr Pooshan Navathe, Principal Medical Officer

Australian Transport Safety Bureau

Mr Martin Dolan, Chief Commissioner

Mr Ian Brokenshire , Acting General Manager, Aviation Safety Investigations

Mr Julian Walsh, General Manager, Strategic Capability

Mr Peter Foley, General Manager, Surface Safety Investigations

Committee met at 09:00

CHAIR ( Senator Sterle ): I declare open the Senate Rural and Regional Affairs and Transport Legislation Committee examination of the particulars of proposed additional expenditure for 2011-12 and related documents for the Infrastructure and Transport portfolio and the Regional Australian Local Government Arts and Sports portfolio. The committee has fixed Friday, 30 March 2012 as the date for the return of answers to questions taken on notice. Senators are reminded that any written questions on notice should be provided to the committee secretariat by the close of business Friday, 17 February 2012. The committee's proceedings today will begin with its examination of the Infrastructure and Transport portfolio, followed by the Regional Australia, Local Government, Arts and Sports portfolio.

Under standing order 26, the committee must take all evidence in public session; this includes answers to questions on notice. Officers and senators are familiar with the rules of the Senate governing estimates hearings. If you need assistance, the secretariat has a copy of the rules. I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised and which I now incorporate in Hansard.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (I) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(Extract, Senate Standing Orders, pp 124-125)

Officers called upon for the first time to answer a question should state their full name and position for the Hansard record and witnesses should speak clearly into the microphone. I remind everyone present to switch off their mobile phones or render them inaudible. As agreed, I propose to call on the estimates in the order shown on the printed program. We will take a break for morning tea at 10.05 am. Other breaks are listed in the program.

Australian Rail Track Corporation

[ 0 9 : 15 ]

CHAIR: I welcome the ARTC; welcome, Mr Fullerton.

Senator JOYCE: I will start with this media release:

A re-elected Gillard Labor Government will begin the work needed for the inland rail link ... The rail link will be some 1,700 kilometres long, with rail stretching from Brisbane to Melbourne through Central West New South Wales.

Mr Albanese told me it would be a visionary nation-building infrastructure project. I do not know how they are going to build it because they only put $30 million towards it, but, because we are sneaking through the forward estimates from when that statement was made, I am a little fascinated as to where are we up to with the inland rail. What has actually happened? Tell me about something that you have done, something you have bought or constructed—such as a bridge—or done the levels on. Tell me something that has happened in the construction of the inland rail.

Mr Mrdak : I will begin by setting the context of the government's commitment and then I will happily hand to Mr Fullerton. As you have said, the government has committed to proceeding with inland rail; $300 million has been committed to the project. There is an amount in the forward estimates, in 2014-15, which is the first year of the commitment; that is now shown in forward estimates. The remainder of the commitment of $270 million is available in 2015-16and 2016-17, and that will provide the first stage of detailed design and also the final route selection. That will enable us to then proceed to construction at the point that additional funds are committed to the project. That is where the project sits at this point.

Senator JOYCE: It would be fair to say that the only thing that has gone towards the construction of the inland rail has been a media release.

Mr Mrdak : No. $15 million was provided to the Australian Rail Track Corporation to undertake a detailed study and work looking at alignments and issues. That work has been completed. That formed the basis of the government then making a commitment of $300 million to progress to the next stage, which is the detailed design, construct and land acquisition for the inland corridor.

Senator JOYCE: You have done a $15 million study. Have you entered into negotiations? I imagine the $15 million study—that is a fair bit of money—must have come up with some idea like: 'This is where we are going to go. This is the land we will need to buy. These are the easements we need. These are the state governments we need to talk to.' Have you started discussions with state governments about easements or with private landholders about purchases? Have you done anything like that that is part and parcel of the requirements to construct?

Mr Mrdak : Yes, we have done some quite intense work in the study in relation to corridor selection, design and the land issues, and also a lot of the environmental and planning issues which need to be addressed. There certainly were discussions with state and territory governments through that process. As far as I am aware, there have not been any discussions at this point with private landholders. The exact details of the corridor route and the engineering design will be matters in the next stage of work, beyond 2014-15.

Senator JOYCE: Have you engaged any engineers?

Mr Mrdak : Certainly engineers were involved in the study that was done, and Mr Fullerton may wish to comment. But engineering advice certainly formed the basis of the work.

Senator JOYCE: A $15 million study. Give me a synopsis of what it said.

