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1. PROJECT DEFINITION
1.1.
Background and project stakeholders
During the 1960’s, there were plans to eventually create a large road throughout
the current section of land to be known as the F35 Freeway, the land was therefore
untouched in the resulting 40 years to enable the road to be built.
In October 1999, the Bracks’ led government announced that the plans to create
the roadway had been scrapped in favour of the Rowville railway line being lengthened.
However, in August 2000, the same government performed a “U-turn” and announced
that they would be seeking federal funding for the commencement of the roadway as they
believed it would be of national importance to the roads systems.
Leading up to the EastLink project, there was a decision to create the largest
urban road project ever constructed in Victoria which would help link the Eastern
Freeway in Mitcham to the Frankston Freeway in the South-East of Victoria. This would
include 39km of tolled motorways and 6km of bypass roads at Dandenong and Ringwood
which would help alleviate the number of vehicles travelling on Springvale Road, Park
Road, Doncaster Road and Reynolds Road. The project would help connect Victoria with
other major arterials as the current numbers of vehicles is rising and travel time is
lowering year by year. This allows for more options for those travelling along the
EastLink corridor.
In 2003, the Victorian Government established the Southern and Eastern
Integrated Transport Authority (SEITA) to help manage and complete the EastLink
project. SEITA had to hear the private sector bids and select the option that they felt was
the best going forward.
The contract to fund, design, build and operate EastLink was chosen in October
of 2004 and was awarded to ConnectEast for a period of 39 years. Stakeholders of the
Eastlink project includes:
-
Victorian Government (in particular, Vic Roads, Department of Planning,
Department of Treasury and Finance, Department of Transport, Department
of Environment and Water, etc.);
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-
Local residents and business owners;
-
Communities in the east and south-east of Melbourne;
-
Special interest groups (includes environment groups, transport industry
stakeholders and aboriginal communities);
-
Motorists (commuters whom will be affected);
-
Finance companies;
-
Contractors and Subcontractors;
-
Eastlink operators.
By identifying the stakeholders, it helps determine the best way or ways to
manage their expectations. Every stakeholder, regardless of his level, wants or expects
something from the project or its outcome. You can use this to your advantage, for
example, during a project proposal meeting. The more thoroughly you address
stakeholder interests in defining project objectives, working methods, planning and
problem-solving, the better chance you have of getting your project approved.
Selected by the government agency, SEITA, ConnectEast became the most
viable as to further move on with the project as they won the bid war against Transurban
(operating CityLink).
The East Link project was introduced as a solution for the increasingly heavy
traffic on Melbourne’s north-east suburbs. It was expected to improve the relationship
between the road and its users, including many groups: population of nearby areas, big
companies that use roads to flow their production, as well as supply a range of retail
chains, supermarkets, and other stores.
The stakeholder management during the construction stage was considered a
success by the leaders of the project, the holding Thiess Jonh Holland. It was based on
the early communication with all stakeholders, running community forums to introduce
the project, as well as update information about them.
The main interest of all stakeholders was the new, modern, fully electronic and
free-flow toll road that was being developed, and its benefits. For locals, especially those
who had to make the way to Melbourne CBD daily, the East Link was a synonym for free
traffic. Population of nearby suburbs was continuously increasing, and the small streets
in those areas were no longer supporting the heavy traffic.
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In addition, the rail system was continuously failing in its mission to carry people
from outer suburbs to the city centre. Accidents were causing disruptions on the network,
many of them caused by the ground-level intersections between suburban streets and
railway tracks. This fact was leading to the increase of traffic in eastern suburbs, and the
other consequent issues.
Furthermore, the easier and faster connection to the CBD brought a significantly
economic development to East Link surround suburbs. Living close to a modern tollway
is considered as a big advantage. New projects were released and built, making people’s
lives better. The cost of living in those areas has also increased, making properties become
more valuable than before.
For companies, the fully traffic-free road allowed them to spend less time in their
delivery services, being important to improve the quality of their products and services.
As a consequence, those companies could reduce their loss rates, increasing their profits.
