The State Government has agreed to the East Perth Redevelopment Authority undertaking a business case assessment on the sinking of the railway line through Northbridge to connect the area with the CBD.
The proposal for EPRA to take this role will now be considered by the Perth City Council.
The Northbridge Link Committee, which consists of representatives from Government and the City of Perth, have advised that EPRA management provides the greatest opportunity to make the project financially feasible.
Under the proposed arrangement, the City of Perth would consider a delivery arrangement that would see the city make the financial contribution required to cover any deficit, with EPRA to manage redevelopment outcomes above the railway undergrounding.
EPRA was invited to review the opportunities for the undergrounding of the railway line and identified a number of areas where revenue rates, development form and a more effective mixture of land uses could be revised to provide a better economic outcome for the project.
Planning and Infrastructure Minister Alannah MacTiernan said EPRA had been invited to take part in the project due to previous experience in managing the redevelopment of Claisebrook Cove East Perth, the Village Northbridge and involvement in the highly successful railway sinking at Subiaco through a common management structure with the Subiaco Redevelopment Authority.
"Sinking the railway line through Northbridge will require dealing with risks, high levels of community interest and activities, land parcels of strategic significance to the State and major physical infrastructure issues," Ms MacTiernan said.
"EPRA has extensive experience in working within this environment and their involvement will enhance the likelihood that this project could be delivered.
"The State Government has worked very hard with the City of Perth to deliver this project but reaffirms its original position that the sinking must be cost neutral."
Lord Mayor Peter Nattrass said the proposal presented a sound economic outcome for the City of Perth that would reduce their financial commitment to the project to a level the council could commit to.
"This agreement will take us a step closer to achieving the shared vision of connecting Northbridge with the Perth central business district to create a mixed use precinct and civic place befitting our capital city," Dr Nattrass said.
The Lord Mayor emphasised that before the proposal could proceed it required council endorsement and for the city's business case to be publicly advertised to describe the financial commitment to the project.
"This project will change the face of Perth and result in unlimited potential to strengthen and revitalise the economic base of the Northbridge area," Dr Nattrass said.
Dr Nattrass said it also offered significant positive investment multiplier effects for the commercial, construction, hospitality, tourism and small business sectors.
Stuart Hicks, Chairman of the Northbridge Link Committee, endorsed the proposal and said it was a vital step toward cohesive planning and management for the project.
He said the combined efforts of the State Government and the City of Perth would ensure the project delivered the common goal of a united CBD.