$2.3 billion NSW train contract will see carriages made in Korea

Image: NSW government

The NSW government has awarded a $2.3 billion contract for 500 intercity train carriages to a multinational consortium, with the trains to be made in South Korea.

AAP reports that the first batch of intercity trains would be delivered in 2019, with the tender awarded to the RailConnect Consortium. This group included UGL, Hyundai Rotem and Mitsubishi Electric Australia.

Andrew Constance, the state transport minister, said the winning bid offered a 25 per cent cost advantage.

“If I didn’t go with this winning bid you’d be criticising me the other way,” the ABC reports him as saying.

“Of course everyone is pro-Australian manufacturing and jobs but at the same time you’ve got to weigh it up, in terms of cost and in terms of technology.”

The NSW opposition and unions criticised the lack of local content requirements.

“In Victoria there is a minimum 50 per cent requirement for local rolling stock orders. Here in NSW, nothing,” said opposition leader Luke Foley.

“The Baird Government is completely disinterested in supporting local manufacturing and local jobs.

The Australian Manufacturing Workers Union said the decision was a “betrayal”, and the money should be spent on local workers and communities.

Maintenance will occur at Kangy Angy, on the central coast.

5 thoughts on “$2.3 billion NSW train contract will see carriages made in Korea

  1. How will local manufacturing in Australia ever survive when the State and Federal Governments have no vision or commitment for the secondary industry? I have been observing the decline of the Australian secondary industry for 30 years, it is a tragedy.

  2. Have they (Govt) not heard of the The Local Multiplier Effect (LME). The term refers to how many times dollars are recirculated within a local economy before leaving through the purchase of an import. Famed economist John Maynard Keynes first coined the term “Local Multiplier Effect” in his 1936 book The General Theory of Employment, Interest and Money. Spending the extra 25% on $2.3b would have delivered multiples of that to the NSW economy….

  3. That 25% saving you are talking about Mr.Minister could have easily return back to government in the form of income tax paid by the people employed to produce those carriages.One does not have to be a genious to understand basic economics.Direct and indirect employment and suppliers as Les below mentions (LME).What about spare parts?No problem just import them.

    1. Exactly, they only look at the short term gains from buying imported. I don’t know about Korea but sometimes countries will provide low or zero tax rates for exports and wages over there are nowhere near what they are here. So there’s your 25% saving. I think this government should be sacked over this. All that money they are raking in from our taxes and stamp duties and they go and spend it overseas. Its the peoples fault that vote for these people. Don’t give Lib or Labor your vote because this is what they do. They just sell off everything and import everything. That’s the easy way find money, that’s not economic management. Its easy to do that.

      1. HR Hyundai Rotam alike with high speed technology’s are much more advanced and one of the safest in the world Australia cannot come close to SKorea technology I’m afraid. Let’s be honest what cars are you driving a Holden or a falcon I don’t think so. They are on a budget targets have to be met and let’s be honest it’s gonna be faster on time and a better product. They have trains in the US, England, South America, Malaysia, Philippines, Pakistan, turkey and many other countries for decades. Actually wages in SK are in the top ten in the world. Robots huge factorys mainly build these trains not nearly as much labor involved as you would think.

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