Alstom results

Alstom releases results for the 2019-2020 financial year

Alstom has released its results for the financial year 2019-2020, ending March 31, 2020.

The Paris-based, Euronext listed rollingstock and signalling manufacturer booked orders of €9.9 billion ($16.6bn) over the year, and had sales results totalling €8.2bn ($13.76bn).

The figures were driven by orders in Europe, including very high speed trains in France, metros, and regional trains, as well as Alstom’s winning of the Metronet railcar build and maintenance contract in Perth and the contract to supply further rollingstock and signalling to the Sydney Metro Southwest extension.

“Although considered a stabilisation year, Alstom enjoyed strong commercial momentum in a very dynamic railway market,” said Henri Poupart-Lafarge, Alstom chairman and chief executive officer.

“We won major orders especially in Europe and in Asia-Pacific. In addition, we secured pioneering orders for our green mobility solutions, illustrating the potential of such technologies and the dynamism of the shift to carbon free transportation modes.”

Research and development spending accounted for 3.7 per cent of sales in 2019/20, with focus particularly on emissions-free mobility, including electric motors, hydrogen fuel-cells, and battery traction systems. Alstom was awarded contracts for its hydrogen train and battery electric train in regions in Germany.

The effect of COVID-19 is not fully realised in these accounts, as they finish at the end of March, 2020, however Alstom noted that it would not issue dividends to shareholders in July. The company calculated that the impact on sales of COVID-19 is roughly €100 million ($167.9m), due to a slowdown of sales recognition. As of May 12 a restart of production is occurring, and the company expects a fast recovery in the rail market.

“Alstom considers the health and safety of its employees and stakeholders as its top priority during this period. We are confident for the resilience of Alstom’s business in the mid-term, given the fundamentals of the rail market and in particular, the need for greener mobility,” said Poupart-Lafarge.

Chinese high speed train. Photo: Bombardier

Albanese puts high speed rail at the centre of COVID-19 recovery

Anthony Albanese will argue for high-speed rail to be a central part of the rebuilding of Australia’s economy following coronavirus (COVID-19), according to reports.

In a speech to be delivered to the shadow cabinet on May 11, Albanese will say that a high-speed rail project along with decentralisation should be pursued by the federal government as a way to recover and create a more resilient nation.

In a draft of the speech, Albanese is expected to combine a commitment to high-speed rail with local train manufacturing.

“We must invest in nation-building infrastructure including iconic projects like high-speed rail and we should be building trains here,” Albanese is expected to say.

“Government procurement policy in rail manufacturing has produced superior outcomes to imports and created regional jobs in Queensland, Victoria and Western Australia.”

In 2019, Labor took a $1 billion land acquisition policy for high-speed rail to the federal election, however the Coalition has not pursued high speed rail during its time in office.

The speech by the federal opposition comes after Treasurer Josh Frydenberg outlined his plans for post-COVID-19 recovery. In a speech to the National Press Club on May 5, Frydenberg said that the government would maintain its $100 billion ten year infrastructure pipeline, but did not nominate particular projects. Frydenberg did, however, note that the current pandemic should not lead to protectionist policies.

In April, shadow transport spokeswoman Catherine King had nominated high speed rail as a “economic game changer” and indicated federal Labor’s continuing support for a high speed rail network linking population centres down the Eastern seaboard. King also noted that investment in high-speed rail would encourage economic growth in regional communities.

At the time, federal Minister for Infrastructure, Transport and Regional Development Michael McCormack said that the government’s focus is building the Inland Rail project and pursuing faster rail projects.

Growing a nation-building industry

Fourteen days into her tenure as CEO of the ARA, Rail Express sat down with Caroline Wilkie for an exclusive interview – her first major interview since taking over from incoming chairman, Danny Broad.

In her opening address to the Australasian Railway Association’s (ARA) Light Rail 2020 conference, the new CEO of the ARA, Caroline Wilkie highlighted that the next 10 to 15 years would see the opening up of major opportunities across the rail sector.

