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TasRail's unexpected $5.8 million operating loss will be met with greater efficiency to ensure major works are not deferred, the CEO says.
In its annual report, Tasmania's public rail company blamed the June flood emergency and the suspension of bauxite mining near Campbell Town for the unbudgeted losses last financial year.
The recorded loss is well above the $4.1 million loss TasRail had estimated for the 2015–16 financial year, and chief executive Damien White admitted it was disappointing.
"The actual financial outcome wasn't where we expected, quite obviously," he said.
"It's the abnormal things at the end of the year, whether it's incidents or mines not starting up, that sort of stuff, what we need to do as much as possible is minimise those one offs."
Floods caused $7.7 million damage across 65 TasRail sites; $4 million in property damage, $1.8 million in business interruption costs and $1.8 million in reduced freight revenue.
"Much of which is covered by insurance, but there's still some uninsured costs and the revenues that were effected during that time," Mr White said.
"Whilst there was certainly some additional costs, we ended up in a better financial position than if we'd said to our customers, you know, we're closing down the operations until we get our tracks back up."
Mr White is confident TasRail can offset the losses, without having to defer any major work.
"It probably just puts more pressure on us getting our efficiency levels right," he said.
Mining downturn hits bottom lineAustralian Bauxite Limited suspended operations at its Bald Hill mine in January, due to a lack of customers, and TasRail estimates that resulted in a $1.8 million loss.
"We went into that with our eyes wide open and certainly took the view that we were better off going into particularly a new mining environment without necessarily investing a lot of money," Mr White said.
"A lot of the mobilisation activities were using leased equipment which has meant we've been able to quit those costs at a much, much lower cost than if we'd invested upfront."
Mr White said TasRail would continue to look for opportunities in the mining sector.
A three-year, $120 million capital works program is currently underway at TasRail, partly funded by the state and federal governments.
The company had invested heavily in upgrades and maintenance in recent years, and would continue to do so, Mr White said.
This article first appeared on www.abc.net.au
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