About This Project

Urban Reform

Australia’s infrastructure shortfall must be urgently addressed in order to ensure our ongoing economic growth and to deliver equitable outcomes for stakeholders and the community.

“Australia will need to pull every lever – new funding mechanisms, new technology, new delivery mechanisms – to get anywhere near reaching its future infrastructure targets……” CEDA, 20th July 2010

The Warren Centre’s Towards a City of Cities report (2004) presented a range of strategies for building sustainable cities. The project provided detailed recommendations for government and industry action, and a number of these were embraced.

However, we are still not consistently delivering the required infrastructure, and our infrastructure deficit is being compounded by an increasing population and dwindling private sector investment.

This infrastructure shortfall must be urgently addressed in order to ensure ongoing economic growth and to deliver equitable outcomes for stakeholders and the community.

The Warren Centre established the Urban Reform Project with the following broad aims:

  • To identify barriers to successful infrastructure projects
  • To identify and publish an Agenda for Reform through a consensus based approach
  • To develop and publish a Framework for Reform and an Action Plan for implementation, expanding on the Agenda for Reform.

 

The ideas and key concerns identified through the colloquium were collated into the Handbook for Reform, which outlines the key success factors and barriers in bringing projects to fruition, including decision making and procurement processes. It is designed to help bridge the gap between planning and delivery of infrastructure. The Handbook for Reform outlined the Agenda for Reform.

The Framework for Reform

Following the release of the Handbook for Reform, the project is developing and testing the Framework for Reform through a series of case studies. These case studies cover:

  • Connectivity (five major transport projects)
  • Planning for Growth
  • Resilience (the capacity of cities including to withstand shocks)

These case studies assess a number of infrastructure examples against the principles identified in the Handbook for Reform – being governance, vision, strategy and implementation.

Each case study is scoped by a small group of experienced industry professionals, across a broad range of disciplines, to produce a summary. These case study summaries will each be examined though a colloquium which brings together industry, government, workforce, community, commercial and public sector experts to further the case studies and identify core strategies for delivering successful infrastructure.

Connectivity Case Study

The Connectivity Case Study was established to test the principles for successful infrastructure project delivery identified in the Handbook For Reform. Experts in planning, engineering and finance analysed five major infrastructure delivery case studies emphasising connectivity.

The Connectivity Case Study was established in 2012 to test the principles identified in the Handbook For Reform, the ‘Red Book’. The Red Book found that successful infrastructure outcomes require best practice in Governance, Vision & Policy, Strategic Planning, and Implementation. In order to verify these main drivers, experts in planning, engineering and finance analysed five major infrastructure delivery case studies emphasising connectivity:

  • Second Airport for Sydney – unrealised major proposal
  • High Speed Rail between East Coast capitals – unrealised major proposal
  • Victorian Regional Rail plan – regional infrastructure initiative
  • South East Queensland Regional Plan – regional infrastructure initiative
  • Westlink M7 Motorway – completed road project

Reviewing the case studies reveals a number of common themes, from which we can draw the following key lessons:

DOWNLOAD CASE STUDY
All projects require extensive inter-government and inter-agency cooperation and strong political leadership

Successful projects show strong and highly visible government leadership assisted by a professional and independent public service, free from short term political interference. Both the M7 and the SEQ case studies demonstrate the importance and effectiveness of strong leadership & inter-governmental cooperation.

A long term vision and commitment, focussed on outcomes not outputs, is essential. The project’s objectives must be clearly understood and articulated

A clearly communicated shared vision for the future, supported by strong and independent advice in policy formulation is essential. Vision and policy need to address change over the life of the project with bipartisan support. Unclear objectives and lack of vision have impeded both the High Speed Rail and Greater Sydney Airport projects.

The project must be part of a strategic plan which incorporates land use and community requirements, and recognises their importance in shaping sustainable communities and the economy

Integrated planning, effective funding frameworks, detailed project briefs and alignment with project deliverables, quality data and special skills are essential. But strategic planning should be responsive to changes in demand, context, technology and standards over the life of the project. Regional Rail, M7 and SEQ all have a strong strategic planning base and have had a significant impact on the future.

Continuous and extensive community and stakeholder consultation is required as well as the flexibility to modify the project in response to submissions

Successful projects are characterised by genuine consultation which incorporates appropriate information to ensure informed debate, as demonstrated by the M7.

Most major projects are long term and multi-jurisdictional, so the policy and regulatory framework needs to be established at an early stage and be able to adjust to changing circumstances

SEQ has shown the benefits of establishing long term plans which provide for regular reviews and updates. The Greater Sydney Airport and High Speed Rail have both suffered from the absence of an adequate policy and regulatory framework.

Alternative procurement processes should be widely considered and, once decided, be adaptable

The M7, SEQ and Regional Rail all have used a variety of procurement and funding mechanisms. Whilst the SEQ debt funding was criticised, its use has created economic wealth and delivered economic infrastructure which will benefit future generations, replacing the legacy that our current generation has enjoyed.

High Speed Rail in Australia

Despite the many recognised benefits of high speed rail connectivity, Australia is – after almost 30 years of initiatives – no closer to high speed rail implementation. The latest government sponsored study offers some hope, but will require strong national sponsorship if it is to avoid the fate of its predecessors.

Actual or planned infrastructure

Subject of high level planning & scoping studies but has not been implemented

Applicable state/s and LGA/s

Australian Government, four state/territory governments, multiple LGAs

Type of infrastructure

East coast high speed rail transportation

Any special features

A nationally significant project of high transformational impact on prevailing regional and commercial landscapes

Years – planning to implementation
Ongoing since 1984 under intermittent private and public sector leadership.
Project Details
Overview

In the absence of a National Transport Plan, the lack of a broader High Speed Rail mandate has meant that project leadership has been powerless and weak. There has been no ‘champion of influence’, and so short-term distractions have always prevailed. As a result, the project now suffers from a high level of public and business scepticism.

High Speed Rail can still be a reality in Australia – but the journey from here to there is still a long one. It starts with strong unequivocal leadership empowered by a common political & industry vision. It gains momentum through demonstrated commitment to execution. It becomes a reality through growing community belief in the project’s longer term importance to the nation.

HSR’s latest chapter offers hope. But without a substantial ramp up in government imperative (akin to the National Broadband Network initiative), the AECOM Phase 2 Study is destined to gather dust alongside so many of its predecessors.

History

High Speed Rail in Australia has a tortured history characterised by ‘hands-off’ government involvement and unsubstantiated private sector initiatives in its earlier years and the undertaking of multiple feasibility and scoping studies in the latter years, the value of which today remains open to question.

Status

In its July 2011 Phase 1 report, AECOM observed that “while some aspects of previous High Speed Rail studies remain of value, previous route recommendations for accessing the capital cities are no longer valid” due increasing network congestion, city expansion into rural areas and foregone access to previously preferred HSR station locations. As a result, HSR implementation will predominately require tunnelled access into urban areas at an estimated extra cost to the project of $6 billion.

Despite an ever increasing capital cost, few would deny the longer term imperative for improved connectivity along the nation’s most populous corridor. And as other nations have found, this imperative will only increase over time given:

  • Population Growth – that for east coast Australian states is expected to grow from 18 million in 2011 up to 28 million by mid-century with the vast majority of this increase destined to expand outer urban areas of the main cities.
  • Multi-Modal Congestion – Melbourne to Sydney being the world’s fourth-busiest air route (Sydney to Brisbane the seventh-busiest in Asia/Pacific) by aircraft movements with road and rail corridors to the north and south of Sydney at capacity;
  • Rising HSR Profile – from expanding international networks, growing patronage levels and technology led improvements in travel times and customer experience. HSR is already the favoured mode for shorter travel within Europe and is now pushing into routes approaching Melbourne to Sydney (725km) in distance. Barcelona to Madrid, a 650km+ route, in just three years of operation has replaced almost 50% of air travel
  • Energy & Environmental Imperatives – with HSR operation proving to be significantly more energy and environmentally efficient (over cars and air travel) and with rising energy costs / environmental concerns more likely to bring this to the fore.
Challenges

High Speed Rail implementation overseas has had its challenges. In an Australian context, these are likely to include:

