NSW transport minister Andrew Constance has announced Downer EDI as managing contractor for the Newcastle Light Rail project, a week after the engineer signalled its desire to go after more contracts in the public transport sector.
Constance on August 9 announced Downer had been selected from a shortlist which also included CPB Contractors, John Holland, Laing O’Rourke, and McConnell Dowell.
Under the contract, Downer will partner with Transport for NSW to design, construct and commission 2.7 kilometres of light rail track, six stops, a stabling and maintenance facility, road works and associated precinct works.
Downer chief executive Grant Fenn was delighted with the news.
“Downer has a long and proud history in Newcastle,” he said on Tuesday.
“Downer works closely with Transport for NSW and we look forward to helping them deliver the signature project for Newcastle and to contribute to the revitalisation of the state’s second largest city.”
Fenn last week told the Australian Financial Review the company would target passenger rail and bus contracts after it announced a 14% drop in net profit to $180.6 million, and said it faced “continued pressure” in its resources businesses.
Struggles in a depressed resources sector necessitate the ASX-listed engineer’s further diversification into other areas.
As Downer said in its August 4 Investor Presentation: “The company is progressing well in repositioning to service increased investment and outsourcing in roads and rail, public transport, utilities, defence and communications”.
The ASX responded well to Downer’s update, with the company’s share price climbing from a $4.16 close on August 3 to roughly $5 a share to start this week.
Along with the Newcastle Light Rail project, Downer is also in the hunt for the $2.8 billion NSW Intercity Fleet deal, and Victoria’s $2 billion contract to deliver 65 high capacity metro trains.
Downer is partnered with Changchun Railway Vehicles in both bids, and Rail Express sources suggest a winner could be announced for one of the rollingstock contracts in a matter of days.
Changes in store for Newcastle network
Constance said Downer was chosen for the Newcastle Light Rail project “following a competitive tender process, which was overseen by an independent Probity Advisor”.
The minister also announced a trio of changes to the existing plans for the line, made as a result of public consultation.
Instead of raised tracks, all tracks along the route will be built flush with the road.
The second change will see a slight alignment shift at Worth Place “to ensure a smoother turn and quicker travel time”.
Finally, as a result of the consultation, a second track will be built across Stewart Avenue near the new Wickham Interchange to reduce disruption when future extensions are built to the light rail network.
Constance said the changes were a sign the state government was taking on board suggestions from the public, and was committed to working with everyone involved “to make sure green space, footpaths, cycleways and parking are front and centre as the final designs are progressed”.
“These improvements are a win-win for customers and local residents,” Constance added.
Newcastle Light Rail will run from a new transport interchange at Wickham – where the heavy passenger line from Sydney ends – to a terminus at Pacific Park on the other side of the Newcastle CBD.
Spanish manufacturer CAF will supply six of its Urbos trams for the new network.