interstate rail passenger services: …atrf.info/papers/1978/1978_russell_walker.pdfearnings from...

INTERSTATE RAIL PASSENGER SERVICES: ANALYSISAND RESOLUTION OF PROBLEMS

S, RUSSELLLEADER, COST RESEARCH SECTIONMANAGEMENT SERVICES BUREAU, WESTRAIL

E,J, WALKERPRINCIPAL SERVICES OFFICERMANAGEMENT SERVICES BUREAU, WESTRAIL

ABSTRACT:

The ability to maintain financially viable inteIsystemxail passengex sezvices has fox. some time been apIoblemto the railway systems jointly operating thosesezvices. This papex deals with the analysis of theproblem and the identification and implementation ofactions to Le50l ve it"

Topics discussed include the interactions necessarybetween railway systems and other government agencies,the assessment of the xelevant costs fOI evaluationand planning purposes and quantification of publicservice obligations involved,

675

INTERSTATE RAIL PASSENGER SERVICES

SUMMARYThe problems of the East-West rail passenger services

(EWRPS) have been analysed ~ith particular emphasis on thefinancial effects on westrall .. (l)

A comparison is made of the results for the presentlevel of operation (seven services per week) wi t,h those for:an expanded service during peak periods (11 services perweek) .. The analysis of the service (at 7 per week), basedon current cost structures and operating methods, indicatesthat the present opexation is losing appr'oximately half amillion dollars per annum; an increase to eleven servicesper week during peak demand periods could be made without

increasing this loss"

However, a package of cost saving and revenue iner'easingmeasures is also out,lined" These have the potent,ial toconvert the loss into an attractive profit for the sevenservices operation, wit.h this profit, inc:reasing by a further$300,000 pa for the 11 services.

Since the achievement of these improved resultsdepends on the success of a variety of implementat,ioninteractions and actions, a strategy is developed for pursuingthe improvements which gives special attention t,o closemonitoring of performance"

Finally, suggest,ions are also included to furtherimprove the railway financial results in the long term, aswell as contribut,ing to a more efficient use of fuel ininterstate passenger t,ransport"

INTRODUCTION

Many of those associated with the management andoperation of the EWRPS were surprised at, the results of arecent study of these services by the Bureau of Tr'ansportEconomics (BTE) which indicated that the services werecovering their incremental operating costs (BTE, 1978)"

. Within Westrail the surprise was largely due to past~nternal cost assessments indicating that the services werehaving an adverse effect on westrail finances" The BTEstudy had however looked only at the overall national positionand had not specifically assessed the effect,s on the individualrailway systems which jointly operate the services" To addto the uncertainty t,he BTE results were based on out-of-dat,ecosts, fares and service levels"

1 Trading name for the Western Austr'alian GovernmentRailways

677

RUSSELL & WALKER

In an endeavour to clarify the situation Westrailundertook a follow-up study and suggested that the otherrailway systems concerned do likewise"

This paper focusses on the Westrail follow-up st,udy"It outlines the analyses and financial assessment.s made, thevery real problems to be overcome to improve the financialviability of t,he services, and the act,ion strategy developed

in the study ..

The papex' is structur:ed to give initially anappreciation of the nature of the service and its problems ..This is tollowed in turn by an outline of the financialassessments made in the Westrail study, an examination ofact,ions and interactions identified as necessary to resolvethe present problems of these services, and finally asumrna:ry of conclusions drawn fx'om the study ..

CHARACTERISTICS OF THE SERVICE

Some background info:rmation on the operating charact,eristics of the EWRPS is essent,ial to an understanding ofthe analyses presented in this paper and will also give abette:r insight to the problems facing these services"

Nature of the Service

The EWRPS are provided by two trains.. One is theIndian Pacific (IF) running between Sydney and Perth andjointly operated by the Public Transport Commission of NewSouth Wales (PTC NSW), the Australian National RailwaysCommission (ANRC) (1) and Westrail" The other is the TransAustralian (TA) running between Pt,. Pirie and Per.th andjointly operated by ANRC and Westrail.. Between them thesetrains provide a daily service (of 40 hours duration)between Perth and Pt" Pirie.. The IF oper'ates four days perweek, and continues through to Sydney, while the TA operateson the other three days of the week terminating at Pt ..Pir'ie. Daily connections are available from Pt., Pirie toAdelaide, Melbourne and on to Sydney ..