In almost each major city in Australia, a new rail project will begin operating in this period. In Canberra, stage 2A of the light rail project is scheduled to open as early as 2023. In Melbourne, the Melbourne Metro tunnel is looking at completion in 2025. In Perth, the Metronet project’s components will start to come online from 2021. In Queensland, Cross River Rail is due to be completed in 2024, while on the Gold Coast, stage 3A of the Light Rail project could be up and running by 2023. Finally, in Sydney the next stage of the Sydney Metro is scheduled for opening in 2024.

While there will be many opportunities for ribbon cutting at each of these projects’ opening days, it will be ensuring that the continued benefit of each rail project extends from the construction into the operational phase that animates Wilkie as she makes her mark on the industry.

“Now is a good time to talk about what role rail will have into the future.”

Wilkie, who was for nine years the CEO of the Australian Airports Association (AAA), highlighted that she would be taking a collaborative approach to communicating these benefits and looking for future opportunities.

“If I’ve got to a media release or I’m banging on the door of a minister’s office, I certainly feel like I’ve not done the right thing,” said Wilkie.

To successfully advocate for an industry sector as the head of its representative association, Wilkie nominates three essential ingredients. Number one being research.

“Define the issue. A clear policy proposal backed by research should be the basis of your advocacy. If you can’t present the facts in a coherent narrative you’re not going to get very far.”

The next step, highlighted Wilkie, was having a cohesive voice as an industry.

“The second thing is then having all the partners and stakeholders on board. There’s no point us advocating for an outcome on behalf of a third party if that third party isn’t saying the same thing,” said Wilkie.

This also extends to ensuring that the government department that she is working with is onboard to convince the key decision-maker.

“If you can’t get the department on your side – both at a state and federal level – they’re not going to write a favourable brief up to the minister,” said Wilkie, who has been closely involved with federal Minister for Infrastructure, Transport and Regional Development and Deputy Prime Minister Michael McCormack’s office during her time at the AAA.

“The minister is going to have a million and one things on his plate and if I’m coming in and saying one thing and the department is saying something opposite, we’re not going to get anywhere.”

The final element is understanding but not playing the politics, said Wilkie.

“Playing a straight bat is really important. I know that there’s government and there’s opposition, but at the AAA I always made sure that we briefed both, to make sure that everyone is aware of our views. That has been the ARA’s history as well, and I intend to maintain that bi-partisan approach.

“I will never attack the government in the media, it’s making sure that those in the departments that we talk to, state or federal level, and the ministers, state or federal, know that we’re positive partners and that we really want to engage with them in a constructive fashion.”

EXPERIENCE IN MAKING THINGS HAPPEN
In her nine years at the AAA, Wilkie oversaw a number of initiatives, but in 2019 her efforts paid off in the form of an unprecedented $100 million fund for regional airports. The products of two years of lobbying, the funding vindicated Wilkie’s collaborative approach to advocacy.

“When we started the campaign, we knew it would take two years and we were right it took two years. We knew we were not going to get this budget cycle, but we could catch the next one if we do the right meetings, get the right messages out there, and generate the right noise and buzz.”

The effort was in the context of infrastructure being devolved to local councils, who were unable to pay for the upkeep of expensive and underutilised assets. Wilkie recalled that essential to the campaign’s ultimate success was the range of voices engaged in the campaign.

“One of the greatest things we did was actually getting our members to be advocates for us, talking to their local member about why it was important and getting that local member to talk to the Deputy Prime Minister.”

The program’s ultimate success drew on these insights while also being realistic about what could be achieved within that timeframe.

“Too often you see some people saying, ‘We want this and that.’ But to be successful, you need to understand to the perspective of the Government of the day and the circumstances in which it is operating. You need to be collegiate in understanding the department’s mandate and its context, ” said Wilkie. “For example, there’s no point going to the Commonwealth this year and asking for additional expenditure, because we’re in a difficult period with the bushfires and coronavirus, so we’re planning conversations for next year.”

However, Wilkie’s experience at the AAA also highlighted that just as much as getting government to fund something or take an action, effective industry leadership can be just as much about ensuring a change does not happen.

In 2012, a proposal was put forward for airports to cover the cost of the presence of Australian Federal Police (AFP) at the facilities.

“It was a classic case of lobbying against a bad policy,” said Wilkie. “Sometimes the greatest achievement is making something not happen.”

