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Category: Rail Transport / Industry / State Parliament / Unions

Report critical of NSW train deal with South Korea

Thursday, 1 Sep 2016 04:45:33 | Andrew Griffits

The report says the trains will also be maintained by Korean workers. (Supplied: NSW Government)

A report by think tank The Australia Institute has criticised the New South Wales Government's decision to award a multi-billion dollar transport infrastructure contract to a foreign consortium.

Earlier this year, the NSW Government awarded a $2.3 billion contract to the RailConnect Consortium to build an inter-city train fleet for the state.

Five hundred new double-decker carriages will be built in South Korea

The trains will run between Sydney and Newcastle, the Central Coast, the South Coast and the Blue Mountains.

Transport Minister Andrew Constance has previously defended the decision to send manufacturing offshore, saying the move represented a 25 per cent saving.

But the report, commissioned by the Australian Manufacturing Workers' Union, has criticised the procurement process.

Institute chief economist Richard Denniss said that, in pursuing the cheapest option, the Government had ignored the wider economic impacts of the deal.

Dr Denniss said: "the NSW Government has, by its own description, purely set out to say, 'what's the cheapest that we can buy these trains?'"

"There's been no comprehensive cost-benefit analysis of the flow on jobs, the training, the investment, the skills that could be developed in the NSW economy from building what is a very large number of public transport assets."

Maintenance may be done by overseas workers

Dr Denniss said it also appeared likely that foreign workers would be used to maintain the new carriages.

"The contract that's been signed suggests that not only will the trains be built overseas ... but overseas workers will come here to perform scheduled maintenance.

"[It is] a very short-sighted approach to skills development and investment in this country."

The report recommended the Government put the contract on hold and undertake what it called "a comprehensive, public, and transparent economic and financial analysis of the costs and benefits of sourcing this important work domestically versus offshore."

"They really should revisit the decision and perform a full cost-benefit analysis," Dr Denniss said.

"Not just try and find the cheapest price, but try and find the best value for NSW and for the Australian economy."

The ABC has contacted the NSW Government for comment.

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