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City Project

Planning

The government revealed the new route in the new master plan, released in July 2001.[1]

The Perth City Rail Advisory Committee was formed in October 2001 in response to controversy over the route through the Perth CBD. It consisted of eight members, including engineers, planners, and representatives from the Property Council and the Perth City Council, and was tasked with submitting its final report outlining the route options in February 2002.[2] The report was delayed as the committee found it hard to reach a consensus;[3] the report ended up being released on 14 March 2002. It proposed three options: an eastern, central, or western route.[4]

  • Western route:
  • Central route: This route
  • Eastern route:

The eastern route was the committee's preferred route, followed by the western route. The government ruled out the eastern route as it cost more than twice the other two routes. The remaining two routes were opened up to public consultation over the following month.[4][5][6] In April 2002, it was announced that the Perth City Rail Advisory Committee would be re-established to conduct a more detailed analysis on the two remaining routes.[7] The Perth City Rail Advisory Committee handed down its report in May 2002, recommending the construction of the central route. The Cabinet of Western Australia officially endorsed this route in June.[8]

The Perth Urban Rail Development Project Supplementary Master Plan was released in August 2002.[9]

Construction

Geotechnical testing by Golder Associates occurred between January and March 2003.[10][11]

The City Project was designed and constructed as part of Package F of the Southern Suburbs Railway project.[citation needed] Expressions of interest for Package F were called for in March 2003[12] and closed in April 2003. Five consortia submitted expressions of interest:[13]

A design change was announced in July 2003, with the William Street bridge on the foreshore now to be demolished. The $1.3 million cost was to be offset by changes to the project's design, including leaving a 135-metre (443 ft) section of the tunnel uncovered within the freeway interchange and using natural light and ventilation for Esplanade station.[14] Consideration was given to sinking the Fremantle line within Northbridge. The state government attempted to reach an agreement for the City of Perth to fund the sinking in exchange for the city receiving the right to develop the land on top of the railway,[15] but by April 2004, the project was deemed too costly, with an estimated cost of $200 million.[16] This section of railway was later sunk as part of the Perth City Link project.

City Connect and the Leighton–Kumagai Gumi Team were shortlisted in May 2003[17][18] and in November 2003, the Leighton–Kumagai Gumi Team was selected as the preferred proponent.[19][20] City Connect lead contractor Clough's managing director had expressed that he did not want to agree to the government's requirement that the contractor take all the risk for cost escalation due to unknowns such as soil conditions and heritage buildings.[21] The following month, the contract was approved by Cabinet,[22] and in February 2004, the contract was signed for $324.5 million.[23][24]

Due to the controversy of the City Project and pressure from the Liberal and Greens parties, MacTiernan promised in January 2004 to table the contract in Parliament, although Leighton opposed this.[25][26][27] The contract was controversial due to the previous cost blowout and the risks of tunnelling. MacTiernan promised that almost all the risk would be on the contractor as it was a fixed-price contract,[28] with the state liable for underground building anchors and the relocation of power and water utilities.[29] The contract was tabled on 2 March 2004. MacTiernan claimed it was "the first time that the contract for such a construction project have been publicly released".[30] The contract stated that delays beyond October 2006 would incur a penalty of $54,000 per day for the contractor.[31] Throughout construction, MacTiernan emphasised that it was a fixed-price contract in response to speculation about cost blowouts.[32]

Demolition of buildings to make way for the William Street station began in April 2004.[33]

After slight delays during the commissioning of the TBM, tunnelling from Esplanade station began on 25 October 2005.[34] The TBM reached William Street station on 7 February 2006.[35] The TBM reached William Street station for the second time on 31 August 2006[36] and reached the Roe Street dive structure on 24 October 2006, marking the completion of tunnel boring.[37] The TBM was dismantled and sold for parts.[38]

In April 2005, MacTiernan revealed that the New MetroRail project completion date had been delayed from December 2006 to April 2007 due to the City Project not being projected to finish construction until December 2006. The delays were attributed on the heritage protection works at Perth Underground station, engineering challenges on the foreshore, and industrial disputes.[39][40] In April 2006, she announced that the City Project's likely completion date had been delayed to April 2007, which meant the Mandurah line would not open until July 2007.[41] In April 2007, MacTiernan revealed another delay, this time with the likely opening date being October 2007.[42]

