LEGISLATIVE COUNCIL PUBLIC ACCOUNTABILITY COMMITTEE Impact of the CBD and South East Light Rail Project Impact of the CBD and South East Light Rail Project Report 2 Report 2 January 2019 January 2019 January www.parliament.nsw.gov.au LEGISLATIVE COUNCIL Public Accountability Committee Impact of the CBD and South East Light Rail Project Ordered to be printed 25 January 2019 according to Standing Order 231 Report 2 - January 2019 i LEGISLATIVE COUNCIL Impact of the CBD and South East Light Rail Project New South Wales Parliamentary Library cataloguing-in-publication data: New South Wales. Parliament. Legislative Council. Public Accountability Committee. Impact of the CBD and South East Light Rail Project / Public Accountability Committee [Sydney, N.S.W.] : the Committee, 2019. [140] pages ; 30 cm. (Report no. 2 / Public Accountability Committee) “January 2019” Chair: Rev. Hon. Fred Nile, MLC. ISBN 9781922258748 1. CBD and South East Light Rail Project (N.S.W.)—Design and construction—Costs. 2. CBD and South East Light Rail Project (N.S.W.)—Design and construction—Planning—Evaluation. 3. Railroads, Local and light—New South Wales—Sydney. 4. Local transit—New South Wales—Sydney. 5. Street railroads—New South Wales—Sydney. I. Nile, Fred. II. Title. III. Series: New South Wales. Parliament. Legislative Council. Public Accountability Committee. Report ; no. 2 388.46099441 (DDC22) ii Report 2 - January 2019 PUBLIC ACCOUNTABILITY COMMITTEE Table of contents Terms of reference vi Committee details vii Chairman’s foreword viii Finding ix Recommendations x Conduct of inquiry xiii Chapter 1 The CBD and South East Light Rail project 1 The CBD and South East Light Rail route 1 Timeline of the project 3 Key stakeholders 4 Benefits of the CBD and South East Light Rail project 5 The Auditor-General's findings 8 Committee comment 10 Chapter 2 Management of the project 11 Project timeframes 11 Completion date 11 Schedule of work in each zone and delays 13 Mitigation of delays 14 Perceived 'go slow' by Acciona 15 Where is work up to? 16 Committee comment 18 Project costs 18 Project budget 19 Penalty clauses for delays 21 Contract modifications 21 Claims under the Building and Construction Industry Security of Payment Act 1999 23 Committee comment 25 Treatment of utilities 25 Ausgrid's explanation of their Adjustment Guidelines 26 Acciona's claims 27 Transport for NSW's response 30 Ausgrid's evidence 33 Report 2 - January 2019 iii LEGISLATIVE COUNCIL Impact of the CBD and South East Light Rail Project Court case 35 Contract management issues 36 Committee comment 38 Management of heritage items and artefacts 39 Committee comment 43 Chapter 3 Capacity and journey times 45 Capacity of light rail services 45 Projected capacity 45 Configuration of the light rail vehicles 46 Concerns about capacity 47 Committee comment 49 Journey times 50 Estimated journey times 50 Concerns about journey times 51 Junction optimisation 51 Committee comment 53 Additional stop near Wimbo Park 54 Committee comment 55 Chapter 4 Key impacts 57 Noise 57 Concerns 57 Compliance and monitoring 59 Impact of the 'Critical State Significant Infrastructure' declaration 63 Committee comment 64 Alternative accommodation 64 Mitigation measures 66 Committee comment 69 Damage to property 70 Committee comment 72 Randwick stabling yard 73 Response to Doncaster residents' concerns 75 Committee comment 77 Parking and footpath access 77 Committee comment 81 Removal of trees 81 Committee comment 85 Acknowledgment of the ongoing impacts 86 Committee comment 87 iv Report 2 - January 2019 PUBLIC ACCOUNTABILITY COMMITTEE Chapter 5 Impacts on business owners 89 Financial impacts 89 Hoardings and signage 92 Committee comment 96 Small Business Assistance Program 97 Stakeholder concerns 100 Committee comment 105 Mental health impacts 107 Committee comment 109 Other business support services 110 Committee comment 113 Appendix 1 Advice from the Clerk of the Parliaments 115 Appendix 2 Zone Occupation Schedule with Duration 121 Appendix 3 Zone Occupation Schedule Original Dates v’s Actual Start Date 123 Appendix 4 Small Business Financial Assistance – Ex Gratia Payments by Zone/Category 125 Appendix 5 Submissions 127 Appendix 6 Witnesses at hearings 133 Appendix 7 Minutes 137 Appendix 8 Dissenting statement 189 Report 2 - January 2019 v LEGISLATIVE COUNCIL Impact of the CBD and South East Light Rail Project Terms of reference 1. That the Public Accountability Committee inquire into and report on the impact of the construction of the CBD and South East Light Rail Project ("the project") on residents and businesses in the vicinity of the light rail route, including: a) the adequacy of the government's response to the financial impact and diminution in social amenity caused by the project on residents and businesses including access to financial compensation and business support services, b) the appropriateness and adequacy of the financial compensation process established by the assessment process and consistency of outcomes, c) the effectiveness of the government's communication with residents and businesses concerning project delays and financial compensation, and d) any other related matters. 