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In this edition

Procurement of North East Link begins as EOIs released

Daniel Andrews announces Machinery of Government changes

Building Queensland release Business Case for Cairns Southern Access Corridor Stage 3

NSW Ports announces $120 million Port Botany rail capacity investment

AER begins work on establishing default market offer

ARA and BIS Oxford Economics release rail skills capability study

Industry News

Appointments

Policy Taskforces and Events

TRANSPORT

Procurement of North East Link begins as EOIs released Earlier this week, the re-elected Andrews Labor Government announced procurement had commenced on North East Link for the $200 million early works package and the circa $8 billion Primary Package PPP. EOIs for the Primary Package are due by 10 May 2019, with procurement expected to take more than 18 months.

The North East Link (NEL) project will connect the Metropolitan Ring Road (M80) and the Eastern Freeway (M3), to complete a ring road

Source: Shutterstock (which includes the Monash Freeway) around Melbourne.

Procurement has now begun for the early works package as well as the Primary Package PPP which includes widening the Eastern Freeway and construction of a six-kilometre tunnel under the Yarra River.

In total the Primary Package includes:

construction of two three-lane tunnels, approximately six kilometres long, passing under Benyule Flats and the Yarra River construction of seven kilometres of freeway between Watsonia and Bulleen Road construction of motorway between the M80 and M3 new interchanges at Manningham Road and Lower Plenty Road, and provision of tunnel systems, intelligent transport systems, tolling infrastructure and other associated infrastructure.

The Government has indicated that procurement for the Primary Package is expected to take over 18 months, with EOIs to be submitted by 10 May 2019.

The $200 million early works package will comprise enabling works for the Primary and Secondary packages. EOIs are due by 1 February 2019. The early works contract is expected to be awarded towards the end of 2019, with work expected to commence in 2020 after receiving environmental and planning approvals.

Figure 1: NEL proposed project packaging

Source: Victorian Government

The $15.8 billion NEL project featured as a major election commitment for Labor, with committing to immediately call for EOIs upon a return to Government. The 2018-19 Victorian Budget had already provisioned $110 million to finalise the planning and design for the project.

The FY2018-19 State Budget also announced that the tunnel component of the project will be procured through an availability PPP. The PPP will also include the operation and maintenance of works delivered in the secondary packages. The Government will also toll the tunnel for an unspecified time, with the revenue retained by the Government.

The business case for the $15.8 billion NEL was released in May 2018. According to the business case, the BCR for the project is 1.3 and increases to 1.4 when wider economic benefits, such as better freight connections, are considered. After evaluating the business case, Infrastructure Australia listed NEL as a “High Priority Project” on its Infrastructure Priority List.

Relevant links Read the Victorian Government’s media release on NEL View North East Link on infrastructurepipeline.org

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GOVERNMENT

Daniel Andrews announces Machinery of Government changes

Yesterday, the re-elected Victorian Premier, Daniel Andrews, announced new Machinery of Government (MoG) changes, effective from 1 January 2019. The changes include the introduction of a standalone Department of Transport.

The announced changes see a restructure of portfolios within Victorian Government departments as well as within the Andrews Government’s Ministries. As part of the restructure the Department of Economic Development, Jobs, Transport and Resources will be split into two separate departments, including a Department of Transport Source: Shutterstock and a Department of Jobs, Precincts and Regions. Additionally, the economic development portfolio will be transferred to the Department of Treasury and Finance.

Key changes to departments, portfolios and ministries relevant to the infrastructure sector are summarised below.

Department of Premier and Cabinet (DPC)

Led by Chris Eccles, the Department will support the Premier, Deputy Premier and the Special Minister of State. Changes to the Department include:

Industrial Relations Victoria will move to DPC from the Department of Economic Development, Jobs, Transport and Resources the Latrobe Valley Authority and the Precincts function of DPC will move to the new Department of Jobs, Precincts and Regions, and establishing a new Fairer Victoria division in DPC, comprising the Office of Women and Youth Affairs and the Government’s multicultural affairs and equality portfolios.

