The Market-led Proposals Guideline defines market-led proposal as one made by the private sector to government to build infrastructure and/or provide services. It originates within the private sector and involves proponents developing a project or service specification and then approaching Government for approval and support of the proposal.
While market-led proposals are covered under this guideline and are therefore separate from other government procurement practices, there are many complementary principles from the Government’s Investment Lifecycle and High Value High Risk (HVHR) Guidelines and procurement practices that are relevant to these proposals.
Market-led Proposals Guideline
The Market-led Proposals Guideline (the guideline) was updated in November 2017. The updated guideline reaffirms Government’s commitment to a transparent process for considering whether market-led proposals are in the public interest, represent value for money and are consistent with Government policy and priorities.
Well-developed proposals are assessed through a five-stage process. Innovative ideas are assessed through a separate two-stage process outlined in Appendix 1 of the guideline.
The Treasurer is the responsible Minister for the guideline and all proposals and innovative ideas must be submitted to the Department of Treasury and Finance (DTF).
Market-led proposals currently under assessment
Digital Train Radio System Upgrade
Stage Four: negotiation and assessment of final offer
Proponent: Vodafone and Nokia Networks
The proposal to upgrade the existing Digital Train Radio System (DTRS) primarily used by Metro Trains was submitted in April 2015 and was approved to move to Stage Four in November 2016.
The proposal involves installation of a new Long-Term Evolution (LTE) 4G network on VicTrack assets, providing an option for the State to transition to an updated communications system.
The upgraded network will also improve Vodafone’s mobile phone coverage along metropolitan Melbourne’s train lines.
If the proposal is successful, the upgraded network will provide the core components for a future 4G Digital Train Radio System (DTRS), and has the potential to enable other rail network projects to be deployed onto a 4G network.
Both Nokia and Vodafone are uniquely positioned to deliver the proposed DTRS upgrade.
The market-led proposal will be considered in the context of planning for the end of the current DTRS contract which expires in 2018.
Next Generation Power Supply to the Melbourne Metropolitan Rail Network
Stage Three: Procurement Preparation
Proponents: AusNet Services and Metro Trains Melbourne
AusNet Services and Metro Trains Melbourne submitted a proposal for an improved electricity supply to Melbourne’s rail network, connected directly to the transmission network. The direct connection points will supply a new dedicated 22 kilovolt alternating current ring main along the entire metropolitan rail network with dual feeds to direct current rail traction substations on the metropolitan rail corridor.
The proposal could provide a more efficient and reliable power supply to meet the requirements of the existing rail network and support future growth. The proposal has unique characteristics.
The Government has approved progression to Stage Three. The proposal is subject to ongoing review and assessment.
Southern Cross Station Upgrade
Stage Three: Procurement Preparation
Proponents: Civic Nexus
Civic Nexus submitted a proposal to undertake capital works at Southern Cross Station to increase the capacity, amenity and function of the station precinct. Civic Nexus is the private sector partner of the existing Southern Cross Station Public Private Partnership.
The proposal could provide additional passenger capacity and address the expected impacts of future patronage growth. The proposal has unique characteristics.
Government has approved progression to stage three. The proposal is subject to ongoing review and assessment.
Finalised proposals (for proposals that proceeded to Stage Two and beyond)
West Gate Tunnel
Finalised: Contract awarded on 11 December 2017
The West Gate Tunnel Project includes the Monash Freeway Upgrade and the Webb Dock Access Improvement Works.
The West Gate Tunnel Project is an important opportunity to deliver real improvements to Melbourne’s transport network by enhancing transport performance in the heavily used M1 corridor and building an alternative to the West Gate Bridge.
It will expand travel choices for motorists and reduce travel times across one of Melbourne’s main cross-city road corridors, providing faster and more direct access to the Port of Melbourne and regional centres and communities.
The project is expected to cost $6.7 billion with construction on the West Gate Tunnel commencing in 2017 and expected to be completed in 2022.