Meanwhile, heavy trucks no longer had to go through small streets in the suburbs,
contributing to the improvement of liveability in those areas.
However, locals were concerned about some possible drawbacks within the
project, despite of the main benefits previously mentioned. The road was expected to
bring a higher level of noise for nearby areas, as well as an increase on pollution rates.
Furthermore, some people do not have to go to the CBD every day, and prefer to walk,
or ride a bike between nearby areas. How would a project, developed for the heavy traffic,
include those people?
East Link project’s developers were also concerned about those issues, and
proposed some solutions, which were accepted by population. As a part of that, a
pedestrian and cyclist track was built throughout the road. In addition, panels were
installed on the edges of the road, in order to contain the spread of noise, and trees were
planted to compensate the higher pollution levels.
1.2.
Goals and objectives
The goals and objectives of the EastLink project cover five major areas:
transport, environment, land use, implementation and providing a financially feasible
solution.
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The transportation goal includes the connection of Eastern, Monash, Frankston
and Peninsula Link freeways, in order to improve transit mobility in the EastLink
corridor. This connection was expected to allow the increase in transit accessibility,
improving the quality of transit service and maximizing EastLink ridership.
Meanwhile, the environmental goal concerns about the preservation of
environmental quality in the corridor. It means that the goal is minimizing potential
adverse operating and construction impacts on the natural and built environment.
Consequently, a special attention was given to Mullum Mullum Valley in order to
minimize the impacts of the construction there.
The land use goal aims to support regional and local land use goals and
objectives. In addition, the implementation goal aims to minimize risk in the corridor. It
was designed a system to reduce the construction risk. Thus, key safety strategies were
implemented in the concept phase since the handover phase to achieve this goal. In
addition, building relationships and support over time with the stakeholders and
community through communication strategies were very important to avoid risks.
Therefore, all the actions should be financially reasonable, allowing their
application. Building a system within project budget with quality and rapid completion.
In addition, building a system that is cost effective and rapid completion and it can be
operated and maintained within available revenue.
The decision to proceed with the East Link project came amid much controversy
about the project. One of the major concerns was its environmental impact, especially
that it comprises two 1.6 km tunnels, running under the environmentally sensitive Mullum
Mullum Valley. So, one of the project goals is to preserve any environmentally sensitive
areas and minimise any negative environmental impact.
The project must deliver social and environmental improvements to the area in
which it operates, where 1.1 million residents lived in the Mitcham-Frankston corridor.
Although the EastLink conveyed economic benefits beyond the region in which it
operates, to the wider Victorian economy. Direct economic benefits of the project were
realised through the creation of 7550 additional jobs.
The project was forecasted to provide the safe and smooth travelling for vehicles,
alleviating traffic congestion and hence providing the benefits of reduced vehicle
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operating costs, reduced accidents, fuel saving and reduced carbon dioxide emissions.
ConnectEast has a continual obligation during the concession period to ensure that the
project is fulfilling its initial intended goals.
Many special resources were required for the execution of the project. They
included the excavation of the tunnel under Mullum Mullum Valley, which required
attention to the archaeological heritage in the area. Also, 450,000 meters cubic of rocks
were excavated, using modern technologies of rockhammers and blast techniques.
Furthermore, the East Link project has a set a new record for consumption of
asphalt – during its peak, more than 4,000 tonnes were used per day. A facility was opened
in the LaTrobe Valley in order to supply more than 22,000 primary items required by the
construction. They included roughly 1,650 bridge beams, 4,630 barriers and more than
15,000 noise walls.
1.3.
Assumptions of the project
According to Office of the Chief Information Officer, a project to be successful
needs to have assumptions which are circumstances and events that occurs which are out
of total control of the project team. Assumptions are considered true even if no proofs are
available for demonstrate that. Every project has its constraints which might restrict or
limit it and it is outside of control of the project team.
A project assumption is believed to be true by historical data or experience of
the people involved in it. Furthermore, it may not have empirical evidence. These
assumptions are considered potential risks so it is important that the communication
between the interested participants be clear, documented and validated.