For' each train the normal consist is similar, beingcomprised of a locomotive, power van, combined mail andbrakevan, dining car, staff dormit,ory car, two club orlounge cars (1 economy class, 1 first class) and six o:rseven coaches with passenger sleeping accommodation.. The IFhas five first class and two economy class coaches withcapacity for 152 passengers while the TA has three firstclass and three economy class coaches with capacity for 150passengers ..

1 The former South Aust,ralian Railways were a jointpartner in this operation up t,o the time of theirrecent transfer to the ANRC ..

678


It is also of note that both trains transport theequivalent, of one to t,wo 10 tonne truck loads of mails andparcels, as well as up to 10 passenger motor vehicles onflat-top wagons"

Patronage and competition

In 1976-77 the passenger journeys eastbound andwestbound at Kalgoorlie were approximately 116,000 representinggross earnings approaching $20 million at current farelevels"

For some periods of the year (eg, t,he January holidayperiod) it is usually necessary to book well in advance tosecure travel accommodation but there are also "off-peak"periods when accommodation is readily available" An illustrationof the patronage levels and trends over recent years isillustrated in Figure 1"

One other feature of the patr'onage demand situationis that approximately 40% of the passengers travel at, concessionrates, most of these being for half fare government grantedpensioner concessions.. Many of the passengers (pensionerand other) are holidaymakers and the WA Depar'tment of Tourismhas estimated (Sernmens 1977) that service level reductionsin January 1977 in the EWRPS would cost WA about 7,000tourists per annum with a corresponding loss of $2;,1 millionin tourist spending within t,he State"

Competition for the government railway systems EWRPScomes from government and private air services, private busservices and of course the private motorist" Rail fareshave generally been set below air fares and above road busfares but different conditions regarding meals and sleepingaccommodation complicate the comparison" The rail journeytime from Perth to Adelaide is 41 hours compared with 36hours by road bus and less than 3 hours by air"

Financial Arrangements and Performance

Sharing Arrangements - Because the services areoperated jointly arrangements are necessary for the sharingof costs and earnings" Current agreements provide forearnings from all intersystern passenger far'es to be shar'edproportionally to the "stage ll fare (i .. e .. virt,ually proportionallyto the distance on each system) while some costs are sharedin proportion to system distance and others are required to~e borne fully by the system incurring the cost in the firstInstance" The costs for dining car provisioning and conductorsare ~xamples of the costs to be pooled and shared proportionallyto dIstance while locomotive operating costs and track costsare examples of those which remain the full responsibilityof the system incurring them initially"

679

rl

Services reduced to4 IP & 3 TA weekly ..

• 10% fare increaseon 1-8-77.

.. Services increasedby 3 TA weekly"

• Services reduced to4 IP 8 4 TA weekly"

~ 25% fare increaseon 1-2-76 ..

ooo

"'

--

5% fare increaseon 1-2-78,

680

RUSSELL & WALKER

"HG 25%-30% far'€ increase tSon 1-7-75.

Services increased to--====== 4 IP & 7 TA weekly"

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681

The complex management, organisation structure of theEWRPS presents anot,her' challenge to achieving effectivemanagement and efficient operation of these services.. Aswell as the line management stTuctures within each railwaysystem, which have interactions wit,h intrastat,e passengerand freight service operation and management, there is alsoa complex intersystem structure involving int,eractionsbetween Railway Commissioners and Government Cabinet, Ministers r

involved in management decisions directly pert,inent to these

services"

Management StructuIe

Financial Performance Indications - As indicatedpreviously the EWRPS' management have suspected that theywere incurring high costs in "subsidising

ll

these services"Some of the Ieasons for such views can be gleaned from areport by the then Executive Director of the Railways ofAustralia Committee (Swan 1976) which summarises resultsfrom a number of past cost studies" Among these results isone covering the whole service (costs and earnings of allsystems) showing that in 1973 earnings were less than 60% of"full ll costs" Other assessments by PTC NSW and ANRC indicat,elosses of the same magnitude, as far as these systems are

concerned, in 1975 and 1976 ..

