short description of your project

2

Short description of your project

The Mornington Railway would like to apply for funding to complete the Rail

infrastructure component of the Moorooduc to Baxter Heritage Railway, this will

help lead a Tourism based post Covid19 economic recovery.

Would you like to make a simple or detailed budget submission?

Detailed Submission

Budget Amount (if known)

$1.86 - 2.4mill depending on options analysis

Are you making the submission as an individual or club / group /

organisation?

Club / group / organisation

Name of Club, Group or Organisation

Mornington Railway Preservation Society Inc

Does your group, club or organisation have an ABN?

Yes

Does your group, club or organisation have insurance?

Yes

Site Location (if applicable)

Moorooduc to Baxter Railway Corridor

How will this project make a difference to the community?

Will synergise with the Baxter to Brairs Rail and Trail, open connectivity options

between communities in the Mornington Peninsula.

Keystone Project of the Mornington Railway Strategic Plan, will result in the

Mornington Railway contribution to the local economy to significantly increase and

Submission No. 54

3

drive tourism growth. Will become an iconic tourist attraction on the Mornington

Peninsula.

Will facilitate semi-regular tourist trains from Melbourne into Mornington for special

events, festivals, race days.

Do you plan to seek additional funding sources, i.e. grants, donations, etc.

Yes, As a major project the Mornington Railway will be seeking matched funding

from State and Federal levels of government, a commitment from the shire first will

highlight to state and federal that this is a project shovel ready and will attract

funds.

Do you currently have money (partial or otherwise) to fund this project?

MRPS has secured 45% of the sleepers required through material disposal projects

from the LXRA and Victrack, this reduces the cost significantly and hopes to

acquire more. Lets discuss this further.

Are there other community members, organisations, businesses, etc. that

you are, or might, work with to help deliver this project?

This project is a community priority and we have a long list of strategic partners

from the Rail Industry, Local area, Local Business' and our volunteer support

network. We would love the opportunity to present this further.

Are there key stages, timelines of dates for this project?

Estimated 3-4 years depending on a number of items, this is ofcourse dependent

on options assessment, we would love the opportunity to present this further.

Has funding previously been sought for this project?

Yes

Will this project require ongoing maintenance or continued financial support

from the Shire? (if known)

No

Submission No. 54

4

Do you want to be heard at the Forward Planning Meeting?

Yes

Additional submission details

The Mornington Railway has received lots of positive feedback from Shire

Councilors and Officers, the Local Community, State and Federal Government,

This project is a shire and state priority, will link our communities together and open

up large tourism opportunities up for the Mornington Peninsula and its traders. We

would love to have the opportunity to discuss the complexities, options and

eventual completion of this project with you further.

Submission attachment/s

The_Mornington_Railway_Strategy_and_Business_Plan_February_2019.pdf

Baxter_to_Briars_Community_Rail_and_Trail.pdf

MRPS_Strategic_Plan_Summary.pdf

I understand that all or any part of this submission will be made public and I

have read the confidentiality statements

Yes

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our Future.

Submission No. 54

MRPS Strategy and Business Plan 2018 V2 1

MORNINGTON RAILWAY STRATEGY AND BUSINESS PLAN

October 2018

Submission No. 54

MRPS Strategy and Business Plan 2018 2

Vision and Mission Statement MRPS’s Vision and Mission are shown below.

Vision – How we want to be known. Mornington Railway will be valued by the community, business, Government and others as a hallmark visitor

attraction on the Mornington Peninsula.

Mission – How we will get there. MRPS will operate the Mornington Railway as a financially and operationally sustainable tourist experience that

contributes significantly to the economy and employment in Victoria.

Submission No. 54


MORNINGTON RAILWAY STRATEGY AND BUSINESS PLAN

Vision and Mission CONTENTS 1. Background 6 2. Introduction 12 2.1 Purpose of the Strategy and Business Plan 12 2.2 How the Plan was Developed 14 2.3 Critical Industry Characteristics 15 3. Key Planning Considerations 19 3.1 Maintaining Viability 19 3.2 Effective Asset Maintenance – Viability 21 3.3 MRPS Current input to the Regional Economy and Employment 22

3.4 Volunteers – Managing Generational Change 26

Linqage International

Unit 1, 17th Floor, 15 Collins Street, Melbourne, 3000, Australia

Telephone: 61 (0)3 9654 1410 Mobile: 61 (0)418 568 199 Email: [email protected]

Lanegold Pty Ltd trading as Linqage International ABN Number: 54 050 949 445

www.linqageinternational.com.au

Submission No. 54


3.5 Current Marketing 30 3.6 Market Analysis Driving Future Marketing 37

3.7 Future Marketing 42 3.8 Meeting Future Marketing Requirements – The Fleet 44 3.9 Meeting Future Marketing Requirements – Support Facilities 48 3.10 Meeting Future Marketing Requirements – Volunteers 48 3.11 Meeting Future Marketing Requirements – Moorooduc Master Plan 49 3.12 Meeting Future Marketing Requirements – Extension to Baxter 50 3.13 Availability of Sleepers 52 3.14 Archival Information 54

4. Supports and Strengths 55 5. Weaknesses and Impediments 58 6. Opportunities 62 7. Threats and Risks 64 8. Strategy Development 68 8.1 Core Strategy 68 8.2 Vision and Mission 73 8.3 Key Factors for Success 74 9. Implementation 77

Submission No. 54


9.1 Balancing Growth and Infrastructure Development Investment with Cash Generating Initiatives 77 10. MRPS Finances Following Successful Implementation of the Strategy 87 10.1 Services, Patronage and Impact on Revenue and Expenses 87 11. Goals and Objectives 96 Attachment 1 - ATHRA - Mornington Railway Economic and Employment Input to the Regional Economy Attachment 2 - Revenue and Expense Budget Attachment 3 - Suggested Organisational Structure Attachment 4 – Master Plan Costs

Submission No. 54


1. Background The Mornington Railway, operated by the Mornington Railway Preservation Society (MRPS), is a tourist and

heritage railway operating on 5.6 kilometres of line between Moorooduc and Mornington on the Mornington

Peninsula. The Mornington Peninsula is renowned as Melbourne’s playground and is less than an hour’s drive

from Melbourne.

Figure 1 – A Vintage Train at the Original Mornington Station

Submission No. 54


The railway operates on part of the former Victorian Railways branch line, built in 1888, which ran from Baxter to

Mornington. The Mornington railway line was a rural railway branching off from the Stony Point railway line at

Baxter. The line operated for 92 years before closing. In 1991, ten years after closing, the line was reopened as

a tourist and heritage railway. The final section of the line between Rail Motor Stopping Place (RMSP) 16 and

the former Mornington terminus was considered to have significant commercial value and was sold by the State

Government to private investors.

Figure 2 – Moorooduc Station Today

Submission No. 54


The railway now runs between Moorooduc station and the completely new Mornington station, which is sited at

Yuilles Road in Mornington, 100m from the site of RMSP 16. A runaround loop has been installed. There is an

intermediate stop at Tanti Park station, formerly Mornington Racecourse Station.

Figure 3 – Map of Mornington Railway

Submission No. 54


MRPS has cleared the remaining section of line between Moorooduc station and Baxter station to assist in its

restoration endeavours. A future extension to Baxter will significantly add to the Mornington Railway visitor

experience and boost patronage. Connection to the soon to be electrified METRO rail network at Baxter will give

Mornington Railway patrons an ability to travel to the railway by the metropolitan rail network. The newly

constructed Peninsula Link freeway crosses the line; an overpass over the line has been constructed to enable

continued operation and may even assist future operations to Baxter by removing significant traffic from the

Moorooduc Highway level crossing.

The railway currently carries in excess of 10,000 patrons and operates 63 days annually, with steam and diesel

hauled trains running between Moorooduc and Mornington railway stations. It operates:

a recently increased service from one Sunday to now every Sunday a month.

Wednesdays during Victorian school holidays.

for Special Event trains such as Driver Experience as required.

The railway is accredited with the Office of the National Rail Safety Regulator as a Rolling Stock Operator (RSO)

and a Rail Infrastructure Manager (RIM).

MRPS has 250 members of whom 70 are active volunteers. The railway is operated solely by MRPS volunteers.

Submission No. 54


The railway has a ten member Committee of Management / Board and the Members are shown below: President Andrew Swaine

Vice President Ken Rees

Secretary Robert Reed

Treasurer Andrew Fairweather

Committee Member Aiden Parlby

Committee Member John Lornie

Committee Member Rodney Reed

Committee Member Joe-Davis Westland

Committee Member Marg French

Committee Member Jim Moody

The Board has a very good mix of business, accounting, financial and engineering skills.

Supporting the Board are the Mechanical Engineering Manager, the Way and Works Manager, and the Traffic

Department Manager. Other key positions include the Marketing Manager and the Training and Education

Manager. The functional organisational structure is shown below. Over time, MRPS will migrate to a more

developed management structure as suggested at Attachment 3. The migration process will include the risk

management assessment and other elements related to management of change, as detailed in the MRPS

Safety Management System.

Submission No. 54


Figure 4 – MRPS Functional Structure

Submission No. 54


2. Introduction 2.1 Purpose of the Strategy and Business Plan This plan details how MRPS will position itself as a hallmark attraction on the Mornington Peninsula by:

consolidating its current position;

growing its volunteer base;

growing patronage; and

progressing measured and achievable expansion by restoring the service to Baxter.

Figure 5 – Baxter offers Significant Benefits to MRPS

Submission No. 54


The plan:

outlines the sound commercial and marketing elements considered by MRPS.

highlights the very strong alignment with Local, State and Federal strategic priorities for the broader region.

describes the job creation, tourism, economic and community benefits.

The plan demonstrates that MRPS’s planned extension to Baxter is “shovel ready” and documents how the

extension will be delivered.

Figure 6 – Peninsula Link Freeway Overpass Showing the Bridge and the Cleared Line

Submission No. 54


2.2 How the Plan was Developed The Strategy and Business Plan was developed in June 2018 following extensive consultation with MRPS Board

members, Society members, key external stakeholders, Local Government and key State and Federal

Government representatives.

A comprehensive Planning Workshop, attended by the Board and key stakeholders, was undertaken as part of

the planning process. The level of consultation was critical as it will ensure that the plan is owned by the MRPS

Board, Society members, and other key stakeholders.

The key elements of the plan were endorsed by the Board at the Planning Workshop.

The plan will be reviewed annually each June.

Submission No. 54


2.3 Critical Industry Characteristics The tourist and heritage rail sector in Australia and internationally is asset and labour intensive. Many railways

that were previously operated as state owned enterprises were closed as the cost of maintenance and staffing

made then non-viable. Most successful tourist and heritage rail operators in Australia are those that lower asset

maintenance and staffing costs through the use of volunteer labour and other cost cutting endeavours such as

re-purposing previously used sleepers.

Successful tourist and heritage operations are generally close to large markets for easy access by both patrons

and volunteers, and ideally, close to other attractions so that patrons can access a suite of attractions.

