Law Path

How to get your share of the in­fra­struc­ture pot of gold

Australian Transport News - - Contents -

How to get your share of the in­fra­struc­ture pot of gold

I nfras­truc­ture is where it’s at. More money than you can count is cur­rently be­ing pumped into ma­jor in­fra­struc­ture projects through­out Aus­tralia – in par­tic­u­lar the east coast.

The 2017-2018 Fed­eral Bud­get com­mit­ted more than $70 bil­lion to in­fra­struc­ture devel­op­ment across Aus­tralia. In­fra­struc­ture Aus­tralia has iden­ti­fied more than $ 55 bil­lion worth of “na­tion-shap­ing projects” in its In­fra­struc­ture Pri­or­ity List.

Cur­rent mega-projects on the go in­clude the $16.8 bil­lion WestCon­nex project and the $10.9 bil­lion Mel­bourne Metro Rail project.

Flow­ing on from the bot­tom­less pit of in­fra­struc­ture spend­ing is an ex­pected na­tional rise in con­struc­tion growth and spend­ing.

The Aus­tralian In­dus­try Group-Aus­tralian Con­struc­tors As­so­ci­a­tion Con­struc­tion Out­look

Sur­vey pre­dicts ma­jor con­struc­tion project growth through to 2019, driven by non-min­ing in­fra­struc­ture and com­mer­cial and res­i­den­tial devel­op­ment work. The Sy­den­ham to Bankstown Ur­ban Re­newal Cor­ri­dor Strat­egy is a prime ex­am­ple.

Whether the in­fra­struc­ture or con­struc­tion projects re­late to road, rail, tun­nels, com­mer­cial build­ings or houses, they all need a steady stream of ma­te­rial in­puts to keep them on track and a pro­duce a re­lent­less stream of soil, spoil and con­struc­tion wast – al­most all of which is re­quired to be trans­ported by road.

Are you sali­vat­ing for your share of this pot of gold yet?

How do you po­si­tion your­self to in­crease your prospects of tak­ing part in this growth and se­cur­ing valu­able busi­ness? Well, you look at the most sig­nif­i­cant pres­sures faced by the own­ers of in­fra­struc­ture and con­struc­tion projects and make sure that you are part of the so­lu­tion rather than the prob­lem.

The 2017 Tele­trac Nav­man Global Con­struc­tion Bench­mark Re­port

iden­ti­fied the three big­gest con­cerns or con­straints within the con­struc­tion and in­fra­struc­ture sec­tor as:

• Man­ag­ing costs

• Im­prov­ing ef­fi­cien­cies

• Re­duc­ing safety breaches/in­ci­dents.

STAND­ING OUT

As al­ways, the pri­mary cri­te­rion is money. Costs are one of the big­gest fac­tors af­fect­ing project re­turn, so in­put pric­ing is al­ways go­ing to be a key con­cern. I will leave that to you to man­age, as you are much more ex­pe­ri­enced than I am.

Apart from cost, ef­fi­ciency is the next big­gest driver of project re­turn.

Time is money and one of the big­gest causes of cost blowout is de­lay and dis­rup­tion to project time­lines, as this al­ways has mas­sive flow- on ef­fects to the mul­ti­ple mov­ing parts nec­es­sary to de­liver any project.

Here, the fo­cus is on qual­ity as­sur­ance, un­der­pinned by good busi­ness prac­tices and of­ten by ap­pro­pri­ate use of tech­nol­ogy so­lu­tions. For ex­am­ple, adop­tion of ve­hi­cle telem­at­ics sys­tems that al­low for up-to-the-minute ve­hi­cle al­lo­ca­tion, sched­ul­ing and track­ing.

Fi­nally, safety is the third-largest con­cern on any project.

Apart from the ‘good­will to all men and women’ as­pect, the rea­son is that noth­ing shuts a project down quicker and more com­pre­hen­sively than a safety in­ci­dent. An ad­di­tional safety el­e­ment is that, un­der the chain of re­spon­si­bil­ity (COR) laws, ve­hi­cle, load and driver safety is a shared re­spon­si­bil­ity right along the road trans­port sup­ply chain, mean­ing that breaches by trans­port op­er­a­tors can drag project prin­ci­pals down with them.

