Roads Australia Industry Presentation 12 March 2015 Peter Duncan Chief Executive Roads and Maritime Services
About Roads and Maritime Minister for Roads and Freight Minister for Transport Roads and Maritime Services Planning and Policy - Planning & Programs - Policy Delivery Cross functional engagement Build Manage Enabling Functions Maintain - Build - Manage journeys (including regulation) - Maintain Roads and Maritime funding 2014-15 ($5.5 billion) Waterways Fund $102 million State Consolidated Fund $1,385 million Roads and Maritime revenue $650 million Motor vehicle taxes (State) $1,854 million Commonwealth $1,510 million Roads and Maritime expenditure 2014-15 ($5.5 billion) Build $2,529 million Manage Journeys $1,066 million Maintain $1,483 million Enable $423 million
Industry Outlook 9 Roads engineering construction by state/territory, By road type, Value of work done, Constant 2012/13 prices $ Billion NSW VIC 9 Roads engineering construction in New South Wales, By road type, value of work done, constant 2012/13 prices $ Billion Forecast Runways & Access Roads QLD SA Private Toll Roads 6 WA Other Subdivisions Local Roads Highways and Arterials 3 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Year ended June Source: ABS, BIS Shrapnel 0 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 Year ended June Source: ABS, BIS Shrapnel Major road projects in Australia, 2003 to 2024. Value of engineering construction work done 6.0 $ Billion Princes Highway upgrades (NSW / VIC) Lane Cove Tunnel (NSW) Cross City Tunnel (NSW) North-South Bypass Tunnel (QLD) East Link (VIC) North - South Corridor (SA) Upgrade M80 (VIC) Airport Link (QLD) Gateway Motorway North (QLD) Bruce Highway upgrades (QLD) Legacy Way (QLD) Forecast NorthConnex M1 - M2 Link (NSW) WestConnex Stage 2 (NSW) WestConnex Stage 1 (NSW) Western Sydney Airport Roads (NSW) Toowoomba Second Range Crossing (QLD) Pacific Motorway upgrades (NSW) East-West Link (QLD) East West Link (VIC) WestConnex M7 Stage 3 (NSW) (NSW) Pacific Highway upgrades (NSW) 0.0 2003 2006 2009 2012 2015 2018 2021 2024 Year ended June Source: BIS Shrapnel
Efficiencies and Effectiveness: Maintenance Contestability Service Category Management and Other Services Transition Progam Management Asset Management Planning Demobilisation Forward Works Program Routine Maintenance Works Tactical Road Pavement Works Simple Minor Improvement Works Event Management Services Incident Response Special Projects Tactical Corridor Works Complex MIW Tactical Bridge and Tunnel Works Trans Contract Years 1 2 3 4 5 6 7 100% 80% 60% 40% 20% 0% = Priced Component = Target Cost = Cost Plus Portion of spend by payment type Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Priced Component Target Cost Cost Plus NB: this is a simplified split for illustration purposes. In reality there may be some elements which comprise a mix of arrangements Commercial Reset points Assumes ensuing FWPs agreed as 3 years in duration There is, perhaps, no better example of this [principles of good commissioning] than the tender within NSW Roads and Maritime Services (RMS) for road maintenance in Sydney s south and west. RMS has based its new contracts on six stewardship principles, which include putting the customer first, performing the services in the best interests of the asset owner and achieving transparency and accountability for outcomes. Extract from opinion piece first published in the Australian Financial Review by ANZSOG Chair of Public Service Delivery at the Australian School of Business, UNSW
History of partnerships M2 Motorway M5 South West Motorway
New delivery approaches PROJECT Maintenance Contestability Pacific Highway Priority 3 WestConnex NorthConnex Western Sydney Infrastructure Program Northern Beaches Hospital APPROACH Stewardship contract Delivery Partner Delivery Authority/RMS Subsidiary Co. Unsolicited proposal / PPP Delivery Office Early Contractor Engagement / D&C (Accelerated)
Experience with Partnerships
Partnerships Kempsey Bridge
Selecting the right model for delivery To provide assurance, Project Board has majority of independent membership with audits of DP against services contract
Features of a delivery partner DP can adopt whole of project approach to innovations (eg mass/haul management, standardise bridge types, quarry supplies) Work packages competitively bid (DP can not self perform) DP contract is services contract where: - Roads and Maritime remains Principal for Work packages - Roads and Maritime can manage project scope, time and cost as required (eg reuse of existing highway as one carriageway) DP is an integrated team Roads and Maritime staff embedded DP contract is a services contract not fixed price DP paid their own actual direct costs (predominately people) Incentivisation DP bids margin at risk (corp OH + profit) DP bids incentive
The Albert Tibby Cotter Bridge
The Albert Tibby Cotter Bridge
The Albert Tibby Cotter Bridge
Thank you. Questions?