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Water special: fill your glasses

Project Alpha, an innovative PFI, is under way to supply almost half of Northern Ireland's treated water

The post-Troubles building boom is in evidence throughout Northern Ireland, from the new motorway link in the south to luxury waterfront apartments in Belfast.

While the housing and commercial sectors might be the most obvious big spenders in the region, major investment is also afoot in water and wastewater.

Years of under-investment while the region had other priorities have resulted in Northern Ireland’s major infrastructure provision lagging behind the rest of the UK, but that is changing rapidly. Last year, Northern Ireland Water - the region's sole provider of water and sewerage services and, since April, a government-owned company (GoCo) - appointed two PFI (private finance initiative) concessions to improve both water and wastewater, Project Alpha and Project Omega.

In launching Project Alpha, the organisation committed itself to the first PFI for the bulk supply of potable water in the UK. The winning concessionaire is Dalriada Water, a joint venture of Leeds-based water specialist Earth Tech, water company Kelda and contractor Farrans.

The company has the task of upgrading and operating four existing water treatment works and building new trunk mains, then supplying water from the four locations for the next 25 years. Between them the four works will supply nearly 50% of Northern Ireland’s entire clean water requirement.

Dalriada has set up a fully integrated construction and operating company, Dalriada Water Services, to finance, build and operate the works. Earth Tech and Kelda have 50/50 ownership this company.

Ian Dickinson, programme director for Dalriada, points out that this is a different way of working to traditional PFI concessionaires. "In a lot of PFIs there are conflicts between short termism and long termism - between capital expenditure and whole-life cost," he explains. "We tried to learn from that and put together a fully integrated construction and operating company."

What often happens in PFIs is that the two elements of the project - construction and operation - are divided up between the individual members of the concession company.

The concessionaire simply acts as a "postbox", passing both action and responsibility down the chain.

The theory behind the Project Alpha setup is that people are seconded from Earth Tech and Kelda to work directly for Dalriada Water Services, which has an identity of its own.

Farrans is principal subcontractor for the construction, with responsibility for design and construction of the civils elements of the four new treatment works and £20M of new pipelines. Mechanical, electrical and process contracts are procured directly by Dalriada.

The relationship between Earth Tech and Farrans goes back 10 years, during which time the two firms have built or refurbished seven water treatment works under a framework with Northern Ireland Water. By the time the four works in the PFI are complete, they will have been responsible for upgrading facilities that produce 90% of the province’s clean water.

During the bidding process, Dalriada submitted 14 variant bids that offered the client a range of alternatives with different degrees of risk to each side.

In the end Northern Ireland Water accepted two major changes to the conforming bid: a power "pass through" deal that sees the water company keeping responsibility for buying power to supply the treatment works; and the decommissioning of one of the five works that was in the original scheme (Forked Bridge) and enlarging one of the others (Castor Bay) to make up for it, then piping clean water between the two.

The client has given the concessionaire a performance output specification that leaves the choice of treatment technology up to them. "They are encouraging innovation," says Dickinson. Dalriada has opted for a process that includes dissolved air flotation and activated carbon.

Payment starts as soon as the works are ready to come on line, giving the concessionaire an incentive to finish construction as quickly as possible. Income will be based on two parameters: available capacity and volume.

"As long as we make the water available we will get paid, even if the water is not taken," explains Dickinson. "On top of that, we will get paid so much per litre. It means we don’t have full demand risk, which wouldn't have been bankable."

In addition, there is a "points-win-prizes" system of bonuses and performance deductions, including deductions for failure to meet the required standards.

"The standards are very tight," explains Dickinson. "Drinking water standards are specified at the customer's tap, but because we're not supplying to the taps, we have to give Northern Ireland Water some headroom to cope with changes in distribution. This is uncharted territory, because it's the first PFI in drinking water. We have to divide up the water quality standard between the company that treats the water and the company that supplies it."

As a result, the two organisations have agreed that the water coming out of Dalriada's works must much cleaner than required by the Water Quality Standard.

The first target for Dalriada is to complete the works as soon as possible. Civils work is already finished at the smallest of the treatment works, Ballinrees, which is set to open next April. The other three must be complete by October 2008.

The JV has adopted a partnering philosophy for the project. It has also tried to use as many companies based either in Northern Ireland or as close to Earth Tech's Yorkshire base as possible.

"The subcontract with Farrans is pretty unusual, but because of our long-term relationship there was quite a lot of trust before we started," explains Dickinson. "We use a modified NEC contract because the partnering ethos is something we're all familiar with, and there is some quite sophisticated risk sharing in that contract."

"We've put a lot of effort into getting that subcontract to work the way we wanted it to, and I think it's really been worth it," he continues. "It's a performance subcontract; we've specified the process design parameters and they design and build. It gives them the opportunity to bring their own innovation and value engineering, and they really get a lot of control over the civil engineering aspects."

Farrans is using two consultants, Jacobs Babtie and local firm McAdam Design, for the civils elements of the works. "We worked with McAdam on all the water framework jobs, when we did one or two treatment works a year," explains Farrans construction manager David Parr. "But we were concerned that they would be overloaded if they had to design all the works in this contract. We already had a relationship with Jacobs Babtie, so we divided the project between the two."

Jacobs Babtie is the designer for the treatment works at Dunore Point and Moyola, and McAdam is responsible for the other two – Ballinrees and Castor Bay – as well as all the architectural issues, planning and the environmental impact assessments for the 70km of new pipelines.

