The use of sewer rehabilitation has increased significantly since trenchless techniques were first introduced in the 1970s, with sewer rehabilitation being less disruptive and often cheaper than conventional methods of sewer repair. As the use of sewer rehabilitation has increased, so has the size of the contracts being undertaken. Previously sewer rehabilitation contracts covered only small one off repair jobs, whereas multimillion dollar contracts are now common place.

However sewer rehabilitation is a risky business. At the beginning of a sewer rehabilitation project there are many uncertainties. For example, the condition of the pipes may not be known – in some cases it may not even be known which pipes are to be included in the project. Contract strategies for sewer rehabilitation works need to recognise that these risks exist. There needs to be fair and equitable measures put in place for managing the risks.

There are only a few contractors who can undertake sewer rehabilitation works, due to the high cost needed to procure the equipment and develop the expertise needed to undertake the works. The quality of the works depends heavily on the expertise of the operators. There is only a small group of engineering consultants who have expertise in this field. Therefore strategies need to be developed to retain expertise. This can involve the introduction of longer term, larger scope contracts.

As rehabilitation techniques have become more established, client’s requirements have increased. Clients are no longer satisfied with just having pipes lined. They are seeking value for money and are striving for higher levels of customer satisfaction. The environment and safety are important and clients want to work with contractors that share their vision and values.

The challenge is how to best manage the risks inherent in a sewer rehabilitation project, whiles also producing a cost effective result for the client and ensuring that contractors receive adequate compensation to enable them to continue to invest in equipment, personnel and the development of new rehabilitation techniques.

It has been ProjectMax and North Shore City Council’s experience that the outcomes desired by clients will not be achieved if sewer rehabilitation projects are managed in the same way as standard construction contracts. It is unrealistic to expect contractors to be solely responsible for managing work dealing with risks while still achieving high level outcomes without significant input from the consultant and client. Contractors will naturally focus on production and difficult low paying works will be avoided.

Sewer rehabilitation works are more akin to maintenance activities in that the works involve working on live systems, the contractor does not have control of the site, there are normally multiple sites spread around a contract area and customer issues are an every day feature. Therefore contract strategies for sewer rehabilitation projects should be modelled on those used for maintenance term contracts. This involve longer term contracts, more collaboration between the contractor, client consultant and focusing on completing small parcels of work rather than production as a whole.

This has been borne out of experience on North Shore City Council’s sewer rehabilitation works.

North Shore City Council owns and operates a separated wastewater collection and treatment system serving a population of approximately 180,000. Increasing population growth and deterioration of the existing wastewater collection system has resulted in regular overflows of sewage during periods of wet weather. In 1998 they instigated Project CARE, an optimised citywide solution for reducing overflows and beach pollution.

The wastewater improvements have involved treatment plant upgrades, sewer amplification works, pump station upgrades, provision of wastewater storage tanks and the rehabilitation of sewers to reduce infiltration and inflow. North Shore City Council typically complete $4 - $5 million worth of wastewater investigation and rehabilitation works per year to reduce rainwater entering through defects in the sewer pipe network and the inflow due to low gully traps and illegal connections etc.

Initially the works were run as standard construction contracts with a focus on production and very little collaborative working between the parties.

Separate contracts were awarded for source detection, analysis and design and then rehabilitation works. Contracts typically covered 4 km of pipe and 400 properties. It took 2 to 3 years to complete an area as a consequence of the investigation, design and rehabilitation being carried out sequentially. Each package of source detection, design and rehabilitation works were tendered separately and there was no guarantee that a contractor who had successfully completed one area would be awarded the next area. As such it was difficult for contractors and consultants to build up expertise in their project team or to invest in new equipment and techniques.

Some of the problems encountered included:

  • Areas took a long time to complete – two to three years;
  • There was a lot of paperwork generated and there was a lot of duplication due to the works being carried out in separate stages;
  • 30-40 per cent of properties were not accessed. Customers were not happy and contractors were not able to complete the works;
  • High overall cost;
  • Contracts ran over time;
  • There was resistance from customers to repair their defective drains;
  • Difficulties were experienced with hydrostatic testing of private drainage. Access into the drains was difficult and normally only part of the drainage system could be tested. This caused delays and contract overruns.

These shortcomings were recognized and more emphasis was placed on the Council, contractor and consultant working together. This resulted in:

  • Simplified procedures being developed to gain access to properties;
  • Hydrostatic testing of private drainage being replaced by CCTV inspections. This was less intrusive and customers found the CCTV reports easier to understand. Pass/fail criteria for private drainage was developed, which has been published in the New Zealand Pipe Inspection Manual;
  • The private drainage repair process was improved. More technical assistance was provided to customers – in some cases limited financial assistance was provided to people who could not afford to repair their private drainage;
  • New rehabilitation techniques were introduced. This resulted in grouting of laterals being replaced by lining and the introduction of lining of lateral connections.

In 2005 it was decided that source detection and rehabilitation works should be combined together under single contracts. Contracts typically have a value between $1 - $2 million. The advantages obtained from the combined contracts are a reduced inconvenience to property owners with the overall rehabilitation proves expedited. Areas are now completed within 9 months. The double handling of activities, such as CCTV inspections, has been eliminated and there has been a reduction in costs.

Whilst the combining of the source detection and rehabilitation brought improvements it still has shortcomings. There is uncertainty for contractors as they have to tender for contracts generating doubt as to whether they will have continuity of work. There were also significant costs in tendering for each contract and the uncertainty brought about by the short-term contracts acted as a disincentive for contractors to develop innovative approaches.

Presently the Council is considering changing their contract strategies and use a model that combines features from construction management and alliancing type contracts. It is hoped that this model will create a partnering environment and a long term engagement. The new contract strategy is expected to be implemented in the second half of 2008.

Key features of the new contract strategy include:

  • The appointment of two contractors to undertake combined source detection and rehabilitation contracts;
  • Appointments will be for a duration of three years, possibly with a right of renewal;
  • The continuation of the present Council – consultant – contractor arrangement, with partnering arrangements being strengthened;
  • Early contractor involvement in the design, construction and commissioning;
  • Innovations will be encouraged;
  • Key performance indicators will be introduced for time, quality, cost, customer relations and innovations;
  • Contracts will be awarded based on a representative sample of work which will be priced by tenderers. The best tenderers will be selected based on price and non-price attributes;
  • Rates from the representative sample of work will be used for pricing further works. An open book approach will be used for valuing works that are not covered in this sample.

It is preferred that the works are split between two contractors rather than all of the works being awarded to one contractor, so as to maintain competition. It is expected that this will drive improved performance, efficiency and the introduction of better rehabilitation techniques.

ProjectMax and North Shore City Council’s experiences are in line with trends in the sewer rehabilitation industry towards longer term, partnering type contracts with the focus on developing sustainable relationships between the client, contract and consultants.

This article is based on a paper of the same name written by Philip McFarlane of ProjectMax and Kumar Wisumperuma of North Shore City Council. The paper was presented at the Trenchless Australasia 2008 Conference and Exhibition held in Sydney.