Melbourne Metro Rail tunnels to follow PPP route

The government of Victoria has announced that the centrepiece of the Melbourne Metro Rail project will be built and financed under a public-private partnership (PPP) model.

Valued at approximately A$5 billion (€3.37 billion; $3.59 billion), the availability-based PPP project will include the design and construction of twin nine-kilometre tunnels and five underground stations, as well as the provision of maintenance and other services during the operating term.

The two tunnels will connect South Kensington with South Yarra, travelling underneath Swanston Street in the central business district (CBD) as part of a new Sunbury to Cranbourne/Pakenham line. The five new stations comprise Arden, Parkville, CBD North, CBD South and Domain.

According to Melbourne Metro Rail Authority, the agency responsible for the project, a request for expression of interest (EOI) is expected to be released in mid-2016.

Additional works, including utility services relocation, protection and other site preparatory works, will be delivered under a separate contract. The EOI for this part is expected to be released this month.

The state government has secured A$4.5 billion to fund Melbourne Metro Rail, with A$1.5 billion allocated in the 2015-16 Victorian Budget, alongside a A$3 billion Metro bond agreement with the banking group of the consortium behind Melbourne’s East West Link.

Melbourne Metro Rail is expected to handle over 20,000 passengers commuting during peak hours, easing congestion on the busy St. Kilda Road/Swanston Street tram corridor. It will also pave the way for future expansion of Melbourne’s public transport network.
The main construction works are scheduled to commence in 2018, with the full project expected to be completed by 2026.

“This is a great news for commuters, taxpayers, and the Victorian economy because it shows Victoria is back in business,” said Brendan Lyon, chief executive of Infrastructure Partnerships Australia, in a statement.

The Australian infrastructure think tank expects there will be a lot of interest from investors in the PPP, which it reckons will protect taxpayers from the complex risks entailed by a project of such scale.

“After a five-year lull in infrastructure projects throughout Melbourne, it is pleasing to see progress being made on this important project,” added Lyon.