Mr Mrdak : The study defines the corridors—

Senator JOYCE: Give me some of the towns it is going to run through.

Mr Mrdak : It will essentially head along the existing ARTC network. It will then go to the new track north of Narromine that heads towards Coonamble, and then will head up to Moree in a North Star type of alignment to then join up with the main line.

Ms O'Connell : If you wish, there is a map that we can submit to you in terms of the alignment.

Senator JOYCE: The $15 million map.

Mr Mrdak : There is quite a detailed study which is publicly available and I will be happy to provide that to you this morning.

Ms O'Connell : That is right.

Senator JOYCE: Is the map locked in? Is that is where it is going?

Ms O'Connell : This map is part of the study report that Mr Mrdak is referring to and it is publicly available; I am happy to provide it.

Mr Mrdak : The study identifies that this is the best corridor. The exact details of the particular landholdings and the like, down to the fine detail, will be done in the next stage but this does identify that this would be the best corridor for the inland rail.

Senator JOYCE: In the $15 million study, did you have people out there doing the levels, on the ground, walking the track, walking where it is going to go, or did they just do it via Google Maps?

Mr Mrdak : I think there were people who did traverse the site, the ground, in particular locations. It did not go to the level of detailed geotech investigations that would form the part of the next stage of work.

Senator JOYCE: I think it goes from Coonamble through to Narrabri, does it not?

Ms O'Connell : I will hand it over to my colleague. Certainly Narrabri is on the map.

Senator JOYCE: It does.

Mr Mrdak : Yes.

Senator JOYCE: What work did you do in that $15 million study between Coonamble and Narrabri? Did someone walk along the line or go for a bit of a wander around?

Mr Fullerton : I need to take that question on notice in terms of the detail but my understanding is that they took a view of all the geotechnical assessments and the alignment to come up with the preferred alignment. You do have some new connections between Narromine to Narrabri.

Senator JOYCE: Did one personnel ever go anywhere between Coonamble and Narrabri?

Mr Mrdak : I think the answer is "Yes" and I am happy to take on notice what was done there.

Senator JOYCE: When do you think it will be completed and do you think that $300 million is going to do the job; that would complete the inland rail?

Mr Mrdak : No, that is the initial commitment for the next stage of work on the project. There would need to be further commitments of funding to complete. I think the overall cost is—

Mr Fullerton : $4.5 billion was the estimate.

Senator JOYCE: That is after 16-17; that is way down the track. Mr Albanese will most likely have retired by the time that starts.

Mr Mrdak : Certainly the government has made a commitment for the next stage of the work. Obviously it will require commitments in the future by government to proceed to construction beyond that $300 million.

Senator JOYCE: What does $300 million get us? Where will the line be after you have spent the $300 million?

Mr Mrdak : We envisage by that stage that will enable us to have completed the detailed design work on the line, some initial land acquisitions and all of the planning and environmental assessments to be completed.

Senator JOYCE: The reality is that there will be no construction of line, even with the expenditure of that $300 million. There might possibly be, down the track, the purchase of property but the line itself, the sleepers, steel, bridges, none of that will be there, except for the existing stuff that is already there.

Mr Mrdak : We would hope to see some investment perhaps in the existing track and maybe in some new areas but predominantly it will be for design and land acquisition.

Senator JOYCE: By 2016-17 we might have designed a line but we will not have built anything. Mr Albanese, when he made his announcement about the inland rail, was really talking about his announcement for the possible design in the long term, that something might happen.

Mr Mrdak : No. It is not a possible design; it is a commitment to proceed to the next stage, which is quite a detailed piece of work which would need to be done before you take any decisions in relation to commitment of construction dollars.

Senator JOYCE: After 2016-17 is when we would be looking at the bricks and mortar or steel and sleeper and bridges construction.

Mr Mrdak : At this stage the commitment is spread out to the years from 14-15 to 17-18.

Senator JOYCE: You have got no money there; even in your own forward estimates you are talking about a $15 million study, then you are talking about, all up, $30 million spent in the forward estimates, then you have got the remainder of the $270 million and you have just confirmed that, at best, we will be looking at the possible purchase of land but, apart from the capital that is already there, in myriad forms of railway lines around the track, there is no real construction of the inland rail; it is still, at that point in time, a well-designed, hopefully, concept rather than anything that has actually been built.

