Australia to remove tariffs for UK rail suppliers

By - World Infrastructure Journal

Australia to remove tariffs for UK rail suppliers

A recently agreed upon trade deal promises to grant UK suppliers unfettered access to the Australian market and government contracts – right at the moment UK rail seems to have faltered yet again domestically.

Under the terms of a recently agreed to trade deal, British rail companies are to be given zero-tariff access to Australia’s market. The agreement, which comes on the back of an Agreement in Principle between the Australian and UK Governments that was signed in June of this year, scraps the existing 5 per cent tariff on all rail products.

The deal, beyond offering more favourable terms on existing contracts, also allows British companies to bid on Australian government contracts related to rail infrastructure. This is big news for the UK rail industry, especially considering that Australia’s 22,500 miles of rail is currently being upgraded as part of a government-funded effort that will invest £82 billion in national rail and local metro lines over the next decade.

The signing of this agreement also offers an exciting opportunity for the UK government, which has been finding it difficult to change its poor record with rail domestically. Despite promising to rationalise the national rail network, the government has continually delayed the delivery of the long-awaited “integrated rail plan. ” Moreover, the HS2 project is currently being rocked by rumours that one of the planned lines across the Pennines will be downgraded, and that the eastern leg (which would run between Birmingham and Leeds) will be scrapped altogether. It is, as such, rather serendipitous that the international market for UK-produced rail goods and services has expanded at such a moment.

However, there is work to be done if this new opportunity is to be taken advantage of. For instance, the “rail network enhancements pipeline” (a list of upcoming upgrades to the railways nationally) has not been updated for a full year – making it difficult for supplier and policymakers alike to find ways to maximise productivity and rationalise production.

Nonetheless, the news that UK suppliers will find themselves on even footing with their Australian counterparts when bidding for contracts in the “number one priority market for rail businesses in the UK” is certainly welcome and should only help to grow the £800 million of rail-related goods and services that the UK currently sells worldwide annually. As the international trade secretary for Hertfordshire-based supplier Altro, Liz Truss said, “Australia is undergoing a huge reconstruction of its train networks and this trade deal will allow British companies to be even more competitive when bidding for these massive, multibillion-pound infrastructure projects. ”

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