Australia’s Victoria Government has announced that a major component of the Melbourne Metro Rail project will be funded and built by a partnership between the state government and the private sector.

Upon completion, the project will transform Melbourne’s train network into an international-style metro system.

The public-private partnership (PPP) will undertake construction of two 9km rail tunnels and five underground stations.

The project will be structured as an ‘availability-based PPP’, with the private sector responsible for financing, operating and maintaining the infrastructure as well as the design and construction of tunnels and stations.

"After four wasted years, we’re getting on with delivering the Melbourne Metro Rail Project."

For the Melbourne Metro Rail project, the state government has already committed A$4.5bn ($3.2bn), with A$1.5bn ($1bn) allocated in the 2015-16 Victorian Budget, alongside a A$3bn ($2.1bn) Metro bond agreement.

Discussions are currently being carried out with the Australian Government regarding the provision of federal funds for the project.

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Relocation of existing services, reconfiguration of existing tracks, and high-capacity and conventional signalling upgrades will be delivered in separate procurement packages.

The project includes tunnels from South Kensington to South Yarra as part of a new Sunbury to Cranbourne and Pakenham line.

The underground stations will be built at Arden, Parkville, CBD North, CBD South and Domain, as well as train and tram interchanges at Parkville and Domain and rail tunnel entrances at South Kensington and South Yarra.

According to the government, the announcement gives the market time to prepare bids and submissions to meet the timelines for the project.

Major construction under the project is scheduled to begin in 2018 and the full project is expected to be completed by 2026.

Victoria treasurer Tim Pallas said: "Victoria was an early adopter in the delivery of PPPs, and we continue to be at the forefront of their evolution, with the multi-billion dollar partnership between government and the private sector now set to deliver the new tunnels, stations and other key components of Melbourne Metro Rail Project.

"The authority will intensify its discussions with the market immediately. After four wasted years, we’re getting on with delivering the Melbourne Metro Rail Project."

In July, the Melbourne Metro Rail Authority (MMRA) has appointed the Aurecon Jacobs Mott MacDonald (AJM) joint venture (JV) as the technical, planning, and engagement adviser for the Melbourne Metro Rail Project.

The JV will support MMRA in progressing technical, planning and engagement work for the project, with key activities already underway.

MMRA is responsible for managing planning works, the development of a project reference design, undertaking site investigations, planning approvals, procurement, construction delivery and project commissioning.