PUBLIC ACCOUNTS COMMITTEE

INFRASTRUCTURE PROJECT FOLLOW-UP INQUIRY

TRANSCRIPT OF EVIDENCE TAKEN AT WEDNESDAY, 17 OCTOBER 2012

SESSION ONE

Members

Mr J.C. Kobelke (Chairman) Mr A. Krsticevic (Deputy Chairman) Dr E. Constable Mr C.J. Tallentire Ms R. Saffioti ______Public Accounts Wednesday, 17 October 2012 — Session One Page 1

<001> I/4 Hearing commenced at 9.36 am

WALDOCK, MR REECE ALLAN Chief Executive Officer, Public Transport Authority, Level 9, 140 William Street, Perth 6000; examined:

BURGESS, MR MARK Managing Director, Public Transport Authority West Parade, East Perth 6004; examined:

HAMILTON, MR ROSS Executive Director, Major Projects, Public Transport Authority, West Parade, East Perth 6004; examined:

The CHAIRMAN: On behalf of the Public Accounts Committee, I would like to thank you for your attendance before us today. You will be aware that the committee has previously examined the procurement of the project. The purpose of this hearing is to assist the committee as it continues to oversee the delivery of major projects. I would like to introduce myself as the chair, John Kobelke, along with Rita Saffioti and Chris Tallentire. I think Dr Constable was involved in another committee and may be a little late getting here. The Public Accounts Committee is a committee of the Legislative Assembly of the Parliament of Western Australia. This hearing is a formal procedure of the Parliament and therefore commands the same respect given to proceedings in the house itself. Even though the committee is not asking witnesses to provide evidence on oath or affirmation, it is important that you understand that any deliberate misleading of the committee may be regarded as a contempt of Parliament. This is a public hearing and Hansard will be making a transcript of the proceedings for the public record. If you refer to any documents during your evidence, it would assist Hansard if you could provide the full title for the record. If during the course of the day’s hearing you feel that information being requested by the committee breaches a commercial confidentiality requirement, please let us know and it may be possible that we could then move into a closed session. Before we proceed with the questions we have for you today, I need to ask you a series of questions. Have you completed the “Details of Witness” form? The Witnesses: Yes. The CHAIRMAN: Do you understand the notes at the bottom of the form about giving evidence to a parliamentary committee? The Witnesses: Yes. The CHAIRMAN: Did you receive and read the information for witnesses briefing sheet provided with the “Details of Witness” form today? The Witnesses: Yes. The CHAIRMAN: Do you have any questions in relation to being a witness at today’s hearing?

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The Witnesses: No. The CHAIRMAN: I appreciate you appearing before us today. We are looking for an update on this project, having previously been briefed on it. I would like to start by getting an update on costs involved with the construction of the rail component and how the alliance is going. The rail sinking component was estimated to cost $360 million. We wondered how you are going with that, both in relation to cost and time. [9.40 am] Mr Waldock: At this stage the total project expenditure for the rail project is $184.196 million, so $18 million expenditure to date. It might be best if I go a bit slower and break it down. If we look at the rail project, we have carried out forward works of $23 million in roundabout terms. We have our own internal costs—the budget costs—of $21 million and we have the alliance costs of $16 million. That is the budget we are working to in terms of the rail project. If we then look at what we have spent to date, at this stage the total project expenditure is $184 million, as I mentioned. The majority of that expenditure is in the rail alliance, as you might expect, because it is the largest part. It is $139 million to date. We also have $18 million for PTA costs and $23 million for forward works costs. Perhaps I will talk in a general sense. We are about halfway through the project. In terms of how I see the project, we are travelling very well. It is half finished. If I look at the many projects that I have been involved in and that I am involved in, in terms of budgets and timing, I must say that this is one of the better projects to date. I will talk about the future in a second. We would have to say that this project is travelling extremely well, about halfway through. In terms of budget and timing, there are no surprises. That is not to say that we do not have some significant risks in front of us. We always have risks in projects. I think when we spoke last time we indicated that the biggest risk for this project was to do with the die structure coming up to Perth station. The die structure is to be very close to the Mandurah underground rail tunnels, and that is still the issue. We have done some redesign—again, this is where the alliance is working extremely well—and we have managed to separate the floor of the die structure from the top of the tunnels by about 1.2 metres. That has reduced the risk profile. In the next two months we would like to tell you just how that went because we are moving into that stage in the next few months. The CHAIRMAN: When you talk about that separation, that is in your detailed planning but you are not into the construction stage at the moment. <002> N/4 9:42:59 AM Mr Waldock: No. We have done what we call the diaphragm walls and we are now moving in the next two months to put the floor in. The floor will be, I guess, the one where we will be travelling very closely to the tunnels. We have reduced the risk, as I say; we have actually separated it—I think before it was only about 400 millimetres — Mr Hamilton: About 700 millimetres, that was the closest. Mr Waldock: So now it is 1.2 metres. We are still very confident and we are working through it; it has been done very well and we will get more detailed questions and answers. If I can perhaps say that we have had two incidents, which we will pick up later. But, overall, in terms of the project itself and timing and budget I think what has happened is we have a very good governance structure in this project. We have actually picked up our governance structure from the Mandurah railway line and we will be using it for the Gateway project. I think we have up a very good alliance partner. We are delighted, as I say other than the two incidents, with how the project is going and the work they are doing. But I think if there is any message for me in this, being involved in a number of large projects, is the enormous preplanning and pre-engineering work we did before. It means pretty much we had a very good understanding of how we were going to stage the project. It was always going to be a complex project in terms of operations still continuing. But there have been no

