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Aurizon has begun assessing damage to its Queensland rail tracks from Cyclone Debbie after closing four rail systems that haul coal from the Bowen Basin due to flooding.
The rail group closed its Newlands, Goonyella, Blackwater and Moura systems, which comprise a 2670-kilometre track network, and was planning to inspect the Newlands and Goonyella corridors by air on Thursday.
"This will provide an initial assessment of any damage or flooding on the rail corridor and allow Aurizon to plan any recovery work that is required," the company said.
Aurizon's road and rail freight operations from Brisbane to Bowen have also been suspended.
The rail group hopes that remediation work done on its rail networks in the aftermath of the devastating 2011 floods will help minimise damage from the cyclone, but said it was too early to comment.
Investors say the track closures could hurt Aurizon's coal haulage volumes, which are forecast to reach between 200 and 212 million tonnes in 2016-17.
Rail tracks will be reopened only after inspections are done to ensure safety, with rail lines expected to start operating again late on Friday at the earliest.
Coal export terminals at Hay Point, Dalrymple Bay and Abbot Point have been shut, while Maritime Safety Queensland has also closed Gladstone Harbour to commercial vessels and suspended shipping.
The disruption to Aurizon's coal haulage operations comes as new chief executive Andrew Harding restructures the company's business model to make managers more accountable for revenues and costs.
Former CEO Lance Hockridge adopted a so-called "functional" structure after the company's float in 2010, centralising activities such as human resources, IT, finance and maintenance to reduce costs across Aurizon's businesses, which include iron ore and freight haulage.
But Mr Harding, who formerly worked for Rio Tinto, wants to return responsibility to divisional managers, and make each business unit accountable for operational and financial performance.
He is in the process of implementing a new business structure and management team, which will be in place by July 1.
Investors have welcomed the new structure, saying Mr Harding "hasn't mucked around" in finding ways to slash costs, such as slashing the number of people who can hire consultants.
One investor said Mr Harding was dismantling fiefdoms that had built up under Mr Hockridge by getting rid of a layer of management.
Mr Harding replaced Aurizon's chief financial officer Keith Neate with Aurizon finance executive Pam Bains immediately after taking over in December, and has brought in former Woodside Petroleum executive Tina Thomas to run human resources. Ms Thomas will start this week and will be the second woman on Aurizon's seven-member executive committee.
Aurizon's executive manager of customer and strategy, Mauro Neves, who worked for Vale before joining the rail group in 2013, has resigned and will leave in mid-April.
Mr Harding has promised to pursue "a very disciplined approach to managing costs and capital" and has also cut the number of people who are allowed to invest money to ensure cash is spent only on projects with high returns. Aurizon's 2016-17 capital spending forecast has been reduced by $50 million to $550 million, with annual spending expected to drop to about $500 million by 2018-19.
Aurizon's shares closed down 1¢ on Thursday at $5.35. The stock has risen 35 per cent over the past 12 months.
This article first appeared on www.afr.com
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