Mr Mrdak : I think it is more design concept at that stage. We would hope, obviously, to be able to commence some construction within that $300 million envelope but at this stage it is very much to take us to the next stage. It will require significant commitments in the future by governments to enable construction to take place.

Senator JOYCE: How much have you put aside for construction for the Toowoomba range in that?

Mr Mrdak : We can get you a detailed cost breakdown but that is one of the considerable costs; it is part of the $4.5 billion. Obviously, a large component of the cost of the project is the link between Toowoomba and Brisbane.

Senator JOYCE: If Mr Albanese was to put out another release, he would say, "The Labor Party stands behind a conclusive study that should finish around about 16-17 into the construction of a railway line, which at this point in time we think is going to cost $4 billion but by then we do not know what it is actually going to cost"; so it really is an apparition rather than a reality. Of course, the concept that the same government will be there is also a bit of an apparition rather than a reality as well.

Mr Mrdak : I think it is more accurate to paint it as the fact that the Australian government has made a commitment of $300 million to allow the project to proceed. I do not think it is one described as—

Senator JOYCE: If I was building a suburban rail network, how many kilometres would $300 million build me, let us say Epping to Parramatta?

Mr Mrdak : Epping-Parramatta, there are no detailed cost estimates beyond the initial estimates have been done, so I do not think I am in a position to give you a comparable estimate of what—

Senator JOYCE: You have a rough idea. How about a freeway: how many kilometres of freeway would $300 million build?

Mr Mrdak : Again, it would depend on the location and various issues. I could not give a per-kilometre rate.

Senator JOYCE: The one near Port Macquarie; the motorway.

Mr Mrdak : Pacific Highway? I am happy to get some advice this morning on a per-kilometre cost; I do not have that figure with me. I would not like to give it to you.

Senator JOYCE: That is fair enough. Can you provide me with an update on the upgrades underway on the Melbourne to Sydney rail line?

Mr Fullerton : There are a number of upgrade works that are occurring in relation to key projects. The first of them is the southern Sydney freight line; that is now in its final stages. That is 36 kilometres of dedicated freight line between Macarthur and Sefton and that is programmed to be completed in January 2013. We commissioned, in December, three passing lanes at Moss Vale and Picton, south of Sydney. We are close to completing the re-railing of the track between Albury and Melbourne.

Senator JOYCE: What is the lowest speed on that rail?

Mr Fullerton : Currently between Melbourne and Sydney we have got speed restrictions in the order of about 100 minutes.

Senator JOYCE: What is the slowest the trains have to drop down to?

Mr Fullerton : I think the lowest speed we would apply, for the worst defect, would be 10 or 20 but I think, on average, the speed restrictions—

Senator JOYCE: Ten or 20 kilometres an hour?

Mr Fullerton : That could be for a serious defect that can get applied.

Senator JOYCE: That is the top speed the train can go, 10 or 20 kilometres an hour, on that defect?

Mr Fullerton : If the defect is serious enough, and that can occur anywhere on our network, it could be slowed down to that speed, but generally those speeds would be between—if you think that that track between Melbourne and Sydney, the top speed is 160 kilometres an hour for the XPT, there are still some areas of the track where the XPT can travel at that speed.

Senator JOYCE: How much of that?

Mr Fullerton : The total amount of track between Melbourne and Sydney, given that it is duplicated, there is about 1,500 kilometres of track. There are only certain sections where the XPT can travel at 160.

Senator JOYCE: How many sections do freight trains have to drop down to 10 kilometres an hour?

Mr Fullerton : I would need to take that away on notice. Generally that would be the exception rather than the rule. I think the best way to describe speed restrictions is "minutes lost".

Senator JOYCE: What is causing these speed restrictions: what geography, what issues? What are the problems there?

Mr Fullerton : As has been reported to the Senate Estimates previously, the bulk of the problems on that corridor relate to track-geometry issues as a result of poor ballast conditions and loss of alignment of the rail, and that is the project that we have now made an announcement, two weeks ago, to spend $134 million to upgrade the ballast, improve the drainage, improve the rail.

Senator JOYCE: $134 million to upgrade the ballast between where and where?

Mr Fullerton : On that track there are about 65 kilometres of mud holes in a track distance of 1,500.

Senator JOYCE: Whereabouts are they?

Mr Fullerton : They spread from Moss Vale all the way through to Melbourne. There are 65 kilometres of mud holes in a total track distance of 1,500 kilometres, which is about 6.6 per cent of the track.

