Australia Rail Infrastructure Investment
Australia is experiencing record levels of investment in infrastructure which is expected to peak at USD36 billion in 2023. According to Infrastructure Australia’s “2021 Infrastructure Market Capacity” report, the majority of investment activity and resource demand will be focused on road and rail, with rail activity being the largest driver of growth. Transport activity over the next five years is expected to be 68% higher than in the previous five years. At its peak in 2022 to 2023 the transport sector will consume over 80% of all resource demands.
The rail sector is critical to Australia’s economy, carrying passengers and commodities on over 33,000km of track. The sector generates annual revenue of USD18 billion and employs more than 50,000 people across 961 companies and agencies. These include private and public operators, passenger and freight operators, track owners and managers, manufacturers, and suppliers.
Significant rail infrastructure investment has in the past been driven by the construction phase of the mining boom, and then, in part, sustained by periods of strong extraction-based phases. The past five years have seen a significant upswing in Australians pursuing a regional lifestyle as technology and the global pandemic increases the trend towards working from home. Improving the local accessibility of smaller cities and regional centers to support economic diversification and sustainable population growth is seen as an important new driver of rail infrastructure investment. The National Faster Rail Agency is developing business cases for various rail corridors, while state and territory transport agencies are pursuing urban transport projects.
Challenges include expected shortages in skills, labor, and materials. Infrastructure Australia anticipates that the demand for plant, labor, equipment, and materials will be two-thirds higher than in the previous five years. Demand for quarried material and cement are likely to produce the most significant challenges due to their reliance on local supply chains. Steel, bitumen, and electrical control equipment are likely to be exposed to international demand and supply chain pressures.
The Inland Rail project is currently the biggest freight rail infrastructure project in Australia. The project will link ports between Brisbane and Melbourne, providing a much faster transit time for goods between the two cities. The project is estimated to cost USD7 billion and will take 10 years to deliver. Other key rail projects include: the Melbourne Metro Tunnel, the Melbourne Airport Rail Link, the Sydney Metro Project, and Brisbane Cross River Rail.
With strong investment set to continue in Australia’s freight and passenger rail infrastructure, Australian suppliers of rail technology, equipment, and solutions are open to reviewing opportunities to partner with and represent U.S. firms.
For more information on rail infrastructure projects and the Australian market for railroad technology and solutions please contact the U.S. Commercial Service in Australia: office.australia@trade.gov.