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Thames Tideway tunnel moves to alliancing model

Bidders on the £4bn-plus Thames Tideway Tunnel supersewer are to discover that they are going to have to rethink their relationships with each other and work more collaboratively with their supply chains.

Thames Tideway Tunnel boss Andy Mitchell is going to tell firms that they will be expected to work in alliance with Thames and an extended supply chain in a bid to drive better project delivery.

Mitchell is going to inform all bidders at an update meeting next week.

Mitchell, who joined the project in the summer from Crossrail, said it was a “fundamental change” to the way the project would be run.

He told NCE that he wants to introduce best practice from other major projects, including Crossrail, in order to foster better team working.

“I do believe that we’ve got a habit of working very well with each other,” he said, speaking to an audience of suppliers at an Infrastructure UK event at the ICE. “So there is a huge opportunity there to step further and further ahead of other countries [in the way we work collaboratively].”

Mitchell explained that the change in procurement approach was permitted as part of an “Autumn Addendum”, factored into the tendering process to allow for any changes to scope arising from the Development Consent Order process.

This was granted last month with minimal amendments to the original plan.

Tendering on the Tideway Tunnel is in full swing, with eight teams of contractors shortlisted across three packages that make up the £2.3bn main construction phase of the scheme. Construction contracts are scheduled to be awarded in 2015, with the main tunnel works due to begin in 2016, lasting seven years.

But despite the advanced stage of tendering, Mitchell is determined to seize the opportunity to change the culture within bidders and their supply chain.

Mitchell was speaking as new chairman of the Infrastructure Client Group, a body that has evolved out of Treasury offshoot Infrastructure UK with the remit of running a series of initiatives over the next three years that will help boost infrastructure delivery.

The Group has this week issued a Guidance Paper “Alliancing Best Practice in Infrastructure Delivery”, and Mitchell is keen to lead from the front by adopting its principles on his project.

The report shows industry leaders how to improve infrastructure delivery through the establishment and development of collaboration in alliances.

It follows the Treasury’s “Infrastructure Cost Review” published in July which established the view that collaboration is the best way to deliver efficient and effective investment in infrastructure.

The report steering group included industry leaders from Network Rail, Highways Agency, Environment Agency, National Grid, BP, TFL, Anglian Water, Thames Water, Crossrail and UK Power Networks.

What is an alliance?

The guidance document says an alliance in general terms is an arrangement where a collaborative and integrated team is brought together from across the extended supply chain. The team shares a set of common goals which meet client requirements and work under common incentives.

As arrangements are cascaded through the supply chain they will remain back-to-back with agreed client outcomes and requirements. Alignment of outcomes should apply to the extended supply chain.

The greatest value will be achieved when client, partners, supply chain and in some cases stakeholder groups are all part of the alliance and aligned with agreed outcomes.

Alliancing differs from traditional approaches in several areas. Risks are normally shared, as is commercial return, alignment between the parties is absolute so that the interests of all participants are the same and the level of integration is high.

Alliancing is not the easy option, developing alliances requires real underlying culture and behavioural change. It also requires a fundamental shift from the embedded approach of traditional contracting and can only be achieved with collective commitment.

The Infrastructure Client Group’s programme was launched at the ICE to an audience of over 100 senior executives from government, infrastructure clients and suppliers.

The new programme of work will address four key themes: improving pipeline visibility and certainty; improving project initiation and procurement; whole life planning and cost control; and supply chain skills and construction delivery.

Speaking at the programme launch, commercial secretary to the Treasury Lord Deighton said: “The recently published IUK Cost Review report set out the government’s plans for a renewed attack on the drivers of high costs and barriers to innovation. 

“The Infrastructure Client Group’s work programme will be an essential instrument in continuing to support cost reduction and improved delivery. The group has already achieved far more, far quicker as infrastructure leaders working together and I welcome this continued collaboration.”

The group will report to the Deighton on progress next autumn.

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