IN THIS EDITION

1. Federal Government commits $5 billion for Airport Rail Link 2. Western Sydney Airport Delivery Partner shortlist announced

3. $1 billion Federal funding for Pacific Motorway M1 upgrades 4. Josh Frydenberg delivers energy policy address to the National Press Club

5. NSW Government introduces bill to Parliament to form Authority; NSW Labor Opposition says it will not proceed with Sydenham to Bankstown metro conversion if elected

6. Additional $75 million committed to the renamed $375 million Mordialloc Freeway 9. Industry news

10. Industry appointments 11. IPA news

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1. Federal Government commits $5 billion for Rail Link

This week the Federal Government announced it would commit $5 billion towards the Melbourne Airport Rail Link (MARL). Media reports indicate the MARL could cost up to $15 billion depending on the route chosen, with the Federal Government expecting the Victorian Government to match the commitment. The nature of the contribution remains undefined, with the Prime Minister indicating a preference for a structure which would retain an equity interest for the Commonwealth. It is unclear at this stage how a taxpayer contribution could be structured as equity, noting that a greenfield suburban rail line is highly unlikely to be cash-flow positive.

In conjunction with the announcement, the Federal Government released the four route options being considered for the MARL (Figure 1). All four options are expected to have an underground station at Melbourne Airport, while three out of the four options would see the MARL join the via Southern Cross Station. However, there is also an option for the MARL to join the new Metro , which is scheduled to open in 2026, using the Albion East design route.

Figure 1: Proposed routes for the Melbourne Airport Rail Link Source: Federal Government

The previous MARL Study, conducted by Public Transport in 2013, looked at all four routes under consideration as part of the current business case process, with the 2013 study concluding that the Albion East Design was the preferred route.

Media reports suggest that the Federal Government prefers the Flemington or the Direct Tunnel routes because of the potential to unlock the former Maribyrnong defence site. However, these routes could be the most expensive options as both would require extensive tunnelling.

The less direct routes of Albion East design and Craigieburn use existing rail lines, so would likely be cheaper.

In making the announcement, the Prime Minister reiterated the expectation that the Victorian Government will partner with the Commonwealth on a 50:50 basis. However, the Prime Minister indicated a preference that Commonwealth support be structured as an equity contribution – but did not offer further details of how this would work in practice.

The project business case will be undertaken to assess each route to help inform the final decision. The business case is expected to be completed later in 2018, with construction potentially starting as early as 2020.

Links

Read the Federal Government’s media release HERE Read IPA’s media release HERE Read IPA's commentary in The Australian HERE View Melbourne Airport Rail Link on infrastructurepipeline.org HERE

△ back to top 2. Western Sydney Airport Delivery Partner shortlist announced

This week WSA Co announced a shortlist of four parties for the Delivery Partner contract as part of the $5.3 billion Western Sydney Airport (WSA).

The delivery partner will provide project management, planning, design development and construction management services to WSA Co throughout the delivery of the Enabling Works - Early Earthworks and Main Works Packages 1, 2 and 3.

The shortlisted parties are:

Bechtel; a Jacobs, Mott MacDonald and Seymour Whyte joint venture; Laing O'Rourke; and WSP.

The shortlisted parties will now progress to the Request for Tender (RFT) phase, with the contract expected to be awarded in mid-2018, in time for the commencement of early earthworks in Q3 2018 (shown in Figure 2).

Figure 2: Indicative delivery timeline of major works packages

Source: WSA Co

View a larger version of this image HERE

An RFT for the Project Manager (Definition) role is also expected to be released later this month once a shortlist is selected from the Expressions of Interest (EOI) phase, which closed in February.

The Project Manager (Definition) will support WSA Co in managing the design of terminal buildings, speciality works, landside facilities and the general precinct. This will include coordination of WSA Co’s advisers and contractors to ensure project objectives are met, in collaboration with the Delivery Partner.

The duration of the contract will be from award – expected in early June 2018 (see Figure 3) – up until the commencement of the tender processes for Main Works Packages 2 and 3.

