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Transport & Logistics

Better rail procurement ‘could save $6bn’

6 Dec 2013, by Informa Insights

Warren Truss, Deputy Prime Minister and Transport Minister. Image via
Warren Truss, Deputy Prime Minister and Transport Minister. Image via

Improvements to rolling stock procurement procedures could net rail authorities nearly $6 billion in savings, a new report has revealed.

The Opportunities for Greater Passenger Rolling Stock Procurement Efficiency document, launched by the government on Thursday (November 28th), highlighted the problems caused by a growing population and an ageing fleet.

According to the report, which was commissioned by the Australasian Rail Association, these issues will create demand for railway engineering infrastructure and future train purchasing.

Deputy prime minister Warren Truss said state governments are expected to pay around $30 billion on new rolling stock over the next 30 years.

“Not only will smoothing rail rolling stock procurement result in significant savings to state rail authorities, but it will also enable the Australian rail industry to make more informed decisions about investing in facilities and training,” he explained.

The report said approximately 1,900 rail cars are due to be replaced over the next 10 years, while 1,100 more will be needed to cope with additional demand.

Forecasted increases to passenger numbers will mean 11,000 rail cars are required by 2043, compared with the 4,000 currently operating.

P13GL12WEBPDF-1 copy“Better planning of upcoming procurement creates certainty for suppliers enabling them to better plan production schedules, increase productivity and encourage investment and, at the same time, potentially reduce costs for suppliers and customers,” Mr Truss stated.

The deputy prime minister also highlighted the importance of retaining this work for Australian rail businesses, adding that it could contribute close to $15.5 billion to local economies over the next 30 years.

“It will also support manufacturing hubs in regions like Maryborough and Newcastle, as well as urban regions like Auburn and Dandenong,” he commented.

The report was compiled by Deloitte Access Economics and co-funded by the Department of Industry.


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