The first train ran through the tunnels in August 2007.[43] The City Project reached practical completion in September 2007 and was handed over to the PTA on 10 September.[44][45] The two underground stations opened on 15 October 2007.[46][47]

[48]

Industrial action

Three hundred workers went on strike from 11 November 2004, complaining about long working hours.[49] The Western Australian Industrial Relations Commission ordered that they returned to work two days later,[50] but the workers voted in favour of defying the order.[51][52] MacTiernan took a hands-off approach regarding the strike, saying it was a matter between the Construction, Forestry and Maritime Employees Union (CFMEU) and Leighton–Kumagai Gumi.[53][54] The strikers returned to work after two weeks, with a deal being reached on 26 November for better pay for nightshift workers.[55] Workers went on strike for two days in January 2005 due to smoke haze,[56][57] which was deemed valid by the Australian Industrial Relations Commission.[58] Two hundred and fifty workers went on strike for two days in April 2005 after a union official was allegedly assaulted by a subcontractor working for Leighton on another package.[59][60] MacTiernan revealed in May 2005 that the City Project was subject to the most days lost due to strikes on the Southern Suburbs Railway project.[61]

Four hundred workers went on strike for a day in July 2005 due to an incident where a digger hit a cable on Wellington Street.[62] More than two hundred workers went on sick leave for several days in August 2005, which was described as a case of "blue flu".[63][64][65]

[66][67][68][69][70][71][72][73]

In February 2006, Leighton filed a writ in the Supreme Court of Western Australia against the CFMEU and CFMEU assistant secretary Joe McDonald, for having allegedly "unlawfully interfered in its business and in its relationship with its employees and subcontractors".[74] Leighton and the CFMEU reached a pre-trial settlement in November 2006, with the CFMEU paying Leighton $150,000 plus legal costs and the CFMEU admitting to breaching the Building and Construction Industry Improvement Act twenty-nine times.[75][76] Leighton and the CFMEU reached another out-of-court settlement in July 2009, worth millions of dollars.[77]

Contract disputes

Throughout 2004 and 2005, the Leighton–Kumagai joint venture claimed that the Public Transport Authority owed them $50 million due to cost overruns. In early 2006, the joint venture claimed an additional $141 million for cost overruns[78][79][80] resulting from unforeseen ground conditions, labour strikes, delays in demolition, and the difficulty in preserving heritage buildings. MacTiernan said that the claims were unfounded and that the state government would not pay for the cost overruns.[80][81] Leighton had initially expected to make an $8 million profit on the project, which was reduced to a $10–15 million loss.[82] Leighton CEO Wal King met with Premier Alan Carpenter in an attempt to reach an agreement.[83] The claims had risen a further $13 million by March 2006, reaching a total of $204 million. MacTiernan said that only a small portion of that total would be paid out.[84]

Leighton filed a writ in the Supreme Court of Western Australia in April 2006 seeking to be relieved from its contractual obligations due to the PTA's failure to establish insurance for the whole cost of the contract, or alternatively have the practical completion deadline extended until the PTA provides the insurance. By this point, tunnelling had stopped because the joint venture did not want to start the most challenging phase with the proper insurance to cover potential risks such as cave-ins.[85][86]

The cost overrun claims were divided into several separate Supreme Court writs. The first writ, filed in June, related to the contract's rise and fall provisions, which specified that an Australian Bureau of Statistics (ABS) index would be used to calculate the escalating cost of labour and materials. The ABS discontinued the index soon after the contract was signed, so the dispute related to which alternative method should be used.[87] Another writ was filed in June 2006, seeking damages to cover the cost of disposing of contaminated soil and an extension to the practical completion deadline.[88] By September 2007, there was another writ for the costs of dewatering.[89]

The trial for the rise and fall provisions dispute started in September 2007.[90][91] In September 2008, the court ruled in favour of Leighton.[92][93] All legal action was ended with a confidential settlement in May 2009. The West Australian reported that Leighton was awarded over $43 million, whereas ABC News reported that the figure was greater than $43 million..[94][95]

References

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Reports

External links

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