Two years ago, Melbourne Water, a wholly state-owned statutory authority and Victoria’s largest urban water business, delivered the challenging $625 million Sugarloaf Pipeline Project as an alliance to ensure Melbourne’s water security.
The corporation used the alliance model for the first time due to the ambitious time-frame of concept-to-completion in three years as well as the project’s large scale.
This “lessons-learnt” article sheds some light on how collaborative contracting proved the right strategy very early on, as the project encountered serious obstacles.
Dealing with the unexpectedArticle continues below…
Apart from lengthy and complex approvals requirements and landowner resistance, the project team faced unanticipated challenges including the Black Saturday bushfires which occurred on 7 February 2009. The bushfires directly impacted the project corridor and resulted in a month of lost production as workers and machinery were dedicated to fire fighting and recovery efforts.
Environmental challenges throughout construction also included the discovery of new populations of threatened species such as the golden sun moth, striped legless lizard and round leaf pomaderris.
Preparing for tough terrain
Engineering challenges were anticipated and included the need to build a tunnel through some of Australia’s hardest rock in the Great Dividing Range and to excavate through sludge to build a pump station on a flood plain.
A values-based culture drove sensitive and well-implemented environmental initiatives and mitigations during construction. Coupled with a clear and energetic stakeholder relations program, this approach succeeded in an environment threatened by intense public and media interest.
New benchmarks were set and the extra effort helped the alliance achieve a completion date of 5 February 2010, finishing five months early and under budget.
Rigorous approvals process
An extremely rigorous planning and environmental approvals process was developed specifically for this project to address the large scale of the project and associated regulatory considerations.
Known as a Project Impact Assessment (PIA), the process was similar to a condensed Environmental Effects Study (EES). The PIA was a detailed study open to public comment and subject to review by an expert, independent panel approved by the Victorian Minister for Planning in early 2008.
This Specialist Advisory Committee reviewed the PIA, which was prepared by more than 140 specialist alliance staff who worked a total of 35,000 hours. The Advisory Committee held public hearings and considered 104 public submissions before submitting its 163-page report to the Victorian Minister on 17 May 2008 recommending conditions to be added to the project.
Navigating the approvals process
Melbourne Water Project Director Rod Clifford was instrumental in charting the project’s course from its announcement through the approvals process.
Mr Clifford said that the PIA public hearings were carried out over seven days. “It was a steep learning curve for everyone as the process was new. Relationships formed with the approval agencies in the twelve month lead up to the most intense decision making time were invaluable during the most difficult stages,” he said.
“The agencies were very pro-active and increased their resources. Some great lessons came out of the process, with a new template approach developed for EMPs on future projects.
“We learned the importance of trying to keep documentation concise, modular and repeatable to assist approving agencies and that customising small sections is problematic.
“We also learnt the value of building a strong diverse approvals team of scientists and specialists – ours exceeded 50 and they provided integrity to our PIA submission.”
The alliance absorbed significant extra resources to ensure the highest environmental standards were met. Over the course of the project, an additional 104 environmental team members were required to write, implement and regulate EMPs and to meet stringent bio-security requirements.
“Only an alliance could have handled this extra requirement without an impact to Melbourne Water. It would have been a significant variation under a normal design and construct contract,” Mr Clifford said.
Managing community opposition
Almost unique in their scale were the challenges that presented to Melbourne Water, such as vehement opposition presented from communities and landowners. This opposition was compounded by protests, arrests and court actions that attracted large amounts of media interest.
The Sugarloaf Pipeline was constructed mainly through private land, making landowner interfaces very complex.
Mr Clifford was at the centre of the community engagement program, which included a “road-show” at the outset to provide information and answer questions.
“Within six to eight weeks of the project starting, every landowner north of the Great Dividing Range withdrew their voluntary consent for land entry,” Mr Clifford said.
Mr Clifford said it was not until the tragic Black Saturday bushfires on 7 February 2009 that landowners separated water policy from project employees.
“The fires were the real turning point in terms of community outrage against the project. Our team rallied to the support of local people and we turned over all our resources to the Country Fire Authority,” he said.
“A significant portion of the corridor burnt out, but workers showed their true character working tirelessly to save project plant, equipment and compound as well as private homes and property,” he said.
“We had been doing some clear, targeted, stakeholder briefing to get our message across and this had made some good inroads as we went from being reactive to agenda setting.
“However when our people came to the community’s assistance after the fires, we started to be accepted locally.”
Alliance Project Manager Rob Cranston started in the Alliance when John Holland was appointed as the construction contractor in December 2007, and said his objective on the Sugarloaf Pipeline was to create a team, to empower and trust them.
“In return, everyone gives you their best judgement and uses that judgement to get through the difficult times,” Mr Cranston said.
“We needed to do the job fast and right, and so it was important to be alliance team players to stay on the project.
“Establishing alliance culture is similar to the journey with safety; you need to spend money on it and create a whole-of-project, across the board view. This included planning exercises involving sign-off from every discipline before construction could start on a property.”
Mr Cranston said partnerships with sub-contractors yielded significant innovation.
“Our approach with sub-contractors was that if you work with us, we will work with you. There was not one claim from sub-contractors; rather they helped us save time and money,” Mr Cranston said.
“Murphy Pipe and Civil delivered a $40 million section of the work and achieved amazing results, including 71 pipe lengths laid in one day by one crew at peak, thanks to good planning and communication,” he said.
“Enthusiastic young engineers from Crib Point Engineering and the Alliance developed a hydraulic pipe-carrier to transport steel pipes into the tunnel under the Toolangi State Forest.
“The complex machinery was designed, fabricated and delivered in only 12 weeks. It was capable of lifting, manoeuvring and connecting the pipe into position relatively quickly, saving four weeks,” Mr Cranston said.
Tenix Alliance worked with the alliance to design and build the Yea power substation, providing specific electrical aspects of the construction.
Mr Cranston said sub-station construction would normally be undertaken by the regional electricity supplier SP AusNet, so being allowed to build the switchyard on its behalf was a coup.
“The alliance took on the risk and did all the modelling for the high-voltage system, ensuring Melbourne Water’s infrastructure was compatible with power system variables.”
Critical success factor
Melbourne Water General Manager Capital Delivery and Sugarloaf Alliance Leadership Team (ALT) representative David Morse has noted that together Mr Cranston and Mr Clifford provided visible leadership for the team which kept their faith that the project was worth it.
“Having two figureheads was very important for a project of this nature. Rod’s role dealing with media, community and stakeholders meant that Rob did not have to take his eyes off project delivery,” he said.
“They modelled collaboration at the highest leadership level with very clear roles and complementary skills.”