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(Rail Corporatisation and
Restructuring) Bill 1996
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.*
(a)
to amend the Transport Administration Act 1988:
*
to establish 2 rail corporations, Rail Access Corporation (RAC)
and Freight Rail Corporation (FRC), as statutory State owned
corporations, within the context of the State Owned
Corporations Act 1989 (the principal functions of RAC being to
hold, manage and establish rail infrastructure facilities, and to
grant access to the State's rail network and of FRC being to
operate rail freight services),
* Amended in committee--see table at end of volume.
*
to establish the Railway Services Authority of New South Wales
(the RSA) (the principal function of the RSA being to supply
goods, such as ballast and sleepers, and provide services, for
example, for repair and maintenance of rail infrastructure
facilities and rolling stock, to the rail industry),
to restructure the State Rail Authority of New South Wales (the
SRA) as the result of the establishment of these bodies by
divesting it of the functions to be exercised by, and the staff,
assets, rights and liabilities to be transferred to, them,
to establish the Public Transport Authority of New South Wales
(the PTA) to advise the Minister for Transport on the
development, coordination and regulation of public passenger
services throughout the State,
to make necessary amendments consequent on the establishment
of the new bodies and the restructuring of the SRA and relating
to other matters,
(b)
to make consequential amendments to other Acts and instruments.
Clause 2 provides for the commencement of the proposed Act on a day or
days to be appointed by proclamation.
Clause 3 gives effect to Schedule 1 that contains amendments to the
Transport Administration Act 1988.
Clause 4 gives effect to Schedule 2 that contains consequential amendments
to other Acts and instruments.
Schedule 1
Amendment of Transport Administration Act
1988
Establishment of Rail Corporations
A new Part inserted in the Transport Administration Act 1988 (the Principal
Act) (Part 2A, clauses 19A19T) makes provision for the establishment of
the 2 Rail Corporations. (See item [15] of Schedule 1.) The Part (and
associated Schedules to the Principal Act to which the Part refers) deal with
the following:
Explanatory note page 2
Provisions dealing with interpretation
Clause 19A provides definitions for the purposes of the Part and Schedule 6A
(as to which, see below). The terms rail infrastructure facilities and NSW
rail network are defined, among others.
Clause 19B provides that the term NSW Rail Access Regime describes an
access regime established from time to time by the Minister for Transport and
approved by the Premier for implementation of the Competition Principles
Agreement between the Commonwealth and the States in relation to third
party access by rail operators to the NSW rail network, including use of rail
infrastructure facilities owned by RAC that are necessary for the safe
operation of rolling stock on that network. The Minister is required to arrange
for publication of a copy of the Regime in the Gazette as soon as practicable
after it has been established.
Provisions relating to Rail Access Corporation
Clause 19C establishes Rail Access Corporation as a statutory State owned
corporation under the State Owned Corporations Act 1989 (the SOC Act).
Clause 19D provides that the principal objectives of RAC are:
to hold, manage and establish efficient, safe and reliable rail
infrastructure facilities, and
to promote and facilitate access to the NSW rail network in accordance
with the NSW Rail Access Regime, and
to be a successful business and, to this end:
(i)
to operate at least as efficiently as any comparable businesses,
and
(ii)
to maximise the net worth of the State's investment in the
Corporation, and
to exhibit a sense of social responsibility by having regard to the
interests of the community in which it operates, and
where its activities affect the environment, to conduct its operations in
compliance with the principles of ecologically sustainable
development contained in section 6 (2) of the Protection of the
Environment Administration Act 1991, and
to exhibit a sense of responsibility towards regional development and
decentralisation in the way in which it operates.
Each of the principal objectives of RAC is of equal importance.
Explanatory note page 3
Clause 19E provides that the principal functions of RAC are:
(a)
to hold, manage and establish rail infrastructure facilities on behalf of
the State, and
(b)
to provide rail operators with access to the NSW rail network.
In providing access to the NSW rail network, RAC must:
(a)
develop and maintain an access pricing policy, and
(b)
compile the master timetable for the allocation of train paths, and
(c)
establish systems to ensure that train paths are allocated in an efficient
and impartial manner under the master timetable, and
(d)
prepare and apply standards for the allocation-of train priorities and the
resolution of conflicts if the master timetable cannot apply for any
reason.
