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Published 29/10/2018

Contractors team up for Wellington’s water work

Council-owned Wellington Water has today confirmed the three teams of contractors that will carry out planned water network construction for councils in metropolitan Wellington for the next four years.

Wellington Water manages the drinking water, stormwater and wastewater networks for the Lower Hutt, Upper Hutt, Porirua and Wellington city councils, and Greater Wellington Regional Council. Together these councils spend some $70-$80 million a year on planned capital work (capex) to improve water network performance. From July 2019 this work – which includes renewing and installing new pipes, valves, pumps and reservoirs – will be carried out by Wellington Water’s capex panel, made up of the three contractor teams.

The teams comprise a mix of local, family-owned businesses, and larger scale contractors.

“This means we’re able to retain the experience and knowledge sitting within local firms that have carried out this kind of work here for years – for generations, in some cases,” Wellington Water’s CEO Colin Crampton said. “At the same time, this team structure allowed these guys to partner up with others who have complementary skills and resources. The whole point of this exercise is to ensure value for money in the long term. That means ensuring a local market that can provide stable employment and development opportunities to build the infrastructure a growing region needs.”

Wellington Water’s Senior Procurement Specialist Aimee Digges La Touche said creating the capex panel model had been a collaborative process. “All of our regular contractors were involved in designing the process and the structure that we have reached today. It’s been an 18-month journey to get here.”

Among many other benefits, the outcome will help smooth out peaks and troughs in activity over the financial year, something that both parties wanted, Ms Digges La Touche said.

“Having certainty over the work they will get will allow panellists to plan better, and reduce costs in the system. It will see an end to ‘peak pricing’ behaviour, where for a variety of reasons we might not get competitive pricing on work that needs to be done, and an end to the kind of work drought that can see smaller firms having to lose staff they’ve invested in. ”

Other benefits include being able to involve contractors early on in the project process, reduced administration costs relating to tendering, a more open environment to encourage knowledge-sharing and innovation among contractors, and a more consistent customer experience.

The capex panel is the third of Wellington Water’s industry-leading procurement structures. A consultancy panel of engineering consultancies was formed in 2016 to provide specialist design and implementation skills. A maintenance alliance, announced in September, will see a Fulton Hogan team embedded within Wellington Water to deliver comprehensive customer service in the maintaining and fixing the four cities’ drinking water, stormwater and wastewater networks.

A fourth procurement project will aggregate the management of the metropolitan region’s four wastewater treatment plants. Currently these are sitting in three different management structures; from 2020, one supplier will be managing all four plants.

The three capex teams are:

1. E. Carson & Sons, Brian Perry, G.P. Friel

2. Construction Contracts Limited (CCL), E.N. Ramsbottom, Juno Civil

3. Fulton Hogan, Dews Construction, HydroTech

Mr Crampton said there would be a nine-month transition to the new model and Wellington Water would be looking to see a step change from the teams in their health and safety and customer service performances. 

He also noted that gaining membership on a panel was a competitive process, and acknowledged the loss that unsuccessful bidders might feel.

The initial contract period for the panel is four years, with a two year renewal period.

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