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Steady Fleet Replacement Plan
RAIL CORPORATION NEW SOUTH WALES Public Private Partnership Request for expressions of interest: Addendum Financing, design, manufacture and maintenance of electric passenger trains. IMPORTANT NOTICE The Proponent is invited to update its Response in accordance with this Addendum to the Request for Expressions of Interest. This invitation should be read in conjunction with the terms and conditions set out in the Request for Expressions of Interest Appendix 1 - Conditions of Tendering. DOCUMENT No. 2004/0106E Addendum Responses to this Addendum to the Request for Expressions of Interest must be received by 10 am on 2 February 2005 0 Page 1 of 6 RAILCORP ROLLINGSTOCK PPP EOI: ADDENDUM TO TAKE ACCOUNT OF DECISION ON SINGLE DECK AND DOUBLE DECK REQUIREMENTS 14 December 2004 Subject This is an Addendum to the Request for Expressions of Interest issued on 31 August 2004 (the EOI). It is issued in accordance with Clause 12 of the Conditions at Appendix 1 to the EOI. It seeks further information, to be returned by 2 February 2004, from the 6 Proponents who submitted Responses to the EOI. The information relates to RailCorp’s requirement for single deck cars, the likely financial arrangements between major subcontractors and the PPP Company, and the creation of satisfactory financial backing for the PPP Company’s obligations for both manufacturing and commissioning and maintenance. RailCorp will contact each Proponent to invite them to a short meeting where the approach that RailCorp intends to take to these issues can be discussed. This Addendum also provides further information for Proponents in relation to Australian and New Zealand Industry Participation. Definitions from the EOI apply in the Addendum. The instructions for return of updated Responses on 2 February are those given in Appendix 1 of the EOI. Background Section 4.4 of the EOI said: “RailCorp is reviewing its operational requirements in the light of the Clearways Program, including whether the use of single-decker cars and/ or 8-car sets would better meet RailCorp’s principal objectives in one or more sectors. A full statement of requirements will be included in the RDP. However, in evaluating Proponents for shortlisting purposes under the Design, Manufacture and Commissioning criteria (Section 5.4), RailCorp may eliminate proponents who fail to demonstrate the capability of designing and manufacturing train sets for current operating configurations.” EOI Document No. 2004/0106E Addendum PPP Replacement of Electric Rollingstock Page 2 of 6 At the Market Briefing on 10 September 2004 the Project Director, Louise Hart, explained this further, as follows: “Single deck or double deck? This is an absolutely fundamental question, for you and for us. The R&S series trains we are replacing represent a third of the current fleet. The single deck/double deck issue is not simply a purchasing decision. It goes to the heart of how we operate the fleet, how we allocate trains between sectors, and how we tailor the infrastructure to deliver the service frequency, capacity and reliability that are required, not just in 2010 but for the next 35 years. “We are investigating the case for single deckers very seriously. We will set out our requirements in the RDP in December. We recognise that you would really like to know the answer before making a decision on whether and how to respond to the EOI but it is a complex evaluation. We can say that on the basis of work done so far, taking into account the implications of the Clearways program and sectorization, the potential requirement for single deckers would be somewhere between 200 and 300 carriages. That is, around half the total number. So, we are pretty certain that we want at least 200 double deck carriages. The question is whether the remainder will be single or double deck. “That ties in with the other question here: will we let one contract or two contracts? Again, we don’t know the answer yet, and it will depend on a number of factors. What we can say is that if we choose a split fleet for the PPP – part single, part double decker – we would expect to let two contracts. It would be open to one party to bid for both, but equally it would be possible to bid for only one.” Decision by RailCorp In the period since August 2004 RailCorp has given careful consideration to its operational requirements, taking into account the implications of the Clearways Program, sectorization, the need for an output specification for the PPP, the likely operating performance and economics of single and double deck trains on different parts of the network, and the implications of a mixed fleet for maintenance. This analysis has concluded that on some routes on the network single deck trains could replace timetabled double deck trains on a one for one basis and provide a more “metro” style service while still meeting forecast demand; while on other routes single deck trains could meet forecast demand if additional trains were introduced into the timetable. RailCorp has therefore decided that it will invite detailed Proposals for the PPP on the following basis. • Two contracts, one for double deck and one for single deck cars. • The total availability required will be equivalent to about 500 cars. • Proposals will be invited for single deck vehicle availability for a minimum of 208 cars. • The actual number of single deck and double deck cars contracted for will be decided based on further operational analysis and the relative value for money offered by the different proposals in response to the RDP. • Provision would be made for maintenance of the single and double deck PPP fleets to be carried out at the same location. EOI Document No. 2004/0106E Addendum PPP Replacement of Electric Rollingstock Page 3 of 6 • Proponents will be shortlisted to bid for the single deck contract or the double deck contract or for both contracts. • The contracts may be awarded to different Proponents or to the same Proponent Value For Money The RDP will set out in detail how value for money will be assessed and in particular how RailCorp will evaluate different levels of single and double deck capacity. In summary, the approach will be as follows: • Proponents will be asked to provide information on passenger capacity per train, including seating and standing capacities based on train configurations to meet RailCorp’s requirements. • Proponents will also be asked to provide other information on the performance of the rollingstock that will allow its overall impact on RailCorp’s costs and operations to be assessed. • The cost and benefit of Proposals to RailCorp will be evaluated by taking account of the following principal factors, among others: the Proponent’s price per unit of availability; Other operational costs to RailCorp, including the impact on: - Quality of service (via acceleration, dwell times, and comfort) - Reliability - Operating costs including electricity consumption. Taking Account of this Decision in the Procurement On 13 October 2004 RailCorp received six Responses to the EOI for single and double deck solutions. RailCorp requires more information from all Proponents