Figure 3: Delivery Partner and Project Manager (Definition) indicative procurement timeline Source: WSA Co

Links

View Western Sydney Airport on infrastructurepipeline.org HERE

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3. $1 billion Federal funding for Pacific Motorway M1 upgrades

The Federal Government has committed $1 billion towards the upgrade of the Varsity Lakes to Tugun and Eight Mile Plains to Daisy Hill sections of the Pacific Motorway M1 Upgrade in Queensland.

The Varsity Lakes to Tugun section will include:

widening of the north and southbound carriageways to six lanes (from the current four lanes); construction of a direct northbound off-ramp from the M1 to Southport – Burleigh Road; ramp upgrades, including auxiliary lanes and reconstruction works; and cycling and pedestrian upgrades.

During its election campaign, the Queensland Government committed to provide $206 million in funding towards the $1.03 billion project cost, based on an 80 per cent funding share from the Commonwealth Government and 20 per cent from the State. However, the Federal Government’s commitment this week confirmed that it will only fund a 50 per cent share of the preliminary funding estimate, subject to a positive assessment of the final business case by Infrastructure .

A preliminary business case for the project is currently being developed by Building Queensland and the Queensland Department of Transport and Main Roads.

Subject to a positive business case assessment and finalisation of funding arrangements, construction of the project is expected to commence in 2020, following the completion of the Mudgeeraba to Varsity Lakes M1 Upgrade.

Additionally, the Eight Mile Plains to Daisy Hill section includes:

widening of the nine-kilometre section of the M1 from six to eight lanes; ramps consolidation; the addition of managed motorway technology; and extension of the South East Busway to Springwood is also being considered as part of the project.

Building Queensland is currently developing a detailed business case for the project. The Commonwealth Government’s funding commitment is based on a 50:50 funding split between the State and Commonwealth governments.

Both projects were identified as near term (0-5 years) Priority Initiatives in Infrastructure Australia's March 2018 Infrastructure Priority List. Links

Read the Federal Government’s media release HERE Read Infrastructure Australia’s Infrastructure Priority List HERE View Varsity Lakes to Tugun on infrastructurepipeline.org HERE View Eight Mile Plains to Daisy Hill on infrastructurepipeline.org HERE

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4. Josh Frydenberg delivers energy policy address to the National Press Club

This week the Federal Minister for Environment and Energy, Josh Frydenberg, delivered an address to the National Press Club titled 'Powering forward: The National Energy Guarantee'. Minister Frydenberg reaffirmed the Federal Government’s position with regard to the need for market based solutions, ensuring a strong role for the private sector and ending distortionary subsidies.

Minister Frydenberg’s address considered three key issues:

the scale of change underway in the energy market; the ongoing and polarising political debate on energy policy; and the case for the National Energy Guarantee (NEG).

Minister Frydenberg began by highlighting that the change underway in the energy system has meant that the existing market structures are no longer fit for purpose. He argued that the market is “no longer delivering the consistently low wholesale prices and the effective signal for new investment which were its hallmarks”.

With regard to the ongoing political debate, Minister Frydenberg made it clear that the Federal Government supports market-based solutions stating that, “we need to find sensible, workable, affordable market based solutions that meet the requirements of the Australian people”.

He pointed to the importance of ensuring domestic gas supply to help “smooth out renewables” and suggested that the market has signalled it is “more willing to upgrade existing plants where the upfront capital investment has already been made than build new ones”.

Turning to renewables, Minister Frydenberg confirmed the Federal Government’s position stating that “the time for new subsidies is over” and to instead “let them battle it out in a properly regulated, technology neutral market.”

Minister Frydenberg acknowledged that Australia is moving towards a “carbon constrained future”, but argued that “calls to decarbonise the economy overnight are irresponsible as they are futile” and as such “only international action can make a difference”.

The Federal Government asserts that under the NEG wholesale prices will fall by 23 per cent over the period 2020 to 2030. It also provides an “in built check and balance” via the reliability component, to account for the fact that states have separate schemes to incentivise renewables.