Sector-relevant ministers supported by the DPC include:

Premier, Daniel Andrews Deputy Premier, Special Minister of State and Minister for Aboriginal Affairs, Gavin Jennings, and Minister for Industrial Relations, .

Department of Treasury and Finance (DTF) Led by David Martine, the Department will also include a new Economic Development Agency, mandated to attract investment and undertake commercial negotiations across the Government.

Ministers supported by DTF include:

Treasurer and Minister for Economic Development, Tim Pallas, and Assistant Treasurer, Robin Scott.

Department of Economic Development, Jobs, Transport and Resources (DEDJTR)

Richard Bolt, Secretary of DEDJTR, has announced his departure from the Victorian Public Service (VPS). He has been replaced by Simon Phemister as Acting Secretary, effective from yesterday. Mr Phemister was formerly the Deputy Secretary of Economic Policy and State Productivity at DPC.

Effective from 1 January 2019, DEDJTR will be divided into two separate departments.

The Department of Transport (DoT) once established will be led by Correy Hannett, in an acting Secretary capacity, while recruitment for the Secretary position gets underway. The Department will be responsible for delivering the State’s transport infrastructure programme.

Ministers supported by DoT will include:

Minister for Transport Infrastructure, Minister for Roads, and the Minister for Road Safety and the TAC, , and Minister for Public Transport and the Minister for Ports and Freight, .

The Department of Jobs, Precincts and Regions (DJPR) will be led by Simon Phemister from 1 January 2019. DJPR has been given the mandate to strengthen the State’s economic performance, particularly in Victoria’s outer regions.

Sector-relevant ministers supported by DJPR include:

Minister for Jobs, Innovation and Trade; Minister for Tourism, Sport and Major Events and Minister for Racing, Minister for Priority Precincts, Gavin Jennings, and Minister for Suburban Development, Marlene Kairouz.

Other appointments include:

Justin Hanney, Deputy Secretary of DEDJTR, has been appointed CEO of City of Melbourne Gillian Miles has been appointed the Chief of Integration and Transport at DoT, and pending confirmation of election results from the Victorian Electoral Commission, Jaclyn Symes will be appointed Minister for Regional Development, Agriculture, and Resources.

Relevant links

Read the full list of ministerial portfolios and appointments

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TRANSPORT

Building Queensland releases Business Case summary for Cairns Southern Access Corridor Stage 3

This week, Building Queensland released the final Business Case and Cost Benefit analysis summaries for Cairns Southern Access Corridor - Stage 3, part of the Bruce Highway Upgrade program. Procurement of the project is expected to begin before the end of the year.

The Business Case and CBA found that the circa $481 million project has a BCR of between 1.06 and 1.13. Market sounding conducted by

Source: Shutterstock the Queensland Government found that a double Early Contractor Involvement (ECI) with a D&C contract would be the most preferable procurement approach for the project.

Cairns Southern Access Corridor – Stage 3 will see the Bruce Highway upgraded from two to four lanes between Edmonton and Gordonvale (Figure 2) along with removal of several rail crossings and road intersections. The upgrade is designed to address traffic congestion and safety issues.

Figure 2: Cairns Southern Access Corridor - Stage 3 Project Area

Source: Building Queensland

The delivery model assessment for the project considered three options:

Transport Infrastructure—Construct Only (TIC-CO) Early Contractor Involvement (ECI), and Alliance Contracting.

The analysis concluded that a Double ECI delivery model would provide the best outcomes, as there was limited scope for innovation in the project, particularly in the northern end of the alignment. The Double ECI model would see two tenderers involved throughout the planning stage, with one tenderer progressing to the delivery stage.

Procurement of the project is expected to begin before the end of 2018. The project is funded in an 80/20 split between the Federal and Queensland governments.

The detailed business case was endorsed by the Building Queensland Board in late 2017, with the summary publicly released this week. To date, the business case has not been submitted to Infrastructure Australia for assessment.

