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Project reaction and disruptions as 2018 phenomena 27 Dec 2018

TunnelTalk reporting

Legal actions and public reactions to major projects have punctuated developments for the underground infrastructure industry through 2018. These have ranged from public inquiries into the cost of major projects to the overturning of court case rulings to questioning the motives of China in promoting its One Belt One Road initiative for global land-based railway and maritime trade routes as the new Silk Roads for the 21st Century.

The first is a significant win by local traders and residents against the disruption and loss of business caused by the open cut construction of the Canada Line LRT project in Vancouver in Canada. The 19km project was advanced between 2005 and 2008 to provide a public transit link to Vancouver Airport in time for the Vancouver Winter Olympics of 2010. A large portion of the route is aligned underground in TBM running tunnels and open cut underground stations in the heart of the city with a 7km long section along Cambie Street converted from the original bored tunnel plan to the less expensive cut-and-cover option progressing on five rolling-program fronts between four open cut stations.

Open cut resulted in costly lawsuit ruling in Vancouver
Open cut resulted in costly lawsuit ruling in Vancouver

Within days of the first train test runs in 2008, a class-action lawsuit was filed by more than 100 business owners in the Cambie Village against the engineering, procurement, construction (EPC) contractor, SNC-Lavalin Inc,and project owner TransLink, claiming that the cut-and-cover disruption cost them hundreds of thousands of dollars in lost business by driving potential customers away.In 2016, the Supreme Court of British Columbia Province ruled that members of the class action could not sue for lost revenue but could instead sue for lost value of the property in which they ran their businesses.

In September 2018 a ruling by the court after hearing the first three claims presented by the owners of a local theatre, a village restaurant and a general store were awarded damages of CAN$128,000, $44,560 and $7,600 respectively. In his ruling, Justice Christopher Grauer wrote:"What made the construction intolerable... was the extended time over which access was restricted." TransLink has been ordered to pay the damages and the ruling is seen as an important precedent for selecting bored tunnel construction over open cut works and for resolving the more than 100 remaining claims from Cambie Village business owners.

The ruling came as planning for the Broadway extension of the Vancouver LRT system was advancing. Mayor of Vancouver Gregor Robertson committed to supporting bored tunnelling for the underground reaches of the new line stating that “as long as I am mayor with a council majority,we will not let cut-and-cover happen.”

Public inquiry on planning, transparency and taxpayer value for money

By contrast, in Australia, a public inquiry into the impact of the WestConnex highway project on local residents and property owners in Sydney,on which most of the new infrastructure is aligned underground in more than 22km of twin-tube, three-lane tunnels, has criticised several aspects of the project. The inquiry by the New South Wales (NSW) Parliament Legislative Council Public Accountability Committee began in June 2018 and the report was presented on 17 December.As part of its remit, the committee investigated all aspects of the project including:

  • the adequacy of the business case, including the cost-benefits ratio
  • the cost, including the size and reasons for overruns
  • consideration of the governance and structure of the project
  • the compulsory acquisition of property for the project
  • the recommendations of the Audit Office of New South Wales and the Australian National Audit Office in regards to WestConnex
  • the extent to which the project is meeting the original goals of the project as articulated in 2012
  • the relationship between WestConnex and other toll road projects including the Sydney Gateway, Western Harbour Tunnel, F6 and Beaches Link, and
  • the cost of the project and whether it represents a good investment for NSW taxpayers.

In its report the committee questioned the transparency of the project with a particular concern that the NSW Government failed to adequately consider alternate options at the start of the project and found deficiencies with the independent assurance process conducted for the first business case. A recommendation is to strengthen the transparency arrangements regarding options analysis and the independent assurance process for future major infrastructure projects.

Another recommendation is that filtration systems be installed on the ventilation stacks of all current and future motorway tunnels following fears voiced within the community that the proposed unfiltered exhaust ventilation from the WestConnex tunnels do not meet best practice standards and will have a negative impact on the health for those living within the vicinity and in surrounding suburbs.

WestConnex aligns more than 22km of six-lane highway underground in twin tube tunnels
WestConnex aligns more than 22km of six-lane highway underground in twin tube tunnels

Management of compulsory purchase of homes and properties for the project was also criticised with the recommendation that process needs to be fairer and more transparent.

In its conclusion, the committee rejected calls from local residents and those opposing the project that it should be stopped stating that the inquiry was undertaken at a time when almost 50% of the project is complete and with the final stage of the project recently awarded. The committee stated that “it remains clear that the project must proceed”, that the cost of stopping now would be borne by the taxpayers of New South Wales and that the projected benefits of the project to the highway systems of the city of Sydney as a whole would be otherwise be lost.

Appeal overturns original collapse ruling

In a surprise overrule, an appeal court overturned the original finding for the contractor in the case of the Glendoe hydro scheme TBM drive headrace tunnel in Scotland, UK. Power utility Scottish andSouthern Electricity won an appeal against the Hochtief-led JV design-build contractor to recover repair costs associated with the collapse in 2009. Hochtief had previously defended itself successfully at the Court of Session in Scotland but on appeal, at the same court, the power companywon its case with a 2 to 1 majority of judges in favour of allowing its claim for £107.6 million of recovery repair costs and £1 million for business losses.

The headrace collapse at about two-thirds the way along the 6.2km long x 5m diameter tunnel occurred a few months after the project was commissioned. With the owner and the design-build contractor in dispute over the cause of the collapse and liability for the costs, the owner called a separate contractor to complete repairs to bring the plant back online in 2012.The hydro scheme had to be shut down for nearly three years while rectification works resulting from a defect that the owner successfully claimed existed prior to take over of the scheme were carried out.The turnkey contractor was said to be looking at options to dispute the appeal ruling that could take the case to the highest court in the UK.

Global infrastructure vision

The One Belt One Road initiative promoted by President Xi Jinping of China is a grand plan to connect Asia, Africa and Europe,with a belt of overland railway corridors and a maritime road of shipping routes in what is known as the new Silk Roads for the 21st Century. From Southeast Asia to Eastern Europe and Africa, the initiative has the support and commitment of 71 countries that account for half the world’s population and a quarter of the global GDP.

The One Belt One Road initiative proposes greater trading connectivity across the globe
The One Belt One Road initiative proposes greater trading connectivity across the globe
(Members of the Asian Infrastructure Investment Bank in orange)

The initiative supported by the Silk Road Fund and Asian Infrastructure Investment Bank is expected to cost more than US$1 trillion. According to one report, China has invested more than $210 billion of this in projects in Asian countries with Chinese firms and Chinese equipment engaging in their construction. At the bauma China construction equipment trade fair in Shanghai in November 2018, Chinese manufacturers were reporting the delivery of TBMs and other items of heavy construction equipment to so called One Belt One Road projects. These included TBMs to railway line projects in Malaysia, Indonesia and Bangladesh.

While many countries support the initiative in principal, others fear development of a neocolonialism and of debt-trap diplomacy by China to extract strategic concessions from countries unable to pay back the infrastructure investment loans. The new government in Malaysia and under another term as Prime Minister for Mahathir Mohamad, Malaysia has cancelled its China-funded One Belt One Road projects including the East Coast Rail Line and the proposed high speed rail link between Kuala Lumpur and Singapore.

The Government of Prime Minister Mahathir Mohamad also threw the construction contract for the underground section of the KVMRT Line 2 of the Kuala Lumpur metro system into disarray before agreement on cutting its cost substantially was negotiated and work continued.

The power and influence of disrupters might well be the lasting legacy of 2018.

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