Delivery Strategy for NZ's Largest Water Treatment Plant Replacement to date - Lessons from around the world

Nikhil Susarla (Watercare), Michelle Morris (Aurecon) and Mia Thomson (Aurecon)

The existing Huia Water Treatment Plant is almost at the end of its operational life. A project is currently underway for the planning, design and construction of a replacement plant at a neighbouring site. The predicted value of the project (>$700M) and complexity has led Watercare to explore project delivery mechanisms in addition to its own Enterprise Model framework. 

This paper summarises the lessons learnt from the procurement strategies employed on recent projects at Watercare and at other water sector projects within New Zealand, in Australia, and in the United Kingdom. The lessons learnt were captured in interviews with personnel that were involved on projects or in the organisations completing them at the time. These lessons have been used to identifythe ideal delivery strategy for the replacement Huia Water Treatment Plant. 

18 case studies were conducted in total. These projects were identified on the grounds that they had similarities in either sector type, scale, risk profile, outcomes, or location. 4 of these were large Watercare projects, to capture lessons learnt in the company. Following this, 12 large water sector projects in the rest of New Zealand, Australia and the United Kingdom were identified to focus on jurisdictions with similar environments and procurement practices. To add greater depth to the study, 2 case studies in different industries were also identified. These studies are also summarised in the paper.

The UK has generally been aligned on delivery through framework partner approaches. Australia has been delivering through differing procurement models, with a mix of framework and ECI Design & Build approaches, including DBOM contracts. For tendered projects ECI appears to be a market favoured approach, with a growing expectation for full or partial reimbursement for tender costs. 

In the market, supply chain concerns may be short-lived, though the global macro-economic picture is still evolving, and future market and supply chain predictions fall short of any certainty. The global contractor market appears to be saturated especially with the current trend of delivering programs through longer term contracts and alliance type models.

Common themes of the study included - reduced risk appetite from contractors, requirement of advanced warning of intent to go to market (but not too long), need for ECI and collaborative contracting, importance of building the right teams and partnerships and getting the appropriate people involved in the project.