  • The Demographic Challenge – establishing an HSR network will significantly influence future economic and social development along a chosen east coast corridor and its surrounds. Associated changes in population/decentralisation policy and planning will bring considerable change to population densities and landscapes of our cities and regions.
  • The Political Challenge – any HSR project will be of high public profile and inherently complex. It will profoundly impact existing community and regional ways of life. In traversing state, territory and municipal boundaries, multiple political stakeholders will require astute management over an extended period.
  • The Business Challenge – an HSR network will fundamentally change the prevailing commercial landscape. As industry commentator Dale Budd said in a 2011 CEDA presentation, HSR will introduce “a new business for Australia that is closer to aviation than to current rail services” and will impact over two-thirds of current domestic and regional aircraft movements at Sydney Airport. Resistance from vested business interests is inevitable, particularly where longer haul air/freight routes become impacted.
  • The Financial Challenge – for most, the biggest of all HSR challenges. It requires the funding of a very large capital cost over an extended (absolute minimum five-year, with most estimates far higher) construction timeframe with limited capacity for meaningful project recoupment. Extensive HSR experience and broad-based industry opinion conclusively point to the need for this cost to be significantly funded by government – although it is worth noting that AECOM’s report expects network operations and maintenance to be self-funding once in operation. The Affordability section contains more detailed funding analysis.
Key Lessons

So as we now head into our latest High Speed Rail chapter, just what lessons can we legitimately draw from our HSR past? There are four worthy of particular mention.

The Need for Shared Vision

HSR projects are highly transformational in nature and are in need of solid foundation. This foundation must comprise a rational strategic plan for regional development and settlement that also explains the need for HSR connectivity. Earlier HSR efforts have lacked this credibility and as a result, have become captive to various vested political and sectional interests.

Given likely public and business scepticism, project planning must be technically rigorous, highly developed (based on route specific EIS) and well-reasoned. The project must also be positioned early with industry, the public and the media as essential and nation building for the future. For as former Sydney Lord Mayor Lucy Turnbull put it at the Green Cities 2012 conference, “governments need … a better way of engaging with the community to obtain a mandate for change earlier in the planning process”.

The Need for Credible Evaluation

HSR evaluation must rise above more narrowly defined measures such as value-for-money, whole-of-life, discounted cost/benefit analysis, and so on. As the Arup and CRC studies have shown, the benefits of HSR are primarily strategic (social, regional & macro-economic) and not readily quantifiable. These benefits will also include capital savings achieved in addressing other modal congestion, particularly Sydney Airport.

The Need for Strong Leadership

International success points to the need for national (not state or provincial) government sponsorship that is bipartisan. The project requires leadership from a strong and highly skilled team empowered in the nation’s best interest. Australia has lacked this sponsorship and leadership with HSR initiatives allowed to wax and wane through various project iterations according to the political priorities of the day.

Taking this one step further, our HSR failures as well as other projects successes demonstrate the need for a “champion of influence”. This champion must be a person of strong political character and community standing who is able to galvanise opinion and keep shorter term political and sectorial distractions at bay.

The Need for Committed Execution

Long term major complex projects are vulnerable to failed delivery and even more so when faced with the above challenges. Stakeholders will require a confidence in HSR deliverability that can only be generated through an early confrontation/resolution of these challenges and a willingness to realistically assess/allocate project risks to those stakeholders best placed to assume them.

Affordability

Cost estimates for High Speed Rail have risen significantly over the timeframe being considered. The Speedrail consortium suggested that 40% of the project’s revised capital cost might have been supported from net operational revenues. However, as project cost estimates have risen, this percentage has fallen.

Arup-TMG’s estimate was closer to 20% and given the sizeable adjustment in AECOM’s latest estimate, it is difficult to envisage a project contribution much beyond 10%-15%. Against a $76 billion cost estimate, this would equate to a substantial government contribution of minimum $65 billion.

Aside from a project’s capacity to fund itself, there is also the issue of market capacity for financing a single project of this magnitude. Although difficult to assess at any time let alone in current global financial crisis impacted markets, it is hard to envisage a combination of local bank, local institutions (including super funds) and offshore (including export credit) being able to source funds much beyond the $10 billion assumed above in any event.

These are large numbers indeed particularly in the current economic and political environments of targeted budget surpluses and prioritised AAA credit ratings. By way of context, a $65 billion contribution would almost double the current combined annual spend by Federal, Queensland, NSW & Victorian governments on all forms of infrastructure. Even when spread over the construction timeframe, $65 billion accounts for over 30% of each government’s current infrastructure spend, for six consecutive years.

The alternative, as suggested by AECOM’s report, is for a more segmented HSR rollout “starting with an interregional project in a sector of greatest current and future population density to ultimately link the three major east coast cities”, according to Peter Thornton of WorleyParsons in the April 2011 edition of Infrastructure Australia. In this regard, most studies under discussion have identified the Sydney to Canberra corridor as the preferred initial inter-regional HSR option which, at an estimated HSR project cost of $29.3 billion according to AECOM, may prove to be a more affordable first step.

Conclusions

In the absence of a National Transport Plan, the lack of a broader High Speed Rail mandate has meant that project leadership has been powerless and weak. There has been no ‘champion of influence’, and so short-term distractions have always prevailed. As a result, the project now suffers from a high level of public and business scepticism.

High Speed Rail can still be a reality in Australia – but the journey from here to there is still a long one. It starts with strong unequivocal leadership empowered by a common political & industry vision. It gains momentum through demonstrated commitment to execution. It becomes a reality through growing community belief in the project’s longer term importance to the nation.

HSR’s latest chapter offers hope. But without a substantial ramp up in government imperative (akin to the National Broadband Network initiative), the AECOM Phase 2 Study is destined to gather dust alongside so many of its predecessors.

Second Sydney Airport

The need for a second Sydney airport has been investigated and debated at federal and state level since 1946. Now that further expansion of Kingsford Smith Aiport is considered unviable, it is widely accepted that Sydney will require additional airport facilities, but plans have advanced little in the last 65 years.

Actual or planned infrastructure
Planned only (in a number of locations) and not implemented
Applicable state/s and LGA/s

Australian Government, NSW Government, multiple LGAs

Type of infrastructure

International airport with associated transport and utility infrastructure including road and rail.

Any special features

Nationally significant infrastructure with implications for domestic & international aviation. Significant movements of passengers and freight requiring support infrastructure. Significant and widespread environmental impacts. Significant generator of economic development nationally, regionally and locally.

Years – planning to implementation

Ongoing since 1940s. Has involved numerous site selection processes and parliamentary investigations at federal and state level.

Project Details
Overview
The need for a second Sydney airport was identified early on in the development of the aviation industry in Australia. Investigations have generally been undertaken in the context of perceived or real capacity issues at Kingsford Smith Airport (KSA) and debate and interest in the need for, and site of, a second airport has generally temporarily waned following infrastructure upgrades at KSA.Numerous site selection processes have been undertaken and at least 20 sites, both within and out of the Sydney Region have at one time or another been examined. For a number of sites, detailed environmental investigations have been undertaken and in the case of the Badgerys Creek site, land actually purchased.
Investigation and debate around a second Sydney airport has generally involved three key considerations:
  • The need for a second Sydney airport – can KSA accommodate future aviation growth; if not, could capacity be taken up by nearby airports such as Newcastle or Canberra with improved connections to Sydney?
  • The function of a second airport – international, domestic, general aviation or all?
  • The location of a second airport

Despite over 60 years of investigation and at times seeming commitment from the Australian and/or New South Wales Governments, a second Sydney Airport is at the time of writing in 2012 still no further advanced than high-level investigations. There have been a number of key factors behind the failure of successive governments at all levels and of all political persuasions to determine the need for and location of this major piece of national infrastructure.

With another Australian HSR initiative now under way, following the 2011 and 2013 releases of the two phases of the study commissioned from AECOM’s by the Australian Government, it is perhaps an appropriate time for some sober introspection.

Might the failures of our earlier HSR initiatives (and the intervening success of others) offer important insights on how we might improve on our implementation prospects this time round?

Scope

A second airport to serve the needs of Sydney (and by extension New South Wales and Australia as a whole) is not a single piece of infrastructure but in reality is a co-ordinated framework of complementary infrastructure provided by federal, state and local governments.