RAC may also conduct any business that it considers will further its
objectives (whether or not related to its principal functions). RAC must act in
accordance with the NSW Rail Access Regime in performing its functions.
Clause 19F is a formal provision that gives effect to Schedule 6A (Powers of
RAC relating to rail infrastructure facilities and land).
Schedule 6A (see item [58] of Schedule 1):
· defines the terms SRA land and SRA building,
provides that RAC owns all rail infrastructure facilities that it installs
in or on land or in or on water and all such facilities in or on land that
are vested in or transferred to it (whether or not it owns the place in or
on which the facilities are situated) and that RAC is empowered to take
whatever steps are necessary to ensure that the rail infrastructure
facilities on SRA land or in SRA buildings are maintained and used in
an efficient, safe and reliable manner,
provides that authorised persons may enter SRA land or a SRA
building on behalf of RAC for purposes connected with maintenance
and management of existing rail infrastructure facilities or the
construction of new facilities,
*
provides for the issue of certificates of authority,
provides that a person who is authorised by RAC to have access to its
rail infrastructure facilities under an access agreement may enter on
SRA land, as permitted by the agreement, without being required to
hold a certificate of authority,
Explanatory note page 4
makes provision as to the manner in which a power of entry may be
exercised,
provides that the State Rail Authority must be compensated by RAC
for damage caused as the result of the exercise of RAC's functions but
only if the construction or maintenance work involved damages or
interferes with a SRA building or other structure, that the Minister may
determine the amount of any monetary compensation if RAC and the
SRA cannot agree on this and that RAC, while charged with
endeavouring to prevent disruption of the SRA's railway passenger
services, is not liable to compensate the SRA for any disruption that
may occur,
provides that land in or on which RAC's rail infrastructure facilities are
installed is taken to be the subject of a covenant in favour of RAC
under which the SRA and lessees and licensees from the SRA must
ensure, among other things, that the facilities and their operation are
not interfered with or obstructed and pursuant to which RAC is entitled
to require the removal of structures or that work cease or be altered and
to claim compensation for loss or damage that RAC suffers,
specifies other circumstances in which persons involved in causing
damage to RAC's rail infrastructure facilities are liable to compensate
RAC,
provides that the written consent of RAC and, in certain circumstances,
the SRA is necessary before a person may connect a railway track to
the NSW rail network and enables unauthorised work to be dismantled
and removed,
provides a procedure for settlement of disputes between RAC and the
SRA by the Minister,
provides that RAC may, with the approval of the portfolio Minister,
acquire land for the purposes of establishing and maintaining rail
infrastructure facilities by agreement or compulsory process under the
Land Acquisition (Just Terms Compensation) Act 1991 and that any
such acquisition of land is taken to be an authorised work and that
RAC is, in relation to that work, taken to be a Constructing Authority
for the purposes of the Public Works Act 1912,
provides that RAC may establish new rail infrastructure facilities or
carry out maintenance or other work on existing rail infrastructure
facilities that are vested in or transferred to it under the proposed Act
without the necessity to obtain approval under the Local Government
Explanatory note page 5
Act 1993, but only (except in emergencies) after giving reasonable
notice to the relevant local council of the work proposed and giving
the local council a reasonable opportunity to make submissions
concerning it,
provides that regulations may be made concerning the making of a
memorandum of understanding between the SRA and RAC for
management of SRA land that is not used by the SRA or SRA lessees
or licensees and on which RAC's rail infrastructure facilities are
situated.
The proposed Act also contains certain other provisions dealing with the
functions of RAC. These include the following:
Item [30] of Schedule 1 omits current section 92 of the Principal Act that
relieves the SRA of the responsibility to maintain certain railway lines and
inserts instead a new provision authorising RAC to cease maintaining railway
lines on which services are not operated.
Item [31] of Schedule 1 prohibits RAC (in place of the SRA) from closing a
railway line and disposing of the land, tracks and other works without the
authority of an Act of Parliament.