to apply the evaluation criteria in section 5 of the EOI fairly and in a way that will enable it to make a well-founded decision on which Proponents should be shortlisted for each contract. It is also mindful of the importance to Proponents of knowing the likely requirements of the PPP before making final decisions about their consortium structure or incurring costs in the RDP stage of the procurement. RailCorp has therefore decided to invite all Proponents to consider whether they wish to amend or resubmit any or all parts of their Responses in order to demonstrate their experience, capability, and capacity to fulfil the requirements of the PPP as it will now be specified. It is inviting the following updated Responses to the EOI. EOI Document No. 2004/0106E Addendum PPP Replacement of Electric Rollingstock Page 4 of 6 Updated Responses required Updated Responses should take account of the following points and specifically address the additional information that may be required as set out below in relation to the Evaluation Criteria (sections 5.2 to 5.6), Financial Information (6.8) and Further Information. In other respects they should be based on the information and requirements as stated in the EOI. Section 2.9: Project Schedule The revised indicative Project schedule is set out below. Selection of Shortlisted Proponents and February 2005 Request for Detailed Proposals Return of Detailed Proposals June 2005 Clarification and confirmation of commitment July-September 2005 for Detailed Proposals Award contract(s) for PPP 1st quarter 2006 Section 4.4: Operational Requirements A full statement of requirements will be included in the RDP. Proponents should know that, as an Addendum to the criteria for evaluating Design, Manufacture and Commissioning experience, capability and capacity, RailCorp now expects to ask for eight car consists for both single and double deck rollingstock. Section 4.6: Australian and New Zealand Industry Participation RailCorp wants to secure the best expertise and resources for the PPP. It has decided that some of the requirement for new rollingstock could be met efficiently by designs that have not previously been used in NSW, and hopes to see participation from domestic and international companies. At the same time, it is concerned to ensure that proposals offer support for the local economy and employment in the short and long terms. There will therefore be a requirement that a minimum of 20% of the value of design, manufacture and commissioning consists of local content. There will be no price preference for local content. Section 5.2 to 5.6: Evaluation Criteria In relation to the criteria set out in the EOI, references to the Proponent’s experience, capability and capacity in sections 5.2, 5.3, 5.4,and 5.6 will now include the experience, capability and capacity of any major supplier of rollingstock, even if the supplier is not part of the Proponent (because it is not an equity investor). Similarly sections 5.2, 5.3, 5.5 and 5.6 will include the experience, capability and capacity of any major maintainer of rollingstock that is not part of the proponent EOI Document No. 2004/0106E Addendum PPP Replacement of Electric Rollingstock Page 5 of 6 Section 6.5: Response to the Evaluation Criteria This should be revised as necessary to address the revised criteria at 5.2 to 5.6 Section 6.8: Financial Information This should be revised to include the following additional information: • Although it is too early to determine the likely equity requirement for the PPP with confidence, RailCorp wishes to consider the ability of Proponents to invest or secure the appropriate combination of equity and performance guarantees from major suppliers and contractors in order to raise funding suitable for the risk profile of the contracts. As an illustration of this, please provide: A description of the proposed arrangements between the manufacturing and maintenance entities and the PPP Company; The identity of the company or companies providing guarantees for the design, manufacturing and commissioning obligations and the maintenance obligations respectively; Where two or more major suppliers will work together to supply cars or maintenance services, a statement on whether they will be jointly and severally liable to the Proponent under the supply contract, and if not how the arrangements will provide reassurance to RailCorp; Financial Information as set out in section 6.8(a) in relation to any major supplier of rollingstock or maintenance services, even if it is not part of the Proponent. And, on the illustrative assumptions that: the total requirement will be met 50% by single deck and 50% by double deck trains the total funding requirement is $1.8billion the amount of equity and quasi equity that Proponents decide is required to fund the PPP is 15% of the total (ie $135m for a single deck contract and $135m for a double deck contract, or $270m if the Proponent proposed to bid for both): (i) the name of the likely investing entities; (ii) the amount of equity/quasi equity expected to be provided by each entity; (iii) how each investing entity expects to fund its investment: (iv) the extent of guarantees they would expect to be in place from rollingstock suppliers and maintenance contractors to mitigate the level of risk carried in PPP Co itself. EOI Document No. 2004/0106E Addendum PPP Replacement of Electric Rollingstock Page 6 of 6 Further Information Proponents should also provide: 1) A description of any change to the membership or constitution of the Proponent to take account of the way in which the PPP is now specified. 2) A statement on whether the Proponent will bid for both the single and the double deck contracts or for one only, and in the latter case which one. Changes to a Proponent’s Team Clause 20 of the Conditions of Tendering in Appendix 1 the EOI said that after selection Proponents would only be allowed to change their proposed shareholders and major suppliers with the prior written consent of RailCorp. While it is not necessarily seeking changes to a Proponent’s team, RailCorp wishes to confirm that this condition will not apply to any changes made in a Proponent’s updated Response. Full Resubmission Where any change is made to a shareholder or major supplier the full Response should be resubmitted. In other cases Proponents are not required to resubmit a full Response to the EOI (although they may do so if they wish). It will be acceptable to submit new information purely in response to this Addendum. Where this is done the entire subsection of the original Response should be replaced and will then be regarded as superseded. In any case, updated Responses should be lodged in accordance with Clause 7 of Appendix 1 to the EOI and comply with the page limits stated there. EOI Conditions The conditions applying to the EOI will apply in full to this addendum including (without limitation) those to the effect that RailCorp will not be liable to any Proponent for any costs, losses, damages or expenses incurred by any Proponent in preparing or submitting its response to this Addendum. EOI Document No. 2004/0106E Addendum PPP Replacement of Electric Rollingstock
"Steady Fleet Replacement Plan"