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Australasian Railway Association Skills Capabilty Study

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Australasian Railway Association Skills Capabilty Study AUSTRALASIAN RAILWAY ASSOCIATION SKILLS CAPABILTY STUDY SKILLS CRISIS: A CALL TO ACTION NOVEMBER 2018 FOREWORD We are living through a renaissance of investment in rail. Projects such as Cross River Rail in Brisbane, Inland Rail, Sydney and Melbourne Metros, the Level Crossing Replacement Program, the Metronet project in Perth, rail extensions in South Australia, expansion of rail lines in the Pilbara, and numerous light rail projects in cities across the country, are heralding this renaissance. New Zealand too, is experiencing a deepening focus on rail. But this hasn’t always been the case. Rail investment stagnation, stop-start funding cycles and short term cost cutting have been a feature of the Australian rail sector since the 1980s. And one of the consequences has been the collapse in investment in training and skills development of the people to build our infrastructure and to operate and maintain first class rail services. This is a clear case of market failure. ARA commissioned this Report to undertake a workforce capability analysis based on planned and forecast rail infrastructure development in Australia and New Zealand over the next 10 years, with implications for a range of rail industry skills across construction, manufacturing, operations and maintenance. And to determine strategies to address them. The term supply and demand is well understood in the marketplace. However, as to rail skills in the current investment environment, it is a case of ‘demand and no supply.’ This is the crisis that this Report seeks to address. We welcome the massive investment in all aspects of rail now underway. This is crucial for our economic growth and improving amenity in our cities and regions. This Report should spur government policy makers, in partnership with industry and the training sector to take bold initiatives in workforce growth and development; cast aside ‘business as usual’ processes and take decisive action to produce the skilled workforce we need in rail passenger and freight transportation. Reform of considerable magnitude and intensity is essential if the looming skills crisis is to be avoided. To do otherwise, the consequence will be sub-optimal outcomes, cost blow outs and substantial delays in project delivery. This Report is a call to action. R N (Bob) Herbert AM Chairman of the Australasian Railway Association 1 TABLE OF CONTENTS Foreword ......................................................................................................................... 1 Executive summary ......................................................................................................... 2 1. Introduction .................................................................................................................. 7 1.1 Scope and methodology ...................................................................................... 7 2. Methodology ................................................................................................................ 8 2.1 Introduction .......................................................................................................... 8 2.2 Industry liaison ..................................................................................................... 8 2.3 Industry survey ..................................................................................................... 9 2.4 Quantitative analysis .......................................................................................... 10 2.5 Defining the rail sector ....................................................................................... 10 2.6 Defining the rail sector workforce capability skill sets ......................................... 11 3. State of play ............................................................................................................... 12 3.1 Australia ............................................................................................................. 12 3.2 New Zealand ...................................................................................................... 14 4. Skills forecasts by jurisdiction .................................................................................... 16 4.1 Summary of findings .......................................................................................... 16 4.2 Jurisdicitional Modelling Results ........................................................................ 18 5. Industry perspectives and challenges ........................................................................ 31 5.1 Key issues impacting on workforce capability .................................................... 31 6. Solutions and actions ................................................................................................. 53 6.1 Introduction ........................................................................................................ 53 6.2 Suggested actions .............................................................................................. 91 7. Appendix - Modelling methodology .......................................................................... 100 8. Appendix – ARA member survey ............................................................................. 115 8.1 Survey objectives ............................................................................................. 115 8.2 Location of rail sector services provided .......................................................... 115 8.3 Service type and role in rail sector ................................................................... 116 8.4 Work done in-house vs contract ....................................................................... 117 8.5 Existing workforce ............................................................................................ 118 8.6 Difficulties in recruitment .................................................................................. 124 8.7 Future concerns and risks ................................................................................ 126 9. References .............................................................................................................. 130 1 EXECUTIVE SUMMARY The overwhelming evidence is that there is a fast developing skills crisis in the Australasian rail industry. Shortages of skills are already apparent. With every new rail project this crisis is deepening. The inevitable result will be a substantial blow out in project costs and unavoidable delays in project delivery. Further, the training system across Australasia is not meeting the challenge of providing a ‘fit-for-purpose’ workforce to help ameliorate the looming skills crisis. Substantial reform is required, particularly cohesion between federal and state government jurisdictions, training providers, both public and private, and the rail industry itself. This report is a call to action. The rail industry is already a significant contributor to the economies of both Australia and New Zealand and this is set to grow as rail consolidates its position as the backbone of the transport system. With a concerted effort and commitment at the highest levels there are additional, worthy benefits to be reaped. OBJECTIVE In 2018, the Australasian Railway Association engaged BIS Oxford Economics to undertake a workforce capability analysis for the rail industry based on planned and forecast rail infrastructure development in Australia and New Zealand over the next 10 years, with implications for a range of rail industry skills across construction, manufacturing, operations and maintenance. Through expansive stakeholder and industry engagement – as well as gap analysis including extensive data analytics – this report seeks to explain how skills demand will form for the rail industry over the coming decade, what will be the key threats to workforce capability, and what industry and government can do to respond to meet the challenges of delivering on the significant rail infrastructure investment. KEY MESSAGES The key messages from the analysis undertaken for this report are: The rail industry in Australia and New Zealand is already experiencing skills shortages as investment grows in new rail infrastructure and rollingstock and operations expand, with the number of train drivers, controllers, track workers, signalling engineers and technicians, maintenance workers, electrical technicians and tunnellers not keeping up with growing demand. Just as importantly, from a future skills perspective, the industry is also suffering a chronic shortage of trainers and assessors. The skills challenge is intensified by the need to not only meet growing demand, but also to replace skills lost to an ageing workforce over the coming decade. The quantitative modelling for this report indicates that over 20 per cent of the existing workforce will retire by 2028, adding substantially to existing workforce gaps across the industry. 2 The ‘stop start’ history of rail investment in Australia and New Zealand – along with differences in standards and systems – has acted as a long run constraint to the sustainable development of skills for the rail industry. However, while the current ‘tsunami’ of rail investment (funded predominantly by the public sector) is creating a renewed sense of urgency towards the development of ‘construction-side’ skills, some of the largest risks relate to roles that will be required to operate and maintain the new rail networks once they are commissioned. These skills are not adequately
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