Key components of a second airport would include:

  • Sufficient land for parallel runways with at least one 4,000m runway to accommodate the largest international aircraft, and associated taxiways and aircraft parking areas
  • Air passenger terminal(s) incorporating, check in, baggage handling, customs and immigration facilities, retail, bars/restaurants, airline lounges, administration, airline catering
  • Car parking
  • A freight terminal
  • Aviation fuel pipeline and connections
  • Ancillary tourist accommodation and conference facilities
  • Rail infrastructure for both freight and passenger movements
  • Road infrastructure

Infrastructure requirements go well beyond the physical boundary of the airport. The airport will necessitate and facilitate significant changes in the land use of the surrounding local area to accommodate ancillary employment uses, freight management and hotel/conference uses. The siting of an airport also restricts other sensitive uses in surrounding areas such as residential development, particularly under flight paths.

Planning for a new airport for Sydney requires a metropolitan-wide strategic land use context. The timing of implementation of the airport in terms of its ultimate size and ‘ramp-up’ to a full international airport also has huge implications for land-use planning and infrastructure provision.

History

A full chronology of government decisions (and indecision), investigations and reports was prepared by the Australian Parliament House Library in 2005 and is available for download (PDF, 843kB). A summary of that document is provided below, updated to the time of completion of this case study in 2012:

1946-1975: Early years – Investigations into the need for and potential location of a second Sydney airport commenced in 1946 with a study undertaken to determine the most appropriate site for the development of a new international airport for Sydney. Sites investigated included Towra Point, Bankstown and Mascot. Consideration of Towra Point continued through to the mid-1960s when a NSW Government study recommended that a second airport be established at Towra Point to be operational by 1980 when KSA was predicted to reach capacity.

Little traction on the Towra Point airport proposal was achieved and by 1969 the Australian Government’s attention turned to broader investigations by a number of agencies into 11 sites ranging from Warnervale on the Central Coast down to Wattamolla. By 1971, the federal view was that a second airport was necessary and that Richmond and Somersby be further investigated as priority sites.

In 1973, the new Whitlam Government ignored the advice of a further report by a joint federal/state Committee that recommended extending the capacity of KSA before constructing a new airport. Federal Cabinet rejected the recommendation and announced Galston as the site of the second airport. However, this site was ruled out the following year on the grounds that it was not financially or economically feasible. The decision also followed protests by local residents.

1976-1988: Badgerys Creek emerges – By 1976 the need for a second Sydney airport was again being debated in the context of the future capacity of KSA. A joint federal/state Major Airport Needs Study (MANS) was commenced to examine whether to build a second runway at KSA or to build a second Sydney Airport amongst an increasing number of studies that showed growth in air travel had been overestimated and that KSA had adequate capacity until at least 2000.

The MANS group released a preliminary report in 1979 that recommended the construction of a third runway at KSA and selected Badgerys Creek as the site for a second airport should one be needed in the future. The report created a divide between the Australian and NSW Governments with NSW rejecting the MANS reports and strongly opposing the need for second runway at KSA.

During the early 1980s the second airport debate was largely characterised by disagreement between the two levels of government. This was to an extent driven by partisan politics. By 1985 a draft environmental impact statement on sites at Wilton and Badgerys Creek was released for public comment by the Commonwealth. In early 1986, Badgerys Creek was selected as the site for the second Sydney airport and land acquisition commenced.

1988-95: Kingsford Smith upgrade buys time – Lack of progress on the development of the airport at Badgerys Creek shifted focus back to capacity at KSA. By the late 1980s the NSW Government, critical of federal handling of Badgerys Creek, heavily promoted the construction of a third runway at KSA. This was supported by the Australian Government in March 1989, however progress on Badgerys Creek would continue, with commitment to the development of a general aviation facility and design work on the future airport.

During the early 1990s, debate over the development of the second Sydney airport intensified. The federal Coalition opposition argued that construction of a second airport at Badgerys Creek should not commence until KSA was fully upgraded and the need for an additional airport established. Approval of the third runway at KSA further cast doubt on the need for and timing of a second airport in Western Sydney.

1995-2002: State and federal disagreement wastes time – By the mid-1990s, with completion of the third runway at KSA and changes to operations and flight paths at that airport, focus again shifted to the second airport. Forecasts for aviation growth were revised upward, particularly for domestic travel.

In 1995 the Australian Government announced the commencement of a comprehensive EIS process for the Badgerys Creek site and included in its budget over $600 million for land acquisition, planning and construction and new roadworks. However momentum was lost when the federal Airport Sales Legislation was blocked by the Opposition in the Senate, effectively wiping out forward funding for the second airport project and delaying its proposed timetable.

By 1996 the new Howard Coalition government, while supporting a second airport in the Sydney basin, included consideration of Holsworthy as a potential site. Holsworthy was however dismissed as a possible site a year later and the Badgerys Creek EIS was publicly released for comment. In response Federal and State MPs from Western Sydney publicly opposed construction of an airport at Badgerys Creek as did the NSW Government and the Western Sydney Alliance of Councils.

2003-2012: A lack of acceptable options – Despite broadly endorsing the Badgerys Creek EIS, by the early 2000s the Australian Government began again to defer plans for the construction of the airport at Badgerys Creek on the basis of there being adequate capacity at KSA in the short to medium term.

By 2003 the Labor federal opposition completely withdrew support for the Badgerys Creek site and proposed yet another round of site investigations should it win government. By 2005, the Australian Government’s view was that there was adequate capacity at KSA.

In December 2009, the Rudd Labor Government released a National Aviation Policy White Paper which stated that the Government did not accept the proposition that KSA could or should handle projected long term aviation growth in the Sydney Region. The paper outlined a joint Australian/NSW Government strategic aviation plan for the Sydney region to consider the medium and long term aviation infrastructure requirements for the region and the land transport network linkages to meet forecast aviation demand.

The paper also stated that Badgerys Creek was no longer an option for a second Sydney airport as the site had been overtaken by urban growth and was now inconsistent with NSW strategic planning for South West Sydney.[/expand]

Lessons Learned

There are a number of key factors that underpin the failure over 65 years for the issue of a second airport for Sydney to be dealt with and implemented by successive governments at all levels and of all political persuasions:

Lack of Federal/State Co-ordination: While there has been at times joint co-operation between the two levels of government, at other times there has been lack of agreement and co-ordination which has undermined any momentum being developed on the project. At times the NSW Government has preferred to support infrastructure upgrades at Kingsford Smith Airport in conflict with federal attempts to investigate new airport sites. The lack of co-ordination has also been at times the result of partisan politics when there are governments of different political persuasion.

Given the suite of infrastructure required to service a new airport, long term commitment and co-operation between both levels of government, and to a lesser extent local government, is essential but unfortunately has been lacking.

 

Lack of Clarity or Certainty on Growth in the Aviation Market: There has been a lack of a long term aviation policy that clearly articulates the needs and future of both KSA and a second Sydney Airport. Uncertainty about growth in the aviation market and the ability of KSA to accommodate that growth in the medium to long term has been used effectively in the past to delay and frustrate progress on decision making and commitment around a second airport.

Notwithstanding significant capacity upgrades at KSA, including the parallel runway and new proposals for a re-organisation of terminal space, KSA is subject to significant restrictions by way of aircraft movement caps and a curfew, which are unlikely to be removed given local political sensitivity.

 

Failure to define the Overall Project & Commit Funding: There has never been clarity or certainty as to what ultimate long term role a second airport would play in the national aviation market and the phasing of airport development required to achieve that role.

Once the site at Badgerys Creek was selected, its ultimate role, staging and timing of development was never consistently defined and its size and function was revised numerous times.

 

Voter Backlash: The mood of voters in electorates surrounding identified potential sites has played a significant role in frustrating the issue. For a number of potential sites, including Somersby, Galston and even Badgerys Creek, local opposition has played a key influencing role in decision making.

In the case of Badgerys Creek, previously safe Labor voting electorates in Western Sydney at both federal and state level have in recent years become increasingly marginal and viewed by both parties as ‘battleground’ seats. This has played a role in dampening the enthusiasm of both major parties to ultimately develop an airport in this location. Ironically, voter discontent in inner suburbs surrounding KSA has also played a role in keeping the need for a second airport on the agenda.

 

Vested Interests: As with every major infrastructure project, vested interests have played a role in influencing the decision making process for the implementation of a second airport for Sydney.

