Dam Safety Upgrade Program - Market Sounding

⁠⁠⁠Overview

Hunter Water Corporation is undertaking wide ranging market sounding to understand the capability, capacity and interest of the dam engineering market to support its Dam Safety Upgrade Program (DSUP). Hunter Water has not commenced a procurement process and is not seeking proposals or commitments through this market sounding.

About

The Dam Safety Upgrade Program covers two projects, delivered independently of one another: the Chichester Dam upgrade and the Grahamstown Reservoir upgrade. Each project is anticipated to be in the range of $200M to $1B. Hunter Water is considering collaborative contracting approaches for each project, including Managing Contractor / Incentivised Target Cost (MC/ITC) and Alliance models.

Whilst upgrades are most likely at this stage, alternative source options coupled with storage reductions may be preferable based on a number of factors, and there is no guarantee that projects at the dams will progress.

External approvals, including the NSW Infrastructure Investor Assurance Framework Health Check and Cabinet Expenditure Review Committee (ERC) approval, will influence the timing of procurement activities and, consequently, overall project delivery. These approval pathways need to be carefully aligned with procurement planning.

Purpose

Hunter Water is undertaking this market sounding process to formally invite interested suppliers to participate in an information sharing process, prior to a later procurement process. Hunter Water is seeking to better understand this market and how it operates, including the types of solutions available, typical delivery models, market capacity, risks and indicative cost drivers.

Hunter Water's expectation is to commence discussions with market participants and utilise this information to develop a delivery model for the works.

Objectives

Hunter Water's intention in conducting this market sounding is to achieve the following objectives:

• Provide market participants with information on options that Hunter Water is considering in regard to ongoing service delivery, including design and construction requirements, pricing model, and commercial and contract model
• Provide the market with the opportunity to comment on market capacity and interest, and on commercial, contract, governance and risk model preferences
• Gather and consider market feedback to inform procurement planning, including optimising the formal procurement process to ensure it delivers the best value outcome, and optimising the contract model to achieve Hunter Water's project objectives