Social Infrastructure
Client:
Sydney Metro
Date:
2020
Value:
$800 million

Services Delivered:

  • Project Management
  • Commercial and Contract Management 
  • Stakeholder Management
  • Risk Management
  • Interface Management

Key Outcomes

Protected Sydney Metro’s interests while acting fairly towards the development consortium to ensure their engagement and motivation to deliver great urban outcomes.

Negotiations actively managed by ConnellGriffin resulted in Sydney Metro not being in a
worse position than the initial agreement; on commercial aspects, ConnellGriffin negotiated for Sydney Metro a fair and equitable outcome for both parties.

Promoted clear internal understanding – at officer / subject matter expert / manager / and executive levels - of the Sydney Metro obligations the PDA and the agreements with LAHC and iNSW.

Developed a clear understanding of residual risks owned by Sydney Metro; through hypothetical scenarios development under which Sydney Metro would be at risks of creating delays or costs; developed mitigation plans to apply to both the OSD and the Station teams to ensure risks were actively managed.

The Project

In December 2019, Sydney Metro signed a Project Delivery Agreement (PDA) for the Waterloo over-station development (OSD) with a development consortium made of Mirvac and John Holland Group. Under the PDA the Development Consortium bought the right to develop 68,750 sqm of GFA of highly mixed-use buildings on the Metro owned land next to the future Waterloo Station and in the air rights above it.

To optimise the value of the development opportunity and stimulate market interest, Sydney Metro had beforehand “de-risked” the development opportunity by preparing a complete data room, setting clear development requirements, and obtaining a state significant concept development approval.

Also, as part of the Waterloo OSD, Sydney Metro committed to broader NSW Government objectives and signed agreements

  • with Infrastructure NSW (INSW) to enable the delivery of a minimum of 5% of the overall residential GFA as Rental Affordable Housing run by a Community Housing Provider; and
  • with the NSW Land & Housing Corporation (LAHC) to provide 70 Social Housing apartments as part of the OSD that would be ‘tenure blind’, meaning integrated with and indistinguishable from market housing.

CLIENT'S OBJECTIVES

To ensure that both the Development Consortium and Sydney Metro met their respective obligations under the Project Delivery Agreement, and that Sydney Metro fulfilled its related agreements for affordable and social housing with INSW and LAHC.

KEY ISSUES

Due to the scale and complexity of the Sydney Metro City • & Southwest project, Sydney Metro developed detailed and complex contractual, commercial and interface arrangements for all the various packages of works of the metro line.

The main challenge was to ensure that Sydney Metro – through the management of the multiple other major contracts – would not create adverse impacts to the OSD and would not become liable for delays or costs to the Waterloo Development under the conditions of the PDA.

Similarly, one key challenge was to ensure that the development consortium was aware of their obligations and would fulfill them in a timely manner so that the OSD works would not adversely impact the delivery of the Waterloo station or other packages of works on the City & Southwest line.

Our Services

Through our engagement, ConnellGriffin:

  • ensured that Sydney Metro and the development consortium met their respective obligations to each other under the PDA;
  • facilitated the orderly coordination of the planning and delivery activities of both the Station Delivery and the OSD components;
  • actively managed the various Sydney Metro obligations under the PDA and the other related agreements with Infrastructure NSW (INSW) and the NSW Land and Housing Corporation (LAHC);
  • confirmed and clarified the development consortium’s obligations under the PDA and ensured they were aware of the work and preparation required to fulfill them;
  • reviewed the PDA to create a register of obligations and a management plan to understand and communicate internally key mechanisms under the PDA. Both documents covered all aspects the with regards to
  • site subdivision
  • program and key dates,
  • payments and value share,
  • delay costs and liquidated damages, 
  • Principal Project Requirement,
  • risk allocation and residual Sydney Metro risks.
  • procured the Social Housing Independent certifier for the 70 units to be handed over to LAHC;
  • identified PDA clauses and mechanisms impacted by the proposed change of use from residential to commercial in the north tower; briefed all relevant internal subject matter experts to confirm conditions under which proposed changes would be acceptable;
  • reviewed and coordinated the Sydney Metro subject matter experts review of the five State Significant Development Applications – ensuring that the development consortium plans and documents were consistent with their PDA requirements, especially their place and design excellence obligations;
  • identified and managed residual risks to Sydney Metro; and
  • briefed Sydney Metro executives and relevant Ministers’ offices on Waterloo PDA / OSD arrangements and residual risks carried by NSW Government.

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