The owners of the privatised KSA have an overriding motive to protect their investment and ensure that KSA remains Sydney’s principal airport and in a position to accommodate as much growth in aviation as possible. Major airlines – particularly Qantas, which is based at KSA – also have a significant investment to protect in terms of maintenance facilities, administration and terminal leases. The establishment of a second airport also has the potential to foster greater competition through providing a potential base for new market entrants.

At times, RAAF facilities have been considered potential sites for a second airport including Richmond and, more recently, Newcastle. The on-going operational needs of the RAAF and the significant local employment they support have also been factors in these sites being discounted.

 

A Sydney Problem: Despite being clearly within federal jurisdiction, the need for a second Sydney airport has been viewed largely as a Sydney or NSW problem. While other state governments are cognisant of the issue, a second Sydney airport is viewed by them as competition for federal infrastructure funding.

There is a general failure to understand that as the key gateway to Australia, the future aviation needs of Sydney are critical to the national economy and the effective operation of the entire aviation network in Australia. Bottlenecks at Sydney reverberate to every other major airport in the country affecting the movement of both passengers and freight. Despite this, there has been little buy-in by other states on the matter.

The Way Forward

The release of the National Aviation Policy White Paper in 2009 reaffirmed support at the federal level for a second Sydney airport, leading to the preparation of an Joint Study on Aviation Capacity for the Sydney Region with the News South Wales Government. The report, which was released in March 2012 shortly after this case study was finalised, was intended to determine the medium and long-term aviation infrastructure needs for the region and identify strategies to meet these needs. If they are to successfully achieve their goals, policymakers will need to bear in mind the following key issues:

 

Vision & Policy Framework: The need for and location of a second Sydney airport needs to be a key component of a comprehensive long term aviation policy in Australia that has the buy-in and support of Australian and State Governments – not just the NSW Government but all State Governments.

There is a need to change the way the aviation policy and airports are dealt with in Australia. There is a need for major airports to be planned and operated as part of a network rather than in isolation. The provision of aviation infrastructure in the Sydney region is critical to the operation of airports across the country. A second airport for Sydney is a national policy issue that requires a common vision and policy framework and the support of other states as a piece of national infrastructure that can have flow on benefits to their economies.

The National Aviation Policy needs to establish clarity as to the role the airport will play within the national aviation network, and particularly relative to KSA, given that airport’s physical and regulatory capacity constraints. Key questions that need to be investigated and addressed include:

  • Whether the airport should be in the Sydney Basin or further afield, including the possibility that the second airport could be an upgrade to airports at Canberra or Newcastle
  • Will the airport’s role be to support KSA or ultimately supersede it as Sydney’s major airport?
  • How does aviation policy interact with other developing federal transport investigations such as High Speed Rail – does it compete with or complement and serve the aviation network?

 

Governance: While aviation is a Commonwealth responsibility, connecting transport infrastructure, utilities and surrounding land use planning are the responsibility of State and Local Government. All levels of government need to be on the same page in terms of supporting the need for a second airport, its location, ultimate size and development staging.

Given its national importance, a second Sydney airport will always require the leadership of the Commonwealth Government with a ‘champion’, preferably a Federal Minister. However, to get truly national buy-in, there needs to be a COAG-backed framework to deliver an overall aviation policy with the second Sydney airport as a key consideration. This may also deliver greater opportunities for bi-partisan support.

Strategic & Integrated Planning: A second Sydney airport will be a key land use driver in the metropolitan and regional context. A key issue will be that site selection and planning for a second airport needs to acknowledge and be compatible with the strategic planning direction for the region, but also will itself ultimately shape land use and infrastructure. If the site is external to the Sydney metropolitan area, how will it relate or affect the metropolitan area and transport linkages to it?

 

Funding & Implementation: A second airport for Sydney will be a long term project in terms of policy, planning and delivery and cover multiple political and budget cycles. Commitments need to be quarantined such that its ultimate delivery cannot be undermined by short term political decision making or electoral mood (such as Badgerys Creek). Given the need to provide for different types of infrastructure to connect and service the airport, there is also a need for State and local infrastructure to be tied in to funding commitments through an overall budget package for all aspects.

Federal funding should be on the basis that it is truly national infrastructure for the benefit of the whole economy. It should not be on the basis of being federal funding for a solely NSW infrastructure project. Other funding sources need to be identified and considered including:

  • Public Private Partnership – the airport will ultimately be privately operated under a lease arrangement, so private finance may be viable
  • Value uplift of surrounding land – potential for tax increment financing mechanisms

There needs to be a single body responsible for overall delivery of the project including an integrated approvals process that ensures all infrastructure is approved for implementation in accordance with overall project strategy, and avoids duplication of approvals.

A Second Sydney Airport or a Western Sydney Airport? A key consideration in any decision on the future aviation needs for Sydney is the growing need of Western Sydney in the overall metropolitan context. By 2036 it is predicted that the population of Western Sydney will be just under three million people. KSA is located in close proximity to the Sydney CBD on the eastern fringe of the metropolitan area and while it serves this area well, it is remote to, and poorly serves most of Western Sydney.

Investigations into the aviation needs of the Sydney region need to specifically address the needs of the large, growing and dynamic population of Western Sydney which generates the demand for an airport in its own right. An airport that focuses on Western Sydney and gives priority to land use, employment and infrastructure linkages within the context of that sub-region could provide a radically different approach to the issue than previous investigations and potentially generate parochial support for an airport to be located there.

Affordability

Cost estimates for High Speed Rail have risen significantly over the timeframe being considered. The Speedrail consortium suggested that 40% of the project’s revised capital cost might have been supported from net operational revenues. However, as project cost estimates have risen, this percentage has fallen.

Arup-TMG’s estimate was closer to 20% and given the sizeable adjustment in AECOM’s latest estimate, it is difficult to envisage a project contribution much beyond 10%-15%. Against a $76 billion cost estimate, this would equate to a substantial government contribution of minimum $65 billion.

Aside from a project’s capacity to fund itself, there is also the issue of market capacity for financing a single project of this magnitude. Although difficult to assess at any time let alone in current global financial crisis impacted markets, it is hard to envisage a combination of local bank, local institutions (including super funds) and offshore (including export credit) being able to source funds much beyond the $10 billion assumed above in any event.

These are large numbers indeed particularly in the current economic and political environments of targeted budget surpluses and prioritised AAA credit ratings. By way of context, a $65 billion contribution would almost double the current combined annual spend by Federal, Queensland, NSW & Victorian governments on all forms of infrastructure. Even when spread over the construction timeframe, $65 billion accounts for over 30% of each government’s current infrastructure spend, for six consecutive years.

The alternative, as suggested by AECOM’s report, is for a more segmented HSR rollout “starting with an interregional project in a sector of greatest current and future population density to ultimately link the three major east coast cities”, according to Peter Thornton of WorleyParsons in the April 2011 edition of Infrastructure Australia. In this regard, most studies under discussion have identified the Sydney to Canberra corridor as the preferred initial inter-regional HSR option which, at an estimated HSR project cost of $29.3 billion according to AECOM, may prove to be a more affordable first step.

Conclusions

In the absence of a National Transport Plan, the lack of a broader High Speed Rail mandate has meant that project leadership has been powerless and weak. There has been no ‘champion of influence’, and so short-term distractions have always prevailed. As a result, the project now suffers from a high level of public and business scepticism.

High Speed Rail can still be a reality in Australia – but the journey from here to there is still a long one. It starts with strong unequivocal leadership empowered by a common political & industry vision. It gains momentum through demonstrated commitment to execution. It becomes a reality through growing community belief in the project’s longer term importance to the nation.

HSR’s latest chapter offers hope. But without a substantial ramp up in government imperative (akin to the National Broadband Network initiative), the AECOM Phase 2 Study is destined to gather dust alongside so many of its predecessors.

South East Queensland Regional Plan

Following substantial growth in South East Queensland, the Queensland Government collaborated with local and federal government to produce a regional plan for managing future growth needs. This was integrated with an infrastructure plan and program, providing clarity of vision and leading to successful delivery.

Actual or planned infrastructure
Actual infrastructure project – 119 projects delivered as of mid-2012 with a further 152 to be delivered by 2014
Applicable state/s and LGA/s
Queensland Government, Australian Government, and multiple LGAs – supported by a MOU as part of the 1994 regional framework.
Type of infrastructure

Whole infrastructure network, with a focus on road and rail.