WESTRAIL STUDY ASSESSMENTS

An illustration of this struct,ure and the numerousinteractions involved is shown in Figure 2"

The Westrail assessments made in a follow-uP to the

Scope of the Study

However in the past, t,here have been no agreed, andregularly produced financial results for measuring andmonitoJ:'ing the overall financial performance of these

services.


The assessment of these costs is a difficult taskfrom a technical viewpoint because many of the functions andfac,tlities provided by each system (egO' track maintenance,roilingstock maint,enance supervision, general administ,r:ation)are not readily separable from those provided for freightoperations (interst,ate and intrastate) and from intrastatepassenger service operations" Added t,o this difficulty arevariances in the costing met,hods of the different systems"current agreement,s provide only that costs be calculated byeach system by the method adopt,ed for' internal cos-t,ing

purposes ..

MANAGEMENT STRUCTURES COVERINGEAST - WEST RAIL PASSENGER SERVICES.

EJOlOlCl

'"'"'"~'"'"Cl

AccountlngOfficersCOtnrnlttee

PassengerOfficersCommittee

ANRC

ManagementStructure ,

PTC NSW

ManagementStructure

- GovernmentMinisters

=1 Treasury

ROA ANZRCommission- I Omn1l.SS1on-ers

ecretariate rs

"I- ... . - - - - -I

IIr------.- L.._-'._-_---iSystems MarKeting &

Planning & Operating ManagementDevelopment - - - - ConferenceCorranittee Committee

,

'orking!Comrnittees

FIGURE 2

, !

~ ..~'l' ~ {-

. ,J t I

WestrailManagementStructure

ATAC - Australian Transport AdVisory Council

ARRDO - Australian Railway Research and Development Organisation

- - - - - --If - - -ATAC

ICo-ordinat- Motor Road Railing & Gener 1 Group Group GroupGroup

I

I ARRIlO I·,

Suo I I Rail !Suo Suo I Group ~Committees Committees Cormni ttees I Co-or~inati 9 - - - - -f Committee

I

p Executive Director ROA Commlttee andANZR Secretariate (dual functions) •

'"eo'"


Reconciliation.with BTE Results

683

The next step in the Westrail follow-up analysis wasbased on the latest cost and fare levels"the approach t,aken was to compare theimplications to Westrail over the next five

two levels of service, the first of these being the

The analysis also showed that when BTE cost andfigures were allocated to railway systems in accord

agreed sharing arrangements, a loss, in fact, resultsIt was evident that this situation was largely

to the relatively higher tex'minal costs that Westrail isto bear. As a result of this finding an investigationmade into the operations and sharing arrangements.,

A forward looking assessment of the financial effectson Westrail for a seven services per week operationcompared with an operation augmented to eleven servicesper week during peak demand periods of the yea:c,

A reconciliation of previous inte:rnal Westrail financialassessments to the BTE results.

To determine the reason fOl: the difference in theseresults westrail made a further analysis. This analysisshowed that after adjust,ment to the totals for differencesin the levels of overhead costs and wages rates t,reated inthe BTE study and Westrail assessments, the results weregener'ally reconcilable.

An evaluation of further potential long term benefitsfrom these services~

A quantification of potential short-term financialimp:rovernents ..

As mentioned before there seemed to' be conflictbetween the BTE results for the service as a whole, and thelatest available Westrail assessments of the financialeffects of operation on westrail"

In each of these assessments the primaI:'Y aim was toindicate the likely financial implications for Westrail. Itwas realised that integration- of the results with similarassessments from other systems was desirable to complete andconfirm the position, but nonetheless the work done wassufficient for Westrail to develop its own strategy ofaction while waiting for results from other systems.

BTE study, covered the following ground:-

Potential Short-Term Improvements

Consideration of tolerance limit,s for the variousassessments ..

