Rail industry news (Australia, New Zealand), AusRAIL, Suppliers and Manufacturers

Government commits to procurement and manufacturing at AusRAIL PLUS

The largest rail conference in the Asian-Pacific region, AusRAIL PLUS 2023 – held last November – pulled in more than 6000 delegates from across the industry. Helping kick it off was the launch of a new national rail procurement and manufacturing strategy.

With the release of the program, the Federal Government cemented its commitment to improving local manufacturing industries.

Announced by Assistant Manufacturing Minister Tim Ayres, it outlines the steps the Government is taking to help grow a sustainable rail manufacturing sector, increase productivity, international competitiveness and industry participation.

He said delivering the strategy in partnership with the States and Territories would support jobs in the outer suburbs and regions by helping to ensure high-quality, low-emissions passenger and freight trains are made in Australia.

The Strategy has six pillars:

  1. Develop a nationally coordinated approach to rolling stock procurement
  2. Harmonise standards for manufacturing rolling stock
  3. Adopt a national local content approach
  4. Maximise opportunities for freight and heavy haul rail manufacturing
  5. Improve research and innovation outcomes in the rail sector
  6. Establish the foundation for good jobs and rewarding careers in rail manufacturing

“The Strategy is part of the National Rail Manufacturing Plan – our election commitment to lift productivity, improve social and environmental outcomes and create economic value,” Ayres said.

“The Government has already delivered on earlier commitments in the Plan including establishing the Office of National Rail Industry Coordination (ONRIC), and the appointment of a National Rail Manufacturing Advocate and Rail Industry Innovation Council.

“ONRIC has been working closely with industry, state and territory governments, unions and the research community to develop the Strategy. This important collaboration will continue throughout implementation.

Jacqui Walters has pledged to deliver on the strategy. IMAGE: Prime Creative Media

“We want to make more things here – we’re rebuilding domestic industrial capability so Australia can make high-value products for our country, our region, and the world.

“The National Rail Procurement and Manufacturing Strategy is the framework for the Commonwealth and the States and Territories to work together to help ensure passenger and freight rail rolling stock is built here in Australia.

“Building an enduring rail manufacturing industry means good jobs, high quality trains and lower costs for taxpayers and the States and Territories.

“An Australasian Railway Association report found that taxpayers would have saved $1.85 billion over the last 10 years if state rolling stock contracts had been better coordinated.”

 Ayres said the Government had a “big ambition for Australian manufacturing: to meet the challenges of our age”.

“We must lift broadly our economic complexity and our position in global and regional supply chains to advance our economic and our broader security interest in our region and the world,” he said. 

“No more complacency. We have delivered the largest ever peacetime commitment from a government to Australian industry: for example, $15 billion for the national reconstruction, $20 billion rewiring the nation’s funding for our electricity and energy system, nearly $400 million in the Industry Growth Program, and the list goes on.

“And I assure you that rail manufacturing is at the centre of our vision for the future of Australian manufacturing.

“Indeed, rail has been at the heart of Australia’s economic and social development since the first steam locomotive was built in Melbourne in 1854.

“Locomotive and carriage workshops in centres all over this country continue to build the passenger and freight trains which connect our communities, and power our economy.

“Regional economies like Newcastle, Ballarat and Maryborough rely upon these workplaces to deliver good jobs, apprenticeships, engineering, and commercial opportunities for small and medium businesses to participate in the manufacture and supply chain.

“Losing this capability would be a tragedy for Australia.

“(Past) decisions to offshore manufacturing have pushed Australia perilously close to reaching an industrial tipping point where this industrial capability is lost forever.”

Ayres said there needed to be more confidence in the national capacity and capability to manufacture products.

“It’s going to be a challenging next few decades. We are confident we’re going to demand a lot from industry over the course of the coming years. We’d expect people to step up, but we have absolute confidence in Australian capability and Australian ingenuity,” he said.

“In coming decades, Government and private sector spending on rail projects will exceed $100 billion.

“The government promised to deliver the National Rail Manufacturing Plan at the last election, an ambitious commitment to build long term domestic industrial capability and help ensure that that capability delivers good jobs in our outer suburbs and our regions.

“Trains designed and built to Australia’s unique conditions will lower costs for government and industry, improve the quality of the commuter experience, and lower our national transport emissions.”

