Australia: Sydney's Metro - an Australian first

Last Updated: 8 December 2009
Article by Angela Jeppesen

By Angela Jeppesen.

Key Points:
Sydney Metro is procuring the permanent route infrastructure through a publicly funded design and construct contract, while the integrated metro operations are being procured as a Privately Financed Project.

After a significant strategic shift by Government away from the North West Metro Project in late 2008, the Sydney Metro Network Stage 1 (Rozelle to Central) (formerly the CBD Metro project) emerged as the proposed backbone to a new Sydney metro rail network. This Stage 1 is proposed to be a 7km long line through the Sydney CBD from Rozelle to Central. The metro concept is a high-speed, driverless train operating underground, with trains arriving every 2-3 minutes during peak periods.

One year on and the procurement of Stage 1 is going full steam ahead and the NSW Government authority, Sydney Metro, is undertaking work on the broader metro network strategy including detailed planning and pre-construction work for Stage 2 from Central to Westmead. Clayton Utz is part of Sydney Metro's integrated project team advising Sydney Metro on the delivery of Stage 1 and extensions.

Around this time last year Sydney Metro's integrated project team was faced with a number of challenges. Not only was the impact of the GFC hitting home after the collapse of Lehman Bros, but the project was subject to a not insignificant degree of political uncertainty and media scrutiny - not to mention being the first metro rail project of its kind to be procured in Australia.

Despite these, Sydney Metro obtained approval to go to the market for expressions of interest for a fully funded Stage 1. The response from the private sector showed strong interest both locally and internationally with expressions of interest received from five consortia for the permanent route infrastructure and seven for the integrated metro operations components.

The success of the expressions of interest stage may in part be due to Government's strategy to separately procure the permanent route infrastructure and the integrated metro operations allowing both local and international entities to focus on their core capabilities and smaller entities to be competitive at the lower project value for each component.

Sydney Metro is procuring the permanent route infrastructure through a publicly funded design and construct contract for the major civils components (ie. the tunnelling, surface civil works, station boxes and caverns).

The integrated metro operations are being procured as a Privately Financed Project (PFP) comprising all other components necessary for an operating metro, including the financing, design, construction, maintenance and operation of all the rail systems, rolling stock, station fit-out, operations control centre etc for a 35 year concession.

While the current economic conditions and the availability of project finance will continue to prove challenging, as the world economy recovers there is a positive outlook for the project, including a PFP component, particularly with the recent successful syndication of the financing of the Victorian Desalination project.

Stage 1 - where is it now?

Permanent Route Infrastructure - the three shortlisted consortia, LineOne, Metro Primo and the Thiess/John Holland Joint Venture [1] have now submitted tenders for the permanent route infrastructure contract, work on which is anticipated to commence mid next year.

Integrated Metro Operations - Sydney Metro issued the Call for Detailed Proposals for the integrated metro operations contract in October to the two shortlisted consortia - Kujika and MetOne [2] - with proposals due in March next year and the successful consortium due to be announced late 2010.

These milestones are significant achievements for Sydney Metro and the project, particularly in the current economic environment.

The broader metro network

Work has come full circle with an extension of Stage 1 to the north-west again being considered as part of the < a href="">broader metro network strategy investigations, together with other lines to the south-east and northern beaches.

Sydney Metro is looking to the future with a key requirement of the Stage 1 integrated metro operations being to retain flexibility to effectively extend Stage 1 from Central to Westmead (Sydney Metro Network - Stage 2) and subsequently out to the north-west, while also allowing for connections for the proposed new lines to the south-east and northern beaches.

Investigative work on Stage 2 (Central to Westmead) has ramped up with the Minister for Transport, David Campbell, announcing the proposed station locations for Stage 2 in June and the further commitment of $91 million from the Commonwealth Government to allow detailed planning and pre-construction works to be under way.

[1] LineOne (Abigroup Contractors Pty Ltd, Obayashi Corporation and McConnell Dowell Constructors (Aust) Pty Ltd), Metro Primo (Leighton Contractors Pty Ltd and S.E.L.I. Societa Execuzione Lavori Idraulici S.p.A.), Thiess/John Holland Joint Venture (Thiess Pty Ltd and John Holland Pty Ltd).

[2] Kujika (Keolis Australia Pty Ltd, Downer EDI Rail Pty Ltd, Thales Australia Limited, Bovis Lend Lease Pty Ltd and McConnell Dowell Constructors (Aust) Pty Ltd) and MetOne (Serco Australia Pty Ltd, Bombardier Transportation Australia Pty Ltd, Laing O'Rourke Australia Construction Pty Ltd and Hastings Management Pty Ltd).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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