Melbourne Metro Early Works

Context

The AUD11 billion (USD8.2 billion) Melbourne Metro Tunnel Project involves the construction of twin 9 km rail tunnels through Melbourne’s central business district, in addition to five new underground stations along this route.
The completed tunnel aims to improve rail capacity by allowing more trains to operate on Melbourne’s rail network particularly during peak periods. This is expected to add more than half a million additional passengers per week to the rail system, while reducing road congestion.
The scope of the early works package included utility and telecommunication service relocations, site preparation works, and construction of two access shafts to allow the construction of the underground stations.

The project had a tight delivery date and program schedule that meant works needed to be done in a relatively short timeframe. This required a delivery approach that could be mobilised relatively quickly, but also allow for flexibility to quickly manage any changes or disruptions as they occurred.
There was also a constraint on available resources that were able to be mobilised by the project owner.
Due to the tight delivery timeframe and high-profile nature of the project, it was essential that an early works package be delivered before the main works packages to minimise the risk of potential disruptions during the main works packages.

Early works were employed to acquire land, conduct site preparation, and conduct utility relocations, and were also used to undertake network enhancement projects (NEPs) to address public concern around traffic impacts. NEPs were road-based enhancements such as variable message signs, bike lanes or turning lanes to mitigate disruption around the construction zones.
The Managing Contractor delivery model was selected due to the size and complexity of the project as well as the ability to engage the contractor quickly and therefore early in the overall project.
The early works managing contractor managed the development of design, as well as the construction documentation and project management of the works on behalf of the project owner. It allowed subcontract packages downstream to be procured on a fixed time and cost basis and to ensure price competitiveness, with the project owner involved in the selection process.

Rail Projects Victoria – Project owner
John Holland – Early Works Managing Contractor
Cross Yarra Partnership Consortium (Lendlease, John Holland, Bouygues Construction, John Liang, and Capella Capital) – Tunnel and Stations PPP
John Holland, CPB Contractors, and AECOM – Rail Infrastructure Competitive Alliance
CPB Contractors, Bombardier Transportation, and Metro Trains – Rail Systems Competitive Alliance.

November 2015 – Open of Expressions of Interest for Early Works Managing Contractor
December 2015 – Close of Expressions of Interest
February 2016 – Shortlist for Early Works Managing Contractor released
June 2016 – Early Works Managing Contractor awarded to John Holland
July 2016 – Early works commenced
January 2018 – Early works completed.

In an audit of the early works package by the State Auditor-General, it was considered to have de-risked key elements of the main works through the land acquisitions, site preparations such as clearance and demolitions, and via services relocations. In particular, the utility relocations assisted in managing a major scope item that could have impacted the cost and schedule of the overall project.
Redesign to accelerate the overall project created delays for the early works managing contractor, but through a negotiated arrangement the delays were passed on to the Tunnels and Stations PPP consortium so that the overall program date was not impacted.
The acceleration by the state was considered to have resulted in the cost overrun for the construction costs in the early works phase against its original budget but was expected to result in savings due to an overall reduction in the project schedule by a year.
By having the early works package that included the PPP interface works, the PPP bidders were able to offer an earlier completion date than they would have otherwise.

Using early works allows projects to conduct early-stage activities such as land acquisitions and utility relocations that can be dealt with more efficiently. This provides greater certainty for the main works contractors and lowers the risk of costly variations or over-pricing related to such scope.
Using a managing contractor model allows the client to have transparency of the costs incurred and to only pay for the risks that eventuate.
Interface risks need to be carefully considered where there are interface points between early works and main works packages.

Last Updated: 15 October 2021