Victorian procurement reforms will add up to savings for taxpayers
Roads Australia says Victorian taxpayers will be the biggest winners from the State Government’s blueprint for public procurement reform, released this week.
Treasurer Tim Pallas released the blueprint, Reforming Public Construction, identifying a raft of reforms to deliver projects quicker and more efficiently, boosting jobs and Victoria’s competitiveness.
The paper was developed in consultation with contractors and industry bodies, including Roads Australia, and identifies three broad areas for action:
- exploring ways to make procurement processes across government more consistent,
- streamlining and simplifying tender requirements to reduce time and costs for industry, and
- harnessing procurement and project management skills within government.
“Standardising contracts and streamlining tender processes for major public infrastructure projects like roads adds up to one thing – cost savings for taxpayers,” Roads Australia President, David Stuart-Watt, said this week.
“The reform opportunities outlined in Reforming Public Construction policy paper will, if followed through on, reduce the cost of bidding and result in more competitive tenders.”
Mr Stuart-Watt congratulated the Government for wanting to work with industry to reform the current procurement process.
“There’s a lot of unnecessary duplication and inefficiencies in the current system – all of which costs bidders time and money, which in turn is reflected in tender prices,” he said.
“Earlier this year, Roads Australia met with Treasurer Pallas, who invited our ideas to improve the current process. We’re delighted that all the issues raised in our submission have been identified in the Government’s response as genuine opportunities for reform.
“These include simplifying current processes and requirements, building greater certainty into the approvals process, greater consistency across departments and agencies, more transparency, and harmonising risk definitions for key contractual items.
“We now look forward to working with the Government to implement as many reforms as possible, as soon as possible.”
Road usage charging study should consider a trial to give community ‘hands on’ experience
A public, voluntary trial of road usage charging (RUC) should be considered as part of the Federal Government’s proposed RUC study, announced in last week’s formal response to Infrastructure Australia’s 15-Year Infrastructure Plan.
Outlining the Government’s response, Urban Infrastructure Minister, Paul Fletcher, said the Government was committed to five key initiatives in its response to the IA 15-Year Plan:
- Work with state governments to develop urban rail plans for Australia's five largest cities and surrounding regions. The review will consider global trends and drivers of urban rail, including technology developments and changing demographic patterns, as well as linkages between rail and urban planning.
- Progress next steps for heavy vehicle reform with states and territories through the development of a forward looking cost base, and a discussion paper to inform consultation on options for an independent price regulator.
- Establish a study, led by an eminent Australian, into the potential benefits and impacts of road user charging for light vehicles. (Any move to implement change, including road user charging, would be a ten to fifteen-year journey and would only go ahead if governments were confident the benefits to the community of any new arrangements outweighed the costs).
- Develop a data collection and dissemination plan, to improve the collection of data on freight movements and public transport across different transport modes. (This will provide for improved and more timely information for infrastructure investment decisions and monitoring of the performance of Australia's infrastructure networks).
- Develop a national freight and supply chain strategy informed by the establishment of a comprehensive, independent inquiry that will examine how the productivity and efficiency of Australia's freight supply chain can best be lifted.
Roads Australia President, David Stuart-Watt, described the commitment to a study into RUC for light vehicles as a significant step towards genuine and much-needed reform of transport funding and pricing.
“However, we’d like to see the terms of reference include a trial of RUC technologies on public roads to help inform the study and bring the community squarely into the process,” he said.
“Transurban has already conducted a private trial on Melbourne roads. We think a government-initiated voluntary trial of light vehicles could be set up with the support of at least one of the States.
“Trials have been an important part of RUC debates in overseas jurisdictions, particularly the United States. It gives the community a voice at the earliest stage and allows for various technologies and policy settings to be tested.”
Mr Stuart-Watt said the imminent arrival of automated vehicles made road funding and pricing reform even more of an imperative.