Uncorrected Proof - Not to be Quoted Public Accounts Wednesday, 17 October 2012 — Session One Page 3 surprises in that part of it, and I must say the shuts—there have been three shuts—pretty much have gone as we would have expected. Tentatively—I am always a bit nervous about this—I have come to you today with the sense that it is going as well as could be expected, if you separate the two incidents which we will pick up later. The CHAIRMAN: How much of the $360 million, which was your indicative budget, was for contingencies? Mr Waldock: There are contingencies at different levels. But, Ross, do you want to pick up both the project contingencies in terms of the overheads and all the detailed line item ones? Mr Hamilton: The detailed planning when we prepared the budget—I would have to go back and check the exact figure that we had in the budget allowance, but I think it was something in the order of 10 per cent in contingencies for the overall rail alliance work and rail works and then also the bus station work. The CHAIRMAN: Is it 10 per cent of the $360 million or 10 per cent of some other amount? Mr Hamilton: It is 10 per cent of the $360 million, which was what was identified for the rail. I will have to check that exact amount. The CHAIRMAN: That 10 per cent is within the $360 million or on top of it? Mr Hamilton: No; within the $360 million. So the $360 million, plus the $248.8 million, I think it is, gives us $609 million project budget. The CHAIRMAN: We will come to the bus station later; we will just concentrate on the rail at the moment. In terms of some of these events that have happened—the fire and the shutdown; is that all caught in contingencies or is that extra cost? Mr Hamilton: The shutdowns are all planned as part of those project works — The CHAIRMAN: Or the unplanned shutdowns in terms of the fire? Mr Hamilton: Basically, the direct costs associated with the fire have gone to our alliance partners; they have been picked up outside of the project budget in that regard. So there were penalties and direct costs for busing and direct costs for repairs. Ms R. SAFFIOTI: What were those costs in relation to the fire? What was the penalty passed onto the alliance? Mr Hamilton: The penalty that was passed onto the alliance was $213 000. They were penalties associated with disruption on each of the different lines. There were bus costs associated with providing buses, which was some $67 000. At this stage, we have had direct costs of $41 000, we have not finalised those costs in terms of the testing of the transformer that was potentially damaged; we have not finalised those direct costs as yet. Total cost to the John Holland part of the alliance was roughly $300 000-odd. The CHAIRMAN: Mr Waldock, if we can come back to the more global picture. You are indicating that, basically, you are around where you would hope to be. Can you be a bit more definitive? Are you anticipating that you will end up at the end of the project on the $360 000 or is there a little bit of creep in terms of unseen costs? You went for an alliance because there were uncertainties and as a way of managing the extra cost that might come in. I wonder if you would be more explicit exactly as to how you are running towards that $360 million as the total cost for sinking the rail? Mr Waldock: We are extremely confident that we will come in within that cost. The CHAIRMAN: In terms of your time line; you are doing well, you said? Mr Waldock: We may come in a little bit early, but we are not predicting that at the present moment. Uncorrected Proof - Not to be Quoted Public Accounts Wednesday, 17 October 2012 — Session One Page 4