Senator JOYCE: I suppose when it rains the mud holes are full of mud.

Mr Fullerton : That is when they manifest the problem; when it rains the water cannot drain away from the ballast and formation.

Senator JOYCE: You are spending four times as much money on ballasts as you have in the forward estimates to build the inland rail.

Mr Fullerton : I cannot comment on that—it is a different scope of works—but the $134 million covers off a whole range of work. It involves rebuilding the formation on about 20 kilometres of that track; shoulder ballast cleaning over the full distance; putting cross drains, cess drains along the track; grinding the rail; tamping in the track; putting in new ballast—

Senator JOYCE: There is a lot of cost in putting in rail where it rains a lot, where it is wetter?

Mr Fullerton : No, because the rail that we replaced is life-expired rail, 47-kilogram rail between Albury and Melbourne. That has now been replaced with 60-kilogram rail. Similarly, what we have done between Whyalla and Broken Hill.

CHAIR: Senator Joyce, what I will do is let you know we are very tight for time and Senator Rhiannon has some questions. Your line of questioning is very important, but if I could ask you to keep that in mind, if we can get a couple more in and then go to Senator Rhiannon.

Senator JOYCE: After you spent your $134 million it will all be fixed, will it not?

Mr Fullerton : We are confident that once we complete that project that that track will be in a condition similar to the rest of the network.

Senator JOYCE: When was it all due to be paid?

Mr Fullerton : The whole program is over a five-year period but the majority of the work will be carried out in the next 18 months. That work started in December last year.

Senator JOYCE: Are you still doing the same form of sleeper insertion where we had the problems of movement before or has that changed?

Mr Fullerton : Yes, we are. We are concrete-sleepering the track between Parkes and Broken Hill with a side-insertion method. We are doing a lot of work to ensure that we do it properly. The issues are not the same as the Melbourne to Sydney track. I might just explain that we would have completed the entire concrete resleepering of interstate track. The bulk of that resleepering, going back to the 1980s, was installed using side-insertion methods. Regardless of whatever method you use, you need to ensure that you have good drainage and good clean ballast.

Senator JOYCE: After your $15 million study on the inland rail, how far will it be from Melbourne to Sydney via the inland rail?

Mr Fullerton : If you can picture the current map of the network, and I think it is an important point that between Melbourne and virtually Cootamundra—

Senator JOYCE: You have done a $15 million study: how many kilometres is it from Melbourne to Brisbane via the inland rail?

Mr Fullerton : I think it is about 1,740 kilometres.

CHAIR: You had better make this your last question, Senator Joyce.

Senator JOYCE: How far is it from Melbourne to Brisbane along the coast?

Mr Fullerton : I think it is about 120 kilometres longer.

Senator JOYCE: It is efficient to have access to slots if you move transport from Melbourne through Sydney and then up the coast through Coffs Harbour, through the Gold Coast to Brisbane. That is an efficient usage of slots as opposed to building an inland rail and having direct connection of slots?

CHAIR: Sorry, Mr Fullerton, I will get you to answer this, but Senator Joyce, I will have to get you to put further questions on notice. If you can answer this, Mr Fullerton, then we will go to Senator Rhiannon.

Mr Fullerton : I think with the upgrading we are getting towards the completion of, which involves the Southern Sydney Freight Line, additional passing lanes, crossing loops, the curve-easing project, plus the capacity enhancement on the North Sydney freight corridor where $1.1 billion has been spent to free up freight capacity, we have—

Senator JOYCE: That is just in Sydney?

Mr Fullerton : In Sydney.

Senator JOYCE: $1.1 billion just in Sydney.

Mr Fullerton : Yes, to provide additional freight capacity and separation of freight between passenger on that Sydney to Newcastle sector.

CHAIR: Thank you, Mr Fullerton. Sorry to cut you off—we are really tight. Thank you, Senator Joyce. Before I do go to Senator Rhiannon, Mr Mrdak, at the request of Senator Humphries and seeing as we are running early, if the Corporate Services people are still in the room, we will bring them back for I think five minutes.

Senator HUMPHRIES: Certainly, Senator.

CHAIR: We are in front but we are not going to go over anywhere else. Let them know, please. Thank you, Senator Rhiannon.

Senator RHIANNON: I would like to pick up on the Southern Sydney Freight Line. There were some responses to Senator Joyce a moment ago. What is the most recent estimate for the completion of the Southern Sydney Freight Line—I want to confirm that I heard correctly—I think you said January 2013?

