International Opportunities for

Australia’s Heavy Haul Sector and

Austrade Assistance Peter Ironmonger – rail sector lead & Trade Manager,

Infrastructure

Heavy Haul Conference Newcastle 2014

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Agenda

• Global HH Opportunities and Growth Areas

• How to Assess and Pursue the Opportunities

• Austrade’s role and assistance

• India freight rail snapshot

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Is there an Australian “brand” in HH rail?

• Feasibility and design, simulation modelling, systems integration

• EPCM

• Operations and asset management, remote condition monitoring, automation

• Training & Education

• Environmental sustainability, safety

• Regulation

• Innovation, R&D, niche equipment and technologies

• Flexible solutions for making things work reliably, efficiently in extreme conditions, high temperatures, remote locations, with longest and heaviest trains

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Opportunities and areas of growth – matched

with Australian capability

• GCC – UAE, Saudi Arabia, Oman

- harsh, remote conditions, greenfields, Aussie expats, capacity bldg

• South Asia – India and Pakistan

- little or no HH experience and expertise, positive re Aust

• SE Asia – incl. Indonesia, Thailand

- proximity to Australia, road freight congestion, capacity constraints

• Latin America – Brazil, Chile

- seeking operational and cost efficiencies, need for flexible

regulation model, resources focus

• Africa

- need for infrastructure, harsh conditions, resources focus

But Australian strategy, capacity and appetite to

compete is the key...

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- $15-25 billion

- Linking 6 GCC

members West to

East: Kuwait,

Bahrain, Qatar,

KSA, UAE, and

Oman via 2,177km

of railway

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GCC rail opportunities

Picture provided by Saudi Railway Company

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Assessing and Pursuing global rail opportunities

• Research and understand your global competitors and recognise what global markets truly value

• Utilise and cross-check diverse sources of intelligence and avoid taking anything on face value

• Partner where possible – understand where you fit in the global value chain and don’t try to go it alone – maybe start here in Aust

• Develop a strategy and deliver a tailored “pitch” re your competitive offering

• Be focused, persistent and be proactive

• Join missions and other initiatives to benefit from “Australia Inc”

• Allocate sufficient people and budget to global marketing and business development

• Seek help from others with relevant capabilities – consultants, ARA, ICN, State Govts, other more experienced companies, Austrade

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How Austrade can assist Australia’s rail sector • By knowing your (and the industry’s) capabilities and interests

are

• Global network, diplomatic status, to connect you with projects, decision-makers, partners – not only in rail, but infrastructure, resources, manufacturing, research, education and training, energy efficiency

• Through our relationships – e.g. in Japan, Korea, Turkey, Europe – for third-market projects

• Promoting and profiling Australia’s HH rail in partnership with other parts of govt, industry – e.g. HH capability brochure

• Information on opportunities, market dynamics and practices – rail market profiles – GCC, Brazil, India, Thailand, Turkey, etc

• Export Market Development Grants http://www.austrade.gov.au/Export/Export-Grants

• Introduction to Efic – SME and structured financial assistance - www.efic.gov.au

• Many other things – just ask and we will either assist or refer you to others who can

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Austrade’s global network

Peter Ironmonger, rail sector lead,

Trade Manager - Infrastructure

Phone: 02 9392 2784

Mobile: 0434 650 404

Email: peter.ironmonger@austrade.gov.au

For further information

India Freight Rail & Heavy Haul

Sector – Focus on DFC

Hemant Padale - Business Development Manager

Australian Trade Commission, India

Heavy Haul Conference 2014, Newcastle

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Indian Rail Market-

Abundant Challenges & Opportunities

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Overview on Indian Railways

• Owned and operated by Government

– Budget CAPEX for FY 2014-15 is $10 billion

– Annual procurement $ 5 billion (Import- $ 500 million)

• Fourth largest network & Second largest freight carrier

• 64,000 kms, 19,000 trains, 25 million passengers/day,

2.65 million tonnes freight/day

• Owns and Operates various manufacturing facilities

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Indian Rail Sector

• Dedicated Freight Corridor (DFC) Projects

• Urban Metrorail Projects

• Indian Rail Expansion & Modernisation Programs

• High Speed Rail Programs

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The Current Freight Scenario…

$14 Billion

Freight

Revenue

$43/tonne

$5 Billion

Passenger

Revenue

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Dedicated Freight Corridor (DFC) Project