A project may be very impacted by assumptions which are proved incorrect. It
is important that all participants agree with the assumptions before the project begins.
Generally, those parts are composing by stakeholders, project participants and executives.
If the assumptions are accorded before the project begins it is more likely to detect some
incorrect one which can avoid its impact on the project.
Assuming that all projects have constraints, it is important that these limitations
are detected and defined. If the project manager knows its limitations, its parameters such
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as deadlines, funding, skill levels and resource availability may be better developed in the
project plan.
Risk analysis normally uses assumptions and constraints as starting point.
Therefore, taking all the knowledge possible before the project begins may have a positive
impact to the project and prevent it to possible negative impacts.
According to Office of the Chief Information Officer, a good and clear to
describe project assumptions is list them based on the current knowledge of the current
day. For instance, this list can contain assumptions related to technology, resources,
scope, expectations or schedules. It is interesting to give more consideration to cost,
timing and people around the project. In addition, it is important to considerate that the
initial phase there is a lot of undetermined aspects which means that the assumptions are
the first step to clarify some unknown aspects of the project. In this case, for the East
Link, there were made many assumptions in order to develop a successful project. One
of which is the timeframe that it was completed in, it was said that the project completed
5 months ahead of schedule. The project was commenced on October 2004 and was
completed on June 2009. This proved that the communications between the stakeholders
and the time management of the contractors Thiess John Holland, were effective and
successful. Another assumption that possibly was made was of cost of the project.
According to DTF (Department of Treasury and Finance), the project was delivered on
budget of $2.5 billion, this provides proof of effective planning by TJH.
Another important assumption is of the environmental impact that may occur
when commencing the project. According to Eastlink builders, the road will relieve
congestion throughout Melbourne’s eastern and south-eastern suburbs, resulting in more
efficient traffic flow, therefore reducing fuel consumption and exhaust output. However,
during the planning phase there was a huge debate regarding the damage to the Mullum
Mullum Valley. Despite this the option selected proved to be the second-to-most
environmentally friendly, the two 1.6 km tunnels.
Other assumptions were also made, this includes the 35 km of bicycle and
pedestrian paths, the 88 bridges, the 45 km of new freeways and 17 interchanges.
Additionally, the purpose of this construction is to create an efficient flow of traffic,
reducing time travelled and creating job opportunities to better the economy.
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1.4.
Resources, services and risks
There were certain things outside the project scope that required special
addressing.
The
first
one
is
the
Relocation
of
existing
utilities.
Over 850 pre-existing services had to be relocated along the 39km strip of roadway. The
construction process in certain areas could not be initiated until the relocation of these
services was complete. These utility services included major metropolitan water mains,
gas mains, powerlines, telephone lines and cables. (DJ&HH 2009)
Secondly, East Link developers were also concerned about Archaeological and
Heritage Excavation stage. Since the Eastlink project was built over one of the biggest
archaeological sites discovered in Victorian history, which involved the local aboriginal
communities. This was not uncovered in the project development phases and was only
discovered during the pre-construction site surface testing.
Because of this the close and careful observation of construction activities was
required in order to keep and preserve the archaeological endeavour. This has led to the
diversion of hundreds of trucks moving per day away from the archaeological trench via
a carefully constructed chicane. Earthworks also was completed on either side of the
trench, construction crews were repositioned to other areas, and a toll gantry and shelter
were also relocated. (Eastlink 2016) (DJ&HH 2009)
Thirdly, there was a special concern about the large amount of water required by
some stages of the project. The use of recycled water came as a solution for that issue.
The water used on the construction site was acquired from the projects 250 sedimentation
ponds. Because of drought circumstances at the time, recycled water was obtained from
the treatment plant at the Mullum Mullum Valley tunnels and from the Melbourne Water
Eastern Treatment Plant for the southern area of the project. (DJ&HH 2009)
Furthermore, many risks were related to the construction of the Eastlink. Many
environmental groups in Melbourne's east and south-east objected to the project. This is
for a number of factors, including vehicle emissions and disruption of habitat in some
places such as the Mullum Mullum Valley and Dandenong Valley Wetlands. The
statement predicted that there will be 18.5 per cent increase in carbon dioxide, impacts
on groundwater and wetlands, high impacts on areas of conservation value and the
potential to affect 38 species of rare or threatened fauna and flora if the freeway was built.
