Local governments in Australia have either recently announced, or are considering, plans to build rapid transit metro systems within the confines of existing CBD infrastructure, including busway routes.
Interestingly, some of these projects are proposing the use of trains with a rubber-tyred guided system which will combine road and rail technology. Having such a system in place would see trains with rubber tyres that run on rolling pads, and could be custom-made to run on tracks built in existing busways (with new tunnels where required).
Although similar systems already exist in cities around the world, for example in Paris, Tokyo, Montreal and Mexico City, a rubber-tyred metro train system would be an Australian first.
There are numerous performance-based benefits of a rubber-tyred system. Rubber tyres offer quieter running and a smoother ride for passengers. They also mean trains have an increased ability to climb or descend slopes compared to traditional ‘steel wheel on steel rail’ systems.
The use of a rubber-tyred metro will give rise to challenges as well as opportunities.
Minimising disruption and managing community relations during these periods will be a critical challenge for local governments and other stakeholders. A diverse range of key stakeholders will be directly impacted by any such project, each with their own priorities, concerns and desired outcomes.
Proactively managing stakeholder issues will go a long way to reducing the likelihood of delays and the risk of legal challenges to a rubber-tyred train project. This should also minimise the need to change project scope later in the procurement process (when it is more expensive and/or difficult to do so).
Any rubber-tyred train project is also likely to present opportunities to reinvigorate commercial activity at sites along the proposed route. Unlocking the potential of these opportunities will require close collaboration between the local governments, State Governments and the private sector.
Constructing new tunnels under a CBD will create significant technical, commercial and legal risks which will need to be properly managed. Managing these risks will require an appreciation of the construction methodology, careful consideration and allocation of contractual risk at the outset of the project, not to mention an appropriate insurance regime which addresses all key risks.
An important risk factor with the proposed rubber-tyred system will be the performance of the tyres in local ambient conditions. This will impact heavily upon the cost of maintaining the system. For example, one performance issue that will need to be addressed is ‘blow out risk’ (the puncturing of tyres while in operation). How will this be managed to ensure minimal damage to units and minimal disruption to the continued operation of the system?
In order to minimise performance-based risks, contractual documentation for any rubber-tyred system should provide appropriate performance guarantees for both the system and its key components (including its life cycle and maintenance costs).
In addition to the challenges and opportunities outlined above, there are other key considerations that will need to be taken into account.
Given the likelihood for overlap with the construction phase of other major infrastructure projects (including Cross River Rail and large metro projects in Sydney and Melbourne) market capacity will be an important consideration.
Achieving optimal project outcomes will require a competitive environment created through appropriate market engagement. It will also require the selection of a procurement model which takes account of potential constraints on the availability of quality tenderers and focuses on the efficient use of available government funding.
How the delivery phase contracts for the project are ‘packaged’ will also be important. For example, will the vehicles be procured separately from the civil works?
By procuring these major packages separately, the government authority will get to pick the best vehicle manufacturer and the best civil contractor based on its own assessment of the players in each market. The market does not (effectively) get to decide this through the consortia that are formed to bid for the project.
However, separate procurement would create a significant interface risk that would need to be carefully managed. One potential solution would be the inclusion of detailed integration obligations sought which would seek to address these risks through specific fitness for purpose clauses.
It will also be important to encourage innovation in private sector bids. An RFP process which allows sufficient flexibility to consider and provide feedback on alternative design proposals that the private sector may put forward would help to achieve the best “value for money” outcome for the project.
As this article demonstrates, a project involving the first use of a rubber-tyred metro system in Australia will create a range of opportunities, as well as some unique challenges. All of these will need to be worked through by both government stakeholders and the private sector to maximise the economic benefits of what could be a city-transforming project.
The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.