The Melbourne Metro Rail Project - Case Study Example

Executive summary The Victorian government is keen to develop efficiently reliable infrastructural networks. Presently, the government has initiated the Melbourne Metro Rail Project (MMRP), considered a principal transport infrastructural project in Australian history. The project is envisioned to significantly transform the Melbourne city’s rail network. The Melbourne Metro Rail Project is expected to deliver High Capacity Metro trains, introduce high capacity signalling, and remove the most perilous level crossings. This will certainly result in a revitalized transport system, which safeguards and enhances Melbourne’s international city status. The project, which is estimated to cost $10.9 billion, comprises two nine-kilometre rail tunnels which will run from South Kensington to South Yarra. The tunnels, which will be used by electric trains, will run under Swanston Street in Melbourne’s Central Business District (CBD), hence linking the Sunbury and Cranbourne/Pakenham railway lines. It will also consist of five underground stations: Arden, Parkville, Domain, the CBD North and the CBD South. The diagram below (figure 1) shows the Melbourne Metro Rail Project overview. Figure 1: Scoping Requirements for the Melbourne Metro Rail Project (2015) The Arden Station (figure 1 above) is located in the western front of the Melbourne Metro. It lies diagonally between Arden and Laurent Streets (figure 2 below). It will host the substation that will supply the power for the Melbourne Metro tunnels work (MMRA ESS 2015). Figure 2: Arden station (MMRA Environment Effects Statement 2015) When completed, the project is expected to be substantially benefit the Melbourne metropolitan community. It will create employment opportunities, improve access to educational opportunities, and ease congestion along the ever busy St Kilda Road and Swanston Street. Furthermore, it will pave the way for future expansion of the public transport network in Melbourne. Key Issues and principles Safety Safety concerns have been raised about the Melbourne Metro Rail Project. The prime safety issue that arises is the project’s effect on the residents’ health. The North Melbourne’s Kangaroo Club is wary of the effect the dust from the Arden worksite may have on the players’ health since the club’s training facility at Arden is close to the worksite (Triple M Footy 2016). Indeed, Tomazin (2016) observes that the project will contaminate groundwater within the vicinity of the construction. This is potentially dangerous to the workers as well as the neighbourhood users. He further observes that the acid sulphate soils from the Arden construction site may also prove hazardous to human health. The residents are worried about their safety as they would be required to relocate when the project starts to avoid the noise and vibration which will be routine. Tomazin (2016) says that many residents are averse to relocating to quest apartments, as this would require payment of high corporate fees. Consequently, they would have low standards of living during the construction period. This social cost is quite frightening to many residents. MacArthur and Hudson (2016) point out that dust, noise and vibration that result from the construction of the project will negatively impact on expectant women and cancer patients. The inconveniences will hamper quick recovery of the patients. They further emphasize that the resultant vibration levels will hinder the Magnetic Resonance Imaging (MRI) machines from functioning accordingly. Victorian Industry Participation Policy The Victorian government has come up with the Victorian Industry Participation Policy (VIPP) which is aimed at ensuring that local suppliers have fair opportunity to compete for government contracts (Department of Economic Development, 2016). The VIPP also ensures that small and medium scale enterprises face no discrimination in the award of the government contracts for transport and other infrastructures (Victoria State Government, 2016). This, the government believes, would create employment opportunities hence economic growth. The VIPP, to achieve its objectives, operate under certain basic principles. The principles are: transparency in all government tendering processes, encouraged competitiveness for the local SMEs, ensuring all government purchases reflect value for money, and non-discriminative practices in any form be it subsidies or protectionism (Victoria State Government 2016 p. 4). Delivery of Project Objectives The project, according to the Victorian Government, would take about ten years (2016 - 2026) from the award of the contract to the start of passenger services (Melbourne Metro Rail Authority (MMRA) 2005). The project would be procured and delivered in four stages. First, the initial works in which the Managing Contractor would prepare the construction sites and make an agreement with Utility Service Providers on the supply of power for the construction works. Next would be the construction of the tunnels and the stations. The tunnels and stations would be operated and managed through a Public Private Partnership (PPP), a consortium between the government and a private party. The rail infrastructural works would then follow. The works in this