AUSTRALIA EXPORTS AND TRADE MARKET BRIEFING December 2021
Australia Exports and Trade Market Briefing December 2021
Australia in Numbers
$30bn
The value of the railway industry to the Australian economy in 2019.
36,000 km
of railway line across the country.
$155bn of investment planned in the next 15 years.
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Australia Exports and Trade Market Briefing December 2021
Market Background In Australia, rail is a significant industry with activities across every major metropolitan and regional area. The Australian industry employs in excess of 165,000 workers, making it a crucial driver of economic growth and pivotal in Australia’s economy. In 2019, the railway industry contributed around $30 billion (£16.2 billion) to the Australian economy, growing by $3.7 billion (£2 billion) since 2016, representing a 14% increase (4.5% a year). According to an October 2020 Rail Sector Deal Exports (RSG) Survey, Australia is the current number one priority market for UK exporters, as well as a top priority market where companies believe their railway sector goods or services have potential to be exported with assistance from the rail industry and Government.
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Moreover, Australia is rated at 90% on the accessibility scale for exporters by European rail trade body UNIFE (World Rail Market Study – Forecast 2020-2025). UNIFE reports that the Australian market in rolling stock, infrastructure and services is forecasted to stagnate with a slight decrease of 0.6 % p.a., reaching EUR 0.9 billion (£0.77 billion) p.a. in 2023–2025. However, a major programme of rail transformation, with investment planned in the next 15 years by central government aided by industry-wide collaboration, could lead to annual growth of 1.5% for the next five years. As of July 2021, Australia had around 15,000 rail projects in delivery.
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Australia Exports and Trade Market Briefing December 2021
Opportunities in the Market There are a wide range of opportunities for UK suppliers in the Australian market. During the COVID-19 pandemic, Australia has supported their railway sector, framing it as a national economic priority. Australian Prime Minister Scott Morrison has signalled he wants construction to continue to be classified as an essential service and considers the sector vital to the economy and jobs. The railways will be an essential part of Australia’s infrastructureled recovery after the 2021-22 Federal Budget confirmed key rail projects would be funded as part of stimulus measures and fast-tracked. Australia’s 2020-21 Federal Budget is funding and fast-tracking several rail projects. Australia is currently experiencing significant population growth, which is driving the need for new and refurbished infrastructure projects and associated urban regeneration in the capital cities,
leading to a host of transport infrastructure projects across all modes. In rail specifically, the focus is on heavy rail for freight and rail for metro systems. On 2 September 2021, the Australian Infrastructure Plan was released. This is an actionable roadmap for infrastructure reform in Australia and includes a pipeline for work and future work. The plan was welcomed by both the Australasian Railway Association (ARA) and the Australian Infrastructure Sustainability Council.
View projects under procurement and pipelines of work here: • www.investment.infrastructure.gov.au/ • www.ara.net.au/about-rail/ construction-and-projects/
Examples of live projects include: • The $10.6 billion (£5.7 billion) Inland Rail project, creating a 1,700 kilometre Melbourne to Brisbane freight rail line along Australia's East Coast. • The Cross River Rail (CRR) project in Brisbane, which involves the delivery of a 10.2 kilometre north-south rail link from Dutton Park to Bowen Hill. This including 5.9 kilometres of rail tunnel under the Brisbane River and central business district, as well as four new underground stations.
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Australia Exports and Trade Market Briefing December 2021
• The $740m (£400 million) Beerburrum to Nambour Rail Upgrade (B2N), covering aroud 40 kilometres of the North Coast Line.
Innovation in UK Rail
• Sydney Metro City & South West, delivering 31 metro stations and more than 66 kilometres of new metro rail. • The proposed $12 billion (£6.5 billion) Sydney Metro West project, a new underground metro railway connecting the Sydney CBD and Parramatta. • The Sydney Metro - Western Sydney Airport, a 23 kilometre driverless train network. • The $11 billion (£6 billion) Melbourne Metro Tunnel Project, delivering a new rail line across the Melbourne CBD, featuring two nine-kilometre tunnels and five new underground stations. • The $6.9 billion (£3.7 billion) Level Crossing Removal project, aimed at removing 50 of Melbourne's most dangerous and congested level crossings by 2022. • Perth’s Metronet public transport program, part of a $1.34 billion (£0.7 billion) investment over the next four years, which comprises completing the Forrestfield-Airport Link, extending metropolitan railway lines, relocating and building new stations, and removing level crossings.