• DFCCIL* – an SPV

• Length: 3,300 Km

• Cost: $16.7 billion

• Complete: FY 2018-19

• Funding Arrangement:

Government, JICA*,

World Bank and under

PPP

DFCCIL- Dedicated Freight Corridor Corporation of India Limited

JICA- Japanese International Co-operation Agency

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Dimensions for DFC Feature Existing On DFC

Moving Dimension

s

Height

7.1 m for Western DFC 5.1 m for Eastern DFC

Width

Container Stack

Single Stack

Double Stack

Train length

Train Load

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Design features of DFC Heavier Axle Loads

Axle Load 22.9t/25t

32.5t/25t for Track Superstructure

Track Loading Density

Maximum Speed

Single Stack

Double Stack

Grade Up to 1 in 100 1 in 200

Curvature Up to 10 degree Up to 2.4 degree

Traction Electrical(25 KV) Electrical(2x25 KV)

Station Spacing 7-10 Km 40 Km

Signalling Absolute/Automatic with 1 Km spacing

Automatic with 2 Km spacing

Communication Emergency

Sockets/Mobile Train Radio Mobile Train Radio

Existing On DFC

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DFC Project- Contracting Strategy

• FIDIC yellow book customized for Design – Build railway infrastructure works

• Slice and Package system – Enhanced competition

• PQ followed by one/two stage bidding – Pre-Qualification followed by two stage bidding – Eastern

Corridor

– Pre-Qualification followed by single stage bidding – Western Corridor

– Engagement of consultant through Quality-Cum-Cost-Based- System (QCBS)

• New Technology encouraged

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Future Plan for Dedicated Freight Corridors

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Impact on Bulk Commodity Transport

Pre DFC Post DFC

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What’s in it for Australia ?

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Global Collaboration with Indian Railways

• Recognition of Australian expertise in Heavy Haul

• Broader engagement strategy with Indian Railways

(Heavy Haul Rail)

• Current MOU with countries;

– Japan, China, Germany, France, Spain, Belgium, Austria, Czech

Republic

– Common areas of collaboration

o Development and Modernisation of assets

o High speed rail and improving speed on existing network

o Operation and Maintenance

o Safety and Station redevelopment

o Freight Rail

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Engagement Opportunities for Australia

• Collaborative Research with Indian Railways research

arm and Universities (Centre of Railway Research)

• Sharing of expertise on Rail Technologies

• Sharing expertise in Financing models and PPP

methodologies

• Engaging in common interest markets (Australia, Africa,

Middle East)

• Engaging with first & last mile connectivity project (private

port operator, private miners)

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Specific Opportunities for Australian Rail

Industry

• Consultancy Services – Project Management

– Quality/Safety Audit

– Freight Pricing; Marketing

– Capacity building; Earthworks; Energy efficiency

• Construction & Systems – Consultancy and design services

• Equipment and Technology – Technologies for condition monitoring

– Technologies for higher axle load and speed

• Education Services & Skills training – Development of Heavy Haul Research Institute & Rail University

– Training in areas of Heavy Haul operations

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Challenges and Mitigation Strategies

• Managing Business Risk

• Contracting Process

• Relationship Management

• Lack of Information

Partnership & Research

• Uncertainty

• Longer Gestation

• Human Resources

Long Term Approach

Within Control Limited Control

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Austrade Support in India

• Dedicated Rail & Transport Initiative team

• Profiling of Australian Rail capability

• Strong engagement with Ministry of Railways, DFCCIL, &

Other key players

• Opportunity identification

• Market Insights

• Partner search

• Market visit program

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Austrade Contact Points for India

Grayson Perry

Trade Commissioner

Email:grayson.perry@austrade.gov.au

Ankur Bhatia

Business Development Manager

(Infrastructure)

Email:ankur.bhatia@austrade.gov.au

Hemant Padale

Business Development Manager

(Infrastructure)

Email:hemant.padale@austrade.gov.au

Peter Ironmonger- peter.ironmonger@austrade.gov.au

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Back Slides

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Key Challenges & Mitigation – Indian Market

• Managing of Risk

• Bureaucracy & Project delays

• Tendering Process

• Lack of Transparency

• Financial constraints

• Relationship management

• Need of an agent /partner

• Lack of skilled manpower

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Strategies to tackle the challenges

• Partnership

• Research

• Patience & long term approach

• Relationships