CASE STUDY SOUTHERN CROSS STATIONto achieve or satisfy a relevant KPI (KPI Failure) then each KPI...
Transcript of CASE STUDY SOUTHERN CROSS STATIONto achieve or satisfy a relevant KPI (KPI Failure) then each KPI...
JULY 2015
AUSTRALIA
CASE STUDYSOUTHERN CROSS STATIONAUSTRALIA
WSP|PARSONS BRINCKERHOFF STATION CAPABILITY
Railway stations are key nodal points for the sustainable transport of passengers. As such they have an important social-economic and environmental role to play.A well-functioning station that can provide comfortable transport options for passengers in an efficient way will encourage commuters and travellers to use this passengers in an efficient way will encourage commuters and travellers to use this comparatively environmentally friendly way of travelling.Because of the facilities and the technology that a station has to include to function safely and efficiently, a station by itself consumes large amounts of resources and might have negative environmental and social impacts on the adjacent environment.
TRANSFORMATION OF TRANSPORT HUBS –SOUTHERN CROSS STATION
1859
1960’s
2000’s
Opening Modernisation Redevelopment
1960’s
2000’s
•The 1880s saw the first of several unrealised plans•Opened as Spencer Street Station in 1859,•From 1888 to 1894 the layout platforms was altered, with new country platforms
•In October 1960 work on a new Spencer Street station commenced•The station building largely replaced the 1880s iron shed •A new 413-metre platform number 1 was built. •A new double-track
•Southern Cross was redeveloped by the Civic Nexus consortium•Innovative design by Grimshaw Architects •Construction began in October 2002 and was completed in late 2006•The central features of platforms
•The current coach terminal location was the site of a number of new platforms built for suburban services.
•A new double-track viaduct was constructed between Spencer Street and Flinders Street station.
•The central features of the design include a wave-shaped roof, a new entrance and concourse on Collins Street
SOUTHERN CROSS STATION PROJECT GOALS
Urban regeneration for Melbourne was a key focus of Victoria’s Premier, Jeff Kennett, who publicized several high profile capital improvement profile capital improvement projects in the city, leading up to a bid for the 2006
One of the largest projects associated with the bid was a $2 billion plan to
regenerate Spencer Street Station and Docklands
CIVIC NEXUS CONSORTIUM CONTRACTED TO DESIGN, BUILD, FINANCE AND MAINTAIN
Key Facts
The project included two components:• A transport interchange • A commercial redevelopment that includes a retail precinct, car parking and offices
Project nameSouthern Cross Station Value$309m (net present cost value, as at June 2002) is the net cost to government for the station development$350m estimated value of commercial development at no cost to governmentDepartment or agency
retail precinct, car parking and officesSome of the features include:• An open design light filled space with full glass frontage to Spencer Street and Collins Street with platform access from both the Bourke Street Bridge and Collins Street extension;
• Passenger information screens with real time train arrival and departure information and comfortable waiting areas;
• A 30-bay coach station;Department or agencyPublic Transport VictoriaDepartment of Economic Development, Jobs, Transport and ResourcesNumber of trains per week14,000 trains operated by Metro, V/Line and CountryLinkNumber of passengers per week328,700
• A 30-bay coach station;• Secure, sheltered parking facilities for 800 cars and five-minute drop off and pick up area; and
• Improved public facilities and new retail outlets.
“INTEGRAL HUB OF MELBOURNE’S PUBLIC TRANSPORT SYSTEM.”
Long Distance ‘InterCity’ Services
Tram Interchange at
Street Level
Freight to Intermodal Terminals
Suburban Rail Services
Retail Shopping Centre
Station Outlets
Bus Terminal Linking Urban Regeneration
MANAGEMENT OF SOUTHERN CROSS STATION
The Southern Cross Station Authority manages the Partnerships Victoria contract for the transport interchange.
There are a number of operators at the site who lease rail and station infrastructure to provide key rail services to the public.
Rail operators exchange payment for access rights to the station – by type of train, axle weight, time of day, number of station – by type of train, axle weight, time of day, number of services per day
Concessionaire gains revenue through retail leasing
SOUTHERN CROSS PPP CONCESSION
Civic Nexus Consortium
Leighton Contractors1
Leighton Contractors
ABN Amro
Nicholas Grimshaw and Partners
Honeywell
2
3
4
Concession
HoneywellAt the end of the lease, the contract can be renegotiated and renewed. If either party chooses not to renew the contract, the station will be returned to the Victoria
government in working order
Cost of Procurement: US$2.3mBasis of Award: Best design at least cost and lowest availability payment for operations and maintenance with
consideration for valuation of surrounding real estate
AVAILABILITY PAYMENT
30 Year Concession From Start of Operating Period
Availability payment
(Core
Annual payment Paid
Reviewed against
quarterly
Annual Indexing
(Core Services Payment)
payment AUD$ 34 million
Paid Quarterly
quarterly passenger
count
Indexing of
Payment
FINANCIAL STRUCTURE OF SOUTHERN CROSS
Equity Investor
Development Australia Fund Management Ltd
Equity Investor
ABN AMRO
75% Equity Stake 25% Equity Stake
Developer
Civic Nexus
Government
Public Transport Victoria
Debt Financier
Civic Finance Limited
D&C Contractor Debtor
AUS$34m p.a.