The CHAIRMAN: So what is your current anticipated date? Mr Waldock: It is June 2014. Ms R. SAFFIOTI: Is this the right time to ask about the redesign? Just to clarify, I understand that the original plan, which would be the Fremantle line tunnel, was going to be built 700 mm over the Mandurah line? Mr Hamilton: Over the top, yes. Ms R. SAFFIOTI: And that has been extended to 1.2 metres? Mr Waldock: Yes. Mr Hamilton: By way of explanation, when we went out to market we had a reference design, which included a vertical profile for the railway and the tunnel and our minimum separation, bearing in mind that the bored tunnels are curving and rising as they come out of the ground, and the Fremantle line tunnels are actually going down as they cross over. The closest point was about 700 mm, which was in the northwest corner, if you like. Due to a redesign of our overhead system—so going away from a catenary contact wire system to a solid conductor system gives us roughly another half a metre of clearance—so we have actually been able to lift the contact and lift the floor of the railway to increase that curve. Ms R. SAFFIOTI: So at that point you are not doing overhead wires, the power will be coming from — Mr Hamilton: No; it is a solid contact wire which runs on the roof, so our pan system remains exactly the same, and the contact wire is contained within an aluminium extruded frame and is basically a solid conductor. Ms R. SAFFIOTI: The train is touching the — [9.50 am] Mr Waldock: The pantographics, yes. Mr Hamilton: It remains the same, yes. The CHAIRMAN: Are there examples of that around the world where there is a transition from point to another? Mr Hamilton: Yes. The CHAIRMAN: Is the technology well-established? Mr Hamilton: Yes. Mr Waldock: Yes. Mr Burgess: We have just had two of our senior people overseas looking at those examples, with people from the alliance, to make sure we understand all aspects—the design we obviously understood reasonably well, but it is the design and operation and maintenance issues. Ms R. SAFFIOTI: Does this redesign carry some risk? I mean, the fact that there is only 1.2 metres separating both tunnels carries some risk. Who will be carrying that risk now and into the future? Will it be PTA? Will it be the alliance contractor? That is in relation to the construction risk and possibly—I hate to say it, one of the tunnels not working as well as it should be. Mr Hamilton: It is a shared risk — Mr Waldock: It is shared risk for the construction. Mr Hamilton: — between PTA and the alliance partners. Mr Waldock: It is construction versus operations, I guess. We made the decision that we have actually got the system so we will be bearing any risks with the operations, but in terms of the Uncorrected Proof - Not to be Quoted Public Accounts Wednesday, 17 October 2012 — Session One Page 5 construction where there are issues with the tunnels and movement and cracking, for the construction phase that will be an alliance risk. <003> P/4 Mr C.J. TALLENTIRE: You have chosen this approach rather than digging deeper or increasing gradient, those sorts of options—were they considered to — Mr Waldock: We looked at all those, Chris. In fact, the gradient is such that in our rail we have not got too much room moving gradients and I think we have worked it out for our operational purposes about as best we could do. In terms of, as you say, whether you could have dug deeper, we could not; we were constrained by the tunnels. We are very confident it will work in operation and we think it is a very elegant solution because we spent a lot of time before we even let the contract with our people, with experts, just understanding how we were going to work within 700 millimetres, what the ground conditions, how we were going to stabilise those tunnels, because they do want to pop up like bath tubs and it is all that hygroscopic pressure you need to manage. We are very confident that we have actually got the best. So, we are actually far more confident now than we were when we came to see you a year ago because, whilst it does not sound much, half a metre, it is very significant in terms of how we manage the construction risk. You would say the same, Ross? Mr Hamilton: Yes, certainly. This was identified, right back when we looked at this project to start off with, as the largest technical risk building over the top of the bored tunnels. We actually studied examples around the world at the time where there is again a very close separation between tunnels in Singapore and London and determined that we could proceed to do this given our original design and the concepts we had. We have worked through with the alliance partners in developing that and coming up with the solution we have now. Ms R. SAFFIOTI: How much stabilisation are you putting above the Mandurah tunnel? Are you stabilising the ground and concrete and doing all those — Mr Hamilton: Right back at the start of the project, we had a rig working out on the ground which prepared a hardened layer over the top of the bored tunnels right across the entire surface. It was done in blocks. That has worked and the diaphragm walls have come down through that hardened layer. We are now in the process of getting the dewatering—well, the dewatering is actually already running—and recharge system up and running so that we can lower the groundwater table sufficiently to allow us to do the excavation and remove the weight of the material over the top of the bored tunnels and that hard layer will help stabilise that. There has been a lot of other ground improvement works done through that area. Ms R. SAFFIOTI: In your risk analysis, what is the risk of the Mandurah tunnel collapsing? The CHAIRMAN: Or floating. Mr Hamilton: Collapsing itself — Ms R. SAFFIOTI: Or rising above, intercepting with the Fremantle — Mr Waldock: It is really the movement we are worried about. We think that we would not have proceeded unless we were confident and we are even more confident now. Mr Hamilton: We put in place a monitoring system, before we started this work was running, of the bore tunnel. So, we have a constant real-time monitoring system with theodolites and crack monitors et cetera right through the Mandurah tunnel. That reports real-time and raises alarms if there is any movement. We have already, as Reece indicated, put diaphragm walls over the top of the bored tunnels and they are down to 1.5 metres at its closest point. There has been no indication of any movement as yet or even really, given the work that has gone on up above with soil conditioning et cetera, there has been no indication of any disturbance to the bored tunnels. So we are confident moving forward that we have got the right solution.

