Sobering light rail lessons from Sydney

If you have been to Sydney over the past year you would have experienced the construction upheaval along Circular Quay and George Street, the city’s main street.

The controversial project is a sobering lesson for our Government, the Auckland Council, and any contractors who sign up for future work on Auckland’s light rail projects.

The Sydney CBD and South East Light project is part of the larger Sydney Light Rail system and features a single 12.8-kilometre line with 19 stops from Circular Quay in the CBD along George Street to Central Station, through Surry Hills to Moore Park, then to Kensington and Kingsford via Anzac Parade and evntually to Randwick.

This phase of the project (started in 2014 for owner Transport for NSW) was expected to be finished next year, in time for the March State election.

Instead the project has turned into a bitter dispute that is heading to court, with the project completion date now expected to be finished by March 2020 at the earliest.

The contractor responsible for the construction is Acciona under lead consortium ALTRAC. Since March, the project has been embroiled in controversary after Acciona launched a A$1.1 billion lawsuit against Transport for NSW alleging “misleading or deceptive conduct” in the lead-up to it signing a contract in 2014 to design and build the project.

News reports say lawyers for the Spanish firm claim the state government misled the contractor on the complexity of utilities work.

NSW Premier Gladys Berejiklian disagrees and says her government won’t be held to ransom as the claims are “completely unjustified”.

“We will not be held to ransom and we will not be forced to do anything that is not in the best interest of the taxpayer,” said the Premier back in April.

Initially, the project cost was A$1.6 billion before a $549 million variation by the time the main works public private partnership (PPP) contract was signed in December 2014.

With the $1.2 billion demanded from Acciona, the final costs could more than double.

NSW Transport Minister Andrew Constance raises contractual issues and insists there is no contract between Acciona and Transport for NSW, or the state of NSW.

“Transport for NSW has contracted the ALTRAC Light Rail Partnership … ALTRAC has in turn engaged with Acciona … any issues should be raised with ALTRAC.

“The contract between ALTRAC and Acciona spell out how risks of dealing with utilities for the construction of the Light Rail are to be managed.”

George Street (like Dominion Road in Auckland), is one of Australia’s oldest streets with two and a half centuries of infrastructure hidden under its seal. Initially, Transport for NSW and the contractor came up with a process to identify what needed to be done, with Acciona now claiming the NSW transport agency led Acciona to believe power company Ausgrid had agreed to a plan to deal with its utilities under the 12.5 kilometres when it claims it had not.

Acciona says it was prevented from dealing directly with Ausgrid and this aspect of the project was dealt with by “ iterative workshops” attended by Acciona and Transport for NSW that developed ‘Schedule F8’ – a spreadsheet that documented agreement on what was to happen on infrastructure on all but a handful of sites.

However, Acciona claims after the deal closed in February 2015, it received a document from Ausgrid with more extensive requirements that amounted to a variation in project scope, that involved enlarging pits for cables and many more relocations of services. This, it says, led to weeks of work at key intersections.

The state oppostion spokesman (and Deputy NSW Labor Leader) says the project could end up becoming the world’s most costly light rail project.

“If the Government had done its homework there would be no dispute. Every time the contractor digs a hole there is something underneath the ground that they weren’t told about. That’s because Gladys [Berejiklian] rushed this project … it should have taken two years to plan.”

Meanwhile, the project has been a nightmare for businesses, workers and visitors in the CBD. While Acciona says it will finish the project, delays mean it will be going to be a year late and with obvious cost overruns.

Australian media reports say businesses along the construction route are suffering with some losing 15 to 30 percent of their turnover after buses were re-routed from stops in late 2015 and light rail construction began in 2014 – particularly around Sydney’s popular Circular Quay area where the light rail project was originally due to be completed last October. And the area is facing another major project soon when redevelopment of the ferry wharves starts next year.

The proposed light rail in Auckland is also designed to run along one of the city’s busiest arterial routes ­ – Dominion Road, which is comparatively narrow and already features restricted bus lanes, median strips and excpetionally heavy traffic loads at peak hours.

Dominion Road is also lined with numerous small shops and businesses reliant on car parking spaces along the route.


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