2022
Sydney
Australasian Railway Association
Australian states currently use a variety of policy approaches for the procurement of passenger trains and related infrastructure and services. This ranges from states such as New South Wales, which emphasises value for money and competition, to states such as Victoria which require a construction project to have at least 90% local content. States vary significantly in their local content requirements, including differences in how local content is defined and how local content percentages are calculated.
This lack of harmonisation across state borders introduces inefficiencies into the Australian rail market, increasing costs and inhibiting investment and competition. Differences between states prevent the development of a national manufacturing operation for Australian rail, and so preclude the opportunity to benefit from economies of scale.
Massive investment is underway in Australian rail, with $ 15 billion of projects planned over the next 15 years for new construction and the replacement of ageing rollingstock. A National Local Content Policy would increase the impact of this investment and help to grow the Australian rail industry in the longer term.
NineSquared was engaged by the Australasian Railway Association to undertake a review of current state-based local content policies, and to analyse the benefits to government and industry of establishing a National Local Content Policy for the Australian rail industry. The assessment consisted of:
Based on feedback from stakeholders received through consultations, NineSquared provided recommendations on steps towards a National Local Content Policy. These recognised the inherent challenges involved in developing a harmonised approach, in the face of state-based procurement practices, political constraints, and physical differences between states’ rail infrastructure. Key recommendations included:
The findings and recommendations from this project were ultimately presented to the Harmonisation Committee established as part of the National Rail Action Plan.
Read the media release from the Australasian Railway Association.