2 bonds of AUS$335m1 bond of US$73.9m
AUS$167m D&C Contract
D&C Contractor
Leighton Contractors
Debtor
Bond Holders
• No payment to concessionaire until construction completion
• AU$34 million annual availability payment began at operations.
AUS$66m for commercial
development rights for 99 year lease
FUNDING AND PAYMENT MECHANISMFunding
Time from RfP to contract award 9 months
Funding Stakeholders • Bond financing through ABN AMRO, 74%• Equity from ABN AMROB, 14%• Value of rights to the commercial estate transferred to Civic
Nexus, 12%
% of Private Sector Funds 100%
Debt to equity financing of Private Sector Funds
74% debt, 14% equity, 12% value of real estate
Payment
Payment mechanism Core Service Payments (CSP), also known as Availability Payments, are made quarterly during the operations and maintenance period of the concession based on station availability, operations and maintenanceThe CSP comprises of 3 main components:
The project was 100% financed by the private sector through Civic Nexus
• Capital – reimbursement to the private sector for cost of the station redevelopment
• Operating – stations operations and management for the 30 year concession period
• Insurance – public sector covers the cost of insuring station operations for the 30 year concession period
RISK TRANSFERSite risk
Design risk
Construction risk
Environmental and social risk
Design and
Construction
•Availability of site (land acquisition/rights-of-way), quality of site (geological conditions, existing asset condition), zoning permits
• Inadequate planning, substandard design, lack of system integration, delayed construction permits and approvals
•Time delay, completion risk, cost overrun, quality issues, sub-contractor mal-performance, untried/complex technology, design change
•Environmental permits and constraints, stakeholder opposition, Environmental and social risk
Commercial risk
Opex risk
Performance risk
Financing risk
Macro risk
Operations
Political and macro
•Environmental permits and constraints, stakeholder opposition, cost of social/environmental mitigation
•Demand shortfall, price elasticity, network interface risk, collection risk
•Higher O&M, labour and commodity costs
•Operational inefficiency, system underperformance, reduced asset availability, service interruptions, innovation risk
•Refinancing availability, borrowing rate risk, counter-party and sponsor risk
•Changes in economy, population, demographics, industrial Macro risk
Regulatory risk
Political risk
Force majeurePolitical and macro
•Changes in economy, population, demographics, industrial development, interest rates, exchange rates, inflation
•Changes in regulated prices, competition, sector framework, taxation
•Breach of contract, expropriation, currency inconvertibility, profit repatriation
•Natural or man made events, eg. Earthquake, flood, civil war, fire, riots, strike
KEY RISK PRINCIPLES FOR SOUTHERN CROSS STATION
Key Risks Risk Allocated to Private
Risk Allocated to State
Transport interchange facility - Majority MinimalTransport interchange facility -design, construction, finance and operation
Majority Minimal
Commercial development – design, construction, finance, operation and integration
Virtually all Virtually none
Rail and signalling infrastructure -construction
Virtually all Virtually none
Risks that were not taken on by the private sector were:• 50 per cent of risk associated with pre-existing site contamination
(contamination that wasn’t previously identified)• Any financial costs associated with changes to the interpretation of Land Tax
Act 1958.
MONITORING PERFORMANCE THROUGH KPI’S
1
Availability
2 3
4 5 6
Food andBeverage
PassengerUsage
In contrast to the Department’s earlier role of directly managing the precinct and the redevelopment, the key roles are now to:4 5 6
7 8 9
10 11 12
AvailabilityPassengerInformationand Signage
Cleaning
Bus BaysSecurity andEmergencyServices
Repairs andMaintenance
the key roles are now to:
• monitor and assess the concessionaire’s management and operation of the station based on a KPI regime on behalf of the State
• manage a number of capital
Tele –Communication
13 14 15
WasteManagement
EnergyManagement
Car Parking
Baggage/TravellerAssistance
Pest Controlprojects within the precinct
• exercise owner obligations over third party land in the broader station precinct.
