01 Metro Trains Melbourne

Optimisation App keeps train investment on track

Metro Trains Melbourne has an eight-year contract to operate and manage $30 billion worth of metropolitan railway assets on behalf of Public Transport Victoria. The company operates 420 trains on 869 kilometres of track, and transports 415,000 passengers per day during the working week.

In collaboration with Telstra’s Readify, Metro Trains Melbourne devised a tool to prioritise spending across 15,000 investment projects, tripling value delivered from its annual $230m.

Where Readify consultants stand out is their ability to connect customer problems with algorithm-based tools: they get scientific answers to real-life problems.”


Robin BarlassDirector of Corporate Services, MTM



With responsibility for A$30 billion of assets, Metro Trains Melbourne (MTM) has a vast annual budget to maintain and renew rolling stock, track, signalling and all the infrastructure associated with a metropolitan rail network. But how should the company prioritise objectives? Spending on signalling may improve punctuality, but should that take precedence over track replacement or station upgrades? As for many large organisations, prioritising thousands of projects is complex.

In 2012, MTM took a scientific approach. The company wanted to mathematically determine how best to spend its annual $230 million asset-renewals budget, and remove subjectivity from the process. Above all MTM wanted to demonstrate to its client, Public Transport Victoria (PTV), that citizens got best value for every dollar spent.

MTM’s first step was to create an Excel-based Renewals Prioritisation Tool (RPT) to cover a 3–5 year planning horizon. This consolidated inputs from asset management staff, delivery units and engineering departments. It also allowed MTM to weigh different criteria, such as customer experience and environmental risk. The RPT produced rankings, but it couldn’t capture all the subtleties involved — or the opportunities.

“Certain combinations of projects deliver an outcome that is better than the sum of their parts — and that’s what the RPT had to calculate,” says Robin Barlass, Director of Corporate Services, MTM. “It had to capture constraints, interdependencies and differing levels of project criticality. And to bring real value to MTM, it had to be interactive and easy to use,
so we could alter scenarios and see the impact.”

Readify consultants checked in regularly to ensure the project met our needs.'


Robin BarlassDirector of Corporate Services, MTM



Advanced maths + smart programming

Creating an advanced RPT was a massively complex challenge that carried huge responsibility. At stake was MTM’s ability to manage a politically sensitive budget of around $230 million per year. Melbourne-based technology company, Readify (a subsidiary of Telstra), had previously created a similar tool for an energy company, so MTM asked Readify for ideas.

Readify proposed an application based on a mathematical technique called portfolio optimisation. This would mean widening the sources from which the RPT drew data, and using linear optimisation mathematics to create a core algorithm.

“Portfolio optimisation involves capturing differing levels of objectives, as well as constraints and interdependencies,” says Leah Scholten, Data and Analytics Director Readify. “In practical terms, the technique would enable the RPT to evaluate many lower-value and disproportionately cheaper activities whose collective benefit exceeds the value delivered by a small number of big-ticket projects.”

Three-step project delivery

Given the scope and complexity of the project, Readify devised a three-step approach to delivery:

  • Step 1: Engaging with stakeholders to define investment objectives for maintenance portfolios. By conducting workshops with track engineers, signalling experts and other specialists, Readify ensured the objectives, criteria and interdependencies of MTM projects were clearly understood. Multi-level collaboration also ensured that application design met the practical needs of real-world decision making.
  • Step 2: Devising a scoring framework that linked portfolio objectives with a project value. Readify created a methodology that quantifies multi-level objectives and project constraints. This allowed the new RPT to deliver a meaningful comparison between dissimilar projects. In turn, this enables MTM to examine trade-offs between individual projects.
  • Step 3: Creating a mathematical tool to calculate optimal combinations of projects. Readify translated the methodology into a series of algorithms, and then Readify software developers built an application interface that turned the algorithms into a practical tool. The build phase included trialling a prototype with MTM workers, so programmers could tweak the interface and enhance usability.

Specialists with practical flare

MTM was impressed by the experience. “Readify consultants checked in regularly to ensure the project met our needs,” says Robin. “Where Readify consultants stand out is their ability to connect customer problems with algorithm-based tools: they get scientific answers to real-life problems.”

The advanced RPT (known within Readify as Odin) was used for the first time in the 2014–15 financial year. Highly interactive, it allows MTM analysts to change objectives, eliminate options and add preferences. This means MTM can recalculate investment priorities for thousands of project combinations and take account of changing factors such as project risk.



207% improvement in value delivered

Since 2015, the new RPT has made a profound difference to the way MTM allocates its infrastructure budget. According to MTM, it has improved the value delivered from their renewals program by 207.6 percent. As the annual renewals budget is approximately $230 million each year, the benefits to the travelling public are enormous, cumulative and ongoing.

Greater rigour and transparency

The new RPT also enhanced budgetary accountability — including for its client, PTV. “If the State Government asks how we can best spend an additional $100 million we can give a scientific answer that is robust and defensible,” says Robin. “What’s more, we can demonstrate why a specific project is not the best use of funds. The RPT gives MTM confidence we are investing in the right things and getting the best value from
nominated funds.”

More sophisticated analysis

The fact that the RPT is highly interactive enhances its utility. MTM workers make
faster, more accurate decisions with deep insights drawn from a variety of data sources. “We can experiment with scenarios,” says Robin. “For example, we can see the impact if we want to increase spending on the customer travel experience and reduce spending in other areas, without compromising safety; then choose the optimal course.”

If a minister asks us how we can best spend $100 million, we can give a scientific answer that is robust and defensible. What’s more, we can demonstrate why a specific project is not the best use of funds.' 


Robin BarlassDirector of Corporate Services, MTM