Item [32] of Schedule 1 provides that a railway line is not to be treated as
closed merely because RAC has entered into a lease or other arrangement in
respect of it in accordance with an inter-governmental agreement.
Item [33] of Schedule 1 replaces existing section 94 (dealing with closure of
level-crossings, bridges and other structures by the SRA) with a provision
authorising RAC, with the approval of the Minister and after notifying the
portfolio Minister and certain other specified bodies, to close a railway-line,
bridge or other similar structure.
Items [35]-[37] of Schedule 1 make provision for RAC to stand in the same
position as the SRA in relation to loss or damage to property by fire arising
from the exercise of its functions. Provision is also made for variation by
regulation of the maximum sum that may be awarded (currently, $50,000) in
any action to recover the amount of such loss or damage.
Provisions relating to Freight Rail Corporation
Clause 19G establishes Freight Rail Corporation as a statutory State owned
corporation under the SOC Act.
Clause 19H provides that the principal objectives of FRC are:
Explanatory note page 6
to operate efficient, safe and reliable rail freight services, and
to be a successful business and, to this end:
(i)
to operate at least as efficiently as any comparable businesses,
and
(ii)
to maximise the net worth of the State's investment in the
Corporation, and
to exhibit a sense of social responsibility by having regard to the
interests of the community in which it operates, and
where its activities affect the-environment, to conduct its operations in
compliance with the principles of ecologically sustainable
development contained in section 6 (2) of the Protection of the
Environment Administration Act 1991 and
to exhibit a sense of responsibility towards regional development and
decentralisation in the way in which it operates.
Each of the principal objectives of FRC is of equal importance.
Clause 19I provides that the principal function of FRC is to operate rail
freight services. FRC may also conduct any business that it considers will
further its objectives (whether or not related to its principal functions).
General matters relating to Rail Corporations
Clause 19J enables the Minister to direct that certain assets, rights and
liabilities of the SRA or any SRA subsidiary corporation be transferred to a
Rail Corporation.
Clause 19K enables the Minister to direct that other assets, rights and
liabilities used by or attaching to the SRA or any SRA subsidiary corporation
be transferred to the Ministerial Holding Corporation (established under the
SOC Act) or to any other person on behalf of the State.
Schedule 4 (Transfer of assets, rights and liabilities of SRA and its
subsidiaries) applies to orders under clauses 19J and 19K.
Clause 19L provides that shares in a Rail Corporation may not be sold or
disposed of except to eligible Ministers.
Clause 19M gives effect to Schedule 6 (Transfer of certain SRA staff (other
than certain chief executives)) so far as the transfer of certain SRA staff to a
Rail Corporation is concerned. This Schedule deals with the transfer of
certain SRA staff to, among other entities, the Rail Corporations.
Explanatory note page 7
Clause 19N defines the foundation charter of a Rail Corporation for the
purposes of the SOC Act.
Clause 19O provides for the appointment of the board of directors by the
voting shareholders. The clause also specifies a procedure for appointment of
one of the directors, on the recommendation of a selection committee, from a
panel of 3 nominees of the Labor Council of New South Wales. The
nominees, and the members of the selection committee, are to be drawn from
industrial organisations of employees having members employed in the
public sector of the rail industry. These provisions displace standard
provisions in the SOC Act under which directors are appointed by the
Governor on the recommendation of the voting shareholders and that deal
with the appointment, and manner of selection, of a staff director.
Clause 19P provides that the portfolio Minister of a Rail Corporation cannot
be a shareholder of the Corporation.
Clause 19Q precludes the same Minister (other than the Treasurer) from
being a shareholder of both Rail Corporations at the same time. This
provision modifies the provision of the SOC Act that provides that the
shareholders of a SOC are to be the Treasurer and any other Minister
nominated by the Premier.
Clauses 19R and 19S modify the application of provisions of the SOC Act so
far as they apply to the chief executive officer and acting chief executive
officer of a Rail Corporation.
Clause 19T modifies the SOC Act by providing that the voting shareholders
of a Rail Corporation are, in consultation with the board, to determine its
share dividend scheme. The SOC Act provides for such a scheme to be in a
form approved by the Treasurer.
