SPECIAL REPORT: The changing profile of the Water Corporation’s $1 billion works program will present more direct opportunities for smaller contractors.
The changing profile of the Water Corporation’s $1 billion works program will present more direct opportunities for smaller contractors.
Water Corporation chief executive Sue Murphy has overseen many large and technically challenging projects during her career but she is particularly enthused about the next development.
“That’s the one we’re really excited about,” she told Business News.
“It’s the last piece in the puzzle for drought proofing Perth.”
She is referring to construction work on a groundwater replenishment scheme, due to kick off later this year.
It follows a successful trial in 2012-13 when 1.2 billion litres of recycled water in the metropolitan area was recharged into underground aquifers.
Mrs Murphy is confident that groundwater replenishment will work and is keen to find an alliance partner with the right track record, the right people and the technical and financial capacity to deliver.
“The individuals in the team are really important,” she said.
Mrs Murphy also recognises that groundwater replenishment has been rejected by the community in other states, where expensive treatment plants sit idle.
“We need to ensure contractors understand the criticality of working effectively with our neighbours,” she said.
One of the keys to success is the commissioning and testing phase, to deliver a fail-safe working system.
“We need to make sure our partners fully understand how important that is, that’s why we’ve gone for an alliance again,” Mrs Murphy said.
The Water Corp is working with two competing consortiums for the groundwater replenishment contract – Lend Lease has partnered with UGL, AECOM and Black & Veatch, while Thiess has partnered with CH2M HILL.
Mrs Murphy said that at the end of the competitive alliance process, the Water Corp aimed to have two groups that could deliver the project.
“By the time you get to the end, the only thing left is money,” she said.
Alliance contracting has for some years been the Water Corp’s favoured model for delivering new projects for some years but it has explored alternatives.
These include getting the alliance partners to operate the asset, as occurs at the Water Corp’s two big desalination plants.
Another alternative is a public private partnership, where the private sector funds the project.
This contracting model was employed on the recently completed $300 million Mundaring water treatment plant, which was delivered by the Helena Water consortium comprising Spain’s ACCIONA Agua, TRILITY and UK-based Lloyds Bank.
Speaking at the official opening earlier this month, Premier Colin Barnett indicated there might be more to come.
“This is the first PPP to deliver a project to the WA water industry and it is an ideal platform for the Water Corporation to encourage more private sector involvement in service delivery into the future,” he said.
The Water Corp’s most recent project to get under way is the $260 million East Rockingham wastewater treatment plant.
A joint venture between Thiess and Sinclair Knight Merz was awarded an $82 million contract in November to design and construct the plant.
The greenfield project will be delivered in alliance with the Water Corporation and is scheduled to be in operation in December 2015.
Mrs Murphy said most of the remaining spending would be on the buying and laying of pipelines.
The other major project under way is the upgrade of the South Hedland and Karratha wastewater treatment plants.
This has been delivered through an alliance with Tenix, at a cost of about $150 million.
With an annual capital works program of about $1 billion, Mrs Murphy said the Water Corp would be delivering a lot of smaller projects, including regional upgrades and maintenance work.
She said this would help mid-sized contractors, such Georgiou Group, DM Civil and Rob Carr, which in the past have often been sub-contractors but in future would have more chances to contract direct with the Water Corp.
The groundwater replenishment scheme will add a further layer of diversity to Perth’s water supply, which has changed dramatically over the past decade.
The state’s two seawater desalination plants, with a combined capacity of 145 billion litres per year, will supply about half of Perth’s water this year.
Groundwater will supply 42 per cent, down from 62 per cent a decade ago, while dams will supply just 7 per cent, down from 38 per cent.
