Perth Arena Construction Project Analysis

This assignment delves into the construction of Perth Arena, analyzing various aspects including the involvement of Aurecon for structural design, the selection of BCG Construction as the main contractor, and different procurement methods employed. It highlights the project's challenges, such as exceeding the estimated cost, and the importance of strategic asset management framework guidelines provided by the Department of Treasury and Finance. The assignment also examines human resource procurement strategies utilized by contractors like BCG.

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Case Study
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Q.1 Objectives of Perth Arena are
 To create a world class multipurpose indoor entertainment centre
 To serve as stadium for various sporting activities
 To attract international events
The Perth Arena was constructed with an objective to create an excellent multipurpose
indoor entertainment centre that could attract international level events. The arena has a
capacity of 13,910 audiences for tennis events, 15,500 audiences for concerts and 14,846 for
basketball tournaments. The aim of Perth Arena is to serve as a platform for the international
events to be conducted. Venuewest owns the arena on behalf of the state government. The
main feature of the project consists of a retractable roof that would allow the events to be
held in natural light or under the stars. The most striking features of the arena are that the
arena has a bold and imaginative design. It was the design strategy of the arena that it would
provide core multifunctional arena without any compromises on the design of the arena. The
venue has many acoustics and staging amenities that offer a flexible arrangement that makes
it suitable for a variety of events. One of the most important features of the arena is
sustainability. Perth arena has features like solar power that consist the largest photovoltaic
arrays in Western Australia. Since its incorporation, the Perth Arena has organized a number
of events that are held in the indoor stadium (Estimateone.com2018).
The stakeholders of Perth Arena include:
 Owners
 The Honourable Minister for Housing and Works
 The main decision maker of Perth Arena is the Honourable Minister.
 The office of Strategic Projects

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 The overall responsibility of the Perth Arena project was with the office of strategic
projects.
 Department of the Housing and Works
 The supervising agency of the project has the main responsibility for acting in the
behalf of the Government of Western Australia.
 Department of Treasury and Finance
 The treasury department controls all the financial transactions
 Governance
 On the behalf of the Western Australia the owners of the Perth Arena is the
VenueWest who is also considered as the CEO of the project.
Other stakeholders involve:
 Ashton Raggat McDougall, the Architectural firm. The responsibility of designing the
firm mainly lied with this firm.
 Cameron Chisolm Nicol is another architectural firm that took the responsibility for
the designing and implementation of the accessories of the project.
 AEG Ogden is the management consultants of the project. It is the responsibility of
the management consultants to take up the responsibility for completing the Project
(Estimateone.com2018).

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Q.2 The original estimate of the Perth Arena was $16 million and the cost surpassed the
estimated cost of the project and the process of construction has taken over a period of five
years. The brief stated that the infrastructure would be an architectural benchmark. The idea
behind the construction was to link indoor entertainment and sporting venues in a place
where the capacity can be approximately between 5 000 and 14 000 people.
The cost for the construction of the Perth Arena is $558 million, which is a clear jump
from what the original estimate was. The development cost per seat of the Arena was
Australian Dollar 36,267. The arena is located in Wellington Street in Perth CBD. When
compared with other projects it can be seen that the cost of Perth Arena is high and the time
taken for the construction of this Arena is too much. It was very important to compare the
cost of the structure with other similarly envisioned infrastructures like Barclays Center in
New York.
One of the major reasons for the change from the initial estimate is that there has been
a lot of shift of responsibility form one authority to another. This further makes parity in
understanding and delay in the process of completion. Because of the change in authority the
quality of the product is also ought to go through a change as one authority had envisioned
the project in one way and another authority will take it forward in a different process.
It can be seen that cost of the Arena is variable as reflected by factors like high cost of
labor, materials, planning at the beginning, excellence in the process of designing, the
intricacy of the construction and economic environment of the country at that point of time
(Humphreys 2015). There were some additional costs generated by the construction of the
project like the traffic generation this is also an external cost. The cost of operating activities
was valued at $12.005 million. Approximately $2.080 million can be anticipated to be the
cost of running the project (Venueswest.wa.gov.au 2018).