“The arrival of automated vehicles calls into question the whole notion of private vehicle ownership – and with it, traditional road revenue sources such as registration and licensing,” he said.
“Whatever happens in the future, roads will still be here and we’ll still have to maintain them. We need to have a sustainable funding solution in place that ensures everyone who uses or benefits from our roads is contributing to their upkeep.”
The Federal Government is supporting 69 of the 78 recommendations made by Infrastructure Australia, confirming that the IA 15-Year Plan will guide key infrastructure policy directions. The Government has already committed funding towards 14 of the 15 projects on Infrastructure Australia's Infrastructure Priority List, including Inland Rail, WestConnex in NSW, and the Forrestfield Airport Link in WA.
For more detail on the Australian Government's response to the Australian Infrastructure Plan, click here.
John Holland to deliver Airport East project
John Holland has been chosen by the NSW Government to manage delivery of the $170m Airport East project in Sydney, helping to transform access to and from Sydney Airport and Port Botany.
Key features and benefits of the proposal include:
- replacing the General Holmes Drive rail level crossing with a road underpass;
- providing improvements to the Mill Pond Road intersections with General Holmes Drive and Botany Road; and
- widening Joyce Drive and General Holmes Drive between O'Riordan Street and Mill Pond Road.
JHG Chief Executive Officer, Joe Barr, said the project would improve traffic flow and access to the area and the movement of rail freight to and from Port Botany. “This is a vital hub of economic activity for NSW, and we are proud to work with the State Government to ensure vehicles travel through as efficiently as possible,” he said.
Regional General Manager NSW/ACT, Scott Olsen, said whilst John Holland had grown and diversified, civil construction remained a key capability.
“Our advanced approach has been crucial when delivering some of Australia’s most complex road projects, such as Westconnex M4 East and the Pacific Highway - Devils Pulpit in NSW,” he said.
Construction is scheduled to commence in early 2017 and take approximately two years to complete.
Transurban Queensland’s $512m Logan Enhancement Project approved
The Queensland Government has approved Transurban’s $512 million Logan Enhancement Project - the first private sector proposal to be assessed and approved under the government’s Market-Led Proposal process.
The project will see the delivery of major upgrades to parts of the Logan and Gateway Extension motorways, including the elimination of key congestion points and the addition of new south-facing ramps at Compton Road.
Transurban CEO, Scott Charlton, said last week the original concept design had been expanded to include increased scope and enhancements that were driven by community and stakeholder feedback.
“This design will address current constraints on the Logan and Gateway Extension motorways while also accommodating growth in the area – particularly from the fast growing freight and logistics industry south of Brisbane,” Mr Charlton said.
Transurban estimates the project will generate 1,300 direct construction jobs, and more than $1.3 billion in economic benefits.
Transurban Queensland will fund the upgrades through toll increases for heavy vehicles (Class 4) on the Logan and Gateway motorways.
Mr Charlton noted that as part of the project, Transurban Queensland would donate up to $2 million to develop a community complex adjacent to the Logan motorway at Heathwood.
“This initiative forms part of Transurban Queensland’s commitment to giving back to the communities in which we operate,” Mr Charlton said.
CPB Contractors has been awarded the contract to take the project into detailed design and construction.
Queensland Treasurer, Curtis Pitt, said last week the Logan Motorway project was one of four market-led proposals (MLPs) worth more than $700 million in total that had progressed to Stage 2 of the MLP process, and the first to proceed to final binding contract stage.
Interactive planning key to NSW's transport future
Transport for NSW has launched a new interactive approach to transport planning that will focus on new technologies to capture what public transport customers, motorists and the community want included in a new 40-year transport roadmap.
The new Future Transport Strategy will guide the State’s approach to public transport and roads infrastructure through flexible planning that is adaptable to rapid social, economic and technological changes. It will also support the recently launched district plans from the Greater Sydney Commission that envisage Greater Sydney as a more productive, liveable and sustainable city, as well as being coordinated with Infrastructure NSW’s State Infrastructure strategy and the Sydney Regional Plan being developed during 2017.