Ayres’ sentiments were echoed by National Rail Manufacturing Advocate Jacqui Walters, who told attendees that the collaboration between industry, governments and the research sector in developing this strategy had established a strong foundation for ongoing cooperation and delivery.

She said that in her discussions with industry stakeholders since being appointed, there had been a relatively small and consistent set of issues experienced across the country that had to be solved if the industry was to grow.

“They include inconsistent procurement practices, particularly around local content, limited pipeline visibility, inconsistent standards, inefficient duplication of supply chains, barriers to adoption of innovation and new technologies, workforce shortages, a lack of diversity in the workforce and out-of-date training instructions,” she said.

“We will continue to sing and listen to input as we shape this work. I look forward to many more candid discussions about solving these challenges and you will see these issues addressed.

“We have known about many of these challenges and in different ways tried to solve them for many, many years. 

“But if we know the answers, why haven’t we managed to fix things? 

“I’m sure most industry members have been involved in strategy development: spotting, brainstorming, diverting and converting red oceans, blue oceans and sometimes way too many post-it notes.

“But what happens when you finish that strategic thinking? How many of you have contributed to workshops, attended a retreat, seen the strategy, launched posters at morning teas? A few things happen, and then it just fades away.

It is a common occurrence and we need to make sure this doesn’t happen in this industry with rail manufacturing. I want to ensure that this work isn’t something that people scratch their heads about at AusRAIL 2027 and say “whatever happened to that manufacturing strategy?”.

“We aim to ensure we deliver and that the growth of the rail manufacturing industry is achieved and that it’s sustained, with an enduring strategy and action.”

For this to happen, Walters said there firstly needed to have a shared vision and commitment.

“Perhaps even more critical than vision is commitment to action from the Australian Government and key stakeholders,” she said.

Tim Ayres addressing delegates. IMAGE: Prime Creative Media

“The Australian Government has shown its commitment through the development, approval and funding of the National Rail manufacturing plan and with the achievements that’s already delivered under that plan, and the launch of this new strategy.

“But you cannot make strategy happen without commitment of adequate resources. Strategy without resourcing is just wishful thinking. 

“We’ve seen commitment from the stakeholders who all own pieces of this puzzle. Unions representing the workforce; state and territory governments as standard setters; procurers, owners and operators; industry and suppliers and operators, large, medium and small; researchers and innovators helping to improve safety, lift productivity and decarbonise; and the various regulatory bodies ensuring our systems work safely, reliably and efficiently.

“This support will continue to be fundamental in delivering on the strategy. Shared vision and commitment will be really important because we will have to tackle complex challenges.

“We can’t leave the work to Assistant Minister Ayres or to me, or to ONRIC or the Council or to you. It will only be successful if leaders work together to solve difficult problems, to remove barriers to achieving the vision, it will take all of us working in partnership. Collaboration will be essential to solve these tough problems.”

Walters said the final critical element to consider was momentum.

“A lot of people have said “just get on with it” and I understand that sense of urgency,” she said. 

“We know that some of these opportunities and challenges have existed for decades. You’ve told me that we have tried this before and yet nothing changes. There is cynicism out there and that’s fair enough.

“But I don’t think we have ever had the alignment and the commitment across governments and the industry that we have today. So I really encourage that healthy cynicism and the frank discussions that I’ve had to date and I welcome them as we work through this. 

“I know that to achieve success we will have to carefully consider competing interests and it will take time to find ways to progress. But we have to balance that with forward momentum to maintain the interest and importantly, the commitment of all stakeholders. 

“We will look for opportunities to progress nearer term solutions while in parallel, working on those more challenging issues.

“We move from admiring these problems to taking action and maintaining and increasing that momentum. 

“As an example, you have told us that one of the highest impact things that we could deliver is a national rolling stock procurement pipeline.

“So we’ll be seeking input as we design and populate the pipeline that will give all stakeholders a view of the forward demand for passenger rolling stock, and will publish that first pipeline in the second quarter of 2024.

“In fact, the first half of next year is going to be pretty busy. In addition to publishing the pipeline, we will map and analyse current rolling stock procurement frameworks and processes and road test ideas for policy reform to support manufacturing, including the adoption of innovation and new technology.

“We will develop a business case to quantify the benefits of coordinating procurement at a national level. This will provide the economic rationale to support the changes that we are contemplating.

“There’s a lot of work that has been done already by many people in this room on these various aspects and we will be building on that. So we certainly don’t plan to go out and reinvent the wheel where we don’t have to.”