Getting it together
In what situations can alliancing produce a better project outcome than conventional contract methods, and what are the challenges? Here is how three collaborative schemes are faring. BY GAVIN RILEY
The theory of alliancing may be well understood by those venturing into such an arrangement, but the concept is recent enough for many of the practical challenges, difficulties and advantages not to be fully appreciated until they are encountered.
For that reason alliancing came under the microscope at this year’s annual conference of Ingenium, the organisation for professionals engaged in the engineering or management of public assets. The conference heard about three contrasting current alliances – maintenance of a roading network, a city mall makeover, and a major drainage-system upgrade. Here is a summary of each project and its alliance team’s experiences to date.
Foveaux contract on the right road
The Foveaux Maintenance Alliance between Southland District Council and Fulton Hogan manages the upkeep in the southeast of the province of more than 1400 kilometres of road – 483km sealed, 912km unsealed, and a further 11km sealed and 13km unsealed on Stewart Island. The alliance is also responsible for nearly 200 bridges and services to several townships and small communities.
Southland had four “generations” of conventional roading contracts before opting for the alliance method. The contract took effect from May last year and was the first of its kind in New Zealand. It runs for five years, with a possible rollover, and is worth a total of about $20 million.
Hoped-for advantages included creating a non-confrontational environment for collaborative problem-solving, opportunities for innovation, increased level of service to the ratepayer, increased focus on, and ability to accurately drive, long-term pavement maintenance, and reduced long-term maintenance costs.
Considerable time and energy was spent putting in place a five-person board and a four-strong management team (large for a relatively small maintenance contract), drawing up an interim agreement, and setting standards (based on the long-term council community plan). Costs and services were agreed and an overall price submitted to the council, which added price “tension” by removing a few dollars to encourage the alliance to perform with efficiency and innovation.
A series of KRAs (key result areas) and KPIs (key performance indicators) were developed to measure performance, during which a council member of the team had to remind her engineering colleagues that the contract was not just about looking after roads but included township services such as maintaining gardens, cleaning toilets and collecting rubbish.
Towards the middle of this year the management team prepared a cost estimate for the second year, since which, according to the council’s roading asset manager, Russell Hawkes, the operation has become “pretty conventional in terms of we’re running subcontractors, the maintenance crew and its resources, and material suppliers”.
However, the team has had to develop what manager Andrew Smith of Fulton Hogan calls “our own pavement management strategy” as an objective measurement of the work being carried out. A long-term aim is not only to maintain the asset but improve it.
Because ratepayer feedback can sometimes be somewhat subjective, Smith and his team are committed to driving over the entire 1400 kilometre roading network every six months to carry out a visual rating and, hopefully, fix potential problems before they arise.
Further, the alliance has imported a ground-penetrating radar machine to gain an idea of the overall metal depth on the network and help determine a metalling strategy. Post-compaction grading trials are also being undertaken.
The council’s Russell Hawkes says the alliance has developed a pretty cost-effective model which has effective measurement tools in place and is only paying for work done – and paying for it on a built-up base cost.
He says it took 15 years of the old contracting model for the council to know “we weren’t where we wanted to be”. On the other hand, the alliance thought it could be where it wanted to be in just 12 months “but I think that in reality we were dreaming” because managing an alliance contract is time-consuming.
Hawkes adds: “Indicators are heading in the right direction. The collaborative approach of the alliance is a benefit to everybody. It’s a win-win for client, contractor and road user.”
He says anyone looking for a new model or replacement contract should consider an alliance as a possible answer and give it a really good, solid assessment. “Southland District Council is highly likely to use the model again. Not definitely, but highly likely.”
Team beautifies city centre mall
Twenty-five years after its last makeover, Christchurch’s City Mall was looking shabby – an unacceptable eyesore in the beautiful Garden City.
The city council proposed a $10.5 million facelift of the 540-metre length, to be carried out under Christchurch’s first alliance contract.
The team, consisting of the council, designer Isthmus Group and contractor Downer EDI Works, was tasked with developing a promenade along High Street, creating “garden rooms” on Cashel Street with outdoor dining and seating, improving events and recreation space at the Cashel-High Streets intersection, planting more trees, replacing a fountain with seating and a signatory public art piece, upgrading the Cashel-Colombo and Hereford-Colombo intersections (vital connections to the area), building service lanes to clean up delivery traffic in the mall, extending the tram route through the mall, improving lighting, and improving retail management and maintenance in the area.