A careful re-examination of track maintenance andoverhead cost,s to ensure that, only incxemental (oxavoidable) costs were included ..

and 3 TA)peak periods

The assess-

684

However, another' important consequence of theassessment wOIk just outlined was that the analysis ofcosts and earnings necessary had pointed to areas wherefinancial improvements might well be achieved. The nextphase of the Westrail study was therefore a closer examination of these ar'eas and a quantification of t,he potentialbenefits .'

The principal result of this evaluation woxk was theindication that Westrail would be out-of-pocket by close tohalf a million dollars pex annum if it continued to operateat the current service levels and under current operatingmethods and conditions., The position was likely to be nobetter, though no worse either, fox t,he augment,ed servicelevel"

Likely patronage levels and resultant passengeI fareearnings for both levels of sexvice, as well as earningsfrom mails and parcels and motorail sexvices providedby the passengex trains"

The cross-checking of costs based on estimated st,affingrequirements against historical cost accounting recordswhere t,he latter wex:'e available. (Some omissions inthe staff estimates were revealed and also the inclusionin the cost accounting records of some administrativeoverheads that would not be avoidable in the short,-term) ..

The calculation of labour costs taking into accountestimated staffing requirements for both levels ofservice, as well as the existing total Westrail staffposition for the various classes of labour involved"

Estimates of charges that the othex systems would raiseagainstWestrail for recoup of a share of theix costs,again, fox' both levels of seIvice ..

Estimates of the incxemental content, dependent on theEWRPS, of the cost,s and earnings of catering sexvicesat Westrail Centre.. (These had not been considered inpxevious evaluations)"

RUSSELL & WALKER

current level (7 single consists per week, 4 IPand the second being for a service augmented at(11 services per week, 4 IP and 7 TA consists) ,

ment included:-


As a result, improvements with the potential toconvert the half million dollar loss to a gain of similarmagnitude were identified and quantified.. FUI'ther thepotential reductions in on-train staff (conductors anddining car service staff) improve the 'economies of scale'of the operation.. Also one of the other potential improvements,the opportunity to improve the utilisation of staff onrollingstock maint,enance, applies only for t,he higher levelof service ..

It follows that the augmented service is the preferredlevel of operation because there is greater potential forimprovement at the higher service level, while the loss isno greater even if the suggested improvements are not. realised ..

The pot,ential improvement axeas identified were asunder:-

Reductions in on-train staff, coach cleaning costs androllingstock maint,enance costs ..

Increased recoups for government imposed concessions ..

Revised cost sharing arrangement.s ..

Increases in occupancy levels ..

The improvement areas will be discussed later in this papertogether with the all important actions necessary for theirimplementation ..

Assessment of Long Term Prospects

Consideration was also given to the long term prospectsfor these services, i"e" over the time period when replacementrollingst,ock would be required"

Looking to a like-far-like replacement of rollingstockit was est,imated that most of the existing rollingstock hadclose to a further twenty years of physically serviceablelife and even the earliest replacements were not likely tobe necessary for about ten years" This situation allowsample time to find out whether, and t,o what extent, thepotential short-term impr'ovements can be realised. withthe improvements implemented a reasonably attractive r'eturnon the capital required for replacements would be available"

Another option identified as wort,hy of attention inthe long term planning of t,hese services was that of intr'oducingsit-up services coupled with buffet meals paid for separatelyfrom the rail fare" An order of magnitude assessment forthis type of operation indicat,ed that, given sufficient

685

RUSSELL & WALKER

patronage (1) for reasonable utilisation of Iollingstock,rail could provide such a service profitably, at farescompetitive with present road bus fares.. These sit-up railservices would also provide more floor space per passengerwith access in transit to facilities such as meals and lightrefreshment services ..

