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In This Edition IN THIS EDITION 1. North East Link business case released 2. Inquiry into National Freight and Supply Chain Strategy Priorities report released; TIC meeting endorses Inquiry and discusses progress of heavy vehicle reform 3. Two contractors shortlisted for $375 million Mordialloc Freeway project 4. Queensland Government announces $897 million for M1 upgrade; Queensland Major Projects Pipeline released 5. Industry news 6. Industry appointments 7. IPA news Home About us Contact 1. North East Link business case released This week, the Victorian Government publicly released the business case for the $16.5 billion North East Link (the Link). The business case finds the Link has a Benefit Cost Ratio (BCR) of 1.3 and a nominal cost of $15.8 billion. It also provides additional information on the procurement approach, and indicative delivery timeline, with construction scheduled to start in the first quarter of 2020. The release of the business case follows the allocation of $110 million for further planning and design funding and initial procurement details for the Link in the 2018-19 State Budget. The business case has also been provided to Infrastructure Australia (IA) for assessment. IA currently lists the Link as a Priority Initiative on the Infrastructure Priority List. The preferred corridor for the Link (Figure 1) includes the construction of an 11-kilometre connection between the M80 at Greensborough and the Eastern Freeway at Springvale Road. The preferred corridor will utilise an existing road reserve along the Greensborough Highway, connected to a new six-lane tunnel running between Lower Plenty Road and Manningham Road, under the Yarra River. Figure 1: North East Link Source: Victorian Government North East Link will be tolled by the State through a state-owned entity (State Toll Co). The business case notes that toll revenue will fund approximately 22 per cent of the project cost (circa $3.5 billion), with the State to provide the balance. The reference procurement approach included in the business case comprises: a primary package comprising the middle section of the Link, including the tunnel, which will be procured as an availability Public Private Partnership (PPP), with a single private operator (PPP Co) to design, construct, operate and maintain the road; and one or two secondary package(s), which will deliver the outer sections of the Link. These package(s) will be procured as design and construct (D&C) contracts with separate private sector partner (or parties). The scope of the secondary packages will be finalised following further stakeholder consultation. Post construction, the road assets delivered through the Secondary Construction Package(s) may be included as part of the Availability PPP. The business case notes that using a PPP procurement approach ensures a clear differentiation between the private operator and the State Toll Co. This approach also allows the State to “consider divestment/monetisation options in the future, once toll revenues have matured.” The Victorian Government has previously procured major roads under availability PPP arrangements, such as Peninsula Link in Melbourne’s southeast. As shown in Figure 2, the Victorian Government has committed to commence procurement of the Link within 100 days if re-elected at the 24 November State election. Contracts are expected to be awarded by early-2020, with construction scheduled to start in the first quarter of 2020 and be completed by 2027. Figure 2: Preliminary procurement timeline Source: Victorian Government Relevant links Read the North East Link business case HERE Read the Victorian Government’s media release HERE View North East Link on infrastructurepipeline.org HERE △ back to top 2. Inquiry into National Freight and Supply Chain Strategy Priorities report released; TIC meeting endorses Inquiry and discusses progress of heavy vehicle reform The Commonwealth has released the final report of the Inquiry into the National Freight and Supply Chain Priorities (the Inquiry). The Inquiry’s recommendation to establish a freight measurement and performance body in the next five years aligns with the prime recommendation in Infrastructure Partnerships Australia’s recently released report Fixing Freight: Establishing Freight Performance Australia. The Inquiry was tasked with identifying the main challenges and priorities for Australia over the next 20 years to improve freight and supply chain efficiency and capacity. The Inquiry’s report provides the foundation and priorities for the National Freight and Supply Chain Strategy (the National Strategy), which is expected to be developed over 2018. The Inquiry found that while Australia’s freight task is increasing, current transport infrastructure will not keep pace with future demand. In addition, the report finds that a national approach is needed to coordinate investment and reform across three key supply chain areas, including: import/export freight; inter- and intra-state freight; and urban freight. In order to address each area, the Inquiry identified a number of five key focus areas across investment, reform and governance – further segmented into 54 priority actions. The Inquiry notes that these actions would help to improve the productivity and efficiency of Australia’s supply chains. The key focus areas include: developing a national and integrated approach targeting proper planning, infrastructure investment and regulation; measuring freight performance to monitor domestic and global competitiveness; planning for future and current needs in order to protect freight corridors from urban encroachment; protecting the accessibility and future expansion capacity of freight precincts; and communicating the importance of freight through training and educational courses. Among the key priority actions was the establishment of an independent freight observatory to collate data and measure freight performance. The Inquiry states that in addition to finding agreement on the National Strategy, success in the first five years would be achieved by the following: establishment of freight performance benchmarks and KPIs; creation of a freight observatory, capturing data, analysing and reporting against KPIs; development of government plans, strategies and planning processes consistent with the National Strategy; and establishment of a national framework to assess investment decisions. According to the timeline in the Inquiry (see Figure 3), the National Strategy will be considered by all transport, infrastructure and freight ministers in Australia at the Council of Australian Governments’ (COAG) Transport and Infrastructure Council (TIC) meeting in November 2018. Figure 3: Timeline for implementation of the Inquiry Source: Federal Government The Inquiry report was released as the COAG Transport and Infrastructure Council (TIC) met in Darwin to discuss the national freight system, heavy vehicle road market reform, and Autonomous Vehicles (AVs). The TIC comprises all state, territory and Commonwealth road, transport and freight ministers. Following the release of the Inquiry report, the Council reinforced the need for a national and consistent freight approach with a commitment to develop a 20-year National Strategy, to be implemented from 2019. On road reform, the Council noted the commencement of the National Heavy Vehicle Charging Pilot. The Council also decided upon several actions, including: modelling and consultation on implementing independent price regulation of heavy vehicle charges; and refining a prototype model for a forward-looking cost base for heavy vehicle charges. The Council also agreed to have a harmonised and ‘purpose built’ national law in place for AVs. The National Transport Commission (NTC) has been tasked with providing further advice on possible regulatory approaches. The Council agreed that key elements of any national law for AVs should: require automated driving systems to be approved under a future safety assurance system, before they are able to be used legally in vehicles on public roads; ensure that automated system driving entities can be held liable for the actions of vehicles which are operating in automated mode; determine who should be held responsible for vehicles operating at low, conditional and high levels of automation; and provide mechanisms for ensuring compliance and enforcement. Relevant links Read the Inquiry into National Freight and Supply Chains Priorities report HERE Read the TIC meeting communique HERE Read IPA’s report ‘Fixing Freight: Establishing Freight Performance Australia’ HERE △ back to top 3. Two contractors shortlisted for $375 million Mordialloc Freeway project The Victorian Government has shortlisted two proponents for the $375 million Mordialloc Freeway project. The shortlisted proponents include a joint venture comprising CPB Contractors and Seymour Whyte, and a joint venture comprising McConnell Dowell and Decmil. The shortlisted parties have been invited to submit tenders for the project, with the contract expected to be awarded by the end of 2018. $300 million was first allocated towards the project in the 2017-18 Victorian Budget, with the 2018-19 State Budget committing an additional $75 million towards an expanded 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; new entry and exit ramps at Springvale Road, Governor Road, Lower Dandenong Road and Centre Dandenong Road; a new interchange at Thames Promenade; and
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