Any special features

Integrated growth plan for the region that incorporated the SEQ Integrated Transport Plan & Program.

Years – planning to implementation

The SEQ2001 plan process began in 1990, with a series of iterative reviews culminating in the release of the SEQ Regional Plan 2009-2031.

Project Details
Governance

The Queensland Government prepared the regional management plan and the associated infrastructure plan. In both cases, the plan was prepared with support from local and federal governments.

The success of the plan and program is the commitment at all levels of government to the delivery of infrastructure to support the needs of the community. While most of the projects relate to infrastructure to be delivered by the Queensland Government, there is always a need to involve responsible local governments – and for the major regional projects, the Australian Government. An agreement as to who has responsibility for the ownership and implementation of projects has generally been clear.

Another governance factor was the long-term commitment to delivery, with $22.2 billion in projects delivered or under construction by 2012.

Vision & Commitment

A key element of the success in the delivery of the projects associated with the plan was the clarity of the vision for south east Queensland shared by state and local stakeholders.

The vision is outlined in the SEQ Regional Plan – “a region of interconnected communities, with excellent accessibility and an extensive and efficient public transport system assisting in the reduction of greenhouse gas emissions.”

One of the principles is “plan, coordinate and deliver regional infrastructure and services in a timely manner to support the regional settlement pattern and desired community outcomes.

Strategic Plan

The SEQ Regional Planning process has demonstrated the power and importance of both continious review and commitment, clearly displaying the significance and success of integrated land use and infrastructure planning.

The overall process which led to the regional plan was begun in 1990 with the initiation of the SEQ2001 process, which sought to provide a coordinated approach to managing growth in the region.

An initial framework for growth management was released in 1994, and went through a series of revisions, reviews among stakeholders and additional detailed reports over the next 15 years, culminating in the release in July 2009 of the SEQ Regional Plan 2009-2031 and the supporting South East Queensland Infrastructure Plan & Program (SEQIPP).

The SEQIPP program is reviewed and updated annually. This helps to ensure that projects remain current and applicable to the principles of the program.

Implementation

The SEQ Infrastructure Plan & Program is designed to address all infrastructure needs in the region, including transport, health, education, energy, water and community services. The plan clearly outlines a program of infrastructure priorities that are deliverable now and in the longer term.

During the course of the plan, the Queensland Government has responded to industry concerns about risk allocation and some changes have resulted. A number of different delivery models were used to deliver the various projects including PPP, Alliance, Construction-only and Design & Construct.

A number of projects were delivered with private sector involvement, namely:

  • Clem7/Clem Jones Tunnel (formerly North-South Bypass Tunnel)
  • Airport Link
  • Gold Coast Rapid Transit
  • Various non-transport projects

The success of private sector involvement may appear to be limited given the bankruptcy of the operators of the Clem7 and the Airport Link. However, successful projects, for example Southbank Institute of TAFE, were achieved, and the financial risk in the tunnel projects was largely confined to the private sector funders.

It is noticeable that a number of projects funded under the SEQIPP since its inception in 2005 have been planning and investigation studies. The majority of larger projects delivered or planned to be delivered in the future were subjected to detailed investigation. A structured process is followed, which takes a potential project from pre-feasibility to concept design using a number of “gateways” along the way. These investigations seek to ensure the project satisfies the various policy requirements and is suitable for inclusion in the program.

Conclusions

The success of the plan and program can be attributed to the shared vision of local and state governments, delivered through a process that ensured planning and budget commitments were matched up and reviewed on an annual basis.

More specifically, the key success factors were:

  • A clear vision and plan
  • A commitment from all levels of government, community and the private sector
  • A commitment to continued funding
  • Agencies capable of delivering projects
  • Review and update so that the plan remains relevant

However, with changed goverment priorities following debt concerns in the early 2010s followed by the election of the LNP Government in 2012, the future of the plan and the rate of delivery now appear somewhat under a cloud, highlighting that even the strongest planning process will end up subject to political realities.

Victorian Regional Rail Link

The Regional Rail Link project provides a new route for the western regional rail services into Melbourne, separating them from existing metropolitan lines and significantly improving the efficiency of all routes. A key element of the Victorian Transport Plan, it will also lay the foundations for the future expansion of the rail network.
Actual or planned infrastructure
Funded and under construction
Applicable state/s and LGA/s

Victorian Government initiative with Australian Government funding contribution

Type of infrastructure

Rail expansion

Any special features

Major project that both serves a regional connection role and opens areas of Melbourne’s west for suburban expansion

Years – planning to implementation

Identified as a major project in the 2009 Victorian Transport Plan

Project Details
Overview

The Victorian Regional Rail Link project creates a new line through the west of Melbourne that links trains from Geelong into Southern Cross Station along dedicated tracks. Additional capacity for extra trains along this line will serve thousands more passengers across the Melbourne and country rail networks in the peak period.

The project was conceived before the Victorian Government sought public comment on an expansion of urban growth and on related transport projects in 2008, but this was the catalyst for developing details sufficient for it to become a joint Federal and State funded project in 2009.

Notwithstanding some local community and political opposition, the project has continued to progress under the control of the Victorian Department of Transport with all construction contracts now let. The necessary environmental and construction approvals have been forthcoming with strong support from the state and federal governments.

The project will fully separate regional trains from metropolitan trains, giving Geelong, Bendigo and Ballarat trains their own dedicated tracks through the suburban system from Sunshine to Southern Cross Station, and thereby increasing both capacity and reliability.

Key project elements include:

  • 47.5 km of new dedicated regional tracks from the west of Werribee to Deer Park
  • Two new stations at Wyndham Vale and Tarneit.
  • New platforms at Sunshine and Footscray
  • Upgraded or rebuilt suburban stations at West Footscray and Tottenham
  • Two new platforms at Southern Cross Station
  • Construction of a new rail bridge over the Maribyrnong River

The Regional Rail Link project should be seen in the context of a wider transport planning strategy and associated funding opportunities. The Victorian Transport Plan, finalised in 2009, sets clear strategic directions to 2020 and beyond for road, rail and freight infrastructure across the state.

This wide-ranging document formed not only the basis for future planning but can be seen to have been instrumental in Victoria’s success in securing $3.2 billion of Australian Government infrastructure funding in 2009.

The plan had its genesis in Sir Rod Eddington’s 2008 report Investing in Transport, which examined transport solutions for connecting Melbourne’s eastern and western suburbs. This report acknowledged that investment should be aimed at increasing prosperity while addressing population growth and the challenge of climate change. Investment must not only provide new transport connections, but also shape the growth and development of Victoria.

Consultation

The Victorian Transport Plan process began in 2008, anchored by a successful consultation process – and most importantly, intra-governmental inputs. The Victorian Cabinet Transport Sub-Committee was set up with representation from different departments within government:

  • Treasury
  • Transport
  • Roads and Ports
  • Planning
  • Regional and Rural Development
  • Environment and Climate Change

Through July, August and September of 2008, the Victorian Government sought input from a wide cross-section of industry and the community:

  • members of the public
  • community and neighbourhood groups
  • local councils
  • public transport operators
  • freight and logistics operators
  • financial groups
  • the construction industry
  • social services organisations.

The 15-week submission period resulted in more than 2,300 individual comments and pieces of feedback. These ranged from:

  • a web forum, which attracted more than 200 participants across Victoria
  • regional and metropolitan transport forums hosted by the Minister for Roads and Ports, Minister for Public Transport and Minister for Regional and Rural Development
  • forums hosted by Members of Parliament
  • the Victorian Transport Summit hosted by the Premier of Victoria

Feedback from the stakeholder consultation process supported the key direction of the plan. It identified a clear expectation for better integration between transport and land use planning; for regular review of the plan; and for clear communication of the plan.

Strategic Plan

The Victorian Transport Plan was released in 2009 and outlined $38 billion in short, medium and long term projects. Significantly, it was not just focused on Melbourne projects but outlines initiatives across cities, regional centres, country towns and rural areas. A key consideration in the plan was building for a Melbourne of 5.5 million people in 2036 (7.0 million in Victoria).The plan identified a multi-strand approach with six clear priorities:

  • Shaping Victoria – Using transport investment to change the shape of Victoria to make jobs and services more accessible
  • Linking regional, rural and metropolitan Victoria – all parts of the State share in the benefits of population and economic growth
  • Creating a Metro System – improving the capacity, frequency, reliability and safety of public transport
  • Moving Around Melbourne – Linking communities by closing gaps, reducing congestion and improving road safety
  • Creating a Sustainable Future – Lowering the carbon footprint from transport
  • Strengthening Victoria’s and Australia’s economy – supporting freight, industrial growth and new jobs.