Framing the issue as one of national security, and therefore the responsibility of the federal government, and getting other stakeholders on board, was to ensure this extra cost was not imposed on airports.

“I think the greatest traction we got in that campaign was arguing that if you want to charge us for that, we want KPIs, we want to have a say over the resourcing,” said Wilkie. “If we’re paying for it, then we want a say and you can well imagine the AFP saying ‘Absolutely not, this is a national security issue.’ This, of course, was our whole argument in the first place. We were able to get a lot of people in the community on board for this particular campaign.”

In other areas, Wilkie has found the value of research in effecting change. In late 2019, the Productivity Commission finalised a report into the airport sector, which found that the current regulation of the sector was fit-for-purpose.

“We were engaging with the Productivity Commission on the facts because we took the view that as they are the greatest economic minds in the country, they will consider the case on its economic merits. That was probably the best example in my time at the AAA of fact-based research and making sure that you got all your members to really be focused on that fact-based research.”

Wilkie sees reports such as the Value of Rail report, prepared for the ARA by Deloitte Access Economics as forming this evidence base for government decision-making, and is something that Wilkie will be looking to update further.

CONTRIBUTING TO THE GREATER GOOD
With these experiences under her belt, Wilkie is aware of the differences between the airport and rail sector, one that she describes as “issues rich”.

“After my first 14 days it’s pretty clear to me that there are distinct groups in the membership, and they each have their distinct issues. I think we can clearly advocate for each of the sectors’ needs without conflicting with someone else.”

Rather than seeing these different sectors as competing Wilkie highlighted that in coming together, the sectors can improve outcomes for the industry as a whole.

“With any membership organisation you go on the principle of ‘do no harm’, as in with any policy I don’t want to advance one member at the expense of another member. More broadly you want to do what’s best for the industry as a whole.”

Apart from her experience heading the AAA, Wilkie has a deep knowledge of the role of industry associations and peak organisations from prior roles at the Tourism and Transport Forum and the Financial Planning Association.

“I love working in industry associations. I enjoy the variety of the role as CEO and I love the advocating for the greater good,” she said.

“For all the work that I did at the AAA the thing that brought me the greatest joy was doing anything that helped people in regional communities, hence why I always say that getting that funding for regional communities is our proudest professional moment. It was a gut-wrenching decision to decide to leave but I had always looked very warmly on the ARA, I knew Danny Broad previously. I am excited about rail and I like the fact that it’s a nation-building industry. It still has that connection with the regions, and it’s obviously got a really exciting trajectory.”

Less than a month into the job, Wilkie is already looking at where rail can have a greater presence in the national conversation.

“We’re looking at doing refresh on some of our statistics; what is the value of rail and why is it important, particularly after the summer bushfires the issues of climate change and emissions are very much front and centre in the policy debate.”

As Europe increases its spending on rail to reduce the carbon footprint of mobility, Wilkie sees the ARA as having a role to play in setting the agenda for a decarbonised economy.

“That’s an area where rail has an amazing story to tell about what it can do, not only in metro areas in terms of increasing use of passenger transport, but even in regional areas, and particularly in terms of freight.”

In other areas, Wilkie is hoping to continue the work already being done by the ARA.

“The other area that’s a big focus for the ARA and which I will take the mantle up on, is about workforce development and skills development. I think that promoting rail employment as something that’s not old fashioned, but modern and dynamic is important. The many environmental benefits of our industry lends itself to being promoted as a green alternative to enriching life. That modern perception will actually greatly impact making it an employer of choice and making younger people decide to work in rail.”

In these areas, Wilkie has been doing her own, firsthand research.

“I grew up in the Hills district in Sydney and now we have the North West Metro. Over Christmas I took my son on it, just to go and ride it, because it was extraordinary. Having grown up in Castle Hill, the best you could hope for was an occasional bus down to Parramatta. So for kids, the new Metro has opened up travel, and allowed people to engage with the city. With developments like that you’re seeing people have a legitimate choice and that’s the difference.”

NEXT STEPS
Wilkie, who describes herself as “conservative” in her approach to association budgeting, stresses that the current ARA team and structure is key to the ongoing success of the association.

