Port and rail underperforming: productivity report

<p>The profitability of Australia’s port and rail infrastructure has declined according to a new report from the Productivity Commission.</p> <p>Treasurer Peter Costello said the report’s findings highlighted the need for reforms to improve the performance of public-controlled trade enterprises. </p> <p>It follows comments from Mr Costello earlier this month calling for federalism to be &#8220completely recast&#8221. </p> <p>He had called for the Federal Government to be given full responsibility for the national economy, including taking control of ports, an idea backed by the head of Australia’s largest logistics provider, Toll Holdings chief executive Paul Little.</p> <p>Mr Costello said the findings of the report underscored the need for improvement in infrastructure and productivity, a topic on the agenda of the recent Council of Australian Governments meeting.</p> <p>"These reforms have the potential to increase significantly Australia’s international competitiveness and deliver substantial benefits to the Australian economy," Mr Costello said.</p> <p>The report, which examined 22 state government-owned ports, found that ports had delivered a return on assets of 6.6%, and a pre-tax profit of $268.</p> <p>The combined value of port assets reached $6.6bn, up from $5.7bn last year.</p> <p>Overall port revenue remained steady at about $1bn, but significant increases in throughput across most of the ports had not prevented overall profitability from slipping by 15% to $268m, the report found. </p> <p>The report also listed rail infrastructure as having underperformed, with its return on assets profitability sitting at 2.9%, well short of the 5.4% risk free bond rate specified as being the benchmark for managing risk.</p> <p>The value of rail assets had increased from $25.6bn in 2003&#4704, to $27.1bn in 2004&#4705, with revenue up from $2.9bn to $6.6bn.</p> <p>The rail sector had recovered from two consecutive before-tax losses, including a $2.3bn deficit in 2003&#4704, to reach a $418m profit in 2004&#4705.</p> <p>Federal transport minister Warren Truss said the results were disappointing and the mindset of government-owned companies had to change.</p> <p>"Obviously we expect maximum performance from our services and our utilities &#8211 that’s essential to build a productive trading arrangement and to ensure that our country is able to pay its way," Mr Truss told the ABC. </p> <br />