"Farrans was entirely responsible for the route of the pipeline," explains Dickinson. "From a Dalriada perspective it was a complete performance specification – we want a pipe from there to here. Farrans was able to plan it and look for the cheapest and shortest route and balance those factors off."

The contractor set itself the task of getting easements for the entire route – i.e. negotiating with landowners rather than invoking compulsory purchase rights – and achieved this within a remarkably short time.

More than 20 other members of the supply chain have been involved with the project since the bid stage, all firms that Earth Tech has dealt with before either in Britain or during the past 10 years in Northern Ireland. "That's the key to deliverability," says Dickinson. "We know the quality of their equipment and their work, which makes it easy for us to operate and maintain the works."

One of the biggest challenges onsite is safety, Northern Ireland has a far worse safety record than other parts of the UK, so Dalriada is working hard to change behaviour. A compulsory eye protection and gloves policy – backed up by a high-profile poster campaign – seems to be paying dividends, as there have so far been no eye injuries.

In all, the Project Alpha concession involves £110M of capital investment, with the civils element accounting for about half of that value.The plants

Moyola

A small, new treatment works on the north west shore of Lough Neagh that completely replaces the existing.

Sludge will be tankered to Dunore Point for processing.

Capacity will be 19M litres per day.

Construction is on stiff clay and requires 2,000m3 of concrete.
Ballinrees

Upgrading an existing works to increase capacity from 27M litres to 47M litres per day.

The catchment is from the River Bann and surrounding hills.

The existing works is only 12 years old and uses a modern method of treatment, so Dalriada is extending this and adding sludge handling and drying facilities.

Construction is on rock, andinvolves 3,000m3 of concrete.

Dunore Point

Dividing walls between the old slow sand filters have been taken out, but the outer walls left in to form a retaining wall for the new 180 M litres per day treatment works.

Exiting rapid gravity filters arebeing kept.

The treatment works is adjacent to dwellings, so care has been taken in locating the larger buildings to avoid spoiling the view of the Lough.

Construction requires 10,000m3 of concrete.
Castor Bay

A large treatment works on the south eastern side of Lough Neagh.

Some of the existing rapid gravity filters are being retained.

It will have a capacity of 147M litres per day when completed.

Construction requires 10,000m3 of concrete.

TREATMENT

Northern Ireland's frying pan shape is at the root of its water treatment issues

Much of Northern Ireland's water comes either directly or indirectly from Lough Neagh, which, with an area of 392km2, is by far the largest freshwater lake in the UK.

"Northern Ireland is like a big frying pan," explains Dickinson. "It's a huge catchment that is very shallow, with a lot of agriculture, which means that a lot of nutrients get into the Lough. It also gets very warm, because it's so shallow, which leads to a lot of algal growth," he adds.

As a result, the raw water is not very easy to treat, especially using the slow sand filter system that is the staple of two out of the four treatment works that Dalriada is working at.

"The problem at the moment is that the slow sand filters get blocked quite quickly with the algae," explains Dalriada programme manager Ian Dickinson. "During the peak algal blooms in early and late summer they have quite a challenge to keep the works going, and have to keep skimming the top layer of sand off. Although it’s done by machine, this is quite labour intensive."

Dalriada is replacing the slow sand filter process with a more complex four-stage treatment process that involves dissolved air flotation (DAF), primary filtration, granular-activated carbon absorbers and manganese contactors. It's a process that both Kelda and Earth Tech are familiar with, and is particularly well suited to dealing with the algae.

During the process, "white water" is created by dissolving air in water at high pressure. When this is introduced into the float tank (the open tank containing water to be treated) the air forms tiny bubbles that attach themselves to the solids in the water and float to the surface.

Typically, the white water is created by introducing air into water at a pressure of about 4bar, but Kelda has developed its own nozzles that achieve the same DAF pressures at just 2.5bar, resulting in significant power savings.

PROGRAMME

A holistic approach to project management

Dalriada has introduced critical chain planning on Project Alpha. This approach to project management treats the project as a whole system rather than a series of individual activities.

It has been described as avoiding the major impact of Parkinson's Law at the task level, while accounting for Murphy's Law at the project level. Parkinson's Law asserts that "work expands to fill (and often exceed) the time allowed", while the basis of Murphy's Law is that "whatever can go wrong, will".

In critical chain planning, each activity in the programme is only allocated the minimum time it should take to carry out that activity, with no contingency period. Instead, an element of time is put into a "project buffer", which can be dipped into - or added to - as the project progresses.

"Critical chain drives things to be done in the minimum time," explains Dalriada programme manager Ian Dickinson.

The JV has created one programme for each of the four treatment works that integrates the civils element of the job with M&E and process plant.

Civils contractor Farrans does not have fixed contract periods, just target dates within the overall programme.

"It's a totally integrated schedule, and everyone's sharing the project buffer," says Dickinson.

This is a new way of working for some of the subcontractors, which now find themselves having to interact with each other a bit more. Steelwork subcontractor Environmental Fabrications, for example, is making two visits to some areas of the treatment works, first to install brackets, then later to fix walkways onto those brackets. In between the two visits, pipes will be installed.

Traditionally, one of the two would have completed their work before they arrived, making access very difficult.

"Our experience with Farrans has given us a leaner way of doing things and shown us how we can be more productive at what we can do," explains the company's managing director Joe Donaldson. "We're more organised, more work is planned up front and issues are resolved before we get to site.

"With this job we're having to look closely at performance and see where the interfaces are going to be. We sat down in February and thrashed out who's got to do what," he continues. "There's a lot to do at the front end, but it does away with friction onsite."

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