Lower South Creek Treatment Program

Context

An additional 500,000 people will live in Sydney’s north-west by 2040, putting increased demands on current wastewater treatment capacity.
To service the increased demand and protect Sydney’s inland waterways, Sydney Water commissioned three major inland wastewater treatment plant upgrade projects – Riverstone Wastewater Treatment Plant, Quakers Hill Water Recycling Plant, and St Marys Water Recycling Plant.

Sydney Water sought the opportunity to move away from the traditional contractor-led alliance model and towards a more effective collaborative model, to improve commercial efficiency and foster continuous improvement.

Sydney Water conducted a market sounding process with potential contractors to inform their selection delivery model and packaging strategy.
Instead of adopting the traditional approach of a contractor-led alliance model, Sydney Water used a Delivery Partner model consisting of a joint venture between UGL Limited and WSP.
Under this model, all projects would be delivered under a single program of works with the Delivery Partner acting as an agent for Sydney Water and retaining the program’s corporate knowledge that would otherwise be lost with multiple contractors.
Sydney Water retained full control of design development, was responsible for directly engaging tier two and three contractors through competitive tender, and was fully integrated into the design, construction, and commissioning processes under a ‘one team’ approach.

November 2015 – Expression of Interest (EOI) for appointment of Delivery Partner published
December 2015 – EOI for appointment of Delivery Partner closed
September 2016 – Delivery Partner contract awarded
December 2018 – Riverstone Water Treatment Plant completed
2021 – Quakers Hill Wastewater Treatment Plant completion due
2021 – St Marys Wastewater Treatment Plant completion due.

Use of the integrated, program-wide approach of the Delivery Partner model allowed Sydney Water and its delivery partners to leverage lessons learnt from initial projects and apply them to future programs by developing a culture of continuously improving their capability and capacity.
The benefits of the Delivery Partner model contributed to forecast savings of AUD53 million (USD40 million) (or 14% cost savings) for the program based on painshare / gainshare mechanisms, and a 20% reduction in Sydney Water procurement full-time equivalent relative to previous projects of this size.
The Delivery Partner model has also helped Sydney Water reduce commercial and interface risk and ‘margin-on-margin’ by allowing Sydney Water to directly engage tier two and three contractors. As a result, Sydney Water’s legal and commercial teams needed to adjust how they operated to account for the increased volume of contracts and more ‘hands-on’ engagement with the supply chain. This led to inefficiency in the early stages of the arrangement that was mitigated as the maturity of the engagement progressed.
The more co-operative style of the Delivery Partner model provided more opportunities to trial new innovations as part of the delivery of the projects, such as using Building Information Modelling (BIM) to provide a holistic view of the projects and ensure greater co-ordination of design processes and progress management and more accurately estimate quantities and prices.

The Delivery Partner model works well with clear work front delineation and with linear infrastructure – however when delivering process infrastructure, such as wastewater treatment plants, parties must be extremely careful in defining interfaces between packages.
Full alignment between Sydney Water’s teams and the Delivery Partner was needed – including linking design with procurement and construction, enabling legal and procurement teams to keep pace with the Delivery Partner’s timelines, and streamlining internal business, key performance indicators, and financial systems.

Last Updated: 16 October 2021