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Fight over 498 new CityRail carriages

Workers in the CityRail maintenance depots at Flemington, Mortdale and Hornsby went on strike on March 16 to protest at the NSW Labor Government�s decision to allow 80% overseas content in the tender for 498 new CityRail carriages. Workers in Newcastle went on strike the next day, marching on Labor MPs after a rally at Parry St Sports Ground.

Newcastle rolling stock manufacturing workers take to the streets on March 17, 2005. Photo: AMWU

The unions are furious that the decision to source the carriages overseas will wipe out the rolling stock manufacturing and maintenance sector in NSW, which employs over 2,000 workers, with skills ranging from design right across to maintenance. There are thousands more employed in related industries.

Senior Deputy President Hamberger of the Australian Industrial Relations Commission recommended, in response to the strikes, that RailCorp engage its maintenance workers in intensive consultation about the PPP, which threatens employment at the CityRail and CountryLink fleet depots.

At the first consultative meeting on April 6, RailCorp said that the consultation was to implement the PPP. Mark Morey, representing the RTBU, insisted that the unions wouuld continue to fight the PPP.

A real sticking point for the maintenance workers is that the government has thrown into the PPP the last 40 Milennium trains, due to be delivered in September 2005.

"This government screams about a skills crisis. But they export hundreds of skilled jobs each year when they send these contracts overseas," said Paul Bastian, NSW Secretary of the Manufacturing workers Union, at the time of the strikes.

"NSW business and unions have told the Government the same thing - send these contracts overseas and you can kiss goodbye to the entire NSW rolling stock industry. That means thousands of jobs and vital skills.

The Expressions of Interest were called in August 2004, but included a provision for only 20% local content, when the previous Transport Minister, Michael Costa, had promised that the new carriages would be built in Australia.

Shortlist

On March 1, the new Transport Minister, John Watkins, announced that the $1,500 million project was now shortlisted to the following bidders:

290 double-deck air conditioned carriages:

Star Transit (United Goninan, Mitsubishi Electric)
Reliance Rail (Downer, EDI Limited, ABN-AMRO, Hitachi, AMP Capital Investors Limited)

208 single deck air-conditioned carriages:

Star Transit
Reliance Rail
Aurora Rail Partnership (Siemens, Commonwealth Bank)
Bombardier Consortium (Bombardier Transportation, Plenary Group, Deutsche Bank)

The union protest meetings, strikes and rallies have been led by the Australian Manufacturing Workers Union, the main union in the rolling stock manufacturing and maintenance area, along with the Rail Tram & Bus Union and the Electrical Trades Union.

Another controversial aspect of the tender is that it takes the form of a Public Private Partnership (PPP), under which the winning group finances the construction and maintains the new rolling stock, and the NSW government pays the consortium for the next 35 years.

The PPP initially splits the rolling stock maintenance system for RailCorp into two parts, creating a new level of uncertainty in the rail system, and creating the potential for workers doing similar tasks being paid on different terms. It is most likely to privatise the entire sector.

The PPP is much more expensive to RailCorp than if the NSW government simply borrowed the money and paid for the construction. It relies on the crazy idea that it is bad for the NSW government to borrow funds, but good for the consortium to borrow even more funds.