$2.3 bn NSW contract for Korean-built trains lacked proper cost/benefit analysis: report

Image: Hyundai Rotem

A report by think tank The Australia Institute and commissioned by the AMWU has criticised the NSW government’s decision to have a fleet of new intercity trains built in South Korea.

The report by the left-leaning institute recommends the contract be put on hold, the decision be revisited, and “a comprehensive, public, and transparent economic and financial analysis of the costs and benefits of sourcing this important work domestically versus offshore” be undertaken.

The $2.3 billion contract for the 500 new intercity trains was awarded to the RailConnect Consortium, including UGL, Mitsubishi Electric Australia, and Hyundai Rotem, last month.

According to The Australia Institute, the government’s claimed saving of 25 per cent did not consider broader economic benefits from building locally.

“The NSW Government has, by its own description, purely set out to say, ‘what’s the cheapest that we can buy these trains?'” chief economist Richard Denniss told the ABC.

“There’s been no comprehensive cost-benefit analysis of the flow on jobs, the training, the investment, the skills that could be developed in the NSW economy from building what is a very large number of public transport assets.”