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Ms R. SAFFIOTI: You will have that ongoing monitoring of the Mandurah rail line in particular to ensure that no cracking and if there was cracking that you would shut the rail line immediately? Mr Hamilton: Yes, and that monitoring will continue beyond the life of this project, this piece of work, through the bus station works and then beyond that with the aboveground developments as well. Ms R. SAFFIOTI: So last question on this one, did you undertake risk analyses? Did you bring in some technical experts and did they identify what percentage of risk you had in relation to the floating or collapse of the Mandurah rail line? Mr Hamilton: We undertook extensive risk analyses. That was obviously one of the risks of damage to the Fremantle tunnels. I cannot quote a percentage figure to you right now. The way our risk system works, it does not use a percentage. It uses a matrix with — Mr Waldock: Likelihood versus consequence. Mr Hamilton: Likelihood versus consequence. And they are not done on a percentage basis. Mr Burgess: The monitoring of the Mandurah and Joondalup tunnels has been going on ever since they were built. So, we have a very long baseline of the positioning of those tunnels and identifying any movement. I think it is safe to say that we would not be doing this work if we did not have a high degree of confidence that we had this under control. The CHAIRMAN: Is the pedestrian underpass included in the alliance contract in that amount and how is that going? Mr Waldock: Yes. That is going extremely well. I suppose, from a Transperth point of view that is one of the huge benefits of this project, the way we are going to see what is connected between the two stations. Mr Hamilton: The pedestrian underpass, the secant piled walls have been constructed under platform 5 and under the station building and they have been completed in the station forecourt now and with the last SLU that we did, SLU 1, 2, the secant piled walls and the roof slab and the reconstruction of platform 5 have already been completed and the railway is now running over that section of the pedestrian underpass. It has not yet been excavated. That will not start until we complete the work that is now occurring on the northern side in platform 7/8 area through to the far side of Roe Street. The CHAIRMAN: Will access to that pedestrian underpass be by escalator or stairs or both? Mr Hamilton: Both. So, you will walk straight off the concourse of the Perth underground, straight into that pedestrian underpass. We actually have a fly through of that on our website at the moment. The CHAIRMAN: But there will be an escalator access at each platform point? Mr Hamilton: Yes, and also stairs and lifts. The CHAIRMAN: To come to a more general question, the whole project while my understanding not clearly a transport initiative, more a town planning one, there were some transport benefits in terms of flexibility of your rail lines which you previously did not have. As you have got into more detailed planning and the construction, are all those still able to be delivered or has there been any additional matters? Given that the stadium and the transport issues with that have arisen since you started, has that led to any changes of your configuration to create greater flexibility with the system? Mr Waldock: No. Certainly from our point of view, as you say, we did not contemplate the stadium at the time, but certainly the work we are doing will allow the stadium challenges in terms of transport to be met far more fully. In other words, the way it can and will work now is that from Burswood we can move trains under this new configuration directly to the northern suburbs,

Uncorrected Proof - Not to be Quoted Public Accounts Wednesday, 17 October 2012 — Session One Page 7 directly to Fremantle. So, we actually have that flexibility direct now. Of course we also have major shuttle services to Perth station from the south and other places. <004> D/5 9:59:30 AM [10.00 am] So it has given us, without even at the time understanding exactly how we might use the extra flexibility on an operational basis, enormous flexibility. I think the other benefit was, of course, we did put in a new platform on the northern side, so we have got an additional platform, which is excellent; and, of course, as I say the thing that I think really excited particularly my Transperth colleagues was the walkways, which are just going to make it so much more sensible rather than going — The CHAIRMAN: Just come back to the platforms. Mr Waldock: Sure. The CHAIRMAN: I think on the original master plan you were talking about 150-metre platforms, which was the six-car set. Now that the government is looking to move to nine-car sets, for which I think you need a 225-metre platform — Mr Waldock: Yes. The CHAIRMAN: — how many of the platforms will accommodate the nine-car set and have the 225 metres? Mr Hamilton: At the moment none of the platforms will actually accommodate a nine-car set. Platform 7–8, I think, is the longest, and unless we extend the platform up under , which means major modifications to Barrack Street, we cannot accommodate a nine-car set in Perth station. The CHAIRMAN: So none of those platforms can take a nine-car set under this current configuration. Mr Hamilton: Not under the current construction. Mr Waldock: Do you want to make a comment about that, Mark? Mr Burgess: Clearly, the idea of nine-car sets is something that has been contemplated in the stadium transport planning, but that is very much still underway. Ms R. SAFFIOTI: Can I just follow up on this. The whole basis of the passenger movements from Perth stadium is nine-car sets, and the whole idea is that you are moving them in a shuffle formation from Burswood to Perth stadium. Mr Burgess: Sorry; if I can just say I do not know whether it is the whole basis. I think that is probably a stronger things than we would say. It is certainly one of the considerations. I mean, you either have it to have higher frequencies, which is a signalling solution, and/or nine-car sets could be part of that solution as well. Ms R. SAFFIOTI: Sorry; some of the information that was given out to both this committee and publicly was that nine-car sets would be what is going to be happening. Can I ask: what would be the extra cost of transforming a couple of the platforms in the Perth station to accommodate nine- car sets? Mr Waldock: To be fair, the master planning for the stadium is not finished. That will be finished in November—late November we are hoping to finish it and put a submission forward in December, having it completed, for government. I think that is when those issues will be picked up, but we still think that nine-car sets is a possibility. We will need to assess that as part of the planning for the stadium, the $300 million, and that will be part of —

