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More needs to be done to reduce the risk to the State of the 49-year lease of its rail freight network, according to Auditor General Colin Murphy.

In his report evaluating the first 12 years of the lease, Mr Murphy said it had delivered on most of its original objectives, including removing Government from operating the network, and its associated costs, and paying down debt.

“The volume of freight carried on the network has increased and the condition of the lines primarily used for mineral and general freight has improved”, Mr Murphy said.

“However, significant sections of the network used for carrying grain have degraded and two lines have been withdrawn from service.

“Without further Government funding, the remaining eight Tier 3 grain lines are likely to be taken out of service after 2013.

“While ongoing Government funding was anticipated at the time of the lease it was not quantified, so it is not possible to conclude whether actual levels of support are more or less than originally estimated.”

The rail freight network consists of 5600km of track in the southern half of WA. It is made up of standard, narrow and dual gauge tracks. The narrow gauge lines are found in agricultural regions and are classified into three tiers of importance.

The State Government leased the entire network in December 2000 for 49 years – initially to the Australian Railroad Group Pty Ltd, which eventually became Brookfield Rail.

Mr Murphy said the lease had delivered on many of its original objectives, but more needed to be done to protect the State’s interests in the future.

He said the risks related to keeping track performance standards up to date, monitoring maintenance and adapting the lease to meet policy objectives on the grain lines.

“A risk-based contract management plan, which the Public Transport Authority is currently developing, should strengthen its capacity to manage these issues in a considered and proactive way,” he said.

Mr Buswell said the decision to keep the Tier 3 lines open would allow Brookfield Rail and Co-operative Bulk Handling to assess the efficiency and viability of continued operations.

But WAFarmers president Dale Park said the Tier 3 lines needed to be funded.

“Imagine if the tracks were actually up to standard, the savings that could be achieved on current rates, not to mention the increase to the safety of all motorists with less grain transported via road,” he said.

Shadow transport minister Ken Travers said the report highlighted the problems created by the original privatisation of the rail network by the previous Liberal-National Government.

“The Barnett Government must accept responsibility for the management of the contract that the Auditor General says exposes WA taxpayers to increased risks and financial costs,” he said.

“Mr Barnett must provide a detailed response on how the Government intends to respond to the many issues raised in this report.”