Summary and commentary on
known non-compliance issues and
level of compliance with the project
brief
Gold Coast Desalination Plant
July 2009
WaterSecure
Level 2, 95 North Quay, Brisbane, Qld 4000
t: +61 7 3015 9700 f: +61 7 3015 9799
© State of Queensland 2008
Commercial In Confidence.
Unauthorised use of this document in any form whatsoever is prohibited.
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Contents
Executive Summary.......................................................................................1
Background ....................................................................................................2
Commissioning Issues..................................................................................3
Review Process..............................................................................................4
Selection of Specialists and Allocation of Disciplines ...............................5
Investigation Process....................................................................................5
Review Effectiveness ....................................................................................6
Summary of findings .....................................................................................7
1.1 Resolved issues ...................................................................................... 7
1.2 Currently being resolved.......................................................................... 8
1.3 Issues that require further investigation/monitoring to identify an
engineering solution or commercial settlement.................................................. 9
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Executive Summary
The Gold Coast Desalination Plant provided first water (reverse osmosis permeate)
in November 2008 and began supplying the Water Grid on 26 February at 33% and
reached 100% production in March. The plant was shut down for five weeks from
late April to early June to allow a number of previously announced defects to be
rectified. The plant resumed production at 33% on 5 June. So far the plant has
supplied about 4.5 billion litres of high-quality drinking water to the Water Grid.
A number of major non-compliances have been identified at the plant. These issues
do not compromise the ability of the plant to produce high-quality water but may
compromise the plant’s design life. Some of these non-compliances have been
rectified, some are in the process of being rectified, while a small number are yet to
be resolved.
Issues identified early in the plant’s commissioning with corroded pipe couplings,
leaking reverse osmosis connection pipes, landfill gas, reverse osmosis valve bolt
failure, damage to special coated bolts and dislodging cartridges have been resolved.
In light of these non-compliances, and in accordance with sound due diligence
practices of a new owner and a request by the State for a review into the cause and
resolution of the early commissioning issues, WaterSecure, through SureSmart
Water, commissioned a compliance review of the Gold Coast Desalination Plant.
The review was to investigate compliance with the Project Brief and other relevant
documents and assess the Alliance’s proposed solutions to identified problems. The
review included physical inspections of relevant components during the recent plant
shutdown.
Resolution is underway on key issues identified in the review and previously,
including corroding pipe header, corroding non-return valves, corroding ball valves
and excessive vibration in the energy recovery devices.
Issues with the permeate and potable water tanks, electric motors, diffuser head,
marine tunnel and intake and outlet shafts are yet to be resolved, as described in the
body of this summary.
It is anticipated that these non-compliances will be rectified within the approved
project budget.
Some elements of the plant constructed by the Alliance Contractor will result in extra
costs of operation above those contemplated in the Project Brief. It is WaterSecure’s
position that appropriate commercial settlement will be agreed with the Alliance
Contractor prior to issuing the final commissioning completion and accepting
handover of the plant.
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Background
In 2005, the Gold Coast City Council (GCCC) selected John Holland and Veolia
Water Australia (Alliance Contractor) to develop and potentially implement the
design, construction, commissioning and operation of a 55ML/d desalination plant.
The GCCC subsequently entered into a Project Alliance Agreement (PAA) with the
Alliance Contractor to deliver the 55ML/d plant.
As part of the South East Region Drought Security Plan, the Queensland State
Government (The State) in conjunction with GCCC requested the Alliance Contractor
to submit a proposal by May 2006 to increase the plant’s capacity to 125ML/d.
By way of an exchange of letters in August 2006, GCCC and the Alliance Contractor
agreed to vary the PAA to increase the scope to the delivery of a 125ML/d plant.
On 15 November 2006, The State registered a Special Purpose Vehicle (SPV) and
the Alliance Contractor was advised of the novation of the PAA to the new entity,
SureSmart Water (SSW), on 27 November 2006. At novation, the shareholders of
SSW were the GCCC and the State.
The State acquired the GCCC interest in the SPV on 13 June 2008 and subsequently
transferred ownership to WaterSecure on 1 October 2008 and SSW became a
subsidiary of WaterSecure, the entity responsible for manufactured water in
Queensland.
In September of 2008, the Alliance Contractor commenced commissioning. During
the commissioning process, SSW became aware of a number of defects and issues
serious enough in nature to trigger the initiation of an independent compliance
review.
Under the Water Regulation 2002, the Gold Coast Desalination Plant was required to
supply water to the SEQ Water Grid at 33% capacity on 30 November 2008 and
100% capacity on 15 January 2009.