“Listening is going to be key in this period and then we’ll go to the ARA Board with a rough plan of how we can service the needs of the distinct groups within the rail industry. Then can we ask for each of these issues what do we need to do? Do we start from basics, is it a research project, do we need to do a submission to government?”

More broadly, Wilkie notes that the role of the industry association is to find areas that can benefit the sector as a whole.

“I think for a body like the ARA, it’s not necessarily about advocating for build more, I see a role for us in trying to move the industry to do better and more with what we have. So, what are the vagaries of the national system that aren’t working for us as an industry, and where can we see productivity improvements? It’s not particularly sexy. I don’t know that anyone can cut a ribbon around it, but when you look at the productivity for the sector, that’s where we as the ARA can actually add the greatest value.

“That really comes back to what the role of the association is about, bringing together the voices of the sector, and putting their issues front and centre with the decision makers.

“As a collective voice, we can achieve things for industry.”

NIF being tested under its own power on NSW network

NSW’s New Intercity Fleet (NIF) is undergoing testing under its own power, in a significant step forward for the regional rail fleet.

Minister for Transport Andrew ConstanceNIF inspected the new trains.

“When the trains first arrived, on-track testing involved using a locomotive to haul the carriages. What we’re seeing today is a really exciting milestone because they’re now travelling around the network under their own power,” said Constance.

Further testing on the Sydney Trains network will calibrate the systems for local operation.

“Over the next few months you’ll see more of these trains on the network as we progressively test all train systems including Automatic Train Protection, passenger door systems, passenger information, CCTV, ride comfort as well as the maximum speed of 160kph,” said Constance. “We’ll also be using this time to familiarise the train crew with the new operating systems and technology on board.”

The trains have been previously criticised by the Rail, Tram and Bus Union (RTBU) for a feature which locks the train if the doors are open.

The fleet will serve regional centres in the Central Coast, Newcastle, South Coast, and Blue Mountains and upgrades to infrastructure and stations along the track are part of the delivery of the new fleet, said Minister for Regional Transport Paul Toole.

“These are modern trains featuring the latest technology, so we need to ensure we upgrade the infrastructure on the network to accommodate them.

“Work is also continuing on sections of the Blue Mountains Line, which will enable customers living between Springwood and Lithgow to experience a new train for the first time since the last of the V-Sets were introduced in 1989.”

The purpose-built maintenance facility for the trains at Kangy Angy on the NSW central coast is also progressing, said Toole.

“This work, along with the construction of the new maintenance facility at Kangy Angy, has helped to create around 1600 local jobs.”

Victorian

Design released for locally-made new VLocity sets

The design of the new VLocity trains for the North East line in Victoria have been released.

The new model will be manufactured by Bombardier at its Dandenong workshops, said Minister for Public Transport, Melissa Horne.

“These new trains will be the first VLocitys to run on standard gauge tracks on Victoria’s regional network and will provide North East line passengers with a more comfortable and reliable train journey,” said Horne.

Features of the new trains include built in USB chargers, six luggage racks and overhead luggage storage, a modern catering facility, and six wheelchair spaces with companion seats nearby. Three bike racks will be installed, as well as four shared tables so groups can sit together. The design also includes accessibility improvements so that transport is accessible to people of all abilities.

The units will be manufactured in three car sets which can run coupled together for a six carriage train. Todd Garvey, director sales & marketing Australia for Bombardier, said the company has utilised its local knowledge and expertise.

“Bombardier is proud to support the Andrews Government by manufacturing these new standard gauge trains for North-East Victoria, in Victoria, using our local supply chain. Our operations in Dandenong employ over 500 people and we are the only business in Australia that can build trains and trams from end-to-end right here in Melbourne. We are fortunate to have a strong, talented workforce and a facility that can deliver for Victoria.”

The new design was developed in consultation with the community in North East Victoria, said Member for Northern Victoria, Jaclyn Symes.

“The feedback from local passenger groups, accessibility advocates, local government and tourism representatives has been fantastic, and central to the design process – I thank everyone who contributed.”

