The Australian Deputy Prime Minister The Hon. Warren Truss recently released a report that identifies opportunities for significant savings in the procurement of passenger rolling stock.
Commissioned by the Australasian Railway Association (ARA) and the Department of Industry, the ‘Opportunities for Greater Passenger Rolling Stock Procurement Efficiency’ Report states that over the next 30 years, $30 billion will be spent by Government on the procurement of heavy rail passenger rolling stock; however with slight changes to the procurement process a saving of $6 billion could be made.
Chief Executive of the ARA, Bryan Nye explains that procurement challenges and expenses are increasing every year due to increasing demands of public transport and the need to replace ageing fleets.
With the rail industry and government having identified these challenges, they now have considerable opportunity for efficiencies in the procurement of rolling stock.
Mr Nye adds that the report provides economic and market evidence along with an approach to stimulate planning and policy deliberations to assist government, operators and industry in moving towards improved procurement of passenger rolling stock.
The report outlines eight key responses to tackle the identified limitations and deliver outcomes, including increasing order sizes to achieve economies of scale; long term coordinated rolling stock planning and train procurement programs; alternative financing arrangements; a reduction in the number of train classes; and harmonisation.
According to Mr Nye, by providing rail businesses with more consistent work, they will be able to retain nearly $15.5 billion in economic activity over the next 30 years. Benefits such as supporting Australian jobs, promoting regional development and increasing productivity can result in a more functional and well-coordinated supply chain and increase innovation in the industry.
Mr Nye concluded by saying that the work in the report was essential for the future growth and sustainability of the Australian rail industry. The ARA will continue to work with Government to ensure that these important actions are taken forward.