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Transport & Logistics

Driving the costs out of rail

27 Jun 2013, by Informa Insights

AusRAILplus2013_HighResAustralia has the sixth largest rail network in the world, moving over 1 billion tonnes of freight every year. Our passenger networks facilitate 780 million customer journeys annually.

From the world’s leading heavy haul networks, to our passenger networks at capacity, we are all facing the challenge that is being faced everywhere in the world: to deliver more but to cost less.

It’s an issue that can be applied to every element of the industry, from asset management and maintenance, to project acquisition and delivery, to track construction, and rolling stock manufacturing.  Across the board our industry needs to develop a culture of delivering at the highest level, with the lowest cost.

In November this year, over 100 rail industry executives, engineers, project managers and academics – some of the leading figures in our industry will gather to contribute to the debate on how we can conquer this challenge: how we can drive the costs out of rail.

We thought we’d take advantage of our access to such a wide range of experts, and get their thoughts on the key elements in driving the costs out of rail from their area of expertise.

William Goosen is a Senior Project Engineer with McConnell Dowell who is preparing a paper for the RTAA on a sleeper replacement project for an iron export line. From his perspective, the major cost drivers in any rail project have to be clearly identified, and each has to be carefully scrutinised with the aim to optimise and reduce cost.

He specifically analysed the benefits of a systems approach to maintenance costs:

‘For lines running at or near full capacity, a cost for lost capacity forfeited due to possession of track for maintenance must be taken into account in order to ensure that decision making is driven in the right direction i.e. a systems approach to cost. The cost on a rail system of forfeited capacity is usually very significant and tends to dwarf the cost of infrastructure maintenance input cost.

To minimising the impact of track possession time for maintenance i.e. optimising possessions in order to minimise disruption to train operations by grouping work and fitting work into “in-between-trains possessions where possible.

A natural consequence flowing from this is that the need for faster methods or machines with higher production will continuously be pushed to the forefront.’

 Driving out costs by properly deploying a systems approach to planning and maintenance is a theme that is supported by Dr. Wolfgang Schoech the Director of External Affairs based in Switzerland at Speno International.

‘One of the key factors to reduce costs is to establish a strategic maintenance scheme from the beginning and to review its application consistently.

 This ensures optimal use and prolongation of the service life of all components involved to a maximum. It not only lowers the life-cycle-costs of the respective item, but also affects the whole system. Due to the interaction of dynamic loads and forces and their effects, the combination of maintenance activities often does not just add up but multiply – in both senses negative and – of course – positive.’

 So the key to managing costs is to effectively plan and define the scope of a project before it is fully embarked upon. It seems logical that good planning should be the cornerstone of any successful project. In reality problems often occur when a project’s criteria are altered at a later stage, or the process is rushed due to external factors such as community pressure or political influences.

Ken Baggett the Industry Director for Rail at AECOM describes how costs can be eliminated by ensuring a thorough preparation phase for the procurement of construction and financing:

‘One of the key factors that would assist in driving the cost out of rail is an appropriate level of design definition prior to the procurement of construction and financing. More time spent on design definition (and defining project costs) would enable clients to more effectively lock down their requirements and allow other stakeholders to have buy in at the commencement of the project. This should limit changes and reduce the potential for cost blow-outs.’

 All too often we read about the spiralling costs of a project under delivery. Set against the backdrop of leaner financial times, and an ever expanding backlog of ‘key infrastructure’, that will help us prepare Australia for the dramatic increase in freight and passenger demand over the coming decades, it seems more important than ever to carefully define and plan our projects before a sod is turned.

Paul Enever is the Security Operations Coordinator from QR. For him, reducing cost is all about communication, and building the right partnerships.  The paper he is preparing for AusRAIL this year examines how the costs of graffiti can be reduced through management and prevention:

‘A key factor in driving costs out of rail is the ability of rail organisations to explore and establish partnerships with government and community organisations where such a partnership would provide benefits to both parties.

For example, rail operators can reduce graffiti removal costs by working with police and local councils to manage and prevent vandalism through enforcement, deterrence, engineering and education.’

 He believes that by openly engaging with other agencies and organisations outside of the industry, we can work to reduce costs by allowing others to relieve the burden:

‘Engaging the expertise of other agencies through partnerships can assist rail organisations to reduce costs by concentrating on their core business whilst agency partners assist to manage other activities.’

Join us at AusRAIL PLUS 2013 on 26th to 28th November to expand on what is a critical issue for the future of our industry in Australia, and indeed across the world.

Add your voice to the debate in our LinkedIn group Rail Network Australasia, and make sure you are at the Sydney Convention and Exhibition Centre to hear how leaders in your industry are working to drive the costs out of rail.

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