Alliance Model Best For Project Aqua

Alliance Model Best For Project Aqua

Meridian Energy is confident the alliance model chosen to manage the design and possible construction of Project Aqua is the best way to reduce the risks around such a huge and complex project.

Project Aqua is a proposed hydro-electric scheme that would run along the south side of the lower Waitaki Valley. It would generate enough low-cost, renewable electricity to power the equivalent of about 375,000 households in an average year and about 250,000 households in a very dry year. A very dry year is a 1-in-20 year event. The Project Aqua alliance consists of a design partner, a construction partner and the project owner, Meridian Energy. The construction partners are Bechtel and McConnell Dowell, while Beca Carter Hollings & Ferner, PB Power (NZ) and UK-based Black & Veatch make up the design team.

“The alliance structure means all three parties are working collaboratively right from the start. If one party gains, then all gain: if one party loses, then all lose. The alliance structure allows participants to embrace the risks involved and manage them within a flexible and transparent project delivery environment,” says Meridian Energy spokesperson, Alan Seay.

The objective is to design a hydro-scheme that produces electricity for less than 5 cents per kilowatt hour. Even if Meridian Energy is successful in getting all the required consents and approvals, Project Aqua must still be a “value proposition” for the company – financially, environmentally and socially sound.

Therefore not surprisingly, the first task of the alliance is to determine a target out-turn cost (TOC) for Project Aqua. The TOC will be based on the huge collective experience of alliance members, as well as the extensive geotechnical investigations undertaken this year in the lower Waitaki Valley.

“Bringing together a variety of companies also means we have a wider pool of knowledge to use in the design and construction of Project Aqua. The companies in our alliance have each been involved in a range of large-scale developments, including other alliance projects,” says Alan Seay.

Alliances have been used to successfully deliver many projects, including some in Australia and New Zealand.

The raising of the Awoonga Dam in Queensland last year was delivered through an alliance of three companies (one of which was PB Power, part of the Project Aqua alliance). That project was completed on 30 June 2002, five months early and 20 percent under budget.

New Zealand’s first such project is the ‘freeflow’ alliance for Transit NZ’s Grafton Gully motorway project in Auckland. Beca Carter Hollings and Ferner, one of the Project Aqua designers, is a member of this alliance. The first stage of this project is due for completion before the end of 2003 and it will be delivered some 3 months early and under the target budget cost.

The major works component of Stage One of the Port of Brisbane Motorway was also delivered by an alliance last year. It was completed six months ahead of time and 10 percent under budget.

“An alliance is clearly a proven way of delivering major developments ahead of time and within budget. We have every faith our alliance is doing the utmost to ensure Project Aqua would be a cost effective project and would be delivered in the most timely manner possible,” says Alan Seay.

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