[LETTERHEAD]

13 May 1985

The Darling Harbour Authority

Level 8, Chinatown Centre

25-29 Dixon Street

SYDNEY NSW 2000

Attention:   Mr  G  Chirgwin – Project Co-ordinator

Dear Sirs,

DEVELOPER’S FORMAL SUBMISSION – PEOPLE MOVER

Further to our ‘Expression of Interest’ of 19 March, 1985, TNT Bulkships Limited was pleased to be shortlisted, and has much pleasure in presenting to the Darling Harbour Authority its ‘Formal Submission’.

The time has come for the Authority to select its Preferred Developer for the PEOPLE MOVER system. What criteria will the Authority address?

• A clear understanding and shared enthusiasm for Darling Harbour and the role of the PEOPLE MOVER in the development.

• Preparedness to accept the financial risk of the venture.

• A system of proven performance and reliability characteristics.

• Demonstrable management skills and track record to produce results on fast track projects.

• Demonstrable management skills in operating complex transportation systems and dealing with the local industrial environment.

• Demonstrable financial strength to successfully complete the project.

• A management team committed to having the system operational by 1 January, 1988.

In presenting this three volume format submission, together with large scale models, TNT Bulkships believes it convincingly meets all the Authority’s criteria to be nominated Preferred Developer.

A wholly owned subsidiary of Thomas Nationwide Transport Limited, TNT Bulkships is responsible for the development of numerous large projects over recent years with capital commitments in the $10 million to $100 million range. Common throughout the projects has been technical innovation, environmental and regulatory constraints and tight time commitments. Detailed in this submission are four case studies of recent projects demonstrating our expertise.

Whilst TNT Bulkships will be responsible for the development, we shall call upon the resources of the TNT Group as appropriate; for example Ansett’s product presentation and marketing expertise and TNT Australia’s close relationship with the various transport unions.

The Authority will be aware that Ansett is the foremost tourist promotion enterprise in Australia, and we are confident Ansett’s full participation in the promotion of the system will enhance its commercial viability and the success of Darling Harbour.

As evidence of our ability to finance the project, we present our 1984 Annual Report and financial data, together with the report of TNT.

In this formal submission, TNT Bulkships confirms its interest in the PEOPLE MOVER project as DEVELOPER/OWNER/OPERATOR and states its preparedness to take the financial risks associated with the venture.

Since becoming interested in the development, we have expended considerable effort to gain a clear understanding of what the role of the PEOPLE MOVER is within the Darling Harbour plan and matching this to systems on offer. Not only have PEOPLE MOVER systems been investigated in all their technical complexities, but similar developments around the world have been visited and studied, particularly from the viewpoint of their transportation links. Unlike many of the other developers shortlisted, TNT Bulkships is not in the role of being tied to or pushing a single system. The selection of the best developer and the most appropriate system is clearly the Authority’s objective.

At the briefing held on 10 April, 1985 the PEOPLE MOVER was described as a ‘tourist ride’. In the Ove Arup transport study and the Pak-Poy and Kneebone report it is listed as a secondary transport mode. After closely observing, first hand, similar developments, particularly Baltimore’s Inner Harbour, what has become obvious is that the success of such projects is universally linked to transport modes. In Baltimore major freeways merge within a block of the development and some 8,000 off-street car parking spaces are available within three blocks. Over 80% arrive by car and the bulk of the remainder by tourist coach.

Sydney’s road system does not compare with Baltimore’s expressways, and Darling Harbour is not at the intersection of such major throughways. Furthermore, the Authority’s transportation studies show 60% commute to the city by public transport (principally rail) during the week and 40% at weekends. But Darling Harbour is not directly serviced by a regular rail system. Nor will the proposed SRA peak day station be a through station for the full metropolitan rail system, as is Town Hall Station. We would thus contend that a rapid, frequent and attractive commuter link from a current public transport hub to Darling Harbour will be of ‘primary’ importance in achieving the projected volumes of people to the ‘place for people’ and thus securing the economic viability of the development.

If, of the order of 50% of people are to find their way to Darling Harbour via the public transport (principally rail) system, we believe it important for the Authority to upgrade in its own mind the PEOPLE MOVER to a primary Darling Harbour transport link. Thus the key element must be the ease of access from a major public transport hub. Walking distance to the PEOPLE MOVER must be minimised and the system should be highly visible.

We see the route detailed in this proposal as a development of the Authority’s preferred alignment, addressing, we believe, in a more determined way, the connection at Town Hall and opening a major market by going into the heart of the commercial centre of Sydney. A route along Market and Pitt streets to Bathurst Street is proposed. Some 300,000 people flow into Sydney’s commercial and business area each work day. By having a station right in the commercial centre of the city, offering frequent rapid transport, we believe will draw weekday lunchtime crowds to the attractions of Darling Harbour, particularly the festival market place, restaurants and food outlets. The phenomenon occurs South Street Seaport New York, drawing lunch and after work patrons from the Wall Street district. A similar pattern also occurs from Baltimore’s Central Business District a few blocks from the Inner Harbour development. Such patronage we deem important to the commercial success of the PEOPLE MOVER.

The route proposed is seen to integrate with Sydney City Council’s declared Pitt Street pedestrian precinct plan. We have undertaken a preliminary road and pedestrian traffic study and the results, detailed in this submission, support the route presented.

Our preferred route also diverges for the Authority’s alignment in a number of other areas which are discussed in detail in the submission. As there has been little opportunity of direct discussion with the Authority so far, clearly many facets of the alignment and station location must be considered fluid at this time.

The Authority will note that the alignment in this submission is a further development from that proposed in the Expression of Interest. Similarly, with a clearer understanding of the role requirements, considerable development of the PEOPLE MOVER systems has occurred in the two months since original registration.