Once the $235 million upgrade to the North East Line is complete, the new trains will run on the standard gauge line. Current services to Albury are hauled by N class locomotives as the rest of the V/Line VLocity fleet are designed for Victoria’s broad gauge network.

Deal complete for 1,500 cars for Berlin underground

Swiss-based railcar manufacturer Stadler has won the contract for 1,500 underground metro cars for the Berlin transport network, Berliner Vekehrsbetriebe (BVG).

The framework agreement, worth up to 3 billion Euros, will also include the supply of spare parts for 32 years.

The announcement, made on March 20, followed the rejection by the Berlin Court of Appeal of a review procedure initiated by an unsuccessful bidder.

The agreement includes a fixed minimum order of 606 cars. Stadler will supply 376 cars for two to four-car vehicle units across the small and large profile sections of the Berlin underground network. Another 230 cars have been ordered, but the call off order has not yet been placed. An additional 894 cars could also be ordered at a later date, however that part of the agreement is optional.

Stadler already has rail vehicles in use on the U1, U2, and U5 lines in Berlin. The new cars will be based on the Stadler-METRO vehicles with the design optimised for improved access, and faster passenger loading and unloading.

A revised design will see the information screens moved from the door to the curved intercar connection between the side wall and ceiling.

“We are delighted that BVG has decided to continue its successful cooperation with our company. We are very proud to have won one of the largest delivery contracts ever awarded in Europe and to be able to complete the order in Berlin for Berlin,” said Jure Mikolčić, CEO of Stadler in Germany.

The new cars will be built at the Stadler Berlin-Pankow site, where Stadler will invest 70 million euros. The investment will go towards a new production hall, and spaces for logistics and commissioning. Furthermore, office space and a new canteen for workers will be built.

“We have decided to bring forward our planned investments in the Stadler location in the German capital in order to create an optimal basis for the implementation of this major project,” said Mikolčić.

COVID-19 stimulus package: what it means for businesses in rail

The federal government has announced a $17.6 billion economic plan to keep Australian businesses in business, so what does this mean for the rail sector?

As the entire global economy faces significant challenges posed by the spread of the coronavirus, stimulus packages have been implemented across the nation to support small and medium sized businesses.

Prime Minister Scott Morrison said as part of the plan up to 6.5 million individuals and 3.5 million businesses would be directly supported by the package.

Caroline Wilkie, Australasian Railway Association (ARA) CEO said stimulus measures announced by the New Zealand, Australian commonwealth and state governments for small and medium enterprises, such as direct payments, asset write offs, apprentice wage subsidies, accelerated depreciation, and payroll tax exemptions will be of benefit to eligible businesses in the rail supply chain.

“However it is likely that additional government support will be necessary,” she said.

Similarly, Luke Wisbey manager – rail for civil engineering and plant hire company Brefni, noted that there is room for current stimulus measures to go further.

“The $17bn support package offered by the Federal Government is quite a significant sum and highlights the enormity of the situation facing business across all sectors including the rail industry,” said Wisbey.

“Although the package offered is substantial, the individual initiatives represent relatively small spends at a time when the economy faces mass bankruptcies. In order for businesses to survive the likely drops in revenue the crisis will generate, the government needs to be considering corporate level funding rather than ad hoc initiatives.”

Wilkie said passenger rail operators are reporting significant reductions in patronage and visible social distancing between customers on Australian and New Zealand rail networks.

At this stage, services have not been reduced. Other ARA members across the freight, contractor and supply chain are also reporting challenging conditions.

“ARA is uniting its members across all sectors of the industry to collectively address the COVID-19 situation and continues to work with our members to assess the industry impact and to engage with the government on areas where assistance can provide the most benefit,” Wilkie said.

What financial support is available?

The federal government will invest $6.7bn to boost tax-free cash flow for employers. The payment will provide cash flow support to businesses with a turnover of less than $50m that employ staff from the beginning of this year to June.

Up to $25,000 is available to help pay wages or for investment to protect against a downturn in activity.

Businesses with turnover less than $500m will be able to access a 15 month investment incentive by accelerating depreciation deductions. These businesses are also eligible for an expanded instant asset write-off for asset investments of up to $150,000. 