The viability of tourist and heritage railway organisations is generally dependent on:

the Board having a record of sound governance.

utilising the assets as intensively as possible to generate a return that enables recurrent expenses to be

covered, and importantly, funds to be generated for ongoing asset maintenance. Being near a large market

means a better return, as railways can operate services at closer to maximum capacity.

the organisation having sufficient facilities to allow for essential maintenance of rolling stock, track and other

assets.

Submission No. 54


having a market focus and an experience that meets the needs of large diverse markets, through product

offerings that include both an excursion family oriented product and a premium product.

offering visitor experiences that vary in length, short, medium and long.

the development and maintenance of an engaging and supportive culture for volunteers and staff, if paid

staff are employed.

having enough volunteers with the right skills to maintain operations – proximity to a large population base

increases the recruiting pool for volunteers.

successful management of inter-generational change issues which result in a culture that is engaging and

welcoming for new volunteers, especially younger volunteers.

having the moveable assets, trains, stored undercover overnight as close as possible to the large market to

minimise “dead running”, ie. operating trains with few passengers as they transit to the large market. It

significantly reduces recurrent expenses. Undercover storage increases passenger comfort, especially in

winter, and significantly decreases maintenance costs.

linking in with other attractions, so that one attraction is on the way to another.

Submission No. 54


The Puffing Billy Railway in Victoria is an example of an organisation that is viable through meeting the above

characteristics.

The Lifecycle of the Tourist and Heritage Rail Sector diagram below illustrates how not addressing the basic

industry requirements detailed above leads to a non-viable outcome.

Critical Industry Characteristics ‐ The Puffing Billy Example

The Puffing Billy Railway (PBR), which attracts over 500,000 patrons annually, exemplifies the key industry characteristics:

PBR is one hour from Melbourne, a major population base and market, creating easy access for tourists.

PBR offers an intensive service all year round of up to 6 trains daily.

PBR offers excursion and premium products.

The Melbourne population base supports over 1,000 active volunteers.

PBR’s operational base, Belgrave, is co-located with a suburban railway station and is the terminus where the majority of passengers

board.

PBR links with other attractions, such as the penguins at Phillip Island or the Yarra Valley, and can be visited on the outbound or

return trips.

Figure 7 – Industry Characteristics – Puffing Billy

Submission No. 54


Figure 8 – Lifecycle of the Tourist and Heritage Rail Sector

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3. Key Planning Considerations

During the extensive consultation process and the Planning Workshop, the following key planning considerations

and issues to be addressed were identified.

3.1 Maintaining Viability MRPS has developed its operations to the point where the ongoing financial viability of the organisation can be

maintained with the current concept of operations, patronage and volunteer base, however, funds for investment

in critical additional infrastructure are not available.

Analysis of the very conservative financial budget at Attachment 2 and presented graphically in the passenger,

revenue and expense budget below confirms MRPS’s financial viability.

The graph uses MRPS’s current accounts as the base year and utilises a conservative 3% growth rate.

The graph confirms MRPS’s ongoing financial viability, however, funds for investment in critical additional

infrastructure are not available.

Submission No. 54


Figure 9 – MRPS Passengers, Revenue and Expense Budget Estimates Based on Current Concept of Operations

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Mornington Railway Passengers, Revenue and ExpensesBudget Based on Current Concept of Operations

Total Passengers Total Revenue Total Expenses

Submission No. 54


3.2 Effective Asset Maintenance – Viability

As detailed in Section 2.3 Critical Industry Characteristics, the MRPS Board appreciates that effective asset

maintenance is critical for viability, as the tourist and heritage rail sector is asset intensive, and longevity is

dependent on ongoing resourcing of asset maintenance, especially maintenance of track.

MRPS successfully maintains 5.6 kilometres of track between Moorooduc and Mornington. MRPS has no

bridges on its line.

All track and other infrastructure maintenance is progressed in accordance with the Asset Management Policy

and Plan in the MRPS Safety Management System (SMS). As detailed earlier, the SMS, including the Asset

Management Policy and Plan is audited internally and also externally by the Office of the National Rail Safety

Regulator.

Since 2015, a concerted effort to clear a backlog of sleepers requiring replacement has been successfully

progressed. 1,300 sleepers have been replaced, with planned work to clear the remaining backlog of 500

sleepers to be completed within 12 months. A full tamp will be undertaken on completion of that work. Re-

ballasting is not required.

Submission No. 54


Routine embankment maintenance, weed spraying, vegetation clearance, and drain maintenance is progressed

in an annual cycle.

In anticipation of works to reopen the line from Moorooduc to Baxter, over the last 2 years, extensive works have

seen that portion of the line cleared of undergrowth and sprayed with weedkiller regularly.

As funds become available, MRPS will progress completion of the track re-laying between Moorooduc and

Baxter.

3.3 MRPS Current Input to the Regional Economy and Employment MRPS is a significant contributor to the local, regional and state economy. The Board identified the need to

ensure that business, the community and all levels of Government appreciate the contribution made by the

organisation.

Annually, the Association of Tourist and Heritage Rail Australia undertakes a detailed analysis to quantify the

economic and employment input of the tourist and heritage railway sector to the Australian economy.

The current analysis is based on the Resources and State Tourism Satellite Accounts 2016 – 17, produced by

Tourism Research Australia in April 2018 and the Economic Contribution of Tourism in Victoria 2016 – 17,

Submission No. 54


produced by the Department of Economic Development Jobs Transport and Resources. Attachment 1 provides

full details.

Annual visitation to the heritage rail sector in Australia of 799,809 patron day trips / visits contributes significantly

to the regional and Australian economy. Detailed analysis shows that each year the people who visited heritage

rail sector venues in Australia directly and indirectly contributed $371.128 million annually to the Australian

economy. The Mornington Railway directly and indirectly contributed $2.64 million annually to the Victorian

economy.

That amount reflects the contribution to the Australian economy resulting from money spent by visitors to the heritage rail sector in Australia and the amount spent on the Mornington Peninsula.

Using the above data, the heritage rail sector in Australia provided a significant contribution to employment. The

direct and indirect full-time equivalent jobs generated by the Mornington Railway are 22.6. The segmentation

that relates to the above data is detailed below.

Submission No. 54


Figure 10 – Segmentation Based on Visitor Days

International, 33.60%

Domestic Overnight,

42.69%

Domestic Day, 23.71%

Segmentation Based on Visitor Days

International Domestic Overnight Domestic Day

Submission No. 54


The chart below in Figure 11 details the sectors showing the percentage spend of each tourist dollar.

Figure 11 – Sector Spending Percentage Spend of Each Tourist Dollar

Retail trade9%

Accommodation and food services

46%Transport, postal

and warehousing

14%

Information media and

telecommunications1%

Rental, hiring and real estate services

(b)2%

Administrative and support

services4%

Public administration and

safety0%

Education and training

5%

Health care and social

assistance1%

Arts and recreation services

14%

Other services1% Ownership of dwellings

3%

Tourism Spend by Sector ‐ Percentage of each Dollar Spent

Submission No. 54


3.4 Volunteers – Managing Generational Change

MRPS has 250 members of whom 70 are active volunteers. The railway is operated solely by MRPS volunteers.

Figure 12 – Mornington Railway is Operated by Volunteers

Submission No. 54


Those numbers provide MRPS with sufficient volunteers and the required skills to support all year round Sunday

operations, school holiday operations, the operation of special trains when required, and to progress essential

track and rolling stock maintenance.

The MRPS Board realises that volunteer capacity and capability is a significant constraint on any increase in

future operational tempo. The MRPS Board appreciates that to retain existing volunteers and to grow volunteer

numbers, generational change issues, as detailed in Figure 8, Lifecycle of the Tourist and Heritage Rail Sector,

must be successfully managed.

Poor management of generational change in tourist and heritage rail organisations can result in them becoming

non-viable, as volunteer contribution decreases, and operations and essential maintenance cannot be sustained.

MRPS is successfully facing the generational change challenge. The issue is exacerbated by existing

volunteering arrangements, that see many volunteers either volunteering during the week (about 45% - generally

retired), or volunteering over the weekend (about 55% - generally in employment or engaged in academic

pursuits), depending on their employment and family situation. In the past, it has resulted in fragmentation as

two separate non-complementary cultures developed. To successfully manage the challenge, MRPS has

progressed the following:

Submission No. 54


A recruitment and induction programme that prepares volunteers for any issues that may arise from

generational change.

A mentoring programme utilising experienced volunteers that support new volunteers in the early stages of

their engagement with the railway.

Regular updating of all volunteers on issues associated with volunteer retention and the importance of

ongoing volunteer engagement and ownership of issues that impact on volunteers and the railway.

Migrating the management of projects on the railway from a functional focus where a specific work group

progresses all tasks associated with a particular discipline, for example rolling stock maintenance, to a

management system where work groups tailored for specific projects are formed and they progress

designated projects. The approach ensures that teams with the appropriate skills and capacity are available

and there is less fragmentation.

Developing a comprehensive training programme for volunteers, and in partnership with Registered Training

Organisations, developing the railway as a training centre.

Facilities and equipment to support volunteers in the track maintenance area are good with old but serviceable

equipment being available. Facilities and equipment for mechanical maintenance are limited with plans to

improve locomotive and rolling stock maintenance facilities when funds are available. Operationally, the facilities

available for volunteers are satisfactory.

Submission No. 54


Figure 13 – An Engaged and Motivated Pool of Volunteers, Especially in Areas Such as Track Maintenance, is Critical to Maintain MRPS’s Viability

Submission No. 54


3.5 Current Marketing 3.5.1 The Product MRPS offers a unique experience. Patrons can experience travel in Edwardian splendour in restored carriages

hauled by a heritage steam locomotive on a picturesque country branch line.

Figure 14 – MRPS Offers a Unique Heritage Travel Experience Through Picturesque Rural Scenery

Submission No. 54


During 2016 / 2017, MRPS carried 11,360 passengers with 2,937 of those being on special trains. Annually,

up to 16 special trains operate including:

Anniversary specials related to locomotives and rolling stock.

Santa and Easter Specials.

Ale Trains.

Birthday Parties / Trundles.

Super Heroes.

Little Train of Horrors.

Grand Final Eve specials.

Australia Day. Special trains are operated as required. All patrons travel in Excursion class. The special train patrons receive

an add on related to the occasion, or in some cases, supporting augmented products such as beer, wine and

canapes.

Patronage figures are severely impacted when diesel locomotives replace the steam locomotive. As a matter

of priority, MRPS will restore another K Class steam locomotive to service. Weather and seasonality do not

disproportionately impact on patronage. Over 98% of all visitors on site travel on MRPS services.

Submission No. 54


Figure 15 – Santa Special on the Mornington Railway

Submission No. 54


The presentation and cleanliness of Mornington Railway’s trains are very good.

The station precinct is rudimentary but adequate. In the medium term, the station facilities require updating to

meet growing visitor expectations, which includes developing the picnic area adjacent to the station at

Moorooduc. Over time, Moorooduc should be developed as an attractive visitor destination.

Over 90% of visitors travel to the railway by car and the current unsealed access road requires sealing.

