Leighton Kumagai appointed preferred proponent for New MetroRail City Project

2/11/03

The Leighton Kumagai team has been appointed as the preferred proponent for the New MetroRail City Project, which involves design and construction of tunnels and underground stations in the Perth CBD.

Planning and Infrastructure Minister Alannah MacTiernan said today that Leighton Kumagai would now enter into a negotiation phase with the Government to reach agreement on contract terms.

"Details of the proposals must remain confidential during the negotiation phase, which we expect will be completed by mid December," Ms MacTiernan said.

"Successful negotiations will lead to award of a contract and I am confident of a positive outcome."

The city project will be delivered under an innovative 'relationship-based' design, construct and maintain contract.

"The contractor will be responsible for all design and construction, as well as maintenance of underground structures and electrical and mechanical services for 10 years after completion," the Minister said.

"Other than for limited, specified events, the risk of cost overrun rests with the contractor.

"The proponents were required to allow for acceptance of this risk in their lump sum bids, including all risk associated with underground geo-technical conditions.

"By limiting Government's exposure to risk, this form of contract offers a high level of certainty in the contract award price.

"However, at the same time, we have included specially designed mechanisms to promote a strong working relationship between the contracting parties."

Ms MacTiernan said the Government was on target for contract award by early 2004.

"This will allow detailed design to commence in earnest," she said.

"Construction activity will start soon after, as the design is progressively completed, and will continue through to project completion in mid-2006."

Leighton Kumagai and CityConnect (a joint venture of Clough, McConnell Dowell and Obayashi) were selected as the two preferred proponents from an initial field of five consortia at Expressions of Interest phase.

The short-listed proponents then prepared detailed submissions over a 14-week period.

"The proponents must both be commended on the high standard of their bids," Ms MacTiernan said.

"The quality of the information provided in response to the technical challenges of the City Project supports the outstanding track record of the companies involved.

"Both proponents submitted proposals meeting Government requirements in every respect. The evaluation was a rigorous, documented process carried out under strict probity controls.

"After thorough consideration of all of the technical and commercial aspects of the bids, Leighton Kumagai was assessed as offering best value for money to Government."