All systems ‘go’ for rail supplier Downer EDI

The massive $3.6 billion rolling stock project is for supply of 626 electric double deck cars for the CityRail Sydney suburban network.
The company recently completed a $20 million upgrade of its Cardiff manufacturing centre to facilitate the delivery of the major PPP for Rail Corporation New South Wales (RailCorp).
The project is expected to inject more than $200 million into the local economy and positions the company to deliver world-class manufacturing and refurbishment services. This includes the overhaul of locomotives used in the Hunter Region’s coalfields and the ongoing delivery of new standard gauge AC traction motor locomotives
Within its freight business, Downer EDI Rail supplies locomotives, rolling stock and maintenance for operators in the mining, intermodal and bulk haulage markets. While history has shown that demand in these sectors fluctuates, CEO Guy Wannop, says that current demand is steady across all divisions of the business.

AJM: What are some of the biggest projects that Downer EDI Rail is involved with currently?
GW: Currently, Downer EDI Rail is involved in a major PPP project for the Rail Corporation of New South Wales. This $3.6b project involves financing, design, manufacture and through-life support (including maintenance, cleaning, repair and refurbishment for a minimum of 30 years) of 626 electric double deck cars for the CityRail Sydney suburban rail network. Downer EDI Rail recently completed the Critical Design Review and the first stainless steel body shells are due to arrive at our Cardiff manufacturing facility in the Hunter Region in August.
The facility upgrade includes new low and high voltage test sheds, static test facilities (including gauge, water and weigh test rigs), a dedicated cab assembly area, new state-of-the-art painting booth, refurbished turntable, and external concrete apron to facilitate large scale deliveries, new rail track and general earthworks.
Downer EDI employs more than 2,000 people in the Hunter Region, and the PPP will add around 190 tradespeople and specialist project staff to its workforce as well as a minimum of 30 apprentices. This employment will provide significant flow on effects for local suppliers and the broader community. Delivery of the final trains scheduled for 2013.
In addition to the PPP project, Downer EDI Rail supplies locomotives to major industry players for use in the Pilbara, Queensland coal fields and the Hunter Valley.

AJM: How much of your business do you see coming from mining moving forwards, say in the next 5-10 years?
GW: Potential opportunities will come from infrastructure investment combined with growth in demand for iron ore from the Pilbara and coal from the Hunter Region and Bowen Basin. The expansion of the capabilities of ports on the east coast of Australia will result in a need for more trains to meet export demands.

AJM: What are the most significant rail infrastructure issues affecting Australia’s competitiveness in your point of view?
GW: In order to move freight from road to rail, major capital investment in infrastructure is necessary, particularly on the east coast of Australia. This investment is crucial for economic, safety and environmental reasons. To avoid shortfalls in rail infrastructure the most efficient system needs to be achieved through co-ordination between mining companies, track owners, ports and rail operators. Infrastructure investment needs to take into account best value for money and the interdependencies inherent in this complex supply chain.

AJM: Do you think that the first round of Infrastructure Australia funded projects will have a knock on effect in creating business for Downer EDI either now or further down the track?
GW: Projects like the rail network infrastructure upgrades already announced for the Hunter Region will increase capacity and provide opportunities to supply new rolling stock to rail operators in this area. It is anticipated that other such projects around Australia will have a similar effect right across the Downer Group.