Bombardier Transportation Australia has had a solid year in spite of the pandemic, thanks largely to their commitment to local manufacturing. Rail Express speaks to ANZ President, Wendy McMillan.
The dichotomy between building trains in Australia or overseas ignores the opportunities for procurement reform that would keep Australia competitive, writes Australasian Railway Association CEO Caroline Wilkie.
In recent months we have seen two very different approaches to rail procurement in Australia.
In New South Wales, the state government welcomed new rollingstock onto the network, after importing trains from overseas.
Meanwhile, in Victoria, the state government confirmed the order of the next tranche of V/Line trains, to be manufactured at Bombardier’s Dandenong facility.
As one state looked to promote local jobs in its own backyard, the other claimed doing so wasn’t really an option.
The truth is, both procurement processes highlight some of the challenges the industry is facing.
The NSW government’s erroneous claims that is wasn’t realistic to build trains in Australia were understandably met with disappointment from the industry.
We have – and always have had – a strong rail manufacturing industry in Australia.
We can be proud of our $2.4 billion rollingstock manufacturing and repair industry with capability and experience across the country.
Companies like Alstom, Bombardier, Downer, and UGL are leading the way in Australia, with over 900 businesses involved in rail manufacturing and supply nationally.
The industry can design, manufacture, maintain, and repair rollingstock to the highest standards, with capability in Cardiff and Broadmeadow in NSW; Dandenong, Ballarat and Newport in Victoria; Maryborough in Queensland; and East Perth in WA.
Metropolitan Sydney and Melbourne are the largest centres of rollingstock maintenance and repairs in Australia, and two of the three largest non-capital city employment bases for the industry nationally are in Newcastle and Lake Macquarie.
But the sector lacks the scale of its international counterparts and is hamstrung by the procurement processes that exist across the country.
While contract awards like those in Victoria do create jobs and support local businesses, more needs to be done to support the long- term health of the sector.
Victoria, like most state governments, applies local content requirements at the state level.
It is not hard to see why governments are prone to favouring a state-first procurement policy when awarding these contracts.
Research conducted by the ARA this year found that while the average business spends about twice their wages cost on intermediary inputs, the rollingstock manufacturing
and repair industry spends five times their wages cost.
It is understandable that governments believe keeping manufacturing in their state will realise these flow-on benefits and maximise the jobs and economic benefits generated from their investment.
But in practice, it really means there are fewer and fewer chances for the industry to win work, create jobs and support innovation and growth.
It means the team working on rollingstock in Victoria might not meet the local content requirements set by NSW, Queensland, or WA.
If the same team wanted to bid for a very similar contract outside of Victoria, they might need to have facilities and people located in the state where they are bidding.
For many companies, that kind of duplication – often for a single contract – is impractical, expensive, and difficult to manage.
Even if they do choose to establish a local presence, the costs can be prohibitive not just because of the need to be local, but because different states may favour different specifications to achieve the same outcome in their tender process.
In the end, this creates layer upon layer of complexity that drives up costs, makes it hard for rail manufacturers to work across jurisdictions and erodes the size of the project pipeline Australian businesses can work towards.
A national approach to rail procurement is the only solution.
We need an approach that recognises our manufacturing industry can only grow and scale up if we treat the whole of Australia as one single market.
We need to ask industry to deliver an outcome or solve a problem, rather than specify the individual components that must be used, even if they are not the best choice available.
We must consider the whole of life costs of an asset, and the additional economic and sustainability benefits our industry can deliver, rather than choose options that are cheap to produce but could cost much more to maintain.
If we take these simple steps, the industry will have greater certainty, increase its investment and training, and have access to a bigger project pipeline.
They will achieve new efficiencies and forge innovation that will make a difference for the industry and the people that rely upon it.
Ultimately, rail manufacturing will grow and increase its competitiveness, providing more jobs and opportunity than is possible right now.
We were heartened to hear NSW Minister for Transport and Roads, Andrew Constance confirm that he is willing to work on the issue with other state governments.
With more rail contractors and manufacturers looking to increase their use of Australian suppliers in the wake of COVID-19, there is no better time to act than now.
We look forward to working with Constance and his counterparts across the country to deliver better outcomes for the industry and the economy.
Stuart Thomson, CEO and managing director of the Rail Manufacturing Cooperative Research Centre shares how the industry has collaborated on innovation, research, and development across the past six years.
Formed in 2014, the Rail Manufacturing Cooperative Research Centre (CRC) has continued to work closely with the industry to assist the rail sector to adopt future digital technologies and address coming workforce needs.
Stuart Thomson, CEO and managing director of the Rail Manufacturing CRC said engagement from the rail sector, universities, and research institutions has been the key to collaborative research and development. Co- funded by the Commonwealth government, the Rail Manufacturing CRC provides a platform for the rail industry to work together to increase its capacity to innovate.
