Better value transport
Transport infrastructure in Sydney costs more than it should.
Committee for Sydney has released a report that considers why this is so, and what the NSW Government can do to reduce the excessive costs.
The report’s findings and recommendations are equally applicable to other states and territories, and other forms of public infrastructure.
Infralegal is pleased to have contributed, alongside the Committee’s members, to the development of this important report.
The report puts the primary cost drivers into three buckets:
how we decide what to build;
how we design and specify that infrastructure; and
how we buy the goods and services needed to build and operate the infrastructure.
It also considers strategies to increase the capacity and productivity of the infrastructure delivery sector.
The report’s recommendations on how to buy transport infrastructure reflect views previously expressed by Infralegal, including:
moving away from competitively tendered fixed price contracts as the default mechanism for delivering complex transport projects that integrate multiple systems, and instead adopting contracting approaches that are designed to encourage and reward collaboration between the different system providers;
adopting contracting techniques that move further along the collaborative contracting spectrum than an incentivised target cost model;
using multi-party agreements to share project risks among project participants, rather than two-party contracts that transfer specific risks and responsibilities to particular participants, to encourage collaborative problem solving instead of the ‘blame game’;
using longer term contractual arrangements to encourage the supply chain to invest in initiatives that will improve value for project owners over the longer term, and provide a legitimate basis on which work can be allocated to supply chain members without the constant need for expensive and wasteful price-based bidding competitions;
ensuring contracting strategies are developed by experienced practitioners;
engaging with the market in a way that encourages meaningful contributions to the contracting strategy, project scope and specifications, risk management strategies and innovation
greater disclosure of project business cases;
using business cases to inform the contracting strategy and contractual incentives;
greater use of standardised (and simplified) contract forms; and
using dispute avoidance boards on all high value or high risk projects.