Due to a number of commissioning issues, these regulation dates were not met.
These issues included excessive sea swell that delayed the flooding of the sea
tunnels; an electrical safety issue that necessitated a temporary shutdown of
commissioning works; and a number of defects in plant components that had come
to light during initial commissioning of the plant.
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Commissioning Issues
On 13 January 2009, the Deputy Premier and then Minister for Infrastructure and
Planning, Paul Lucas, and WaterSecure Chair David Gray, hosted a media
conference regarding the regulation dates and a number of defects uncovered at the
plant. The Deputy Premier’s media release of that date listed the following known
defects. Although not an exhaustive list the matters below were considered the key
defects at the time that prevented the plant from commencing operation in
accordance with its regulated dates:
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•
•
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Early corrosion in 45 pipe couplings
Problems with the plant’s non-return valves
Problems with the connections on the hoses connecting the reverse osmosis
pressure vessels
Excessive vibration in some parts of the plant.
In the media conference, Mr Gray stated the plant would begin production in
February at 33%, moving to 100% production in March. The plant would then shut
down some time in April for 4-5 weeks to allow these defects to be rectified.
In light of these defects, and in accordance with sound due diligence practices of a
new owner and a request by the State for a review into the cause and resolution of
the early commissioning issues, WaterSecure, through SureSmart Water,
commissioned a compliance review of the Gold Coast Desalination Plant. The
review was to investigate compliance with the Project Brief and other relevant
documents and assess the Alliance’s proposed solutions to identified problems.
The review was conducted by a team of discipline specialists on behalf of SSW and
addressed:
1. Known issues and the appropriateness of the Alliance Contractor’s solution
2. Compliance with the Project Brief.
The areas for review were broken down into various disciplines and respective
independent discipline specialists were engaged to review these specific areas.
They are:
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Marine and Tunnelling works
Environmental Compliance
Material Selection and Durability
Structural/Civil/Architectural
Electrical Installation
Instruments and Controls
Operability.
A further investigation into pulsation-induced vibration that appears to be associated
with the reverse osmosis energy recovery devices was also undertaken.
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The Materials and Durability investigation was extended to take advantage of the
planned shutdown from 27 April-5 June 2009 and provided an opportunity to
undertake closer inspection of the stainless steel pipework.
The Alliance Contractor was also invited to comment on the findings of these
investigations.
This report summarises the key findings of the independent discipline specialists’
reviews. It is now up to WaterSecure to address these issues with the Alliance
Contractor to either agree an engineering solution or an acceptable commercial
solution. WaterSecure has made it clear to the Alliance Contractor that it will not
accept handover of the plant until agreement has been reached on all key issues
identified.
Review Process
Complex engineering projects usually have operability challenges and these are
identified during commissioning and handover and routinely require rectification or
resolution prior to acceptance by the owner.
The scope of the project and technical requirements are defined in the PAA, Project
Brief (and associated changes including approved Scope Changes) and the
Durability Plan.
The compliance review has been conducted against these
requirements.
The compliance review scope encompasses targeted review of:
1. known concerns and
2. a review of compliance with the Project Brief.
The reviewers were directed to investigate and report on the suitability and
appropriateness of the Alliance Contractor’s assessment and proposed corrective
actions. The known areas of concerns were:
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•
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•
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Durability of stainless steel pipes and fittings
Failure of the glass-lined RO permeate tank
Leachate intrusion into the seawater intake shaft
Excessive vibration in pipe work systems
Durability and performance of non return valves
Cracked marine diffuser head
Cartridge filters dislodging under high flow
Cadmium Xylan coated bolt material selection
Incompatible threads on permeate hoses
Potable water tank leak
Land fill gas (including methane) release from land fill
Suitability of Destec couplings for use with seawater
Mechanical failure of bolts securing valves on the high pressure side of reverse
osmosis trains.
These known areas of concern were identified through an analysis of issues SSW
and the Alliance Contractor discussed throughout the plant’s construction, and the
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issues and defects identified through early commissioning. The motivation to conduct
the Engineering Review came about as a result of the above issues in consultation
with the State.
Selection of Specialists and Allocation of
Disciplines
Following a Request for Proposal process, eight consultants were appointed to
review and report on their area of expertise. These ‘discipline specialists’ were as
follows:
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Marine and Tunnelling works , Tenix
Environmental Compliance , Golder & Associates
Material Selection and Durability , Sussex Material Solutions
Structural/Civil/Architectural , MWH
, EDTC Services
Electrical Installation Instruments and Controls , EDTC Services
Operability , Water Industry Consultant
Vibration –
, Worley Parsons.
