By Jennifer Perry
How do you envisage QR’s transformation from a public to a private entity?
The Government has announced a process, we’ve been cooperating with them around the process, in particular, making presentations to the sale advisors about the size, scope and opportunities for QR’s future.
We understand that the Government will make a decision about that by the end of the year, we are cooperating with all of that, we’re supportive of the notion that the business is to be privatised, with the passenger business remaining in public hands and we look forward to understanding what the decision is going to be with respect to the nature of the transaction and the timing and so forth.
For us, as much as it is a distraction in the business, it reinforces the point that we have to focus and focus heavily on the job at hand…it’s business as usual here at QR. We have been following a path over last couple of years of what we describe as getting fit: of putting ourselves in a position which is stronger from a safety, customer and commercial point of view so we can be a robust and growing business in the future, whatever be the particular ownership arrangements.
Our message to everybody in our organisation is to stay focused on the job we all have in front of us but also to push ahead with the transformation and developing projects and all of the changes we need to make to continue to improve the business.
How do you see the role of QR’s passenger business role moving forward? Is there any real alternative available than a government business?
Ultimately, that is a matter for the owners of the business, they’re very clear and we’re very supportive of the notion that the passenger business is best left in public ownership.
The form that that takes over time and how best that’s operated will be the subject of some ongoing consideration and debate.
Again, for the moment, from the point of view of QR’s passenger people, this is the time to concentrate on the job at hand – safety and lifting our performance for our customer as for the owners.
Is capital a problem for QR at the moment, given both the sale process and the global financial crisis?
Firstly, like any business in the current economic circumstances, we do indeed, have to scrutinise every dollar that we spend to make sure that firstly, it’s actually necessary to spend it and secondly, that its being spent efficiently.
Like so many companies we are lifting our game in that area.
More generally however, the availability of capital has not been constrained subject to what I’ve just said. The things that we’ve been able to do in recent months, for example, in New South Wales, we have underpinned the winning of those three major coal contracts to a commitment in excess of $300 million in capital. In Queensland, we’ve recently announced the go-ahead of the Goonyella to Abbot Point project, or better known, the Northern Missing Link project – that single project is a commitment well in excess of $1 billion.
In any analysis, we are continuing to focus on what needs to be done and continuing to get the support of our owners to spend capital where it makes sense for the future of the business.
Do you foresee the QR sale impacting on the ownership of other parts of the Australian system, e.g. any other consolidations or rearrangements of above and below rail ownership?
I think we’re only going to know that as time goes by. The good news is whatever form the privatisation takes at QR we’ll see a move to an increasingly customer responsive and efficient market place for the provision of rail and rail services in Australia. That can only be good for the customer for the industry in the medium and long-term. What it means structurally, is something that will play out as all of that becomes clear over time.
Competition between QR and other operators seems to be particularly aggressive this year. QR has been winning more market share in the NSW Hunter Valley and interstate intermodal businesses but losing market share in Queensland, particularly in the central Queensland coalfields. Do you see this as levelling out soon, or does it have some years to go before a degree of stability is established, if ever?
The nature of competition is there will always be some movement around contracts and market shares, especially in businesses where single contracts can represent big chunks of business or market share.
The important thing both in NSW and Queensland is to remember the sheer scale of the business, both of these are businesses which are already enormous and they are growing and growing at very strong rates.
Even in circumstances where there are shifts in market share, both of the major operators are in fact, carrying more tonnage – that’s an important element to keep in mind around all of this. What we’re focused on is competing for the growths in tonnage in both of those markets.
More generally, we are very supportive of the competition. I believe it is good for the customer but also good for both of the operators. It certainly injects a level of focus and of making sure as it were, that we’re both on our game, and in a QLD environment, if I can turn to that, given that QR had 100 per cent of the market for a long time, inevitably we will lose market share. From my point of view that’s actually a good thing – it means going forward, QR will compete and compete vigorously for business but we will be very much focused on the business that we can best service and the way we can best service that business to the advantage of our customers.
What are the biggest challenges for QR in expanding its business across Australia?
There’s a range of challenges. We’ve spoken about the contextual issue of privatisation and what that means from the point of view of distraction in the business, so we’re very much looking at business as business as usual as we see through those changes.
The priorities in the business are well known and are very clear – the things I’ve been talking about – first and foremost, about safety and the need to improve our safety performance. Secondly, customers and the ongoing need to improve the customer service we provide. Thirdly, it’s about building the commerciality of the business both generally and from the point of view of lifting the returns in the business.
Fourthly, we’re focused on profitable growth and I continue to make the observation that this is a business that has had outstanding growth opportunities over the coming years and finally, we’re focused on people and people capability – lifting the capability of our people in all sorts of ways so we can deliver on the promise of all those priorities.
 
