Victoria State ‘future proofs’ with investment in major transport and infrastructure projects
09 August 2016
Engineers Ireland continued its strong focus at maintaining and supporting links with its regional branches as it arranged for a representation earlier in the year at the annual Engineers Ireland Australia/New Zealand Region Saint Patrick’s Day Seminar, held this year at the Crown Palladium in Melbourne, Australia.
ICE president Sir John Armitt earlier this year delivered his presidential address, ‘Civil engineers: Shaping ourselves and our world’, to Engineers Ireland members at Clyde Road. Sir John has made a significant contribution to Britain’s infrastructure. Among his many achievements was leading the team responsible for constructing venues including the Olympic Stadium, Aquatics Centre, Velopark, media centre and athletes facilities, as well as associated transport systems, for the London 2012 Olympics.
In his presentation, he placed a strong emphasis on the need for Engineers Ireland to foster relations with other professional bodies at a domestic level and to nurture strong international and cross-community links and collaboration across the engineering profession.
Engineers Ireland’s representation at this event in Melbourne was an ideal opportunity to galvanise such links and to communicate with the ex-patriate members of the engineering community who have an interest in the current state of the construction sector and significant projects and opportunities arising in Ireland.
This was the second year that the seminar was run by the Antipodean branch, following on from the success of the inaugural event held in 2015 and attended by former director general, John Power. Representing Engineers Ireland at this year’s event were Murt Coleman, Executive Board member and chair of the Finance Committee, and Dónal Minnock, operations manager, Transport Infrastructure Ireland (TII) and chair of the Roads and Transportation Society.
Infrastructure projects in Victoria State
The first speaker was Daniel Mulino, the Victorian parliamentary secretary for the Department of Treasury and Finance. He presented on the very comprehensive range of infrastructure projects that the Department were pursuing. Mulino noted that Ireland and the State of Victoria were somewhat equivalent in terms of population size (currently 5.791 million). Victoria has enjoyed significant population growth (circa 1.5-1.7 per cent) over the last 20 years and it is projected to continue growing at equivalent levels.
Victoria has a AAA credit rating, which is exceptional for a State Government, and it has significant capacity to raise its debt levels whilst retaining its strong credit rating. It was interesting to hear that the Government appeared to be open not only to the possibility of up-front capital spending, but also the utilisation of a private-sector funding to facilitate the delivery of some of its more complex and challenging projects including:
• 50 level crossings project:
This project involves the removal of 50 dangerous and congested level crossings, with the goal of transforming the way people live, work and travel across metropolitan Melbourne and the improvement of safety for drivers and pedestrians. To put into an Irish context, this project is effectively the equivalent of 50 Newlands Cross projects and therefore explains the circa $6 billion dollar cost and the decision to link funding with the lease of Melbourne Port.
The project has an ambitious programme with all 50 level crossings to be removed over the next eight years, with at least 20 level crossings to be completed by 2018. The Victoria State Government has utilised an innovative means of financing the 50 level crossings project, through the linking of it with the lease of Melbourne Port, such that the lease proceeds go to the Victorian Transport Fund (VTF), which in turn supports projects like removing level crossings, building Melbourne Metro and the Western Distributor and other important transport initiatives.
Around the world and across Australia, successful port leases have seen benefits flowing to the community, exporters, port users, industry and the state and in the case of Melbourne only the port’s commercial operations are being leased. The Victorian and Commonwealth Governments retain responsibility for regulating the port’s safety, security and environmental functions.
• Melbourne Metro:
The Metro Project is a significant priority project for the Victoria State Government also. The project will deliver two 9km rail tunnels from South Kensington to South Yarra via the Melbourne City Business District (CBD) with five new underground stations. The line will run from the north-west to the south-east and combine the Sunbury Line with the Cranbourne/Pakenham Line of Melbourne. The funding of this project, with a price tag of $10.9 billion Australian dollars, is quite simply not possible by relying on the fare box.
Challenges lie ahead in determining how best to subdivide the project to provide for delivery, with appropriate risk transfer and public sector funding will be a vital component. For example, the Victorian Government has opted to utilise an Availability Payment PPP-type procurement for the delivery of the tunnel and stations.
• Western Distributor Road:
The Western Distributor is a proposed 5km toll road in Melbourne, to link the West Gate Freeway at Yarraville with CityLink at Docklands via a tunnel beneath Yarraville.
The $5.5 billion project was proposed as an unsolicited offer by infrastructure company Transurban in 2014 as a means of alleviating congestion on the M1 corridor, providing a new river crossing as an alternative to the West Gate Bridge and moving trucks away from homes in the city’s inner west. The freeway-standard link would include a 1.5 km-long, six-lane tunnel and a new bridge over the Maribyrnong River.
The Victorian Government announced in December 2015 it would proceed with the project. The project was presented to the then Victorian Labour opposition in 2014 as an unsolicited proposal by Transurban. Transurban offered to pay two-thirds of the cost of construction in exchange for a 10- to 15-year extension of its CityLink toll contract. It will be a significant challenge to the Victorian Government in negotiating a value for money outcome for the exchequer. Ireland itself has had mixed experiences with unsolicited infrastructure offers and it will be interesting to see how this project progresses.
• Murray Basin rail project:
This project involves standardising the rail freight lines servicing the Murray Basin region in the north-west of Victoria. The project will also increase axle loading on these lines from 19 to 21 tonnes. These improvements will mean the freight industry in the Murray Basin region will be able to deliver exports to Victoria’s ports in a more efficient and cost-competitive way. Standardisation and upgrade of all the key rail lines in the Murray Basin Region comes at a nominal cost estimate of $416.2 million.
