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Rail industry ready to lead recovery

If the current project pipeline is maintained, rail could lead Australia’s economic recovery after the shocks of coronavirus (COVID-19), the results of a survey of the rail industry show.

The Australasian Railway Association (ARA) has released the results of a survey of its members which has highlighted that major players in the rail sector are looking to local manufacturers and producers to strengthen their supply chains.

The turn to local suppliers comes after the rail industry identified the biggest impact of COVID-19 as being constraints on international shipment of goods.

ARA chief executive officer Caroline Wilkie said that the survey results highlight an opportunity for Australia.

“Many businesses are looking to change their supply chains in the future and this presents a real opportunity for Australian manufacturers and suppliers.”

In a sign of positivity for the sector, the survey respondents said that most of the negative impacts of COVID-19 such as deferred investment, workforce expansion, or capital expenditure would only be in the short to medium term.

“A third of respondents could be back to full capacity within a month of the return to normal operations if the policy settings and project pipeline is right,” said Wilkie.

“Suppliers and contractors stand ready to bounce back quickly to support the recovery.”

Wilkie said that while the survey results were promising for local suppliers, government action could be the make or break factor. A firm commitment to the current infrastructure supply chain and additional stimulus measures would enable the rail industry to work with local suppliers.

“This is the perfect time for governments to streamline procurement processes and boost local content policies to support the generation of new jobs in the rail supply chain,” said Wilkie.

The insights from the ARA survey come after a number of bodies have highlighted the importance of infrastructure spending to lead Australia out of the COVID-19 crisis. On May 20, Engineers Australia released a nine-point plan, with point number one being “Keep the focus on infrastructure projects”.

Infrastructure Partnerships Australia noted that the $60 billion difference between the estimated and actual cost of JobKeeper could be directed into productivity-boosting infrastructure.

“Now the federal government has additional balance sheet capacity it should look to investments that can deliver the most bang for stimulus buck,” said CEO Adrian Dwyer.

“Infrastructure investment supported the national economy before COVID-19 and it’s the right policy tool to support our way out of this crisis.”

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