Mr Fullerton : We expect it to be operating in January 2013.

Senator RHIANNON: Could you provide a breakdown of spending on this freight line—I was interested in maybe taking it on notice—by financial year and by spending category, and including there construction design and consultancy services? I was interested in having that understanding. Would it be best to take that on notice? Maybe if you can take that on notice because I thought that what I had read is that the 49 trains set out on page 6 were actual trains, so I am trying to understand what the average train movements per day in the Hunter Valley are and why there has been any discrepancy; if you could take that on notice, please.

Mr Fullerton : It may also referring to return trains; the 49 trains might be loaded trains versus the 88 which could be trains in both directions, but I will check that for you.

Senator RHIANNON: Thank you.

CHAIR: Senator Xenophon, you have put the request in and I am going to flick to you, and I know that you will be respectful of our time limits.

Senator XENOPHON: I am always respectful, Chair.

CHAIR: If you stop swearing at me in Greek, I might even let you have a little bit longer.

Senator XENOPHON: I think it is the other way around. I just put that on notice; it is the other way around. Hopefully, they will not go into Hansard, the swearwords in Greek. Mr Fullerton, the ARTC responded to some of the issues raised in the ATSB's interim factual report, including the consistency of use of train control reports. In response from the ARTC, saying that they are unaware of recent complaints about the lack of creation of train control reports, has the ARTC received any information to the contrary since providing the statement?

Mr Fullerton : No.

Senator XENOPHON: Given that the train control reports are the avenue in which train drivers report issues about the track, will the ARTC be investigating the claims that some drivers allegedly are not creating train control reports?

Mr Fullerton : Previously we were aware that some train controllers were not recording it and we took action to ensure that all train reports from drivers were entered onto the train control report.

Senator XENOPHON: On notice, could you provide details of what that action was; is there a culture of encouraging people to make reports; and to what extent is there a culture of encouraging the creation of reports where there is a problem? Further to that—and I am happy for you to take that on notice—does the ARTC have any additional avenues for drivers to make reports about track problems and are any of these avenues confidential?

Mr Fullerton : There is a number. The train controller report is a formal process and the driver talking to the train controller; drivers can report concerns through their own employers, the rail operators; and on a monthly basis we have meetings with each of the rail operators across our network and it is an opportunity for them to raise issues about concerns that could be expressed by their drivers on a network.

Senator XENOPHON: Do you think it would be helpful, if some drivers were reluctant to report it openly, to have a confidential mechanism by which they could report complaints of track problems?

Mr Fullerton : Yes. I would think drivers should have an avenue to be able to report that and they would report it through their employers. They have opportunities to write directly to the ARTC—

Senator XENOPHON: Is there a confidential mechanism by which they could report if they were so minded?

Mr Fullerton : I would need to take that on notice. We do certainly have driver reports coming through to ARTC.

Senator XENOPHON: Sure, but do you think it would be desirable in some cases, for whatever reason, that drivers could report matters confidentially?

Mr Fullerton : I think that is desirable.

Senator XENOPHON: If you could take that on notice because that is quite important. Mr Mrdak, I asked you some questions—I think it was the budget estimates in May 2011—about Mr Cantrell, one of the consultants for the ARTC. I asked whether Mr Cantrell has any commercial or financial arrangements, any consultancy with any entities that are involved in providing equipment for side insertion, or organisational entities that provide that. You said you would take it on notice. The answer on notice was:

Mr Cantrell has advised that he has not done any consultancy work for manufacturers of equipment that can be used in side insertion ...

With the answer being 'no' does that cover, from your point of view, all the related matters that I asked in the question? It relates to manufacturers but does it relate to all those associated entities that may have a commercial interest?

Mr Mrdak : I think that information was provided through the ARTC. I might hand over to Mr Fullerton.

Senator XENOPHON: I asked you because it was a series of questions I put to you.

Mr Fullerton : My understanding of that response is that he has had no association with any entities that provide side-insertion equipment.

Senator XENOPHON: The answer, however, was 'has not done any consultancy work for manufacturers of equipment'. The question was somewhat broader than that. Perhaps you could take that on notice to confirm that.

Mr Fullerton : I will take it on notice.