Transport Infrastructure Ireland projects
Representing Transport Infrastructure Ireland (TII), I was very pleased to be invited to present on the broad range of activities with which TII is now engaged as it approaches its first anniversary post the merger of the National Roads Authority and the Railway Procurement Agency. TII’s remit is now more diverse, in so far as in addition to it being a funding agency for local authority-delivered roads projects, it is a direct client on many very significant infrastructural projects through its PPP programme such as the M50 upgrade PPP Scheme, the Limerick Tunnel PPP Scheme, but more notably the New Ross Bypass, the Enniscorthy Bypass and the N17/N18 PPP Schemes currently under construction.
When you add into the mix the very significant milestone that is the LUAS Cross City project, also currently under construction, it is reasonable to say that despite our very challenging budgetary circumstances, TII is progressing circa €1 billion worth of heavy infrastructure.
Furthermore, through our Network Management and Commercial Operations Divisions, we now have a pipeline of operations, maintenance, and asset-management services in relation to our Motorway Maintenance & Renewal Contracts (MMaRC), Operation and Maintenance of Tunnels and Traffic Control Centre Contract (OMTTCC), Luas red and green line operations and M50 barrier free tolling projects, a pipeline that quite simply did not exist just over a decade ago.
Nevertheless, TII also has in place numerous shovel-ready projects that are subject to the availability of funding under the current development plan ‘Building on Recovery 2016-2022’ as well as a broad range of other roads projects in the pipeline that it may be in a position to advance in the event of improving Exchequer returns and any interim review of the current plan that might occur.
With the ambitious Metro North project now being advanced by TII with an intended commencement of construction in 2021, it seems that TII is ready to anticipate any improvement in capital funding availability, and that it does indeed offer a prospect to the expatriate community seeking to venture home to return the benefit of their international experience to the Irish construction sector.
Engineers intending to return to Ireland
Paul Carroll, who is a director of CPL Resources, explained the services offered by CPL (originally Computer Placements Limited) to then engineering community, and more particularly in the context of the Engineers Ireland ANZ Branch technical seminar, to the many engineers in attendance at the seminar who were exploring the possibilities available to them at returning home to Ireland.
He described a positive outlook at home for graduates in the areas of STEM and more significantly STEAM (Science, Technology, Engineering Arts and Mathematics) and noted the use of their online service One Tribe, specifically aimed at facilitating a move back home to progress their careers back in Ireland.
The final word came from Murt Coleman of Engineers Ireland, who impressed upon the audience the need for Engineers Ireland to grow its membership at home and abroad and to try to establish itself further as a profession of reputation and integrity. He noted the importance of maintaining strong ties with the expatriate engineering community and the important role Engineers Ireland had in paving the way home for its disapora when economic stability and furthermore growth re-emerged in Ireland.
Coleman paid tribute to the excellent rate of progress of the Australia/New Zealand region having attended committee meetings whilst there and encouraged inter alia the Roads & Transportation Society continue to support and engage with the branch to underpin its further establishment.
The audience was a diverse mix of consultants and contractors alike and some interesting questions were raised, such as when we might see a freeflow scenario on all our toll roads across the national road network in Ireland. The question of why Irish Government cannot utilise superannuation funds to support infrastructure development to meet the future demands on Irish infrastructure was also queried.
Interestingly, one of the more ‘adversarial’ questions asked by a member of the local contracting fraternity of the Department of Treasury & Finance representative related to the relatively sudden extensive expenditure announcements by the Victorian State Government and the need to get access to readily skilled and affordable labour. The question seemed to echo the experiences in Ireland throughout the period of exceptional construction output experienced in or around the period 2000-2005.
It seems that the scarcity of well trained and experienced tradespeople is a universal problem (something that was, incidentally, verified by my Melbourne based sister-in-law’s complaints to me on how no-one she contacted was interested in doing their reasonably significant basement floor replacement project that they desperately needed doing!).
It seems Sir John Armitt may have been right on a number of fronts. One of the challenges of our profession is the fact that we need as many trades/technicians/inspectors as we need engineers. One of the challenges also facing our industry and, in particular, our policymakers and decision makers is the need to ensure that there is sufficient capacity in the market to absorb (and in a cost-effective manner) any significant increases in expenditure that may arise on the back of improved economic circumstances.
In essence, it seems that the State of Victoria is in a buoyant position and is very much focused on the future. It may have an equivalent economy size to Ireland, but the perspective is so very much different. Ireland is currently working towards a position of ‘recovery’, whereas as engineers I think that we can only look in envy at our Australian counterparts in the State of Victoria and the extent of the projects being progressed.
Its development plan is aimed at catering for, or perhaps as Victorians might claim, catching up with the anticipated demand, whereas our current development plan is aimed at rebalancing. As an Irishman and an engineer, I hope that our circumstances can continue to improve such that our Government can return to setting our development plans based on catering for the future needs of our citizens, and with investment levels that are per capita/as a percentage of GDP proportionate and commensurate with other State economies similar in scale and character.
From a transportation perspective, we need to proceed with the delivery of our national road network, our rail network, our light-rail network and our bus network to underpin the economic competitiveness of the State, and to facilitate the quality of life that all our citizens should be able to enjoy.http://www.engineersjournal.ie/2016/08/09/engineers-ireland-australia-transport-infrastructure/http://www.engineersjournal.ie/wp-content/uploads/2016/07/Melbourne.jpghttp://www.engineersjournal.ie/wp-content/uploads/2016/07/Melbourne-300x300.jpgCivilArup,Australia,civil,infrastructure,New Zealand,Transport Infrastructure Ireland