Similar to the relief provided following the bushfires, the Australian Taxation Office (ATO) will provide administrative relief for certain tax obligations on a case-by-case basis. 

If you’re a quarterly pay as you go (PAYG) instalments payer you can vary your PAYG instalments on your activity statement for the March 2020 quarter. Wisbey noted that thresholds here limit the amount of available assistance,

“The 50 per cent allowance on PAYG capped at $25,000 limits the target pool and those companies still need to pay net wages and super. For SME businesses, support with wages are of most concern. We support the wage assistance initiative for apprentices and trainees.”

What about investment in my business?

From March 12, businesses with a turnover of less than $500m will be able to deduct 50 per cent of the cost of an eligible asset on installation, with existing depreciation rules applying to the balance of the asset cost.

A time-limited 15 month investment incentive to support business investment and economic growth over the short term, by accelerating depreciation deductions. 

How will my state support my business?

State governments across Australia have announced their own stimulus packages which includes state support for the waiver of payroll tax, fees and charges for businesses, and additional maintenance and cleaners of transport assets.  

In NSW, the state government has announced that more than $250m will be invested to employ additional cleaners of public infrastructure, including TfNSW’s external operators statewide. This is in addition to the $450m for the waiver of payroll tax for businesses with payrolls of up to $10m for three months and raising the threshold limit to $1m in 2020-21.

Thresholds here also exclude some businesses, highlighted Wisbey.

“The proposed NSW holiday on Payroll tax is good and should be extended until the end of the year at least. The threshold has also been lifted to $1m before it kicks in. However, this is an absolute tax on employment & the threshold should be north of $5m to be more effective.”

The Queensland government will create a new $500m loan facility, interest free for the first 12 months, to support businesses to keep Queenslanders in work and extend the coronavirus payroll tax deferral to all businesses across the state.

Western Australia’s state government stimulus package includes $114 million in measures to support Western Australian small and medium businesses.

Ben Wyatt, WA Treasurer said “the state government’s stimulus package works hand in glove with the commonwealth government, and ensures these additional measures complement the stimulus announced by the Prime Minister last week.”

Specific state and territory information and assistance for businesses can be found on the federal government’s website.

Meeting the growing demand for intermodal freight

CFCL Australia’s Matthew Roberts told Rail Express about the fleet lessor’s flexible approach, and how it’s responding to growing intermodal demand.

The growing volume of freight in Australia is presenting both challenges and opportunities for the rail sector. A 50 per cent increase in the decade to 2016 is putting pressure on intermodal, containerised freight, as rail is called upon to shuttle freight from ports to intermodal terminals.

In this context, logistics operators are looking to get more goods onto rail, and CFCL Australia (CFCLA) is able to provide a flexible solution, outlines Matthew Roberts, CFCLA rollingstock operations manager.

“Most of our wagon fleet is intermodal, and we hire out our wagons to all the rail operators, and some non-rail customers use them and engage other people to haul trains for them.”

CFCLA’s 1,700 wagons are supported by 78 locomotives. As a company with over two decades experience in Australia and deep roots in the home of rail freight Chicago, the integrated rail services provider is able to give peace of mind to operators and contractors.

“With our intermodal wagons we wet lease, which means we do all the maintenance,” said Roberts. “Like hiring a car, we do everything; the car is registered and we complete the servicing and repairs so all the customer needs to do is phone our 24-hour helpdesk to arrange workshop time that suits their schedule. When someone goes in and bids for a job, they don’t have to hold the wagons for 30 years, they’re only holding them for the period of the contract with their customer.”

The recent openings of intermodal terminals, particularly around the Sydney basin and further afield in NSW, have increased the need for CFCLA’s intermodal expertise.

“We have been contacted by a broad range of shippers and freight owners who are looking for assistance or advice on getting their freight between terminals, which is port to metro and regional terminals and return, there could even be regional-to-regional opportunities”, Roberts said.

When Inland Rail opens in 2025, Roberts also expects demand to increase. Of benefit would be open access terminals along the route.

“Inland rail will hopefully grow the pie by bringing new freight onto rail. The convenience of the Inland Rail line will encourage people who might currently ship by road to port to use rail instead,” he said.