Establishment of the Railway Services Authority
A new Part inserted in the Principal Act (Part 2B, clauses 19U19AH) makes
provision for the establishment, functions, management and assets, rights and
liabilities of the Railway Services Authority of New South Wales. (See item
[15] of Schedule 1.) Part 2B (and associated Schedules to the Principal Act to
which the Part refers) deal with the following:
Clause 19U establishes the RSA as a statutory body representing the Crown.
Clause 19V provides that the RSA is to supply goods (such as ballast,
sleepers or equipment) and provide services (for example, relating to the
repair and maintenance of rail infrastructure facilities and rolling stock) to the
Explanatory note page 8
rail industry in New South Wales and may provide goods and services to
other industries or to the rail industry outside the State. The provision sets out
other functions of the RSA and provides that it may exercise its functions
within and outside the State.
Clause 19W requires the RSA to exercise its functions safely and efficiently
and in accordance with sound commercial practice.
Clause 19X requires the RSA to conduct its operations in accordance with
the requirements of the Rail Safety Act 1993.
Clause 19Y provides for the appointment of the Chief Executive of the RSA
by the Governor and for the application of Schedule 2 (Provisions relating to
Chief Executives) to the Principal Act to the appointee.
Clause 19Z provides for the affairs of the RSA to be managed and controlled
by the Chief Executive of the RSA.
Clause 19AA provides that the RSA is, in exercising its functions, subject to
Ministerial control and direction.
Clause 19AB requires the RSA to supply the Minister with relevant
information of its activities.
Clause 19AC makes provision for the preparation and annual review of a
corporate plan for the RSA.
Clause 19AD enables the RSA to exercise its functions through public or
private subsidiary corporations, partnerships, joint ventures or other
associations with other persons or bodies.
Clause 19AE makes provision for public subsidiary corporations (being
statutory bodies representing the Crown). The clause enables such a
corporation to be established by regulation to exercise specified or delegated
functions of the RSA and enables appropriate assets and liabilities of the
RSA to be transferred to it.
Clause 19AF authorises the RSA to form private corporations, to acquire
interests in private corporations or to dispose of any such interest. The
approval of the Treasurer and the Minister is required if such a private
corporation becomes or ceases to be a private subsidiary corporation (that is,
a private corporation in which the RSA has a controlling interest). A private
subsidiary corporation is not to be a statutory body representing the Crown.
Clause 19AG authorises the delegation of the functions of the RSA to
authorised persons.
Explanatory note page 9
Clause 19AH enables the Minister to direct that certain assets, rights and
liabilities of the SRA or any SRA subsidiary corporation be transferred to the
RSA. Schedule 4 (Transfer of assets, rights and liabilities of SRA and its
subsidiaries) applies to orders under this clause.
A new Division of Part 7 of the Principal Act (Division 1 A, clauses 5959C)
makes provision with respect to the staff of the RSA. (See item [23] of
Schedule 1.) This Division makes provision as to the following:
Clause 59 authorises the RSA to employ necessary staff. The staff is not
employed under the Public Sector Management Act 1988.
Clause 59A authorises the RSA to fix the salary, wages and conditions of
employment of its staff (subject to any other Act or law).
Clause 59B authorises regulations to be made with respect to the employment
of the staff of the RSA. The regulations are to be subject to any relevant
award and to any industrial agreement or enterprise agreement in connection
with that employment.
Clause 59C gives effect to Schedule 6 (Transfer of certain SRA staff (other
than certain chief executives)) so far as the transfer of certain SRA staff to the
RSA is concerned. This Schedule deals with the transfer of certain SRA staff
to, among other entities, the RSA.
A
new Division of Part 8 to the Principal Act (Division 1A, clauses
72A-72D) makes provision with respect to financial provisions relating to
the RSA. (See item [25] of Schedule 1.) The Division provides for the
following:
Clause 72A provides for the establishment of the Railway Services Authority
Fund.
Clause 72B provides for the payment into the RSA Fund of revenue,
Government grants and other money of the RSA.
Clause 72C provides for the payment from the RSA Fund of all payments
required to be made by the RSA.
Clause 72D requires the RSA to pay to the Treasurer out of any surplus for a
financial year a dividend determined by the Minister and approved by the
Treasurer.
