In brief

This alert sets out details of a number of upcoming infrastructure projects in the pipeline for South Australia, including the status of works packages for the Torrens to Darlington (T2D) section of the flagship North-South Corridor project, which is currently South Australia's largest infrastructure project.

These projects were discussed at a construction sector industry briefing on 1 September 2021 convened by the Honourable Corey Wingard MP, Minister for Infrastructure and Transport and the Department for Infrastructure and Transport (DIT). They are part of a large and ongoing investment in South Australia which is projected to reach $17.9 billion over the next four years, with $8.8 billion in spending for road and transportation infrastructure. In the next year, the DIT projects that infrastructure spending in South Australia will be two to three times the historic yearly amount.

The current focus of the DIT is to bring projects to shovel ready status as quickly as possible, without sacrificing the quality of project delivery. To achieve this, DIT has improved internal processes for design and development, committed to standardised contracts which take a structured approach to risk, utilised collaborative forms of contracting where appropriate, sought wide-ranging industry participation and introduced reward mechanisms for high performance based on previous performance data. The DIT Forward Work Planner for Major Programs 2021 - 2024 can be accessed here.

This alert considers:

  1. The "headline" project North-South Corridor upgrade (Torrens to Darlington, or T2D Project), a major connector which will create a continuous 78km motorway link from north to south across Adelaide. This ten year, $9.9 billion project is well into procurement and EOIs for the first major works package are expected to be sought in early 2022.
  2. Other notable projects, including the following: New Women's & Children's Hospital ($1.95 billion), Riverbank Arena ($662 million), Hahndorf Township Improvements Access Upgrade ($250 million), Strzelecki Track ($215 million), Truro Bypass ($202 million) and the Aboriginal Art and Cultural Centre ($200 million).
 
 
  1. State Procurement of T2D Project:  

The packaging strategy for the Project is as follows:

  • Package A: Southern Tunnel, including lowered and surface motorways connecting to the tunnel;
  • Package B: Tunnel connector works, linking the north and south tunnels;
  • Package C: Northern Tunnel; and
  • Package D: the Torrens connector surface motorway.

Each package will involve a collaborative contracting model, with Packages A and C using modified D&C contracts with elements of collaborative contracting, and Packages B and D involving alliancing contracts.  Bid costs are likely to be at least patially reimbursable, to encourage participation in the tender process.

Works will include separable / early works packages to maximise early procurement.  In addition, motorway control and ITS works may be separately procured, to apply across all four packages.

2. Current status

Over $100 million of contracts has already been awarded, including ground investigations work and some utility relocations work. The DIT has commenced industry engagement, seeking to ramp up skilled labour and expertise, materials procurement and the like.  For example, ensuring that the over 400 pre-cast tunnel lining segments required per week can be procured in time to enable the TBMs to progress. The building reference design and Project Assessment Report are being prepared by DIT and are expected in the next few months.

3. Upcoming procurement

The next packages and expected timing for procurement are:

  • Market Sounding Phase 2 - registrations of interest opened 30 August 2021, with assessment to begin 13 September 2021;
  • Legal - RFP opens Q3 2021;
  • Ground Investigations - RFT opens Q3 2021 (by 14 September 2021).  This includes northern tunnel ground investigations and requests from tenderers for further ground conditions information.  Southern tunnel investigations are already underway.
  • Demolition services - RFP opens Q4 2021;
  • Shadow O&M Services - RFT opens Q4 2021;
  • Potholing and Service ID Services - RFT opens Q1 2022;
  • Spoil Management - RFP opens Q2 2022; and
  • EOI and RFT for Package A: Southern Tunnel (>$2bn package) - EOIs open Q2 2022.
4. Summary of next key packages

a. Market Sounding (Phase 2)  

With bids already open for market sounding (see link here), this package involves establishing feedback from:

  • Contractors who have worked on large roads and tunnels (particularly under collaborative contracting models) or who have been involved in other segments of the North-South Corridor and other projects in SA;
  • O&M contractors who manage large roads and tunnels, including to consider whole-of-life matters and innovative technology solutions; and
  • Wider supply chain participants in SA infrastructure, including in spoil management, construction services, materials supply and design/engineering services.

This will feed into the final delivery strategy expected to be produced by DIT in Q4 2021, which in turn is expected to feed into further industry consultation in Q1 2022 and the Package A materials.

b.  Package A - Southern Tunnels - EOI

This is a large main works package for the Southern Tunnel, including approach roads.  It involves around 6km of six-lane motorway, of which around 4km is TBM tunnelling and 450m is cut and cover tunnelling.

The package includes construction, tunnel systems, ventilation and safety works, noise mitigation and other project-wide components. It is possible that this will also include joint-package elements, such as motorway control / ITS. The DIT is looking to identify and mitigate risk early, including by engaging with contractors to understand the desired level of geotechnical and contamination reporting required, as well as to mitigate risks associated with utility service relocation, spoil management, pre-cast construction facility locations and dealing with approvals from other regulators. Procurement is anticipated to commence in mid-2022 with construction to commence in early 2023.  