stage will be procured through “competitive alliance in which the government collaborates with…parties to share risks and responsibilities…” (MMR A, 2005, p. 5). Finally, the designing, installation and commissioning of the rail systems will be done, as well, through a competitive alliance. The project timelines (MMRA, 2005, p. 55) would be as follows: 2016 / 2017 – Early works (following planning approvals) 2017 – Tunnels and stations contract awarded 2022 / 23 – Civil and structural works at stations, portals and tunnels completed 2024 / 25 – Station fit out and installation of rail systems completed 2025 – Systems integration and operational readiness completed 2026 – Commencement of passenger services Risks to the Project There are different risks that may hinder the progress and delivery of the project as planned. In the early stages, as Melbourne Metro Business Case (2016) observes, there could be delays occasioned by the telecommunications Act. This would further delay the start of the tunnelling works thus the works may not be completed within the stipulated time. To mitigate such delays, the managing contractor should ensure that the necessary approvals occur in time (Melbourne Metro Business Case 2016). In the like manner, the managing contractor should also roll out dates for the completion of specific stages. Inadequate power may also hamper the project. To counter this, the Melbourne Metro Rail Authority needs to have a direct working link with the Utility Services Providers (Melbourne Metro Business Case 2016). Still, there are likely to be additional costs since the project is quite ambitious. Maintenance costs should be projected and factored during the budgeting stage. Environmental Sustainability The impacts the project will have on the environment have been a major concern to stakeholders and the Arden and the larger Melbourne denizens. The environmental sustainability of the project has to be considered since infrastructural projects usually cause massive destruction to the environment. Brown (2016) reports how detrimental the project is likely to be the environment. The construction of Arden, Parkville and Domain stations, according to him, will destroy a massive number of both young and mature trees from the local parklands. The Shrine of Remembrance, as well, will not be spared. This follows that measures should be put in place to minimize trees destruction and to replace the ones that will inevitably be destroyed. It is not only the trees that are at risk. Some rare animal species such as the goshawk owl and the flying fox, Brown (2016) adds, will be threatened with the destruction of their habitats. The Melbourne City Council is as well concerned about the project’s effect on environmental sustainability. According to Carey and Lucas (2016), the vibration caused by tunnelling works and excavations will place iconic landmarks at great risk. The city’s most treasured buildings feared to be affected are: City Baths, Melbourne Town Hall, and Princes Bridge. Indeed, the residents fear that vibrations may have detrimental effects on the Recreation Centre, the Weston Milling and the North Melbourne Football Ground (Victoria State Government 2016). To ensure environmental sustainability, the project has developed a sustainability policy which focuses on “climate resilience, resource efficiency, waste water…” (Melbourne Metro ESS, 2015, p. 36). It would also ensure that many of the removed mature trees are reinstated and new ones are, as well planted, after the project’s completion. The City of Melbourne’s Forest Strategies would carry out the reinstatement and the planting of the trees (Melbourne Metro ESS 2015). Stakeholder Relations Melbourne Metro Rail Authority is committed to engaging with both the community and stakeholders in an open and inclusive manner. The open engagement occurs throughout the planning, execution and delivery of the project (MMRA 2015). Since the project is of a magnitude scale, proper and continuous consultations with community groups, businesses, residents, local councils, transport operators and the stakeholders is inevitable (MMRA 2015). MMRA engages comprehensively with the communities and stakeholders by raising their awareness on the importance of the project, seeking their opinions and addressing their concerns as satisfactorily as possible (Melbourne Metro EES 2015). The Melbourne Metro Rail Project being one of the largest infrastructure projects, the Victorian government has accordingly incorporated other companies. For instance, the Victoria government has awarded KBR, Inc. an alliance contract, making the company one of the shareholders in the project. KBR, Inc. together with another company, John Holland will remove the dangerous railway crossings across Melbourne, specifically at Centre Road in Bentleigh and North Road in Ormond (KBR, Inc. 2015). John Holland, another shareholder in the Metro Trains Melbourne (MTM), provides specialist skills in “signalling and communication infrastructure” (John Holland Group Pty Ltd, 2016). Future Proofing The population of Melbourne City is growing steadily, expected to hit 8 million mark by the year 2050 (Buxton, Hearsch and Tesdorpf, 2015). For this reason, the current transport infrastructure will be under unbearable strain