The Future Transport Strategy will place a greater focus on supporting new and emerging technologies to create better outcomes for transport customers, as well as supporting passenger and freight services.
A website has been launched to provide insights into the transport planning process and a snapshot of what has been achieved since the 2012 Long Term Transport Master Plan.
“We’re full steam ahead on a $41.5 billion transport infrastructure program that’s transforming the state,” Deputy Secretary Freight, Strategy & Planning, Clare Gardiner-Barnes, said last week.
“This includes the Sydney Metro network in the Northwest, City, West and South West, the Northern Beaches B-Line, as well as light rail projects in the Sydney CBD and South East, Newcastle and Parramatta.
"This investment also includes improvements to country roads and country rail. Our 2012 Master Plan has guided this unprecedented investment.”
Ms Gardiner-Barnes explained that the new strategy aims to take a fresh approach to planning and build on the NSW Government’s commitment to be more technology focused and to lead customer-based reforms such as those in point to point transport.
Early next year consultation on the state’s transport future will begin, using a digital experience to find out what services customers want over the next 40 years.
“The approach will be designed to get more people involved in transport planning and generate more meaningful input that we can really use to shape the future of transport in NSW," she said.
More information on the approach will be available early next year. To find out more about the Future Transport Strategy, visit www.future.transport.nsw.gov.au
IV invites feedback on road pricing and cost benefit analysis papers
Infrastructure Victoria has released two important discussion papers in the past fortnight – the first outlining how the introduction of a well-designed road pricing scheme could help address growing congestion on Melbourne roads, and the second looking at how improvements to cost benefit analysis can capture more economic, social and environmental impacts of infrastructure projects.
The road pricing paper is the first in a series of papers on transport network pricing from Infrastructure Victoria’s research program. The overall aim of this series is to examine the options, challenges and opportunities for transport network pricing in Victoria.
The road ahead outlines the problems with the current approach to transport pricing in Victoria, and the benefits and limitations of introducing a new road pricing regime to reduce congestion and make the most efficient use of the state’s transport network.
It considers overseas case studies such as London and Stockholm and outlines four potential models for road pricing. These models and mechanisms will be assessed in the next paper as part of stage two of the research series.
The cost benefit analysis discussion paper, Moving from evaluation to valuation, is also the first in a series which aims to improve how infrastructure projects are assessed and compared.
Infrastructure Victoria CEO, Michel Masson, said this week cost benefit analysis was a rigorous and transparent framework but could be improved and used more consistently.
“Cost benefit analysis of major transport projects does not currently capture all economic, social and environmental impacts. For example, we do not currently capture the impact on the urban amenity or biodiversity,” he said.
Infrastructure Victoria has considered international best practice examples and research from other jurisdictions, and hopes to use these to ascribe dollar terms to other economic, social and environmental values for use in the social housing, health and criminal justice sectors in Victoria.
“While we may never be able to capture all impacts, we think there is an opportunity to expand the use of cost benefit analysis in transport and other sectors which face key challenges and require substantial investment,” Mr Masson said.
“In NSW, cost benefit analysis is already being used in the health sector, and we think it could be used in Victoria in appraisals for building infrastructure like hospitals and prisons.”
In 2017, Infrastructure Victoria will develop a practical tool for the social housing, health, criminal justice and transport sectors—and will set out a comprehensive list of economic, social and environmental impacts to be considered.
“To meet Victoria’s infrastructure needs over the next 30 years, government needs to get the most value-for-money for infrastructure investment and cost benefit analysis is a key tool to support decision making," Mr Masson said.
“Importantly, our research will complement but not replace the existing state and federal guidelines.”
Infrastructure Victoria is seeking feedback on both discussion papers – February 15 for the road pricing paper and January 25 for the cost benefit analysis paper. Go to infrastructurevictoria.com.au for more information.