Australia is rated at 90% on the accessibility scale for exporters by UNIFE. UNIFE World Rail Market Study – Forecast 2020-2025
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Australia Exports and Trade Market Briefing December 2021
UK - Australia Trade Deal The UK and Australia have agreed closer economic ties, enabling greater market access for exporters. In July 2021, the UK and Australian Governments signed an Agreement in Principle, which paves the way for a Free Trade Agreement (FTA). The agreement should enable businesses to access the Australian market more easily. Currently, UK manufacturers face a 5% import tax, which would be removed with an FTA, increasing competitiveness of UK manufactured goods and supporting UK jobs and skills investment. With the 5% tariff being scrapped, UK companies will be able to bid for Australian government contracts for rolling stock, infrastructure, and consultancy. It is also expected that the FTA will also include the mutual recognition of professional services qualifications, which would improve a two-way movement of professionals and allow workers to transfer and use their qualifications in the other country. The agreement should be finalised in late 2021.
Then UK International Trade Secretary Liz Truss with Australia Trade Minister Dan Tehan
Visit the Department for International Trade website for recent updates here.
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This is a chance for both our nations to make history. Despite our long friendship and the common values that unite us, our two great countries have never before had a free trade agreement. That can change now the UK has left the EU and become an independent trading nation once again. Trade Secretary Liz Truss announcing the Agreement in Principle
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Australia Exports and Trade Market Briefing December 2021
RIA Member Case studies Three examples of rail suppliers who currently export to Australia. British Steel: British Steel has been exporting to Australia since 2014, working with an incumbent steel supplier to supplement their offer. They developed and gained approval for their steel sleepers, which had to go through rigorous testing before being granted approval. The first sleepers were delivered in early 2020, and since then, over 37,000 sleepers have been manufactured and delivered into South Western Australia. With an FTA with Australia, British Steel would be able to be more competitive in a market that is crucial to the Australian economy thanks to the removal of the current 5% import tax. Ricardo Rail: Ricardo entered the Australia railway market in 2019 and currently have a team of 100 consultants supporting a client portfolio that includes Transport for NSW, Downer and Sydney Metro. One of their most recent successes was their appointment in October 2020 as Shadow Operator for two extensions to the Sydney Metro network. Ricardo will represent the interests of the future O&M contractor throughout the early specification, design and procurement processes, ensuring the day-to-day needs of a fully operational driverless (GoA4) railway are understood by the various contractors and suppliers throughout the build. Jewers Doors: Jewers Doors’ Australian reseller, Max Doors Solutions (MDS), were commissioned by the principal project team of Coleman Rail and Architectus to supply and install automatic bi-folding doors for the Lilyfield maintenance depot for Sydney Light Rail. They also recently completed the installation of four sets of Swift-SEW doors on the maintenance depot for the new Light Rail system in Canberra, as well as 10 sets of Swift-SEW doors for the New Intercity Fleet (NIF) at Kangy Angy, and they are currently working on the supply of 5 doors for the Parramatta Light Rail.
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Australia Exports and Trade Market Briefing December 2021
How can RIA help you? RIA provides support to UK rail businesses looking to export whether for the first time or to build on current success. The Railway Industry Association (RIA) is the voice of the UK rail supply community. We help to grow a sustainable, highperforming, railway supply industry, and to export UK rail expertise and products. RIA has over 300 companies in membership in a sector that contributes £43 billion in economic growth and £14 billion in tax revenue each year, as well as employing 710,000 people. RIA provides its members with extensive services, including: • Representation of the supply industry's interests to Government, Network Rail (NR), TfL, HS2, ORR and other key stakeholders; • Providing opportunities for dialogue and networking between members, including several Groups; • Supply chain improvement initiatives; • Provision of technical, commercial and political information every week; • Export promotional activity, through briefings, rail trade missions overseas, hosting inwards visits. This includes Australia and New Zealand in November 2022 (TBC); and • Organising UK presence at rail exhibitions overseas on Great branded
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UK Pavilions, including AusRail Plus. In 2021, RIA comissioned Oxford Economics to produce a report on the value of UK rail. It highlights the fact that the UK rail industry is a significant exporter, selling £600 million in goods and services abroad each year. Moreover, the European rail trade body UNIFE’s recently-released World Rail Market Study report predicts annual rail market growth of between 1 and 2.3% until 2025, when an annual volume of approximately €204 billion (£175 billion) per annum could be expected.
