Project Shotover - What Did We Learn? What Did We Achieve?

The Wakatipu Basin is experiencing a rapidly growing resident population and rapidly growing tourist numbers in what is one of the most sought after destinations in New Zealand. Since the early 2000’s, Queenstown Lakes District Council (QLDC) has been under pressure, from Otago Regional Council, to upgrade the facilities which discharge into the near pristine Shotover and Kawarau Rivers.

Project Shotover, serving the communities of Queenstown, Frankton, Lake Hayes, Lake Hayes Estate, Shotover Country and Arrowtown, is a three stage project to completely renew the wastewater treatment facilities.

This paper considers the Stage 1 project which was procured in 2014/15, built in 2015/16 and commissioned in 2017. At the time, it was the largest capital works project ever undertaken by QLDC. It followed Project Pure, the equivalent facility servicing Wanaka, which had encountered problems in its development and had left the Council nervous about the ability of the industry to deliver such projects to a high standard, within time and budget while meeting all of Council’s needs.

Like Pure, Shotover was delivered using a Design, Build and Operate procurement method. However, for Shotover, the ‘Operate‘ period was increased to 5 years (using the FIDIC Gold form of contract) emphasizing the importance of the operability/reliability of the plant to the contractor. While leaving the process selection completely up to proposers, Shotover also came with a very prescriptive set of ‘Employer’s Requirements’ stipulating the minimum standards required and guarantees on performance and operating cost.

Shotover was completed prior to commencement of the new consents, it was completed within budget, with comparatively few and minor variations and the new MLE + UV process is producing a very high standard of effluent. This level of success demonstrated the Council team’s ability to work through complex projects successfully and has given the Council the confidence to subsequently embark on its major infrastructure development programme, starting with the Eastern Access Road.

As with all major projects, Project Shotover also offers up learnings and lessons that are valuable to the wider water and wastewater industry. While D&B / DBO is still popular and is a very good delivery mechanism, it is not a silver bullet and nor is it appropriate in all situations. This style of delivery requires a substantial investment from the market to bid, adds to the level of risk carried by the contractor, and also requires substantial input on the client side to set up and manage. It does not do away with a consultant team and it is not necessarily a quicker means of delivery. The size and nature of contract selected for this delivery mechanism needs to be commensurate with the amount of risk that the contractor is required to take on.