09 Jun 2011

Slashing travel times with the Peninsula Link Project

by Marko Misko, Naomi Kelly, Dan Fitts

This is the first time availability charge model PPPs have been used for an Australian road PPP project.

What was the project?

The Peninsula Link Project brings the people of Frankston and the Mornington Peninsula easier travel by connecting them to the south end of East Link. The 27 km freeway standard road with 11 local road connections and more than 35 bridges cuts travel times between Mount Martha and Carrum Downs dramatically.

The Victorian Government awarded the contract to deliver the project to the Southern Way Consortium (which was formed by Abigroup, Bilfinger Berger and the Royal Bank of Scotland).

What's so unusual about Peninsula Link?

The way it was delivered.

Peninsula Link was delivered as an Availability PPP, which means that Southern Way Consortium will finance, design, build, operate and maintain the road for the agreed project term of 25 years, in exchange for the payment of an availability charge (by the Victorian Government) rather than tolls (paid by users).

This is the first time availability charge model PPPs have been used for an Australian road PPP project, which traditionally required the private sector to assume patronage risk.

What did Clayton Utz do?

Melbourne Major Projects partners Marko Misko, Naomi Kelly and Dan Fitts led a team which provided strategic legal and commercial advice to the Linking Melbourne Authority on all aspects of the project.

Using the valuable lessons learnt from previous similar projects over the last decade, we developed innovative tendering processes and highly streamlined contractual project documentation, which helped the project be delivered in record time – nine months from the Expression of Interest phase to Contract Close. We also helped minimise the project bid costs for both the Victorian Government and private sector bidders.

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