Thames Tideway Tunnel

Industry Day
Building for 22nd century London

Agenda

01 02 03 04 05 06 07 08 09

Welcome
The Thames Tideway Tunnel Jim Otta

INDUSTRY day The Project

A Formal Introduction Martin Baggs History, Scope, Values and Legacy Mike Gerrard

Procurement

Overall Procurement Strategy Amar Qureshi

Development Consent Order

Route to Consent Phil Stride

Health and Safety BREAK Construction

Key Issues Roger Bailey

Transformational H&S Culture Nigel Valvona and Roger Bailey

Procurement AND DESIGN Q&A Panel

Route and Evaluation Jonathan Ferry and Malcolm Orford

Section 1:

Welcome

Jim Otta Programme Director for Thames Tideway Tunnel

Section 2:

Thames Tideway Tunnel Industry Day

...the national need for this infrastructure has been demonstrated... it has been concluded that it is the only option to address the problem of discharging unacceptable levels of untreated sewage into the River Thames... Wastewater National Policy Statement, designated on 26 March 2012

Richard Benyon

Britain has a proud history of innovative and world-leading infrastructure projects. The Thames Tideway Tunnel was given first approval by the last Labour Government, and since 2010, we have helped scrutinise and progress the coalitions plans. I have continually made clear our ongoing support for this project from the Despatch Box. It is vital that we address the long-standing problem of untreated sewage being discharged into the River Thames. The Thames Tideway Tunnel has the potential to create jobs and apprenticeships at all skills levels and to create a Thames fit for the 21st century. Gavin Shuker MP Shadow Minister for Environment, Food and Rural Affairs

Section 3:

The Project

Mike Gerrard Managing Director of Thames Tideway Tunnel

Building for 22nd century London

Respect for the Environment

A major boost for the Economy

Making London a better place

Setting a new Health & Safety benchmark

A better quality of life for people

A cleaner Thames, a growing economy and a healthier future for London

Dr Stephen Halliday

Section 4:

Procurement

Amar Qureshi Commerical Director for Thames Tideway Tunnel

Guiding principles

11

Maximising competition Resilience Our values

Core strategy

12

JEU
LOT 1 West
UP TO 500M

Packaging:
LOT 3 East
UP TO 800M

LOT 2 Central
UP TO 950M

Bidders can bid on all three lots Bidders can bid the same teams for all three lots Bidders can only win one contract (except in exceptional circumstances)

Frameworks support all 3 lots

Resilience:
Ensured by three package approach Step-in rights

Contracts:
MEICA Framework Agreement Security Framework Agreement Occupational Health Framework Agreement

 Three frameworks will support all lots; MEICA, security and occupational health Contractors will call off from these frameworks Contract will be NEC 3 Option C Target Price Contract (as amended)

Timetable

13

Main Works Contract Notice Release

JULY 2013

Main Works ITT Release (WEST)

Nov 2013

Receipt of Main Works tenders

(WEST)
APRIL 2014

Final Negotiation Results for Main Works

Feb 2015

Main Works Target Award Date

MAY 2015

APRIL 2014
Issue Contract Notice for IP

AUGUST 2014
Receipt of IP initial tenders

JAN 2015
Final negotiation and bids for IP

MAY 2015
IP Target Award Date

What is the IP?

14

 The IPTwill be a separate, regulated infrastructure provider he IP will be a separate, regulated infrastructure provider with revenue determined by Ofwat, under terms of its licence with revenue determined by Ofwat,
under terms of its licence

 An IP will be procured by TWUL, pursuant to the Water An IP will be procured by TWUL, pursuant to  the Water Industry (Specified Infrastructure Industry (Specified Infrastructure Projects) Regulations 2013
Projects) Regulations 2013

 The regulatory framework risk mitigants, including a The regulatory  framework and and risk mitigants, including a comprehensive insurance package comprehensive insurance package and a Government Support and a Government Support Package, will give Package, will give the IP characteristics similar to a regulated the IP characteristics similar to a regulated UK water company UK water company

IP management

15

 The project has a high-quality executive team, comprising specially selected appointees, experienced TWUL managers and industry experts  Substantial amount of resources will move over to the IP

The IP at a glance
Secretary of State Liaison Agreement TWUL Interface AgreementS

16

Government Support Package

IP

TWUL Licence

IP Licence NEC3 PMSA

OFWAT

Construction Contractors

PMC

Commercial Insurances Insurers

Alliance Agreement

Incentives

17

LEVEL ONE Main workS

NEC Option C contracts between IP and contractor contain target costs and 50/50 pain/gain share arrangements

Incentives

18

LEVEL TWO alliance

Consists of two parts programme and cost Programme is split into two aspects; Interface Incentives and Acceptance Incentives Cost involves the main works contractors only and incentivises meeting budgets and timely delivery of the project Designed to align contractors/TWULs incentives with IPs, to deliver project on time andon budget Flexible in response to their performance against KPIs

Incentives

19

LEVEL three IP
IP  to deliver on budget by increasing/decreasing the shareholder returns in response to cost savings/overruns Similar to Ofwats standard approach for the industry

What are we searching for?

