Australia could cut train procurement costs by AUS$6 billion

Will Green is news editor of Supply Management
29 November 2013

29 November 2013 | Will Green

State governments in Australia could save AUS$6 billion (£3.3 billion) through better procurement in a 30-year programme to replace train rolling stock.

The report, by Deloitte Access Economics, said the cash could be saved by avoiding small orders and increasing commonalities across projects to replace rolling stock in New South Wales, Victoria, Western Australia and South Australia.

Opportunities for Greater Passenger Rolling Stock Procurement Efficiency, commissioned by the Australasian Railway Association (ARA) and partly funded by the Department of Industry, recommended increasing order sizes, long-term coordinated rolling stock planning, alternative financial arrangements and reducing the number of train classes.

The report said state governments planned to spend AUS$30 billion (£16.7 billion) over the next 30 years on passenger rolling stock.

Bryan Nye, chief executive of the ARA, said: “This is a significant opportunity, where a staggering AUS$6 billion could be saved.

“The rail industry and government have identified these challenges and now have a considerable opportunity for efficiencies in the procurement of rolling stock.

“This report provides economic and market evidence along with an approach to stimulate planning and policy deliberations, in order to assist government, operators and industry in moving towards improved procurement of passenger rolling stock.”

Nye said the work was also essential to the future growth and sustainability of the Australian rail industry, helping to retain almost AUS$15.5 billion (£8.6 billion) of economic activity over the next three decades.

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