SPECIAL REPORT: Costs and a local skills shortage are among the challenges facing the state as it seeks to develop a local train car manufacturing sector.
Costs and a local skills shortage are among the challenges facing the state as it seeks to develop a local train car manufacturing sector.
The state government is just weeks away from announcing a decision on the $1.6 billion contract to suppy 246 new Metronet rail cars, but local content requirements are expected to face cost and skills hurdles as the project moves forward.
Three rail car manufacturers were shortlisted for the build in August 2018 – Alstom Transport, a consortium of CAF Rail and UGL, and a joint venture of Bombardier and Downer.
The government’s position is that 50 per cent of manufacturing should be done in Western Australia, at a new workshop in Bellevue near the old Midland rail yards.
That will most likely mean welding, fabrication and assembly work, while high-tech parts will be imported.
(click here to see a PDF of the full four-article special report)
Among parts to be foreign sourced would be the traction system, which represents about a quarter of the content of a rail car.
One problem for the project will be the lack of a skilled workforce available with the state’s previous rail manufacturing workshop closing in 1994.
Proponents will need to start afresh in training and recruiting rail industry professionals.
Highlighting this issue, the Australian Railway Association is forecasting a national shortage of about 11,700 persons in rail construction and manufacturing by 2025.
Australia-wide, the industry will be about 30 per cent short of staff in roles such as engineering and electrotechnology by the middle of next decade, according to a November 2018 skills capability study by the association.
A further concern will be the additional cost of partially manufacturing locally, with an industry source telling Business News it will be about twice the price of importing finished rail cars.
The Queensland state government halved its procurement costs when it opted to buy rail cars from India rather than manufacture locally in 2014, although that project was beset by design flaws and poor policy decisions by the relevant government department.
WA’s Metronet deliveries will take place in two batches – an order of 102 new rail cars in 2021, and a further 144 rail cars, to replace part of the existing fleet, from 2023 to 2028. That staged build process means the state’s new rail manufacturing industry will have a steady workflow over the long term, although it will contribute to higher costs.
Making tracks
The biggest part of Metronet is the construction of new rail lines, with four projects in the pipeline.
Construction of the $536 million Thornlie-Cockburn link and $420 million Yanchep extension is slated to start in 2019, with the tenders to be awarded by mid year.
The state has opted to source both as one package in a bid to ensure scale to attract the attention of bigger contractors, which have been highly focused on east coast markets in recent years.
Business News revealed in September the state would also separately release two forward works packages, worth up to $80 million, to give smaller local contractors a slice of the action.
The Morley-Ellenbrook line, which will cost at least $1.1 billion, is still in the planning phase, with work on a business case under way.
A recent assessment by the independent Infrastructure Australia, however, said the project would not be needed for up to 15 years.
The Forrestfield-Airport rail link has been hit by a major setback with the line now to open in the second half of 2021, a delay of nearly 12 months.
The biggest problem was a sinkhole next to Dundas Road near the airport, which was caused by a leak.
Construction of the link started in 2016.
Furthermore, about $100 million was allocated by the government for redevelopment of existing train stations, including Bayswater, where both the Ellenbrook and Forrestfield lines will connect to the existing network.
Heading south
Private business Arc Infrastructure also has rail development plans, according to executive director Murray Cook.
“Arc is working with partners Talison Lithium and the South West Development Commission to look at a rail-based supply chain in the South West to support the growing lithium industry in the region,” Mr Cook said.
“Project partners have delivered a preliminary feasibility study that provides positive indications that there are options to show rail is competitive with road on a dollar/tonne level.
“Reinstatement of the existing Bunbury to Greenbushes rail line is only one part of the required supply chain.
“The study has considered broader infrastructure requirements, including rail loading facilities at the mine, unloading facilities at Bunbury and Kwinana ports and unloading facilities at the proposed Kemerton Industrial Park.”
The Greenbushes line was shut more than a decade ago.
