Roads contracts shifting control

MAIN Roads has awarded the first of seven new-style maintenance contracts as industry players finalise their pitch to win the remaining multi-million dollar deals.

Transport Minister Simon O’Brien announced last week the DownerMouchel joint venture had been awarded the Integrated Service Agreement for state roads in the metropolitan area.

Mr O’Brien said the metropolitan ISA was “valued at about $340 million over five years” while Downer EDI was more conservative, saying “the ISA budget will be over $50 million each year”.

Either way, the metro agreement is expected to be the largest of seven ISAs the government will award over the next 10 months.

The shift from the old-style term network contracts to the new-style ISAs is the latest evolution in Main Roads contracting model.

Mr O’Brien said the ISA selection process aimed to identify the best value for money proposal and considered which contractors were “most likely to form an effective collaborative relationship with Main Roads”.

Industry players say the old term network contracts were more outcomes-focused and gave them greater autonomy, and potentially more financial upside.

The ISAs are designed to shift control to Main Roads, and allow it to build in-house knowledge, leaving some contractors to describe their new role as little more than labour and plant hire providers.

In contrast, the Alliancing Association of Australia has hailed Main Roads and its chief executive Menno Henneveld for their outstanding contribution to collaborative contracting.

“Main Roads WA leads the advancement of collaborative contracting through its continued use and refinement of the model to maximise value delivery,” executive director Alain Mignot said at the association’s annual awards last month.

“Led by alliance pioneer Menno Henneveld, Main Roads WA’s early adoption and advocacy of alliancing in Australia has gone on to encourage several east coast government agencies to engage more collaboratively with industry.”

DownerMouchel was one of nine contractors to bid for the seven ISAs and so far is the main winner.

Downer said the metro agreement was the first contract win for its recently formed strategic joint venture with UK consulting group Mouchel International, a new entrant to the Australian market.

As well as the metro agreement, the joint venture has been named as preferred proponent for road maintenance in the Gascoyne and Mid West region.

Downer estimated the annual spend under the latter agreement will be $35 million.

In addition, it was one of five contractors to bid for the Kimberley contract.

Fulton Hogan (formerly the Road Care joint venture) has previously been named as preferred proponent for the South West and Great Southern regions, while the Leighton Opes Team (comprising Leighton Contractors and Opus International Consultants) is preferred proponent for the Wheatbelt region.

Bidders for the outstanding regional contracts include BGC AECOM, Macmahon Contractors, Abigroup Contractors, Ngarda Leighton Opus Team and the Smart Roads Consortium.

The latter comprises Highway Construction, along with Structural Systems and Egis Projects.