NSW still considering PPP for Sydney Metro

10 January 2017 - 12:00 am UTC

The NSW government says it is still pursuing a competitive tender for a possible PPP to connect the Sydney Metro Northwest with the City and South West Metro.

The so called “augmentation” of the two lines is the only part of the yet to be built City & South West Metro that could involve some form of PPP.

While the Northwest metro, due to open in 2019, was procured via a PPP – won by the Northwest Rapid Transit consortium consisting of UGL, John Holland, Leighton, MTR and Plenary in 2014 – the southern arm is almost entirely funded from the ongoing sale of NSW electricity networks and procured using design and construct contracts.

NSW minister for transport and infrastructure, Andrew Constance, announced on Tuesday (10 January) planning approval had been granted for the southwest section of Sydney Metro.

This is a 16.5km, mostly underground, link from the end of Metro Northwest at the northern suburb of Chatswood, under Sydney Harbour and CBD, to Sydenham south of the city.

Construction of this begins around the third quarter of 2017, with tunnel boring due to start in 2018. It will continue alongside existing tracks above ground to the south western suburb of Bankstown. The southern part of Sydney Metro is due to be running by 2024.

The planning approval includes permission to demolish more than 200 buildings, including some office blocks in the CBD to make way for the line and seven new stations.

The government is now working out how to connect the rails, signalling and communications between the northern and southern parts of the metro.

This is known as the trains, systems, operations and maintenance contract (TSOM).

Constance told InfraAsia the plan is still to put this out to tender under a PPP contract and this is being worked on now. A government spokesperson said it could take until the end of 2018 to decide on how the link between the two lines would be built.

Numerous advisers to construction and financing contractors have told InfraAsia it is going to be very hard for the government to attract suppliers for both the TSOM contract and the D&C contracts on the rest of the line prepared to go up against the Northwest Rapid Transit Consortium.

Constance insisted the government is working on ensuring there is competitive tension, although he said they would need to “balance” this with the need to draw on North West Rapid Transit’s experience.

“[Connecting the two lines] will be seamless, but ultimately what we have to do is work through the various aspects of the PPP as to how you would configure that,” he said.

“We want to deliver competitive tension to get the best outcome in terms of cost for taxpayers. There is a very real need to drive that, that has been my expectation in the project team.

“Ultimately we want to deliver the best outcomes, but at the same time we want to capitalise on the experience we are seeing through northwest – balance it out.”

Two consortia – Ferrovial, Acciona and BAM, competing with John Holland, CPB and Ghella – were shortlisted in August to build the twin tunnels under Sydney Harbour and seven new stations and are understood to have lodged final bids at the end of 2016.

The government said it will pick a winner by mid-2017.

The tunnels and TSOM contracts are two of seven contracts in total due to be awarded for the Sydney City & Southwest Metro in 2017.