Understanding the sensitivity of the alignment outside the Authority’s gazetted area, we have undertaken preliminary discussion at various government and administrative levels and, whilst recognising the difficulties before us, we are quietly confident approvals can be obtained in the time programme detailed in the proposal, provided the State Government, Sydney City Council, Darling Harbour Authority and all other interested parties support this concept and expedite approvals.

The PEOPLE MOVER will be the artery that links Daring Harbour to the City of Sydney. It will contribute to the substantial weekday patronage of the development. The PEOPLE MOVER will also link Darling Harbour to a major public transport hub, therefore linking the development to the Sydney metropolitan area. We have named the PEOPLE MOVER project HARBOUR LINK.

[HARBOUR LINK LOGO 0]

As previously stated, our interest in registering is as developer/owner/operator. We do not claim previous experience in establishing a PEOPLE MOVER system, and as such have reviewed existing proven PEOPLE MOVER systems and have shortlisted two we believe meet the requirements of the Darling Harbour development. They are the H-Bahn system produced by Siemens A.G. of West Germany and the Monorail Type IIS system of Von Roll A.G. of Switzerland. A continuing programme of analysing the qualitative considerations and quantitative cost benefits of both systems is directed at identifying the preffered supplier in adequate time to meet the Authority’s 1 January 1988 fully operational target date.

Just as the Authority is seeking out a suitable developer with a proven performance record to ensure completion on time, we have sought out and identified a number of contractors we are confident will ensure this target is achieved. Firstly, both Siemens and Von Roll have the expertise, production facilities and financial strength to deliver on time.

Siemens’ association with Australia dates back a century and they established a subsidiary in Australia in 1955. Siemens Australia today employs 1.300 people, servicing the power engineering, electrical, communications and data systems industries. Siemens has retained BHP Engineering Group to assist with local civil engineering and construction aspects.

Von Roll, which was formed in 1823 in Switzerland, has appointed Lend Lease as their associate on the Darling Harbour project. Lend Lease, as a major Australian corporation, has an enviable record in project development.

The development management role, particularly in facilitating all approvals necessary outside the area covered by the Darling Harbour Authority, would be entrusted to an experienced development manager such as the Hayson Group of Companies. Engineering and prefabrication of concrete and steel sections, together with their erection, would be contracted to groups such as Transfield, Leightons, Hornibrooks or Civil and Civic. Overall system performance guarantees would be provided by either Siemens or Von Roll.

Both suppliers have proposed that as a minimum all structural and civil work would be performed locally. Drive systems would be supplied from their facilities in Europe. In both cases, over 50% of the expenditure would be in New South Wales. Further, we have requested both suppliers examine the practicality of extending local content with coach work and control systems being produced in New South Wales. Clearly, a significant transfer of technology to Australia will occur.

The economic feasibility of the PEOPLE MOVER is dependent on the commitment of funds to all major aspects of the plan promoted by the Authority and the timely and imaginative implementation of that plan to draw the volume of people projected in the study. Likewise, we see the PEOPLE MOVER as an integral part of the success of the Darling Harbour development if the Authority is able to achieve its objective of “creating a place for people”. Integration of the PEOPLE MOVER with bus, rail, coach and ferry transport modes is an aspect requiring further discussion with the Authority.

By providing the essential transport link above the development, the PEOPLE MOVER ensures maximum use of the surface space as a “place for people” free from all but essential service traffic. But not only as an efficient transport mode; by passing through the development as proposed in our suggested route, the PEOPLE MOVER will significantly add to the visual excitement that is an essential ingredient in creating a place for people. All this will occur with a minimum of noise and void of air pollution.

Whilst the PEOPLE MOVER’s initial role is servicing the Darling Harbour development, we have a vision of the service being extended to Circular Quay and eventually linking many of the city’s principal attractions – the Opera House, the Rocks and Darling Harbour and the commercial business district.

Finally, the STATEMENT OF FINANCIAL ARRANGEMENTS. The risks associated with the PEOPLE MOVER development should not be underestimated. The developer will be required to invest tens of millions of dollars and have an operating cost structure that will only have a small component variable with actual patronage.

As the success of Darling Harbour and the PEOPLE MOVER are inexorably linked, the financial arrangements should recognise these facts.

We propose that the right of way for the total system be granted for a 25 year term with options to extend to 50 years at a nominal lease fee.

Revenue from the first 5.5 million patrons each year would accrue to the developer. From 5.5 to 6.5 million patrons, the Authority would earn $0.25 for each patron. From 6.5 to 7.5 million the Authority would earn $0.35 for each patron and above 7.5 million $0.40 for each patron. For the purposes of this calculation, patrons shall be defined as each full fare paying rider or their equivalent in fare terms.

At the briefing on 12 April 1985, the Authority provided patronage figures calculated by Pak-Poy and Kneebone. These figures were based on information available to 31 March 1985, and showed high and low patronage of 13.5 and 8.6 million per annum for the PEOPLE MOVER, based on annual attendance at Darling Harbour of 14 million and 11.6 million respectively.

On the low figure this would represent an income to the Authority of $1,040,000. On the high figure the Authority’s income would be $2,900,000.

We would propose making available to the Authority each year 100,000 complementary tickets for distribution at its discretion, perhaps for special promotions or special interest groups, school children, disabled, pensioners, overseas visitors etc.

The extent of income available for advertising has not been fully addressed. We propose that the first million dollars of net advertising income accrue to the developer and then the Authority would earn 20% of net advertising income over one million dollars.

This proposal is based on the existing tax environment.

We trust this submission meets with the Authority’s requirements and we look forward to your early advice.

Yours faithfully,

(signature)

PAUL D. KEEN

General Manager