It was a big list – but a small project in alliance terms. The alliance model was chosen, says the council’s capital development unit manager, Ross Herrett, “because of the enthusiasm and commitment of indviduals once they are freed from the restraints of traditional behaviour”.
The project began in August last year and is due to be completed in November next year. The City Mall alliance is dedicated to improved relationships and buy-in at all levels. Everyone is part of the team and works from an on-site office, not from their own.
There is intense focus on best-practice management of safety and health, environmental and stakeholder issues, on innovation, and on delivering the project on time and with an agreed target cost.
Herrett says: “It not easy. It’s easy to say, but if you’re dealing with a streetscape project with lots and lots of people it’s very difficult.”
To strengthen relationships and buy-in, the alliance added “a couple of wise heads” to its young and enthusiastic management team and brought in a representative of the local Business Association to ensure retailers are kept well informed (retailers are losing 30-50 percent of their revenue through unavoidable project disruption).
Sheets providing updates of progress on the project have been supplied regularly to retailers, and information issued to the public through newspaper articles and local radio.
Because of the interaction between workers on site and the passing public, workshops have been held to ensure buy-in to the alliance culture permeates right through the team. A survey of the public has given staff an 83 percent rating for courtesy and politeness.
Regular staff social events are held and an acronym, FASTER, has been adopted – fun, ambition, support, trust, energy, respect. “When you’re facing challenges, they’re very good things to reflect on,” says Downer EDI Works general manager business development Steve Killeen.
Products required on the project are being sourced from socially and environmentally responsible suppliers. Blue stone has come from a local supplier even though the cheapest option was to ship it from China.
Downer EDI Works has an incredibly low lost-time injury rate (below one per 100,000 hours) and has maintained this on the project – none in 15,000 hours, just one dust-in-eye incident and a strained back.
For innovation the alliance has borrowed happily from two Auckland streetscape projects. The adopted ideas include pedestrian ramps and a cutting booth to reduce dust. A Christchurch staff original is a better method for laying the blue-stone paving.
Killeen says a survey he was involved with on another project showed 53 percent of unnecessary cost was due to communication errors between designer and construction team. This finding has been taken on board by the City Mall design team, “whose graphic abilities are excellent”.
Killeen believes the alliance is delivering on its promise. He says a small team needs staying power and commitment. “And you do need availability of central support and expertise to help the core team because you can’t afford a big alliance structure.”
Clear, careful and close consultation
Clear Harbour Alliance is a partnership involving Metrowater, GHD, Opus and Downer EDI Works and was formed to carry out a three-year $50 million sewer separation project involving 1200 residential and commercial properties in Kingsland and Mt Eden in Auckland.
Due to be completed in 2010, the project is expected to reduce the annual volume of pollution entering the Waitemata Harbour by 70,000 cubic metres.
The alliance is a first for the New Zealand water industry and was the method chosen for this project because of the need to achieve an exceptional standard of community relations and customer care.
Kingsland and Mt Eden is a daunting area in which to install separate pipes for wastewater and stormwater and to connect the system to houses and business premises. It has steep and narrow streets, in which commuters park free as they catch a bus to work. The area also carries main traffic routes.
As well as design and operations managers, the alliance management team includes a community relations manager. The project website carries information and updates on the project, plus fact sheets telling people what they can expect to happen on their property.
“They expected a man with a shovel on a drainage job. A 10-tonne digger can be a surprise, so we must inform them,” says Justin Connolly, a consultant with GHD’s infrastructure strategy group.
Newsletters are issued three times a year giving clear outlines about what is happening and what the alliance is trying to achieve. During road works, alliance staff visit property owners or occupiers to tell them when the team will be working on their property. If no one is home, a note is left in the letterbox, or a wallet card giving a contact number and project details. Owners and occupiers are also informed when the work around them is about to finish.
Customer-care training is given to alliance staff and the team has its own 0800 number.
“Our efforts are targeted directly at customers. People get frustrated when they can’t talk to those who know what’s going on,” Connolly says.
“Projects in the past have had only one person with a lot of information in their head or on their computer.”
Clear Harbour Alliance also has a detailed database containing relevant information and cross-referenced material about each property. This enables staff to provide even better customer care.
Team culture has been carefully nurtured and developed by the alliance to maximise overall performance. “You must have buy-in from all staff. A lot of time and effort was spent on developing the team and breaking down barriers between management, design and construction staff, ” Connolly says.
Contractor Vol.32 No.8 September 2008