In addition, this latter type of operation offer9potential for an overall reduction in the total fuel consumptionfor interstate passenger transport.. That is, based on anexamination within Westrail of the relative efficiency offuel consumption for .:road and rail transport the comparisonshown in Table 1 was derived"

1 In his address on liThe Role of the Transport Industryin the Australian Economy" Taplin (1973) indicated thatthe most significant change in the future AustralianTransport System would be the growth in travelling forrecreation.. Couple this tr'end with the developing fuelsituation and there are good prospects fo:]:' such patronagebeing available"

686

TABLE 1

687


.. 0275(1)

.. 0154 (2).. 0085(2).. 0075(2)

.. 0041(J)

comparison of Fuel consumption Efficiency

in Long Distance Passenger TI'ansport

3 The assessment for the proposed new rail sit-up servicesis based on the consumpt,ion for the present locomotivehauled coach operation, with passenger capacity perconsist increased from 144 to 540 ..

2 These figures are based on internal Westrail assessments ..However the figures assessed for locomotive hauledcoaches have been adjusted to allow a credit for thefuel saved in the haulage of mails and parcels andpassengers' motor vehicles, which are an integral partof the locomotive hauled coach operation" Even withthis credit the r'ail services are still at a disadvantagein the comparison because rail services are self supportingwhereas the road bus and private motor vehicle optionsrequire ancillary service support en route for mealsand sleeping facilities"

1 This is only a br'cad indicator given for comparativepurposes" It is 1:>ased on the assumpt,ion of four passengersper motor vehicle and fuel consumpt,ion rate of 9krn/litre

(approx 2 5rnpg) ..

Litres per Passenger KM

privat,e Mot,ol:' VehicleLocomotive Hauled Coaches - present service

Road BuSRailcarProposed Locomotive Hauled Coaches - sit-up

service

RUSSELL & WALKER

IMPLEMENTATION ACTIONS

Following t,he quantification of potential benefitsattempts were made to identify the all impor'tant. implementationactions and interactions necessary to realise these benefitsWhen consideration is given to the management structure forthe EWRPS outlined earlier it is not surprising that theseinteractions involve not only internal west:r:ail operatorsand administrators, but also those of other governmentIailway systems and other St,ate and Commonwealth governmentdepartments ..

Reducing Costs

At,tention was first directed to t,he area whichScrafton (1973) indicated as one of his two key requirementsfor improving future rail passenger transport, i"e" "ta makebetter use of manpower".,

The potential cost savings quantified in this areawere based on reducing the number of on-train conduct,ors anddining car att,endants, and on a mOI'e efficient utilisationof labour for coach cleaning and rollingstock maintenancework. The on-train staff reductions had previously been putforward by the ROA MaIketing and Operating Committee aspracticable from an operat,ing viewpoint, large differencesbetween systems (for similar results) pointed to a potent,ialfor coach cleaning economies, and the rollingstock maintenanceeconomies identified were based on bet,ter use of staff forthe higher service level ..

In view of the prior wOIk by the ROA MaIketing andOperating Committee, and its sub-group the Passenger OfficersCorrunittee, it was l:'ecommended that these groups be responsiblefor developing and negotiating a package deal with all ofthe Railway Unions involved.. A key requirement of thisinteraction with Unions was to be the stressing of thelikely long term adveI'se effect on all Railway Unions ifeconomies were not made and conversely the promising longterm future if a viable operation could now be achieved"

Recognition of Public SeIvice Obligations

The effort to quantify the deficiency arising fromexecuting public seIvice obligations focussed on one area concession fares" What was sought was the deficiency (oneexists) between the subsidy Westrail receives from the WAState Treasury for pensioner and some ot,her governmentgranted concession fares, and the amount required to make upfull fares on t,hese concessions. 'First approximation'estimates derived were almost sufficient in themselves togive Westrail a break-even result on the EWRPS but it becameevident in the course of this work that a satisfactorilyreliable assessment for a claim to be lodged with the Treasury

688

Assessments of the marginal costs and earningsassociated with changes in the occupancy level of the trainshad shown that a large proportion (about 70%) of the costswere I1fixed" with the commitment to operate a consist andtherefore served t,o show the potential value of efforts toimprove occupancy levels.. Although past levels averagedabout 90% there had been times of the year (see Figure 1)when there was ample capacity available for' more passengers ..