The plan based its investment priorities on modes that would allow Victorians to choose the best means of transport for the type of journey they are making. Key projects included:

  • The Regional Rail Link
  • Up to 70 new metro trains
  • 50 new low floor trams
  • Train operational changes to increase peak capacity
  • Up to 74 new V/Line carriages for the regional rail network
  • 50 additional police on trains and trams – taking the total to 250
  • A new rail link to South Morang
  • A program to separate road and rail at key intersections, starting with Springvale Road, Nunawading
  • A program for outer suburban roads
  • A package for safer country roads
  • New bike lanes and a public bike hire scheme for Melbourne’s CBD.

Major elements were:

  • The Stage One Melbourne Metro tunnel from Dynon to Domain to transform Melbourne’s suburban rail system into a modern mass transit metro network. Stage Two would the take the rail link underground to Caulfield where the complete project would boost rail capacity by 40,000 passengers an hour.
  • A two-stage Truck Action Plan aimed at removing thousands of trucks from residential streets in Melbourne’s inner west and improve freight access to the Port of Melbourne. The project included a new road link from the West Gate Freeway into the port.
  • A new river crossing to relieve dependence on the West Gate Bridge and deliver more streamlined freight access to the Port of Melbourne Precinct. This involved a road tunnel from Geelong Road/ Sunshine Road to Dynon Road/Footscray Road in the Port.

Other key projects in the Victorian Transport Plan include completing the ‘missing link’ between the Metropolitan Ring Road and the Eastern Freeway at Bulleen.

Potential funding in partnership with the Australian Government was identified for the Peninsula Link (a 25 kilometre four-lane connection between EastLink at Carrum Downs and Mount Martha) and the Regional Rail Link.

The private sector was engaged through advance warning and partnering strategy opportunities.

Legislation was passed to complement the Plan – the Transport Integration Bill and Major Transport Projects Facilitation Bill was passed in 2009.

Governance

An important part of the Victorian Transport Plan was the requirement for collaboration between state and federal governments. In 2009, in the face of the global financial Crisis, the Australian Government announced its $20 billion Building Australia Fund. Through Infrastructure Australia (IA), the Australian Government looked to fund priority projects that:

  • increase Australia’s productivity
  • diversify the economy
  • build on Australia’s global competitive advantages
  • develop our cities
  • reduce greenhouse emissions
  • improve social equity, and quality of life, in Australian cities and regions.

These priorities closely align with the stated objectives of the Victorian Transport Plan. Victoria’s funding submission addressed not only initiatives in metropolitan Melbourne, but strong regional and nation building components. The Plan closely aligns with the Australian Government’s objectives and priorities.

Five packages were promoted:

Melbourne Metro Package

  • Regional Rail Link
  • Melbourne Metro (Stage 1)
  • Melton Rail Extension

West Gate Alternative and Truck Action Plan Package

  • Truck Action Plan (Stage 1) – Hyde Street
  • Alternative to West Gate Bridge

National Ports and Rail Connection Package

  • Port of Melbourne International Freight Terminal and Rail Connections
  • Donnybrook/Beveridge Interstate Freight Terminal
  • Port of Hastings Development

Regional Development Package

  • Green Triangle – HPFV Network and Rail/Port Connections
  • Regional Broadband – VicFibreLINKS
  • Geelong Urban Growth Package
  • Gippsland Coal Industries

Melbourne Orbital Package

  • Peninsula Link
  • Grade Separations
  • North East Link

Importantly, the submission was reinforced by the Victorian Government’s commitment to deliver a wide range of state funded projects in the first two years of the plan:

View projects

  • The first of up to 70 new metro trains arriving from late 2009
  • New regional trains
  • New rail services to Maryborough
  • More metro train and bus services
  • Extra police on trains and trams at night and more staff at stations
  • The start of construction of a new railway to South Morang
  • Delivery of the myki ticketing system
  • Electrification of the metro rail network to Sunbury started
  • Construction of Dingley Arterial from Perry Road to Springvale Road started
  • Grade separation of Springvale Road at Nunawading started
  • Peninsula Link started
  • Doncaster Area Rapid Transit (DART) upgrade
  • Additional buses
  • New train stations in growth areas and upgrades to stations across Victoria underway
  • First of the upgraded bicycle lanes on commuter routes to Melbourne completed and the public bike hire scheme in the CBD in operation
  • Completion of the M1 Monash-CityLink-West Gate upgrade
  • Completion of the Calder Freeway duplication, Deer Park Bypass and the first stages of Geelong Ring Road
  • Current arterial road upgrades in outer suburbs completed and new ones underway
  • New noise walls on heavy freight routes
  • Planning for multi-billion dollar projects including new rail and road tunnels

The election of the new Coalition state government in 2010 predictably saw changes in priorities and some change in direction for transport planning in Victoria. But while the plan may have been viewed as a legacy of the previous government, the key projects announced by the Coalition government in 2011 largely align with its main conclusions:

  • East West Link
  • Melbourne Metro
  • Removing Level Crossings
  • Port of Hastings Planning

The new government also announced some new transport initiatives:

  • Avalon Airport Rail Link
  • Dandenong Rail Capacity Project
  • High Capacity Signalling (HCS) Test Line Project
  • Tram Route 86 Demonstration Project

The new government undertook a review of the Regional Rail Link project and formally approved progress in April 2011.

Implementation

The Regional Rail Link will be jointly funded by the Victorian Government ($2.1 billion) and the Australian Government ($3.2 billion). This reflects an increase in projected cost since 2009 from $4.3 billion to $5.3 billion in 2012.

The Regional Rail Link is being constructed in six work packages (originally seven, but Work Packages C and D were combined before the bidding stage). Two work packages will be run as Alliance contracts, where the contractor, designer, rail operator and client work together on construction. Four work packages will be delivered by existing rail operators or through Design & Construct contracts, where a contractor agrees to design and construct the works for the client at a fixed price.

Work Package A –Southern Cross Station to Moonee Ponds Creek

  • track, civil and overhead traction power infrastructure
  • trackside signalling equipment
  • a new bridge deck over Dudley Street, and
  • strengthening of and protection work on existing structures in the area

Awarded July 2011 to Activate, a John Holland and Coleman Rail joint venture.

Work Package B – Southern Cross Station to Maribrynong River

  • realigning and upgrading the existing track
  • building two lines

Awarded May 2012 to Integrate Rail (John Holland, Abigroup, Coleman Rail, AECOM & GHD)

Work Package C – Footscray to Deer Park

  • Upgrades to Footscray station including new platforms adjacent to Irving Street, improved station entrance and forecourts incorporating escalators, ramps, lifts and stairs.
  • Major bridge works at Hopkins Street, Nicholson Street, Albert Street, Victoria Street, Ashley Street and Stony Creek.
  • Rebuild of West Footscray station, including ramps, lifts and stairs.
  • Improvements to the entrance, forecourt and an additional 100 car parking spaces at Tottenham station.
  • Laying of new track over 7.5 kilometres from Footscray to Sunshine.
  • A major upgrade to Sunshine station including a new platform and pedestrian overpass, improved station entrance, ramps and forecourts, lifts and stairs.
  • Replacement of HV McKay Memorial Gardens footbridge.
  • Removal of two level crossings at Anderson Road.
  • Upgrading of existing pedestrian crossings at Sydney Street, Adelaide Street, Young Street and Tower Street.
  • Improvement works to level crossings at Fitzgerald Road (Ardeer), Mt Derrimut Road and Robinsons Road (Deer Park).
  • Modifications to the metropolitan signalling system from Footscray to Sunshine

Delivery by an Alliance team consisting of Regional Rail Link Authority, V/Line, Thiess, Balfour Beatty, Parsons Brinkenhoff and Sinclair Knight Merz

Work Package E – Deer Park to West Werribee Junction

  • New track over 26 kilometres from Deer Park to West Werribee Junction.
  • No new level crossings with 12 road over rail bridges.
  • Four major structures at Werribee River, Lollipop Creek, Skeleton Creek and Davis Creek.
  • Two new stations at Wyndham Vale and Tarneit with lifts, ramps and stairs.
  • A full depth cutting over 2 kilometres through Wyndham Vale.
  • 34 new waterway crossings / drainage structures (pink lines).
  • Extension of Christies Road, and construction of Armstrong Road (orange dashed line).
  • Civil works for signalling

Awarded to Baulderstone Leighton Joint Venture (BLJV).