Each discipline specialist had the necessary expertise to undertake the relevant
reviews and was independent of the project’s design and construction.
There was allowance in the scope for a mechanical and process review function,
however, given the compressed time scale, availability issues with suitable
specialists, difficulty agreeing terms and conditions and following consultation with
SSW, it was decided not to proceed with these disciplines unless the report
subsequently indicated a need for these areas to be examined more closely.
Subsequently, it became apparent that a review of the vibration in the pipework
system by a suitably qualified mechanical engineer with process experience was
appropriate. Preliminary investigations have been completed and the specialist will
review the Alliance Contractor’s remedy to the problem once the plant is returned to
production and ensure the appropriate monitoring and measurements are performed
to establish the extent to which the Alliance Contractor’s corrective actions satisfy the
brief requirements.
Investigation Process
Desktop and site inspection reviews have been conducted to assess the level of
compliance with the documents identified in the terms of reference. Destructive, nondestructive and performance testing were not carried out as part of these
investigations but recommended actions arising from the review may result in further
testing.
Generally, site inspections were restricted to those elements that had not been built
in, buried or submerged. However, during the course of the review it was considered
prudent to inspect areas that were not readily accessible and this forms part of the
reviewers’ recommended actions.
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The review of the selected areas includes:
1. Review of the ‘for construction’ design including drawings and specifications for
technical compliance with the Project Brief
2. Review the design including drawings and specifications to ensure they include
all elements of the scope required by the Project Brief, PAA and approved scope
changes
3. Review the ‘for construction’ design risk register, Hazop reports, output for the
design safety and operability review, Hazardous area review plan and the
HACCP plan and confirm that the matters raised or recommended have been
closed out
4. Conduct visual inspections of the constructed facility where practical, review
quality records and conduct interviews as required to ascertain the level of
conformance with the approved ‘for construction’ design
5. Reconcile ALG decisions and scope changes with the Project Brief and verify this
has translated to the ‘for construction’ design
6. Review appropriateness of the Project Brief to meet its intended purpose
7. Review of the adequacy of the commissioning, acceptance testing and proving
plans including review of available results
8. Review of the suitability of the point of origin of mechanical equipment; and
9. Review of the risk report prepared by the insurance brokers and advise on
matters that require the attention of the Alliance Contractor.
Review Effectiveness
The review has generally gone well with access to site, personnel and documents
usually available. The Alliance Contractor was engaged in commissioning activities
during the review resulting in restricted access to both site and Alliance Contractor
personnel. While this added a level of difficulty to the review process, it should be
noted that the Alliance Contractor was cooperative and generous with their time and
resources, when provided.
Many documents pertinent to the review were in the process of being added to the
document control system and were still being updated during the review. This was
also the case with some of the supporting documents reviewed by the team.
Notwithstanding these impediments to conducting investigations, the review team felt
they were provided with sufficient access and documentation to undertake a
meaningful review.
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Summary of findings
The Gold Coast Desalination Plant began supplying the Water Grid on 26 February
at 33% and reached 100% production in March. So far the plant has supplied about
4.5 billion litres of high-quality drinking water to the Water Grid.
A number of major non-compliances have been identified at the plant. These issues
do not compromise the ability of the plant to produce high-quality water but may
compromise the plant’s design life. Some of these defects have been rectified, some
are in the process of being rectified, while the remainder are yet to be resolved, as
described below.
It is anticipated that the non-compliances will be rectified within the approved project
budget.
Some of the solutions proposed by the Alliance Contractor generate additional
operating costs not contemplated in the concept design for the life of the asset.
These will be the subject of further negotiation with the Alliance Contractor.
It is anticipated that the plant will be in a position to resume production at 100%
capacity in July 2009 should this be required to meet Water Grid instructions.
WaterSecure will only accept handover of the plant when it is free of major defects
or, where it is impractical to rectify a defect, a commercial settlement is in place.
The non-compliances have been grouped below in three categories:
1. Issues that have already been resolved
2. Issues that are currently being resolved
3. Issues that require further investigation/monitoring to identify an engineering
solution or commercial settlement.
1.1
Resolved issues
The following issues have been identified and resolved:
• Corroded pipe couplings
Early corrosion was detected in the rings of pipe couplings. There were 45 such
couplings that could have been affected. The corrosion was due to the use of rings
made from an unsuitable alloy. All of these couplings apart from a few associated
with the energy recovery devices were replaced with high-grade stainless steel
flanges during the planned shutdown from April 27-June 5. The remainder have now
been replaced.