Southern Cross –Services and
Development Agreement
PERFORMANCE ABATEMENT‘if a Quarterly Performance Report reports the Concessionaire, in the provision of the Services, as failing to achieve or satisfy a relevant KPI (KPI Failure) then each KPI Failure will attract, and the Concessionaire will accumulate, the applicable Penalty Points.’
4 Penalty Bands – Points Based
Band 1 - 2.5%
Band 2 – 10%
Abatement Amount =
Abatement Amount =
(Adjusted Core Services
Agreement x Penalty
Bracket 1 Percentage)
xAbatement points per Quarter
250
(Adjusted Core Services Agreement x
(Penalty Bracket 1 Percentage) +
(Adjusted Core Services Agreement x
(Penalty Bracket 2 Percentage – Penalty
Bracket 1 Percentage)
x (Abatement points per Quarter – 250))
250
Band 3 – 40%
Band 4 – 100%
Abatement Amount =
Abatement Amount =
Bracket 1 Percentage)
(Adjusted Core Services Agreement x
(Penalty Bracket 2 Percentage) +
(Adjusted Core Services Agreement x
(Penalty Bracket 3 Percentage – Penalty
Bracket 2 Percentage)
x (Abatement points per Quarter – 500))
250
(Adjusted Core Services Agreement x
(Penalty Bracket 3 Percentage) +
(Adjusted Core Services Agreement x
(Penalty Bracket 4 Percentage – Penalty
Bracket 3 Percentage)
x (Abatement points per Quarter – 750))
250
AVAILABILITY PAYMENT LINKED TO PASSENGER NUMBERS
4,00,00,000
4,50,00,000
Pa
sse
ng
er
Nu
mb
ers
Annual Passenger Numbers
0
50,00,000
1,00,00,000
1,50,00,000
2,00,00,000
2,50,00,000
3,00,00,000
3,50,00,000
4,00,00,000
Pa
sse
ng
er
Nu
mb
ers
YearFlinder Street Station
Southern Cross Station
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Southern Cross Station
• Annual passenger numbers using Southern Cross Station have remained half of those through Flinders Street Station
• Average annual passenger growth:• Flinders Street Station 3%• Southern Cross Station 0.7%
PROJECT PROGRAMME
April 2005 August 2006
15 months late
2000 2001 2002 2003 2004 2005 2006
Intention to redevelop Spencer St station announced
Planning study completed
Civic Nexus announced as preferred bidder
Construction delays begin to occur
Ongoing difficulties related to construction
Construction of intermodal facility completed and GSA finalised
Approvals complete
Design complete
Planned
Completion
Payments to the developer withheld
• $21 million for modifications and additional works to which the Department Of Infrastructure agreed that the developer was entitled under the original contractual terms
• $8.5 million to settle claims to which the concessionaire did not admit liability• $2.75 million to settle a site access claim after the 2006 Commonwealth Games
Over Budget Payments to Developer
Southern Cross Station Authority created
Expressions of interest sought and request for proposals
Construction commenced
Settlement deed agreed to deal with delays
Descoping
• Rail modification and signalling upgrade works were removed from the project• Department Of Infrastructure taking over responsibility for completion of the project• The State received a credit (calculated by an independent reviewer) from the concessionaire for the de-scoped works
DELAYS AND OVER BUDGETThe state required the redevelopment consortium to keep the station at full
operation capacity throughout the project
Work could only occur for three hours at night. This proved even more daunting than originally expected as proved even more daunting than originally expected as construction crews struggled to move equipment in place, complete daily tasks, and leave enough time for clearing the tracks, cleaning the site, and re-electrifying the system before the morning rush
Dangerous work and undesirable hours, construction crews had to be paid much more than normal, often just to sit and wait
DESIGN SPECIFICATIONThe redevelopment had a loosely defined design specification that allowed innovation, but ultimately provided the catalyst for costly flaws in the design
Key
Design
• A transport interchange facility, including a 30 bay coach station• 800 car parking facility• A commercial development
Southern Cross has suffered from design issues. Its award- winning roof caused concerns in the form of complaints from
workers and passengers alike that the station
Design
Requirements
• A commercial development• Rail modifications and signal upgrades• To create a new iconic building in Melbourne, placing particular emphasis
on design• Construction was required to have minimal impact on station operations
workers and passengers alike that the station is not circulating air quickly enough to prevent the build up of train exhaust on the platforms. In 2011, the state agreed to front the funding
for fitting large fans onto the roof.