Relevant links

Read Building Queensland’s Business Case Summary and Cost Benefit Analysis Summary View Bruce Highway – Cairns Southern Access Corridor – Stage 3 on infrastructurepipeline.org

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TRANSPORT

NSW Ports announces $120 million Port Botany rail capacity investment This week, NSW Ports announced it will invest $120 million to increase rail capacity at Port Botany. Work on the first phase of the ‘on-dock’ rail upgrades is expected to start in 2019, with completion scheduled for 2023. Further investment is expected for additional phases of the rail capacity upgrade project.

NSW Ports’ $120 million investment aims to increase rail capacity at Port Botany to three million TEUs per year. The rail upgrades will increase the number of containers that can be transported to and

Source: NSW Ports from Port Botany, through improved capacity and efficiency.

This rail investment is part of NSW Ports’ 2015 Master Plan which outlined plans for ‘increasing capacity and meeting future growth’ to support the broader NSW economy. Similarly, the rail capacity upgrades will contribute to the NSW Government’s objective of increasing the rail share of freight to and from Port Botany to 28 per cent by 2021.

The increased rail capacity will also help Port Botany manage increased activity from the Enfield Intermodal Logistics Centre which was opened in 2016, and the Moorebank Intermodal Terminal which is due to open in 2019.

Stage one of the rail investment will take place at the Patrick Stevedoring facility and will see rail capacity double from 750,000 to 1.5 million TEUs. The number of trains able to pass through Port Botany will also double from 16 to 32 per day.

This first phase of the investment will see construction of facilities with four 600 metre rail sidings. These 600 metre rail sidings will reduce splitting and shunting of trains, improving train turnaround times by at least one hour. New automated rail mounted gantries will be used to accelerate the stripping and loading of trains.

To fund the investment, NSW Ports will increase wharfage fees on full imports and exports by $3.08 per TEU from 1 July 2019. The wharfage fee increases will be spread over the long term, with the increases to be removed once the cost of the investment has been recovered.

The first phase of the rail upgrade programme will start in 2019 and is expected to be completed by 2023.

The upgrade will complement the proposed Port Botany Rail Duplication, which the Federal Government allocated $400 million towards in its 2018-19 Budget. The project will involve the duplication of rail track and bridges across the 2.9 kilometre freight line between Mascot and Botany. It will also involve the construction of a passing loop between Cabramatta and Warwick Farm.

The Port Botany rail duplication is listed as an initiative for investigation (0-10 years) in the NSW Future Transport Strategy, while Infrastructure Australia lists it as a High Priority Initiative on its Infrastructure Priority List with a near term (0-5 years) delivery timescale.

The project will be delivered by the Australian Rail Track Corporation (ARTC).

Relevant links

Read the media release Read the NSW Ports Master Plan View Port Botany Rail Duplication on infrastructurepipeline.org

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ENERGY AER begins work on establishing default market offer The AER has begun work on developing maximum prices for the default market offer to apply from 1 July 2019. In conjunction with this, the AER will also develop a mechanism for determining a reference bill amount for each network distribution region, from which discounts can be calculated.

At the October meeting of the COAG Energy Council, the Commonwealth Government requested the AER develop a default

Source: Shutterstock market offer for jurisdictions not subject to price regulation, as recommended by the ACCC in its Retail Electricity Pricing Inquiry.

The proposed default offer is designed to prevent customers paying higher prices on standing offers by setting a maximum price. The default prices will apply from 1 July 2019. This forms part of a series of government interventions with a stated objective of lowering electricity prices and ensuring the reliability of the grid.

Development of the reference bill amount for each region will run in parallel with the development of default market offer prices. Electricity retailers will be required to calculate and advertise discounts using the reference bill set by the AER.

Energy market participants have expressed concerns that partial re-regulation through a default price will dampen incentives for competition in the retail market.