• Leaking pipe work on reverse osmosis pressure vessels
Flexible pipes connecting the reverse osmosis pressure vessels were leaking due
mainly to incompatible threads on the pipe connectors. All flexible pipes have been
replaced with rigid pipes.
• Landfill gas release
Concern had been expressed about the potential for gas to be released from the
former landfill site over which the desalination plant is sited. A solution was identified
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which involved the installation of a sheet piled wall where needed around the
perimeter of the plant to restrict the ingress of methane from the disused landfill site.
The performance of the solution is deemed to be effective.
• Mechanical failure of bolts on valves on the high-pressure side of RO trains
Bolts securing one of the valves on the high-pressure side of the reverse osmosis
trains failed. Investigations found some of the bolts in the batch used for this
purpose were made of inferior steel despite being stamped ‘316 stainless’. All of
these bolts used throughout the plant (some 1600 bolts) have been replaced.
• Damage to specially coated bolts
The choice of Cadmium Xylan coated bolts was made as a value engineering
solution in preference to 316 stainless steel bolts. However, the bolts were installed
incorrectly, causing damage to the protective coating. Damaged nuts and bolts have
been replaced and washers have been fitted to resolve the problem.
• Cartridge filters dislodging under high flow
A problem emerged with the cartridge filters on the microfiltration units dislodging
under high flow. This issue has been resolved by modifying the cartridge filter
assembly.
The majority of the cost of rectifying the above issues was a project cost (ie covered
by the approved project cost estimate and borne equally by SSW and the Alliance
Contractor).
1.2
Currently being resolved
The following issues have been identified and are in the process of being resolved:
• Corroded non-return valves
Early corrosion was detected in some of the plant’s 26 non-return valves. The
corrosion was due to a manufacturing error. The supplier has accepted responsibility
for the error and has agreed to replace all 26. The valves have to be custom made
and are expected to be delivered to the plant in September 2009. Subject to them
arriving in September as anticipated, they will be replaced in a planned shutdown in
October 2009. In the meantime, the existing valves have been double coated with
epoxy to allow them to function without further corrosion and the possibility of
damage to the reverse osmosis membranes.
• High grade stainless steel piping corrosion
The original specification called for high-grade stainless steel to be used throughout
the plant. In November 2006, the Alliance Project Management Team (APMT)
endorsed a change of scope to allow a combination of high-grade super duplex 2507
stainless steel and lower-grade 2205 stainless steel to be used; the higher-grade
stainless steel was to be used in those areas most vulnerable to corrosion, with the
lower-grade steel used in less vulnerable sections. The installation of the above
combination of stainless steels had never been implemented in sea water reverse
osmosis plants before and was the subject of much discussion and debate between
SSW and the Alliance Contractor in 2006 and 2007.
In November 2008, some signs of corrosion in the stainless steel pipework had
become apparent. However, based on available evidence at the time this was not
deemed to be a systemic fault at the time. The Alliance Contractor proposed to
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install new access points in the SAF pipework to allow closer inspection of the
pipework throughout its expected life and corrosion monitoring to provide early
indication of corrosion. The shutdown in April-June allowed detailed investigations to
be undertaken to decide whether the hybrid solution was suitable.
These
investigations have shown that some early corrosion is evident and the Alliance has
agreed that the replacement of all 2205 stainless steel in contact with sea water or
brine with the high-grade 2507 stainless steel is warranted.
There will be a significant lead time in ordering the new material. Potential
improvements to the plumbing design will be investigated in this period and may be
implemented when the piping is replaced. A shutdown of approximately two to three
months will be necessary for this work to occur. The shutdown timing will depend on
the lead time for delivery of the replacement material. The plant can continue to
operate safely to meet the requirements of the Water Grid Manager with the current
pipework in place.
• Excessive vibration in energy recovery devices
Excessive vibration has been observed in piping and equipment connected to the
reverse osmosis energy recovery devices. The Alliance Contractor’s solution to this
problem was to install bracing back to the building structure, to modify the energy
recovery devices and to finetune the devices.
The original intent of the building design was a free-standing structure with plant and
equipment within and unconnected to the building walls. There was concern that
bracing the pipework to the building may compromise the wind load capability of the
building and that the vibration transmitted to the building structure may adversely
affect the durability of the cladding fixing system. The Alliance Contractor has
investigated the impact of the bracing and is satisfied that it will not adversely impact
on the building.
This re-engineering has resulted in increased satisfaction with the level of vibration.
These apparent improvements will be confirmed in a further engineering study after
the plant has been returned to full capacity.
