Advancing the business case for Australia’s rail manufacturing industry

By Jennifer Perry

There is also a recognised need to increase the capacity of the rail network to meet significant demand from commuters in and between major centres, and an increasing demand for rail freight in general as well as to service the needs of our mining and agricultural sectors in particular.
While it is important that the Australian rail manufacturing industry is well-positioned to meet this demand, the capability and competitiveness of local companies is a key issue, according to the Australasian Railway Association’s (ARA) chief executive Bryan Nye.
“This needs to be identified, assessed and strategies put in place to promote the strengths of suppliers and address the gaps and weaknesses,” he said.
UGL Rail’s chief executive Dean Jenkins said that the approach in industry has not been to gain protection for uncompetitive local suppliers, but rather to achieve greater competitiveness in the capability of local companies to supply.
“This is all done in the context of meeting best possible practice and honouring both the intent and letter of Trade Practices legislation,” he said.
With the industry’s success and sustainability predicated on its ability to provide “quality products at competitive prices”, Jenkins said this issue needs an established mechanism that gives some surety to the companies involved.
The ARA has commenced working with suppliers of rolling stock equipment and the Industry Capability Network Limited (ICNL) to address these issues.
The ARA and ICNL have come up with a number of industry initiatives to advance the business environment for the rail manufacturing industry which will be overseen by a proposed Rail Supplier Taskforce.
The initiatives were put to the Council of Australian Governments (COAG) in April and the Australian Transport Commission (ATC) recommended they be formally considered at the next COAG meeting in July.
While the scope of the taskforce’s work is huge, Nye said that it has the support of industry and State and Federal Governments.
“The role of the taskforce is to advance the initiatives at a COAG level and represent industry - it is important that no stakeholder is left out of the loop,” Nye said.
“The taskforce and initiatives are based on the premise that there has to be a better way than operating from a silo mentality that looks at the short-term, quick-win ways of doing business - there are far too many risks and costs involved with this.
“We do not want to create a monopolistic and protectionist approach to rail manufacturing but are looking at it from a whole of life cycle concept and the myriad of opportunities that are created for companies when you do so.”
There are many organisations that are in a position to assist in advancing the initiatives. These include representative bodies such as ARIC, AiGroup and relevant unions, the ICNL, Enterprise Connect, the CRC for Rail Innovation and other research organisations, Austrade, the ACCC and State and Federal Industry Departments.
“It must be recognised that this issue is complex and the collaborative approach is a demanding process,” Nye said.
“It requires dedicated resources to make the connections and then to follow through and expedite them - collaboration will not occur without this commitment.”
The proposed initiatives include:
.Establishing the metrics of the rail supplier industry and its contribution to national, state and regional economies
.Identifying the capability, strengths and weaknesses of local suppliers
.Examining approaches to procurement and how to achieve a more coordinated effort to replenish ageing rolling stock and infrastructure
.The harmonisation of differing safety, technology and design standards
.Addressing the forward skill requirements of the rail sector and suppliers
.Achieving collaboration among the various Government agencies, research organisations and other stakeholders that are in a position to play a constructive supporting role