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The CHAIRMAN: Can I just clarify: that possibility cannot be at the western end; it has to be at the eastern end, does it, going under the Barrack Street Bridge? Mr Hamilton: Yes. Mr Waldock: Yes. The CHAIRMAN: Therefore, it requires major modifications to the Barrack Street Bridge to put in a platform for a nine-car set. Mr Waldock: It will require modifications to Barrack Street Bridge, yes. The CHAIRMAN: Potentially a total rebuilt rebuild of the Barrack Street Bridge. Mr Waldock: We have actually widened—I do not think it is a rebuild at all, no. Mr Hamilton: Basically, you would have to remove piers so that we could actually extend the platform. Barrack Street has already been modified once—so extended once—back in the 70s, I think it was. It is being extended again as part of this project to accommodate the track which runs on the north side adjacent to Roe Street; so it is being extended again. The issues of how you would modify the bridge and accommodate the platforms in there would need a fairly careful examination. Obviously, it is a heritage structure and all of those considerations need to come into play. Mr Waldock: But it is not as if we have not done work on it before and will in the future. Ms R. SAFFIOTI: Sure. But as part of the modelling for sea transport component of the Perth stadium, have you started undertaking some costings of the modifications that would be required to the Barrack Street Bridge? Mr Hamilton: My understanding at the moment is that the planning is based around a six-car operation. Whilst it is contemplated that it could operate as a nine-car set operation in the longer term, we are currently, as I understand it, doing it around a six-car operation, and fleeting and those sorts of things. But, as Reece says, it has not been finalised as yet and will come out in the master plan PDP. Ms R. SAFFIOTI: Just on the other component of this, there was talk about nine-car sets being at the new Aubin Grove train station announced by the government, but obviously that is not in the near future if Perth station cannot accommodate nine-car sets. Mr Waldock: That is a little bit different, if I could — Ms R. SAFFIOTI: Yes. Mr Waldock: We think that nine-car sets are certainly a possibility on the north–south line over the next 20 years. The north–south line is the line that is going to be most stressed as we see the city grow. The CHAIRMAN: Is the Perth underground long enough to cater for a nine-car set? Mr Waldock: It depends how you do it. It certainly can be if you use different door opening issues, so we can actually allow doors to be opened—not the full cars, but a number of doors to be opened. The CHAIRMAN: So what you are saying is that the car at the end would not be up against the platform? Mr Waldock: At one end, yes, that is right. But certainly that is done elsewhere around the world. Again, these things are not new, and clearly a lot of it is working with our customers and indicating that people who do not want to get off at Perth station can sit at the ends. So that is part of our thinking, and we would not in any way not look at that as a real option in the future because, as you would imagine, if you are running train systems, you are looking at maximising the capacity of the system. Then, as we said, you could either close the headways down or you could actually give each train greater capacity. Now, in terms of, I guess, operations, longer trains are more effective than trying to close headways down. Uncorrected Proof - Not to be Quoted Public Accounts Wednesday, 17 October 2012 — Session One Page 9

Ms R. SAFFIOTI: This is my last question. The platforms at Belmont—as I understand, there were six platforms as part of the public transport solution to this stadium and nine-car sets. So the idea is to have the train station at Belmont being able to accommodate nine-car sets, but there is no plan currently to allow nine-car sets to be used at the Perth station. Mr Waldock: No. Do you want to make a comment? Mr Burgess: The stadium master plan will contemplate both the frequency issues and whether it would be done with six-car sets or whether nine-car sets need to be introduced at some point. Therefore, that master plan would contemplate any work that needs to be done at any point, because if there were nine-car sets running to the stadium, it would only be between the stadium and Perth station in the first instance. As Reece is indicating, if you go to major cities, they run long trains, so it is a combination of you working with frequency as you can and working with longer trains. But if you go to Hong Kong, you will get nine-car trains, because that is what big cities do. So, at some point in its future Perth will meet nine-car trains, particularly on the north–south line, and we will have to confront issues like the Perth underground station. We will have to confront that issue one day: the question is when. Dr E. CONSTABLE: In Sydney there are double-decker trains. Mr Waldock: Yes, there are. Mr Burgess: They are not very good either. Dr E. CONSTABLE: Pardon? Mr Burgess: They are not very good and no-one else has them, which is — Dr E. CONSTABLE: Why are they not any good. Are we talking about length or height? Mr Waldock: If I could perhaps pick that up, because this has been raised. One, we have got narrow gauge and they have got standard gauge, so it is a different track system, and so theirs is wider, and that means the stability is better for those types of trains. Secondly, our tunnels are built for single trains, so we would have to change all our tunnel systems. But perhaps more importantly in the issue that Mr Burgess raised is that the modern approach to mass transit in rail is to be looking at trains as you actually have very fast and quick both access and egress from the trains. So if you can imagine that what we would be looking at doing more is having the new generation trains. There will be more doors so people can get on and get off quickly. The problem with double- decker trains, as you might expect, is that the stations are quite—the roll times are very significant as people move up and down. So I think it is a different view of how modern rail is working. So that is, I guess, where the view is going; but, secondly, our physical constraints would not allow it anyway. Mr Burgess: They keep buying them because they have set up their infrastructure for them, so you almost get forced into that situation. But there was a recent Australian Bureau of Infrastructure, Transport and Regional Economics paper on urban railways in Australia, and it does identify the fact that it is probably a decision that if you could undo it all and go back, it is not necessarily something you would want to do. Dr E. CONSTABLE: Double-deckers do not work because they are too slow. When you get to the station, you get people — Mr Burgess: That is exactly it, yes. Mr Waldock: And roll times, yes. Dr E. CONSTABLE: In the other sense, if you have a short station, you have twice as many people on the train. Mr Waldock: Yes. They certainly insist, yes.

