The total cost of the new Intercity Fleet (NIF) and Regional Rail Fleet (RRF) has risen to nearly A$7 billion.
The NSW Auditor-General has criticized Transport for NSW (TfNSW) over the combined cost of A$6.8 billion (US$4.4 billion) for the new Intercity Fleet (NIF) and Regional Rail Fleet (RRF) requested by the state. She also criticized the authority’s handling of the five-year delay in bringing the NIF into service.
The RRF contract was awarded in February 2019 to Momentum Trains, a consortium comprising CAF, UGL Rail and Pacific Partnerships.
The contract includes the design, manufacture and maintenance of the new fleet and also the design, construction, maintenance and commissioning of a new purpose-built maintenance facility in Dubbo, which has been completed and is now operated by UGL.
Deliveries of the new fleet of six trains are now continuing in Australia. However, the Auditor-General says the capital cost of the new fleet has risen by an estimated 53% to A$2.3 billion from A$1.26 billion when the contract was awarded. The first trains are expected to enter service in 2023.
The NIF, a new generation of intercity diesel trains known as the Mariyung Fleet, was built by the RailConnect NSW consortium of UGL, Hyundai Rotem and Mitsubishi Electric Australia under a contract awarded in August 2016.
Initially consisting of 55 10-car trains, the contract was later extended to include 610 cars for a total of A$2.4 billion. However, the cost has since risen to A$4.5 billion and the trains only entered service in late 2024 after deliveries began in late 2020, following a dispute with the Rail, Tram and Bus Union (RTBU) over safety concerns.
The Auditor-General says in his report that TfNSW has not actively procured either new fleet. In particular, the report says that TfNSW failed to:
- Scope or estimate the full costs of the NIF or RRF effectively to inform assurance activities or investment decisions, while significantly minimizing the cost of enabling work for both projects
- Correctly calculating the number of NIF trains needed to avoid overcrowding, although recognizing that overcrowding was likely on some peak services, resulting in additional work and costs, including purchasing additional trains at higher fares, and
- Actively engaging with drivers and onboarding staff during planning and procurement, limiting their ability to manage industrial business risks, specifically those related to the decision to introduce a driver-only NIF operation.
On the positive side, the Auditor-General says TfNSW followed the processes required by the NSW Government and its procurement policies, and managed integrity and conflict of interest issues in line with those policies.
The Auditor-General made five recommendations to TfNSW:
- Improve its use of demand forecasting to guide investment decisions and rolling stock purchasing activities
- Introducing mandatory stakeholder consultation requirements to guide rolling stock procurement projects
- Develop effective assurance processes throughout all phases of the project
- Improve public transparency by providing clear, consistent and comprehensive reporting on project scope, schedule and costs
- Ensure written advice provided to Ministers and the NSW Government is comprehensive, objective and evidence-based.
