Article: Delayed train order cost $54m

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From the Melbourne Age click here!

Delayed train order cost $54m

Delayed train order cost $54m
Clay Lucas
October 9, 2010

A FLEET of new trains for Melbourne ordered by the Brumby government last year will cost almost $3 million more per train than identical vehicles bought just a year before.

The jump in price came after the government ignored its own findings on the number of new trains that would be needed to keep up with surging patronage.

The rise in the cost of 38 new Alstom X'Trapolis trains for Melbourne was due to currency fluctuations that changed the cost of the European-made vehicles.

The increased cost was revealed by Auditor-General Des Pearson in his annual review of state government finances, released this week.

In 2003, a shelved government plan predicted the government would need 74 new trains by 2013 to keep up with planned demand on the city's trains.

An order for new trains was not placed until February 2008, with French company Alstom contracted to build 18. These cost $14.4 million for each train.

By February 2009, as overcrowding became more severe, the government ordered 20 more trains from Alstom - by which time the cost had jumped by $2.7 million to $17.1 million each.

The Auditor-General found changes in currency prices had caused the difference in price.

''The Australian dollar became weaker against the euro between the time of the original order and ... purchase of the additional 20 trains,'' the report said.

Opposition transport spokesman Terry Mulder said the finding was proof the Brumby government had been too late to act on surging train patronage.

''We knew we needed all 38 of these trains, and this was just a budget decision. And I have no doubt that decision was made in part because so much money was being chewed up by myki at the time in 2008,'' he said.

The $54 million difference in cost could have been used to buy four more trains, Mr Mulder said.

Twelve of the new Alstom trains are already in service in Melbourne, with two more being prepared to run on the network now. Another new train will arrive by boat from Italy on Monday.

Of the entire 38-train order from Alstom, the first 18 are being built completely in Europe, with most of the manufacturing done in Poland and assembly in Italy.

The Victorian manufacturing industry objected after that 18-train order from Europe, leading to the next 20 Alstom units being manufactured in Poland, but assembled in Ballarat instead of Italy.

Australian Industry Group Victorian director Tim Piper said the recent awarding of a contract to Bombardier to manufacture 50 trams in Dandenong - with much of the vehicle manufactured in Melbourne - showed a local rail industry could once again thrive here.

The contract included an option for another 100 trams to be built in Dandenong.

Mr Piper said more rail manufacturing should be done here.

''It [would] take out all the vagaries of a Victorian government having to deal with a dollar that fluctuates. Let's not pretend that we can do all [manufacturing] here ... but up to 70 per cent can be done locally,'' he said.

A spokesman for Public Transport Minister Martin Pakula said the first order of trains had been made to get new trains on the network as soon as possible.