The SewerFix Wet Weather Alliance story

Contributor: Steve Hall
Posted: 02/01/2010  5:28:00 PM EST  |  0
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Tags: sewerfix | sydney water | capital work | alliance delivery model | alliance contract | alliance | alliancing | infrastructure | brownfield | MWH | PB | Mandis Roberts | United Group | project lifecycle | budget | constructor | value | construction | TOC | KPI | | sewer | water | planning

Like most public authorities responsible for providing new and upgraded infrastructure, Sydney Water has traditionally segregated the planning and delivery phases of capital works project lifecycles.  The two distinct phases are typically characterised by the use of internal resources and consultants to carry out the planning (define the problem, evaluate the various options to select the preferred solution, then carry out the necessary studies to gain environmental planning approval), followed by outsourcing of the delivery (design, construction and commissioning) to one or more separate contractors or to an alliance delivery model where appropriate.

However, as highlighted by their recent industry award recognising their outstanding contribution to alliancing, Sydney Water have continued to break new ground by establishing the first alliance in Australia for which the scope includes the entire planning phase in addition to delivery of a capital works program.

The SewerFix Wet Weather Alliance commenced in 2007 to deliver the current stage of Sydney Water’s wet weather overflow abatement program, which aims to improve recreational water quality and protect public health by reducing the frequency of wet weather-related overflows from its sewerage systems. The program is driven by regulatory pollution reduction licences, and the solutions primarily involve construction of sewerage system augmentations within existing highly urbanised areas.

However, modifying and creating new infrastructure in brownfield sites is a costly exercise in terms of both monetary and social capital, and the inexact nature of sewerage system performance under variable climatic conditions requires complex predictive modelling to both quantify the problem, and verify that the proposed solutions will work.  So an imperative for Sydney Water’s investment of $200+ million between 2007 and 2012 is that the system improvement works are carefully and thoroughly planned to avoid the creation of potentially redundant assets that not only cost a lot of money, but are often unavoidably disruptive to the local community during construction.

For this reason Sydney Water teamed up with alliance partners MWH, PB, Manidis Roberts and United Group to create an integrated multidisciplinary team which carry out the project lifecycle right through from initial problem definition to handover of the new/modified asset.  Together the alliance partners provide a depth of resources that amalgamate their complementary skills in strategic planning, sewer network analysis, engineering design, operations and maintenance, environmental impact assessment, specialist environmental services, community stakeholder relations, cost estimating, construction, safety and environmental management.

Combining the planning and delivery resources into a single program team has already delivered value to Sydney Water through several mechanisms and outcomes.  Firstly, the detailed network hydraulic analysis carried out to date by the alliance has resulted in tens of millions of dollars of capital savings against the initial business case budget estimates projected from Sydney Water’s earlier macro-level planning.  These savings have allowed part of the allocated program funding to be redirected to other areas determined to have high priority needs, such as surcharging sewers on private properties.

Secondly, the integration of the alliance’s planning teams with some of Sydney Water’s other functional areas such as strategic asset management, asset planning, networks and treatment plant operations and maintenance, has paid dividends through optimisation of proposed overflow abatement works with other projects and initiatives being undertaken separately by Sydney Water.  For example, recent and impending residential and commercial land releases around the suburbs of Warriewood, West Dapto and Macquarie Park, required the consideration of an additional driver to improving system performance, namely Sydney Water’s obligations as a service provider for urban growth.  The available skill sets within the alliance provided a specialist team working closely with Sydney Water’s growth planners to undertake a number of strategic servicing strategies that adopted a consultative and integrated water cycle management approach.

Thirdly, the collaboration of people from different functions and perspectives is widely recognised as one of the fundamental success factors in the application of alliancing as a game-breaking project/program delivery model.  Within the SewerFix Wet Weather Alliance, this principle is reinforced by the opportunity for early involvement of constructors in the project lifecycle, which fulfils the oft-referenced paradigm relating to the ability to reduce cost/add value being highest during the initial planning stages.

The overlap of early projects under construction while planning continues for new projects, also presents converse benefits i.e. the opportunity for planning engineers, environmental scientists and stakeholder consultation specialists to gain firsthand exposure to actual delivery phase issues, which rapidly up-skills the planning team with respect to the practical constraints of constructing and commissioning their proposed solutions.

One of the challenges of incorporating planning into the scope of the alliance has been the application of the established risk/reward commercial model, which centres on a target outturn cost (TOC) and a suite of key performance indicators (KPIs) to measure non-cost performance against core objectives. The performance gain share aspect is addressed via a KPI that measures the “quality” of the planning process by an industry expert panel against terms of reference established by Sydney Water’s internal stakeholders.  However, estimating and validating TOC budgets for the planning phase activities carries a high degree of uncertainty because the scope of planning is often dependent on a range of variables that are only uncovered as the planning proceeds. Furthermore, within a program driven by regulatory targets and capital expenditure expectations, a healthy tension can exist around the timeframes to resolve some of the more complex planning and approval issues.

Notwithstanding the degree of difficulty, the alliance principles have prevailed thus far, resulting in a net negative figure for TOC variations to date based on the refund to Sydney Water of “windfall” underruns against some of the planning work for which the actual scope was significantly less than what was originally estimated. This highlights that the success of undertaking planning in an alliance framework is underpinned by the maturity of Sydney Water and its four alliance partners in being able to apply trust, transparency and flexibility to the handling of commercial transactions.

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