The Australasian Railway Association (ARA) will set up a new single National Rail Safety Regulator in January 2013, which will replace the seven state-based regulators in Australia.
National Rail Safety Regulator, which will be based in Adelaide, will also replace 46 pieces of state, territory and national legislation related to railway safety.
It is expected to bring safe operation of rail transport across the country, promote rail safety, and remove unnecessary red tape and duplication.
The Australasian Railway Association CEO Bryan Nye said this reform is essential for the Australian rail industry, as it will improve productivity and safety on various levels of operations.
"National, consistent and uniform regulation is the key to efficient and safe railway operations," Nye said.
"However, it is disappointing that the New South Wales government decided to retain the current fatigue and drug and alcohol management provisions."
In 2011, the rail industry undertook about 199,897 drug and alcohol tests, of which 199,603 returned negative results and only 294 (0.147%) returned a positive reading.
"Clearly the sheer number of tests conducted and the incredibly low positive drug and alcohol readings demonstrates the rail industry’s commitment to managing employee safety," Nye said.
In the future, the ARA and the rail industry will collaborate with New South Wales (NSW) to reveal how new systems and procedures will alleviate their concerns.
Along with other authorities, NSW has also signed the agreement to implement the national rail safety law to standardise rail safety regulation across the country.
The New South Wales Minister for Transport Gladys Berejiklian said: "NSW supports the establishment of the National Rail Safety Regulator and its aims to cut regulatory red tape and provide a consistent national approach; however, we will not allow the compromising of safety outcomes around fatigue and drug testing in NSW."