sydney’s $2 billion circular quay re-development draws big bidders

sydney’s $2 billion circular quay re-development draws big bidders


June 2018
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Sydney’s $2 billion Circular Quay re-development draws big bidders

Sydney’s Circular Quay is set to receive a significant overhaul, drawing the attention of Australia’s biggest developers and infrastructure groups. The iconic Sydney ferry wharves redevelopment is estimated to have an end value of between $1 and $2 billion.

AMP Capital, Broadspectrum's APP Corporation, Lendlease, Dexus, Scentre Group and Plenary Group are amongst the crowd vying for the redevelopment rights. International infrastructure operators and developers including Dutch giant BAM International, Canada's Brookfield and Malaysia’s Setia are also set to submit proposals.

The revitalisation project comes from an expression of interest campaign put forward by the NSW Government and will encompass the area of Circular Quay, its five wharves and their immediate foreshores. Residential projects will not be considered, however the site does allow for valuable offerings of retail and office space.

"The [tender process] will provide the opportunity for the private sector to make an offer to the NSW Government to design, develop, construct, operate, maintain, finance and manage the revitalisation of Circular Quay," tender documents say.

While the estimated value and scope of the project has attracted a far-reaching field of responses, the impact of this undertaking has also brought concern from various parties.

 

Transport issues

Any tender put forward needs to ensure proper and manageable access to public transport infrastructure. Circular Quay is one of the busiest precincts in Australia and is home to the 10th busiest bus station in Sydney, which handles more than 40,000 bus-trips alone each weekday.

The state government expects to see a 40 per cent increase in traffic in the area by 2041.

"Circular Quay needs renewal because the precinct is expected to grow from currently around 50 million visitors every year, to more than 80 million people per year by 2041," a Transport for NSW spokesman said.

"We are also committed to upgrading the wharves to comply with disability legislation and improve public transport accessibility." 

There is also concern as to whether the private contractor will be able to maintain transport services during construction.

Maritime Union of Australia official Paul Garrett has said "The larger issue here is the construction, whereby a private contractor doesn't coordinate with the government to ensure services are delivered during the construction phase." 

 

Delays and extra costs

As NSW approaches an election in March, the State Government is overhauling the way it tenders for and delivers infrastructure projects to create a more "collaborative" relationship with contractors.

This change comes as the NSW Government aims to avoid delays and costs incurred from previous projects that have run overtime and incurred unexpected expenses.

Sydney's new light rail line along George Street is currently one year behind schedule and $1 billion over budget. The project is now held up in the Supreme Court in a bitter dispute over who is responsible for unforeseen costs associated with moving utilities.

NSW Premier Gladys Berejiklian has said “We need to work with industry to get the very best results in a changing market." 

 

Open door to a confined precinct renewal

Designs for the Circular Quay precinct are due by the start of August.

"At the conclusion of the current phase of [the tender] and design development processes, the government will make a decision whether to proceed to full precinct renewal (which includes the upgrading of the ferry wharves), or confine the project to only the wharf upgrade," the spokesman from Transport for NSW has said.

Towards the end of 2018, a short-list of three contractors will go into the next round of refining their schemes in a process that is due to end in mid-2019.