We have been working to address key operational issues in our Melbourne train and tram businesses and were pleased to announce in February 2002 an interim agreement was reached with the Victorian Government.

This agreement has put these businesses on a stronger financial footing and enables us to develop patronage recovery proposals which will address some of the key operational issues such as fare evasion. For example, we are working with the State Government and the other operators through a dedicated ticketing task force to develop proposals to improve and ultimately replace the ticketing system. This initiative will improve the availability, ease of use and security of ticket machines. A major media campaign promoting heavy penalties for fare evasion has also been launched, coupled with intensive fare evasion “blitz” inspection activity.

In October our two metropolitan Victorian businesses were officially rebranded under the “Moving Melbourne” banner: Bayside Trains became M>Train and Swanston Trams became M>Tram. The launch of the new brand was supported by a new customerfriendly website, www.movingmelbourne.com, and new customer information at tram stops. We also began the roll-out of refurbished trains and trams in Victoria, delivering improved features.

A major highlight of 2001 was the signing of a A$410m (£147m) contract to build 29 new two-car diesel trains for regional Victoria. The new 160kph trains, to be delivered from 2004, will improve services and customer comfort as well as significantly reduce journey times.

Buses

During the year good progress was made in our bus operations. Significant improvements in both punctuality and reliability were achieved.

In August John Lee joined as Managing Director of Westbus. John was formerly senior adviser to New South Wales’ inaugural Co-ordinator General of Rail and brings extensive experience from his involvement in co-ordinating commuter services for the Sydney 2000 Olympics.

Towards the end of the year we acquired Glenorie Bus Company for A$23.5m (£8.5m) which gave critical mass to our Sydney operations. Growth of our business in the Hills district of Sydney is a key objective for 2002 and this acquisition opens the way for new and better integrated services, including in-bound commuter services from Glenorie’s catchment area, the fast-growing western suburbs of Sydney.

Demand for school services in New South Wales continues to grow and we expect this aspect of the business to generate further revenue in 2002.

More and more people are using Melbourne’s public transport services, thanks to high levels of reliability and punctuality on the city’s train and tram services.

The branding of M>Train and M>Tram was rolled out across all areas of the operation during the year.