Minister Frydenberg asserted that market concentration is a problem, which is why the Federal Government has tasked the Australian Consumer and Competition Commission (ACCC) to examine the competitiveness of retail electricity supply, he said. He also suggests that there are opportunities for medium-sized players to “expand market share through innovation”.

The next Council of Australian Governments (COAG) Energy Council meeting is scheduled for Friday 20 April 2018.

The Energy Security Board will be presenting a high level model of the NEG and seek Council’s “agreement to move to the next phase of detailed design”.

The proposed timing for final design is August 2018, with legislation to set the emissions target and enact the mechanism, to be passed by the end of the calendar year.

Links

Read Minister Frydenberg’s address to the National Press Club HERE

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5. NSW Government introduces bill to Parliament to form Sydney Metro Authority; NSW Labor Opposition says it will not proceed with Sydenham to Bankstown metro conversion if elected

This week the NSW Government introduced the Transport Administration Amendment (Sydney Metro) Bill (the Bill) to Parliament, to establish a Sydney Metro Statutory Authority (SMA). If passed, the SMA will be owned by the NSW Government and sit within the Transport cluster.

The Transport Administration Amendment (Sydney Metro) Bill 2018 proposes the formation of SMA, which will see Sydney Metro owned by the NSW Government in a corporatised structure, similar to that of Sydney Trains.

According to the Bill, the principal objectives of the SMA will be to:

“deliver safe and reliable metro passenger services in an efficient, effective and financially responsible manner”; and “facilitate and carry out the orderly and efficient development of land in the locality of metro stations, depots and stabling yards, and proposed metro stations, depots and stabling yards.”

To this end, SMA may design, construct, develop and operate the Sydney Metro network, and develop land around the current or proposed metro stations, depots or stabling yards.

At present, the Sydney Metro project is being delivered by the Sydney Metro Delivery Office, which sits under Transport for NSW (shown in Figure 4). Under the legislation, delivery of the Sydney Metro project would be transitioned into the proposed SMA. Pending passage of the legislation, the SMA will come into effect on 1 July 2018.

Figure 4: Current NSW Transport cluster organisation chart

Source: NSW Government

Also this week, the NSW Labor Opposition announced, if elected, that it will not proceed with the Sydenham – Bankstown component of the $12.5 billion Sydney Metro – City and Southwest project. The Opposition stated that they would use the funds to fast-track the Sydney Metro West project.

The NSW Opposition stated that not proceeding with the Sydenham – Bankstown Metro conversion would “free up billions of dollars” to fund the Sydney Metro West project. As part of the announcement, NSW Labor also stated that it will not proceed with the Beaches Link project.

However, Labor’s announcement would impact multiple packages of work on the Sydney Metro – City and Southwest project, with contracts already awarded for the Sydenham Station and Junction Works and and Station Excavation Works packages. Another two packages; the Line-wide Works and Southwest Station and Corridor Works are presently under procurement and are expected to be awarded ahead of the NSW Election in March 2019.

Signalling a danger of political risk, the NSW Opposition has reserved the option to unwind contracts should it be elected to Government in March 2019.

Links

View the Transport Administration Amendment (Sydney Metro) Bill 2018 HERE Read the NSW Opposition’s media release HERE

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6. Additional $75 million committed to the renamed $375 million Mordialloc Freeway

This week the Victorian Government announced that it will commit an additional $75 million towards the $375 million Mordialloc Freeway project (formerly the $300 million Mordialloc Bypass) in the 2018/19 State Budget.

$300 million was allocated towards the first iteration of the project in the 2017/18 Budget. This commitment came following funding of $10.6 million contained in the 2014/15 Budget for a business case for the project.

The Mordialloc Freeway will see the construction of:

a four-lane, nine-kilometre freeway between Springvale Road in Aspendale Gardens and the Dingley Bypass; the construction of new entry and exit ramps at Springvale Road, Governor Road, Lower Dandenong Road and Centre Dandenong Road; a new interchange at Thames Promenade; and a shared path for cyclists and pedestrians.

