Queensland, Brisbane Airport Link Tunnel- Case study 03/02/2022 1 Presented by: Audrey Mwala Director Project Finance & Risk Analysis The Public Private Partnership Commission, Malawi. Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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05/02/2023 Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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Queensland, Brisbane Airport Link Tunnel- Case study
Presented by:Audrey Mwala
Director Project Finance & Risk AnalysisThe Public Private Partnership Commission, Malawi.
05/02/2023 Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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Brisbane Airport Link Tunnel•One of Australia's largest ever road project•Connects Brisbane’s northern suburbs with CBD, airport, the Clem7 and Inner City Bypass•Cuts out 18 traffic lights •Cuts out 20 minutes of driving time.•Eased congestion on north side of Brisbane•A world class piece of infrastructure that will support Brisbane’s growth in decades ahead.
05/02/2023 Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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The Project
• A multi-billion investment in toll road and tunnel• A 6.7km multi-lane road• Electronic free-flow toll road • Has a 5.7km tunnel from the city to the Airport.
05/02/2023 Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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PPP arrangement
• A 45 year PPP contract• Financial structure assumption:– The loan facility will be refinanced– Asset revaluations were forecast– Reinvestment of profits
• SPV: BrisConnection consortium• The contractors: Thiess and John Holland Group. • Operator: BrisConnections
05/02/2023 Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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Why low traffic• Drivers in Brisbane simply don’t like tolls• Not enough drivers saw the benefit in saving time• Seen as a privilege not a need to use the Tunnel.• People drive less, there is a decline in vehicle km
travelled by Australians per person recently• Young people get their licences later than before • Telecommuting • E-shopping
05/02/2023 Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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Lessons learnt• The project vehicle failed but Queensland got a brand new asset
that will continue to support Brisbane’s growth into decades ahead.• Need for a reassessment as to how such projects get built in the
future.– Demand risk sharing– Independent recheck of the traffic forecast report– Force majeure events to include genuinely unforeseen challenges by any
reasonable experts• Be comfortable with the current worse case scenario
– Avoid assuming success based on possible future restructuring of the finance
• Prior markets demands tests• Continued communication on project progress with the public
especially the residents where the tunnel passed• Government responsibility, PPP is simply an alternative not a way
05/02/2023 Brisbane Airport Link Tunnel Case Study, Presented by Audrey Mwala, Malawi
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Project Financing• The project was expected to cost $2.054 billion• Funding was provided by government and a
private partner • Public contributions come from:• Government of Canada: $450 million• Government of British Columbia: $435 million• Vancouver Airport Authority: $300 million• TransLink: $334 million• City of Vancouver: $29 million• The private sector InTransitBC has invested $750
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Risk allocation• The private consortium assumed the
bulk of construction and operating risks
• The regional transportation authority bore:– property acquisition risk– ridership revenue risk because:– it controls the transportation system and – related marketing and – is responsible for setting fare levels and – integrating train and bus schedules.
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The PPP structure
• InTransitBC was a preferred party to design, construct, and partially finance the system,
• It owns the train vehicles, • It operates and maintains the Line under an operating license from the Greater
Vancouver Transportation Authority through to the end of the agreement.• The Greater Vancouver Transportation Authority:
– owns the line, – collects all fare revenues – Sets system-wide transportation policies and fare levels.
• InTransitBC was awarded a 35-year contract• A combination of public and private monies funded construction.• Completed several months ahead of schedule in August 2009
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InTransitBC Remuneration
• During the construction period, InTransitBC was paid after achieving identified milestones.
• During the operating period, payments are made for the achievement of performance targets such as:– train frequency, – safety, cleanliness and – ridership.
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Implementation challenges• The PPP approach was new in the community, it generated
considerable debate at the regional government level; • Unions made PPPs an issue, opposed private involvement in
what they believe is govt’s role• Unions argued that the process did not allow plans to be
developed with public consultation, it limited discussion to abstract parameters, leaving design details to private partner.
• Opponents believe it was politically motivated and that it would cost more money because of the private involvement
• Opponents have claimed that the approval process was undemocratic and dishonest
• Cambie Street experienced significant loss of business due to disruptions during the construction phase i.e. One side of the street was cut off from traffic and parking was affected