3.1.2  Delays in delivery of the infrastructure

On 2 July 2002, the Southern Cross Station Authority3 (SCSA) entered into a services and development agreement (SDA) with Civic Nexus Pty Ltd (the concessionaire). Under the SDA, the concessionaire was assigned responsibility to design and construct the station and, upon its completion, to manage the operations of the station for a 30-year period.

On 27 August 2002, Leighton Contractors (the developer) was engaged by the concessionaire to complete the construction of the station. Construction commenced in October 2002.

The redevelopment was to be completed on 27 April 2005 at which time the SCSA would hand over management of the operations to the concessionaire. However, construction progress was slow and it became apparent that the construction milestones would not be met by the developer due to significant time delays and cost overruns.

By late 2004, the developer had publicly announced a forecast loss on the project of $122.6 million, and was beginning to make some significant compensation claims, primarily against the State and to a lesser extent against the concessionaire.

The SCSA undertook a lengthy negotiation process with the concessionaire and the developer to settle the claims. On 31 July 2006, a global settlement agreement was finalised and the principal construction works were completed.

On 1 August 2006, the concessionaire took over management of the station precinct operations.

March 2004 saw the closure and demolition of the old station building.

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3  Formerly known as the Spencer Street Station Authority.