Figure 5: Mordialloc Freeway alignment

Source: VicRoads

The Victorian Government has stated that this will mean that there is a continuous freeway link between Frankston and Clayton.

The Environmental Effects Statement (EES) for the project is currently under development, with media reports suggesting the “process will begin in September and finish in March” 2019.

Expressions of Interest (EOIs) for the project were called for in February 2018, with a preferred proponent expected to be announced by the end of 2018.

There has been no change to the project’s construction timeline, with construction on the project expected to commence in 2019 and be completed by the end of 2021.

Links

Read the Victorian Government’s media release HERE View Mordialloc Freeway on infrastructurepipeline.org HERE

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9. Industry news

RCR Tomlinson has been awarded a $60 million engineering, construction and procurement contract by the Bright Energy Investments joint venture comprising Cbus, Synergy and DIF to construct stage two of the Greenough River Solar Farm in Western Australia. The project will expand capacity of the Greenough River Solar Farm from its current 10 megawatts (MW) to 30MW. Construction on the project is expected to commence immediately and be completed by the second quarter of 2019.

The Clean Energy Finance Corporation (CEFC) will invest $150 million into IFM Investors’ $12 billion IFM Australian Infrastructure Fund. The investment will be used for emissions reduction and energy efficiency initiatives across assets such as Ausgrid, Airport, Melbourne Airport, Port Botany and the Port of Brisbane.

Designs for the western and eastern tunnel entrances for the $11 billion Melbourne Metro project have been released for public comment, with submissions closing 27 April 2018. The tunnels are being constructed by the Cross Yarra Partnership consortium comprising Lendlease, John Holland, Bouygues Construction and Capella Capital, as part of the $6 billion Metro Tunnel and Station Works Package.

The Victorian Government will commit $3 million towards designing and planning a new tram line to run between Caulfield to Rowville in Melbourne’s south-east. The funding will be used to examine “alignments, park and ride options, stop locations, cost and travel time benefits” that the project could provide if it were to proceed.

Construction has commenced on a tunnelling hub in Yarraville in Melbourne for Transurban’s $6.7 billion Project. The West Gate Tunnel Project is being constructed by a consortium comprising John Holland and CPB Contractors.

The location of the $534 million New Tweed Heads Hospital in NSW will be located just to the west of Kingscliff. The selection of the site follows an examination of about 30 sites in the region.

The Epping to Chatswood heavy rail line will close on 30 September 2018 to allow for the upgrade of the line to metro standard, as part of the $8.3 billion Sydney Metro – Northwest project. Buses will replace trains between Epping and Chatswood during the conversion period. Sydney Metro – Northwest is expected to be operational by 2019.

Sydney Airport has released a paper with Deloitte Access Economics titled Economic contribution of Sydney Airport. The report finds that businesses within the Sydney Airport precinct contributed $10.7 billion to the economy in 2017. Read the full report HERE

Arup has released a paper titled Mobility-as-a-Service: The value proposition for the public and our urban systems examining the concept of Mobility-as-a-Service (MaaS) from various perspectives including consumers, transit agencies and Government. The report recommends that Public Private Partnerships (PPPs) should be utilised to test MaaS models and that outcomes from these PPPs be used to inform regulatory and legislative change in the future. Read the full report HERE

Hastings Funds Management international businesses have been rebranded as Vantage Infrastructure. The rebrand follows Northill’s acquisition of Hastings Funds Management's international businesses from Westpac.

The Queensland and Federal governments have released the design for the $80 million Northern Access Upgrade Project – Stage 1, part of the Bruce Highway Upgrade. Stage 1 will see the widening of the Bruce Highway to six lanes from the Ron Camm Bridge to Mackay-Bucasia Road intersection and to four lanes from Mackay-Bucasia Road to the Davey Street overpass.

