Spencer street station's redevelopment

The issue

In Australia, the A$350 million redevelopment of Melbourne's Spencer Street Station was among the first Public Private Partnership (“PPP”) projects to be implemented under the Victoria State Government's Partnerships Victoria policy.

Spencer Street Station is a world-class station that accommodates interstate, regional and metropolitan rail and bus services in a single comfortable, convenient and safe facility. The station — which also includes a shopping plaza, offices, apartments, and a hotel has the capacity to handle 30,000 commuters per hour during peak periods.

For its financing, the project tapped a mix of sources including funds raised in the capital markets through the use of structural enhancements and equity coverage. Other sources of specialised financing helped nurture the project’s commercial development potential while bolstering support and participation by third-party privatised rail operators.

Our approach

PricewaterhouseCoopers acted as the lead financial, commercial and strategic adviser to the Victorian Government on its PPP with the Civic Nexus consortium, the group responsible for the redevelopment of the Spencer Street Station — Melbourne’s main city and rural railway station. The redevelopment of the complex includes real estate development opportunities as well as restructuring of rail infrastructure. Civic Nexus is responsible for the design, construction and long-term maintenance and operation of the interchange facility.

The outcome

PwC advised on all aspects of the project, including preparing tender documentation and bid evaluation, ensuring that all requirements were fulfilled in the procurement process, and maintaining adequate competition to achieve value-for-money. In addition, PwC carried out project structuring, option analysis and determination of optimal scope and delivery methods, as well as risk assessment and allocation, development of a detailed financial model and joint preparation of the business case.