8 lessons learnt from dredging projects

There’s no shortage of hold-ups when it comes to dredging projects, with such a big industry, Australia is full of them. Ahead of Dredging and Reclamation 2014, I caught up with a few project leaders to see where mistakes have been made. Some key areas stood out that I wanted to share with you:

Mapping is key

Financial considerations are hard to overestimate in any project. Developers can often be unwilling to spend money on mapping and monitoring, instead opting for the simplest possible technique. Unfortunately, as you go down the line with this approach, there’s still some surprise when the approvals get rejected. Without the right equipment, the operation tends to go over thresholds or other similar measurements. In the field, the simplest technique doesn’t give you the answer all the time. You’ll only end up having to spend your money on fines and delays instead. Be one step ahead of the regulators and the public.

Transferring risk can end up costing big bucks

Dredging project owners are always looking to reduce their risk, trying to create contracts that transfer risk to the dredging contractor and it doesn’t work. A contractor can decide at some point that they haven’t made enough money, pick an area of AS 2124 and attack it and make a claim. If multiple contractors operate within a wharf or similar structure at the same time, this can cause access issues and lead to further claims.

There’s an illusion in the current way contracts are done that risk can be transferred from the project owner. Whilst this may save short term costs, it can lead to substantial cost and time delays down the line.

Owners still have a lack of experience in terms of practical dredging knowledge. Most teams have a procurement unit working in isolation and independently of everyone else, which leads to a single vision. Risk becomes points on a paper inside a contract that becomes transferred rather than dealt with from a practical view.

Communication is top priority

It seems obvious, but it’s still an area that leads to many issues throughout the dredging process. This is crucial both for contract relationships and to avoid delays and disputes from stakeholders.

Collaboration, partnership, and being able to see another person’s perspective is key. Building a rapport builds confidence and trust that the contract and project is being handled responsibly – work together early and often, both at the project level and more broadly.

Good planning up front and a robust assessment of baseline environmental conditions needs to be locked in. Have a very well defined project description early on and don’t change it. All of those things will help approvals, stakeholder communication and consultation.

The ‘unforeseen’ can be avoided

If you’re acting for the Principal, start thinking about the likelihood of unexpected conditions at the early feasibility stage of a project right up to when you select a tenderer. After selecting a tenderer and the Contractor is working on site, you lose much of the power to influence. Take steps to identify possible latent conditions at any early stage, before you’re confronted with them during project execution.

Latent conditions need to be managed

If a Principal is faced with a more complex project with varying soil and rock types, then it is well advised to carry out a more thorough investigation to lower the risk of not detecting a latent condition. Obviously there is a cut off; a Principal can’t investigate every cubic meter for the planned Project.

Any site investigation can only be a representation of anticipated subsurface conditions. Principals should always aim to reduce the risk to an acceptable degree. Consider Early Contractor Involvement with the scope of the planned site investigation.

Geotechnical modelling has huge potential

 

Both the Principal and the Contractor should formulate a robust 3D geotechnical model of the likely subsurface conditions. The model can determine what materials you are likely to encounter in different types and categories.

The Principal’s consultant and the Contractor’s production estimator can then calculate the derived productions fairly accurately. If a latent condition is encountered, a geotechnical model can provide the parties with a benchmark to calculate where the differences are. Be wary of interpretation – different biases can lead to issues.

Take proactive measures

A proactive way of dealing with disputes as they arise is needed. A dispute board can be selected for their knowledge and expertise before any dispute has arisen. By undertaking an on-going relationship and regular site visits, the dispute board will acquire a good working knowledge of the project. When a dispute arises, the dispute board will have a much better understanding than a court or arbitral tribunal, which will only be appointed after a dispute has arisen.

Keep learning and evolving

The fundamental of dredging is that you dig the stuff up out of the ground and put it somewhere – that hasn’t changed. What has changed is the way that you do it, and that’s driven from environmental approvals.

The management of reclamation areas has improved enormously, and understanding how to minimise the amount of turbidity or sediments that get back into the environment. That’s going to become much more important as work is done in the Great Barrier Reef Marine Park. Innovation will be dealing with the conditions and coming up with the best outcome using all of your knowledge and resources available to come up with a solution.

The Dredging and Reclamation conference has been developed as a value creation forum where knowledge, new ideas, best practice and real world learning experiences can be shared amongst other dredging professionals. Providing key case studies from leading practitioners, the conference will share insight into Australia’s most exciting dredging projects in the planning, design or development stages.

Find out more by visiting www.dredgingandreclamation.com.au or call 02 9229 1090.

Government Organisations tasked with risky business…

Times are changing for government organisations, and for many it’s going to come as quite a shock. When it comes to risk, we haven’t seen anything that’s actually required government agencies to set up a framework that really aligns to processes. The framework is aimed to fully manage risk and proactively put tools in place to mitigate any potential outcomes.

By the 1st July, under new guidelines, it’s time for organisation to progress beyond compliance.

Rod Farrar, Director of Paladin Risk Management Services has been working with organisations for years, helping them to develop and implement risk management frameworks for their business. He explained how in many organisations, if risk management is done at all, it is in a token manner and is mainly seen as a compliance exercise – it does not add value to the organisation in any way. Even with the introduction of the PGPA, there is a danger that Government Agencies will do just enough to be compliant but it’s time to start looking at the wider strategic and operational picture. If embraced fully, in the long term, there’s huge potential to achieve the national objective of doing ‘more with less’.

It’s time for change

What needs to happen between now and July 1st? According to Rod, organisations need to embrace the true benefits of ERM to achieve their full potential: “Many Government organisations are in a situation where they spend more time crisis managing than they do on risk management. If they start to see risk management as more than a compliance activity, one which is fully integrated into their other organisational programs, then huge efficiencies are to be gained.

“There are some key areas that need to change, and it has to start with a culture shift driven from within. To manage risk effectively, we need to be working in a no blame culture, where we learn from our mistakes.”

“When you have a culture that embraces open discussion around mistakes, people are more encouraged to prevent it happening again and therefore adapt new processes. There’s absolutely no capability of a risk framework succeeding if there is a blame culture.”

For many organisations, this would require a big shift in culture, with support needed from top to bottom

“Everyone is accountable for driving a positive culture, management need to lead through open communication, but all tiers need to embrace change in order to switch from re-active to pro-active. There needs to be a transition from ‘doing risk management’ to ‘managing risk.’

“I look around the public service now and government agencies have to come up with efficiency dividends. This is usually done by reducing staff numbers. If we managed risk properly, however, efficiency dividends may not be needed.

Where the benefits can be seen

It seems clear there are some real benefits to be had for the entire business when risk management is seen as more than just a compliance exercise. Rod described the knock on effect that has seen many organisations dramatically improve operations:

“Organisations are currently spending too much time managing a crisis. It’s been shown that managing crises costs more than proactively managing risk.

“What risk management will do – if it’s integrated properly with strategic and business planning, compliance, performance management and internal audit is reduce the amount of work an organisation is required to do and will significantly reduce expenditure.   “Risk management has also been shown to improve objectives, planning and relationships with stakeholders.

 “Simply relying on risk champions within your organisation to be the focus of the risk management effort will not work – the organisation as a whole needs to embrace the program within a well-structured risk management framework.”

Join the Masterclass

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