A new report from the Australasian Railway Association (ARA) has corroborated the significant benefits offered by a national approach to local content policies.
The Towards a national local content policy report was compiled by economics and strategy consultancy NineSquared on behalf of the ARA.
He revealed that most state governments use local content policies requiring some content to be sourced or manufactured in their state as part of their purchase of public transportation vehicles and components.
The report recognized that while achieving full harmonization of policies across states can be challenging, there are significant opportunities to achieve greater consistency by taking incremental steps toward a more national approach.
He recommended priority areas to consider as part of a path to harmonization, including:
- Develop a consistent definition of local content
- Create alignment of regulatory requirements between states
- Identify opportunities to integrate state requirements
- Understanding Federal Government Involvement
- Examine bid evaluation mechanisms
- Review audits and compliance requirements
- Generate greater market awareness of vendor capabilities and requirements
ARA chief executive Caroline Wilkie said the report confirmed that establishing a national local content policy for the Australian rail industry could bring significant benefits and increase the competitiveness of the industry.
Ms Wilkie explained that different sourcing approaches had limited market size, leading to price premiums that eroded value and impacted the competitiveness of the Australian market.
“Different local content policies between states can drive up costs, hamper investment, and create inefficiencies throughout the procurement process,” Wilkie said.
“A more holistic national approach to local content policies would help rail companies achieve economies of scale, reduce costs, improve quality and create greater competition in the marketplace.
“This would ultimately lead to better outcomes for industry and government, maximizing the return on investment for critical rail infrastructure.
“A nationally consistent approach would also allow industry to better adapt and evolve its products and services in response to changing technology and new skill requirements.”
macaw Towards a national local content policy the report can be read in full at this link.