Politics threatens East West Link in Melbourne 08 Oct 2014
- Contracts are signed for construction of the East West Link in Melbourne, but uncertainty is overshadowing the project following news that Victoria State Labour Party will try to scrap it if wins power in the forthcoming November elections.
Contracts signed, but East West Link under threat
- An Aust$5.3 billion public-private partnership contract between the Victorian State Government and the Lend Lease/Acciona/Buoygues joint venture was signed on 30 September. However, the Labour Party wants to kill off the project and instead divert the $3 billion worth of state and Federal funding that is earmarked for the East West highway project into its preferred scheme for an underground rail line under the city centre.
- To make matters even more uncertain the Liberal-led Coalition Government has just lost the first round of a Supreme Court battle launched against it by two local Melbourne councils. The local councils claim that the Government’s planning minister did not consider East West Link’s economic benefits properly before making his decision to approve the scheme, which includes 4.4km of 15m diameter twin running tunnels.
- A final decision by the Court is expected in December. If the Government loses the case the Labour Party says it will pull the plug on the project if it has been returned to power in the elections. Current polls suggest that Labour enjoys a significant lead and is likely to form a new Coalition Government come 29 November.
- Such action, however, is likely to spark more legal hearings, with the East West Connect joint venture construction and finance consortium likely to sue for breach of contract and financial compensation.
Melbourne awards highway mega-project 09 Sept 2014
Peter Kenyon - TunnelTalk
- Melbourne selects the Buoygues/Acciona/Lend Lease joint venture, collectively known as the East West Connect (EWC) consortium, as preferred bidder for design and construction of the Aust$6-8 billion East West highway link mega-project.
- The decision follows a four-month technical evaluation period by the contracting authority, the Linking Melbourne Authority (LMA). LMA will now deal exclusively with EWC to confirm technical aspects of the proposal and is expected to announce official award of the contract in the coming weeks. Excavation is expected to be by TBM of up to 15m diameter.
- The 18km highway project is split into two phases - the eastern phase, which includes at its heart a 4.4km long three-lane twin-running tunnel - and a western phase which is due to go into an advanced planning stage at the end of this year (2014).
- Construction of the whole of the eastern section - which includes road connections at either end, a major bridge, as well as two cut-and-cover portals and the main tunnel itself - is scheduled to take five years, with the tunnel section scheduled to take three years to build. An interchange with the busy Elliott Avenue highway, which was in the original design to allow entry and exit to the main tunnel alignment prior to it emerging from the western portal for connection with the City Link freeway, has been shelved.
- Two other joint venture teams were shortlisted to bid for the contract, but lost out at the final evaluation stage. They were:
- Inter Link Group, comprising Cintra Infrestures SA, Retail Employees Superannuation, Samsung C&T, Ferrovial Agroman (Australia), Ghella, Transfield Services (Australia) and Macquerie Capital, and;
- Momemtum Infrastructure, comprising John Holland, Dragados Australia, Leighton, Iridium Concesiones and the Bank of Tokyo-Mitsubishi IFJ.
- The contract will be let on an Availability PPP basis, under which the winning bidder will receive periodic payments according to a pre-agreed performance schedule, with tolling risk in the hands of the public sector. The more usual PPP form of contracting has seen a number of contractors in Australia deliver high quality road tunnel infrastructure that has hit financial trouble when the toll income, post-construction, failed to match the overoptimistic forecasts upon which the concession competition was based. The method also enables losing bidders to be compensated for their technical submissions, which can then be utilised as part of the winning bid.
Three lane twin tube design requires 15m TBM
East West Link alignment link the M2 and E3 highways
- The Federal government will be contibuting Aust$3 billion towards the Aust$12-16 billion total cost of the project (eastern and western sections), while the Victoria State Government has shouldered the procurement costs to get the project to the construction phase.
- "This is another important milestone which brings us a step closer to the start of major construction by the end of 2014," said Jamie Briggs, Victoria State Government's Assistant Minister for Infrastructure.
- "Following an extensive evaluation process the Victorian Government will now enter into exclusive negotiations with East West Connect to deliver what is one of the world's largest infrastructure projects currently out to tender," said Victoria State Government Treasurer Michael O'Brien. "Negotiation with the preferred bidder around the delivery of the eastern section of the East West Link commences the final stage of the tender process."
- A reference design for the project, drawn up by project owner LMA, specifies a preference for TBM excavation of the tunnel, but the contracting method used openly encourages bidders to make technical suggestions of their own. Borehole investigations completed over the last two years suggest a predominant geology along the tunnel alignment of high strength basalt of up to 249MPa, transitioning into sandstone, siltstone and mudstone.
- Melbourne contracting model to minimise risk - TunnelTalk, November 2013
Australia suffers toll concession failures - TunnelTalk, July 2013