IN-HOUSE CAPABILITIES
CFCLA plans to respond to increasing demand by growing its workshop productivity. Located in Goulburn, NSW and at Islington Railway Workshops in Kilburn, South Australia, the two workshops house the knowledge that CFCLA has built up over 22 years in the Australian rail industry.

“We’ve have locomotive overhaul facilities, so we can do any sort of service on a locomotive that we own. We own 78 locomotives ourselves and we also work on customer-owned locomotives and can complete a full overhaul should the customer desire,” said Roberts.

With freight movements and logistics networks functioning on tight time intervals and schedules, CFCLA enables an operator to keep its cargo moving.

“The idea is that customers passing our workshops can drop off and pick up locomotives with ease, so there’s no downtime,” said Roberts. “They can drop off a locomotive, leave it there for a couple of days for servicing, and take one of our locomotives straight out of the workshop and keep going.”

This kind of servicing and maintenance also lends itself to finding a smarter solution, based on knowledge of what factors are affecting the sector.

“The intermodal sector is picking up, but there’s presently a shortage of 40-foot wagons in the market,” said Roberts. “We’re looking at either modifying or building more 40-foot wagons. We’re looking at a program of cutting some 60-foot wagons into 40-foot wagons and that’s to allow for maximum container weight and not running with empty space on the train.”

By modifying 60-foot wagons to 40 feet, CFCLA is meeting the emerging needs of freight operators needing to fit more containers through congested terminals, such as Port Botany with limited rail infrastructure and minimising train lengths, which reduces costs in things such as access fees.

“On a 60-foot wagon you can put two heavy containers, but using up more train length to do it. We’re looking at how to get more 40-foot wagons into the market. They’re at a premium because the sidings at the port are fairly short and that’s a restricting factor; the time it takes to shunt at the ports as trains become longer,” said Roberts.

These kinds of modifications go some way to ensuring that rail can continue to move larger volumes of freight, even as port terminals are constrained in siding space.

“A lot of infrastructure owners seem to have built short sidings, around 600 metres long,” said Roberts. “The trains are getting longer and longer but the infrastructure at those places is not.”

Already, those freight operators that CFCLA is working with are putting in requests for CFCLA to provide more, shorter wagons, a service that CFCLA can offer because of the flexibility enabled by having its own workshops.

“We’ve been working with Crawfords Freight Lines and they have a demand for more 40-foot wagons, and also Bowmans Rail in South Australia, they’ve got a demand for more 40-foot wagons,” highlighted Roberts. “They can still carry the freight on longer wagons, but you can’t put a third maximum loaded container on the wagon making the train longer.”

Work for both of these clients will be handled by CFCLA itself.

“Our own workshops will do the work, our own workshops will make the modifications,” said Roberts.

SAFETY AND COMPLIANCE: THE BACKBONE TO INTERMODAL FREIGHT
To continue to responsively meet the demand of rail operators, CFCLA sees an ever-growing need for workshop capabilities.

“We’ll have to look at expansion of the workshop sector. If the sector grows, we grow with it, so we will have more intermodal wagons for the increasing traffic,” said Roberts.

CFCLA’s workshop staff will bring to intermodal wagons their expertise in a variety of rail operations, highlighted Roberts.

“We do all types of rail maintenance work; whether it’s rail equipment that is used out on the line for track maintenance, or passenger cars for the Ghan and Indian Pacific, including wagons and locomotives.”

Beyond the range of jobs able to be completed, what distinguishes CFCLA’s workshops is the intensive safety and compliance regime that is applied from the shop floor up to senior management.

“On the subject of safety, it goes without saying there is no compromise as without doubt rail is a risk management business,” said Roberts.

“We have a very strong safety management system with the regulator, the Office of the National Rail Safety Regulator. They visit and audit us three times a year or more. Customers can come to us, knowing that the regulator visits, checks what we’re doing, visits the workshops, and comes into the office and looks at all our records. We need to demonstrate we are competent at what we do.

“Where it does count for maintenance is the shop floor. The guys on the shop floor have access to the documentation because there is quite a bit of documentation on how to change a wheel, how to measure a wheel even, so that everything is recorded and completed properly.”

