THOUSANDS of RailCorp jobs will be axed in the biggest reform to the rail network in a generation.

Transport Minister Gladys Berejiklian is today expected to announce the axing of 20 per cent of the rail system's middle management - or 750 jobs - in the first tranche of a RailCorp reform process.

The axings are the precursor to much bigger cuts, with a recent Booz consultancy report into RailCorp recommending 3000 to 4500 of RailCorp's 15,000 jobs be slashed.

The action could result in the first rail strikes in years.

Under the changes RailCorp will be broken up into two organisations - Sydney Trains and NSW Trains - and 750 bureaucrats will be given voluntary redundancies.

It is understood the minister this morning called together staff and unions to brief them on the government's plans.

Further cuts are expected when the government negotiates an enterprise bargaining agreement it has with the unions which the former Labor government put in place until 2014. Under that agreement, the minister is not permitted to summarily sack staff.

The changes come after the government found RailCorp had four times as many senior bureaucrats for the size of its workforce than the former RTA and 20 times the Department of Education.

The government is also putting RailCorp cleaning services under new management and will tell the unions to lift their game unless they want the cleaning services privatised.

Under existing rules, cleaning staff can only remove graffiti from some sections inside trains - the entrance way, floors and walls - but are prevented from cleaning the main areas of the carriage.

That cleaning must be carried out separately by maintenance workers. The rules mean ceilings, doors and floors of most of our trains can have ugly graffiti on them for up to 58 days at a time.

"We are expecting a brawl with rail unions," a senior government source said.

"We need decisive action because RailCorp in its current form is financially unsustainable. It costs $10 million a day to run, with costs rising three times as fast as the number of passenger journeys."

Reformers including former rail boss Vince Graham have for two decades been urging an axe be taken to RailCorp to break the grip of unions.

Under the changes, two new specialist organisations will be formed to focus on the specific needs of Sydney and intercity/country customers.

Sydney Trains will serve Sydney customers. NSW Trains will serve intercity and regional customers who travel longer distances and need comfortable services with on-board facilities. The changes to the new organisations will take 12 to 18 months to implement.

From July 1, responsibility for construction and major projects will be transferred to Transport for NSW. Also from July 1, a new customer services division will be established. A specialist unit will be formed to attack graffiti and rubbish on trains and stations.

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Originally published as Ruthless RailCorp reforms planned