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New South Wales axes £3bn Sydney metro project

Australia’s New South Wales government this week faced industry anger and hefty compensation costs after cancelling the A$5bn (£2.9bn) Sydney Metro project on Sunday.

New premier Kristina Keneally axed the 9km long CBD Metro scheme even though the government had already spent more than £190M on the project.

Three consortiums had been shortlisted and invited to bid for the main construction contract.

They are: Line 1 (McConnell Dowell Corporation/Abigroup/ Obayashi Corporation), Metro Primo (Leighton Contractors/S.E.L.I) and a Thiess/John Holland joint venture.

Keneally canned the metro project after taking the axe to a transport plan produced by her predecessor and Labor Party colleague Nathan Rees.

Keneally ousted Rees as New South Wales premier in December.

The CBD Metro was to serve Sydney’s central business district and was identified as the “central spine” for a larger metro system, including western and northern extensions.

But Keneally said the metro scheme failed to address Sydney’s real transport needs.

Calls for compensation

She has published a Metropolitan Transport Plan focusing instead on the development of heavy rail. Sizeable compensation payouts are expected. The construction industry is estimated to have spent up to £35M to date on the project.

A working group will be set up to “work through with the tenderers their costs so that we can reimburse them,” said Keneally.

“We’ll do the same for property owners whose properties have not yet been acquired.” The reimbursement plan received a cautious welcome.

The Australian Industry Group expressed concern that the government had not committed to repaying costs in full.

“It would be both reasonable and fair to compensate the consortia for the Sydney Metro project 100% of the costs they have incurred,” said Australian Industry Group chief executive Heather Ridout.

“The risk of a client not proceeding with a project once it is in the market is not a risk that companies could or should have to price into a contract proposal.”

The Australian Constructors Association (ACA) issued similar calls for full reimbursement. “The duration of the bid phase has meant that significant opportunity costs have also been incurred by participants, as valuable resources have been dedicated to responding to the project,” said ACA executive director Jim Barrett.

“We listened to the community and made a tough decision”

Kristina Keneally, New South Wales Premier

Official figures show that the government has spent £193M on the project up to December 2009 including £73M on property acquisitions and £85M on advice, planning, tender management, staffing and administration.

The New South Wales government said the cancellation has cost 350 jobs including 157 contractors employed by the now defunct Sydney Metro Authority and 130 contractors at a project office run by Parsons Brinckerhoff.

New South Wales Treasury officials had been pushing to postpone the project until 2030. Construction was due to start later this year.

Keneally’s new plan, ratified by a specially convened state cabinet meeting on Sunday, focuses on slashing travel times for commuters living in western Sydney with the construction of a £3.9bn north west rail link and the expansion of the light system rail including a £2.6bn Western Express CityRail Service.

The plan also includes more commuter car parks, new ferries, and the introduction of air conditioned buses and trains.

The 10 year, £29.3bn programme is claimed to be fully funded and includes £4bn for new or expanded transport infrastructure and services.

Transport and planning ministers will jointly approve major transport infrastructure, ensuring projects are matched to growth.

“We’ve listened to the community and made a tough decision,” said Keneally. “This is about re-allocating spending to where it is needed. Sydney is no longer one city but a series of regional cities.

“This is about responding to the challenges of Sydney’s growing population,” she said.

By 2036, Sydney is expected to grow by 1.7M to 5.98M. Australia’s New South Wales government this week faced industry anger and hefty compensation costs after cancelling the A$5bn (£2.9bn) Sydney Metro project on Sunday.

What does the Metropolitan Transport Plan include?

The $4.5 billion Western Express CityRail Service − a separate dedicated rail track to slash travelling times from western Sydney to the city. It will achieve faster and more frequent services with a goal of up to 50 per cent more services and 17 per cent more passengers on the CityRail network on an average weekday. This will occur through:

  • Separating a dedicated track from all other traffic;
  • Construction of a new five kilometre priority tunnel − City Relief Line − will be built from 2015 in the city to separate western services from inner-city trains to provide shorter journey times;
  • Construction of eight new platforms to increase capacity at Redfern, Central, Town Hall and Wynyard to relieve congestion;
  • New express train services will be introduced for the Blue Mountains, Richmond, Penrith, Blacktown and Parramatta; and
  • Increase CityRail’s capacity on all lines and allow the introduction of express rail services to western Sydney.

Start of work on the $6.7 billion North West rail link from Epping to Rouse Hill with six stations at Franklin Road, Castle Hill, Hills Centre, Norwest, Burns Road and Rouse Hill in 2017;

A $500 million expansion of the current light rail system − bringing its total length to 16.9 kilometres with up to 20 new stations and almost 10 kilometres of new track − a more than doubling of the distance of the existing route. The $500 million comprises:

  • Road works and infrastructure;
  • 4.1 kilometres of light rail from Circular Quay via Barangaroo to Haymarket; and
  • 5.6 kilometres of light rail from Lilyfield to Dulwich Hill.

Improvements to bus services − costing $2.9 billion − which includes:

  • Roll out of 1,000 new buses in Strategic Bus Corridors in Sydney, Newcastle, Wollongong and the Central Coast;
  • Bus priority measures such as GPS traffic light priority; and
  • New STA and private bus depots.

Over the next 10 years, $3.1 billion for new trains and this is in addition to the 626 carriages on order;

Creation of the new Sydney Metropolitan Development Authority to drive future transit-oriented development and urban renewal. Authority will be similar to the highly successful Redfern Waterloo Authority and Barangaroo Delivery Authority. It will be responsible for implementing the integrated metropolitan land use strategy and will report to the Minister for Roads and Transport and the Minister for Planning with its own board with a Federal Government representative.);

A number of other transport related measures including:

  • $158 million in cycleways − completing many of the city’s high priority missing links;
  • More than $400 million in commuter car parks; and
  • $57 million Commuter Infrastructure Fund for local transport partnerships − such as improved and easy access for people with disabilities and more awnings and shelters at rail stations;
  • $225 million over 10 years for Sydney ferries, including six vessels;
  • $536 million for motorway planning, transit corridor reservations and land acquisition for future projects;
  • $483 million from State and Federal Governments to deliver important freight works in Sydney, including a NSW Freight Plan to increase productivity and secure jobs;

State Government will continue to deliver $21.9 billion of joint State and Federal funded road projects; and

An historic partnership with the City of Sydney to develop a memorandum of understanding on public transport; movement on laneways and streets and planning issues such as pedestrian friendly areas and civic spaces.

Readers' comments (1)

  • For all the talk about how good my countrymen are in capital projects, we have 15-20 year paralysis in pressing the 'go' button on any major project such as this. What a waste of £200M+ (in 2010 pounds/dollars).

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