RIA Major Projects Report
In November 2021, RIA published its Major Projects Report, setting out the range of capabilities in the UK supply chain for delivering major rail projects with over 45 case studies. It also highlights the export potential of this. Read the report here
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Australia Exports and Trade Market Briefing December 2021
Innovation in UK Rail
RIA Export Activities RIA export events are typically open to both member and non-member UK companies and can include overseas trade missions to markets or arranging UK Pavilions at major rail exhibitions worldwide, such as AusRail, InnoTrans or Trako. RIA members benefit from our exporting advice and receive our weekly Export Mail, in which we collate business opportunities, news updates and upcoming activities. On 10 August 2020, RIA ran a webinar with the UK’s Department for International Trade (DIT) on Australia and New Zealand, where we heard from railway sector officials from the key Transport Agencies in New South Wales, Victoria and New Zealand, who provided an overview of the Covid-19 situation and outlined key projects in each location, informed about next milestones and highlighted opportunities on the horizon. In March 2021, RIA in partnership with the Australian DIT team ran a virtual rail trade mission to the country, which Kings Building, 16 Smith Square, London, SW1P 3HQ +44 (0) 20 7201 0777
attracted 44 UK companies. Over a five-day period, split into three-hour daily segments, the group received various federal, and state led presentations from officials and key rail clients. The second week of the mission, saw UK companies engage in 1-2-1 meeting sessions remotely via the mission platform. RIA regularly arranges a pavilion for UK companies at the leading Australian rail exhibition and conference, visiting every other year for the AusRail Plus edition of the show. With the current rules around travelling still excluding UK nationals, RIA is currently awaiting rule changes before committing to the February 2022 AusRail Plus event, a Rail Trade Mission in November 2022 and a UK Pavilion at AusRail Plus 2023 For more details on how RIA can help you with your export activities, and to keep up to date with RIA’s Exports activity and upcoming events, visit our website here. RIA can also share details on the wider support available to UK exporters.
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Australia Exports and Trade Market Briefing December 2021
Working with the Australasian Railway Association (ARA) In March 2019, the Railway Industry Association (RIA) and the Australasian Railway Association (ARA) signed a Memorandum of Understanding providing greater co-operation and collaboration between the two industries. The partnership sees us working more closely together, benefiting both organisations’ memberships, and helping to boost each country’s export potential in rail. The agreement sees: • The exchanging of information linked to research and innovation (not IP protected) undertaken in either country;
• Sharing and exchanging information and approaches relating to skill needs, training and the attraction of career aspirants to the railway industry; • Closer working arrangements in trade fairs and rail exhibitions in either Australia, the UK or in third countries, where appropriate; • Access to meeting facilities in the offices of ARA or RIA by members of either organisation. See the full press release here and contact RIA for further details – please email Neil.Walker@riagb.org.uk.
RIA Trade Policy Work After leaving the EU, the UK is seeking to develop an independent trade policy. Rail is a sizeable and strategically important industry for UK plc, both domestically and through its export potential. Currently worth £600 million a year, the UK railway export market could provide even more if the rail sector is included in, and takes advantage of, opportunities arising from trade deals the Government negotiates with EU and non-EU countries. RIA is calling on the Government to consider rail as a key part of future trade
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policy, highlighting our six key trade asks: 1. Rail to continue to be included in the negotiation of free trade deals – UK railway exports are a real growth opportunity; 2. Access to an appropriately skilled workforce and mobility for skilled UK workers, at all levels, to enable the UK to compete globally; 3. Consistent application of standards with mutual recognition/ equivalence and non-discrimination as core principles in all trade agreements;
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Australia Exports and Trade Market Briefing December 2021
Innovation in UK Rail
4. Smooth cross border trade rules – which minimise cost and delay, and avoid trade distortionary tariffs as much as possible; 5. Reciprocal rules on market access and domestic content. As rail is primarily
funded by the public purse throughout the EU and internationally, this is a key concern for the UK rail supply chain. 6. Opportunities for collaboration on rail research and development.
Key contacts From RIA:
Neil Walker, Exports Director, Railway Industry Association neil.walker@riagb.org.uk Kate Jennings, Policy Director, Railway Industry Association kate.jennings@riagb.org.uk Francesca Lentini, Senior Policy Executive, Railway Industry Association francesca.lentini@riagb.org.uk
From DIT:
Ian Barnett, Senior Trade Development Manager Trade – Infrastructure & Energy, British Consulate-General, Melbourne, Department for International Trade ian.barnett@fcdo.gov.uk
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