The Victorian Government is changing the procurement of the two Suburban Roads Upgrade packages into a $2.2 billion road construction blitz.

In an effort to support the construction industry’s role in boosting the state’s economy, the Victorian Government will accelerate the massive Suburban Roads Upgrade, using a new procurement approach to give local construction companies more opportunities to win contracts.

As part of the state government’s economic response to COVID-19, consultation has occurred with smaller construction companies to understand how to best support their involvement in the Big Build program.

The approach is modelled on the Level Crossing Removal Project – a collaborative model that delivers benefits for both local communities and industry, while providing certainty for the construction sector. It aims to support Tier 2, 3 and 4 companies access this work, creating more jobs and capacity in the construction sector

Victorian Minister for Transport Infrastructure, Jacinta Allan, said, “We’ve been able to deliver our Level Crossing removals at a record pace by working collaboratively with the construction industry – we’ll now do the same for this massive package of road upgrades across Victoria.”

“Our construction industry will be a vital part of our economic recovery – this approach will give local construction companies the best chance to secure work and get shovels in the ground sooner.”

“While we get on with some of our biggest road and rail projects Victoria has ever seen – these projects will improve the journeys of thousands of motorists every day.”

Construction companies will be pre-qualified following a tender process for work according to the scale and complexity of jobs – with work awarded based on past performance and value-for-money.

Twelve priority projects in Melbourne’s North and South East, worth $2.2 billion will be progressively awarded to pre-qualified companies under this approach.

The tender process for the Northern and South Eastern Public-Private Partnership packages of road upgrade will be terminated and incorporated into the new program approach – a move that  has been met with some industry criticism.

Roads Australia President, Michael Bushby, said the shortlisted consortium members were disappointed that the program would not go ahead as originally planned.

“It is important that the Victorian Government does not allow this decision to undermine business confidence in its transport infrastructure program,” Mr Bushby said.

“The Suburban Roads Upgrade program was designed to deliver early benefits for road users from accelerated road improvements, and it is important these benefits are not lost.

“This late change of approach by the Victorian Government now offers the parties an opportunity to acknowledge the state of the industry and reset the dial to ensure future projects are delivered in a sustainable way.

“It is becoming increasingly clear that the recent national infrastructure boom in the number and size of transport projects has revealed major issues in the way traditional projects are delivered.”

Mr Bushby said that if governments wish to get the best value out of its capital and people, these issues need to be addressed.

“It will require coordinated action by both industry and government. Indeed, one of the issues to emerge has been too little collaboration between industry and government, especially in the early stages of the procurement process,” Mr Bushby said.

“For the wider industry, it is important that proposed suburban roads upgrades and the announced COVID economic recovery projects proceed quickly with positive, collaborative changes in the way procurement is undertaken on these multi-billion dollar infrastructure programs.

“Industry acknowledges that the Victorian Level Crossing Removal Project has been a collaborative model that ensured governments got great value for the infrastructure spend, while ensuring contractors, consultants and suppliers of all sizes were able to undertake the work required.

“This revised approach should provide wider opportunities for all contractors and suppliers.

Mr Bushby also said that while it was disappointing that COVID-19 had led to delays in awarding tenders, such as the Suburban Roads Upgrade, it had also initiated a massive Federal/state infrastructure spend.

“It is imperative that the revised tenders for the Suburban Roads Upgrade and other economic stimulus projects needed to be implemented quickly and managed effectively,” Mr Bushby said.

“The measure of success of this new initiative will be how quickly these collaborative projects can be brought to market and how well industry adapts to the challenge.”

A Registration of Interest to qualify for the panels will be released shortly with work on the first projects expected to start before the end of 2020.

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