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The hits

Project 70; PFI

From a plethora of such relevant incentives, Smith singles out third party interfaces as the team's top innovation. He glosses over troublefree discussions with 25 landowners prior to laying 10km of pipelines at Inverness, or the need for half a dozen separate planning applications for consent to discharge treated sewage. Instead he focuses on Tesco.

The planned retail park alongside the Moray Firth was known to nudge into the route of the new interceptor sewer. However the dotted lines outlining a new Tesco supermarket right across the pipeline arrived only after the contract had been signed.

Skirt around it, said client North of Scotland Water Authority. But Catchment's construction team - Bechtel and Morrison - were wary. They knew that even invading the powerful retailer's land, let alone ripping up a just completed carpark, could lead to compensation talk in the millions.

The contractor proposed a wider diversion away from the park altogether. But this affected NoSWA's separate deal to provide other developers access to the new sewer. And to complicate the debate, several protected badger setts lay in the way of the favoured re-route; a problem solvable only by expensive pumping to raise the sewer alignment.

With an entourage of lawyers, developers, wild life protectors and swiftly recruited MPs hovering at the site gates, the project team swung into proactive third party discussions.

'Initial misunderstanding of the other side's position made us defensive and wary of each other,' recalls NoSWA project manager Bill Grigor-Taylor. 'But once the barriers were down we addressed the problems and solutions rather than each other through the contract.'

Less than two months later, a new route's extra costs had been shared; everyone - even the badgers - was happy and construction remained on schedule. How different, Smith muses, from a comparable third party interface experienced by both Morrison and himself several years ago at Forfar north of Dundee. A single compulsorarily purchased home stood in the way of A90 road improvements. And the householder's refusal to leave led to vast expense, extensive delay, damaging publicity and - worse - serious distress to the evicted family. 'There were no winners that time - we all lost,' Smith recalls.

At Fort William, the 'third party' drivers of sludge wagons triggered another win-win outcome. Catchment needed a new pump station and NoSWA wanted screening facilities for a storm overflow - work not in the contractor's contract but to be sited across the drivers' access route to existing sludge treatment facilities.

Resite the screens into the new pump station, suggested the drivers. And, not to be upstaged, client and contractor agreed to add maintenance of the screens to the operating contract.

A major risk factor during this 25 year operational phase is plant reliability. PFI repayment is linked directly to sewage treatment and any failure to treat to prescribed standards results in zero payment to Catchment.

The prime innovation under M4I's 'project integration' label - where all sides work together to reduce whole life costs - has been to replace the contractor's traditional 12 month post completion maintenance period by a three year pain-gain share deal.

As an incentive for everyone to get the equipment right from day one, any loss of income through plant failure during the first three years of operation is born equally by Catchment and its contractor. Similarly, any saving in treatment costs above agreed figures is shared too.

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