Report snapshot: Rail rolling stock procurement

21 October 2025
Transport

About this report

This audit assessed how effectively Transport for NSW (TfNSW) procured the New Intercity Fleet (NIF) and the Regional Rail Fleet (RRF).

The combined estimated capital cost to completion of these procurements is currently $6.8 billion.

Findings

TfNSW did not effectively procure the New Intercity Fleet or the Regional Rail Fleet.

TfNSW did follow the processes required by the NSW Government and its own procurement policies, and managed probity and conflict of interest issues in alignment with those policies.

TfNSW did not effectively scope or estimate the full costs of the NIF or the RRF to inform assurance activities or investment decisions, and significantly underestimated the costs of enabling works for both projects.

TfNSW did not properly account for the number of NIF trains needed to avoid overcrowding, despite being aware overcrowding was likely on some peak services. This led to additional works and costs, including purchasing additional trains at higher prices.

TfNSW did not engage effectively with drivers and guards in planning and procurement. This limited its ability to manage the risks of industrial action, specifically those related to the decision for the NIF to be driver-only operated.

Documented ‘lessons learnt’ warned of the risks of using a Public Private Partnership (PPP) for the procurement of rolling stock, including the risks of variations. However, TfNSW did not effectively manage these elevated risks for the RRF, which were exacerbated by the decision to not include operation of the fleet in the PPP.

Recommendations

The audit makes six recommendations to TfNSW which relate to:

  • improving its use of demand forecasting to inform investment decisions and rail rolling stock procurement activities
  • introducing mandatory requirements for stakeholder consultation to inform rail rolling stock procurement projects
  • developing effective assurance processes at all project stages
  • improving public transparency by reporting clearly, consistently and comprehensively on the scope, timeline and costs of projects
  • ensuring written advice to ministers and Cabinet is comprehensive, evidence-based and objective
  • maintaining and properly classifying records, including advice to ministers and government, at all project stages.

Fast facts

  • 5 years delay between the planned and actual date of the first NIF trains entering service
  • 3+ years forecast delay for the first RRF trains to enter service (from early 2023 to late 2026)
  • >55% increase in the estimated capital cost to complete the NIF (from award of contract)
  • >53% increase in the estimated capital cost to complete the RRF (from contract award)
  • ~$4.5b current estimated capital cost to complete the NIF
  • ~$2.3b current estimated capital cost to complete the RRF

Further information

Please contact Renee O'Kane, Chief of Staff, on 9275 7347 or by email.

Rail rolling stock procurement