Level Crossing Removal Project Alliance Agreement

Project safety audits provide timely independent advice to the government (as an investor) as well as to the delivery department or agency on the progress of HVHR projects. Our 2017 audit showed that using program alliances with sometimes faster price competition saves time, but dispels competitive tensions. To address this risk, LXRA has developed a number of mechanisms to minimize costs, including a benchmarking tool. This $480 million package includes the removal of level crossings on Blackburn Road in Blackburn, Heatherdale Road in Mitcham and Furlong and Main Roads in St Albans. The package was awarded in September 2015 to an alliance of CPB Contractors, Aurecon and Acardis. The elimination of the four crossings was completed in 2017. LXRA used these principles to select the most dangerous and overloaded sites for LXRP2. LXRP2 also minimizes delivery time and costs by removing sites in addition to LXRP1 sites or other major projects. MTIA uses the calibration tool to estimate the reference costs for each other plant package. MTIA offers a high price to program alliances to help them develop their cost estimates. It is essential that agencies implement the discoveries of the first phase of the project in order to improve the implementation and value for money of the second phase.

In total, the government has provided $6.8 billion for the first 50 crossings that, in accordance with the 2019-20 budget, are expected to be spent up to GJ222-23. As part of the franchise agreement with rail operator Metro Trains, PTV created a standard governance group in early 2018. This group ensures that Metro Train`s technical standards meet the technical standards of the network. The main purpose of a business case is to provide the government with enough information to make an informed investment decision. The preparation of a business case is one of the most important requirements of the DTF for all HVHR infrastructure projects. The Level Crossing Removal Authority has entrusted the project to Laing O`Rourke, Jacobs and Metro Trains Melbourne, the same alliance that won the Toorak Road crossing in 2019. Note: In 2013, VicRoads began planning work to remove 10 crossing points. The government transferred responsibility to LXRA in 2015.

Source: VAGO, based on information provided by DoT and MTIA. We recommended that LXRA evaluate its approach to packaging during the project to ensure that it can incorporate the knowledge gained into its future packaging decisions. DoT and MTIA also improved the measure of the project`s usefulness and revised their acquisition approach to minimize costs. We also found that LXRA used a different approach for The Frankston Line Sites, which took into account the impact of distance options on neighbouring lands. LXRA did not use this criterion to assess LXRP2`s separation options. To date, the Ministry of Finance (DTF) has authorized the release of $1.28 billion of the project`s risk provision to meet the pressure of escalating costs. The remaining risk provision is $879 million. Following its election in 2014, the Victorian government implemented its pre-election commitment to eliminate 50 of Melbourne`s most dangerous and saturated crossings by 2022. These 50 sites are listed in Appendix D. At the time, the estimated cost of the project was $6.9 billion. We also found the risk that changes to technical standards would affect the time and cost of ongoing projects approved to previous standards.

Agencies that re-edit these projects should modify their plants or request exemptions from the new standards. As explained in Chapter 2, all HVHR projects must go through the TFSA gateway review process.