Work Package F – West Werribee Junction section of works

  • Two new dedicated regional tracks over 2.5 kilometres connecting the existing Geelong line to the Regional Rail Link.
  • A new rail bridge over the existing broad gauge and standard gauge tracks and Bulban Road.
  • Realignment of Bulban Road to accommodate the new rail bridge.
  • Service and fibre optic cable relocations, as well as drainage and landscaping works.
  • Slewing of the existing broad gauge (V/Line) tracks.
  • Signalling civil works

Awarded to Leighton-Downer Joint Venture (Leighton Contractors and Downer EDI Works).

Work Package G – Train Control and Systems

  • Modification of existing Metro and V/Line train control systems. (spanning the entire Regional Rail Link corridor).
  • Creation of a new train control system and new generation computer based signalling system for the Regional Rail Link tracks.
  • Installation of approximately 36 kilometres of fibre optic cable to support the new train control systems. (spanning the entire Regional Rail Link corridor).
  • Passenger information systems at new and substantially modified stations including Footscray, West Footscray, Sunshine, Tarneit and Wyndham Vale

Delivery by an Alliance team consisting of RLL Authority, Metro, V/Line, UGL and Manidis Roberts.[/expand]

Corridors

Fundamental to the delivery of rail or road infrastructure is the identification and importantly, the acquisition of the corridor through which the railway or road will run.The outer portion of the Regional Rail Link corridor runs largely through farming or undeveloped land on the fringe of the Melbourne metropolitan area. Some corridor zones in newly developed areas (eg Wyndham Vale) have been previously reserved. As part of the Regional Rail Link process, a strategy for land acquisition was developed and clearly articulated in print and on the Internet. There were several steps in the process:

  • Notice of intention to acquire: The first step in the formal acquisition process is the issuing of a Notice of Intention to Acquire from the Department. Those who want to sell their land immediately may come to an agreement a price. The compensation would be the same as that under a compulsory acquisition process.
  • Notice of acquisition: Where land is required at a particular point in time, a formal Notice of Acquisition is published in the Victorian Government Gazette and the land is vested in the name of the authority. If land is a principal place of residence or business, Regional Rail Link would not take possession of the land for at least three months without agreement.
  • Compensation: Compensation for acquired land is assessed as outlined in the Land Acquisition and Compensation Act 1986 and Government Policy. Compensation is based of the market value of the land that is acquired, plus any additional amounts such as non-financial disadvantages and allowances. Payment will be made within 30 days of receiving the request. Appeals are through the Victorian Civil and Administrative Appeals Tribunal or the Supreme Court for a resolution.

Where land needs to be sold after the release of plans for the project and land costs are impacted, a number of compensation options are available:

  • Loss on Sale Compensation: if land is sold for less than its market value as a direct result of the project
  • Financial Loss Compensation: a planning permit is refused on the basis that the land is required for a public purpose.
  • Early purchase by the government: early acquisition may be possible on hardship grounds.
Conclusions

Despite costs on the Regional Rail Link escalating by $1 billion, the project is proceeding. A number of important lessons can be drawn from both the planning process and the delivery strategy.

Vision and commitment
  • The project is anchored by a rigorous and comprehensive Transport Plan
  • The Plan was developed with intra-government department inputs and wide industry and the community consultation
  • The Transport Plan outlines both metropolitan and regional initiatives
  • The Plan has a clear philosophical position and recognises the importance of all key transport element – road, rail and freight
  • The Regional Rail Link serves both the Geelong regional corridor and Melbourne’s growing western suburbs
  • The Regional Rail Link delivers wider network benefits through dedicated regional lines that free up metropolitan and freight rail.
Governance
  • Delivery by Victorian Department of Transport
  • Intra-departmental involvement in project management
  • Successful bid for federal funding based on a comprehensive framework for transport throughout Victoria
Strategic plan
  • The Victorian Transport Plan creates a framework for road rail and freight upgrades through both regional and metropolitan Victoria
  • The Plan was developed with cross government department inputs and wide industry and the community consultation
  • Clear short, medium and long term projects and delivery targets
  • VTP survived change in government with minimal changes to the programme.
  • Plan closely aligns with federal infrastructure objectives making funding easier to support.

Implementation

  • A delivery method that allows participation by a wide range of companies.
  • Segmentation of the project into a series of discrete packages
  • Different delivery packages – Alliance partnerships and Design & Construct packages

M7 Motorway

The history of the development of the Westlink M7 Motorway epitomises the often complicated relationships between federal and state governments in dealing with major urban transport. It also shows the great benefits that result when governments and the community work together.

Actual or planned infrastructure

Completed in 2005

Applicable state/s and LGA/s

NSW Government initiative with Australian Government and private sector funding

Type of infrastructure

Major road scheme

Any special features

Successfully managed and future-proofed BOOT PPP scheme

Years – planning to implementation

Discussed for 50 years; seven year period from prioritisation to completion

Project Details
Overview

Key transport links such as the M7 are critical elements of a city’s Strategic Plan and transport and land use planning needs to be fully integrated. The Australian Government’s involvement with cities and urban planning waxes and wanes with changes of government, although it has long accepted its role and responsibility for interstate transport by funding the National Highway Network.

Until 1993, the National Highway Network (as planned and designated) terminated on the outskirts of Sydney at Prestons (South Western Freeway) and Wahroonga (F3). In 1993 an interim National Highway route was proclaimed between Prestons and Wahroonga via the Hume Highway, Cumberland Highway, James Ruse Drive and Pennant Hills Road.

The route of the M7 Motorway had a very long gestation period. It could be said that this long process of planning, deliberation, consultation and review was a key to its ultimate acceptance and success. Some sections of the route were identified as part of the County of Cumberland Plan in 1951, and over the next 50 years various road corridors were reserved. Initially, these were not conceived as part of a unified western route.

A major breakthrough in the planning of the M7 and other Sydney motorways occurred with the publication of Roads 2000 by the then Department of Main Roads in 1987. This plan for the year 2000 proposed a Sydney Orbital route comprising the as-yet-unbuilt Gore Hill Freeway, Castlereagh Freeway, Prospect Arterial and South Western freeway, with a Southern Arterial link from St Peters to the Western Distributor-Harbour Bridge-Warringah Freeway.

For the first time, an orbital route was proposed through Western Sydney, connecting the County of Cumberland Plan’s radial freeways (Castlereagh and South Western).

During the next decade the Castlereagh and south Western Freeways were planned and built as toll roads (M2 and M5) and it was realised that the Western Sydney Orbital should also be built to freeway standard, a higher standard than envisaged by the route shown in Roads 2000.

A further seven years of route development, environmental assessment and consultation followed and in 2001 the Australian Government committed partial funding so tenders were called for a Build Own Operate and Transfer (BOOT) PPP.

The M7 was opened to traffic in December 2005.

However, the National Highway Network through Sydney is still incomplete. The F3 to M2 section through Pennant Hills still remains to be developed and has been the subject of numerous studies and debates between the three tiers of government and the community.

Planning

Elements of the M7 had a 50-year plus planning history. In one form or another it was identified in various federal, NSW and RTA strategies including the Sydney Area Transportation Study (1974), National Highway Program (1974), Roads 2000 (1987), Liverpool to Hornsby Highway Strategy (1993) and Action for Transport (1998).

The Australian Government funded an environmental impact study and additional route selection studies in the mid-1990s and this gave the project significant impetus. Action for Transport established the Western Sydney Orbital as a priority project for completion by 2007 as part of a strategy to complete the Sydney Orbital, and linked it to major land use development strategies in western Sydney.  Also required for completion at that time were the Eastern Distributor, the M5East and a link between the M2 and the Gore Hill Freeway.

Extensive community and other stakeholder consultation was undertaken in the late 1990s and further changes were made to the route in response to feedback.