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The CHAIRMAN: Can we move to get some understanding of how the proposed new light rail, or MAX, will actually fit in with your current planning? Mr Waldock: Indeed, yes. The CHAIRMAN: So its actual location and interchange between the systems. Mr Waldock: Yes, without question, and we are making light rail information available when we can. Clearly, the issues of final decisions in terms of some of the alignment areas, particularly through the CBD, are still ringed, as you know, in the announcement of six weeks ago or seven weeks ago, but we will continue to work through that. But as per the information to date on the MAX, we see that that whole—this area we are talking about, the Perth City Link, will be very much the hub of bus, rail and certainly light rail as well, so it certainly will be the — The CHAIRMAN: I am working on the assumption that you want a very easy interchange between people from the MAX to the bus station or the rail. Mr Waldock: Indeed. The CHAIRMAN: What are the options by which you can potentially do that? What are the options you are looking at? Mr Hamilton: Understanding that light rail is coming or is being contemplated, we have looked at how that might be set up and we have worked with the Metropolitan Redevelopment Authority about how that will work and a consideration about how it will work within City Square and started to actually look at the details of where the platform might sit and look at how the interaction between the bus station entry off City Square and the train station entry off City Square and light rail in itself will work in the public open space. So there has been some consideration of it. The CHAIRMAN: That presupposes the light rail will go through to City Square. Mr Waldock: That is it. Mr Hamilton: Yes. Mr Waldock: That is the current state of the planning. Mr Hamilton: But, clearly, in terms of what we are currently constructing, we need to have an understanding—if that is the decision that government makes, to build light rail and it is in that space, we have got to have some thoughts as to how that might work. The CHAIRMAN: Does that have implications for your current contract, that you might have to modify it in some way to allow for it, or is it going to be totally stand-alone as an add-on afterwards to make provision for transfer from MAX onto your other systems? Mr Waldock: Yes. The only issue we have got with the contract is to make sure that light rail can move through it and the grades are right, and we have made sure that that works, so I guess all we are doing is risk-proofing the MAX project in terms of what the outcomes will be in this sort of city — Mr C.J. TALLENTIRE: So is there any potential for train passengers to get off the train and use the same platform to get onto the MAX? Mr Waldock: No. Mr C.J. TALLENTIRE: Is that already ruled out? Mr Waldock: Well, it depends which trains, but certainly what will happen with the trains is that the access points will move straight in—I mean, all things will lead to the City Square, so it should be, at this stage, a very, very sort of seamless exchange. Mr C.J. TALLENTIRE: But that seamlessness would still involve changing levels, escalators, platforms —