Item [28] of Schedule 1 extends a provision dealing with the sale, lease or
disposal of land by the SRA to the RSA.
Explanatory note page 10
Restructuring of the SRA
Items [4], [6] and [7] of Schedule 1 omit references to railway freight
services and road freight services in relation to services provided by the SRA.
In future, the SRA is to provide railway passenger services only.
Items [8] and [10] of Schedule 1 omit references to the construction of
railways and the generation and supply of electricity from a provision listing
the miscellaneous functions of the SRA.
Item [12] of Schedule 1 omits a provision specifying that the
Director-General of the
Department of Transport is to be a member of the
SRA Board. Items [41] and [42] make consequential amendments to
Schedule
and
1 (Constitution and procedure of the State Rail Authority Board
State Transit Authority Board). (A similar amendment, referred
to below, is
made in relation to the State Transit Authority Board.)
Items [13] and [14] make amendments in relation to the content of
plans to be prepared by the SRA. (A similar amendment is made by items
[17] and [18] in relation to corporate plans prepared by the State Transit
Authority. The provision dealing with the corporate plans to be prepared by
the RSA (clause 19AC referred to above) also contains the same
requirements.)
As mentioned elsewhere in this explanatory note, items [15] and [23] of
Schedule 1 make provision as to the transfer of certain SRA staff to the Rail
Corporations and the RSA.
Item [26] of Schedule 1 omits a reference to freight services from a provision
dealing with Ministerial supervision of orders fixing charges for services
operated by the SRA and the State Transit Authority.
Item [29] of Schedule 1 omits reference to the SRA being able to acquire
land for the construction or extension of a railway.
Item [34] of Schedule 1 omits a provision enabling the Minister to require the
SRA to inquire into and report on any railway accident.
Establishment of the Public Transport Authority
A new Part inserted in the Principal Act (Part 5, clauses 44 and 45) makes
provision for the establishment of the Public Transport Authority of New
South Wales. (See item [22] of Schedule 1.)
Clause 44 establishes the PTA comprising the Director-General of the
Department of Transport, the Chief Executives of the SRA and the State
Explanatory note page 11
Transit Authority, the Chairpersons of the Boards of those Authorities, not
more than 5 persons appointed by the Minister, including representatives of
bus and coach proprietors, taxi-cab and private motor vehicle hire operators
and marine passenger transport operators and another person appointed by
the Minister as the Chairperson of the PTA. Schedule 3 (Provisions relating
to Public Transport Authority and Roads and Traffic Advisory Council)
applies with respect to the constitution and procedure of the PTA.
Clause 45 sets out the functions of the PTA. The PTA is to advise the
Minister on matters relating to the development, coordination and regulation
of public passenger services throughout the State.
Amendments of Principal Act consequent on establishment of
new bodies and restructuring of the SRA and relating to
other matters
Item [l] of Schedule 1 amends the long title of the Principal Act.
Items [2], [3] and [5] of Schedule 1 amend, and insert, definitions and make
provision for the interpretation of the Principal Act, as amended by the
proposed Act.
Item [9] of Schedule 1 contains a direction for incorporation purposes.
Item [ 1 l ] of Schedule 1 requires that RAC, FRC and the RSA, as well as the
SRA as at present, must exercise their functions under the Principal Act
subject to the requirements of the National Rail Corporation (Agreement) Act
1991 and the Agreement approved by that Act.
Item [16] of Schedule 1 omits a provision specifying that the
Director-General of the Department of Transport is to be a member of the
State Transit Authority Board. A similar amendment, and consequential
amendments in items [41] and [42], in relation to the SRA Board are referred
to above.
AS mentioned above, items [17] and [18] of Schedule 1 amend a provision
dealing with corporate plans to be prepared by the State Transit Authority to
mirror provisions relating to corporate plans to be prepared by the SRA and
the RSA.
Items [19] and [20] of Schedule 1 replace a requirement for the
Director-General of the Department of Transport to ensure the provision of
transport services with a requirement that the Director-General ensure the
provision of passenger services.
Explanatory note page 12
Item [21] of Schedule 1 omits a section that requires the State Transit
Authority to make staff and facilities available to the Director-General of the
Department of Transport. Item [24] of Schedule 1 contains a consequential
amendment.