The AER released a position paper on 9 November outlining its approach to determine the default market offer prices. A public forum is being held on 5 December seeking stakeholder feedback. Written submissions are due by 7 December.

The ACCC released its Retail Electricity Pricing Inquiry in June this year. Development of the default market offer and reference bill refer specifically to recommendations 30, 49, 32 and 50 of the ACCC report.

Relevant links

Read the AER’s position paper Read the ACCC’s report

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SKILLS

ARA and BIS Oxford Economics release rail skills capability study This week, the Australasian Rail Association (ARA) and BIS Oxford Economics released a report on the rail skills capability and capacity of Australia and New Zealand. In the context of the unprecedented pipeline of rail projects, the report finds that both countries need to improve their rail skills capacity to avoid delays and cost blow-outs in delivery of the pipeline.

The Skills Capability Study, conducted by BIS Oxford Economics on behalf of the ARA, provides a workforce capability analysis for the

Source: Shutterstock Australian and New Zealand rail industry over the next 10 years.

Key priorities identified by the report towards achieving sustainable workforce capability include: smoothing the investment pipeline through project timing and coordination, between jurisdictions developing a national Rail Industry Skills Development Strategy (RISDS), and boosting awareness of rail careers.

Noting the importance of an infrastructure investment pipeline, the report identifies the Australia and New Zealand Infrastructure Pipeline (infrastructurepipeline.org) as the best platform to understand and improve the visibility of the rail project pipeline. The report sees the ARA Commit to working with Infrastructure Partnerships Australia to support infrastructurepipeline.org. Currently there is circa $80 billion in major rail projects between Prospective and Announced on infrastructurepipeline.org (see Figure 3).

Figure 3: Major rail project pipeline

Source: infrastructurepipeline.org

BIS Oxford Economics’ modelling indicates demand for skills across the rail sector will increase substantially in the next decade. This includes the construction and manufacturing workforce, which is estimated to peak at almost double current demand in FY2023 (Figure 4). According to the study, the operations and maintenance workforce demand will also steadily increase by 5,000 out to FY2027 from current levels.

Workforce demand will be most prominent on the Australian eastern seaboard, with Queensland workforce demand seeing the largest increase. Demand is expected to peak at 50,000 in FY2023, up from less than 10,000 this financial year, in order to deliver major projects such as Cross River Rail, Beerburrum to Nambour Rail Upgrade, Inland Rail and Gold Coast Light Rail Stage 3.

Figure 4: Australian rail workforce gaps – construction and manufacturing

Source: BIS Oxford Economics

Further, the study acknowledges that the historical differences in rail standards and systems between states and national jurisdictions are a barrier to the transfer and mobility of the rail workforce, exacerbating the challenges of a growing pipeline. In developing a RISDS the study recommends that there be a ‘continued focus on further harmonisation in standards and systems used across rail jurisdictions in Australia and New Zealand, as well as more effective recognition of existing standards which are harmonised’.

Harmonisation of standards along with increased and coordinated promotion of rail careers will help in part to meet workforce demand. According to the study, these initiatives will also assist in offsetting a predicted 20 per cent reduction in the existing workforce due to retirement.

Relevant links

Read the ARA’s media release Read the Australasian Railway Association's Skills Capability Study View major rail projects on infrastructurepipeline.org

BACK TO TOP Industry news

The ACCC has granted authorisation for arrangements between SA Housing Authority, Renewal SA and land and property developers. The authorisation enables developers to agree to requests from SA Housing Authority or Renewal SA, including agreement to cap prices for some properties, rent or sell to certain tenants or purchasers and to not compete for the renting or selling of property.

The Tasmanian Government will invest an additional $105 million into hospitals, as a result of increasing patient demand. This investment is on top of the $465 million already budgeted for health in the Tasmanian 2018-19 Budget.