Figure 16 – The Moorooduc Station Precinct Showing Basic Station Facilities, Picnic Area, and Unsealed Access Road

Picnic Area

Access Road

Station Facilities

Submission No. 54


Timetable The MRPS Timetable and running days, extracted from the website, are detailed below.

See

http://morningtonrailway.org.au/excursion-trains/

Figure 17 – Mornington Railway Timetable

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Figure 18 – Mornington Railway Running Days

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Fares The MRPS fares, extracted from the website, are detailed below.

See

http://morningtonrailway.org.au/excursion-trains/

The average fare per passenger is $9.87. Retail recovery is $0.338 per passenger.

Figure 19 – Mornington Railway Fares

Submission No. 54


3.6 Market Analysis Driving Future Marketing 3.6.1 Visitation Data Analysis of the Mornington Peninsula Regional Tourism Summary Year Ending December 2017, from the

Victorian Department of Economic Development Jobs Transport and Resources, shows that after the Puffing

Billy Railway, Mornington Railway has the largest market catchment of any tourist and heritage railway in

Australia. Annually, the Mornington Peninsula has 6.863 million visitors, which is more than the Dandenong

Ranges where the Puffing Billy Railway is located. That region attracts 5.3 million visitors annually. Figure 20

provides specific details. Most patrons are day trippers followed by domestic overnight visitors.

Domestic Overnight, 1,600,000,

23%

Domestic Day Trips, 5,200,000,

76%

International Overnight, 63,000, 1%

Mornington Peninsula Tourism Visits Segmentation 2017

Domestic Overnight Domestic Day Trips International OvernightFigure 20 – Mornington Peninsula Tourism Visits Showing Segmentation

Submission No. 54


Figure 21 provides specific details of the growth in the segments. Growth in visitor numbers in all segments is

strong, especially Domestic Overnight and Domestic Day Trips.

Figure 21 – Visitation Growth

18.2%

13.6%10.8%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

Domestic Overnight Domestic Day Trips International Overnight

Mornington Peninsula Tourism Visitation Growth 2017

Domestic Overnight

Domestic Day Trips

International Overnight

Submission No. 54


Figure 22 provides specific details of the value of the segments. Total value of the tourism spend is $1.045

billion. The segment with the largest value is Domestic Overnight.

Domestic Overnight,

$514,000,000, 49%

Domestic Day Trips, $444,000,000, 43%

International Overnight, $87,000,000, 8%

Mornington Peninsula Tourism Value of Segments


Figure 22 – Value of the Segments

Submission No. 54


Figure 23 provides specific details of the growth in value of the segments. There is very good growth potential in

all segments.

Figure 23 – Growth in Value of Each Segment

15.5%

24.4%

56.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%


Mornington Peninsula Tourism Growth in Spend 2017

Domestic Overnight

Domestic Day Trips

International Overnight

Submission No. 54


3.6.2 Analysis of the Visitation Data Analysis of the data detailed above shows that:

• The market MRPS serves is very large, one of the largest in Australia, and large by international

standards.

• The Domestic Day Market, the largest market and the railway’s current market, is strong and growing

significantly and should remain a priority. The railway’s current Excursion product caters for 80% of that

segment, however, relative to other tourist and heritage operators in Australia, 20% of the Domestic Day

market that seeks a Premium product does not currently have its needs met at Mornington Railway.

• The Domestic Overnight Market, the next largest market, is substantial, valuable and should be the next

priority. As detailed above, a Premium product is required.

• Internationals – the numbers are small but they spend a lot of money. It is also a large market, not as

substantial as the Domestic market, but it is of significant value.

• There is sufficient demand to justify a migration, as capacity becomes available, with Saturday operations

to complement Sunday operations, and eventually daily weekday running.

Noting the patronage of the Puffing Billy Railway, which operates up to six services daily, is over 500,000

patrons annually, and similarly located tourist and heritage railways overseas, conservatively, the Mornington

Railway could grow patronage to over 300,000 annually within a decade.

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3.7 Future Marketing As identified in Section 3.6 above and Section 2.3, Critical Industry Characteristics, future product development

must focus on:

Developing a Premium “First Class” product based around a parlour car service capable of serving patrons

drinks and canapes and an open style van suitable as a dance venue to support special events.

As volunteer capacity develops, operating trains on Saturday as well as Sunday each weekend, with

services eventually operating throughout the week.

As resources become available, restoring a second steam locomotive to ensure the availability of one

steam locomotive at all times. It will eliminate the drops in patronage experienced when heritage diesel

locomotives are operated because a steam locomotive is in maintenance.

As resources become available, improve the visitor experience by paving the entry road, enhancing the

station precinct, improving picnic facilities, and upgrading the station building and signal box.

As resources become available, extending the line from Moorooduc to Baxter. It will facilitate offering a

visitor experience that can vary in length from short to medium to long, and will offer patrons the

opportunity to dwell at Baxter, Moorooduc or Mornington.

Developing Moorooduc as a destination with a Discovery Centre that displays exhibitions telling the story

of railways on the Mornington Peninsula and their importance to the community. It should be further

Submission No. 54


developed to include displays of main line steam locomotives and other rail related equipment that will be

able to access the railway through the connection to the suburban network at Baxter.

Over time, in partnership with training organisations, develop a Trade Training Facility that utilises the high

level of metal, wood and other trades required to restore and maintain heritage rolling stock, in order to

train and develop youth to a “job ready” status. Viewing opportunities at the facility could be included as

part of the visitor experience.

The Workshops Rail Museum at Ipswich in Queensland has identified in customer surveys the popularity of

visitors being able to witness “behind the scenes” trade work required to support heritage operations.

Figure 24 – Ipswich Railway Museum Conducts Popular “Behind the Scenes” Tours at Queensland Rail’s Ipswich Workshops

Submission No. 54


3.8 Meeting Future Marketing Requirements – The Fleet 3.8.1 Passenger Cars The current operational passenger carriage fleet adequately supports MRPS’s current operations. The carriage

fleet consists of:

57BE - The carriage is currently undergoing a re-paint and replacement of guttering on both sides of the

vehicle. It is hoped it will be back in service by September 2018.

27BU - The carriage is the next to have a re-paint in oil based gloss enamel and completion of minor

repairs.

24AW - It was the second last carriage to be restored. No further work is planned except for a wash down

and clean and a possible re-paint in oil based gloss enamel.

45BE - It was the last carriage to be restored and re-painted in oil based gloss enamel. Apart from an

annual wash down, no further work is planned in the near future.

65AW - It is the emergency carriage in case it is required to replace any of the other 4 carriages while they

are in for repairs. It will require a full external restoration in the next 2-3 years.

5CV - The vehicle takes any overflow of passengers and is utilised for the Ale Trains. It requires roof

repairs.

7CV - Restoration of the van, an additional support vehicle for the Ale Trains, is proceeding as resources

are available.

Submission No. 54


86BPL - It is in the early stages of a full restoration.

State Car 2 (Parlour Car) Melville - It is to be restored for First Class Premium services. The programme of full carriage restoration over the past 4 years, as contrasted to previous “patch and paint”

methods, was achieved with four well-presented and restored passenger carriages going forward that support

MRPS.

3.8.2 Current – Locomotives MRPS has one steam locomotive and three diesel locomotives available for service:

K 163 - Planned maintenance has been satisfactorily progressed, with heavy maintenance to the cylinders,

valve gear and boiler nearing completion.

T 343 and T 411 - diesel electric locomotives are both serviceable.

W 241 - diesel hydraulic locomotive is serviceable.

3.8.3 Future Fleet Works In summary, as funds become available, MRPS will focus on:

Progressing restoration of the State Car 2, first class carriage, Melville, to facilitate introduction of a

Premium service – cost $70,000.

Site clearing, track laying and construction of covered carriage storage that will see all operational

Submission No. 54


carriages stored under cover. It will significantly improve the customer experience, especially in

winter, will reduce carriage maintenance costs, and will reduce volunteer workloads – Cost $150,000.

Completion of K 177 steam locomotive restoration. The recent unavailability of K163 shows the

decrease in patronage that results when diesel locomotives are substituted for steam locomotives. A

second standby locomotive is required. K177 has had investment of $120,000 to date, and $180,000

is required to complete the works to return the locomotive to service. Volunteer capacity is available

to undertake the work.

Progressing restoration of the guards van 7CV to improve the facilities available for special trains,

such as the Ale Train. Cost - $10,000.

MRPS has a small but adequate fleet of support vehicles and rail tractors.

All maintenance of rolling stock is in accordance with the Asset Management Policy and Plan in the MRPS

Safety Management System (SMS). The SMS, including the Asset Management Policy and Plan, is audited

internally and also externally by the Office of the National Rail Safety Regulator.

Submission No. 54


The MRPS current fleet, augmented by an additional van, Premium class carriage, and a steam locomotive, is

adequate and will meet current and future needs.

Figure 25 – When Not in Use, MRPS’s Wooden Carriages are Stabled Outside in the Weather

Additional Covered Storage Sidings are Required

Submission No. 54


3.9 Meeting Future Marketing Requirements – Support Facilities As funds become available, critical support infrastructure that will facilitate maintenance and enable the

introduction of new products will be constructed or upgraded. Those facilities include:


carriages stored under cover. It will greatly improve the customer experience, especially in winter,

will reduce carriage maintenance costs, and will reduce volunteer workloads – Cost $180,000.

Progressing the installation of a hard stand, overhead lifting gantry and pit for locomotive

maintenance – Cost $178,000.

3.10 Meeting Future Marketing Requirements – Volunteers

As detailed earlier, MRPS has 250 members and 70 active volunteers. Those numbers provide MRPS with

sufficient volunteers possessing the required skills to support all year round Sunday operations, school holiday

operation, and the operation of special trains when required. Changing the MRPS concept of operations to

include Saturday running, to provide for full weekend operations, will require membership to increase to 500

members and an increase to 140 active volunteers. The increase is achievable given the size and population of

the catchment area of the volunteer pool.

That increase would be sufficient to support operations that utilise the Moorooduc to Baxter section of line.

Submission No. 54


3.11 Meeting Future Marketing Requirements – Moorooduc Master Plan Linked to the development of new products and the provision of critical infrastructure is progression of the

Moorooduc Master Plan. Implementation of that plan will support MRPS product development and will see

Moorooduc developed as a suitable operating base and a visitor destination – Cost $2.68 Million. Details are at

Attachment 4.

Figure 26 – MRPS Moorooduc Master Plan

Submission No. 54


3.12 Meeting Future Marketing Requirements – Extension to Baxter The MRPS Board has identified the significant opportunity that the extension to Baxter will provide the railway in

terms of improving the visitor experience.

Linked to extension of the electrified suburban rail network to Baxter, the connection will mean that patrons can

cross the Baxter platform to board Mornington Railway trains. The link will also facilitate charter trains operating

to Mornington and the cross transfer of locomotives and rolling stock.

The Board has adopted an incremental growth strategy, with track in the section being re-laid progressively as

sleepers are made available. The first aspect of the incremental growth strategy is to secure approval for PTV

works to install boom gates at Moorooduc Road.