to serve such a population. Unless proper integrated planning which involves transport infrastructural expansion is put in place, Melbourne City will degenerate into utter dysfunction characterized by “unsustainable economic, social and environmental consequences.” (Buxton, Hearsch and Tesdorpf, 2015, p. 4). The Melbourne Metro Rail Project comes in handy in providing a solution. For one, the project would expand railway network such that some extra 39, 000 passengers will conveniently access jobs, educational and health services (MMRA EES 2005). The businesses, as well, will easily relocate outside the Central Business District and still satisfactorily access customers, suppliers and the required professional services (MMRA EES 2015). MMRA (2016) notes that Arden Station will trigger unprecedented expansion of the inner city – and this will result to “future proof of Melbourne’s economic prosperity”. Significantly, the Arden Station will effectively connect the suburbs to the Melbourne rail system. In tandem with the project, MMRA (2016) has pointed out that, the Victoria Planning Authority will establish new commercial and residential regions in Arden-Macaulay section. The plan will also regenerate Moonee Ponds Creek. Consortium Structure and Management The project is a consortium in nature. The MMRA on behalf of the Victorian government issues a Registration of Interest (ROI) (MMRA 2015). The ROI is issued to facilitate collaboration with stakeholders and other key players to enhance efficient delivery of the project through open procurement of the needed services. In addition, MMRA (2015) reports, MMRA consults with a myriad of advisers which among others include: Aquenta, Advisian, Herbert Smith Freehills and O’Connor Marsden and Associates. The consortium is constituted as a Special Purpose Vehicle (SPV) whose main interest is the delivery and management of the infrastructure on behalf of the Victorian government. The industry partners that constitute the SPV are financial experts, legal experts, design experts, facility managers and the contractor. The SPV, according to the Melbourne Metro Business Case (2016), is the backbone of the project as it “typically designs, builds and finances the facilities…and maintains them to specified standards.” (p. 19). References Brown, S. (2016) “Melbourne Metro Rail Tunnel: How Construction Will Affect You”, ABC [online] available: www.abc.net.au/news/2016-06-17/melbourne_metro_rail_ road_closure [2 september 2016] Buxton, M., Hearsch, J. and Tesdorpf, P. (2015) “Future Proofing Melbourne: Integrating Land Use and Transport Strategy”, Rail Future Inc. [online] available: infrastructureaustralia.gov.au/policy-publications/submissions/aip/files/rail_futures_ institute_inc.pdf [2 September 2016] Carey, A. and Lucas, C. (2016) “Melbourne Metro Rail: Iconic Landmarks at Risk From Tunnel Works, Council Warns”, The Age, Victoria [online] available: www.theage.com .au/Victoria/victorianews [3 September 2016] Department of Economic Development (2016) “Victorian Industry Participation Policy” [online] available: economicdevelopment.vic.gov.au/Victoria-industry- participation-policy [2 September 2016] John Holland Group Pty Ltd. (2016) “Rail” [online] available: www.johnholland.com.au /what_we_do/industry_sectors/rail [2 September 2016] KBR, Inc. (2015) “KBR Awarded Major Infrastructure Upgrade Project in Australia” [online] available: investors.kbr.com/investors/press_releases/press_releas_details 2015 [3 September 2016] McArthur, G. and Hudson, F. (2016) “Patients’ Safety to Be Compromised, Highly Sensitive Equipment Endangered Under Current Melbourne Metro Rail Project Plans”, Herald Sun [online] available:www.heraldsun.com.au/news/Victoria/patients-safety-to-be- Compromised [3 September 2016] MMRA (2015) “Melbourne Metro Project: Registration of Interest” [online] available: metrotunnel.vic.gov.au/_data/assets/pdf_file/0012/3404/MM-Registration [3 Sept.2016] MMRA (2016) “Arden Station Metro Tunnel” [online] available: metrotunnel.vic.gov.au locations/arden [3 September 2016] MMRA EES (2015) “Melbourne Metro Rail Project: Environmental Effects Statements, Summary Report” [online] available: metrotunnel.vic.gov.au/_data/assets/pdf_file/ 0015/51063/MMRP_Summary [2 September 2016] Melbourne Metro Business Case (2016) “Appendix 12: Packaging and Procurement Options Analysis” [online] available: metrotunnel.vic.gov.au/_data/assets/pdf/ Oo17/40490/MM_Business_Case [2 September 2016] Tomazin, F. (2016) “Metro Tunnel Dig May Pose Health Hazards, Government Report Warns”, The Age, Victoria [online] available: www.theage.com.au/victoria/metro_ tunnel_dig_may_pose_health_hazards [2 September 2016] Triple M Footy (2016) “The Kangaroos Concerned About Melbourne Metro Rail Tunnel” [online] available: www.triplem.com.au/m,elbourne/.../the kangaroos-... [2 September 2016] Victoria State Government (2016a) “Victorian Industry Participation Policy (VIPP) Guidelines” [online] available: economicdevelopment.vic.gov.au/_data/assets/ pdf_file/0006/1312935/VI [2 September 2016] Victoria State Government (2016b) “Melbourne Metro Rail: Community and Stakeholder Feedback Report” [online] available: metrotunnel.vic.gov.au/_data/assets/pdf_file/0519 /51067/MMRP – Technical-Appendix [3 September 2016] Read More