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Construction of Eastlink would result in unacceptable environmental
impact. The types of impact would be soil erosion, vegetation loss and disruption to plant
and animal communities and consequent fragmentation of habitat. It allowed the
destruction of trees and associated habitat along the full length of the proposed Eastlink
route. The other specific concerns was the impact on Aboriginal and European heritage.
The construction of the Eastlink power line will necessitate the use of heavy
machinery and access to pylon sites about every 400-500 metres along the entire length
of the line. In some places it would be impossible to fully rehabilitate the land. Once the
soil was disrupted, a scar would be there forever. This transmission line would cross
farming land that is subject to high erosion from water.
Particular concern was about the potential for soil erosion following the
excavation of pylon sites and creation of access roads. Soil erosion affects not only the
immediate construction sites but has the potential to affect the water quality of the river
systems through siltation and increased flow of nutrients from fallen trees.
Construction of Eastlink project caused the destruction of many hundreds of
trees along the power line casement. Though government legislate to ensure tree
preservation and provide funding for tree replanting, yet allow large scale destruction of
trees by power authorities. Clearing of trees, could lead to soil erosion and increased
stream siltation, and which will have an impact on biodiversity, animal habitats, weed
invasion, and reduction in environmental integrity.
The consequences of tree clearing along the power line route will be
fragmentation of habitat. There was a concern at the prospect of extensive damage to
vegetation and wildlife habitat, at a time when every effort was being made to reduce
habitat loss and thereby species loss'.
Various submissions expressed the view that the creation of a bare corridor
through native vegetation, and revegetated farmlands would have a negative impact on
wildlife, particularly tree dwelling mammals such as koalas, possums and gliders, and
birds such as the Red Goshawk, Squatter Pigeon and Glossy Black Cockatoo.
These submissions pointed out that habitat for such wildlife is already
fragmented and any further breakup of the integrity of the areas in which they live could
threaten their viability. The easement created by Eastlink would result in a continuous
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north south barrier to the movement of tree dwelling animals, especially in areas where
trees are already scarce.
Part of the area through which Eastlink would pass was of significant Aboriginal
heritage. The area was used as a camp by Aboriginal people and many of the trees bear
marks of Aboriginals removing bark. There is also an Aboriginal camp site and a site of
rock quarrying. For the towers and cables of Eastlink to be in close proximity to this site
would destroy much of its significance and atmosphere’.
The New England and Toowoomba regions have been settled for many years
and some properties have been in the hands of the one family for three or more
generations. Owners of these properties felt a strong pride in their family heritage and
expressed a strong desire that their property should remain in the ownership of their
family for many more generations. They felt that the imposition of Eastlink has threatened
future heritage: that younger generations would not want to live on a property which had
traversing through it a high voltage power line for health reasons, for aesthetic reasons
and for reasons of privacy.
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2. PROJECT DELIVERY SYSTEM
The type of delivery system used for the East Link was a Public Private
Partnership. A Public Private Partnership system is a government service venture that is
funded and operated through a partnership of government and one or more private sector
companies, in this case, the Victorian Government and Connect East. In a world-first for
a project of this type, the concessionaire has committed to a range of key performance
indicators that ensured a level of service delivery for the users.
A Public Private Partnership system would be beneficial for this type of project
as all the risks that are associated with the cost, performance and design would be headed
by the Special Purpose Vehicle (SPV), which in this case would be ConnectEast. The
Public Private Partnership system allows incentivising the private sector to deliver
projects on time and within budget which was reflected by EastLink coming in under
budget and being completed 5 months before the estimated completion date. By clearly
outlining present and future costs of infrastructure projects throughout the lifetime, the
budget can be expressed very specifically and can often be met with ease in a Public
Private Partnership delivery system. Public Private Partnership delivery systems also help
deliver better value for money and help create productive working relationships between
the public and private sectors.
