Rail giant spread its wings at home and abroad Feature Article

Thursday, 01 April 2004


    Australia's only remaining publicly owned railway company, QR, is capitalising on national competition reforms and building new business beyond its historically located Queensland operations.

    Rail giant spread its wings ... at home and abroad

    Australia's only remaining publicly owned railway company, QR, is capitalising on national competition reforms and building new business beyond its historically located Queensland operations.

    QR staff in 2004 are increasingly to be found at work across Australia and internationally. QR's aim is to remain Australia's leading coal and bulk transport provider, as well as becoming a leading national transport and logistics business, and a global rail based solutions company.

    "Our aim is to achieve this through alliances and aquisitions, leveraging off all the things we do well, and by aligning and adjusting the whole organisation to meet the needs of our targeted markets," says chief executive officer Bob Scheuber who has been at the helm of QR since December 2000.

    "We have a great business in Queensland," says Scheuber, "but it is important in a single national rail market for us to think and act nationally.

    "Today's reality is that while we're under increasing pressure to hold onto our business in Queensland, we're also well placed to take advantage of the business opportunities that are emerging for us in an open Australian market.

    "In addition, because we have remained an integrated railway and retained all of our core technical and engineering competencies, we are in a position to tap into the enormous business opportunities abroad, especially in Asia."

    Prior to his appointment as CEO, Scheuber was deputy chief executive for five years. He is the current vice president of the Australasian Railway Association and a member of the Australian Logistics Council. He is also a fellow of the Australian Institute of Management and a member of the Australian Institute of Company Directors.

    Scheuber has been a senior executive with QR during the most radically transforming period in its 139 year history, starting with the introduction of National Competition Policy in 1995. It was also the year in which QR began its revolutionary adjustment from a bureaucratic, engineering-based government department that was immune to market forces, to a commercially-focussed, government-owned corporation with its own board of private sector directors.

    A $6.5 billion, 10-year capital investment program, accompanied by a program of significant internal reform, laid the foundation for the re-building of QR as a modern, efficient railway.

    However, as Scheuber readily acknowledges, capital investment by itself does not guarantee success.

    "We provide our services in a contestable environment. Our customers know - just as our competitors' customers know - that they have choices, and they will be looking for the best provider, in terms of price and service that they can find," he says.

    "It's all about performance."

    And, as the head of a publicly owned Australian business, he dismisses the notion the private sector has a mortgage on performance.

    During the last 12 months QR has put some runs on the board that reinforces its belief that it can compete and win in Australia's open rail market.

    In Queensland it successfully retained 40 million tonnes of coal haulage business with the BHP-Billiton Mitsubishi Alliance, and was selected by Xstrata to build a new 110 km spur line and to haul up to eight million tonnes of coal from its new Rolleston mine in central Queensland.

    Across the border in the Hunter Valley-Newcastle region, QR in its own right, or through its New South Wales operation, Interail, signalled its arrival with the capture of significant tonnages of coal haulage business. It now has commitments for around 12 per cent of the total coal haulage market in New South Wales. This includes 10 million tonnes annually for BHP Billiton's massive Mount Arthur North mine. In Newcastle, United Goninan is presently on schedule to deliver 222 new coal wagons and six heavy haul diesel locomotives on time for the commencement of the BHP Billiton contract.

    As Australia's largest bulk commodity hauler, QR moved 139 million tonnes of coal in Queensland in 2002/03. This was a national record for a single year. QR also carries significant tonnages of other mineral products, as well as sugar, grain, containers and cattle.

    In a further example of its expanding Australian operations, QR is set to begin a Brisbane-Sydney-Melbourne container service to connect with a service from north Queensland in April. This follows the introduction of a successful container service between Casino in northern New South Wales and the Port of Brisbane last year.

    In its suburban and long distance passenger services in Queensland it has been at the forefront of developments in Australia. Its south-east Queensland inter-urban and metropolitan commuter services continue to experience good growth and their on-time running has been among the best in Australia for the past six years. Its hi-tech tilt trains are proving highly popular with travellers along the coastal route between Brisbane and Cairns. Separate services by the 160 km/h tilt trains operate between Cairns and Brisbane, Rockhampton and Brisbane and Bundaberg and Brisbane.

    No single activity, however, demonstrates the competitive capabilities of today's QR more than its specialist consulting business, iQR, which is gaining an international reputation as a supplier of complete rail solutions.

    "iQR is actively marketing our intellectual property and our range of expert technical services and products in Australia and abroad," says Scheuber. "This is a profitable and growing business area for us.

    "Following a visit to Hong Kong, Hanoi and other South-East Asian capitals last year, I was amazed at how well QR is known in the region, and how much opportunity there is out there for QR." Major success to date for iQR has been winning multiple contracts with Kowloon Canton Rail Corporation in Hong Kong as a partner in the KCRC joint venture. The latest of these projects is the construction of the Lok Ma Chau spur line which is urgently needed to relieve increasing congestion of boundary crossings at the border between Hong Kong New Territories and China.

    iQR is also presently project managing the Rawang-Ipoh double tracking project in Malaysia.

    Scheuber said QR was prepared to consider any sound commercial prospect - at home or abroad - that fitted within its business strategy, and he was confident of ongoing success for the corporation.


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