20

World-class expertise

Continuous improvement and innovation Raising the bar on what was done before

Commitment to projects legacy

Andrew Triggs Hodge

21

Section 5:

Development Consent Order

Phil Stride Head of Thames Tideway Tunnel

Key points

23

Huge amount of work undertaken to consult with stakeholders Comprehensive Development Consent Application submitted to and accepted by the Planning Inspectorate On track for Development Consent Order to be granted in autumn 2014

Consultation phases

24

Phase one
13 Sept 2010 14 Jan 2011

Phase two
4 Nov 2011 10 Feb 2012

Section 48 Publicity
16 July 2012 5 Oct 2012

114
days of public exhibitions held

attended

200 meetings

over

LONDON BOROUGHS

14

9,400
responses received during consultation

months development

30

Application for development consent

26

Application submitted to Planning Inspectorate (PINS): 28 February 2013 Application accepted by PINS: 27 March 2013 PINS have appointed five inspectors  Rule 6 letter issued on 25 July 2013, outlining principle issues and inviting interested parties to Preliminary Meeting

Application available on PINS website www.planningportal.gov.uk

Planning milestones

27

Inspectors have Preliminary Examination Inspectors Secretaries of Inspectors have Preliminary Examination Inspectors Secretaries of 12 months Meeting will be period will close will then have State for DCLG 12 months Meeting will be period will close will then have State for DCLG from March 12 September in March 2014 three months and Defra will from March 12 September in March 2014 three months and Defra will 2013 to 2013 review 2013 to make a then make then make to review 2013 to make a submission recommendation a decision, submission recommendation a decision, to to thethe relevant by relevantexpected expected by ministers autumn 2014 ministers autumn 2014

Caroline Hampden White

28

Section 6:

Creating a transformational health and safety culture

Nigel Valvona Health, Safety, Security and Environment Manager for Thames Tideway Tunnel

Roger Bailey Head of Asset Delivery for Thames Tideway Tunnel

Health and Safety

30

31

Aims

32

Leadership

Competence

Health & Wellbeing

Safe Workplace

Engagement

Communication

Performance and improvement

33

Aims

34

Leadership

Competence

Health & Wellbeing

Safe Workplace

Engagement

Communication

Performance and improvement

Section 7:

Construction

Roger Bailey Head of Asset Delivery for Thames Tideway Tunnel

Categories of work

36

Category one
Main works: Up to 2.3 billion

Category two
Pre-Development Consent Order (DCO) Enabling Works: Up to 135 million

Category three
Post-DCO TWUL interface works: Up to 220 million

Key issues

37

Health and safety Minimise disruption to Londoners Tunnelling and shaft sinking expertise  Minimise interfaces and complexity Innovation  Marine works and marine transport

Division of category one works

Abbey Mills Pumping Station
23

38

TOWER HAMLETS CITY OF LONDON EALING

KENSINGTON & CHELSEA HAMMERSMITH & FULHAM
L he i h me

ou

ut C se

Beckton Sewage Treatment Works

24

CITY OF WESTMINSTER
14

15

22 21

NEWHAM

1 1

16

17

HOUNSLOW

22

10 10 9

13 13

Greenwich connection tunnel

18

11

12 12

19

20

RICHMOND UPON 3 THAMES

4 5 6

LAMBETH

SOUTHWARK

LEWISHAM

GREENWICH

WANDSWORTH

Frogmore connection tunnel

London clay

WEST

London Clay/Lambeth Group/Thanets

CENTRAL

EAST
Chalk

300500M

600950M

500800M

Transportation

39

 Keep disruption for London residents and on Londons roads to a minimum Commitment to moving at least 4.2 million tonnes, out of 8 million tonnes, of material by river  11 of our 24 sites are located next to the River Thames and allow for practical use of river transport

All by road 425,000

ROAD & RIVER 163,000

Marine works

40

PUTNEY EMBANKMENT FORESHORE

CREMORNE WHARF

KIRTLING STREET

ALBERT EMBANKMENT FORESHORE

BLACKFRIARS BRIDGE FORESHORE

KING EDWARD MEMORIAL PARK

cARNWATH ROAD RIVERSIDE

CHELSEA EMBANKMENT FORESHORE

HEATHWALL PUMPING STATION

VICTORIA EMBANKMENT FORESHORE

CHAMBERS WHARF

TRANSHIPMENT / RECEPTOR SITE

MAIN DRIVE SITES OTHER MARINE SITES

WEST CONTRACT CENTRAL CONTRACT

EAST CONTRACT

River transport

41

West ContrACtor
Deliver arisings from  foreshore and main drive site to transhipment site