2. That the committee report by 25 January 2019.1 The terms of reference were self-referred by the committee on Tuesday 22 May 2018.2 1 The original reporting date was 1 December 2018 (Minutes, Legislative Council, 22 May 2018, p 2557). The reporting date was later extended to 25 January 2018 (Minutes, Legislative Council, 13 November 2018, p 3162). 2 Minutes, NSW Legislative Council, 22 May 2018, p 2557. vi Report 2 - January 2019 PUBLIC ACCOUNTABILITY COMMITTEE Committee details Committee members Rev the Hon Fred Nile MLC Christian Democratic Party Chairman The Hon Matthew Mason-Cox MLC Liberal Party Deputy Chair The Hon Greg Donnelly MLC Australian Labor Party Ms Cate Faehrmann MLC* The Greens The Hon Courtney Houssos MLC Australian Labor Party The Hon Trevor Khan MLC The Nationals The Hon Shayne Mallard MLC* Liberal Party * Ms Cate Faehrmann MLC is substituting for Mr Justin Field MLC for the duration of the inquiry. * The Hon Shayne Mallard MLC is substituting for the Hon Natalie Ward MLC for the duration of the inquiry Contact details Website www.parliament.nsw.gov.au Email [email protected] Telephone 02 9230 3313 Report 2 - January 2019 vii LEGISLATIVE COUNCIL Impact of the CBD and South East Light Rail Project Chairman’s foreword The CBD and South East Light Rail (CSELR) project is a major infrastructure project in Sydney that will connect Circular Quay to Kingsford and Randwick. It aims to improve public transport capacity, and to ease traffic congestion which is costing the economy a substantial amount of money each year. It is a complex and large project, with construction occurring down one of Sydney CBD's most congested streets, and the benefits of the project, once finalised, are potentially significant. Unfortunately though, serious questions have been raised in relation to the project's timeframes and costs. It is already delayed by at least a year, and although Transport for NSW would like it to be finalised by December 2019, the official completion date is currently March 2020. There may also be a further two month delay, according to the evidence provided by ALTRAC and Acciona. In terms of costs, unresolved claims for contract modifications, undetermined penalties for delays, and a complex legal dispute between Transport for NSW and Acciona, have raised questions about whether the project will exceed its $2.1 billion budget. This is understandable, given a liquidity facility fund has had to be established for ALTRAC and the department has had to provide $100 million to a contractor to keep the project moving. With infrastructure projects of this magnitude, a degree of disruption is to be expected. However, as this inquiry has shown, the impacts of construction have been profoundly experienced by residents and businesses located along the light rail route. Many have experienced excessive noise, dust, vibration and damage to their homes. Some of these issues have been heightened due to construction delays. The committee acknowledges that the level of noise during works undertaken out of hours has been impinging particularly on residents' lives and that noise has not been adequately monitored. Although alternative accommodation has been offered as a mitigation measure to some residents, the committee understands that this has often been an impracticable option. The impact of this project on businesses has been particularly significant. It was clear to the committee just how much businesses have struggled since the commencement of construction of the light rail, with some having closed down. It has been especially hard for small businesses that have been impacted by barricades, disruption in foot traffic and the severe loss of trade and goodwill. Not only have they endured significant financial losses, their physical and mental wellbeing has also been negatively impacted. This was particularly distressing for committee members to see, and we thank those who came forward to share with us so honestly the affect this project has had on their personal lives. There are lessons to be learnt from how this project has been managed. With this in mind, many of the committee's recommendations are aimed at informing how future major infrastructure projects are planned and implemented, particularly in terms of how construction may affect residents, businesses and the wider community. While it has been a tough time for many affected by this project, I personally hope that once completed, this light rail service will deliver its anticipated benefits. Finally, I would like to thank all those who participated in this inquiry. Your input is greatly valued in assisting the committee's work. I also thank my committee colleagues for their hard work and the committee secretariat for their support. We look forward to seeing this complex project finalised soon. Revd the Hon Fred Nile MLC Committee Chairman viii Report 2 - January 2019 PUBLIC ACCOUNTABILITY COMMITTEE Finding Finding 1 87 The committee finds that the delay of the project has contributed to the distress of residents and businesses.