Improved Occupancy Levels

After consideration of these problems it seemed thatthey might best be handled initially through the ROA AccountingOfficers Conference and recommendations were made accordingly"However progress and further development on t,his topicclearly interact wit,h decisions and act,ions of other ROA

groups ..

The other problem seen in the sharing arrangementswas the exclusion of t,erminal booking office and marshallingcosts fx'om the costs to be shared" When this terminal workis not evenly distributed over systems, and yet earnings areshared propor:tionallY to distance, it, is evident that aninequitable situation exist,s.

Cost Sharing Arrangements.

Two aspect,s of the cost, sharing arrangements st,oodout as requiring attention.. The fir'st, of these was t.he needfor uniformity by all systems in adopt,ingincremental costsas the basis for assessing the costs t,o be shared" If thismethod of costing waS adopted the relevant dat,a for managementplanning and control purposes would then be readily available

when requir:ed ..


689

Accordingly it was r'ecommended that appropriateofficers within westrail prepare such a claim and a case for

negotiation with the Treasury ..

Because of the indication from the BTE study thatthe services, overall, were covering operat,ing costs I effortwas not spent to pursue the broader general question ofsubsidies.. Should sufficient of the potential improvementsdiscussed in this paper prove not to be realisable, andgovernment still require the services to operate, theremight then be value in pursuing the topic of subsidiesfurther.. If experience in the USA and Canada, for example,is any criterion a case for large subsidies for long distancerail passenger t,ransport may well be sust,ainable.. (SeeReistrup (1976) and Johnston, Ray, Bunting and Mozersky

(1976)) ..

could only be obtained by a comprehensive approach coveringall State rail passenger fare concessions ..

y

RUSSELL & WALKER

Further, a healthy result from a maIginal analysis of thecosts and earnings of the motorail service (haulage ofpassenger motor vehicles in conjunction with the EWRPS)offer'ed one means of encouraging patronage and lifting theoccupancy levels"

TO initiate action in this area the Westrail Comm-ercial and Publicity Sections were nominated. Interaction withother systems through the ROA Marketing and Operat,ing Committee was again indicated so that co-ordinated action could betaken ..

Strategy Development and Implementation

In view of the extent of the actions and interactionsproposed and the uncertainties r'egarding the realisabilityof the potential improvements a strategy was developed forWestrail to follow over the next few yeaIs ..

Factors considexed in the development of thisstxategy wexe the alternative possible courses of action(i"e .. implement potential improvements, do nothing, discontinuethe services, further reduce sexvices); the px'acticability,the timing and the level of gains achievable; and implementationcosts associated with these alternatives.. However: as onlyvery broad indications were obtained here, the stxategydeveloped was a cautious one depending heavily on closemonitoring of futur'e performance.

Not. surprisingly therefoIe t,he st,rategy comprisedseveral lines of action r:equixing co-operation betweenWestrail operators, financial analysts and management foreffective implementation, viz;

Establish the realisable level of benefits from implementation of the potential improvements identified, throughcareful monitoring of peIfOJ::mance over the implement,ationperiod ..

Depending on the level of impxovement achieved (orachievable) follow one of the two lines of actionbelow:-

if the improvements are such t,hat the servicesbecome cont,ributoIs to Westxail profitabili ty,continue with the seIvices, incIeased to 11 servicesper week during peak periods, while planning anddeveloping longer term improvements.,

if it becomes evident that the irnpIovements realisable are not sufficient to enable the services tocontxibute to Westrail profitability, retain theimprovements but develop plans to implementdiscontinuance of the services ox to obtainapPxopIiate 'public service' subsidies.

