State government in the dark on use of $2.7b train maintenance fund

The Victorian government does not know whether the $2.7 billion it spends maintaining and renewing Melbourne’s rail assets is targeted fairly across train lines or provides value for money.

In a report tabled in parliament this month, the Victorian Auditor-General’s Office said although Metro Trains services were safe, reliable and punctual, the government was not properly overseeing works or whether they were efficient and benefited the network long term.

The Victorian Auditor-General’s Office says the government does not know if the Metro Trains contract provides value for money.Credit:Simon Schluter

“[The Department of Transport and Planning] does not know if the spread of works across the 15 train lines … supports passengers equitably across the network,” the report, Maintaining Railway Assets Across Metropolitan Melbourne, said.

The overall seven-year deal with private operator Metro Trains was worth $6.2 billion, $2.7 billion of which went to maintaining and renewing assets. Although the Auditor-General’s Office said the department did not know if the contract provided value for money, it has been extended an extra 18 months.

The report said the department did not have a long-term strategy for infrastructure, such as tracks and signals, or technology assets such as systems providing passenger information.

In particular, the office found a “significant backlog” in renewing obsolete technology such as operational control and management systems. The department did not know the size of the backlog or why Metro had spent only 68 per cent of the planned budget by 2021-22.

“Without this information, the department cannot fully understand the risks to the network and to its future asset funding needs … It also cannot make sure that Metro is managing those risks effectively,” the Auditor-General’s Office said.

The department and Metro knew control and monitoring systems were obsolete by 2019, but the technology is not expected to be renewed until July next year.

Metro blamed slow progress on a lack of experienced staff, with some seconded to major transport projects, and pandemic-induced supply chain problems around technology.

The government also did not know how Metro prioritised renewals, and whether it picked the most needed or the most convenient, easiest or cheapest.

While services often fell short of punctuality and reliability targets, the Auditor-General’s Office said maintenance and renewals were not a significant factor. Weather and trespassers were more likely to cause problems.

State Deputy Opposition Leader David Southwick said it was no wonder train performance lagged when the government was “completely in the dark over the upkeep of the system”.

“This lazy approach to vital train maintenance is further evidence of a tired government that is simply out of ideas,” he said. “Victorians need and deserve a proper rail maintenance plan to ensure trains run on time and Victorians can reliably get where they need to go without constant delays, cancellations and interruptions.”

Daniel Bowen, from the Public Transport Users Association, said the department needed to ensure taxpayers were getting value for money and the network was as reliable as possible. Infrastructure had to be properly maintained to ensure the network “remains reliable and usable into the future, beyond the current operator contract”, he said.

The auditor-general made 10 recommendations to improve the way asset performance is assessed, how maintenance and renewals are planned, and how the department oversees that work.

Department of Transport and Planning secretary Paul Younis told the Auditor-General’s Office its report “does not reflect the strength and maturity” of the contract with Metro, but he accepted all recommendations.

A spokeswoman for the department said the contract had robust measures to ensure assets were maintained efficiently and safely with minimal disruptions. “We work very closely with Metro Trains as the operator of our metropolitan train network to ensure our network is maintained and run in a way that ensures safe and reliable journeys,” she said in a statement.

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