It shouldn’t sur­prise you that the three are not just in­de­pen­dent con­sid­er­a­tions but are also linked.

Safe trans­port busi­nesses are less sub­ject to dis­rup­tion and down­time, mean­ing they are more op­er­a­tionally ef­fi­cient and in­crease costs savings, rather than in­crease costs.

For ex­am­ple, the Aus­troads 2008 Anal­y­sis of the Safety Ben­e­fits of Heavy Ve­hi­cle Ac­cred­i­ta­tion Schemes re­port found that heavy ve­hi­cles en­rolled in in­dus­try ac­cred­i­ta­tion schemes, such as Truck­Safe, were be­tween half and three quar­ters less likely to be in­volved in crashes than non-ac­cred­ited ve­hi­cles.

“Safe trans­port busi­nesses are less sub­ject to dis­rup­tion”

Like­wise, ac­cred­ited op­er­a­tors found that claims costs were 57 per cent lower within two years of ob­tain­ing ac­cred­i­ta­tion. Fewer crashes and fewer claims mean more time haul­ing freight and meet­ing project mile­stones.

What all of this boils down to is as­sur­ance. In or­der to be awarded more of this valu­able work, trans­port op­er­a­tors need to pro­vide project prin­ci­pals with greater as­sur­ance, in terms of cost cer­tainty, op­er­a­tional ef­fi­ciency and safety, than the next trans­port oper­a­tor.

As­sur­ance in re­la­tion to com­pli­ance is in­creas­ingly be­com­ing a non-ne­go­tiable com­po­nent of any ten­der or award of work.

Many of the ma­jor projects have started adopt­ing de­tailed com­pli­ance as­sur­ance frame­works into their ten­der process – im­pos­ing manda­tory re­quire­ments for de­tailed COR man­age­ment plans to be sub­mit­ted for eval­u­a­tion be­fore work is awarded.

On the project prin­ci­pal’s side, they re­quire a high level of as­sur­ance that con­trac­tors and sub­con­trac­tors have proper aware­ness of and sys­tems de­signed to en­sure com­pli­ance with their COR obli­ga­tions

On the con­trac­tor’s side, it is im­por­tant, and quickly be­com­ing es­sen­tial, that you are able to clearly and con­vinc­ingly demon­strate that you com­pli­ance is up to speed and you do not pose a com­pli­ance risk to the project be­fore you get any work.

KEY CON­SID­ER­A­TIONS

Es­sen­tial cri­te­ria in­cluded in many of these project re­quire­ments in­clude:

• Hazard iden­ti­fi­ca­tion and risk anal­y­sis of the COR com­pli­ance breaches

• Pre- qual­i­fi­ca­tion COR com­pli­ance screen­ing of any sub­con­trac­tors

• COR com­pli­ance terms in all sup­ply chain con­tracts

• In­ci­dent re­port­ing, re­sponse and

res­o­lu­tion sys­tems

• Sys­tems for pro­vid­ing ef­fec­tive in­duc­tion, train­ing and aware­ness of COR com­pli­ance re­quire­ments and prac­tices for your own em­ploy­ees and sup­pli­ers/sub­con­trac­tors

• Sys­tems in place for mon­i­tor­ing and mea­sur­ing your and your part­ners’ COR com­pli­ance per­for­mance and for re­port­ing it up the tree. So, in or­der to in­crease your prospects of gain­ing more project work, start think­ing more from the per­spec­tive of what as­sur­ance you can pro­vide to project prin­ci­pals to al­le­vi­ate the pres­sures that im­pact on their busi­ness.

It also helps to have this in­for­ma­tion read­ily to hand and in a con­cise and well-pre­sented pack­age, rather than pre­sent­ing them with a doc­u­ment dump and say­ing ‘ find it your­self ’.

Nathan Ce­cil is a part­ner at Hold­ing Redlich T: 02 8083 0429 M: 0405 239 402 E: nathan.ce­cil@hold­in­gredlich.com

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