Sydney Water, Australia’s largest water and wastewater company, has become the country’s first major infrastructure provider to adopt NEC as its standard procurement route for construction works and services – and other clients look set to follow.
Mark Simister, head of delivery management, announced last month that the state-owned corporation had selected NEC4 contracts to support the roll-out of its new procurement and delivery strategy, called ‘Partnering for Success’.
‘Through our new Partnering for Success procurement initiative, we are looking to use the NEC4 suite of contracts to benefit Sydney Water, our partners and ultimately our customers’ he said.
‘It will give our partners more certainty and drive better decision making across the whole lifecycle of our assets, improving our productivity and delivering value for our customers.’
Owned by the New South Wales government, Sydney Water supplies water, wastewater, recycled water and stormwater services to more than five million people in Sydney, the Illawarra region and the Blue Mountains. With the population expected to grow to 7.7 million by 2036, significant new infrastructure is needed.
Assets currently include 243 reservoirs, 16 wastewater treatment plants, 835 pumping stations, 22,000km of water mains and 25,000km of sewers. The company and its partners delivered almost A$800 million (£440 million) of capital works in 2017−18.
The new NEC4-based contractual model for procuring asset-related goods and services aligns with the New South Wales government’s tenpoint plan published last year to develop a more collaborative relationship with the over-stretched construction sector.
The company is now looking to partner with three new consortia to provide design, construction, maintenance and facilities management services for up to ten years. Prequalification closed in February and contracts will be awarded later in the year.
According to Simister, ‘This initiative will simplify our supply chain and deliver significant benefits to Sydney Water, our customers and our partners through increased efficiency, continuity of work, resource availability and partner capability.’
Meanwhile Main Roads Western Australia is about to complete its first NEC trial on a A$25 million (£14 million) highway upgrade north of Perth. Main Roads contracts manager Andrew Ives says, ‘We are now considering further use of NEC target-cost contracts on other projects in the near future,’.
Owen Hayford of PwC in Sydney says Australian clients have historically seen NEC as too ‘contractor-friendly’ on risk allocation. But this, ‘could soon be overcome as the current overheated construction market is putting a much greater focus on the pricing and management of risk,’