Assessment 3 - Metro Tunnel PDF

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Summary

Assignment 3 - metro tunnel project from year 2019...

Description

Overview of Organisation and type of industry Metro Tunnel Project aims to create a new railway from Sunbury to Cranbourne/Pakenham as well as delivering twin 9km tunnels under the CBD whilst also adding 5 new underground stations across Victoria – North Melbourne (Arden), Parkville, State Library (CBD North), Town Hall (CBD South) and Anzac (Domain). (Victorian State Government 2018). $6 billion project State Construction contribution - $2.5 billion State Capital Contribution - $1.5 billion Department – Rail Projects Australia Project Company – Cross Yarra Partnership Equity Investor and Builder – LendLease Engineering Equity Investor and Builder – Bouygues Construction Australia Equity Investor and Maintenance – John Holland Equity Investor and Financial Sponsor – Capella Capital Key Stakeholders - Internal o Department of Rail Projects Victoria o Victoria (The State) o Cross Yarra Partnership (Project Co) o LendLease Engineering Pty Ltd (D&C Subcontractor) o John Holland Pty Ltd (Maintenance Subcontractor) o Bouygues Construction Australia Pty Ltd o Capella Capital - External o Melbourne Community o Suppliers o Transport users o Existing transport facilities Stakeholder Priorities The internal stakeholders’ priorities are - A minimum 5-star certified rating for each of the underground stations - Completing the project within the time frame and budget - Providing additional capacity on Melbourne’s railway system - Improving customer experience - Support the long-term plan to develop and operate Victoria’s rail network - Improve access and reduce congestion of the tram system within the CBD and road network in the north, west and south east. - Improve accessibility to jobs, education and other social/economic purposes - Provide a value for money transport solution - Contribute to a safe and accessible metropolitan rail network The external stakeholders’ priorities are - A safe, clean and accessible public transport system

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Increased number of job openings Increased access to locations previously inaccessible Access to existing infrastructure whilst construction is ongoing Increased flow by decongesting roads/tram lines Ease of access into everyday activities such as work, school, etc.

Tensions between stakeholders “Stakeholder conflict arises when the needs of some stakeholder groups compromise the expectations of others.” (Business Case Studies 2019). Some potential conflicts between shareholders of the Metro Tunnel Project are – - Purchasing cheaper supplies thus keeping the cost down but risking the supplies being of low quality and not up to standard. - Delaying the project due to unforeseen circumstances. This will not make the community and transport users happy at all. - Poor working conditions/treatment of employees may lead to a large number of resignations or even workers strike. - Changes in law after Contract Close may affect the overall cost or savings of the project Managing potential conflict or misalignment of priorities Female workers - Conflict: gender distribution within the construction workforce e.g. not enough females. - Conflict: The D&C subcontractor has committed to a minimum of 15.5% of female participation in regard to completing this project. This exceeds the national construction industry average by 5.5%. Transport availability - Tension: Some railways being shut down during maintenance periods or during the night. - Resolution: Putting in place replacement buses, from station to station whenever a maintenance period or night works are in play. Modifications: - Conflict: the state may request Project Co to implement modifications to the project or asset management services at any time throughout the project. - Resolution: the state adequately compensate Project Co in accordance to the project agreement. Public interest The state assessed the public interest rate by providing a test in which the following criteria were evaluated – - Effectiveness: This project will allow more people to use public transport, providing more jobs, promoting environmental sustainability, improving overall transport efficiency and reliability. - Accountability and transparency: the community will be informed about the obligations of both the Government and private sector partners as well as these obligations being overseen by the Auditor-General.

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Affected individuals and communities: Due to the thorough planning, all affected individuals/communities have been identified and consulted with. All stakeholders along the metro tunnel route will continue to be consulted with until the project is finished. Equity: disadvantaged groups have been identified and the appropriate steps have been/are being put in place to help cater towards these groups/individuals. Public access: the tunnel and stations infrastructure will be made available to the train franchisee to operate and public access will be allowed except for overnight closure periods and during essential maintenance periods. Consumer rights: the service recipients owed a high-level duty of care have all been identified. The project will meet all special needs and rights via the adequate design, construction and maintenance of the project. Security: contract specifications require this project to be designed, built and maintained in a way that complies with all relevant occupational health and safety standards/laws. Privacy: the project will comply with all applicable privacy standards.

Value for money “A PPP model drives innovation, best practice and value for money on the project.” (MetroTunnel 2020). According to the Australian Government (2019) Value for money isn’t solely about $$, a whole range of financial/non-financial factors need to be included. If the Metro Tunnel Project was funded by the Public Sector Comparator it was cost $5,327.8 million, whereas if they use the Private Sector Comparator it will only cost them $5,240.4 million. Saving a total of $87.4 million on the overall project which ends up being a 1.6% savings. The Private sector also contains a number of additional non-financial benefits for the state and public. This tells us that going with the Private Sector Comparator is the best value for money option....