Victoria's transport market - An update

With the Victorian Government in the process of implementing its $38 billion Transport Plan, the Victorian transport market is a hive of activity with a number of road, rail and fleet modernisation projects being rolled out. The projects are aimed at easing congestion on city, suburban and regional transport networks and creating a transport system that can manage future population and economic growth. Some of the key projects currently being rolled out are outlined below.

Melbourne Metro Project (Stage 1)

The Victorian Government has begun considering procurement options and route alignment for the Melbourne Metro Project (Stage 1). Construction of Stage 1 of the project is expected to start in 2012. It will comprise a tunnel running between Dynon (west of Melbourne) and St Kilda Road at Domain (on the southern end of the Melbourne CBD). It will include new stations at Parkville (Melbourne University precinct) and St Kilda Road. The Melbourne Metro project aims to benefit Melbourne's metropolitan rail network by:

• creating more rail track in the inner-city to unclog Melbourne's rail corridor;
• giving people from all lines an interchange point to access the new stations;
• relieving pressure on trams in Melbourne's CBD; and
• providing rail access to the Parkville University and hospital precincts.

Peninsula Link

Construction is underway on the $759 million Peninsula Link project. Also a part of the Victorian Transport Plan, Peninsula Link will connect the EastLink toll road in Melbourne's east with the Mornington Peninsula in Victoria's southern bay region.

Transport Minister Tim Pallas said, "Peninsula Link, when completed in 2013, would make life easier for more than a quarter of a million people living in Frankston and the Mornington Peninsula and for the thousands of tourists who visit the popular holiday spot each year".

An Australian first in the road sector, Peninsula Link will be delivered as an availability model PPP. The proponent will finance, design, build, operate and maintain the freeway for 25 years, in exchange for payment of an availability charge (by the Victorian Government) rather than tolls (paid by users). Availability charge model PPPs are well established in the Australian social infrastructure sector, however road PPP projects in Australia have traditionally required the private sector to assume patronage risk.

The Peninsula Link Project was the first project to be delivered under the new Victorian Major Transport Projects Facilitation Act - the legislative regime introduced to facilitate the Victorian Transport Plan. Clayton Utz advised on the project.

Regional Rail Link project

With the number of commuters using Melbourne's trains increasing by about 9 percent each year, the Victorian Government has committed to investing in new trains, tracks, stations and increasing capacity through projects such as the $4.3 billion Regional Rail Link project. This project involves the construction of a new line running from West Werribee to Sunshine and then through to Southern Cross Station. Regional Rail Link is being delivered via alliances and traditional D&C contracts. Regional Rail Link aims to provide more frequent and reliable regional rail services, removing the bottlenecks where country trains reach the metropolitan network. Early works have begun on this project with construction expected to start in 2010.

With billions of dollars of transport projects planned or underway, Victoria is making a firm commitment to transport system improvement which should ultimately benefit its tourism industry.