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Costing - Rail Revitalisation

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					Release of Costing

Election policy
Name of policy to be costed: Rail Revitalisation Package

Costing request submitted by: Leader of the Tasmanian Greens, Nick McKim MP

Date request received: 15 March 2010

Date of public release of policy: 10 March 2010

Additional information requested (including date): Not applicable

Additional information received (including date): Not applicable


Financial implications1
Impact on:                        2010-11            2011-12           2012-13           2013-14
                                     $’000              $’000             $’000             $’000

Net Operating Balance                (666)              (666)             (666)             (666)


Fiscal Balance                       (666)              (666)             (666)             (666)


                                   (3 249)            (3 249)             (666)             (666)
Consolidated Fund2
Notes:
1. A negative number indicates a deterioration in the relevant measure.
2. The Consolidated Fund impact includes offsets against the existing equity investment provision
   for rail rolling stock contributions of $11 million per annum, included in the 2009-10 Mid-Year
   Financial Report.


Other Information
Caveats or qualifications to the costing:
For the purposes of costing this policy, Treasury has assumed that the following
purchases will be treated as equity investments in the Tasmanian Railway
Company Pty Ltd for the capital upgrade of rail rolling stock:
•   new locomotives ($12.5 million);
•   container wagons ($10.0 million); and
•   refurbishment of existing locomotive fleet ($8.0 million).
Treasury notes that the 2009-10 Mid-Year Financial Report included an equity
investment provision of $11 million per annum for the capital upgrade of rolling
stock. For the purposes of costing this policy, it is assumed that the deterioration of
the Consolidated Fund will be offset by the following amounts of existing equity
investment provisions:


Department of Treasury and Finance                                                 17 March 2010
•   $11 million in 2010-11 and 2011-12; and
•   $3.33 million in 2012-13.
Treasury has also assumed that the funding to 'train and employ additional train
drivers' of $2.0 million will be a contribution paid to the Tasmanian Railway
Company Pty Ltd by a way of a grant, and will be administered by the Department
of Infrastructure, Energy and Resources.
It is assumed that the detailed design and implementation of the policy will be
managed to ensure that the funding allocation of $32.5 million over three years is
not exceeded.

Other comments: Not applicable

Costing methodology used:
Treasury notes that this policy intends to commit $32.5 million over three years to
improve the capacity and reliability of the rolling stock of the Tasmanian Railway
Company Pty Ltd.
Treasury has assumed that:
•   the funding to purchase new locomotives ($12.5 million) and refurbish the
    existing locomotive fleet ($8.0 million), will commence in 2010-11 and will be
    spent in equal amounts over two years;
•   the funding to purchase container wagons ($10.0 million) and to train and
    employ additional train drivers ($2.0 million), will commence in 2010-11 and will
    be spent in equal amounts over three years; and
•   the funding contribution to 'train and employ additional train drivers' will go
    beyond 2012-13.

Statistical data used: Not applicable

Behavioural assumptions used: Not applicable




Department of Treasury and Finance                                       17 March 2010

				
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Description: Costing - Rail Revitalisation