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Procurement Method Report

   

Added on  2020-05-28

25 Pages6099 Words235 Views
Alliancing Procurement Method 1ALLIANCING PROCUREMENT METHODASSIGNMENT 2CRITICAL ANALYSIS REPORTSTUDENT NAMESTUDENT IDCOURSE NAMEPROFESSORUNIVERSITYCITY/STATEDATE

Alliancing Procurement Method 2Table of ContentsExecutive Summary...................................................................................................................................31.Introduction.......................................................................................................................................41.1.Purpose of the Report................................................................................................................41.2.Project Description....................................................................................................................42.Factors Affecting Choice of Construction Procurement Method...................................................72.1.Cost.............................................................................................................................................82.2.Time............................................................................................................................................82.3.Clients’ expertise and requirements.........................................................................................82.4.Project characteristics...............................................................................................................92.5.Ability to make changes............................................................................................................92.6.Risks..........................................................................................................................................102.7.Industry preference.................................................................................................................102.8.External factors........................................................................................................................103.Procurement method used in Southern Cross Station Project.....................................................103.1.Characteristics of PPP Procurement Method........................................................................113.2.Advantages of PPP Procurement Method..............................................................................123.3.Disadvantages of PPP Procurement Method.........................................................................144.Important Procurement Characteristics........................................................................................155.Potential Reasons Why PPP was Selected for Southern Cross Station Project..........................166.Popularity of PPP Procurement Method.......................................................................................177.Opinion.............................................................................................................................................188.Conclusion........................................................................................................................................19References................................................................................................................................................20

Alliancing Procurement Method 3Executive SummaryProcurement method is very important in construction industry. The procurement method used can cause project success or failure. Thus it is very important for the client to select the most suitable procurement method. The purpose of this report is to critically analyze the procurement method used in executing the Southern Cross Station project. This was a mega infrastructure development project owned by the Southern Cross Station Authority on behalf of the Victorian State Government. The project was executed using public private partnership (PPP) where the government collaborated with private parties to implement the project. Considering the characteristics and objectives of the project, PPP was not the most suitable procurement method. This method contributed to the late completion of the project due to numerous disputes and cost overruns The best method that would have been used in this project is alliancing contracting.

Alliancing Procurement Method 41.Introduction1.1.Purpose of the ReportProcurement is a very crucial process in every construction project. This is the process that determines how the project will be executed, key stakeholders and the overall efficiency of project execution. Therefore it is very important for clients to ensure that they select the most appropriate procurement method so as to complete their projects within stipulated time and budget, and to the required industry standards and quality. This report aims at analyzing differentconstruction procurement methods so as to select the best method for Southern Cross Station project. The project was executed using public private partnership (PPP) procurement method and so this report will investigate if this method was appropriate or whether there is a better procurement method for the project. 1.2.Project DescriptionSouthern Cross Station (formerly known as Spencer Street Station) is one of the mega projects that was designed to transform and improve transport infrastructure in Melbourne, Victoria, Australia. The project is located in Docklands, Melbourne, on Spencer Street between La Trobe Street and Collins Street. This station is Victoria’s civic landmark and one of the biggest infrastructure projects in Melbourne, Australia. It is the 3rd busiest railway station in Melbourne, having an average daily commuter traffic of 100,000[ CITATION Rai18 \l 1033 ]. The railway station is owned by IFM Investors and operated by AssetCo Management. IFM Investorshas signed a 30-year lease agreement with Victorian State Government to own, operate and maintain the station until 2036. The agreement is under a PPP.Southern Cross Station has different features, components and facilities. They include the transport interchange redevelopment, 16 platforms, 22 rail tracks, a retail plaza, main office

Alliancing Procurement Method 5building, residential towers, passenger information screens displaying real time train departure and arrival information, 30-bay coach station, 800-cars parking facilities, 5-minute pick up and drop off area and improved public facilities. The station is characterized by high-quality baggage-handling, ticketing and waiting services. All these facilities are equipped with state-of-the-art passenger information display, lighting and seating systems. The station is renowned for its unique architectural trapezoidal roof system that covers a whole city block of approximately 600,000 m2. The main objectives of this project were to provide practical transport experience bytransforming the existing bus terminus and railway station into a first-rate inter-modal transport facility, ease movement of passengers, improve staffs’ working environment and make Southern Cross Station a major transport and retain hub. The station serves interstate, regional and metropolitan bus and rail commuters. The target of the project was to manage 15 million passengers annually and increase this number to 45 million by 2020.Southern Cross Station project started in 2000 when the then Southern Cross Station Authority, a representative of the Victorian State Government, was mandated to oversee the procurement, financing, construction and operation of the project. In 2002, the Authority signed a Services and Development Agreement with Civic Nexus Pty Ltd, a private consortium, to design, construct and operate the station for a period of 30 years. Construction works started in 2002 and were scheduled to be completed in 2005. Nevertheless, construction works did not commence as expected due to contractual disputes, cost overruns and delays until 2006[ CITATIONMcC15 \l 1033 ]. Other partners involved in the construction of Southern Cross Station were: Grimshaw Jackson Joint Venture (architects), Leighton Contractors (builders), Delaware North Australia, Honeywell Limited, ABN AMRO and Daryl Jackson Architecture. The entire project

Alliancing Procurement Method 6was executed by Civic Nexus consortium, which contracted the other partners. The primary owner of the project is Public Transport Victoria.As stated before, this project was executed under a PPP. It was initially estimated to cost A$350 million but it is estimated to have cost A$700 million. Construction works commenced in2002 and ended in 2013. Every year, Civic Nexus is paid A$30 million for operating and maintaining the facility. This will go on until 2036 when the 30-year lease agreement expires. Southern Cross Station Redevelopment project was not completed within stipulated time and budget due to the wrong choice of procurement method.Below are some photos of the Southern Cross Station

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