Whole-of-government approach needed for rail investment


A whole-of-government approach is needed to maximise the benefits of the forecast $46 billion investment in rail over the next decade, a Senate inquiry has found.

The Rural and Regional Affairs and Transport References Committee’s report recommends the Commonwealth lead development of a national rail manufacturing industry plan.

This would “smooth out the peaks and troughs in market demand and create more certainty and predictability for manufacturers servicing the rail industry”.

The report says the Commonwealth should establish a national coordinating body, re-establish a Rail Supplier Advocate, and work with state and territory governments (and industry) set up railway industry skills centres at local TAFEs and colleges.

The report recommends the Commonwealth work with the states and territories on a national rail procurement strategy to enable small and medium-sized enterprises to flourish and to maximise investment in local research and development.

The committee has been investigating how government procurement and policy levers could be harnessed to “improve the value for money, competitiveness, stability of work and capability of the rail manufacturing industry with specific reference [among other things] to the importance of the national rail industry as a regional employer and activity-generator”.

List of recommendations

Recommendation 1

5.10 The committee recommends that the Australian Government establish a National Rail Manufacturing Industry Plan to maximise the benefits of the $46 billion in investment expected over the next decade.

Recommendation 2

5.11 The committee recommends that a National Rail Manufacturing Industry Plan develop a mechanism for the Commonwealth to smooth out the peaks and troughs in market demand and create more certainty and predictability for manufacturers servicing the rail industry.

Recommendation 3

5.12 The committee recommends that, following the Australian Government's establishment of a National Rail Manufacturing Industry Plan, state and territory governments endorse the plan and agree on methods to adequately support, resource and progress the plan.

Recommendation 4

5.18 The committee recommends the development of a National Rail Procurement Strategy by the Commonwealth in coordination with all states and territories. As signatories to the strategy, states and territories should include procurement contract measures – consistent with international trade obligations – which allow for the development of industrial capabilities for small and medium sized enterprises (SMEs). As part of these contract measures, consideration should also be given to:

  1. maximising local content for the manufacture of passenger, freight and light rail rolling stock in procurement;

  2. the relevant financial and non-financial costs and benefits of each project including, but not limited to:

  3. the quality of goods and services

  4. fitness for purpose of the proposal

  5. the potential supplier's relevant experience and performance history

  6. flexibility of the proposal (including innovation and adaptability over the lifecycle of the procurement)

  7. environmental sustainability of the proposed goods and services (such as energy efficiency and environmental impact)

  8. whole of life costs

  9. requirements for contractors to undertake training strategies to educate and engage local apprentices, trainees and engineering cadets;

  10. commitments to local industry development and supply chain engagement; and

  11. harmonisation of safety standards.

Recommendation 5

5.19 The committee recommends that a National Rail Procurement Strategy be used to work with all states and territories to maximise investment in local research and development, as well as engagement with universities and research agencies.

Recommendation 6

5.23 The committee recommends the establishment of a Commonwealth coordinating body – to be headed by a tripartite council – to drive and coordinate a National Rail Manufacturing Industry Plan, a National Rail Procurement Strategy and industry consultation.

Recommendation 7

5.24 The committee recommends that a Commonwealth coordinating body be given direct terms of reference to work directly with the rail manufacturing supply chain in developing and expanding industry capability networks.

Recommendation 8

5.29 The committee recommends that the Australian Government work with state and territory governments, and the rail industry, to develop Rail Industry Skills Centres at local TAFEs and colleges.

The report is available here.

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