Senator XENOPHON: Finally, in terms of issues of tracks—and again I am happy for you to take this on notice—with respect to mud-hole problems and the issue of the average speed of the Sydney-Melbourne rail link, could you advise what the number of complaints has been in the last 12 months compared to the previous 12 months, for instance, and I am happy for you to do it on a calendar or financial year basis, and also whether there has been an improvement in average speeds? Thank you, Chair.

CHAIR: Thank you, Senator Xenophon. I would like to cover very quickly ones like the mud holes. On the Melbourne to Sydney resleepering, when did that project commence; when was it initiated?

Mr Fullerton : On the Melbourne to Sydney track the concrete resleepering program started in early 2007.

CHAIR: How much money was allocated to that project?

Mr Fullerton : That part of the work was through the grant funding. There was an $820 million grant funding that flowed into ARTC from 2004 to 2007. Of that $820 million, around about $200 million was allocated for concrete sleepering between Melbourne and Sydney.

CHAIR: To address the mud-hole problem, how much money would that cost?

Mr Fullerton : To address the mud-hole problem now?

CHAIR: I am picking up on Senator Xenophon's mud-hole query. For the $800 million, did we get the full job done to address the mud holes?

Mr Fullerton : The $820 million that ARTC received, they allocated that on a priority basis. The ARTC took the view that, with the funds allocated for concrete resleepering, the preference was to get the timber sleepers out and the concrete sleepers in and we believed the fouled ballast that we knew existed at the time was manageable.

CHAIR: What I am trying to establish, Mr Fullerton,—very as I have to keep myself in line here—was that enough money to address the issues that were raised by Senator Xenophon; as part of the resleepering and fixing the mud holes?

Mr Fullerton : It was not enough money to do the concrete resleepering and all the ballast work at the same time. We believed that it was as manageable problem and we had planned to do that as part of our five-year maintenance program, but what happened in 2010, as we know, we had record rainfalls that exacerbated the problem.

CHAIR: Sure. We also know there was a change of government in 2007 at the end, so I am just establishing when it all started. Thank you.

Senator HUMPHRIES: I want to ask about the impact on the department's budget of the increase in the efficiency dividend from 1.5 to four per cent. Can you tell me what the dollar amount of that increase represents for the budget of the department?

Mr Mrdak : The total effect of the efficiency dividend, which, as you know, is the complete four per cent, is $10.1 million in 2012-13.

Senator HUMPHRIES: That is the complete four per cent or is that the 2.5 per cent added on?

Mr Mrdak : That is the complete four per cent. The 2.5 per cent one-off efficiency dividend is a cost to the department's budget next year of $4.58 million.

Senator HUMPHRIES: Can you indicate briefly what strategies the department is going to use to deal with that dividend?

Mr Mrdak : We will do the business planning for 2012-13 shortly through our budgeting process. At this stage we envisage absorbing that efficiency dividend through efficiencies in our corporate services and in our line divisions. We will be focusing on areas such as travel, supplier expenditure, those types of areas, IT and obviously some of the other running costs of the department where we can make some savings to achieve that.

Senator HUMPHRIES: Do you anticipate there being any job losses as a result of the enhanced dividend?

Mr Mrdak : No, I do not. We anticipate maintaining our current staffing level. We will not fill some vacancies that are currently available in the department in 2012-13, but I envisage our staffing levels staying about where they currently are.

Senator HUMPHRIES: How many people do you employ across the department?

Mr Mrdak : We have 982 FTE in the department, just over 1,000 people.

Senator IAN MACDONALD: Mr Mrdak, there has to be a limit. You have an efficiency dividend every year, you have an enhanced one this year. It always makes me say you must have been awfully inefficient before if you can cope with all these budget cuts and not lose staff. There has to be a limit.

Mr Mrdak : There are limits, the department is not inefficient, but in 2012-13 we will face a challenge and we will have to meet that within our budget; we will have to find savings within the department's operation.

Senator IAN MACDONALD: No job losses, no less people?

Mr Mrdak : That is my intention.

Senator IAN MACDONALD: I know it is your intention but be real; how can you keep having these efficiency dividends and maintain the same staff? It does not make sense.

Mr Mrdak : As I said, we will not fill some vacancies as they occur; we will have to do that. At this stage, there will not be any forced redundancies or any redundancies envisaged; we will simply cut our cloth to the budget available next year. That has challenges for us but we will meet the budget.

CHAIR: What we will do, Mr Mrdak, is go to the smoko break earlier, take the 15 minutes, come back and then go straight into Infrastructure Australia.

Proceedings suspended from 09:56 to 10:09