Infrastructure Build: Risks in Construction Contracts
January 2017 | Paul Jachymek – Senior Legal Counsel Road Map - Presentation
Who is Metrolinx?
What we are Building
How we Procure
What Keeps us up at Night – Risks on these Projects
2 Who is Metrolinx?
Metrolinx was created in 2006 by the Province of Ontario as the first Regional Transportation Agency for the Greater Toronto and Hamilton Area.
Metrolinx Planning is guided by a Regional Transportation Plan – “the Big Move”. Plan Build Operate
3 We Plan: From 2008…
4 We Plan: To A Network Vision
5 Building the Regional Rapid Transit Network
Transforming New light rail transit Two bus rapid UP Express Connecting it all GO train service lines (LRT) transit projects together – Regional Express air Express Rail Under construction: Partially in- rail link from Expanding and Eglinton (RER) service, Union Station revitalizing Crosstown with to Pearson Union Station, More service remainder airport the heart of the on all lines In design/planning: under regional network Finch West construction: Delivered on Hurontario Electric trains, Viva in York One payment Hamilton time and on every 15 Region budget system across minutes or the 905 region Mississauga better in both Started and now Transitway directions, for service June deploying on most GO 6, 2015 TTC, on UP and customers on OC Transpo
6 GO Transit and Regional Express Rail (RER)
7 Procurement RER Procurement Strategy
In June 2016, the Metrolinx Board of Directors approved the RER Procurement Plan, which included:
Package 1 Enabling Works Series of Design-Bid-Build, Build-Finance, and Design-Build-Finance contracts Both on-corridor and off-corridor construction Target completion by 2020
Package 2 and 3 procurements (to be awarded in 2019) Off-corridor (stations and parking) On-corridor (track, signals, electrification, vehicles)
8 8 Project Status - RER
In-Service Corridor Project Stage On-Time On-Budget Date Regional Express Rail Projects Barrie Design 2025 Kitchener Design 2025 Lakeshore East Design 2025 Lakeshore West Design 2025 Milton Design 2025 Stouffville Design/Construction 2025
USRC Design 2025 Network Infrastructure Design 2025 Vehicles Design/Study 2025 Parking, Access & Property Design/Study Various TOTAL RER $13,500,000,000
9 RER Projects: Short Term Launch (Package 1)
No. Project Model Issue RFQ Issue RFP FC Stouffville Stations 1 DBF 16-Jul 16-Sep Q3 2017 Package HWY 401 / 409 Rail 2 DBF 16-Sep 16-Dec Q3 2017 Tunnel Cooksville Station 3 DBF 16-Sep Q1 2017 Q3 2017 Redevelopment 4 Union Station upgrades DBF Q4 2016 Q2 2017 Q1 2018
5 Barrie Corridor Grading BF Q1 2017 Q3 2017 Q4 2017 Lakeshore East 6 Grading Package (East BF Q1 2017 Q3 2017 Q1 2018 Corridor Expansion) Lakeshore East Grading Package 7 BF Q1 2017 Q3 2017 Q1 2018 (Central Corridor Expansion)
10 RER Projects: Short Term Launch (Package 1)
No. Project Model Issue RFQ Issue RFP FC Lakeshore East 8 Grading Package (West BF Q1 2017 Q2 2018 Q4 2018 Corridor Expansion) Rutherford Station 9 DBF Q1 2017 Q3 2017 Q2 2018 Package Lakeshore East - 10 BF Q1 2018 Q2 2018 Q1 2019 Eastern Stations Lakeshore West 11 DBF Q3 2017 Q4 2017 Q4 2018 Corridor Package Davenport Diamond 12 DBF Q3 2017 Q4 2017 Q3 2018 Grade Separation 13 Kipling Bus Terminal DBF Q1 2017 Q2 2017 Q3 2017
11 Cooksville Station
Station improvements and 1,900 space parking structure
Coordinated with the Hurontario LRT
In the RFQ stage
12 Kipling Station
New bus terminal integrated into the TTC subway station
GO station accessibility
In the RFQ stage
13 Bridges, Track and Grade Separations
New infrastructure
Approximately 150 kms of upgrades to tracks
Nearly 100 bridge modifications
146 rail/road crossings being evaluated for grade separations
Rouge River Bridge Expansion
Davenport Diamond Grade Separation
14 LRT Initiatives
Approved Budget for In-Service Corridor Project Stage On-Time On-Budget Capital Construction Date Rapid Transit Projects
Eglinton Crosstown LRT Construction $5,300,000,000 2021 Finch West LRT Design $1,000,000,000 2021 Hurontario LRT Design $1,400,000,000 2022 Hamilton LRT Design $1,000,000,000 2024 Viva BRT Various $1,500,000,000 Various
15 Delivery of Projects – Methods Used
AFP – Specific for transit - Bundled DBF BF DBFM DBFMO (Vehicles -In)
CCDC 2/4- Revised
DB –New
Technical Advisors - Bundled QBS – New approach
16 Risk Transfer Principles
Assign risk to the party best able to: Manage and mitigate the risk Price the risk and/or accept cost risk
Recognize and plan for sector-specific and project-specific risks
Maintain the principles that risks allocated to Contractor must be capable of being priced by Contractor
Establish clear contractual and technical rules in the agreement
Go to market with consistent approach on Risk Management
17 Transit Projects have Unique and Complex Risks
Long Linear projects in urban environments with long timescales Geotechnical Environmental Utilities Existing Major Infrastructure Permits, Licenses, Approvals and Agreements Track Access Regime Impact on Existing Service Property Impacts - acquisitions
18 Transit Projects have Unique and Complex Risks
Stakeholder Relationships Payments Mechanism Community Benefits Key Individuals Liquidated Damages VPM Injurious Affection Safety Value for Money
19 Some Issues - Expanded
Geotechnical As is where is basis Baseline Reports Project Specific
Environmental Rail Corridor = Rail Corridor Contamination
PLAA Risk of stakeholder review, political risk (volume issues)
20 Some Issues - Expanded
Utilities Unknown and Mislocated Utilities Metrolinx risk where location is severely mislocated Relocation Shared risk regime for cost and/or schedule for relocation work that must be completed by the Utility company themselves that is of a significant value or impact on schedule (Category 1 utility regime) What can be done ahead of time
Existing Infrastructure Latent Defects and integrated infrastructure
21 Some Issues - Expanded
Track Access
Establish clear rules for the submission and processing of requests for access to track
Flagging provided by Metrolinx supplier with clear rules for requesting flagging services and clear commitment to provide
Delay and Compensation Event eligibility for failure to provide flagging where properly requested
22 Some Issues - Expanded
Impact on Service
In circumstances where Metrolinx service to customers must be impacted by Project Co, establish contractual terms and conditions to motivate proponents to limit impacts (include the pricing of these provisions in the procurement process to be evaluated)
Damages associated with delays – LDs – Interim Completion, Substantial Completion, Train Delays, Track Closures, Customer Impacts
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