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Roads Australia Insider - February 24, 2017


Three shortlisted for Melbourne outer west roads package

Three consortia have been shortlisted for the $1.8 billion road and maintenance upgrade of Melbourne’s outer western roads.

Treasurer Tim Pallas announced last week that Netflow (Plenary Origination, Plenary Group, Cintra Global, WBHO Infrastructure, Broadspectrum, Amey Consulting) Western Improvement Network (CPB Contractors, Pacific Partnerships, Ventia, DIF Management Australia, Marubeni Corporation) and Western Roads Partnerships (Lendlease Engineering, Lendlease Services, Lendlease Infrastructure Investments, Capella Capital, WRP OSAR Finance Co, Cut & Fill, BBGI SICAV) had been short-listed to tender for the almost 30 kilometres of lane duplication and wider road maintenance.

The successful bidder will deliver eight planned road projects, which involve a combination of duplication and upgrade works – and deliver 20 years of maintenance for a wider network of over 750 lane kilometers, including:

  • Dunnings Road and Palmers Road, from Point Cook Road to Princes Freeway, Point Cook
  • Palmers Road, from Princes Freeway to Western Freeway, Truganina
  • Derrimut Road, from Sayers Road to Dohertys Road, Tarneit
  • Leakes Road, from Fitzgerald Road to Derrimut Road, Truganina
  • Dohertys Road, from Fitzgerald Road to Grieve Parade, Laverton North
  • Dohertys Road, from Foundation Road to Palmers Road, Truganina
  • Princes Freeway/Forsyth Road interchange, Hoppers Crossing
  • Duncans Road interchange, Werribee/Werribee South

The contract will be awarded in late 2017 with early works starting shortly afterwards.    


More level crossings to go on the Frankston line  

The Victorian Government has announced plans to remove three more dangerous and congested level crossings on the Frankston line.  

Public Transport Minister, Jacinta Allan, announced this week that the Frankston line will be lowered under Charman Road and Park Road in Cheltenham, and Balcombe Road in Mentone. The project will also completely rebuild Cheltenham and Mentone Stations, with platform levels below the ground.  

The level crossings are some of Victoria’s most congested, with boom gates down for up to 49 minutes in the morning peak. They are also dangerous, with two collisions and countless near-misses in the last decade.  

This consultation and detailed design work will continue through the first half of this year, with the projects put out to tender by the end of the year and construction starting by the end of 2018.


Centre of Procurement Excellence proposed for NSW  

A NSW Parliamentary Committee has recommended the establishment of a centre of procurement excellence in NSW to encourage consistent procurement practices across government.  

The recommendation is included in the Legislative Assembly Committee on Transport and Infrastructure’s report on its inquiry into the procurement of government infrastructure projects.

The Committee says the proposed centre of excellence would help maintain best practice in procurement processes and provide a platform for the sharing of procurement lessons learned from projects across government.  

Among other key findings, the Committee has called on the NSW Government to:

  • continue to promote unsolicited proposals as a means of developing and delivering innovative ideas, and at the same time examine ways to make the process easier;
  • continue to eliminate unnecessary information requirement during bidding stages in order to reduce bid costs;
  • provide a consistent and transparent pipeline of infrastructure projects to minimise bid costs and increase contestability;
  • extend the public-private partnership procurement model to smaller infrastructure projects through bundled public-private partnerships;
  • following a review of procurement contracts across all government agencies, standardise contracts where practical;
  • include in the NSW Public Private Partnerships Guidelines clear principles for the allocation of project risk;
  • assess whether contracting out of proportionate liability provisions should be prohibited across government contracts; and
  • investigate the best possible means to ensure that in all government contracts and public private partnerships all steel used on government projects comply with the Australian standard.

The Committee has asked the Government to respond to the report findings by August. For more information, go to the Committee webpage.


Weak infrastructure outlook underlines need for long-term pipeline, says CCF

The Civil Contractors Federation is calling on the Commonwealth to develop a Long Term Infrastructure Program in the wake of a new report that predicts a prolonged weakness in domestic demand and employment.

CCF National CEO, Chris Melham, says the Program should focus on shovel-ready projects with proven productivity benefits initially, and then on maintaining a rolling, long term infrastructure investment program that provides industry confidence and certainty.

The recommendation comes off the back of the inaugural Australia Infrastructure Outlook Report, published this month by the CCF in conjunction with BIS Shrapnel. Among the key findings in the Report:

  • Measured engineering construction activity is set to fall further over the next four years, as the last leg of the resources boom – LNG – moves to bust. However, non-mining and heavy industry civil construction is expected to stabilise in 2016/17 and move higher in subsequent years.
  • Overwhelmingly, the biggest driver of the pickup in non-mining civil work from here is the rise in transport infrastructure investment and, specifically, roads and rail construction.
  • The other large contributor to the growth in non-mining civil work is the ongoing rollout of the NBN (boosting telecommunications work). Relatively weaker growth is anticipated for other utility segments, including electricity, water and sewerage.
  • Given the importance of the mining industry to the “resource state economies” such as Western Australia and Queensland, the fall in resources investment will impact heavily across other industries as well as building and construction subcategories. These states will have a harder path ahead.
  • Nationally, falling total building and construction activity – along with the lost ‘multiplier’ benefits construction spending has on the economy – is keeping growth in domestic demand and Gross National Expenditure (GNE) subdued. Growth in domestic demand and GNE are key drivers of growth in employment. While GNE growth in Australia has slowed from 5-6 per cent per annum to just over 1 per cent in recent years, it is even worse in some of the worst affected states.     
  • By contrast, measures of economic production (GDP) are being supported by rising mining output and exports, but this growth is not as employment intensive. While economic growth ticked up to 2.7 per cent through 2015/16, activity contracted in the September 2016 quarter, and annual average growth is expected to stay constrained between 2-3 per cent through the remainder of the decade.
  • Construction sector employment is projected to fall from 1.05 million persons in 2015/16 to 950,000 persons by 2019/20 – a direct loss of around 100,000 jobs.

Based on the Report findings, the CCF has made a number of other key recommendations around infrastructure funding and procurement, including a call for debt funding of productive infrastructure, maximising efficiencies in procurement, and increased maintenance spending.

For more information on the Report, contact Chris Melham or ph. 02 6273 8312.    


Cintra and Plenary combine to create Netflow

Cintra and Plenary have combined to create a joint venture business – Netflow - to compete in the Australia and New Zealand road infrastructure market, with a focus on toll road and concession projects.  

Uniquely, Netflow brings construction capability through Cintra’s sister business, Ferrovial Agroman.  

Cintra CEO, Enrique Diaz-Rato, said Netflow will play an important role in creating competition in the sector by looking to develop roads with a sharp focus on customer outcomes.  

“Cintra has extensive international road development and operational experience, under a variety of payment models, that can be leveraged and adapted to the Australian market,” Mr Diaz-Rato said.

“In Plenary we have found a partner with a similar approach to infrastructure development and management, and we look forward to growing a portfolio of road projects together.  

“The success Cintra and Plenary had as part of the Nexus Infrastructure consortium in winning the A$1.6 billion Toowoomba Second Range Crossing project shows what we can achieve in this market.”  

Plenary CEO, Paul Oppenheim, said teaming with Cintra signalled Plenary’s intent to build on its Australian portfolio and follows successful road infrastructure projects in Australia and North America.

Phil Dreaver, a founding director of Plenary’s North American business, has been appointed Managing Director of Netflow and will lead all aspects of its operations. Mr Dreaver confirmed that Sydney’s WestConnex was a significant opportunity for the new business and would attract Netflow’s initial focus.


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