5. Analysis of DIT's approach to T2D

It would appear that DIT is taking a proactive and well-managed approach to the procurement of this large project.  DIT is thinking well ahead, looking to the future to identify potential risks and procurement requirements and aiming to address these with industry early. Project timeframes appear realistic and achievable.  There may be some difficulty in procuring the necessary plant, skilled labour and design expertise given the strong pipeline of large road tunnelling projects already active across Australia (for example, WestConnex, the North-East Link and the Westgate Tunnel).  As a result, it is fortunate that DIT is taking such a proactive role in addressing these potential shortages early to minimise the risk of disruption to this project.

B. Other infrastructure projects The following infrastructure projects are approaching tender in the next 12 months and exceed $35 million.  All tenders can be accessed here. Open tenders:  
Project   Value   Key dates   Scope of works
Heysen Tunnels Refit and Safety upgrade   $75 million   Tender opened 1 Sep 2021 and closes 1 Oct 2021   Repairs to tunnel lining and installation of monitoring devices, upgrade to lighting, traffic cameras, incident detection systems, smoke and fog control units, CCTV, traffic control devices, ventilation system Over Height Vehicle Detection system and installation of a fire suppression system.
             
Old Murray Bridge Refurbishment   $36 million   Tender opened 1 Sep 2021 and closes 1 Oct 2021   Replacement of two piles, repair stone abutments, blasting and repainting of bridge structure, replacement of fences, upgrading of bridge lighting and installation of cathodic protection and interpretive signing.
Future tendering opportunities:  
Project   Value   Key dates   Scope of works
New Women's & Children's Hospital   $1.95 billion  
  • RFT period is September to December 2021
  The new hospital includes 500 treatment spaces and 170 outpatient consultation rooms, a 1,215 space multi-level carpark and improvements to Port Road Bridge including an additional lane, a new pedestrian and cyclist path and intersection upgrades. The project is to be delivered using a managing contractor contract structure.
             
Strzelecki Track   $215 million  
  • Stage 2, package 2b tender ($50 million) - Mar 2022
  • Stage 2, package 3 tender ($75 million) - Nov 2022
 

The project includes road resurfacing of the currently unpaved roadway. The following packages will be released soon:

  • Stage 2, package 2b: Della Road - 50 km
  • Stage 2, package 3: Strzelecki Creek Crossing to Cobblers Sandhills - 47 km
             
Hahndorf Township Improvements Access Upgrade   $250 million  
  • Tender in early 2022
  • Award in late 2022
  Construction of a new link road and interchange and improvements to access to and from the South Eastern Freeway and on the main street of Hahndorf. To be delivered under an Alliance contract (combined with Truro Bypass).
             
Truro Bypass   $202 million  
  • Tender in early 2022
  • Award in late 2022
  Approximately 14km of road to be constructed. To be delivered under an Alliance contract (combined with Hahndorf Township).
             
New Rostrevor High School   $86 million  
  • EOI in progress
  The demolition of existing building and the construction of a new public secondary school to accommodate 1200 students from year 7 to 12.
             
Aboriginal Art and Cultures Centre   $200 million  
  • RFT in progress
  • early works to begin in late 2021
  • completion in early 2025
  The construction of a new building to exhibit aboriginal art and culture. The exhibits are set to create an immersive experience combining traditional storytelling with modern technology.
             
Riverbank Arena   $662 million  
  • Lead professional services procurement mid 2022
  • construction to commence in 2025
  The construction of a new arena to replace the Adelaide Entertainment Centre capable of hosting 15,000 persons for concerts, conventions and court sports.
             
Cultural Institutions Collection Storage   $86.5 million  
  • tender to commence in Q1 2022
  The construction of a new storage facility for South Australian Museum collections.
             
Conclusion Our Construction Group has a deep and commercially focussed understanding of the infrastructure sector and the construction industry, and of the particular interests of the various parties to any project. We act on high profile transactions for developers, principals, governments, contractors, major subcontractors, engineering and architectural consultants as well as banks in Australia and the world. In working closely with a variety of other advisers on major projects, we are able to understand and address non-legal issues that arise in every project such as financial and technical issues. We deal with risk allocation in construction contracts; minimise disputation in a fair, balanced and commercially realistic manner; and provide appropriate risk protection to our clients, whether they are the principal or the contractor. We strive to deliver the required result for the project whilst managing the cost and time risks in the preparation of contract documentation. Our experience includes:
  • significant experience on the front-end in drafting and negotiating contracts for the design, construction, operation and maintenance of infrastructure projects in the transport (rail, light-rail, road), infrastructure, power, health, telecommunications, utilities and resource sectors and in relation to EPC (and closely-related D&C) contracts generally.  
  • back-end work with senior back-end lawyers with extensive experience acting for major Australian and multinational corporations and government agencies in relation to complex contractual and non-contractual claims arising from infrastructure projects, defects in plant and faults in heavy mining machinery.  
  • being able to bring in dispute resolution specialists who are experienced in advising construction and engineering clients throughout all phases of the infrastructure project lifecycle including representation in statutory adjudications, expert determinations, and arbitrations as well as Court proceedings in all Australian States and Territories.
A complete recording of the briefing event (from which the above information was extracted) can be accessed via the Government of South Australia Department for Infrastructure and Transport website here.