A JV between Thiess, Hochtief and Alstom has won the US$457.2M contract to build a 14km long tunnel as part of the Epping to Chatswood section of Sydney’s Parramatta rail link in New South Wales (NSW).

The deal is the first to be awarded for work on the rail link and is the largest single infrastructure contract ever awarded by a NSW government. Construction, which includes several stations, is due to start this year for completion in 2008.

Ironically Thiess won the contract after beating off competition from its own parent company, Leighton Contractors, which is one of Australia’s top construction firms. In a further twist Germany’s Hochtief, another member of the Thiess consortium, is Leighton’s major shareholder.

Thiess executive general manager David Saxelby said: “This project will form a major component of Sydney’s public transport rail network and we are delighted the strength of our local and international based group has been recognised by the NSW government.”

The Thiess-Hochtief-Alstom group was one of four groups shortlisted to bid for the rail tunnel. The three others were Leighton Contractors, Baulderstone Hornibrook in JV with Germany’s Bilfinger Berger, and Transfield in association with Japan’s Obayashi.

Four other groups – Leighton, Baulderstone Hornibrook with Bilfinger Berger, Alstom Australia and a joint venture between Siemens and Barclay Mowlem – are bidding for the railway systems contract.

The New South Wales government is also kick-starting plans for a US$538.4M, 3.5km long road tunnel that will link the M4 motorway with Sydney’s road network after the authorities gave the go-ahead for a feasibility study.

State transport minister Carl Scully said construction of the M4 East link, which also includes 2.5km of at-grade roads, could start within three years.

The tunnel would be a privately funded toll road that would link the M4 motorway at North Strathfield with the City West Link and Parramatta Road at Haberfield.

The M4 is owned by Statewide Roads (SWR), which is believed to have lobbied the state government for permission to build the new tunnel in return for an extension of its M4 concession which expires in 2010.

SWR, which is majority owned by the Macquarie Infrastructure Group, has confirmed its interest in building the new tunnel, although the feasibility study will be carried out by NSW’s public works department.