ACT News

License article

Simon Corbell announces two shortlisted consortiums for tram line

The race to build Canberra's tram line is down to two bidders, among them some of the world's biggest train companies.

The ACT government has shortlisted two consortiums to submit detailed bids to build, own and operate the tram line.

One, calling itself Canberra Metro, is led by Leighton subsidiary Pacific Partnerships, and includes Mitsubishi and John Holland, and German firm DB International GmbH.

The other, Activate, is led by Downer EDI, which would design and build, and includes train-building company Bombardier and Keolis Downer, which operates the new Gold Coast tram and Melbourne's tram network.

The tram is expected to cost $780 million for the 12 kilometres from Gungahlin to the city, with the shortlisted consortiums now also asked to submit a price for a 3.2 kilometre extension to Russell.


Capital Metro Minister Simon Corbell said the four consortiums in the first stage had not provided detailed design, but rather had been asked to submit their credentials, their capacity and their "early thinking" on the government's aspirations for the project. There had been a very positive response to government requirements, including the capacity to carry bikes.

The government had "tested their general view and understanding of government's affordability threshold", he said. Consortiums were also asked for a view on the government paying them a lump sum of 50 per cent of debt at the end of construction or at the first refinancing of the project. Mr Corbell did not provide detail of their response on the lump sum, but said consortiums had welcomed that fact that the government had the payment on its radar.

The consortiums had also welcomed the government's willingness to consider the Russell extension, he said.

The two shortlisted groups would now provide detailed design and a bid price, setting out what the tram would cost the territory. The government will pay the winning bidder an annual fee, but has yet to go public on how much it expects that fee to be.

Mr Corbell said "request for proposal" documents would go to the two shortlisted groups in April for the Gungahlin line, and a couple of months later for the Russell extension. The request for proposal was "many many hundreds of pages in size" and specified all of the government's requirements, including construction, the tram service, financial issues and a penalty regime for failure to deliver.

Four consortiums submitted expressions of interest in December. Two have now been knocked out – the consortium building the Sydney tram line, comprising Transdev, Alstom, Acciona and Capella Capital; and a group led by Macquarie Capital that included Siemens.

Mr Corbell said the four had been assessed on experience delivering comparable projects, ability to provide a very high level of safety, understanding of commercial and risk management, strong financial capacity, and understanding of the government's overall aspirations for the project.

They had been assessed by sub-panels dealing with each criteria and including outside experts on urban design, and by an evaluation panel, which had reported to the Capital Metro board. Cabinet had accepted the board's recommendation, Mr Corbell said.

The two successful consortiums were "well-formed", with mature relationships among the companies making up each consortium, and mature financing arrangements, he said. They both understood that the government had "sent a very strong affordability signal" by releasing the business case, and were highly experienced.

"We're dealing with highly experienced, globally experienced companies that have delivered urban rail, including light rail and heavy rail projects in Australia and overseas," he said.

Both were developing relationships with local subcontractors and suppliers, which would be critical in the final bids.

On April 9, Capital Metro is holding a "networking event" for which local businesses are invited to register, where they can meet the shortlisted consortiums.

Mr Corbell said the shortlisting was a very significant milestone. "We have met every milestone so far for this project which I'm very proud of, so we are tracking to make a decision on the successful bidder early in 2016 with works under way later in 2016," he said.