In anticipation of works to re-open the line from Moorooduc to Baxter, over the last 2 years, extensive efforts

have seen that portion of the line cleared of undergrowth and sprayed with weedkiller regularly. As funds

become available, MRPS will progress completion of the track re-laying between Moorooduc and Baxter.

Submission No. 54


A cost breakdown for that work is shown below: Baxter Extension Base Data Kilometres Sleepers per kilometre Total Sleepers Days Labour Ballast Tonnes Assumes VicTrack pays for main line connection and 5 1,600 8,000 40 3,000.00 signalling and PTV funds crossings Unit cost Total Cost Ex. Sleepers and Labour Sleeper cost $140.00 $1,120,000.00 Track Screws / Pandrol Clips $2.00 $64,000.00 $64,000.00 Track Crew 4+Foremen @ $5,000 / day $5,000.00 $200,000.00 Point Timbers $40,000.00 $40,000.00 $40,000.00 Ballast $50.00 $150,000.00 $150,000.00 Petrol Driven Specialist Tools $60,000.00 $60,000.00 $60,000.00 Hire of Equipment - Tamper $10,000.00 $10,000.00 $10,000.00 Drainage Rehabilitation $25,000.00 $25,000.00 $25,000.00 Bank Stabilisation $30,000.00 $30,000.00 $30,000.00 Other including fuel $3,000.00 $3,000.00 $3,000.00 Station Works Frankston / Flinders Rd. $34,000.00 $34,000.00 $34,000.00 Parking Baxter and Frank./Flinders Rd. $40,000.00 $40,000.00 $40,000.00 Contingency $30,000.00 $30,000.00 $30,000.00 Total $1,806,000.00 $486,000.00

External funding to progress the Baxter Extension and other infrastructure upgrades is being sought.

Figure 27 – Costs Associated with the Baxter Extension

Submission No. 54


3.13 Availability of Sleepers The MRPS aggressive sleeper replacement programme, proposed works to increase undercover storage

facilities for rolling stock, and extension of the railway from Moorooduc to Baxter, will see the requirement for

8,000 new or second hand sleepers.

Figure 28 – Peninsula Link Freeway Overpass Showing the Bridge and the Cleared Line on the Baxter Moorooduc Section

Submission No. 54


In Victoria, the sector relies on the flow down of sleepers, and other material such as ballast and rail, from major

rail projects where old infrastructure is replaced. Suitable second hand sleepers are made available to the sector

through the endeavours of the Tourist and Heritage Railway Registrar.

In recent times, the unavailability of suitable second hand sleepers has severely impacted on the sector.

MRPS identified the need to liaise closely with the Tourist and Heritage Railway Registrar and also to approach key influencers in Government to facilitate improved second hand sleeper availability, especially for concrete

sleepers.

Figure 29 – a Reliable Supply of Suitable Second Hand Railway Sleepers is Critical to the Sector

Submission No. 54


3.14 Archival Information MRPS is unusual for a tourist and heritage railway as it has extensive archival records and an active archivist

group. Those records tell the story of development of railways on the Mornington Peninsula and reflect the

impact the railway had on the community.

The records will form the basis of future displays for visitors

MRPS has a comprehensive Archival Business Plan that requires resourcing.

Submission No. 54


4. Supports and Strengths

The major supports and strengths to be considered in implementation of this Strategy and Business Plan were

identified as:

• Location Mornington Railway’s location on the V/Line network and relative proximity to the very large

Melbourne market is a major strength.

• Viability The Mornington Railway is financially and operationally viable as demonstrated by its near three

decades of operation.

• Significant Spare Capacity

With the shift from one Sunday a month to operating regularly every Sunday, Mornington Railway has

effectively increased its passenger lift capacity by 62%. Given that the increase in capacity has taken

place with existing volunteer capacity and with little increase in recurrent costs, it is a major support.

Submission No. 54


• Good Rail Infrastructure The condition of Mornington Railway’s track is relatively good having been constructed with heavy rail

and good ballast. It is a major strength.

• Product – a Good Experience Mornington Railway’s Excursion class offers patrons a unique experience. Patrons can experience

travel in Edwardian splendour in restored carriages hauled by a heritage steam locomotive on a

picturesque country branch line. It is a major strength.

• Input to the Local Economy and Jobs

Mornington Railway directly and indirectly contributes $2.64 million annually to the Victorian

economy and generates 22.6 direct and indirect full-time equivalent jobs.

Submission No. 54


Figure 30 – Mornington Railway – a Unique Visitor Experience

Submission No. 54


5. Weaknesses and Impediments

The major weaknesses and impediments to be considered in implementation of this Strategy and Business Plan

were identified as:

• Limited Capital in a Capital Intensive Industry The tourist and heritage rail sector is a capital intensive sector. Mornington Railway has limited capital to

invest in new infrastructure. It is a weakness. The sector overcomes the weakness by growing revenue and

surpluses, utilising existing infrastructure and recycled materials, and through the use of volunteers.

• People Intensive Industry / Limited Volunteer Capacity The tourist and heritage sector is a people intensive industry. Currently, Mornington Railway’s volunteer

capability is at full capacity. It is a weakness. Future migration to more intensive services will require an

increase in membership and volunteer numbers. Addressing generational change issues will assist in

securing additional volunteers for the railway, together with electrification of the line to Baxter as more

volunteers can travel from Melbourne, undertake their duties on the railway, and then return to Melbourne

all in a day using METRO services.

Submission No. 54


• Declining Availability of Second Hand Materials The declining availability of low cost, second hand sleepers, rail, ballast and other materials is a significant

weakness, that will impose a substantial financial burden on the Mornington Railway and the sector.

• Steam Locomotive Availability

Mornington Railway only has one operational steam locomotive. Unavailability of the locomotive

when it is being serviced results in a significant decrease in patronage. It is a weakness that will be

overcome once a second steam locomotive is available.

• Lack of a Premium Product. Mornington Railway is unable to meet the needs of an estimated 20% of the market, as it is does not

offer a Premium Product. It is a weakness. Introduction of a Premium Product, consisting of travel

in a First Class carriage with wine and canapes being served, will address the issue and see fare

revenue increase substantially.

• Timetabling Industry experience shows that a simple and easy to remember timetable assists patrons in planning their

visit. Mornington Railway’s timetable is difficult for patrons to remember. It is a weakness that will be easily

addressed through simple adjustment of the operating timetable.

Submission No. 54


• Short, Medium and Long Travel Options Industry experience also shows that patrons like to choose from a short, medium or long experience.

Currently, Mornington Railway does not offer that choice. It is a weakness. Completion of the extension to

Baxter will address the weakness.

• Limited Undercover Storage Limited undercover storage results in Mornington Railway stabling its operational rolling stock outside in the

weather. The additional maintenance load is the equivalent of one full time painter. The passenger

experience is also impacted, as in winter, passengers travel in cold and damp vehicles. The limited

undercover storage is a weakness. Additional planned undercover storage will address the weakness.

• Limited Government Support Mornington Railway’s location, as an organisation within an “Interface Council” (outside the designated

Regional Development Victoria boundaries) means that it cannot secure funding through Regional

Development Victoria. It is a weakness. The weakness will be addressed through direct lobbying of local

State Government members and through the progression of grant applications to the Federal Government

or philanthropic organisations.

Submission No. 54


• Bureaucracy Mornington Railway’s operational and growth endeavours take place in a highly bureaucratic environment

that requires significant time and volunteer capability, capacity and patience. It is a weakness. Where

possible, some issues are being addressed through the industry body, ATHRA.

Submission No. 54


6. Opportunities

The major opportunities considered in implementation of this Strategy and Business Plan were identified as:

• Rail Discovery Centre / Trade Training at Moorooduc Establishment of a Rail Discovery Centre at Moorooduc, based around displays that tell the story of

railways and the community on the Mornington Peninsula, and a Trade Training Facility, afford the

Mornington Railway an opportunity to significantly improve the visitor experience and provide a social and

employment dividend to the community.

• Develop More Meaningful Alliances Linked to the opportunity detailed above, the Mornington Railway has the opportunity to establish and

benefit from alliances with organisations such as Steamrail Victoria and other operators, to facilitate the

effective migration of rail operations and maintenance from Newport to suitable areas around the State.

Moorooduc, with a main line connection at Baxter, offers a suitable venue for additional storage, display

and maintenance facilities, and as a base for main line operations.

Submission No. 54


Figure 31 – Alliances Have Benefits

Figure 20 – Volunteers – Their Capability and Capacity is Critical for Operations

Submission No. 54


7. Threats and Risks

The threats and risks considered in implementation of this Strategy and Business Plan were identified as:

Loss of Board Effectiveness / Failure of Governance

The loss of Board effectiveness or a failure in governance are threats that would impact on the success of

Mornington Railway’s operations.

Likelihood of occurring: LOW

Likely impact should it occur: HIGH

The threat will be effectively managed by rigorous Board processes, including audits, and a Board

Succession Plan.

Unexpected Change in the Economy Mornington Railway’s revenue is driven by patronage. There is a risk that a downturn which impacts on the

disposable income of patrons would impact on the railway.


Submission No. 54



The threat will be managed by effective marketing that highlights the low cost of travel to and on the railway.

Inability to Secure Resources / Funding to Progress Infrastructure Projects Mornington Railway has identified critical infrastructure that requires resourcing and funding. There is a risk

that securing resources / funding will be delayed or will not be achieved.



The threat will be effectively managed by engaging key funding organisations to ensure that the economic,

employment and social benefits resulting from Mornington Railway’s infrastructure initiatives are understood

and justify the investment.

Project Mismanagement Significant resources and funds will be expended as Mornington Railway implements its plans. In the event

that there was a failure in project management, delays and poor planning would be costly and would impact

on Mornington Railway’s expense base and viability.

Submission No. 54




The risk will be managed by utilisation of experienced managers with a record of achievement in the area.

Loss of Key Personnel and Loss of Volunteers Key personnel and volunteers are critical to effectively operate the Mornington Railway. A loss of key

personnel or a reduced pool of volunteers will significantly impact on operations.



The threat will be managed through an effective Recruitment and Training Plan and a Succession Plan,

complemented by support mechanisms that will reduce the possibility of key personnel and volunteer burn

out.

Major Level Crossing Incident / Catastrophic Equipment Failure A major level crossing incident or a catastrophic equipment failure is a significant threat.

Submission No. 54




The threat will be managed through effective risk analysis and rigorous risk mitigation regimes.

Figure 32 – Catastrophic Equipment Failure – a Risk

Submission No. 54


8. Strategy Development Having completed a comprehensive analysis of the issues impacting on Mornington Railway, together with an

assessment of its strengths / supports, weaknesses / impediments, opportunities, threats / risks, it was possible

to develop a core strategy, key factors for success, and goals and objectives.

8.1 Core Strategy

Mornington Railway will be valued by the community, business, Government and others as a hallmark visitor

attraction on the Mornington Peninsula. To realise its vision, MRPS will operate the Mornington Railway as a

financially and operationally sustainable tourist experience that contributes significantly to the economy and

employment in Victoria.

