Aurizon has made an initial assessment of the estimated financial impact associated with the recent weather event of Cyclone Marcia and the concurrent industrial campaign by rail unions in Queensland.
The estimated total impact of Cyclone Marcia on Earnings Before Tax and Interest (EBIT) is $ 24 – 28 million. The estimated impact of the industrial campaign is up to EBIT $ 2 million.
The estimated financial impact on the Network business, including lost access revenue from reduced railings (based on existing tariffs) and the cost of repairing damaged infrastructure, is $ 14
- 16 million EBIT. Flood repair costs and certain revenues are expected to be recovered in subsequent financial years, following resolution of the UT4 regulatory process.
The estimated financial impact on the above-rail business, including coal and intermodal services is $10 - 12 million EBIT. Aurizon will be working closely with customers and supply chain partners over the remainder of the financial year to recover lost volumes through additional services.
Industrial relations campaign
From 20 – 24 February, the Rail Tram & Bus Union (RTBU) and the Australian Federal Union of Locomotive Employees (AFULE) notified a series of industrial actions by traincrew in various locations across Queensland, including the flood-affected Central Queensland network.
The estimated financial impact of cancelled rail services caused by this action in January and February is up to $ 2 million EBIT. This is exclusive of financial impacts to customers, the loss of coal royalty revenue to the State Government, and the reputational cost to Queensland as a reliable supplier of high-quality coal to global markets. Each week, the Queensland coal network transports approximately 4 million tonnes of coal with export revenue of approximately $500 million.
Aurizon does not have any further notifications of industrial action in Queensland at this point. The RTBU and AFULE are continuing bargaining negotiations on the two outstanding Enterprise Agreements in Queensland.
Status of network and rail services
Category 5 Cyclone Marcia crossed the Queensland coast, north of Rockhampton, on Friday 20 February, and then tracked south over the Blackwater and Moura rail systems, with wind gusts of over 300km per hour and rainfall in some areas of up to 500mm during the weather event.
The Newlands coal system and rail services continued to operate throughout. Rail services on the Goonyella coal corridor were interrupted due to temporary suspension of in-loading operations by the coal terminals at Hay Point from 19 to 20 February.
Services on the Blackwater and Moura coal systems were suspended on the afternoon of 19 February and commenced a staged resumption for Blackwater from 21 February. Services from Blackwater through to the port in Gladstone were recommenced from 5pm on 22 February, with an initial 40kph blanket speed restriction applied to the North Coast Line. This was lifted to 60kph blanket after 24 hours of railings, and sits at an 80kph blanket speed restriction as at 26 February.
The Moura corridor has sustained major infrastructure damage, including extensive erosion at Bell's Creek, near Mt Rainbow (45 kilometres north-east of Biloela). Aurizon has mobilised all available resources at 20 major repair sites along the corridor, with the program of work expected to be completed by the end of this month.
The North Coast corridor between Brisbane and Cairns, on which Aurizon operates general freight services, was closed between Brisbane and Mackay on 19 February, and progressively re-opened from 22 February.