Public private partnership (PPP), was introduced as a tool to overcome the
governments’ budget shortcoming to deliver public infrastructure. PPP places the
financial burden and most of the risk liability is transferred to a special purpose vehicle
(SPV) that is formed as a single purpose entity for the procurement of a project.
Also, public private partnership contracts’ strategies follow a pattern that emphasises
three common policy objectives: achieving a specific toll rate, managing congestion, and
minimising
state
subsidy/maximising
revenue
(Gross,
2010).
Eastlink serves as a prominent paradigm for successful public-private partnerships.
Much effort and research has been invested in understanding the contractual and
functional framework of public-private partnerships. In a capitalised economy and liberal
democracy such as Australia, the partnership is implemented through the market
exchange system (privatisation), where the production and consumption are decided by
the private market (Estache & Philippe, 2012). For the procurement of the Eastlink
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project, Linking Melbourne Authority and Department of Transport contracted with
ConnectEast, a single purpose entity dedicated to the successful delivery of Eastlink.
ConnectEast was the successful bidder, and hence, on 14 October 2004, it was awarded
the 39-year concession to finance, design, construct, commission, toll, operate, deliver
customer services, maintain, repair and ultimately hand over EastLink to the State at the
end of the concession period.
This system offers efficiency and convenience as the production process is
controlled by the private sector, risk is shifted from the the government to the private
partner, and the private partner is given the incentive to perform at its optimum as they
are allowed to reap the profits of the infrastructure for the period of the contract.
The EastLink Project is one of the largest PPP projects under the Partnerships
Victoria Policy. ConnectEast was a consortium of Macquarie Bank, Thiess John Holland
(TJH), and ConnectEast who put their strengths and skills together (Alam, et al., 2014).
TJH was contracted by ConnectEast to design and construct EastLink. TJH is a major
construction company and has constructed numerous major road projects in Australia.
The Southern and Eastern
Integrated Transport
Authority (SEITA)
(SEITA)
Victorian Government
Victorian
Government
(SEITA)
Independent Reviewer
(IR)
Theiss John
Holland (TJH)
Connect East
Macquaire Bank
Figure 1 – Contractual relationship flowchart
The above flowchart in Figure 1, illustrates and simplifies the contractual
relationships established for the procurement of EastLink Project. In 2003, the Victorian
government established the Southern and Eastern Integrated Transport Authority
(SEITA), to act on behalf of the government to oversee and manage the EastLink Project.
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Hence, SEITA managed the selection process of the private sector bids and currently
manages the state’s ongoing interest in the project (Johnson & Humffray, 2010).
The public private partnership (PPP) contract created for East Link was unique
compared to the other contracts created in the other states of Australia. In this contract
there was a provision for an independent reviewer (IR) who acted as a verifier, and had
direct contractual relationship with the state and Connect East, but had no contractual
obligation with the construction and design company (Thiess and John Holland). Its main
objective is to review the work and certify it when it is performed in accordance with the
specifications of the contract.
Another feature of the contract that made it unique, is that the East Link
Concession deed outlined clearly a series of key performance indicators (KPIs), that
ensured a certain level of service delivery during the entire concession period (Alam, et
al., 2014).
Even though it is a member of the Connect East partnership, Thiess and Jonh
Holland company awarded the Design and Construction (D&C) contract in a separated
process. Meanwhile, Macquaire Bank acted as a financial supporter of the project,
controlling funds in order to ensure the construction would be always on budget.
2.1.
Development process
East Link’s development process included various stages: initiation,
development, construction and handover. For the initiation phase is necessary that some
points would be evaluated such as identifying the problem, identifying stakeholders, team
member, feasibility studying and defining goals and objectives for the project.