Items [27], [44], [46], [59], [61] and [62] of Schedule 1 make consequential
amendments to headings of a Division and Schedules, to enabling clause
references and to the arrangement of a Schedule.
Items [38]-[40] of Schedule 1 insert a reference to the RSA in a provision
dealing with transport authorities and references to the RSA and PTA in a
provision dealing with the personal liability of certain persons.
Items [43], [52] and [54]-[56] of Schedule 1 make amendments by way of
statute law revision.
Item [45] of Schedule 1 inserts a reference to the Chief Executive of the RSA
in Schedule 2 (Provisions relating to Chief Executives) to the Principal Act.
Items [47]-[51] of Schedule l make miscellaneous amendments to Schedule
3 (Provisions relating to Public Transport Authority and Roads and Traffic
Advisory Council) to ensure that the provisions of that Schedule extend to
the PTA.
Item [53] of Schedule 1 inserts Schedule 4 into the Principal Act containing
provisions relating to the transfer of assets, rights and liabilities of the SRA
and its subsidiaries under the proposed Act.
Item [57] of Schedule 1 inserts Schedule 6 into the Principal Act containing
provisions relating to the transfer of former SRA staff (other than certain
chief executives). The former staff may be transferred to a Rail Corporation
or the RSA. The Schedule maintains existing employment entitlements on
transfer and, in particular, provides for the continuation of the existing
enterprise agreements applying to the SRA, the recognition of previous
service with the SRA for all purposes, the maintenance of existing rates of
pay on transfer, and provisions for staff mobility of former SRA staff among
the new employers. Provision is made that existing terms and conditions of
employment, for transferred staff and new employees of the Rail
Corporations and the RSA, may be varied but only by the means by which
they are able to be varied currently. The Schedule also makes specific
provision as to the long service leave and sick leave entitlements of
transferred staff and new employees of the Rail Corporations and provides
that the Transport Appeal Boards Act 1980 does not apply to the Rail
Corporations.
Explanatory note page 13
Item [60] of Schedule 1 inserts reference to the proposed Act in a provision
enabling regulations of a savings or transitional nature to be made as a
consequence of its enactment.
Item [63] of Schedule 1 inserts provisions of a savings or transitional nature
in Schedule 7 (Savings, transitional and other provisions) to the Principal
Act. Provision is made, among other things:
*
that the holders of certain specified positions in the SRA at the date of
commencement of the proposed Act are, on that date, appointed as the
chief executives respectively of the Rail Corporations and the RSA,
and
*
concerning references to the SRA in electricity and other legislation,
and
*
pending applications for review of promotion appointments,
disciplinary proceedings and appeals to Transport Appeal Boards by or
concerning SRA staff to be transferred to a Rail Corporation or the
RSA by the operation of orders under the proposed Act.
Schedule 2
Amendment of other Acts and instruments
This Schedule contains consequential amendments to the following Acts and
instruments:
Attachment of Wages Limitation Act 1957 No 28
Clean Air Act 1961 No 69
Clean Waters Act 1970 No 78
Conveyancing Act 1919 No 6
Electricity (Pacific Power) Act 1950 No 22
Electricity Safety Act 1945 (1946 No 13)
Electricity Supply Act 1995 No 94
First State Superannuation Act 1992 No 100
Irrigation Act 1912 No 73
Local Government Act 1993 No 30
National Rail Corporation (Agreement) Act 1991 No 82
Pipelines Act 1967 No 90
Explanatory note page 14
Public Authorities (Financial Arrangements) Act 1987 No 33
Public Finance and Audit Act 1983 No 152
Public Sector Executives Superannuation Act 1989 No 106
Public Sector Management Act 1988 No 33
Rail Safety Act 1993 No 50
Roads Act 1993 No 33
Roads (General) Regulation I994
State Authorities Non-contributory Superannuation Act 1987 No 212
State Authorities Superannuation Act 1987 No 211
Superannuation Act 1916 No 28
Transport Appeal Boards Act 1980 No 104
Water (Part 8-General) Regulation 1995
Explanatory note page 15