Specifically, the Mornington Railway will incrementally and sustainably grow patronage to achieve 20,000 patrons

per annum within two years. Mornington Railway will develop a strong First Class offering with in excess of 20%

of patrons travelling First Class. That product will further support Special Trains such as the Ale Train and the

Driver Experience offering. Initially, MRPS will use social media and publicity to promote its new every Sunday

running timetable. The threefold increase in Sunday services and capacity will see patronage double over two

years. Surplus funds generated will be utilised to develop a Premium Product capability and improve undercover

storage for rolling stock. A recruitment programme linked to the increase in patronage will see volunteer numbers

double within two years. Additional volunteers will enable migration to a Saturday and Sunday service every

Submission No. 54


Figure 33 – Utilise Spare Capacity to Grow Patronage

Submission No. 54


weekend. Surplus funds generated will be utilised to restore an additional steam locomotive, improve locomotive

maintenance facilities, and enhance the station precinct.

Incrementally, MRPS will progress the extension to Baxter, with an initial goal of securing boom gates for the

Moorooduc Road crossing; input to the future development of Baxter Station and the surrounding precinct; and a

reliable supply of sleepers. On an opportunity basis, MRPS will seek external funding. The Baxter extension will

provide very substantial benefits to the Mornington Railway, as it will significantly improve the visitor experience,

and enable the railway to capitalise on the benefits of a cross platform connection with the suburban network

operator METRO, and facilitate main line operations and rolling stock transfers.

Linked to this initiative is progressing the establishment of a Discovery Centre and Trade Training Facility at

Moorooduc. It is a major project, however, the social, economic and employment benefits, coupled with the

significant benefit to the railway through improvement in the visitor experience, will make the project attractive to

Government and other funding sources.

The Mornington Railway Board will continue to provide leadership, sound governance, policy direction and

oversee a rigorous risk management regime. Board effectiveness will be further improved through a review of

the Board’s Succession Plan.

Submission No. 54


The Mornington Railway will successfully maintain its effective engagement of the community, businesses and

key influencers in Government to secure support and funding. Within the industry, Mornington Railway will continue

to engage industry participants through ATHRA and other organisations, in order to ensure policy and other

outcomes that are optimal for the organisation.

Staffing will continue to be provided by volunteers. Mornington Railway’s Training Plan and Succession Plan will

be reviewed to ensure that the organisation has adequate numbers of trained, skilled volunteers and that their

workloads avoid “volunteer burn out”.

Within five years, Mornington Railway will have annual patronage of 40,000 and will contribute $23.55 million

annually to the Victorian regional economy and generate 122 full time equivalent positions.

Within ten years of completing the extension to Baxter, the railway will have annual patronage of 300,000.

Submission No. 54


Figure 34 – MRPS Locomotive T411 Stabled at Baxter 1993

Submission No. 54


8.2 Vision and Mission Having considered the core strategy, the Board developed Mornington Railway’s Vision and Mission.

Vision – How we want to be known. Mornington Railway will be valued by the community, business, Government and others as a hallmark visitor

attraction on the Mornington Peninsula.

Mission – How we will get there. MRPS will operate the Mornington Railway as a financially and operationally sustainable tourist experience that

contributes significantly to the economy and employment in Victoria.

Figure 35 – MRPS – A Hallmark Visitor Attraction

Submission No. 54


8.3 Key Factors for Success

The following key factors for success were identified:

Funding Mornington Railway must effectively engage funding organisations to resource critical infrastructure projects

in a timely manner.

Priorities

Mornington Railway must continue to focus on its prioritised project activities as follows:

Progressing restoration of the State Car 2, first class carriage, Melville, to facilitate the introduction of

a Premium Product – cost $70,000.


carriages stored under cover. It will significantly improve the customer experience, especially in winter,


Incrementally progressing the installation of a hard stand, overhead lifting gantry and pit for locomotive

inspections to expedite completion of K 177 steam locomotive restoration. The recent unavailability of

K163 shows the decrease in patronage that results when diesel locomotives are substituted for steam

locomotives. A second standby locomotive is required. K177 has had investment of $120,000 to date,

and $180,000 is required to complete the works to return the locomotive to service. Volunteer capacity

is available to undertake the work.

Submission No. 54


Progressing restoration of the guards van 7CV to improve the facilities available for Special Trains

such as the Ale Train. Cost - $10,000.


carriages stored under cover. It will greatly improve the customer experience, especially in winter, will

reduce carriage maintenance costs, and will reduce volunteer workloads – Cost $180,000.

Progressing the installation of a hard stand, overhead lifting gantry and pit for locomotive maintenance

– Cost $178,000.

Progressing incrementally the extension to Baxter – Cost $1.806 Million.

Progressing the Master Plan Development including the Rail Discovery Centre and the Training

Centre of Excellence – Cost $2.68 Million.

Engagement Mornington Railway must successfully maintain its effective engagement of the community, businesses and

key influencers in Government.

Governance

Leadership, sound governance, policy direction and risk management must continue to be provided

by the Board.

Project Management Mornington Railway must effectively manage the risks associated with projects.

Submission No. 54


Volunteers Mornington Railway must effectively manage generational change issues to ensure that volunteer capability

and capacity is maintained. Marketing The conservative marketing targets must be achieved and promotional tools based around social media and

publicity must effectively support the railway.

Submission No. 54


9. Implementation 9.1 Balancing Growth and Infrastructure Development Investment with Cash Generating Initiatives

MRPS must balance its investment in essential infrastructure with achievable cash generating initiatives.

9.1.1 Short Term Needs. MRPS, having achieved commercial viability, has a need to focus on immediate short

term cash generating activities to fund essential capital items. The most effective means of progressing that is

to:

Expeditiously return to service the railway’s K class steam locomotive, K163.

Progress short term social media and publicity based marketing initiatives to increase patronage that

utilises existing capacity on planned scheduled services. It can be progressed without any additional

operational expenses or any additional demand on volunteers.

Seek funding through successfully securing small project related State and Federal funding.

Currently, patronage is 11,360 (16% capacity utilisation). Doubling patronage over a 24 month period will see

annual surpluses rise to in excess of $100,000, as detailed in the financial budget at Attachment 2.

The surplus funds will be utilised as follows:

Submission No. 54


Progressing restoration of the State Car 2, first class carriage, Melville, to facilitate the introduction of a

Premium Product – cost $70,000.


carriages stored under cover. It will significantly improve the customer experience, especially in winter,


Short Term Input to the Regional Economy and Employment Attachment 1 - ATHRA - Mornington Railway Economic and Employment Input to the Regional Economy and

Attachment 2 show the current MRPS Input to the Regional Economy and Employment as being: $2.64 million

annually with a direct and indirect employment contribution of 22.6 jobs.

An increase to 20,000 patrons will see that contribution rise to $3.6 million annually with the employment

contribution increasing to 32.2 jobs. That is an increase in economic input of $1 million annually and the

employment contribution increases by 10 positions.

Submission No. 54


Figure 36 – Mornington Railway Patrons Spend Substantial Amounts in the Region and in Mornington

Submission No. 54


0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Mornington Railway Passengers, Revenue and ExpensesBudget Based on Current Concept of Operations and 50%

Increase in Capacity Utilisation

Tourist Passengers Total Revenue Total Expenses

Figure 37 – MRPS Passengers, Revenue and Expense Budget Estimates – 50% Increase in Capacity Utilisation Year 2

Submission No. 54


9.1.2 Medium Term Needs. MRPS, having progressed short term cash generation activities and doubled its

membership and volunteer capacity, will increase its scheduled services to include Saturday operations every

week. The most effective means of successfully implementing change is:

Increase membership from 250 to 500 members with the volunteer pool increasing from 70 to 140.

Progress short term social media and publicity based marketing initiatives to promote the change in

timetabled services.

Continue to seek funding through successfully securing small project related State and Federal funding.

Patronage will rise to 37,000 in Year 3 and annual surplus will rise to in excess of $150,000, as detailed in the

financial budget at Attachment 2.

The surplus funds will be utilised as follows:

Incrementally progressing the installation of a hard stand, overhead lifting gantry and pit for locomotive

inspections to expedite completion of K 177 steam locomotive restoration. The recent unavailability of

K163 shows the decrease in patronage that results when diesel locomotives are substituted for steam

locomotives. A second standby locomotive is required. K177 has had investment of $120,000 to date, and

$180,000 is required to complete the works to return the locomotive to service. Volunteer capacity is

available to undertake the work.

Submission No. 54


Progressing restoration of the guards van 7CV to improve the facilities available for Special Trains such

as the Ale Train. Cost - $10,000.

Successfully negotiate with Public Transport Victoria to achieve reinstatement of the Moorooduc Road

level crossing with boom gates.

Incremental and achievable progress on the Moorooduc to Baxter extension by undertaking incremental

re-sleepering on the extension whilst pursuing major funding of $1.86 Million for the extension.

Seeking major funding for the Master Plan implementation, the Rail Discovery Centre and Training Centre

of Excellence, $2.68 Million.

In the next 12 months, the annual surplus will rise to in excess of $360,000, as detailed in the financial budget at

Attachment 2.

Medium Term Input to the Regional Economy and Employment An increase to 46,000 patrons will see the contribution rise from $3.6 million to $10.7 million annually, with the

employment contribution increasing to 91.6 jobs. That is an increase in economic input of $7 million annually and

the employment contribution increases by 60 positions.

Submission No. 54


Figure 38 – MRPS Passengers, Revenue and Expense Budget Estimates – Weekend Running and School Holidays

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1 2 3 4 5 6 7 8 9 10 11

Mornington Railway Passengers, Revenue and Expenses

Budget Based on Weekend Running and School Holidays

Total Pax Total Revenue Total Expenses

Submission No. 54


9.1.3 Long Term Needs. Long term, as MRPS patronage increases, the railway will incrementally develop its

services, initially offering services on Monday and Friday. As the incremental change consolidates, the railway

will offer services on Tuesday, Wednesday and Thursday. Ideally, that should take place prior to completion of

the extension to Baxter, estimated to be in Year 8. The most effective means of progressing that is to:

Increase membership to 2,000 members by year 8, with volunteer numbers increasing to 670.

Continue social media and publicity based marketing initiatives to promote the change in timetabled

services.

Continue to seek funding through successfully securing small project related State and Federal funding.

By Year 7, the surplus will be in excess of $1 million annually, as detailed in the financial budget at Attachment

2.

Those funds will be utilised to complete the extension to Baxter and to progress the Discovery Centre and Trade

Training Facility initiative and on improvements to the station precincts.

Submission No. 54


Figure 39 – MRPS Passengers, Revenue and Expense Budget Estimates – Running Every Day and Extension to Baxter in Year 8

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

1 2 3 4 5 6 7 8 9 10 11 12 13 14

Mornington Railway Passengers, Revenue and ExpensesBudget Based on Incremental Increase to Every Day Running and

Baxter Extension in Year 8

Total Pax Total Revenue Total Expenses

Submission No. 54


Long Term Input to the Regional Economy and Employment The increase to 150,000 patrons annually in Year 8 will see the contribution rise from $10.7 million annually to

$39 million annually, with the employment contribution increasing from 91.6 jobs to over 340 jobs. That is an

increase in economic input of over $28 million annually and the employment contribution increases by over 240

positions.

