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Signing of $700 million locomotive contract between Goninans and National Rail, 11 September 1995: speech

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News Release Hon. Laurie Brereton MP Minister for Transport ♦ Minister for Industrial Relations SPEECH BY H O N LA U RIE B R E R E T O N MP

Signing of $700 million locomotive contract between Goninans and National Rail S ep tem b er 11

I am delighted to be here today for the signing of what must be one of the most significant

commercial deals for the Newcastle region for many years — the $700 million contract between

National Rail and Goninans for the purchase and maintenance of up to 120 new locomotives.

1 congratulate NR for an investment that will provide a timely boost to the competitiveness of the

rail freight industry, something which has only recently been enhanced by the One Nation

Standard Gauge rail highway linking all mainland capital cities. Similarly, I warmly congratulate

the workforce and management of Goninans for winning what is Australia’s largest ever diesel-

electric locomotive supply contract. In the process you have provided a huge economic fillip to

this region, a region very close to the heart of all Labor politicians.

It’s not the first time the Government’s had cause to congratulate Goninans. For Goninans, along

with 90 other companies throughout the country, has previously been cited as a role mode! for

Australian industry through the Federal Government’s Best Practice Program.

Indeed in 1991 an expert panel — led by BHP’s CEO John Prescott — aw-arded Goninans

$500,000 in the first ever round of Best Practice funding.

This $25 million Best Practice program is a key innovation of my other department, Industrial

Relations, and promotes the adoption of world’s best practice by Australian firms.

It aims to encourage the involvement of workers in decision making processes, thereby building a

sense of teamwork dedicated to the pursuit of high productivity.

With Best Practice funding, and $5.6 million dollars of its own, Goninans embraced those

principles and laid the foundations for significant change. The end result has been a dramatic

improvement in its industrial relations climate.

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Indeed the current agreement with the three on-site unions has been a pacesetter in terms of best

practice and enterprise bargaining in the Hunter region.

It, along with earlier workplace changes, established the environment for success in large and

competitive tender processes, like that for the locomotives. As a result it will now deliver in

terms of jobs and investment for the whole area.

The contract will involve Goninan workers assembling at least 80 — and up to 120 — locomotives

here at Broadmeadow and at Bassendean in Perth. On top of that, a new maintenance plant will

be built in Melbourne to maintain the new locos for a 15-year period.

Eventually ten new locos will roll off the production line in Newcastle every six weeks, while six

will leave the Perth plant.

That’s double the rate of any similar Australian production in the past. Tribute again to the

workplace changes made by workers and management.

In the process there will be many, many winners. The Goninans team being the biggest.

But lets not forget the opportunities for about 300 sub-contractors, many of them in NSW.

Indeed its estimated that more than 1400 new jobs will be created during the construction phase —

the bulk of them right here in the Newcastle region.

All of these workers will help realise the Government’s quest to revitalise interstate rail freight

operations. That’s what all our rail initiatives in recent years have sought to do. The first

initiative being the actual establishment of NR two and a half years ago.


Since then NR, assisted by the $430 million One Nation track investment and an innovative

workforce and management, has substantially improved rail productivity and operating

performance, while halving interstate freight losses.

The $1.2 billion investment program now being undertaken by NR, of which this investment is

the major component, will help further improve the competitiveness of the industry.


So too, the Government believes, will a new initiative called Track Australia which I announced

at a function to celebrate completion of the standard gauge highway. It’s task will be to manage

the national rail network for the owners of the track. I expect that this authority will also

generate resources for future track investment, upgrading the network in accordance with

commercial requirements.

The viability of establishing Track Australia is currently being addressed in conjunction with «

State Governments who own relevant parts of the track.

Either way, to keep pace with the changing face of the rail industry, the acquisition of these new

locomotives is critical to the future success of NR.

NR can no longer afford the substantial number of breakdowns which have drastically affected its

ability to meet customer expectations.

Tire arrangements to be formalised today will help overcome this problem.

The new locomotives will be faster, quieter, they’ll boast state of the art technology. Furthermore

the greater fuel efficiency of the new units will cut NR’s fuel bill by $25 million in the first five


All this will mean far greater reliability, shorter transit times and lower costs.

As a result, the benefits of the investment will also be passed on to the freight forwarder, the

manufacturer and ultimately to all Australians.

The first locomotive will be handed over to NR in the second half of next year. It will be a

further milestone in NR’s and Goninan's development and will signify a new era for Australia’s

national rail freight system.