Balfour Beatty consortium pulls out of Sydney light rail PPP

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Balfour Beatty consortium pulls out of Sydney light rail PPP

According to local sources, iLinQ, one of the three consortia shortlisted for the new light rail system for CBD and South East Sydney, has announced that it is withdrawing from the PPP tender process.

According to the sources, Balfour Beatty is concerned about cost overruns on moving underground utilities in an area called George Street. It seems like utilities such as water, electricity and telecommunications lines have to be moved, but utilities companies like Telstra and AGL will have no incentive to move their infrastructure quickly and cheaply.

Other sources mention that the company had recently signalled a profit warning and it was reviewing its operations in Australia.

However, the bid's collapse is probably a combination of these factors.

Balfour Beatty was part of a consortium composed also by Keolis DownerBombardierMacquarie Capital and McConnell Dowell.

The other two shortlisted candidates are the following:

The contract will cover design, finance, construction, services relocations, operation and maintenance of the 12-kilometre project, as well as the operation and maintenance of the Inner West Light Rail network.

The project is estimated to cost approximately A$1.6 billion. Construction is expected to commence this year 2014 and is expected to take five or six years to complete. From mid-2015, the successful tenderer will also operate and maintain the existing light rail network.

On 4 June 2014, Australia's Minister for Transport Gladys Berejiklian announced green light had been given for the project. The main contract to design, build, operate and maintain the new system is expected to be awarded by early 2015 with major construction commencing soon after. The service is expected to be open and operational in 2019 or 2020.

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