Published on
October 24, 2025
Transport for New South Wales (TfNSW) has come under scrutiny from the New South Wales Auditor-General, who has raised concerns over the rising costs and significant delays associated with the procurement of the New Intercity Fleet (NIF) and Regional Rail Fleet (RRF). The total combined cost for these fleets has soared to nearly $A 7 billion ($US 4.4 billion), an increase that has attracted criticism for its management and procurement practices. The Auditor-General’s report also points to a delay of five years in the NIF entering service, further highlighting inefficiencies in the process.
Cost Overruns and Procurement Challenges
The NIF and RRF projects, which were meant to modernize the rail system in New South Wales, have experienced significant cost overruns. The original contract for the RRF, awarded to Momentum Trains in February 2019, was valued at $A 1.26 billion. However, due to increased costs, the project’s capital expenditure rose by an estimated 53%, reaching $A 2.3 billion. This 53% increase underscores the difficulties TfNSW faced in accurately forecasting the full costs of the project, which included design, manufacture, and maintenance of the new trains, as well as the construction of a new maintenance facility in Dubbo, which has already been completed.
In addition, the NIF, a new generation of intercity diesel trains known as the Mariyung fleet, was originally set to include 55 trains under a contract awarded in 2016. The project was later expanded to include 610 cars, increasing the overall cost from $A 2.4 billion to $A 4.5 billion. However, the first trains were not expected to enter service until late 2024, despite deliveries beginning in 2020. These delays were largely due to a dispute with the Rail, Tram and Bus Union (RTBU) over safety concerns, further compounding the challenges faced by TfNSW.
Auditor-General’s Criticisms and Recommendations
The Auditor-General’s report criticizes TfNSW for its failure to effectively estimate the full costs and plan for the long-term needs of the NIF and RRF projects. The key concerns include:
- Inaccurate Cost Estimates: TfNSW underestimated the total costs involved in both projects, particularly in terms of enabling works required for the successful implementation of the fleets.
- Inadequate Planning for Capacity: TfNSW failed to properly assess the number of NIF trains required to avoid overcrowding, despite knowing that peak services were likely to be overcrowded. This oversight led to additional works and the purchase of more trains at higher prices.
- Limited Stakeholder Engagement: The report found that TfNSW did not engage effectively with drivers and onboard staff during the planning and procurement process. This lack of consultation resulted in difficulties managing risks such as industrial action, which was triggered by the decision to introduce driver-only operations on the NIF trains.
Despite these shortcomings, the Auditor-General acknowledged that TfNSW followed the required procurement processes set by the NSW government and managed probity and conflict of interest issues in line with those policies.
Future Actions and Recommendations for Improvement
The Auditor-General has made five key recommendations for TfNSW to improve future procurement projects:
- Enhanced Demand Forecasting: TfNSW should improve its use of demand forecasting to better inform investment decisions and rolling stock procurement activities.
- Mandatory Stakeholder Consultation: The agency should introduce mandatory requirements for stakeholder consultation to ensure that all parties are adequately involved in rolling stock procurement projects.
- Strengthened Assurance Processes: TfNSW should develop more effective assurance processes at all stages of procurement to ensure projects are delivered on time and within budget.
- Greater Public Transparency: TfNSW should improve its public transparency by reporting clearly, consistently, and comprehensively on project scope, timelines, and costs.
- Comprehensive Advice to Ministers: Written advice to ministers and the NSW Cabinet should be evidence-based, objective, and comprehensive to support informed decision-making.
Conclusion: A Critical Step for Future Rail Projects
The significant delays and cost overruns in the New Intercity Fleet and Regional Rail Fleet projects highlight the importance of improving procurement practices and ensuring that future rail projects are better managed. While TfNSW has made strides in rail modernisation, the Auditor-General’s report provides valuable insights into areas that need attention for the successful delivery of future infrastructure projects. By addressing these recommendations, TfNSW can ensure that it meets its objectives for sustainable, efficient, and reliable rail transport in New South Wales.