Submission No. 54


10. MRPS FINANCES FOLLOWING SUCCESSFUL IMPLEMENTATION OF THE STRATEGY 10.1 Services, Patronage and Impact on Revenue and Expenses The financial analysis is based on the following:

Initially trains will operate on the existing Sunday, Public Holidays and School Holiday timetable.

A premium product will be available after year 2.

After 2 years the railway will commence operating on Saturday in addition to the days currently

operated.

After 5 years the railway will migrate to services every day of the week.

By Year 8 the railway will complete Baxter Extension.

Special event trains such as “Santa Specials” and “The Ales Train” will be regularly operated as required.

The SRP effectively provides VGR with double the passenger carrying capacity with minimal additional cost

and minimal additional volunteer input.

Attachment 2, the Revenue and Expense Budget, reflects the market analysis detailed in Section 3.5 and

3.6. It shows that MRPS patronage growth is conservative with 38,000 passengers being carried in Year 3,

63,000 passengers in Year 5 and 150,000 passengers in Year 8.

Submission No. 54


The budget at Attachment 2 is for 10 years, as the sector is capital and maintenance intensive and requires

positive cash flows over a long period to ensure sustainability. Accrued surpluses are required for major

capital works such as bridge replacement and boiler refurbishment or replacement.

Figure 40 below is an extract from the 10 year MRPS Passenger Numbers, and Revenue and Expense

Budget, showing the financial state of the railway that justifies the capital investment identified in the plan.

Submission No. 54


11,360 16,617 26,977 37,896 47,178 63,690 84,433 112,345 149,926 159,955 170,948 183,088$204,979 $273,898$478,390 $578,501 $706,272

$926,484$1,196,183

$1,566,284

$3,825,505$4,165,961

$4,537,349

$4,942,499

$155,963$169,369 $230,891 $297,391 $317,385 $376,392 $392,441 $433,927 $519,015 $540,777 $563,760 $588,053

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11

Passengers, Revenue and ExpensesYear 0 to Year 11

Passengers Revenue Expenses

Year 5

40,645 Passengers

Figure 40 – MRPS Passengers, Revenue and Expenses

Submission No. 54


Passenger Numbers Passenger JourneysYear 0 11,360 22,720

Year 1 16,617 33,234

Year 2 26,977 53,954

Year 3 37,896 75,792

Year 4 47,178 94,355

Year 5 63,690 127,379

Year 6 84,433 168,867

Year 7 112,345 224,689

Year 8 149,926 299,852

Year 9 159,955 319,910

Year 10 170,948 341,895

Year 11 183,088 366,175

Column1

Column2

11,360 22,72016,617 33,23426,97753,95437,896

75,79247,178

94,35563,690

127,37984,433

168,867

112,345

224,689

149,926

299,852

159,955

319,910

170,948

341,895

183,088

366,175

050,000

100,000150,000200,000250,000300,000350,000400,000

MRPS Passenger Growth

Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Column1 Column2

Figure 41 – MRPS Passenger Growth and Passenger Journey Growth

Submission No. 54


Figure 42 shows the increase in revenue without a commensurate increase in expenses as the marginal expenses per passenger over such a relatively short journey is minimal.

Revenue Expenses

Year 0 $204,979 $155,963

Year 1 $273,898 $169,369

Year 2 $478,390 $230,891

Year 3 $578,501 $297,391

Year 4 $706,272 $317,385

Year 5 $926,484 $376,392

Year 6 $1,196,183 $392,441

Year 7 $1,566,284 $433,927

Year 8 $3,825,505 $519,015

Year 9 $4,165,961 $540,777

Year 10 $4,537,349 $563,760

Year 11 $4,942,499 $588,053

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

MRPS Revenue and Expenses Year 8


Figure 42 –MRPS Revenue and Expenses

Submission No. 54


Figure 43 shows MRPSs revenue, expenses and surplus. The surpluses will be accumulated to form a reserve

to provide for capital works, such as major earthworks, boiler replacements and improved facilities.

Figure 43 – MRPS Revenue, Expenses and Surplus

Revenue Expenses SurplusYear 0 $204,979 $155,963 $49,016

Year 1 $273,898 $169,369 $104,529

Year 2 $478,390 $230,891 $247,499

Year 3 $578,501 $297,391 $281,110

Year 4 $706,272 $317,385 $388,887

Year 5 $926,484 $376,392 $550,092

Year 6 $1,196,183 $392,441 $803,742

Year 7 $1,566,284 $433,927 $1,132,357

Year 8 $3,825,505 $519,015 $3,306,489

Year 9 $4,165,961 $540,777 $3,625,184

Year 10 $4,537,349 $563,760 $3,973,589

Year 11 $4,942,499 $588,053 $4,354,446

MRPS Revenue, Expenses and Surplus


Submission No. 54


Figure 44 shows MRPS revenue for year 8. Compared with other tourist and heritage rail organisations, it

highlights the importance of First Class.

Figure 44 – MRPS Revenue Year 8

Excursion, $3,500,167

First Class, $151,791

MRPS Revenue Year 5

Submission No. 54


Figure 45 shows MRPS expenses for year8. The administration expenses are low relative to other tourist and

heritage rail organisations.

Figure 45 – MRPS Expenses Year 8

Marketing, $25,504 Fund Raising, $13,787

Insurance, $25,768Admin., $25,504

Utilities, $12,233

Running Expenses, $37,097

Loco. Expenses, $190,000

Vehicles , $23,185 , $0

Way and Works, $27,546

Other Expenses, $38,210

First Class Food and Alcohol, $100,182

MRPS Expenses Year 8

Submission No. 54


The diagrams and information detailed above reflect the financial sustainability of MRPS and the clear

benefits of being close to a very large market. The financial data justifies the capital investment identified in

the Strategy and Business Plan. It clearly consolidates MRPS’s position both in terms of patronage and

sustainability.

Of significance, when compared with other tourist and heritage railways, MRPS is differentiated by the

revenue gained from First Class patronage, and the subsequent surpluses that will substantially lower the

organisation’s financial risk and provide for the funding of earthworks, boiler replacements and other major

capital improvements.

Submission No. 54


9. GOALS AND OBJECTIVES

The Goals for the venture are:

Goal 1 Core Product MRPS will be a hallmark tourist attraction on the Mornington Peninsula.

Goal 2 People MRPS will be operated by professional, customer focused volunteers working in a co-operative environment.

Goal 3 Marketing MRPS will ensure its ongoing viability through effective promotion and marketing.

Goal 4 Finance MRPS will be financially viable.

Goal 5 Infrastructure MRPS infrastructure maintained in a manner that ensures ongoing operational sustainability.

Goal 6 Governance MRPS Board will provide sound policy direction, governance and leadership.

Submission No. 54


Goal 1 Core Product MRPS will be a hallmark tourist attraction on the Mornington Peninsula. Objectives:

1.1 By February 2019, submit funding applications for Federal and State grants.

1.2 By June 2019, develop the accreditation update required for the Baxter Extension.

1.3 As required, monitor developments in electrification of the line to Baxter to optimise benefits to MRPS.

1.4 By June 2019, finalise MRPS booking system requirements and purchase the necessary licences.

1.5 Annually each June, having reviewed the booking system data, implement changes to MRPS’s marketing

and operations, which address any trends identified.

1.6 By 2026, incrementally migrate MRPS scheduled services to daily running.

Submission No. 54


1.7 By 2016, MRPS will operate services to Baxter.

Submission No. 54


Goal 2 People MRPS will be operated by professional, customer focused volunteers working in a co-operative environment.

Objectives:

2.1 By June 2019, develop a recruitment and induction programme that prepares volunteers for any

issues that may arise from generational change.

2.3 By June 2019, develop a mentoring programme utilising experienced volunteers that support new

volunteers in the early stages of their engagement with the railway.

2.4 Annually each February, update all volunteers on issues associated with volunteer retention and the

importance of ongoing volunteer engagement and ownership of issues that impact on volunteers and the

railway.

2.5 By June 2019, complete the migration of the management of projects on the railway from a functional focus

where a specific work group progresses all tasks associated with a particular discipline, for example rolling

Submission No. 54


stock maintenance, to a management system where work groups tailored for specific projects are formed

and they progress designated projects. The approach ensures that teams with the appropriate skills and

capacity are available and there is less fragmentation.

2.6 By October 2019, develop a comprehensive training programme for volunteers and, in partnership with

Registered Training Organisations, developing the railway as a training centre

2.7 By 2020, double the number of members and active volunteers.

2.8 By 2023 have 1,000 members and 350 active volunteers.

2.9 Annually each August, conduct a volunteer satisfaction survey.

2.10 Annually each November, having reviewed MRPS’s operational and other requirements to identify any

volunteer and staffing issues, implement actions to address those issues.

2.11Annually each November, conduct a volunteer function that includes the presentation of certificates of

appreciation for volunteers.

Submission No. 54


Goal 3 Marketing The MRPS will ensure its viability through effective marketing. Objectives:

3.1 Annually each July, review MRPS’s marketing and publicity arrangements to ensure optimal outcomes for

the railway.

3.2 Annually each July, review the placement of road signs at strategic locations, detailing the experience

offered at the railway.

3.3 Annually each August, having reviewed relationships with major tourism stakeholders and operators in the

region, amend MRPS’s marketing to ensure optimal outcomes for the railway.

3.4 By 2020, MRPS will double its patronage through a relaunch of services supported by the use of social

media and low cost publicity

Submission No. 54


3.5 By 2024, MRPS will operate daily services and have patronage of 64,000 passengers and 128,000

passenger journeys annually.

Submission No. 54


Goal 4 Finance

The MRPS will be financially viable. Objectives:

4.1 By December 2019, secure undertakings from State and Federal Government departments for the required

funding for MRPS infrastructure identified in the Strategy and Business Plan. 4.2 Annually each June, review MRPS’s marketing performance to ensure that revenue budgets are achieved. 4.3 Annually each February, prepare a revenue and expense budget for Board approval. 4.4 Annually each February, having identified possible sources of funding for capital works for new MRPS

initiatives, undertake activities to secure the funding.

4.5 Annually each February, review MRPS’s financial risk management to ensure optimal outcomes.

Submission No. 54


Goal 5 Infrastructure The MRPS infrastructure maintained in a manner that ensures ongoing operational sustainability. Objectives:

5.1 By June 2019, complete the restoration of the State Car 2, first class carriage, Melville, to facilitate the

introduction of a premium service – cost $70,000.

5.2 By June 2020. Complete site clearing, track laying and construction of covered carriage storage that will

see all operational carriages stored under cover – Cost $150,000.

5.3 By December 2020, incrementally progressing the installation of a hard stand, overhead lifting gantry and

pit for locomotive inspections – Cost $80,000.

5.4 By December 2021, complete restoration of K 177 steam locomotive – Cost $180,000.

5.5 By December 2012, complete restoration of the guards van 7CV to improve the facilities available for

special trains such as the Ale Train. Cost - $10,000.