The route traversed significant greenfield land which was being planned for residential and industrial development. The road was increasingly recognised as a key freight and passenger link for transport within and outside Sydney and became a catalyst for growth. There are differing opinions as to whether the then current Sydney Metropolitan Strategy recognised its importance and prioritised it in a town planning sense or that the RTA led the planning process through the development of the road. Notwithstanding, it has achieved outstanding success in integrating land use and transport, and in promoting commercial development in Western Sydney.

Funding

The initial planning and route development studies were funded by the New South Wales Government through the RTA and its predecessors.  A major impetus occurred in 1994 when the Australian Government announced plans to fund and undertake an environmental impact study, followed by a $109 million federal allocation for pre-construction activities in 1996.

The project was identified in Action for Transport in 1998 as a priority project, but neither the Australian nor NSW Government had sufficient funds to build the road. Various procurement options were investigated and in 1999 the option of a privately funded toll road was assessed. In 2001 the project was released to the market as a BOOT scheme. The Australian Government provided $360 million, mainly for land acquisition, in recognition of the road’s future function as part of the National Highway Network.

Precedents had been established in NSW with other toll road projects and procurement was based on the NSW Government’s recently released guidelines ‘Working with Government’. A very rigorous process was followed involving registrations of Interest and the submission of three fully developed proposals by private sector consortia. The bids were assessed using both a public sector comparator and a non-price assessment against other pre-determined criteria. The tender evaluation and review panels included senior personnel from the RTA, Treasury, Australian Government, State Contracts Board and private sector consultants.

Following the short listing of two proponents and the evaluation of their further submissions, the Westlink Motorway consortium was selected in October 2002 with a concession period until February 2037. Conditions precedent were satisfied by February 2003 and construction commenced in July 2003.

The capital cost of the project was estimated at $1.54 billion of which the Australian Government funded $360 million, the remainder being provided by the private sector. A key feature of the M7 is the use of cashless distance based tolling, with a cap or upper limit on the toll paid for a single trip.

There is a strong possibility that at sometime during its concession period additional traffic lanes will be needed. This has happened with both the M2 and M5. The design and construction of the M7 have provided a median sufficiently wide for an additional lane in each direction in the future, either for buses or for general traffic. However, it is unclear from the Summary of Contracts (PDF, 2.2MB) how this is expressly provided for, or what the contemplated negotiation process will be.

This raises an issue of ‘Future Proofing’ or ‘Resilience’ for such major infrastructure PPP projects.  In the case of both the M2 and M5 widening, there was a lengthy negotiation process between the RTA and the owners of each toll road. There was an interesting tension between each company wanting to protect or enhance its financial position and the government wanting to see both motorways widened, on behalf of the public. Unless contracts are set up to anticipate major enhancements, which require major investment and perhaps add to financial risk, the role of government in delivering transport infrastructure for the public can be frustrated.

The Best Practice Case Study Report (PDF, 2.0MB) produced by PwC for the federal Department of Infrastructure & Transport concludes that:

  • The project was viable as a standalone commercial operation. The fundamentals underlying the growth of Western Sydney could sustain the project as a commercial venture, capable of being financed at a toll level which was affordable to motorists.
  • Private investment can be used to bring forward infrastructure: the use of the BOOT PPP model allowed the motorway to be delivered when full government funding was not available.
  • The BOOT model has inherent benefits to government in the allocation of risk to the private sector. Under this model, government could transfer the significant toll road risks of construction, tolling operations and traffic forecasts to the private sector.”
Governance

Due to its long project history the M7 was planned and managed by a number of different governments and agencies.

The RTA and its predecessors and relevant NSW Ministers were mainly responsible for the project, although the Commonwealth was significantly involved particularly after the roads nomination in 1994 as part of the National Highway Network.

From then on, the project was essentially led by the RTA and managed jointly by the federal and state governments. There was multi-government and multi-agency involvement and there were a number of joint federal/state and multi-agency review panels and steering committees.

Local Government was consulted but had minimal authority and involvement.

Satisfying Objectives

From the state and federal governments’, community’s and owner’s perspectives the M7 has been a very successful project. There have been a number of post opening reviews.

The RTA’s March 2010 Post Implementation Review concluded that the project had been “Highly Beneficial’ (defined as Major positive impacts resulting in substantial and long term improvements or enhancements of the existing environment) when assessed against the objectives stated in the EIS.

Infrastructure Partnerships Australia identified the development of the M7 as representing best practice in its Best Practice Case Study and commented “The road has been comprehensively hailed by all stakeholders as a great achievement that delivers significant benefits to the community. The Australian, NSW and local governments have all praised the contribution that Westlink M7 has made to improving transport across and through Sydney. Business leaders have applauded Westlink M7 as a significant driver of investment and employment growth in Sydney”.

The IPA study also refers to a 2006 UMR telephone survey of 600 Western Sydney residents asking their opinion of the M7. The findings showed that only 6% of respondents had a negative view and 75% of respondents had either ‘very positive’ or ‘somewhat positive’ opinion.

The Department of Infrastructure and Transport/PwC Best Practice report selected the M7 as one of six major case studies to highlight those facets of major infrastructure projects that demonstrate best practice. It concluded that “The factors contributing to the success of the M7 fit in to four overarching themes:

  • The project demonstrated superior engagement with its community
  • The project was in the public’s interest:
  • The procurement process following a structured approach to demonstrate governance and deliver value for money
  • Utilisation of private financing
Conclusions

There are a number of factors which underpin the success of the M7 and are lessons for future projects including:

Robust long term planning

Conceptual planning was undertaken over several decades and integrated with broader metro strategies. It was identified as a priority project in a number of planning studies (and treated as such). There was a demonstrated need for the project.

Significant sections of route were identified and corridors were resumed as part of the County of Cumberland Plan in 1950s. It was identified in various national, NSW and RTA strategies including Sydney Area Transportation Study (1974), National Highway Program (1974) and Action for Transport 2010 (1998).

Shows the benefit of long term and consistent planning.

Leadership

Essentially was led by RTA – a state government agency, however had significant involvement of the Australian Government through its National Highways programme. It was strongly supported by the relevant federal and NSW Government Ministers and had cross agency involvement though planning and approvals and contract reviews. The critical Steering Committees and Review Panel included State and Commonwealth representatives.

Shared vision and governance

There was multi-government and multi-agency involvement. Although the RTA was the lead agency, the involvement of the Australian Government was very significant, particularly the vision of a new National Highway link through Sydney to replace the interim link via the Cumberland Highway. The Australian Government provided funding to enable important environmental and route development studies, and during life of project there were a number of joint federal/state government and multi-agency review panels and steering committees There was limited local government involvement, although extensive communication and consultation, and strong support for the vision from WESROC and Councils in Western Sydney. This shared vision and commitment was a key characteristic of the project’s success.

Extensive consultation

There was early and continuous involvement with community and other stakeholders. The route development and environmental assessment process incorporated widespread consultation and feedback which led to a number of changes to original concepts, as detailed in the NSW Department of Planning’s Director General’s report produced before project commencement in 2002. By the late 1990s, there was significant community demand for the project.

Consultation continued through the construction period and also during operations.

Commercially viable

There was insufficient available government funding, so was procured as a BOOT PPP through a very comprehensive and detailed process. Precedents had been established with other toll roads and procurement was based on newly released “Working with Government” guidelines. Was viable as a stand alone commercial operation as a toll road – used distance tolling for first time.

The project has been commercially successful, as highlighted in operator Transurban’s 2011 Investor Roadshow Presentation, and has delivered significant public benefits as highlighted in Ernst & Young’s economic analysis report. It has been recognised by government and private sector as an example of best practice.

A significant factor in the commercial viability of this PPP, unlike two more recent road examples in Sydney, was the fact that the M7 delivered high benefits to road users, often including significant savings in travel distance as well as time.  Whilst toll rates are usually set to recover the costs of toll roads, the project costs sometimes include features (such as tunnels) which benefit the local community rather than the road users. In the case of the M7, the toll payers have perceived a high benefit from using the M7, both in the peak and off-peak, and hence the traffic figures have ensured financial viability.

This project has been recognised by the Australian Government and the private sector as an example of best practice.

Date

2012-2013

Category
Project
Tags
infrastructure

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