The NZ Government has announced that it will combine Housing New Zealand, HLC and KiwiBuild to create a new Housing and Urban Development Authority. The HUDA will lead a range of large and small urban development projects. For some large-scale complex development projects, the authority will have the ability to shorten planning and consenting processes, build and change infrastructure, fund infrastructure and development, combine parcels of land and reconfigure reserves. The new legislation to establish the HUDA will be introduced to NZ Parliament in 2019.

The SA Government has worked with Tesla and Energy Locals to launch the second phase of South Australia’s Virtual Power Plant. The second phase of the VPP will produce 250MW and will see 1,000 SA Housing properties have home energy systems installed.

The SA Government has released the tender for the supply of Adelaide Metro Buses over the next 10 years. The tender aims to increase the number of bus services and expand Adelaide’s public transport network.

The WA Government has announced that it is seeking eligible experts to join the WA State Design Review Panel. The Panel will consist of 40 people who are required to provide independent advice for the improvement of infrastructure projects and building designs. Expressions of Interest close on 21 December.

Spotless has been awarded a 40-year asset services contract to provide full building maintenance and replacement activities for two student residences at the University of Melbourne. The partnership also includes AMP Capital Diversified Infrastructure Fund as the investor. Work on the residences will commence in early 2019.

The Victorian Government has announced that as part of proposed further level crossing removals at Union Road, Surrey Hills and Mont Albert Road, Mont Albert, it will also construct new Surrey Hills and Mont Albert Stations. The level crossings are being removed as part of the additional 25 level crossings that the Victorian Government aims to remove by 2022.

The Port of Melbourne has released trade results for October 2018. The total container throughput showed a 5.9 per cent increase over October 2017 and was a 6.9 per cent increase for the financial year to date.

AMP Capital has agreed to sell its 50 per cent shareholding in the companies of Singapore-listed AIMS AMP Capital Industrial REIT to its joint venture partner, AIMS Financial Group. AMP Capital is also selling its 10.26 per cent principal stake in AA REIT to AIMS Financial Group.

The SA Government has announced that work has commenced on the $55 million Gawler East Link Project. The 5.5-kilometre project will link Main North Road to the new residential properties in Gawler’s east and will include intersection and road upgrades, including a bridge over South Para River.

The Australian Rail Track Corporation has awarded Golder Associates with a $23 million contract for the geotechnical studies of the Toowoomba to Kagaru Sections PPP of the Inland Rail, commencing immediately. The geotechnical studies will provide information for all the companies who plan to bid on the PPP contract.

The NT Government has invited developers to submit tenders for the construction of a 70 residential unit complex for hospital staff at the Alice Springs Hospital. The construction will be fully funded by the developer. The tender will be undertaken in two stages, with Stage 1 calling for Expressions of Interest from developers, and Stage 2 being a detailed tender submission from the pre-selected tenders in Stage 1.

John Laing has reached financial close on Segment 3 of the I-75 Improvement Project in Michigan. The project includes a storage and drainage tunnel and a pump station for the mitigation of future flooding. The project is built on an availability-based payment structure, over an approximately 30-year contract.

The Queensland Government has released Partnering for Growth with the Community Housing Sector. Under the initiative, the Brisbane Housing Company is investing $222 million over four years to deliver 682 new affordable homes for Queenslanders. Partnering for Growth is an initiative of the Queensland Housing Strategy 2017-2027 and provides a framework for the community housing sector to work alongside Government to provide housing support and increase housing supply.

Auckland Transport has released a Request for Tender for the $16 million Karangahape Road Enhancements project. Construction is expected to commence in early 2019 and be completed by early 2020. The Karangahape project is a joint project between Auckland Transport and Auckland Council.

John Laing has secured a 49.8 per cent investment in the 112MW Granville Harbour Wind Farm in Tasmania. The project will power over 45,000 homes. It is in the early stages of construction and is expected to be fully operational in late 2019.

The Federal Government has released its response to the India Economic Strategy, agreeing to an initial implementation plan until 2035. The key actions for the first 12 months include the development of a MOU between Austrade and Invest India and the establishment of an Australia-India Food Partnership. The implementation plan will also provide grants up to $500,000 through the Australia-India Strategic Research Fund, expand the Australia-India Mining Partnership, and seek to improve engagement with airlines to increase direct flights through the Australia-India air services agreement.

