Sydney’s Cross City Tunnel
INFRASTRUCTURE FINANCE:
THE SYDNEY CROSS CITY TUNNEL
OPIM-5668 Project Risk and Cost Management
Feb 18th, 2011
Sourabhdeep Singh Khanna
Hiren Gonsai
John Celis
Winston Spencer
Executive Summary
In 2000, Cheung Kong Infrastructure Holdings Limited (CKI) was faced with a great opportunity to invest in a transportation project in Australia. The group was particularly interested in investing in Australia due to the country’s stable regulatory environment and economic growth. This project presented a good chance for the firm to continue with its globalization strategy and achieve its global ambitions in transportation infrastructure project investment.
In September 2000, the Australian’s Roads and Traffic Authority (RTA) invited tenders for the construction, financing and 30-year operation of the Sydney Cross City Tunnel (CCT). The primary objectives of the CCT project were to 1) relieve traffic congestion in central Sydney, 2) improve the reliability of public transport and, 3) provide a safer environment and improved amenities to vehicles, cyclists and pedestrians. The CCT project comprised two stages: The first one encompassed two east-west tunnels that would run between the eastern side of the Darling Harbour and Kings Cross. Stage Two would take advantage of the opportunities afforded by reduced traffic congestion such as improvements to surface roads, including new bus and bicycle lanes and other improvements to pedestrian facilities.
CKI together with its major business partner, Bilfmger Berger Aktiengesellschaft (AG), decided to form the CrossCity Motorway Consortium (the CCM consortium) and submitted its final proposal to the RTA in October 2001. Although Transportation investments generate significant risks, CKl was confident that the project risks could be mitigated through careful planning and negotiation with the Australian government authorities.
In the hope to reap maximum returns, CM consortium’s proposal
THE SYDNEY CROSS CITY TUNNEL
OPIM-5668 Project Risk and Cost Management
Feb 18th, 2011
Sourabhdeep Singh Khanna
Hiren Gonsai
John Celis
Winston Spencer
Executive Summary
In 2000, Cheung Kong Infrastructure Holdings Limited (CKI) was faced with a great opportunity to invest in a transportation project in Australia. The group was particularly interested in investing in Australia due to the country’s stable regulatory environment and economic growth. This project presented a good chance for the firm to continue with its globalization strategy and achieve its global ambitions in transportation infrastructure project investment.
In September 2000, the Australian’s Roads and Traffic Authority (RTA) invited tenders for the construction, financing and 30-year operation of the Sydney Cross City Tunnel (CCT). The primary objectives of the CCT project were to 1) relieve traffic congestion in central Sydney, 2) improve the reliability of public transport and, 3) provide a safer environment and improved amenities to vehicles, cyclists and pedestrians. The CCT project comprised two stages: The first one encompassed two east-west tunnels that would run between the eastern side of the Darling Harbour and Kings Cross. Stage Two would take advantage of the opportunities afforded by reduced traffic congestion such as improvements to surface roads, including new bus and bicycle lanes and other improvements to pedestrian facilities.
CKI together with its major business partner, Bilfmger Berger Aktiengesellschaft (AG), decided to form the CrossCity Motorway Consortium (the CCM consortium) and submitted its final proposal to the RTA in October 2001. Although Transportation investments generate significant risks, CKl was confident that the project risks could be mitigated through careful planning and negotiation with the Australian government authorities.
In the hope to reap maximum returns, CM consortium’s proposal