PEDESTRIAN FLOW
Poor planning can create ‘hotspots’ in pedestrian congestion
The new station layout has resulted in significant inconvenience to thousands of passengers who use the station every day, and the station has been criticised in urban design circles for poor connections to secondary streets surrounding the station and awkward pedestrian junctures
Poor pedestrian access and tram interchange at street level
LEVERAGING THROUGH COMMERCIAL RETAILThe performance of the commercial development is also inconsistent with
forecasts for both inside and outside spaces
November 2006Shopping complex opened as a Direct Factory Outlet (DFO) with food court and Virgin Megastore
• A more efficient complex and a subtle mix of retail facilities and public spaces could have been achieved.
and Virgin Megastore
March 2007With unoccupied tenancies, Phase 2 opens
2009
The DFO relocates to a new site at South Wharf and the shopping centre is refitted by the owner Austexx and rebranded as ‘Spencer Street Fashion Station’
2013Struggling, the shopping centre is again rebranded as ‘Spencer Outlet Centre
• A more efficient complex and a subtle mix of retail facilities and public spaces could have been achieved.• This may have been improved with greater involvement of expert retailers in the design and approval processes
• The lessons learnt by the contractor in building the roof were not carried through to the adjacent retail development.
• This has resulted in less favourable public opinion of the commercial development and detracted from the impact of the overall station development
MORE RECENTLYThe need for comprehensive Due Diligence from the outset……
PTV have funded all night rail services.PTV have funded all night rail services.However, the concession does not
allow for the station to open and night trains do not stop
POSITIVE OUTCOMES OF THE REDEVELOPMENT
• Environmentally sustainable design
• Innovative low-energy solutions
Sustainability
• RIBA International Award • RIBA Lubetkin Prize • Australian Institute of Architects
• Innovative low-energy solutions
• Dispersal of diesel fumes, exhaust gases and hot air without any use of electric fans
Major Awards
• Australian Institute of Architects Victorian Architecture Medal
• Australian Institute of Architects William Wardell Award for Public Architecture
• Victorian Industry Capability Network Industry Achievement Award
APPLICATION IN INDIA - IDENTIFYING AND ATTRACTING THE RIGHT SERVICE PROVIDERS MIX
Travel Retail(eg. Large bazaar, Lifestyle, Vishal Mart…)
Food and Beverages(eg. Haldirams, CCD…)
• Formats varying from mono-brand stores to multi brand stores•Focus on diverse range of fast moving goods
•Fast-food retailers to fine-dine restaurants•Option for take-away/collaboration for on-board food services
Key Metrics
Footfall
Passenger Entertainment(eg. cinemas…)
Parking Facilities
Office Space
food services
• Increasing passenger dwell-time through movie theatres, spa facilities•Ensuring right mix of high vs low turnaround time of services to maintain smooth passenger flow•Multilayer parking facility for all modes of transport•Segregation between long-stay parking for leisure travellers vs short stay parking•Vertical expansion to monetise air-space efficiently•Offer temporary/permanent leasing, conference room facilities, desktops
Visibility
Growth forecast
Exposure to tourism /
In-station Hotel
Other Real Estate
room facilities, desktops•Bank branches
•Quality stay in-station hotel with waiting lounges
•Other construction such as affordable housing etc.
tourism / business
Type of customers
High return with little investment
APPLICATION IN INDIASTATIONS TO REFLECT THE CULTURE AND CHARACTER OF THE CITY
Information centre for famous Tie-ups with tour
Access Wait/Leisure time at the station
Information centre for famous cultural / heritage sites close to the station and famous places
in the City
Local theatre / music shows
Tie-ups with tour operators for short
day tours
Museums preserving city heritage
Vicinity and station exterior architecture to give flavour of the
City specific murals on station walls adding to
Exhibitions / community shows showcasing local
to give flavour of the City
station walls adding to aesthetic appeal
shows showcasing local arts and crafts
LESSONS LEARNT
What does it mean for station redevelopment?
• Align all stakeholders
‘Constructability‘of designs could
arguably have been fully analysed to ensure that relevant parties had
the capacity to
Construction risks need to be proactively
managed by all parties but PPP
models can be very effective forms of • Align all stakeholders
such as railway boards, private players and government bodies
• Focus on whole life-cycle instead of opportunistic approaches
• Predictable and cost efficient processes
the capacity to deliver the project The
complexity of the roof design was potentially underestimated by the private sector partner and its cost was higher
than expected
Major project upgrades, on existing infrastructure
The precinct development was
There are additional risk associated with ‘iconic’ projects and these risks need to be managed
intensively
effective forms of delivery
• Long-term contracts need long term commitment and resources
on existing infrastructure that needs to remain
operation, pose complex technical challenges
Important to ensure construction companies have a suitable team to perform the tasks and manage all the risk that are accepted by them
development was generally well integrated and able to ensure that the project did not dive
the city from the Docklandsdevelopment
Speaker – Paul Holmes
Technical Lead Transport Commercial and Strategy
Melbourne
www.pbworld.comwww.pbworld.com