Submission No. 54


5.6 By 2026, complete the works associated with the extension to Baxter.

Submission No. 54


Goal 6 Governance

MRPS Board will provide sound policy direction, governance and leadership.

Objectives:

6.1 Annually each May, review the performance of MRPS’s Board. 6.2 Annually each June, review implementation of the Board Development and Succession Plan. 6.3 Bi-annually every June and December, review implementation of the Strategy and Business Plan.

Submission No. 54


Attachment 1 - ATHRA - Mornington Railway Economic and Employment Input to the Regional Economy

Submission No. 54


Attachment 2 - Revenue and Expense Budget

Submission No. 54


Attachment 1 - ATHRA - Mornington Railway Economic and Employment Input to the Regional Economy

Submission No. 54

ASSOCIATION OF TOURIST AND HERITAGE RAIL AUSTRALIA

Mornington Railway (Mornington Railway Preservation Society)

Annual Economic and Employment Input

to the Regional Economy

August 2018 Prepared by

L I N Q A G E I N T E R N A T I O N A L Telephone:+ 61(0)3 9654 1410 Mobile: +61 (0)418568 199 Email: [email protected]

Submission No. 54

ATHRA and Mornington Railway - Economic and Employment Analysis 2018

2

ATHRA Economic and Employment Analysis

1. Introduction

Railways, once a dominant political and an economic force in developing Australia, have now become an important

element in cultural heritage life. Australian railways enabled the agricultural and industrial development of the country,

the growth of our major cities and provided the birthplace of many country communities by their strategic placement

and the need for services. The evolution of the Australian transport system over the last 80 years has seen rail no

longer an important day to day element in people’s lives.

The heritage rail sector provides significant economic benefits to Australia through employment, tourism and

expenditure and the intangible benefits of volunteering. Today, those organisations are for many people the public

face of the rail industry. Specified below are details of the economic analysis utilised to calculate the economic and

employment benefits of the heritage rail sector in Australia and the Mornington Railway based on Australian tourist

and heritage sector 2016 / 2017 annual patronage data and Economic Contribution of Tourism in Victoria 2016 - 17

Department of Economic Development Jobs Transport and Resources and State Tourism Satellite Accounts 2016 -

17 produced by Tourism Research Australia April 2018.

Submission No. 54


3

2. Economic and Employment Data Analysis of Resources and State Tourism Satellite Accounts 2016 - 17 produced by Tourism Research Australia April

2018 and Economic Contribution of Tourism in Victoria 2016 - 17 Department of Economic Development Jobs

Transport and Resources shows for Australia the following.

For direct employment, one job is created for every $79,000 aggregated tourism spend.

For indirect employment, one job is created for every $154,000 aggregated tourism spend.

The multiplier for direct to indirect economic contribution is conservatively estimated to be 1.99.

187.7 million Domestic day visitors spend $105 per day.

93.7 million Domestic overnight visitors stay 338,000,000 nights and spend $185 per day.

7.9 million International visitors stay 266 million nights and spend $152 per day.

Submission No. 54


4

3. Patronage Data

Analysis of the data provided by the heritage rail sector shows that the aggregate patron day trips / visits for the

sector in Australia is 799,809 patron day trips / visits for the period 2016 / 2017 and is currently 5,680 patron day

trips / visits for the Mornington Railway. In 2022, the Mornington Railway annual patron days will be 30,308.

Submission No. 54


5

4. Contribution to the National Economy

The contribution to the national economy of the 799,809 patron day trips / visits to organisations in the heritage rail

sector in Australia and the Mornington Railway’s contribution are detailed below in Figure 1.

Source: Economic Contribution of Tourism in Victoria 2016 - 17 Department of Economic Development Jobs Transport and Resources and State Tourism Satellite Accounts 2016 - 17 produced

by Tourism Research Australia April 2018

Figure 1 – Annual Contribution by the Heritage Rail Sector to the Australian Economy and Employment and the Mornington Railway Contribution to the Victorian Economy and Employment in 2022

Tourist and Hertage Rail Sector AustraliaPatron Day Trips / Visits 799,809 Daily Spend Direct Contribution Indirect ContribuDirect EmploymIndirect Employment

33.60% 268,725 International $152.6 $41,015,432.11 $81,585,850.49 522.0 529.242.69% 341,462 Domestic Overni $185.2 $63,242,187.36 $125,798,202.71 804.8 816.023.71% 189,623 Domestic Day $105.0 $19,900,888.48 $39,585,854.12 253.3 256.8

100.00% $124,158,507.95 $246,969,907.31 1,580.0 1,601.9

Total Direct and Indirect Economic Contriburion $371,128,415Total Direct and Indirect EmploymentContriburion 3,181.9

Submission No. 54


6

The segmentation that relates to the above is detailed below in Figure 2.

Figure 2 – Segmentation Based on Visitor Days

International, 33.60%

Domestic Overnight,

42.69%

Domestic Day, 23.71%

Segmentation Based on Visitor Days

International Domestic Overnight Domestic Day

Submission No. 54


7

The chart below in Figure 3 details the sectors showing the percentage spend for each tourist dollar.

Figure 3 – Sector Percentage Spend for Each Tourist Dollar

Retail trade9%

Accommodation and food services

46%Transport, postal and

warehousing14%

Information media and

telecommunications

1%

Rental, hiring and real estate services

(b)2%

Administrative and support services

4%

Public administration

and safety0%

Education and training

5%

Health care and social assistance

1%

Arts and recreation services

14%

Other services1%

Ownership of dwellings

3%

Tourism Spend by Sector ‐ Percentage of each Dollar Spent

Submission No. 54


8

5. Summary

Annual visitation to the heritage rail sector in Australia, being 799,809 patron day trips / visits, and the current 5,680

patron day trips / visits for the Mornington Railway contribute significantly to the regional and Australian economy.

Detailed analysis using the data above shows that each year the people who visited heritage rail sector venues in

Australia contributed $371.128 million annually to the Australian economy. By 2022, the Mornington Railway will

directly and indirectly contribute $14.1 million annually to the Victorian economy.

That amount reflects the contribution to the Australian economy resulting from money spent by visitors to the heritage rail sector in Australia and the amount spent in the Mornington Peninsula.

Using the above data, the heritage rail sector in Australia will provide a significant contribution to employment. In

2022, the direct and indirect full-time equivalent jobs to be generated by the Mornington Railway will be 120.6.

The jobs to be created will be in the sectors detailed in Figure 3, many will be part-time positions or part-time positions

that will become full-time positions, and most will be in the hospitality, tourism and retail sectors.

Submission No. 54


9

In addition to the above economic benefits, the Australian economy, especially the regional economy, will be

enhanced as there will be an increase in the diversity of recreational pursuits which improves the region’s liveability.

Submission No. 54


Attachment 2 - Revenue and Expense Budget

Submission No. 54

Attachment 2. Detailed Revenue and Expense 2018 Changed Concept of OperationsRevenue from Operations Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6Assumptions Double Saturday Monday/FridayAverage fare per Tourist $9.87 $10.16 $10.47 $10.78 $11.11 $11.44 $11.78Annual Adjustment - 3%First Class Fare $20.00 $20.60 $21.22 $21.85 $22.51 $23.19 $23.88

$0 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Souvenir Recovery per Passenger $1.97 $2.03 $2.09 $2.16 $2.22 $2.29 $2.36DataTourist Passengers 10,460 14,121 19,769 27,677 38,748 54,247 70,521Total Tourist Ticket Sales $103,229 $143,540 $206,984 $298,471 $430,395 $620,630 $831,023First Class Passengers 0 0 1,900 2,660 3,724 5,325 6,923First Class Sales $0 $0 $40,314 $58,133 $83,828 $123,470 $165,326Special Events Passengers 900 927 955 983 1,013 1,043 1,075Total Fund Raising $22,906 $23,594 $24,301 $25,030 $25,781 $26,555 $27,351Total Running Day Income $20,653 $21,272 $21,910 $22,568 $23,245 $23,942 $24,660Rental Income $30,725 $31,647 $32,596 $33,574 $34,581 $35,619 $36,687

0 0 0 0 0 0 0$0 $0 $0 $0 $0 $0 $0

Total Passengers 11,360 15,048 22,624 31,321 43,485 60,616 78,519Operational Revenue $177,513 $220,052 $326,106 $437,776 $597,830 $830,215 $1,085,049Other IncomeFuel Rebate $2,617 $2,696 $2,776 $2,860 $2,945 $3,034 $3,125Subscriptions $6,559 $6,756 $6,958 $7,167 $7,382 $7,604 $7,832Misc. Income $791 $815 $839 $864 $890 $917 $944Donations $17,499 $18,024 $18,565 $19,122 $19,695 $20,286 $20,895Total Revenue $204,979 $248,342 $355,245 $467,789 $628,744 $862,056 $1,117,845

Submission No. 54

Operating ExpensesMarketing $14,960 $22,960 $23,649 $35,204 $36,260 $59,371 $61,153

$0 $0 $0 $0 $0 $0 $0Fund Raising $10,884 $11,210 $11,547 $11,893 $12,250 $12,617 $12,996

$0 $0 $0 $0 $0 $0 $0Insurance $20,341 $20,952 $21,580 $22,227 $22,894 $23,581 $24,289

$0 $0 $0 $0 $0 $0 $0Admin. $12,584 $12,962 $13,351 $13,751 $14,164 $14,589 $15,026

$0 $0 $0 $0 $0 $0 $0Utilities $9,657 $9,946 $10,245 $10,552 $10,869 $11,195 $11,531

$0 $0 $0 $0 $0 $0 $0Running Expenses $3,177 $5,177 $5,332 $8,221 $8,468 $14,246 $14,673

$0 $0 $0 $0 $0 $0 $0Loco. Expenses $28,829 $62,162 $64,027 $112,175 $115,541 $211,837 $218,192

$0 $0 $0 $0 $0 $0 $0Vehicles $6,832 $12,165 $12,530 $20,234 $20,841 $36,248 $37,336

$0 $0 $0 $0 $0 $0 $0Way and Works $21,745 $22,397 $23,069 $23,761 $24,474 $25,208 $25,965

$0 $0 $0 $0 $0 $0 $0Other Expenses $26,954 $27,763 $28,595 $29,453 $30,337 $31,247 $32,184

$0 $0 $0 $0 $0 $0 $0First Class Expenses $0 $0 $20,157 $29,067 $41,914 $61,735 $82,663

$0 $0 $0 $0 $0 $0 $0Wages Mgr., Fitter and Apprentice $0 $0 $0 $0 $0 $180,000 $185,400

Total Expenses $155,963 $207,694 $234,082 $316,539 $338,011 $681,874 $721,407

Total Expenses $155,963 $207,694 $234,082 $316,539 $338,011 $681,874 $721,407Surplus / Shortfall $49,016 $40,648 $121,163 $151,250 $290,732 $180,182 $396,438Accumulated Surplus / Shortfall $49,016 $89,664 $210,827 $362,076 $652,809 $832,990 $1,229,428

Capex $70,000 $75,000 $75,000 $190,000Melville (Undercover Storage) K177 & 7CV

(Site Clearing, Track Laying)