Thomson said what distinguishes the Rail Manufacturing CRC is its approach to cross- sectoral research. Bringing together the depth of research in universities and the applied knowledge of the rail industry, along with the support of the federal government, the Rail Manufacturing CRC can advance innovation across manufacturing, design and modelling. After six years in operation, the Rail Manufacturing CRC is coming to the end of its tenure on June 30 this year, with the Centre now working to complete its final projects.
“The Rail Manufacturing CRC has worked closely with the rail sector to deliver industry focused projects. During this time of uncertainty due to the COVID-19 pandemic, the team has been working to wrap up projects and manage financial and reporting requirements required before the Centre closes,” Thomson said.
Since 2014, the Rail Manufacturing CRC has been driving the development of products, technologies, and supply chain networks to enhance the competitiveness of Australia’s rail manufacturing industry. Thomson said that despite the closure of the Centre, the CRC has created a culture of innovation that will continue to grow.
“The industry has faced, and will continue to face, infrastructure and innovation challenges in Australia. By developing research projects and teaming up experts to support the industry, we are ensuring innovation meets industry’s needs and requirements to deliver the transformational change required in the rail sector,” Thomson said.
DEVELOPING AUSTRALIAN RAIL MANUFACTURING
Thomson said multinationals have invested in the programs run by the Rail Manufacturing CRC because there is technical expertise based in Australia’s heavy-haul and passenger rail experience that companies know can genuinely assist their businesses. The next challenge for the industry is making sure there’s a pipeline of work to enable investment in capital, research and development, and innovation.
Within the Australian rail sector, a great deal of focus in the last six years has been devoted to the development of condition-based monitoring systems and applications. Thomson said the Rail Manufacturing CRC has worked on a variety of condition-based monitoring projects, including the development of battery control systems that can extend maintenance cycles, the modelling of wheel bearing wear to determine the best maintenance practices, and developing weld modelling software to assist in improving the quality of welding in rail manufacture.
In collaboration with major rail operators, the Rail Manufacturing CRC has initiated projects to develop models to assess predictive maintenance of rail switches for an operator’s network. Predictive monitoring of rail infrastructure has also allowed the Centre to innovate the use of vision systems to identify maintenance needs on overhead wires and associated infrastructure.
The Rail Manufacturing CRC has worked with Downer and the University of Technology Sydney to develop a new technology called Dwell Track. The new innovation utilises 3D infra-red vision to measure passenger congestion on platforms. This information can be used to better understand passenger movement and to assist operators make decisions to limit congestion, alter platform designs, and – in the future – provide real time information to rail staff and passengers. The technology has since been tested in real time at a train station in an Australian capital city.
Thomson said many of the projects at the Rail Manufacturing CRC have a high probability of future commercial success. “We have six technologies that are likely to yield commercial returns in the near future, so that’s quite an achievement,” he said.
Thomson credits the input of the Centre’s PhD scholarship students who have contributed to research projects. Thomson noted they represent the next generation of highly skilled rail employees. “There is a great deal of discussion around future skills gaps and developing the next generation of rail employees. We anticipate that the vast majority of our rail postgraduates, 51 in total, will seek careers in the rail sector, especially if the sector increases local manufacturing post COVID-19.” Thomson said.
CONTINUING INDUSTRY-FOCUSED RESEARCH
Thomson wants Australia to maintain core national manufacturing and capabilities. “Particularly in Victoria there is a lot of movement happening around local manufacturing because there’s a requirement for at least 50 per cent of components in the rolling stock be produced in Victoria,” he said. Thomson believes the industry is working towards a harmonisation of standards and operations. Putting further policies and governance structures to support rail manufacturing in place will allow market growth and further investment in rail.
Further research and development in the rail sector will support the industry in adopting new technologies, building new local industries, and assisting the sector to increase productivity, safety, and sustainability. The Rail Manufacturing CRC expects its programs will benefit ongoing collaboration after the Centre closes its doors.
“A culture of collaboration has evolved over the past six years and will continue to develop. We’ve seen some incredible outcomes and, for example, I think over the next few years there will be a major interest in energy storage for rail,” Thomson said. The Centre has conducted research in energy storage control systems, and also in the battery area looking at lithium technologies for use in trains. Thomson said back-up systems, rolling stock, and below rail condition monitoring are a highly focused research area too.
“The growth the rail industry needs will most likely happen in the next few years,” Thomson said. Improvements in technology and data collection has aided the acceleration of innovation and Thomson believes automation across rail manufacturing and operations will be heightened. “The sector can expect to see increasing automation and the use of artificial intelligence to monitor and control systems and subsystems above and below rail,” he said.
“New skill sets and innovation from the Rail Manufacturing CRC programs has provided a springboard for industry to engage and collaborate,” said Thomson. “I think it’s a very exciting time for the future of Australia’s rail sector. The industry can expect to see advancements in technology that will be highly relevant for major train operations within the country, and will have global reach and applicability.”