Implementing these standards is an experienced and specialised workforce, many of whom come to CFCLA with a background in rail, and if not are trained by CFCLA to become part of what Roberts described as a “family”.

“We try and treat everyone like we would our own family, so our CEO knows people on the shop floor by name and they know her. We talk to each other.”

In sum, noted Roberts, “what we really do is simple – we have workshops wagons and locomotives – we just try and do that well”.

WA transport minister defends railcar manufacturing in Bellevue

Liza Harvey, leader of the opposition in Western Australia, has labelled railcar manufacturing as a practise from a bygone era.

In a speech to the state’s business community at the Business News Politics Breakfast on Wednesday morning, Harvey said “we don’t know the total cost to the state of the McGowan Government rail car experiment” and claimed that railcar manufacturing should not be a focus for WA.

“What we will not do is heavily subsidise industries where the State has no comparative advantage, nor bring back industries from a bygone era,” Harvey said in her speech.

Harvey said the opposition has been trying to scrutinise the decision by the McGowan Labor government to determine if this decision delivers value for money for the taxpayer of Western Australia given that this is a $1.3 billion investment.

WA Transport Minister Rita Saffioti said that building railcars in WA was cheaper than other options.

“The cost of WA-made railcars is cheaper than the cost of the previous procurement of B-Series from Queensland that was ordered when she was Deputy Premier,” Saffioti said.

“The cost per railcar under the last order of B-Series trains was $4.05 million, while the cost under the new C-Series contract is around $2.97 million.”

The spokesperson from the office of Liza Harvey said Saffioti has refused on many occasions to provide any transparency regarding this contract.

“The Minister has refused to provide any breakdown regarding the various cost elements of the contract such as the cost of maintenance,” she said.

“The Minister has refused to table the contract or provide a business case.

“The Leader of the Opposition indicated that a future Liberal Government would not be subsidising uncompetitive industries however, we will not do what the current Government does and create sovereign risk by ripping up contracts,” Harvey said.

Saffioti denied Harvey’s claims including a comment that WA’s facility was going to “fit out trains from Victoria”.

“Victoria builds its own trains – as do many modern economies around the world. WA will also be building its own trains,” she said.

Saffioti said train manufacturing involves modern skills that are easily transferable to other industries.

“The Opposition Leader’s embarrassing attack on WA workers shows the Liberal Party hasn’t moved on from their fundamental opposition to rail and local jobs,” she said.

“Our vision for WA is to build a modern train manufacturing and maintenance hub, that not only builds and maintains our public transport trains, but creates further opportunities for the freight, agricultural and mining industries.”

Saffioti said these industries are major users of rail and rolling stock, and the railcar contract provides growth opportunities throughout the state.

“The question for Ms Harvey is: If Western Australia should not build our 246 C-series railcars, and six Australind railcars, then who should?”

Qube container. Photo: Qube

Qube purchases four Australian-made locomotives

Qube has awarded the contract to build four locomotives to UGL, part of the CIMIC Group.

The four locomotives will be built in Newcastle at UGL’s workshops there, said UGL’s managing director Jason Spears.

“These contracts extend our light rail capability alongside our Adelaide heavy rail presence and commence our relationship with Qube Logistics. UGL has a strong reputation for quality and safety and we look forward to exhibiting that through these manufacturing, maintenance and operations contracts.”

Qube has recently signed extensions to its freight rail logistics business. Late last year, the company announced that it had signed contracts with Shell Australia and Bluescope Steel. In its Half Year results announcement, Qube indicated that it would spend $73 million on new rollingstock and infrastructure to support the Bluescope contract.

Additionally, its Moorebank Logistics Park began rail operations with a major warehouse for retailer Target.

Further agreements for tenants at other sections of the Park are in the final stages of being negotiated.

According to UGL, its base in Newcastle was key to the purchase by Qube.

“UGL’s long history of manufacturing is key to our success in Newcastle. We’re proud that UGL has had a presence in in NSW for more than 120 years, including a strong presence in Newcastle.”

The news follows the announcement that UGL, along with Transit Systems and John Holland will operate the Adelaide tram network from July 2020.