• High-pressure ball valves
The high-pressure ball valves installed were not of the correct quality and are
therefore prone to corrosion. The Alliance Contractor has agreed to replace these
valves. The plant is able to be operated safely while these valves are being replaced.
With the exception of the non-return valve which is manufacturer issue, the cost of
rectifying these issues was a project cost.
1.3
Issues that require further investigation/monitoring to
identify an engineering solution or commercial
settlement
The following issues require further investigation or monitoring and commercial
settlement:
• Tunnel concrete specification
The Reviewers found the project brief appropriate and adequate for the purpose of
constructing and operating the tunnels and marine works and found that it was
entirely the responsibility of the Alliance to carry out relevant studies and develop
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detailed technical design, specification and operating and maintenance manuals to
comply with the specified performance criteria.
Initial investigations have revealed several significant departures from the project
brief relating to asset life expectancy, design, materials selection and quality, repair
of defects and access for maintenance and inspection.
However, further
investigations indicate that the departures from the concrete specification will not
compromise the design life of the tunnel.
Some sections of the marine tunnels were constructed using concrete inconsistent
with the project specification. It is now believed the initial specification was overspecified, and the concrete lining installed will meet the durability requirements.
The ability to drain the tunnel has not been proven and the Alliance Contractor does
not intend to do so. This matter is the subject of further negotiations with the Alliance
Contractor.
• Groundwater intrusion into intake and outlet shafts
The intake shaft is located on site at the end of the intake tunnel and seawater is
pumped from this shaft into the plant for treatment. The concrete in the shaft walls
has cracked and may be allowing groundwater into the shaft. The groundwater may
be contaminated with leachate from the adjacent landfill site. This creates two
problems:
1. It introduces a risk of damage to the reverse osmosis membranes due to the
accumulation of hydrocarbons and ammonia and
2. It provides a direct path for contaminants to the receiving environment at the
outlet diffuser.
The Alliance’s solution was to inject brine around the shaft to prevent groundwater
entering the shaft. This has created two problems:
1. The injection of brine had not been approved by the Department of Environment
and Resource Management, although the department was aware that it was
taking place and
2. The introduction of brine into the concrete will reduce durability.
SSW directed that brine injection cease until it had received formal approval from
DERM to do so. DERM has now given approval for the injection of brine as a
temporary measure. SSW position is that brine injection is only a temporary solution;
a static solution that creates an impermeable barrier around the shaft must be
implemented. This matter is the subject of further negotiations with the Alliance
Contractor. It is WaterSecure’s position that an agreed solution to this issue will be
required before handover of the plant from the Alliance Contractor will be accepted.
In the course of the review, the possibility of similar problems occurring with the
outlet shaft was raised. This matter will be thoroughly investigated. If required, the
solution developed for the intake shaft may be applied to the outlet shaft.
• Electric motor efficiencies
The project specification called for high-efficiency motors to be used throughout the
plant. High-efficiency high-pressure pumps have been used, but other non-highefficiency pumps have been used for some other applications. This will result in an
increase in the plant’s power consumption.
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Investigations have found a likely increase in annual running costs. A commercial
settlement for this extra cost will be negotiated.
• Damage to glass-lined reverse osmosis permeate tank
The reverse osmosis permeate tank was damaged during installation because the
floor panels were outside tolerance. In addition, glass on the tank walls was
damaged due to over-tightening of bolts. The tank has been given a solventless
epoxy base over the damaged steel base. The base and walls were coated with a
2mm thick poly urea coating. The tank is functioning properly. The Alliance
Contractor believes tank has been repaired to full design life. This matter is the
subject of further negotiations with the Alliance Contractor.
• Potable water tank leak
There were reports of hairline cracking of the vitreous coating during fabrication.
During commissioning, the tank panel sealing material was damaged by over
chlorination during sterilisation. Signs of corrosion have become apparent and there
may be a need for cathodic protection in the future. The sealing material has been
replaced and all bolts are being replaced. The Alliance Contractor believes the
selection of the tank was justified and it has been repaired to its full design life. This
matter is the subject of further negotiations with the Alliance Contractor.
• Cracked marine diffuser head
The marine diffuser head was damaged, probably during installation. The Alliance
Contractor has carried out repairs and the diffuser head is operating properly. There
is concern that the repairs may not be sufficient to give the diffuser head its full
design life. The Alliance Contractor believes there has been no differential
movement between head and branch pipe in first six months of its installation and
that any movement would only occur in extreme weather. This matter is the subject
of further negotiations with the Alliance Contractor.
Responsibility for the cost to rectify these issues is still to be determined. Insurance
claims are being pursued where appropriate.
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