COVER STORY
Maximising the benefits of rail’s spending boom A dependable pipeline demanding true local manufacturing would ensure local businesses are able to capitalise fully on substantial rail spending across Australia and New Zealand.
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NFASTECH ENGINEERED FASTENING managing director, Glenn Heffernan, has seen his fair share of market shifts. From the mining boom, just beginning when he joined as the company’s financial controller in 2003, to the shrinking and reshaping of manufacturing which influenced his acquisition of the business through a management buyout in 2017, Heffernan has substantial experience navigating peaks and troughs in his company’s target markets. Heffernan, now managing director of the business, sees the growth already underway in the rail sector and believes his business is poised to take advantage. But he says the unpredictable nature of spending from federal, state and territory governments in Australia and New Zealand can create challenges for businesses like Infastech and its customers. “The trend over the last few years has been growth, but it’s been spasmodic,” Heffernan told Rail Express. “Governments have made a lot of announcements over the last five years with varying levels of certainty, but it doesn’t seem there’s a long forecast of projects in the pipeline, and when they do happen, they come across very quickly.” Heffernan is not the first to raise this issue. The Australasian Railway Association (ARA) has repeatedly called on governments to commit to a unified pipeline for major rail projects, to allow the private sector to better prepare itself with adequate skills and equipment to ensure contracts are executed as efficiently as possible. The ARA recommended the federal government resource the Australia & New Zealand Infrastructure Pipeline in
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ISSUE 9 2019 | RAIL EXPRESS
its 2019-20 Budget Submission as part of this. Despite this push from industry, the politicised nature of spending on major infrastructure projects means companies are operating with a significant level of uncertainty across the region. Even the largest, most financially stable international rollingstock manufacturers have identified the sporadic nature of spending as a limiting factor in their commitment to the local market. Heffernan is seeing this trend not from the perspective of a tier one manufacturer or engineering firm, but from deep within the rail supply chain. The companies Infastech serves with fastening tools, equipment, parts and maintenance are often contractors or suppliers of the tier one companies delivering rollingstock or rail infrastructure projects under major government contracts. And he says the lack of proper commitment to long-term planning makes it difficult for everyone to deliver. “The ideal would be to have a long pipeline of specific projects, and detailed requirements of those projects. But at the moment it seems to be a short pipeline, and very little notice between when a project is identified or announced, and when it goes ahead,” he said. “This means we’re holding stock to support these programs when they are announced, without any security of demand. That insecurity flows down the whole line, because it makes it difficult for our customers to speak to their customers, and their customers are some of the biggest companies in Australia – or in the world – and it’s very difficult to communicate some of these things. What might seem
With hundreds of millions of dollars committed to rail in Australia and New Zealand, how can this be maximised to benefit local businesses and their employees?
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