Partnering

Road network owners face a significant challenge associated with the ability to meet your duty of care to road network users within sustainable capital and maintenance budget levels.

Feeding into this challenge is a common set of drivers.

  1. Increasing asset deterioration due to age and changing usage (more, heavier, faster)
  2. Lack of commensurate growth in revenue
  3. A long period of under investment in the asset base
  4. User expectation of continued service quality
  5. Increased fiscal pressure across the entire business
  6. Increasing cost of materials that meet desired specifications

Effectively addressing these factors requires a fundamental rethink of planning, funding and service delivery models, combined with the political will to take innovative steps. In my view, there are some very realistic options available but they do require a significant shift from traditional means of approaching the asset management problems faced.

To even begin to address these factors, investment is required in sound asset management planning in order to:

  • define the services required by the community and the assets required to provide them
  • understand the assets you have – particularly performance (condition, safety, reliability) and deterioration mechanisms (physical, chemical, electrical)
  • determine the asset standards and associated funding you require
  • design performance measures to know whether or not you’re delivering

I’d suggest that this in itself presents a major hurdle to progress. This development stage can draw significant capital in itself – developing asset management systems, data collection and analysis, life cycle modelling and reporting – while there is always the risk of paying a third party to provide an answer that you can’t afford and therefore increasing your risk exposure because you now know the extent of the problem.

Partnering provides a strong alternative to traditional procurement of asset management and maintenance services. It recognises that

  • No organisation has a monopoly on skills and resources
  • Traditional forms of procurement are not always appropriate
  • Significant risks
  • Variable scope
  • Project uncertainties

Principles of partnering are:

  • Long term relationship based on mutual trust
  • Collaborative development
  • Upfront risk identification and allocation
  • Open book costing
  • Select most appropriate form of delivery contract

Partnering Options


Early Contractor Involvement (ECI)

This is a model that was developed in the UK and pioneered in Australia by the Queensland Department of Main Roads from around 2003. While it’s increasingly used for large and complex construction projects, it’s application to maintenance projects in Australia is limited to the extent that I have not seen any other than the Hydro Tasmania project.

The key aspects of ECI are as follows:

  • Non-price selection process – select the best team
  • Two stage contract
  • Negotiate design/methodology, risk and price
  • Strong partnership/relationship focus – one project team combining client and contractor
  • Delivery under conventional forms of contract

Resource Sharing

The opportunity to integrate existing operational resourcing (workforce, plant and equipment) of both parties under a single management and supervisory structure into any delivery model
Asset Management and Maintenance Program Development and Support

Provision of asset management and maintenance program support services:

  • Data capture and management methodology
  • Budgeting
  • Routine programme development methodologies
  • Operational training
  • Technical advice

It is time for asset owners to think laterally about solving the asset management issues it faces and one approach is to partner with the private sector to do that. At the core of that approach, however, is the capacity to form an open, honest and trusting relationship that allows all issues to be tabled and confronted in a constructive manner.

It requires a shared understanding that both parties are not only working to a common goal – a better asset management outcome – but have their own needs and drivers that must be addressed. If this can be achieved, the outcomes should far outweigh what either of the organisations can deliver in their own right.

Read about Stornoway partnering with energy producer Hydro Tasmania here

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