VIC Gov drops PPP contract model on $2.2B Suburban Road Upgrades

The Victorian Government has chosen to streamline the $2.2 billion Suburban Road Upgrade program.

The new contractual approach will be based on on the Level Crossing Removal Project contracts which are a collaborative partnership.

Infrastructure Partnerships Australia released a statement expressing their disappointment in the move which will terminate the existing tender process for the work, saying it leaves a long road ahead to rebuild trust.

The statement reads, Infrastructure Partnerships Australia understands the decision to change procurement direction on the Suburban Roads Upgrade would not have come lightly, but it will not be without its costs.

Chief Executive, Infrastructure Partnerships Australia, Adrian Dwyer said while we understand governments need to take an agile approach to managing risk in response to COVID-19, the disappointing decision today to terminate a formal and active tender process will inevitably damage confidence and undermine certainty.

“Bidders have invested substantial time and resources preparing binding tenders for these packages of work to only have the rug pulled out from under them.”

In a statement the Victorian Government said using an innovative procurement approach to give local construction companies more opportunities to win contracts.

It said as part of the Government’s response to coronavirus, consultation has occurred with smaller construction companies to understand how to best support their involvement in the Big Build program.

This new model is hoped to support Tier 2, 3 and 4 companies to access these works, creating more jobs and capacity in the construction sector.

Works worth $2.2 billion will be progressively awarded, in 12 projects, to pre-qualified companies under the new approach.

The tender process for the Northern and South Eastern Public-Private Partnership packages of road upgrade will be terminated and incorporated into the new program approach.

A Registration of Interest will be released next week with work on the first projects expected to start before the end of the year.

Minister for Transport Infrastructure Jacinta Allan said we’ve been able to deliver our Level Crossing removals at a record pace by working collaboratively with the construction industry – we’ll now do the same for this massive package of road upgrades across Victoria.

“Our construction industry will be a vital part of our economic recovery – this approach will give local construction companies the best chance to secure work and get shovels in the ground sooner.”

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