ACT News

No compensation for unsuccessful Capital Metro light rail consortium bid

The ACT government won't pay compensation to the losing consortium bidding to build the city to Gungahlin light rail line.

The business case for the $698 million project includes provisions for the territory to reimburse the losing shortlisted consortium for some of its bid preparation costs. The provisions say the government "may, in its discretion, consider the provision of partial bid cost reimbursements".

An artist's impression of the Capital Metro Gungahlin tram line.
An artist's impression of the Capital Metro Gungahlin tram line. Photo: Supplied

This month Chief Minister Andrew Barr and Capital Metro Minister Simon Corbell named the Canberra Metro consortium as the winning bidder for the project, leaving companies involved in the rival Activate Consortium disappointed.

Activate included 10 international transport, infrastructure and finance firms, including lead respondent Downer EDI Works and the operator of Melbourne's tram network Keolis Downer. A consortium spokesman declined to comment.

An artist's impression of the Capital Metro Gungahlin tram line.
An artist's impression of the Capital Metro Gungahlin tram line. Photo: Supplied

A spokesman for Mr Corbell said the government had informed bidders no compensation would be provided.

"The procurement documents were issued to project bidders on the basis that they would bear their own costs for participation in the project's procurement process without reimbursement by the ACT government," he said.

"No bid cost reimbursements are being paid to either of the shortlisted bidders. Both shortlisted bidders participated in the process knowing that would be the case."

The business case shows participants involved in the market sounding for the project identified "key potential approaches" included shortlisting of only two bidders and "providing some contribution for costs" to the losing bidder. Providing for bid cost reimbursement upon use of a termination for convenience clause is also cited, as flagged by the ACT opposition if it wins the October election.

Financial sponsors told the Capital Metro Agency the presence or absence of bid cost reimbursement would not limit their participation, with many indicating shortlisting of only two bidders was more important than compensation for unsuccessful bidders.

Mr Corbell also explained other aspects of the project cost this week.

The cost of relocation of underground pipe and wires along the Northbourne Avenue and Flemington Road corridor will be the responsibility of the successful Canberra Metro consortium and are included in the $698 million price tag, plus or minus $35 million.

The $375 million lump sum contribution from the government, flagged in the 2015-16 territory budget, will be funded through the sale of government office buildings, rundown public housing properties and the ACTTAB betting agency, boosted by the federal government's asset recycling initiative bonus of $60 million.

The land for light rail stops and depots will be licensed to Canberra Metro for the 20-year term of the project.

"The licensed land may only be used by Canberra Metro for the purpose of the project," the spokesman said. "All project assets remain owned by the territory."

Mr Corbel has refused to say whether Canberra Metro's bid was lower than Activate's, but said it was the "most competitive" and factors other than price had been taken into account. Pacific Partnerships leads the Canberra Metro, with the trams supplied by Spanish company CAF and operated by German company Deutsche Bahn.

Chinese infrastructure and engineering giant CCCC International Holdings and its subsidiary, John Holland are included in the consortium, along with CIMIC, formerly Leighton Holdings, Mitsubishi Corporation, Aberdeen Infrastructure Investments and the Bank of Tokyo.