CentrAL ContrACtor
Deliver arisings from  foreshore and main drive site to a transhipment site a transhipment site for Central and West transhipment to receptor site

eAst ContrACtor D  eliver material

from foreshore and main drive site to a receptor site

O  perate and manage D  eliver arisings from

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43

44

45

Employment and skills

46

Ethical behaviour

Direct labour and local labour

Training and apprentices

London living wage

Working conditions

Local engagement

Section 8:

Procurement and design

Jonathan Ferry Programme Procurement Manager for Thames Tideway Tunnel

Malcolm Orford Delivery Services Manager for Thames Tideway Tunnel

PQQ selection process

48

Intending to shortlist: Five tenderers for West and East Four tenderers for Central

Recommend express interest and submit PQQ for all three, as significant commonality across packages keeps options open

Once results known, all successful parties will be notified and asked to formally confirm their commitment to tender

If a lot is declined a reserve will be invited to tender

PQQ selection process

49

Bravo
Used for PQQ and ITT

Financial questions
Failing the threshold will require a submission of further information

Conflicts of interest Declare or beware

if in doubt use Bravo

Experience references
Used to validate further information

Bid cost reimbursement

In the event of procurement failure only

Exclusivity
Scarce/specialist resources

PQQ selection process

50

Win One Only Rule

This rule applies to all Relevant Organisations, not just JVs

Exceptional circumstances

ITT variants

51

OJEU Contract Notice box ticked

Minor only ITT will stipulate

Not seeking design based variants

Not seeking bundling variants e.g. West and Central

ITT sequencing

52

Tender Period WEST ITT Nov 2013 EAST ITT Jan 2014 CENTRAL ITT Apr 2014

IP & Main Works Award

Bid Evaluate IP Appointed

OCI 120 days

ITT

53

All confirmed tenderers on all packages will receive full ITT West documentation Addenda DCO updates Cascaded wrap-in of frameworks

Win One Only rule

54

RANK

west

CENTRAL

EAST

1 2 3 4 5

A B C D E

A B C D

A B C D E

Heads of ITT terms

55

NEC Option C target price

50/50 pain/gain

Limitation of liability 100 million or 25% of totP

Fee capped at totP (target)

Up to 10% of fee at risk around delivering contracted deliverables

5% reports/submissions 5% contracted commitments

ITT criteria 70/30

56

Technical 70 marks aligned with value streams

Leadership, management team quality, structure and behaviours (including Behavioural Assessment) Outline plans; execution, design management, H&S, quality, environmental Methodological proposals for contract specifics Supply chain proposals Output based approach to: Community relations H&S Legacy Innovation proposals Incentivisation cascade

ITT criteria 70/30

57

ITT Criteria 70/30

Commercial 30 marks
30 marks based on a notional price model, fee sensitive Scoring relative to lowest notional price

Qualifications
Looking for clean bids Market acceptable Homogeneous across all three contracts Any qualifications may result in non-compliance or accounted for within the commercial model

ITT design responsibilities overview

58

The IP will be the employer

IP

Responsible for employers design requirements and integration of design across contracts

Contractors
CAT 1 West CAT 1 Central CAT 1 East
Detailed design of works including local hydraulics and coordinating with other contractors

ITT employers responsibility

59

Employer will retain certain system design responsibilities

Design flows

Volume, diameter and gradient of main tunnel system

Integration of designs to ensure compliance with the operating techniques

ITT contractors design responsibility

60

Contractor is responsible for all detailed design of the works within each geography

Developing employers reference design in accordance with works information

Detailed design of all local hydraulics at interceptions and drop structures

Working across contracts to ensure standardisation of MEICA and access arrangements

Discharge Development Consent requirements including approvals from local authorities and stakeholders

61

ITT design and delivery overview

62

Need to raise the health and safety bar by minimising risks through design  ust achieve DCO requirements, environmental M requirements and high stakeholder expectations Innovation through means, methods and materials Logistics and site management 

Hot start ITT briefings

63

Joint
Scope Engineering Legacy HSSE Commercial/Legal DCO/Consents Site visits

Individual
Commercially confidential one-to-ones

ITT tender award and the IP

64

A declared process which will be followed

IP process will not be allowed to influence or change

Bid costs

65

Reimbursement 50%

Eligible costs

Qualifying bidders

Relevant event

Outcomes

66

World-class partners to help achieve objectives

Three deliverable propositions that represent value for money

Best practice PLUS

Chas Newens and Dominic Coughlin

67

Section 9:

Q&A Panel