2023 – Case Study – How an Advanced Procurement Model Can Create Certainty in Deliverability and Risk Allocation for a Fast-tracked Large Scale Dam Improvement Project in Queensland.

Mal Shepherd, Shane McDowall, Paul Klug

The purpose of this paper is to share a dam owner’s perspective on the procurement process undertaken, including observations, and lessons learnt to establish an alliance to deliver the Paradise Dam Improvement Project (PDIP) located in Queensland.

As the owner of Paradise dam, Sunwater is responsible for overseeing the planning, engineering, procurement, and delivery of the PDIP. Sunwater was conscious that given the complex nature of the project it was necessary to set the project up for success through a truly collaborative contracting model. (Flyvbjerg.B, 2019) Sunwater with its transaction advisor RPS considered various procurement options and selected a Focused Alliance Procurement Model (FAPM) to progressively select both design and construction partners to deliver the project in an alliance framework based upon a reference front-end engineering design (FEED) to progress and develop a target outturn cost (TOC) ready for a final investment decision. This paper provides a dam owner’s perspective on the conference’s Sub Theme 1: securing future resources – design and construction of new and upgraded resilient dams.

A unique feature of the FAPM procurement phase has been how Sunwater and RPS addressed industry concerns, insights, and feedback around perceptions of inefficient and ineffective procurement processes. (Love P. E., 1998) By addressing the industry feedback, we have been able to attract and select the “best in class” in the heavy civil infrastructure industry to become a project partner. This was achieved through the adoption of a convergent procurement process to achieve project objectives, including but not limited to certainty of deliverability, outcomes and benefits whilst also assessing how willing contractors were to truly embrace a shared project risk model through the demonstrated and applied application of their knowledge of dam construction techniques and challenges that could be applied to the PDIP. Consideration of the industry feedback allowed the removal of inefficient and ineffective procurement processes to help build a more sustainable process and industry. (Department of Energy and Public Works, 2023) (DEPW, 2023) (NSW Government, 2018) Simply put, project success is improved by contracting with organisations that have done it before. (Gardner.D, 2023) This means starting a project in the right way, avoiding the adage that projects go wrong at the end. With a change in mindset that was based upon we all win or lose together on a foundational behaviour of trust, we are setting the project up for success at the beginning, with the end in mind.

This case study is unique in that the project requires the augmentation of an existing roller compacted concrete (RCC) dam with potentially both “dimensionable”, “undimensionable”, “foreseeable” and “unforeseeable” risk profiles setting an environment of certain uncertainty.

Through the chosen FAPM with features of an augmented partial-price alliance procurement process, Sunwater has fostered the right behaviour and cultural aspects, to secure contemporary local and international dam contractors with the relevant experience, that will aid the building of new industry capacity that will also encourage new entrants with a risk allocation that is both fair and provides an equitable contract delivery model providing value for money outcomes. (Queensland Treasury, 2015)

This paper considers how Sunwater with its transaction advisor RPS have developed a fit for purpose model that both leverages the lessons learnt from the Rookwood Weir alliance, which is in the final stages of delivery and has allowed Sunwater to engage with and secure resources in a heated infrastructure market and a constrained dam industry.

This topic is very relevant to the dam industry given the large number of dam upgrade projects scheduled over the next decade and this paper seeks to provide guidance and learnings from the PDIP experience.

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