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The project city links include deterioration of the public transport infrastructure. With
the time the cost of the maintenance continued to amplify. The venue has many benefits the
net economic benefits of the arena include direct revenue that can be generated around 95.8
million US dollar was produced by the local economy. The venue also generate 2,350 jobs
and US dollar 3.1 million in the annual payroll. There were also helped in enhancing the
economic attractiveness of the region because it provided a facility for entertainment. Ever
since the incorporation, the Perth Arena region has open doors for the international tours and
concerts. In the year 2013 for the first time the Hopman Cup was held in the Perth Arena.
With the help of the review of the benefits of the Perth Arena, it can be found that the
attendance of the spectators was around 10,468 people. The benefits gained by this event
were calculated dollar 132 million in Western Australia team (Humphreys 2015).
Q.3 The stakeholder circle is used for effective monitoring the power and influence of the
stakeholders. This tool helps in determination of success as well as the failure of the project.
The reason behind the development of the tool is identification and prioritization of the main
stakeholders of the project. The main stakeholders of the Arena are
The owners of the Arena, the honourable minister for housing and works, the office of
the project strategic projects, department of housing and works, Department of Housing and
Works, Departments of Treasury and Finance and Governance.
Stakeholders
Owners- VenuesWest can be said to be the CEO of the project.
Honourable minister of housing and works- Evaluation, monitoring and control of all the
projects in the state are taken care by the ministry of housing and works.
The office of strategic projects OSP was made the in charge of the arena Project done earlier
by DHW but even this department proved itself inefficient with full indemnity.

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Department of Housing works
Even this department failed badly from the very start of the project.
Department of treasury and finance
This particular department controls all the financial transactions that were related to
the project. There was not proper monitoring of the finances. It can be said that even this
particular department failed (Estimateone.com2018).
VenuesWest takes care of the Governance on the behalf or the state of Western
Australia.
The contractors of the company are Bukeridge Group of companies. The company
that won the contract for this project cannot be blamed because it was the design that is to be
blamed for the increase in the costs of the project. AEG Ogeden was the management
consultants and they did their work very efficiently. Other stakeholders involve two
Architectural firms the Ashton Raggatt McDougall and Cameron Chisholm Nicol. Ashton
Raggat McDougall failed to carry out its responsibility in designing the project efficiently as
the main reason behind the increase of the cost was the design of the project. However,
Cameron Chisholm Nicol was successful in carry out its responsibility of implementation of
the project accessories that included seating arrangements, materials required for
administrative sections and control panels (Estimateone.com2018).
ARM and CCN were the main architects of this project. They involved Aurecon for
the provision of design services for providing a structure to the Arena. They also incorporated
facilities like vertical transport, retractable roof mechanism and fire safety systems. The main
contractors of the Perth Arena were the BCG Construction whose parent company is BCG
Pty Ltd Australia. They were made the subcontractors with the agreement of BCG the main
contractors of the project. After several transfers of the project finally BCG effectively

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managed the project. The project was successfully completed and even started to cater as a
platform for various international events including sports and cultural events. They proved to
be an effective team (Humphreys 2015).
Q.4 The strategic framework of Asset management framework of Department of Treasury
and Finance provides guidelines for procurement of capital for the various projects. The
procurement guide was designed to help the DWH for procurement of resources for the
construction of various projects. Appropriate selection of the method for procurement of
financial resources is very important. The various methods of procurement include:
 Traditional approach
 Design and Construct
 Management
 Relational (Walker 2015)
The criteria for selection of procurement of financial resources are affected by a
number of factors that include economic, social, political and social factors. Project
characteristics also play a major role in the determination of procurement criteria team
(Humphreys 2015). For example, Perth Arena because of its design incurred a large amount
of cost. Cost is another important factor that determines the selection criteria of procurement
method. The arena incurred a large amount of cost and so the method used for procurement
of cost involved taking bank loans so fulfil the requirement as per the design of the Arena
(Dtf.vic.gov.au 2018). This project exceeded the estimated cost Another, most important
factor that determines the selection criteria of the method of finance procurement is the
duration of the project. The total time taken for this project was five years. For such a long
span of time, it can be said that the procurement methods changed as per the new changes
that occurred during the five years. When the projects are extended to such a long span of

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time then there are chances that the company might have faced certain mismanagement and
unexpected costs and this contributes to the project ending up exceeding the budget for the
project (Bcg.Com2018).
Human resource Procurement
The contractors like BCG and DWH generally did the procurement of human
resources. They used both internal and external recruitment methods to hire the engineers,
labours, designers, technicians and other staffs who were involved in the construction
activities of the project.

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References
Bcg.Com. 2018. Engineering, Construction, and Infrastructure.
https://www.bcg.com/industries/engineered-products-infrastructure/engineering-construction-
infrastructure.aspx.
Dtf.vic.gov.au. 2018. Treasury And Finance - Home. . http://www.dtf.vic.gov.au/Home.
Estimateone.com. 2018. Department of Housing- Wellington Street Perth: Construction
Tender On Estimateone. https://estimateone.com/project/department-of-housing-wellington-
street-perth-.
Humphreys, Dave. "How the west was won." Australasian Leisure Management 110 (2015):
28.
Venueswest.wa.gov.au. 2018. Events Perth - Perth Arena | Venueswest.
https://www.venueswest.wa.gov.au/venues/perth-arena/.
Walker, Anthony. Project management in construction. John Wiley & Sons, 2015.