This, the government believes, would create employment opportunities hence economic growth. The VIPP, to achieve its objectives, operate under certain basic principles. The principles are: transparency in all government tendering processes, encouraged competitiveness for the local SMEs, ensuring all government purchases reflect value for money, and non-discriminative practices in any form be it subsidies or protectionism (Victoria State Government 2016 p. 4). Delivery of Project Objectives The project, according to the Victorian Government, would take about ten years (2016 - 2026) from the award of the contract to the start of passenger services (Melbourne Metro Rail Authority (MMRA) 2005).

The project would be procured and delivered in four stages. First, the initial works in which the Managing Contractor would prepare the construction sites and make an agreement with Utility Service Providers on the supply of power for the construction works. Next would be the construction of the tunnels and the stations. The tunnels and stations would be operated and managed through a Public Private Partnership (PPP), a consortium between the government and a private party. The rail infrastructural works would then follow.

The works in this stage will be procured through “competitive alliance in which the government collaborates with…parties to share risks and responsibilities…” (MMR A, 2005, p. 5). Finally, the designing, installation and commissioning of the rail systems will be done, as well, through a competitive alliance. The project timelines (MMRA, 2005, p. 55) would be as follows: 2016 / 2017 – Early works (following planning approvals) 2017 – Tunnels and stations contract awarded 2022 / 23 – Civil and structural works at stations, portals and tunnels completed 2024 / 25 – Station fit out and installation of rail systems completed 2025 – Systems integration and operational readiness completed 2026 – Commencement of passenger services Risks to the Project There are different risks that may hinder the progress and delivery of the project as planned.

In the early stages, as Melbourne Metro Business Case (2016) observes, there could be delays occasioned by the telecommunications Act. This would further delay the start of the tunnelling works thus the works may not be completed within the stipulated time. To mitigate such delays, the managing contractor should ensure that the necessary approvals occur in time (Melbourne Metro Business Case 2016). In the like manner, the managing contractor should also roll out dates for the completion of specific stages.

Inadequate power may also hamper the project. To counter this, the Melbourne Metro Rail Authority needs to have a direct working link with the Utility Services Providers (Melbourne Metro Business Case 2016). Still, there are likely to be additional costs since the project is quite ambitious. Maintenance costs should be projected and factored during the budgeting stage. Environmental Sustainability The impacts the project will have on the environment have been a major concern to stakeholders and the Arden and the larger Melbourne denizens.

The environmental sustainability of the project has to be considered since infrastructural projects usually cause massive destruction to the environment. Brown (2016) reports how detrimental the project is likely to be the environment. The construction of Arden, Parkville and Domain stations, according to him, will destroy a massive number of both young and mature trees from the local parklands. The Shrine of Remembrance, as well, will not be spared. This follows that measures should be put in place to minimize trees destruction and to replace the ones that will inevitably be destroyed.

It is not only the trees that are at risk. Some rare animal species such as the goshawk owl and the flying fox, Brown (2016) adds, will be threatened with the destruction of their habitats. The Melbourne City Council is as well concerned about the project’s effect on environmental sustainability.

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