Rider Levett Bucknall (RLB) has released the RLB Crane Index for the second quarter of 2018. The index found that across quarter two, there were 684 cranes across Australia, with record highs recorded in Melbourne, Newcastle and Hobart, while Sydney and Adelaide fell marginally compared to record highs seen in the previous edition of the index. Read the RLB Crane Index HERE

The NZ Government has released a snapshot of Government accounts showing that the Government surplus is NZ$500 million (A$474 million) higher than forecast in the 2017/18 Budget. The operating balance before gains and losses was NZ$2.85 billion (A$2.7 billion), NZ$494 million (A$468.45 million) above forecasts from the Budget.

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10. Industry appointments

Founding IPA Chairman, Mark Birrell, will join the Board of Transurban as a Non-executive Director, effective 1 May 2018. Mr Birrell is deeply respected across the sector, having served as a Minister in the Kennett Government and more recently as Chair of Infrastructure Australia.

Ian Hunt has resigned as Chief Executive Officer of Moorebank Intermodal. Mr Hunt was first appointed as CEO of Moorebank Intermodal in September 2013, and is a previous CEO of Reliance Rail and Connector Motorways.

Graham Hodges will retire as Deputy Chief Executive Officer of ANZ in early-May. Mr Hodges first joined the bank in 1991 and has been Deputy Chief Executive Officer since May 2009.

Terry Lee-Williams and Elizabeth Halsted have joined the cities team at Arup. Mr Lee-Williams was most recently Chief Transport Advisor at the City of Sydney, while Ms Halsted joins Arup from Auckland Transport where she was Head of Innovation, Digital and Sustainability.

Deloitte has made four appointments in its Motor Industry Services team. Chris Mandile, Ben Hershman, Ahmed Mahmoud, and Karen Spear have all joined the team as Directors.

Arcadis has appointed Scott Winter to its cost and commercial team. Mr Winter worked across numerous projects in Australia, Abu Dhabi, Qatar, Czech Republic, South Africa and UK prior to joining Arcadis.

WSP has made three appointments to its Geotechnics and Tunnelling Team. Diane Mather has joined as Principal Tunnel Engineer, with Sudheer Pradhan joining as Major Projects Executive and Lianne McKenzie as Principal Engineering Geologist.

Thirteen Directors have been elected to the Royal Bank of Canada’s Board. The 13 elected directors are Andrew Chisholm, Jacynthe Côté, Toos Daruvala, David Denison, Alice Laberge, Michael McCain, David McKay, Heather Munroe-Blum, Thomas Renyi, Kathleen Taylor, Bridget van Kralingen, Thierry Vandal and Jeffery Yabuki.

The NT Government has appointed four new Directors to the Board of Power and Water Corporation. David Bartholomew, Teresa Dyson and Rowena McNally have all been appointed for a four-year term commencing immediately, while Gaye McMath will join the Board for a four-year term from September.

Kelly Patterson has commenced as Assistant Company Secretary of NAB, replacing Elizabeth Melville-Jones.

Michael Stiassny has been appointed as Chair of the New Zealand Transport Agency Board, effective 19 April 2018. Mr Stiassny has been appointed for a three-year term.

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11. IPA news

IPA Energy Taskforce

IPA will be holding an Energy Taskforce with Tony Wood AM, Energy Program Director, Grattan Institute. Date: Tuesday, 24 April 2018 Time: 10.30am – 12:00pm

Venue: Herbert Smith Freehills

Brisbane - 480 Queen Street

Melbourne - 101 Collins Street

Sydney - ANZ Tower, 161 Castlereagh Street

Mr Wood will be attending in Melbourne.

To register for the Energy Taskforce, please email Katie Aherne HERE

IPA Transport Taskforce IPA will be holding a Transport Taskforce with Rodd Staples, Secretary, Transport for NSW.

Date: Tuesday, 22 May 2018 Time: 2.30pm – 4.00pm

Venue: Ashurst

Brisbane - Level 38, Riverside Centre, 123 Eagle Street

Melbourne - Level 26, 181 William Street

Sydney - Level 10, 5 Martin Place

Mr Staples will be attending in Sydney.

To register for the Transport Taskforce, please email Katie Aherne HERE

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