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The successful bidder to build the Melbourne Metro rail tunnel will be given development rights at two prime CBD sites above underground stations, on the condition the new buildings have architectural merit.
The prize sites earmarked for development include the scruffy, heavily trafficked row of shops along Swanston Street between the Young and Jackson Hotel and the Nicholas Building.
The site is home to a McDonald's, a souvenir store, a Hungry Jacks, a Commonwealth Bank branch and the Port Phillip Arcade, all of which will make way for a new station.
An artist's impression of a new station to be built in the Melbourne Metro project. But South Yarra will not get a new station under current plans.
The north-west corner of Swanston and Latrobe streets, opposite RMIT University, is also up for redevelopment, in a deal designed to help pay for the Melbourne Metro project.
The $6 billion contract to build the nine-kilometre tunnel and its five underground stations was put out to tender on Thursday.
Potential bidders have also been offered the opportunity to develop new commercial buildings around Arden station, which will be the hub of a planned new inner-city suburb.
The developments could "reduce the net cost of the Metro tunnel", according to tender documents published on Thursday.
As well as the chance to build new city towers, the consortium that goes on to build the tunnel will have rights to in-station retail and advertising.
But the tender documents warn that the winning bidder must build something that will have aesthetic appeal to Melburnians, and be sympathetic to nearby "iconic" buildings such as the Melbourne Library, St Paul's Cathedral and City Square.
"The [on-site developments] at CBD North and CBD South, as core components of the above ground station structures, represent key visible design elements for the Metro Tunnel and as such may be perceived by some as the 'face of the project'," the document states.
"Any urban design response and architectural outcome for these two stations ... will require recognition of these factors."
The funding model of building commercial buildings above underground railway stations has been used with great success in Hong Kong.
Parkville and Domain, the two other planned underground stations, will not be developed along these lines.
Melbourne Metro is a nine-kilometre twin tunnel from South Kensington to South Yarra, which will cost an estimated $10.9 billion.
The announcement that the project had been put out to market was made by deputy premier James Merlino on Thursday.
"Yesterday we fully funded this project, every single dollar required to build this project is delivered, today we're putting the contract out to market," Mr Merlino said.
The Andrews government has committed to build the tunnel without funding from the federal government, although the door remains open for the Turnbull government to contribute if it chooses to.
This article first appeared on www.theage.com.au
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