Key features include:
- widening the West Gate Freeway from 8 to 12 lanes between the M80 and Williamstown Road
- a tunnel under Yarraville and a second river crossing over the Maribyrnong
- an elevated road along Footscray Road with direct links to CityLink, the Port of Melbourne and the western edge of the CBD
- the longest managed motorway system in Australia from Geelong to Pakenham
- over 14km of new cycling and upgraded cycling and walking paths
- widening the Monash Freeway from 8 to 10 lanes between EastLink and South Gippsland Highway, and from 4 to 6 lanes to Clyde Road in Berwick
Port Phillip Ferries
Finalised: Contract executed 27 June 2017
Proponent: The Little Group (trading as Port Phillip Ferries)
The Victorian Government has entered into an agreement with The Little Group (trading as Port Phillip Ferries) to support an exclusive three year trial of a new ferry service between Portarlington and the Docklands (Victoria Harbour).
The ferry service will be operated by Port Phillip Ferries supported by up to $5.04 million in Government fund ing over the next three years to facilitate the trial.
The trial will provide the first regular passenger ferry service operating from Portarlington to Melbourne. The trial will also provide additional travel options for visitors to the Bellarine Peninsula and will encourage both Melbourne, interstate and overseas visitors to visit the various Bellarine Peninsula attractions, thereby helping to support the local Bellarine economy.
Port Phillip Ferries will operate two return services per day between Portarlington and the Docklands from Monday to Sunday and public holidays.
Port Phillip Ferries has commenced operation of the service.
Victoria Police Centre
Finalised: Contract executed 19 January 2017
Proponent: Australia Post and Cbus Property
Australia Post and Cbus Property will fund and develop a new Victorian Police Centre on land owned by Australia Post at 311 Spencer Street, Melbourne. The Victorian Government will enter into a long term lease with the proponents for use of the facility.
The site will allow connection to the adjacent City West Police Complex at 313 Spencer Street, Melbourne, creating a consolidated police precinct and will also provide the appropriate security required for police headquarters.
Construction is due to commence in 2017 and completion is expected in 2020.
Finalised: Contract awarded on 6 October 2014 and Financial Close was achieved on 30 April 2015
The CityLink–Tulla Widening project will widen the CityLink and Tullamarine Freeway and introduce a Freeway Management System. It will build capacity, boost performance and improve safety on one of Melbourne's busiest roads.
The CityLink–Tulla Widening project is proceeding under the Market-Led Proposals Interim Guideline and will be self-funded by Transurban. When combined with the widening of the Tullamarine Freeway to Melbourne Airport, which is partly funded by the State and Commonwealth Governments, the total cost of the project is around $1.3 billion. Construction on the project will commence in 2015 and be completed in 2018.
Development of a unique disease surveillance system and production of disease prevention products for the State of Victoria
Finalised – did not progress to stage three (June 2018)
Proponent: Apiam Animal Health
Proposal submitted in June 2017 to purchase and upgrade the government operated Pig Services Centre at Epsom.
Accelerating the Victorian Government's Customer Engagement Strategy
Finalised – did not progress to stage three (March 2018)
Proponent: Australia Post
Proposal submitted in January 2017 to deliver a multi-channel customer engagement solution that provides accessibility for Victorian citizens to Government through both physical and digital channels.
Emerald Hill Wellbeing Precinct and Housing Development
Finalised – did not progress to Stage Three (February 2017)
Proponent: Australian Unity
Proposal submitted in November 2015 to build replacement public housing and aged care accommodation in South Melbourne
Anchorage on the Sea
Finalised – did not progress to Stage Three (May 2016)
Proponent: Fortan Holdings Pty Ltd
Proposal submitted in September 2015 to build and operate a marina tourist and convention development in Port Phillip Bay.
Moolap Saltworks Urban Renewal
Finalised – did not progress at Stage Three (June 2015)
Proponent: Ridley Corporation
Proposal submitted in March 2014 to purchase Crown land and redevelop the former Moolap Saltworks site located in the City of Greater Geelong.
Cranbourne- Pakenham Rail Corridor project
Finalised – did not progress at Stage Four (March 2015)
Proponents: Consortium sponsored by MTR, John Holland Construction and UGL Rail Services
Proposal submitted in October 2013 for an integrated package of infrastructure including trains, maintenance depot, high capacity signalling and level crossings to increase capacity on the Cranbourne- Pakenham rail corridor.
To request a pre-submission meeting, submit a proposal or make enquiries regarding the market-led proposals process, please contact:
Deputy Secretary, Commercial Division
Department of Treasury and Finance
Level 5 / 1 Treasury Place
Melbourne VIC 3002