Alliancing pays dividends for Melbourne Water

Melbourne water, a fully state owned statutory authority and Victoria’s largest urban water business, delivered the challenging Sugarloaf Pipeline project as an alliance to ensure Melbourne’s water security. The 70km long Sugarloaf Pipeline follows the Melba Highway from the Goulburn River in the north to Yarra Glen, where it feeds into the Sugarloaf Reservoir.

Together with alliance partners John Holland; and GHD and SKM who were the design partners, Melbourne Water set about making the most of the opportunities available to them under the alliancing business model.

Collaborative contracting proved the right strategy very early on, as the project encountered serious obstacles that tested the team, individuals, the companies involved; and the alliance’s ability to maintain focus on outcomes, seek solutions and deliver value.

Unique and enormous challenges included communities and landowners vehemently opposed to Melbourne Water taking “their” water, this was compounded by protests, arrests and court actions that attracted large amounts of media interest.

The team also faced challenging transportation logistics for 5,500 pipes weighing up to 10.5 tonnes on mostly single-lane roads and in a constrained construction corridor. An extremely rigorous planning and environmental approvals process had to be developed specifically for this project to deal with the extra adversity. For example:

• State approvals: Environmental Management Plans (EMPs) required approval by the Victorian Minister for Planning and endorsement by the Minister for Environment and Climate Change

• Federal approvals: EMPs for the Toolangi State Forest, Sugarloaf Reservoir and the waterway crossings needed approval from the Commonwealth Department of the Environment, Water, Heritage and the Arts.

Known as a Project Impact Assessment (PIA), the process was like 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 Minister for Planning in early 2008.

The Alliance absorbed significant additional cost to ensure the highest environmental standards were met. Over the course of the project an extra $15m was spent on an additional 104 environmental team members to write, implement and regulate EMP’s and to meet stringent bio- security requirements.

“We went beyond the norm, but it will be interesting to see if this level of approvals scrutiny becomes business as usual. 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,” said Melbourne Water’s Project Director, Rod Clifford.

Feeling the pressure

As a critical water supply project, the pressure was already on from a cost and schedule perspective. The emotionally charged environment, vocal opponents and intense media scrutiny served to take that pressure to another level.

“Protesters were targeting people working on the project, not the organisation responsible for the project,” Mr Clifford said. “So we partnered with the police to prepare for public meetings, protests and to visit landowners. We agreed at the police’s request to be responsible for prosecuting any Water Act offences, while police would be responsible for criminal offences, this required us to train Melbourne Water people in prosecution and enforcement under the Water Act.”

Turning point

Rod Clifford said it was not until the Black Saturday bush fires that landowners separated water policy from project people. The land and property team worked closely with landowners to ensure that properties were accessed in accordance with the Water Act 1989 (Vic) and negotiated with landowners to minimise disruption to their daily lives during construction, including maintaining access, relocating sheds or gates and sorting out reinstatement requirements.

Strict bio-security measures were taken along the pipeline corridor to protect private and public land from the spread of weeds and plant and animal diseases. The alliance hired a Chilean needle grass specialist from the Victorian Department of Primary Industries (DPI) to help manage spread this weed, which is of national significance. Quarterly monitoring and control of weeds along the corridor will continue for two years after completion.

All vehicles, especially dozers and other earthmoving equipment were blasted with high-pressure air or washed thoroughly. Bio-security checkpoints were set up and registers were strictly maintained. Protocols also included workers washing their boots in tubs of chemicals before entering properties to make sure construction activities did not contribute to potential spread of plant and animal pests and diseases.

Keeping the workforce safe

Not one LTI was recorded for the whole project. This outstanding result was achieved through innovations such as a confidential hotline to make it easier for alliance workers to report safety ideas, concerns and incidents.

Known as the 1800 No Harm free call hotline, it was rolled out to everybody through promotional stickers and posters, pre-start meetings and toolbox talks. Our safety team developed the idea and said, “It was a tool to change behaviour and culture in the workplace without feeling like you are dobbing in your mates.”

This simple idea will have a life beyond the alliance, as it has been adopted by John Holland nationally.

What else has been learned ?

A key benefit of the process was the opportunity for Melbourne Water people to “learn on the job” through the selection process and this was an important step in preparing the organisation for the new delivery model.

A recommendation was that senior leaders continue to be involved in future selection processes and that the commercial skills gained be transferred to other managers and alliance project teams, building internal capacity, commercial acumen and reducing reliance on external facilitators.

Melbourne Water has moved on to use the progressive alliance approach again on its Eastern Treatment Plant Upgrade. “This is one of the largest recycling plants in the world. Because it is a treatment process, we as the client have to cover treatment risk and we need to optimise treatment with designers before we fold in the contractor,” said David Morse from Melbourne Water.

“Where the progressive approach was right for Sugarloaf Pipeline Project to meet critical timeframes, we are doing it with the Eastern Treatment Plant Upgrade to manage technology risk. Alliancing is one delivery mechanism available to us and is very useful for delivering complex water projects and treatment plants, so we will likely adjust our collaborative approach in line with the changes,” he said.