With deliveries of new locomotives at their highest level for 15 years, Mark Carter reviews the transformation underway and looks at new players entering the supply market.

INDUSTRY criticism is regularly levelled at Australia's ageing locomotive fleet. However, this is rarely viewed in the context of overall industry requirements and fails to take into account recent high levels of production.

The number of locomotives in use across all spheres of operation is currently around 2100 units. And while around 24% of this total is 30 years old or more, over 33% of the fleet, or some 700 locomotives, were delivered new or were substantially re-manufactured in the last decade. Of these 542 were delivered in the last five years.

Rather than a major fleet regeneration programme, Australia's mining boom was the major catalyst for this growth. The new locomotives are used predominately on frontline services leaving the part of the fleet that is in excess of 30 years old for regional freight services on low-volume branch lines and non-revenue duties.

The frontline fleet is at present made up of around 1300 locomotives, with a current average age of 11.6 years, which are used by rail operators for Hunter Valley and Queensland coal traffic, the Pilbara iron-ore railways and intermodal and other bulk traffics using the interstate mainline network. More specifically the average age of the combined Queensland coal fleet operated by Pacific National and QR National is less than eight years, while the Pilbara iron-ore and Hunter Valley coal fleets, operated by various owners, are on average around nine years old.

The decision in June this year by locomotive manufacturer Downer to cease production in Australia at a time when new locomotive deliveries are at their highest level for over a decade caught the rail industry by surprise leaving only UGL as the established local manufacturer.

Downer and UGL and their antecedents have delivered well over 80% of the current Australian motive power fleet, but there were already signs rail operators were starting to look outside of the duopoly.

QRNIn recent years, operators have had to pick from just three locally-produced 'off the shelf' products. UGL and Downer both produce a standard-gauge 3200kW model (the GT46C-ACe and C44ACi respectively) while Downer also produces a narrow-gauge 2260kW GT42CU-AC.

A combined total of close to 360 of these locomotives have been built in just over a decade. However, the high-output standard-gauge units do not come cheap, while the GT42CU is unforgiving on some of the lightly-laid track found frequently in Australia.

With a new mainline unit costing around $A 6m ($US 6.3m), rail operators have increasingly been looking for cost savings from foreign manufacturers. They have also been seeking a greater variety of products, the latter especially with regard to narrow-gauge operations, with US-based MotivePower and Progress Rail at the forefront of recent locomotive orders.

When Western Australian agribusiness CBH decided to take a greater control over its logistics operations by owning its own rail fleet, it turned to MotivePower for the supply of 22 locomotives (16 narrow-gauge MP27CNs and six standard-gauge MP33cs) for its grain haulage operations - management of which is contracted out to US shortline operator, Watco.

Powered by Cummins engines, a type not widely used in Australia, and nominally rated at 2015kW narrow-gauge and 2640kW standard-gauge, delivery took only a year following the signing of contracts.

MotivePower subsequently secured an order to supply 10 standard-gauge MP33C locomotives to CFCL Australia's leasing rail joint venture. This will instigate the retirement of some of CFCLA's older lease units as well as accommodate increases in intermodal grain haulage in the eastern states.

Since the late 1970s, government and post-privatisation owners of the narrow-gauge railfreight network in Tasmania have maintained operations by purchasing second-hand locomotives from other operators as well as rebuilding a handful of their own. With the state government having resumed ownership, it is somewhat ironic that it will be responsible for acquiring the first new locomotives for the island's railways in almost 40 years.

Progress Rail beat off competition from Bombardier, National Rail Equipment Corporation (NREC), United States, and CSR Qishuyan to secure the contract for 17 new locomotives valued at more than $A 60m. With Downer as its Australian partner, Progress Rail will supply the 1640kW units powered by Caterpillar 3512C engines, another engine manufacturer that is yet to secure widespread use in Australian rail applications. Delivery of the first locomotive is scheduled for mid-2013, with completion of the order by late 2014.

Open-access intermodal operator SCT Logistics first considered purchasing locomotives from China back in 2005, but eventually opted for 15 locally-built Downer EMD-powered GT46C-ACe units which were delivered in 2008. However, with extra motive power required by its new bulk haul subsidiary, the company again looked to China and settled on a 3000kW SAD1 model from CSR Ziyang that will use an MTU 20V4000R43L engine.

The first six locomotives arrived in Australia in February, and although a specific contract value has not been made public, it can be safely assumed that the purchase price is considerably less than comparable Australian-built units. Cleared for operation across most of the interstate network, the locomotives have already performed impressively on iron-ore trains in South Australia, with other operators no doubt watching developments closely.

For almost two decades when looking to rebuild or remanufacture locomotives, operators have opted to use domestic niche manufacturers. But even this option now appears to be heading offshore with Qube Logistics opting to purchase eight 132-tonne, 2460kW model E-3000E3B locomotives from NREC utilising refurbished EMD 16-645E3B power units.

In their 2012 annual reports, both Downer and UGL indicated that they believe even with mining investment slowing, the locomotive market is likely to remain healthy for some time in Australia counteracting claims from some in the industry. The fact that there are 500 locomotives in service that are 30 years old or more indicates there is a strong opportunity for further revitalisation of the fleet over the next few years.

But with some operators already identifying locomotives from overseas manufacturers as better suited to their specific needs, and others seemingly waiting to see if these new models are reliable in Australian conditions, foreign-developed and produced units could soon be the locomotives of choice when in search of cost-effective replacements.