Wyaralong Dam

Client: Queensland Water Infrastructure

Location: QLD

Role: Commercial Advisor

Date: 2007 - 2009

Wyaralong Dam is the newest dam in South East Queensland, completed in 2011.

The $500 million Wyaralong Dam and the proposed $1.7 billion Traveston Crossing Dam were the two water storage projects announced by the Queensland Government in response to the drought affecting SE Queensland in the mid-2000’s.

Scope of work

The Queensland Government established the Queensland Water Infrastructure Pty Ltd (QWI) to develop the dams, obtain approvals, deliver and commission them to be available to capture inflows by 2012. QWI engaged Principals now with E3 Advisory as advisors to assist with the design and facilitation of tender and selection processes to secure capable D&C contractors. The key features of this advisory assignment related to the tight timeframes available to deliver both dams simultaneously. E3 Advisory’s role was to:

  • Validate the delivery option – confirm the alliance contracting model was suitable and a selection process could engage two D&C consortia to tender for both projects as 1st and 2nd prizes in a single competition
  • Design a flexible process – produce and manage a selection process that could maintain competitive tension whilst avoiding unnecessary duplication and expense to five dam consortia and retain the flexibility to adapt to the planning approval of either both projects, one project or no project at all
  • Manage the procurement – facilitate a 2-step VfM (Value for Money) selection process under the direction of QWI and with QWI staff directly integrated with two shortlisted consortia as they completed for the dam projects
  • Negotiate the price – provide a detailed line-by-line review of the preferred proponents price proposal. Directly challenge and negotiate the construction solution and agree a suitable target price range for QWI to award a construction contract

Key achievements

E3 Advisory experts were integrated with QWI throughout the entire procurement, having designed and developed the interactive tender phase then managed the selection of the preferred D&C proponent with the following outcomes:

  • Simultaneous tender two projects –designed and managed the shortlisting of two proponents for both projects in just over two months
  • Competition in innovation – developed and facilitated a 2 x stage VfM (Value for Money) interaction for QWI to identify the most appropriate proponent to deliver the main Traveston Dam as a 1st prize with the smaller Wyaralong dam awarded to the 2nd prize-getter
  • Adapting to change – part way through the selection process the Traveston Crossing project failed to receive approval from the Federal Environment Minister. This eventuality was considered in the tender design and documentation. Both proponents were instructed to focus on the smaller Wyaralong Dam without losing momentum or compromising their IP or the legality of the tender process
  • Comparative price tool – in order to maintain competitive tension during the VfM phase a benchmark tool was introduced (the Price for Comparative Purposes) to predict the expected range of outturn costs for each proponent based on their approach to risks common to both teams, focusing on design parameters, material selection and construction techniques. The tool accurately predicted the preferred proponent and the range of outturn costs matched the final contracted price

The independent final VFM (completion) report stated:

“In overview, the Program was completed $9.5m (or 2.7%) under QWI’s budget, on time and to a high quality standard. In terms of the primary cost, time and quality objectives, the Wyaralong Dam Program exceeded all its nominated project performance objectives…”