Submission No. 54

Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 137 Days Baxter$12.14 $12.50 $23.00 $23.69 $24.40 $25.13 $25.89

$24.60 $25.34 $50.00 $51.50 $53.05 $54.64 $56.28$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00$0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00$2.43 $2.50 $2.58 $2.65 $2.73 $2.82 $2.90

91,678 94,428 97,261 100,179 103,184 106,280 109,468$1,112,740 $1,180,506 $2,237,003 $2,373,237 $2,517,767 $2,671,099 $2,833,769

9,000 9,270 9,548 9,834 10,129 10,433 10,746$221,372 $234,854 $477,394 $506,467 $537,311 $570,033 $604,748

1,107 1,140 1,174 1,210 1,246 1,283 1,322$28,172 $29,017 $29,888 $30,784 $31,708 $32,659 $33,639$25,400 $26,162 $26,947 $27,755 $28,588 $29,446 $30,329$37,788 $38,922 $40,089 $41,292 $42,531 $43,807 $45,121

0 0 0 0 0 0 0$0 $0 $0 $0 $0 $0 $0

101,785 104,838 107,983 111,223 114,559 117,996 121,536$1,425,472 $1,509,460 $2,811,321 $2,979,535 $3,157,904 $3,347,043 $3,547,605

$3,219 $3,315 $3,415 $3,517 $3,623 $3,731 $3,843$8,067 $8,309 $8,558 $8,815 $9,079 $9,352 $9,632

$973 $1,002 $1,032 $1,063 $1,095 $1,128 $1,162$21,522 $22,167 $22,832 $23,517 $24,223 $24,949 $25,698

$1,459,252 $1,544,254 $2,847,158 $3,016,447 $3,195,924 $3,386,203 $3,587,940

Submission No. 54

$93,597 $96,405 $99,297 $102,276 $105,344 $108,505 $111,760$0 $0 $0 $0 $0 $0 $0

$13,386 $13,787 $14,201 $14,627 $15,066 $15,518 $15,983$0 $0 $0 $0 $0 $0 $0

$25,017 $25,768 $26,541 $27,337 $28,157 $29,002 $29,872$0 $0 $0 $0 $0 $0 $0

$15,477 $15,941 $16,420 $16,912 $17,420 $17,942 $18,480$0 $0 $0 $0 $0 $0 $0

$11,876 $12,233 $12,600 $12,978 $13,367 $13,768 $14,181$0 $0 $0 $0 $0 $0 $0

$22,784 $23,468 $24,172 $24,897 $25,644 $26,413 $27,205$0 $0 $0 $0 $0 $0 $0

$353,377 $363,979 $655,161 $674,816 $695,061 $715,912 $737,390$0 $0 $0 $0 $0 $0 $0

$58,965 $60,734 $62,556 $64,433 $66,366 $68,357 $70,408$0 $0 $0 $0 $0 $0 $0

$26,744 $27,546 $28,372 $29,223 $30,100 $31,003 $31,933$0 $0 $0 $0 $0 $0 $0

$33,150 $34,145 $35,169 $36,224 $37,311 $38,430 $39,583$0 $0 $0 $0 $0 $0 $0

$110,686 $117,427 $238,697 $253,234 $268,656 $285,017 $302,374$0 $0 $0 $0 $0 $0 $0

$190,962 $196,691 $202,592 $208,669 $214,929 $221,377 $228,019

$956,022 $988,123 $1,415,777 $1,465,626 $1,517,420 $1,571,244 $1,627,188

$956,022 $988,123 $1,415,777 $1,465,626 $1,517,420 $1,571,244 $1,627,188$503,230 $556,131 $1,431,381 $1,550,821 $1,678,504 $1,814,959 $1,960,752

$1,732,658 $2,288,789 $3,720,170 $5,270,991 $6,949,495 $8,764,455 $10,725,207

$1,202,800Baxter

Submission No. 54

Attachment 3Mornington Railway Preservation Society

Suggested Organisational Management Structure

ManagementCommittee

Human Resources Committee

Membership Officer

Training and Education Manager

Roster Officer for Safeworking

Roster Officer for Steam

Roster Officer for Diesel

Roster Officer for Station Staff

Driver Experience Co‐Ordinator

Catering Manager

Rail and General Safety

Committee

Document Controller

Safety Officer

Key Registrar

Marketing Committee

Facebook Page Manager

Publications Manager

Way and Works Manager

Signals and Telegraph Manager

Mechanical Engineering Manager

Fitter in Charge Steam

Fitter in Charge Diesel

UndergearSpecialist

Light Engineering Manager

Project Manager K177

ICT Manager Carriage Manager

Painting Manager

Infrastructure Manager

BoardBoard

7 Members

Assistant Way and Works Manager

Event Manager

Mid‐Week Track Gang Leader

Party Co‐Ordinator

Submission No. 54

Attachment 4 - Master Plan - Rail Discovery Centre & Rail Skills Training Centre of Excellence Details

Design & permits $45,000

Manufacture & supply $180,000 Steel work

Brickwork $40,000 Pit and Perimeter wall with windows

Erect $120,000 Foundations, cranes, labour

Fit out $30,000 Water, electricity

$415,000

Track Track $48,000

Turnouts $65,000

Floor $135,000

$248,000

Facilities Jacking $105,000 Special jacks for lifting locomotives

Amenities $72,000 Staff & visitor toilets & wash area

$177,000

Intepretation Walkways etc $41,000 Discrete pathways & elevated viewing area

Display & interactive $46,000

Signage, foyer & entry $23,000

$110,000

$950,000Project cost

Shed structure

Roundhouse and Skills Training building

Sub total

Sub total

Sub total

Sub total

Submission No. 54

Design & permits $45,000 Brick front and Station Master's vestibule

Manufacture & supply $400,000 Steel work with skylights

Brickwork $240,000 Brick arched front 2 track entry

Erect $130,000 Foundations, crane and labour

Fit out $95,000

$910,000

Track Track $65,000

Turnouts $70,000

paving $20,000

$155,000

Toilets Visitor toilets $65,000 Including disabled toilets

Staff amenities $30,000 Including wash area

$95,000

Intepretation On platform cameos $100,000 Construct Edwardian and Art Deco cameos

Display & interactive $400,000 Sound and light

Signage $70,000

$570,000

$1,730,000

Roundhouse and Station Train Display Pavillion $2,680,000

Sub total

Project cost

Display Pavilion Pavilion structure

Brick arch metal shed

Sub total

Sub total

Sub total

Submission No. 54

The Vision is to create anengaging tourism corridor,including the restoration of theheritage railway from Baxter toMornington, constructing theMornington Community Safelinkfrom the end of the PeninsulaLink Trail to Mornington anddeveloping the centrally locatedMt Eliza Regional Park, whereMoorooduc station will form avisitation hub for the community.

S A F E L I N K A N D M O R N I N G T O N R A I L W A Y

The Gateway to theMornington Peninsula Beginyour journey here by connectingfrom public transportation andthe trail connection toWesternport.

The restored railwaywill follow the

Peninsula Link Trail from Baxter to Mt

Eliza Regional Park.

BAXTER STATION

EXISITINGPENINSULA LINK

MT ELIZAREGIONALPARKHistoric Railway located in theMt Eliza Regional Park. ThePark is ideal for Broad BasedCommunity Activities that willallow the community to enjoywalking, Picnic and BBQsfacilities, trains and wetlands.Adjacent to the HistoricMoorooduc Cool Stores.

SAFELINKTRAIL

Construction of Safelink trail will

connect thecommunities of Mt Eliza,Mornington, Mt Martha

and Baxter. Its part ofthe Bay Trail!

HARRAP CREEK TRAIL

Safelink joins theHarrap Creek trail

which culminates atThe Briars park

completing the entireBaxter to Briars Rail

and Trail.

INTERPRETATION

Creation of Interpretivesignage along the corridorfocusing on native vegetation,railway, local and indigenousheritage.

The Mission

Restore the heritagerailway line from Baxter toMoorooduc. Developbroad based communityactivities at Mt ElizaRegional Park. Createinterpretive signage alongthe corridor focusing onnative vegetation, railway,local and indigenousheritage.

The Cost The Economic Benefit The Mornington CommunitySafelink Trail will cost $6m.

The Safelink Trail willcontribute $4.45m and 10 FTEin year 1, Total $9.3m and 25FTE's to the local economy.

GETAWAY TO PORTPHILLIP BAYExtend your journey inthe Mornington Township Toenjoy its vibrant culinary, coffeeand social culture basedexperience.

The Moorooduc to BaxterRailway will cost $1.86m or$2.4m with recycled compositeplastic sleepers.

The Moorooduc to Baxter RailwayStrategic Plan will contributedirect and indirect $14m and120.6 FTE's to the local economy. Plastic Sleeper Options saves 64tonnes/km (320 Tonnes total)from landfill.

The Community Benefit

Creates a year round visitor destinationthat connects local communities on theNorthern Peninsula for Residents on thePeninsula and South East Melbourne.

Run tourist trains direct fromMelbourne to Mornington forlocal events and races.Safely operate running festivalsand Fun Run with K163.

The Baxter to Moorooduc Railway Restoration including the Moorooduc Highway Crossing andthe Mornington Community Safelink Project are ready for immediate government investment.

Submission No. 54

"Restoring our Railway Heritage for all Generations"

Summary of Mornington Railway Strategic Plan

Introduction

The Mornington Railway Preservation Society Inc, abbreviated to MRPS. The MRPS was founded in

1984 and has brought joy to thousands of visitors around Victoria with Heritage Steam and Diesel

Locomotive excursions and events.

Vision – How we want to be known.

Mornington Railway will be valued by the community, business, Government and others as a

hallmark visitor attraction on the Mornington Peninsula.

Mission – How we will get there.

MRPS will operate the Mornington Railway as a financially and operationally sustainable tourist

experience that contributes significantly to the economy and employment in Victoria.

Economic benefit

Currently the MRPS contributes $2.64 Million and 22.6 Full Time Equivalent Jobs annually to the

economy as of 2018.

Forecasted to contribute $14million and 120.6 Full Time Equivalent Jobs annually to the economy

by 2022 as a result of the implementation of the MRPS strategic plan.

Key Capital Projects / Priorities outlined by the strategic plan

Melville carriage restored to facilitate a first class service and events carriage, this offers a strong

payback to assist MRPS fund future capital expenses.

Infrastructure Improvements to Moorooduc; to facilitate heavy maintenance, undercover storage

of wooden bodied carriages, Rail Discovery Centre to show the story of Victorian Railways and a

trade training centre, to develop victoria’s next railway workers.

Restoration / Acquisition of 2nd Steam locomotive the MRPS fundraising ability drops significantly

when our single steam locomotive is out for maintenance, a second steam locomotive will ensure

the sustainability of the Mornington Railway’s core business.

Back to Baxter is the ultimate objective to return heritage steam and diesel operations to Baxter and

link with the Victorian public railway network, this offers huge potential to expand our services and

ensure continued sustainability.

Submission No. 54

short description of your project

Documents