Queensland’s peak contracting body has today welcomed the approval of the business case for Gold Coast Light Rail Stage 3a by Infrastructure Australia but cautioned that there are still many hurdles to overcome before surfers can jump on a tram at Broadbeach to catch a break at Burleigh Heads.
Queensland Major Contractors Association (QMCA) has highlighted that there is still a substantial ($154M) shortfall between the estimated cost to build the project and funding commitments made so far by the State Government, Federal Government and Gold Coast City Council.
QMCA cautioned that even if the remaining funds are found there is no guarantee that contractors will bid to construct the project with the business case being based on a contractual model including:
“..assessment and allocation of risk following the same framework currently adopted for Stage 2”
This framework involved transferring almost all project risks such as dealing with existing utilities, managing ground contamination and the many project stakeholders to the Contractor.
QMCA has consistently called for Government to take a partnership-based approach to project risk allocation including joint management of risks that are hard to quantify and Contactors being able to rely upon information provided to them during the tender process.
QMCA CEO Jon Davies called on Queensland Government to arrange sufficient funding for the project so that work can commence without further delay. “Queensland is currently experiencing a deep and avoidable recession in infrastructure spending caused largely by political bickering around project funding.”
“It is vital that political games are set aside so that work can commence and Queensland can reap the benefit of investment, jobs and long-term commercial growth,” said Mr Davies.
Mr Davies also warned that if the project is brought to the market on the same terms as Stage 2 the Government may be disappointed by the level of interest in bidding for the project. “Major projects such as Gold Coast Light Rail are constructed by Tier 1 Contractors that operate throughout Australia and take decisions as to where to allocate their resources
on a National basis. If they are likely to get a better return by sending people to Sydney or Melbourne that is what they will do”.
“Currently we are seeing the State Governments in NSW and Victoria utilising more collaborative forms of contract to deliver their projects including a more equitable allocation of project risk. These projects are a far more attractive proposition than a further stage of Gold Coast Light Rail procured under the same terms as Stage 2.” said Mr Davies.
QMCA calls on the Queensland Government to ensure that any proposed contract for Gold Coast Light Rail Stage 3a contains an equitable allocation of responsibility for risk and encourages collaboration between the parties to achieve the best possible outcome for the people of the Gold Coast.
