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Project complexities driving owners to seek delivery options

Project complexities driving owners to seek delivery options

Big planner: Burnham

Big planner: Burnham

by DEXTER BACHELDER, SVP, Aconex | Feb 10, 2016 

Architect Daniel Burnham is credited with saying, “Make no little plans; they have no magic to stir men’s blood.”

If Burnham were alive today, he would be thrilled by all the awe-inspiring construction projects underway in 2016.

The world’s largest bridge, longest gas pipeline, and biggest airport all are now under construction in China, alone. Elsewhere on the planet, soaring skyscrapers, expanding metropolitan areas, and smarter, more efficient transportation corridors also are coming into view.

The rise of these megaprojects is changing how projects are delivered. Gone is the day when public entities automatically chose some variant of design-bid-build delivery for planning, procuring and completing a construction project. Instead, a growing number of public entities are recruiting private sector capital and expertise, and turning to alternative project delivery (APD) methods.

Megaprojects, Many alternatives

Alternative delivery allows greater flexibility in planning, design and construction. Depending on what is right for a particular project, approaches vary from construction manager (CM) at-risk to design-build, and design-build-finance-operate-maintain. Coupled with alternative financing methods like public-private partnerships (P3s) and joint ventures, alternative delivery is enabling ambitious projects to move forward by providing higher levels of accountability and a wider allocation of risk.

COMING NEXT WEEK! To learn more about P3s and other alternative project delivery methods, plan on attending our next #SmartWorlds special event. For more details, including speakers and ticket information, click here.

COMING NEXT WEEK! To learn more about P3s and other alternative project delivery methods, plan on attending our next #SmartWorlds special event. For more details, including speakers and ticket information, click here.

One megaproject that showcases the new P3 delivery dynamic is the $1.88 billion Regina Freeway Bypass, the largest transportation infrastructure project in the history of Canada’s Saskatchewan Province. The P3 project is made up of the Government of Saskatchewan and a joint venture consisting of four of Canada’s largest construction companies: Graham Infrastructure, LP; Parsons Canada, Ltd.; Carmacks Enterprises; and Vinci Construction Terrassement.

The decision to go with alternative financing and alternative delivery will shave approximately six years off the project timeline and 17% off the budget.
— Value for Money Assessment Report, Ernst & Young

With the goal of relieving congestion and improving safety in the capital region, the joint venture has agreed to design, build, finance, operate and maintain approximately 105 kilometers of roads and 12 new overpasses. According to an independent report, the decision to go with alternative financing and alternative delivery will shave approximately six years off the project timeline and 17% off the budget. The Value for Money Assessment Report, completed by Ernst & Young, found that “cost savings will be achieved through construction and design innovations, life-cycle optimization, risks shifted from the public to the private sector and a fixed-price project agreement.”

Overcoming Delivery Challenges

At Aconex, we’ve supported the successful delivery of hundreds of alternative delivery projects. In the hope that others may benefit from reading about the challenges our customers have overcome, we’ve collected their experiences on large infrastructure projects in a new white paperAlternative Delivery: Sharing Risk and Building Trust.

Also, watch our on-demand webinar, How Strategic Alliances and Alternative Delivery Methods Drive Project Success. Previous webinars, featuring HNTB, FluorParsons, and others, can also be viewed here.

Based in Boston and now in his 10th year with Aconex, the author is senior vice president of global business development and general manager for the Americas. Founded in Melbourne, Australia, in 2000, the firm is a global provider of project information management platforms for the construction and engineering industry. Bachelder can be reached via the Aconex blog, where this article first appeared.

 

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