The University of Newcastle’s School of Architecture and Built Environment is performing a study on spoil handling practices in Australia. To inform its research, the University is seeking to engage with construction professionals involved in spoil handling, such as spoil managers, project managers, and environmental managers. If you or your company are interested in contributing to the study, please contact Ali Rahimzadeh via [email protected].

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Appointments

The NSW Opposition has announced changes to the Shadow Cabinet in advance of the election in March 2019. Ryan Park has been appointed as Shadow Minister for Infrastructure and retains his existing position as Shadow Treasurer. Tania Mihailuk has been appointed as Shadow Minister of Planning, Shadow Minister for Housing and Shadow Minister for Family and Community Services.

Broadspectrum’s Board of Directors has appointed Tom Quinn as the Company's new Managing Director and Chief Executive Officer, effective 1 December 2018. Mr Quinn was most recently Chief Executive, Resources in the Broadspectrum business.

Sam Kaplan and Ross Burney have been reappointed as Directors on the Qube Board at the 2018 Annual General Meeting.

MUFG Investor Services, the global asset servicing arm of Mitsubishi UFJ Financial Group, has appointed John Sergides and Hideto Shimada to take on permanent roles as Chief Executive Officer and Chief Executive Officer & Chief Risk Officer respectively, effective January 1, 2019. Eiji Ihori, the current interim Chief Executive Officer, will return to his substantive role as Senior Managing Executive Officer, Mitsubishi UFJ Trust and Banking Corporation (MUTB).

Pat Donovan has been appointed the new Chief Executive of Officer of WA's Water Corporation, effective 1 January 2019. Mr Donovan is currently Water Corporation’s General Manager of Operations.

The Queensland Government has announced new appointments to the Building Queensland Board for the next three years. Alan Millhouse has been re-appointed as Chairman and Catherine Bull and Kevin Hegarty have been re-appointed as Directors. Lesley Morris and Fiona Murdoch have been appointed as Directors.

Nirangjan Nagarajah has joined White & Case as a new partner in Melbourne. Mr Nagarajah joins from his most recent role at Gilbert + Tobin where he was a partner in the Corporate Advisory Group.

White & Case has also announced promotions for 21 lawyers to counsel and 21 lawyers to local partner. Additionally, White & Case has hired 14 counsel and nine local partners during 2018. View the full list of appointments and promotions.

The NZ Government has appointed Melinda Dickey as an Environment Judge and District Court Judge in Auckland. Ms Dickey is also a partner at Brookfields Lawyers.

The Federal Government has announced three appointments to the Australian Maritime Safety Authority Board. Rosalie Balkin and Tony Briggs have been appointed to the AMSA Board to serve three-year terms. Peter Toohey has been re-appointed for his second three-year term.

AECOM has appointed Steve Cooley as the Director of Asset Management and Optimisation in Australia and New Zealand. Mr Cooley joins from his most recent role as Technical Executive of Asset and Network Performance at WSP. The WA Government has appointed Nicole Roocke as Chief Executive Officer of the Minerals Research Institute of Western Australia. Ms Roocke joins from her most recent role as Deputy Chief Executive Officer of the Chamber of Minerals and Energy of Western Australia.

GHD has appointed Seraphine Bray to the new position of Indigenous Services Leader in Australia. Ms Bay joins from her role as Manager of Indigenous and Social Inclusion at CPB Contractors.

Mikel Alonso has also been appointed as Market Leader, Transportation in Australia for GHD. The appointment follows David Kinniburgh’s relocation to London to take up a new role as Transportation Market Leader, Northern Hemisphere.

Greg Italiano has been appointed the new WA Government’s Chief Information Officer, effective 17 December 2018. Mr Italiano was previously the Executive Director of Corporate Services within the Department of Justice.

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