• 10/5/2016

Why is the alliance contracting model considered the best approach to delivering the Tampere tramline project?

YIT Corporation News, October 5, 2016 at 11:15 a.m.

Alliance contracting has been used in the design of the Tampere light railway project. In alliance contracting, the project parties work as part of a jointly created organisation. During the initial development stage, the City of Tampere as the commissioner and YIT Construction Ltd, VR Track Oy and Pöyry Finland Oy along with Ratatek Oy as the alliance partner were responsible for the design and development of the project.

The first phase of the project will see the creation of tram routes from Hervanta to the city center and from the city center to the Tays Central Hospital. In the second phase, a further route connecting the city center and Lentävänniemi will be introduced. The alliance aims to deliver the completed infrastructure for the first phase by May 31, 2021.

Will the alliance model work?

“The alliance partners and other stakeholders have been working in close collaboration to deliver this unique project long before the construction phase. The alliance contracting model allows us to achieve our mutual objectives, as both the risks and benefits are shared,” says Jarkko Salmenoja, Vice President, YIT.

The project also involves a high degree of community engagement, with Tampere residents and local businesses and other organisations contributing to the planning stage. Their views and suggestions are reflected in the designs. During the initial stages, a number of community engagement events and other presentations took place and the commissioner, alliance partners and stakeholders worked closely together to align their views and requirements. 

“The alliance contracting model is well-suited to highly complex infrastructure projects.It allows the commissioner to have one contractual arrangement, unlike in other large-scale infrastructure projects where responsibility for the design and implementation has been splintered across perhaps hundreds of individual contracts and the project management team are faced with a huge challenge as a result. The alliance model will allow us to respond flexibly to any changes that may arise during the project,” Salmenoja points out.

The aim of the project is to deliver greater convenience for residents, promote growth and development within the region, introduce a new sense of vitality and forms of collaboration, drive sustainable development, be economically viable, and to act as a new source of pride for everyone in Tampere.

“Incentives are in place to encourage the alliance partners to achieve their objectives. A set of sanctions will also apply in the event that these are not met. The contracting model is set up to encourage positive outcomes for all those involved. All of us are committed to excellent joint working and successful delivery,” Salmenoja says.

How is the target cost calculated?

The estimated project cost was revised during the development phase and now stands at EUR 282.9 million. This is nearly EUR 33 million more than the original EUR 250 million draft budget set by the City Council. What led to the rise in costs?

“The rise in costs was largely due to revisions to the scope and specification of the project,” writes Vision Oy’s Lauri Merikallio, an independent expert on alliance contracting. The draft cost estimate included in the general plan was calculated with a ± 25% margin of error due to the low degree of specification. The revised cost estimate of EUR 282.9 million remains within the set margin.

During the development phase, a number of revisions were introduced to the project plans and requirements. Costs rose due to the broad criteria provided initially as well as the challenging urban setting. Significant changes have been introduced to the general plan across nearly all of the streets involved in Phase 1 of the project. A lower temperature has now been specified for the project in a bid to avoid expensive and difficult repairs resulting from frost heave. The general plan also did not specify a power supply and feeder station for the tram depot and these were added during the development phase. Increasing the length of the rolling stock from 33 meters to 37 meters, with provisional provision for 47 meter stock, also increased the cost. More tram stops were also added. The extent of the excavation works and traffic management arrangements required during the construction phase had also been underestimated in the general plan.

“The cost is now binding and all the alliance partners are jointly committed to it. We have had the commissioner, contractors and designers all working together on the design, which means that we have been able to put together a high-quality project plan and save time on the project duration,” explains Salmenoja.

The Finnish government has committed EUR 71 million of funding to the light rail project. Of this, EUR 55 million will be made available during the first phase, with a further EUR 16 million released in the second phase.

What was the outcome of the development phase?

The budget allocated for the light railway development phase was EUR 10.5 million, while the actual costs were EUR 10.4 million. The expected outputs for the development phase, i.e. a draft implementation plan and target cost, were delivered on time and on budget.

“During the development phase, we were able to support the zoning and street plan process and to make progress on licensing matters. This will help us adhere to the project timetable further down the line,” explains Salmenoja.

In his report, the independent alliance expert Lauri Merikallio notes the following: “The alliance have worked well together during the development phase and they have been able to evolve and improve their working practices during this time.  The alliance have been successful in identifying the operating models requiring further development and have taken prompt action in these areas. Examples of this include the slight over resourcing evident at the beginning of the project and the amendments to the operating model with regard to the plans for the depot and project specifications.  The light railway alliance were able to make use of modern technology and collaborative models, such as the Big Room concept.”

Representatives from all the alliance parties are based at the Big Room, the shared project working space. During the development phase more than 280 innovations and ideas were recorded by the Big Room team. Examples of these, listed  by Salmenoja, include the following: “Good forward planning will allow us to avoid some expensive cable and sewage works. Earth banks will allow us to avoid the cost of a plate pile system. We will also re-use materials sourced from the light railway route and other projects ongoing in the city.”

Is the tram a viable option for Tampere?

Finland is committed to reducing its carbon emissions and energy-efficient public transport systems contribute to these efforts. This is why the Finnish government has chosen to offer financial support for the Tampere tram project.

According to public transport specialist Mikko Laaksonen, data from cities with tram networks clearly suggest that the trams are directly responsible for promoting public transport use.

The energy consumed by trams per passenger is half that of buses. Electrically operated trams also generate zero pollution in their local area.

Tram stops are shorter in duration than the stops made by buses and they accelerate at a greater rate. Additionally, there is more scope for creating preferential arrangements for trams in terms of traffic lanes and traffic lights than buses. As a result, trams travel 15−20% faster than buses on an average, equivalent route. The modern low-floor trams are quiet, benefit from an increased life cycle and offer greater comfort to passengers, including the elderly, disabled and children.

“The effect of a successful light railway system on private car usage is attributable less to a shift from driving to public transit and more to the ability of light railways to attract the bulk of new growth in transport volumes overall,” Laaksonen writes.

In cities with popular tram systems, such as Zürich, Basel, Freiburg and Strasbourg, trams are associated with high social status. In the United States in particular, including the city of Dallas, great emphasis has been placed on highlighting the difference in social status between trams and buses, and this approach has proved successful in persuading wealthy drivers to opt for the tram service.

“Light railways have been shown to promote urban development, enhance the city’s popular appeal and increase property values,” Salmenoja says.

In Strasbourg and Portland, the new tram systems were estimated to have led to a 10% rise in residential property prices. In Stockholm, the Tvärbana cross-town light railway system has exceeded estimated passenger volumes.

Berlin, Budapest, Paris, St. Petersburg, Melbourne, Milan... All of these world class cities have their own tram networks. The decision on whether Tampere will join their ranks is due soon. The City Council is expected to decide whether to proceed to the implementation phase on October 24, 2016.


Further information:

Hanna Malmivaara, Vice President, Communications, YIT Corporation, tel. +358 40 561 6568, hanna.malmivaara@yit.fi

Jarkko Salmenoja, Vice President, YIT Construction Ltd, tel. +358 40 356 7057, jarkko.salmenoja@yit.fi


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