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Mr Hamilton: From Perth underground it will be because you will need to use that anyway, but from Perth station—you will move out of Perth station at grade under the into City Square, where, at this stage, the MAX light rail station is contemplated. Mr Burgess: So, it will be, as I say, a short walk, and the same with the bus station, when the bus station is underground. I mean, you will have to change grade to get up to the street level, but it will be a very short walk in connection. Ms R. SAFFIOTI: Just in relation to the MAX, currently the buses going to the Wellington Street bus station are primarily Mirrabooka–Morley buses. What percentage of the Wellington bus station buses will be now moved into the MAX onto the light rail? So, what impact does that have on your Wellington bus station configurations? Mr Waldock: Do you want to talk about that? Mr Burgess: Yes. The ones that are up the Alexander Drive corridor—obviously, as you say, the Mirrabooka buses and so on—I do not remember the percentage that it is of the Wellington Street bus station. The Wellington Street bus station has a reasonable other collection of buses, though— those from the Charles Street corridor, for example, plus the City Beach and the Cambridge Street services, and even some of those—some of the planning we are doing on the bus station on the basis of “if there is a decision to take light rail” is understanding what will happen in the William Street mall area, if I can call it that. The contemplation of a transit mall in the block between Wellington Street and Hay Street means that probably some of the services that are currently Guildford Road services and so on would need to in the future come to Wellington Street bus station, and we are working through what the route for those buses will be. But they will be new buses to the Wellington Street bus station that do not go there at the moment. <005> C/5 10:14:19 AM [10.15 am] So if a decision is made to move light rail on the corridor we have just been talking about, we will actually have to take some services that currently go down William Street and probably relocate them. Their new terminus would be Wellington Street bus station. So we have done a series of permutations on that as to where those buses might go. I understand your question, which is: does that mean Wellington Street bus station has a lesser audience of buses? The answer is: we have done all that analysis and because we would need to relocate some buses where the light rail goes down William Street, because we would not want that to be too congested, Wellington Street almost ends up doing the same job in the future post light rail as it does today in terms of number of buses. The CHAIRMAN: Could we actually turn to the Wellington Street bus station? On a previous presentation I was under the impression that you had fairly firm plans for the capacity and the location of that. Has that changed in any way? Has your time line changed for the Wellington Street bus station? Mr Waldock: No. The CHAIRMAN: It is still the same? Mr Waldock: Yes. The CHAIRMAN: Your procurement was looking at being not an alliance but direct construct, or direct tender to a constructor. Are you still of a mind that you will go that way; and how advanced are you in terms of the procurement model for that bus station? Mr Waldock: We have been spending a lot of time on thinking this through, because we certainly want to make sure that this part of the project works as well as the rail to date. It is fair to say that we are not there yet in terms of the actual procurement methodology, and we are still looking through all the issues, whether it should be an alliance or a design and construct basically. They are the two key models. In all this we have got to templates and we have certainly clear approaches as Uncorrected Proof - Not to be Quoted Public Accounts Wednesday, 17 October 2012 — Session One Page 12 to how we work through the analysis and particularly the risk side of things. We are not there yet. We believe in fact certainly the contract procurement process will start in March next year, which means we will have to be very clear, before we do that, on exactly what particular model; and, as I say, in the next four weeks we have a number of sessions with independent experts and a team of people across different government agencies, both the Water Corporation and Health—people who have had some experience of these distant contracts—just to make sure we are picking up all their experiences. So to answer your question: no, we are not there yet. We think we will be there certainly by Christmas time in terms of a decision, in terms of the delivery mechanism and the methodology, and we will be ready by March next year and then move out as part of the procurement process externally. The CHAIRMAN: What are some of the factors that have given you the need for or the thought that you should review the procurement model when previously the design and construct was clearly your proposal some months back? Mr Waldock: Ross is dying to say something, but if I could just say from my point of view—and I do not live this every day, as you would expect—the alliance has worked extraordinary well. There is no doubt in the sort of work we are doing for the rail project where there are many unknowns, you certainly would not want a Mandurah railway black-letter law, with claims going backwards and forwards; it would be untenable and it would all take our eye off the real end game. The bus station is a little bit different. We can pretty much contain that to some extent and it will not be affected. In the day-to-day operations we will have a temporary bus station. So that is why it could be different to what we are doing. But again it has been a very useful approach this, in terms of a constrained site more generally and how we work and so that has been a positive. One of the problems with alliances is—and this is textbook stuff and it is pretty obvious—that the more you go to an alliance, the more you share the risk, rather than put the risk on the contractor. It is, I guess, the principles: our view that if you can move the risk to the contractor, then you are taking some risk off the state. So that is where a D&C may provide some benefits in terms of who takes the risk of the construction, rather than a shared risk as in an alliance. So, that is in a general sense some of the things we are coming to terms with in terms of weighing all that up: what is the best approach? But I know that Mr Hamilton has been very close to this and might like to say a few more words. Ross? Mr Hamilton: Thanks, Reece. We certainly recognise that the risk profiles for the railway works compared with the bus works are quite different. The proper process will examine all those risk options against the procurement models that are there. I think when we last spoke we had not put any detailed thought into the bus work, other than suggesting that it is a different risk profile and it might suit a D&C. But we are currently going through that process now, examining those risks against the procurement options to work out what is the best way to manage those risks to the benefit of the state. The CHAIRMAN: Just confirming what you have already said, but the actual size, the building and the capacity of the building for the new bus station has not changed. Mr Hamilton: That is correct. The CHAIRMAN: What about the actual anticipated cost; has that changed, even if it has changed into the dollars of the year you are going to construct? Mr Waldock: No, because we did in fact do dollars of the future. But I guess — The CHAIRMAN: Are you still working on $249 million? Mr Waldock: Yes, $249 million or $248.9 million, whatever it is. But if there is any sort of sense we are getting it is that there may be a continuing window in the construction market which is reasonably attractive to us. So we are quietly optimistic but we have got a long way to go

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Ms R. SAFFIOTI: Can I just ask how much of that has been spent? How many dollars of that contract have been spent? Mr Waldock: Yes. In fact I have got that somewhere. I think we have spent so far on the bus works $4.38 million. Ms R. SAFFIOTI: And that is how much has been contributed; there are no outstanding contracts on that? Mr Waldock: No, no. Mr Hamilton: By way of clarification, just so you understand, the alliance — Mr Waldock: That is this budget. Mr Hamilton: That is the bus budget, and the bus budget remains the $240 million. The alliance contract for the rail work is actually building a portion of the decline structure to the bus station, simply because it was the best way to do it and it was included. So there is approximately $27 million of work that was being done for the bus station under the current contract. The CHAIRMAN: Within the $360 million? Mr Hamilton: No, no. The contract for the alliance is $340 million; the rail project budget is $360 million. That $340 million includes this $27 million worth of work for the bus decline structure, which is actually being done now over the next period. Ms R. SAFFIOTI: Can I just clarify, the Wellington bus station budget is that? Mr Hamilton: It is $248 million. Ms R. SAFFIOTI: Yes, plus the $27 million? Mr Hamilton: No; that is included. So that $27 million worth of work, which is being done as part of this contract, will be allocated to the bus station budget. It is not part of the rail budget. Ms R. SAFFIOTI: Okay, and has that commenced yet or not? Mr Hamilton: Yes, some of it is. Mr Waldock: As I said, the figure I mentioned — Ms R. SAFFIOTI: Is part of that? Mr Hamilton: That is part of that. Mr Waldock: No. You asked how much has been spent. We spent $4.4 million to date. The CHAIRMAN: Just to clarify what you said, that $27 million is part of the preparatory work for the Wellington Street bus station. Is that included in the $360 million or additional to the $360 million? Mr Hamilton: It is additional to the $360 million budget allocation. It is included in the alliance $340 million contract. Mr C.J. TALLENTIRE: We have all seen on TV and elsewhere the Bigger Picture campaign. I am wondering whether any of this money totalling around $609 million is being used to fund the Bigger Picture. Mr Waldock: No, this is a quarantined money pool for these purposes. Yes, we had a lot of experience in the new metro rail project where we had a large budget, we thought, at the time and we had scope creep everywhere. We are really determined not to see any scope creep, including those sorts of issues. Ms R. SAFFIOTI: So the PTA did not contribute to the Bigger Picture campaign? Mr Waldock: The portfolio did, yes, but it was not through this particular project.