690


Monitoring of Performance

From the foregoing it is clear: that monitoring ofperformance will be required to play a major role in thestrategy" Fortunat,ely steps were taken some two years agowithin West,rail in this direction and most of the basicrequirements are already available.,

That is, procedures have been intI:'oduced to providemanagement with quarterly financial results of the operationof the EWRPS, but only from a Westrail viewpoint.. With somerelatively minor changes and ext,ensions these quarterlyresul ts ar'e capable of pr'oviding a ready measure for themonitoring of performance"

The other important ingredient in this area is afinancial analysis of the results achieved.. To obt,ain fullvalue from the reporting and monitoring processes there isa need for careful analysis of the results each quart,er inconjunction with previous results and consideration of knownand expected changes in the operating and financial conditions"

Results of this analytical (post audit) review will beI'equired for present,ation to top management"

CONCLUSIONS

Principal Results

In summary the principal results from the Westrailassessments were:-

Under the current operating conditions WestI'ail wouldbe out-of-pocket by approximately half a million dollarsper annum with continued operation of the EWRPS. Thisresult can be reconciled to an earlier BTE result thatthe service as a whole was covering operating costs atmid 1976 cost" fare and service levels ..

With the only change being an increase in servicelevels to eleven per week during peak demand periodsthe Westrail result would not be appreciably worse (orbetter) "

There are a number of potential improvements which, iffully realised, would convert, the loss to a gain of$550,000 pa",

If the improvements were successfully implemented therewould be an increase from $550,000 to $850,000 pa for aservice augmented to eleven consists per week duringpeak periods"

If the improvements could be fully realised, like-forlike capital replacement of rollingstock would representa reasonably attract,ive investment"

691

RUSSELL & WALKER

A new or additional form of service involving sit,-uppassenger accommodation and buffet meal services couldbe an even mOJ:'e economically attractive proposition forthe long term"

Short-Term Implications

Short-term implications that can be drawn from theseresults are that without the realisation of some improvementit would be better for Westrail to cease to operate t,heseservices if this was a practicable option" But there is nodoubt they should be retained if the potential improvementscan be fully realised and even with partial realisation acommercial case for retention might still exist.

Given the likely shoI't-term practical constraints(political and economic) to cessation of the services thereis benefit to Westrail in pursuing the improvements, providedonly that the costs of implementation are kept within thebenefit from the improvement.

Therefore a cautious strategy is appropriate at thisstage, with careful, regular monitoring of performancenecessary to deter'mine the course of action during theperiod when the implementation of the short-term improvementsis pursued ..

Long Term Implications

Looking now to the longer term planning horizon whencapital replacement would be needed, the analyses indicatethat there is good reason for optimism.. That is, providingthat t,he short-term problems can be overcome, and this willrequire effective interaction within railway systems, betweenr'ailway systems and bet,ween government departments, theEWRPS should be well able to fund its own future capitalneeds. As well as this potential to be commercially viablefor the railways, there is promise that EWRPS could make aworthwhile contribution to reducing the overall use of fuelfor interstate passenger transport"

We therefore conclude that, given effective interaction,co-operation and corrective actions in the short-term, theEWRPS have promising prospects of making a valuable contributionto railway finances as well as to the Australian communityin general" Conversely, without effective action to resolvethe shor't-term problems this opportunity may well be lost"

692

m


REFERENCES

BTE (19'78) "East-West Rail Passenger Service:lndian Pacificand TraDS Aust,ralian" Bureau of Transport Economics, Canberra"

JOHNSTON EE, RAY A, BUNTING PM, MOZERSKY KA, (1976) "Pricingand Subsidy of Air and Rail Passenger Transpo:rt", CanadianTransport Commission Research Branch, Ottawa, Ontario"

REISTRUP PH (1976), "Five Year Corporate Plan 19 )7-1981",National Railroad Passenger corporation (Amtrak), Washingt.on

D.C.SCRAFTON D (1973) "Action Required to Increase Productivityin the Passenger operations Field" (seminar paper) Charter'edInstitute of Transport (Victorian section) Melbourne ..

SEMMENS N (1977) "Policy Stops Visitors - Expert" ("WestAustralian" newspaper :report on hearings by Senate Selectcommittee on Tourism held in Perth) west,ern Aust,ralianNewspapers Ltd, (August 4 1977) Perth ..

SWAN TA (1976) "Report on Interstate Passenger Trains"Railways of Australia Committee, Melbourne.

TAPLIN JHE (1973) "The Role of the Transport Industry in theAustralian Economy"" (Seminar keynote address) CharteredInstitute of Transport (Vict,orian section) Melbourne"

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