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Ms R. SAFFIOTI: How much did they contribute? Mr Waldock: I cannot quite remember. I think $500 000. Ms R. SAFFIOTI: How much? Mr Waldock: It was $500 000. That was, I think, the portfolio total that we put into the program. The CHAIRMAN: And to what extent has that replaced some of your existing information systems, or has it built on your existing information systems where people are directed to your website? Mr Hamilton: Yes, we think it has built on. Certainly there is no doubt that in my wider role I think there is enormous confusion about who is doing what, what is the information and where do you go? My sense is the next few years as we continue to roll out these projects, particularly in the CBD, we need to continue to improve our information systems to the community, not just in terms of, I guess, because we want to show leadership and we want to make sure we have a well-informed community in terms of what is happening to their city. But I think more importantly particularly the road systems are under enormous stress, as we all know. And the road systems are not as easy as you might think. CBD roads are the City of Perth, but we take a huge role with Main Roads for traffic lights and an increasing role in terms of our control operation centre and how we maximise capacity. So there is no doubt that we need to be able to both talk about what is happening — The CHAIRMAN: Can I just cut through, because we are running out of time? Mr Hamilton: Yes. The CHAIRMAN: I have limited exposure but I am generally impressed to be able to go on your website and work out bus routes et cetera, and now people are being directed to the Bigger Picture website when it comes to traffic congestion. Mr Waldock: Yes. The CHAIRMAN: So is all of that information likely to be subsumed under the Bigger Picture website, or are you then redirected back to your other website to provide information? Mr Waldock: Yes, you are redirected back. So, Main Roads will still be the custodian of all information to do with roads and journey planning for roads, as the PTA is. I think what this allows people, though, especially for roads, to go to a number of websites and be directed to the same information. But I think what we are also doing with the roads is enhancing the information. So we are trying to help people make better decisions about how they get to work in the future. Ms R. SAFFIOTI: Just in relation to the two incidents—I am just trying to find the details here. The key incident was the electrical fire. Were there any other incidents in which penalties have been paid by the contractor? Mr Waldock: No. The other incident was the fatality, which happened on 31 December, post- Christmas gone; and that was during a major shutdown. Of course that is subject to investigation, both at the federal level with Comcare, and I think our Office of Rail Safety is doing an investigation too. So, they are investigations. The issues there were at a human scale, particularly for one of John Holland’s trusted and long employees and the family. The electrical one was the one which we talked about the money. That was black Tuesday, if you remember, and it was a very significant event, which was a contractor error and we have actually been through that investigation. I think we are a lot clearer now that what should have happened did not happen and there have been penalties imposed. Ms R. SAFFIOTI: So, apart from the fatality, which is obviously under separate arms of investigation, have there been any other penalties applied to the contractor? Mr Hamilton: No.

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The CHAIRMAN: The City of Perth is a direct contributor to the overall project. How much of their contribution gets caught up in your budget in terms of work they will do on street arrangements or pavements to fit in with yours? Is that a component? Mr Waldock: No, that is not. As you are probably aware, they are actually putting in $36.9 million into our projects, $24.85 million into the rail, and $12 million for the bus. So theirs are milestone payments and they have already funded—I am not sure what they have given us to date. Mr Hamilton: They have given us the rail. The payment occurs on signing the contracts and the bus station payment will occur when we sign the contract for the bus station. The CHAIRMAN: So that is quite separate from work they might do directly on surrounding streets? Mr Hamilton: Yes. The CHAIRMAN: Enhanced, though, to fit in with the work that is being done? Mr Waldock: That is additional, yes. The CHAIRMAN: And that money from the City of Perth is included in the budget figures you have already given us, or is it additional to that? Mr Waldock: No, that is included, so it is all fully integrated. We are happy to provide that information about who the various amounts are from. There is commonwealth, City of Perth and state; and both rail and bus contributions we are happy to make that available. The CHAIRMAN: If you could, that would be most appreciated. Thank you very much for your evidence before the committee today. I just have some formalities to close off. A transcript of this hearing will be forwarded to you for correction of minor errors. Any such corrections must be made and the transcript returned within 10 days from the date of the letter attached to the transcript. If the transcript is not returned within this period, it will be deemed to be correct. New material cannot be added via these corrections and the sense of your evidence cannot be altered. Should you wish to provide additional information or elaborate on particular points, please include a supplementary submission for the committee’s consideration when you return your corrected transcript of evidence. I think there was just that one point on the costings, if you could include that as additional information. Again I thank you very much for your evidence before us today. Hearing concluded at 10.29 am

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