In order to identify the problem, the magazine EastLink: Melbourne’s motorway
masterpiece states that Aleksic, previously with the State Government’s road agency
VicRoads, studied the traffic in the late 1990s and concluded that there was a demand for
a north-south highway to the east of the city. However, only in 2002 the government
decided to combine the Eastern Freeway Extension and Scoresby Freeway projects.
After a clearly identifying what the problem is and the physical circumstances
that exist, the government worked through possible solutions and selected team members.
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Thus, in 2003, the Southern and Eastern Integrated Transport Authority was established
to manage the EastLink Project on behalf of the Victorian Government. They managed
the selection of the private sector bids which ConnectEast was awarded the contract to
fund, design, build, own and operate EastLink for a period of 39 years. Then, the Connect
East contracted Thiess John Holland to design and construct EastLink (Southern and
Eastern Integrated Transport Authority, 2008). Beside the government and private sector,
local residents, motorists, business owner and community were stakeholders involved in
the project.
Other important feature in the early stages of the EastLink was a feasibility
study. The linking Melbourne authority presentation to the assessment committee
information session (2003) presented some diagrams and possibly environmental risks
and impacts which were identified in areas such as flora and fauna, vibration, historical
heritage, groundwater, contamination, air, noise and surface water. This was important to
avoid future financial risks.
Finally, the circumstances that led to the project, the identification of the
stakeholders, the selection of team members and the feasibility study were major features
in this initial phase to define the goals and objectives of the project which were previously
listed.
For development phase, there are some important procedures in order to have a
strong project.
The stages are designing process, risk management planning and
preparing work breakdown structure.
The first stage is designing process. At this moment happens the process
drawings and a specification on which construction will be carried out were developed.
In the article EastLink: redefining the possible (Johnson and Humffray, 2009),
the author presents that before a drawing was issued for construction, an in-house design
management team was assembled to oversee all designs, plans and drawings issued by
five civil works design consultants. The design was broken up into a series of elements
such as bridges, road geometry, landscaping, noise walls and mounds and conduits. In
addition, the InCite document tracking system was used.
For an effective project it is important to have clear procurement and contracts.
A project-specific Enterprise Agreement with unions like Australian Worker’s Union, the
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Construction, Forestry, Mining and Energy Union, the Electrical Trades Union, the
Australian Manufacturing Workers Union and Thiess John Holland, allowed a number of
pioneering measures in terms of workplace flexibility.
The Risk management plan needs to be done. For the Eastlink project, Thiess
John Holland was responsible for all risks excluding a couple of carve-outs where risk
was shared with the State, and on a fixed time, fixed cost basis.
According to Johnson and Humffray (2009), Thiess John Holland in order to
coordinate a large and complex project divided the project into six key regions: Mitcham,
Ringwood, Knox, Monash, Dandenong and Frankston. Each region included a regional
office with locally-based management and project teams covering key aspects such as
safety, environment, quality, community and traffic. These regions were supported by a
global project team based in Mount Waverley, which included senior management,
human resources, planning and design.
Within the construction process, according to Johnson and Humffray (2009),
there were more than 850 services, mostly involving major metropolitan water mains, gas
mains, powerlines, telephone lines and cables were relocated along the 39km motorway.
In most cases construction work could not begin until utility relocation was completed.
Following it is listed some of activities which were done for Thiess John Holland
in the construction phase and were done in the design and development phase:
- Ringwood rail bridge slide
- Precast concrete tunnel inverts
- Tanked tunnel with low water ingress requirements
- Precast concrete piers and bridge cross-heads
- Twin, three-lane, 1.6km tunnels under the Mullum Mullum Valley
- 103 structures, including 88 bridges
To keep the project on track at all times a number of programming initiatives
were implemented (Johnson and Humffray, 2009), including:
-
Regions receiving monthly development and supply of programs by the
teams of project.
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-
Reports summarizing monthly the tracks in critical paths or works and
quantifying gain or delay or anything important that can lead to changes to
the program.
-
In order to ensure no completion obligation, contractual completion
obligations were documented and tracked day by day in the last year of the
project.
-
To improve the knowledge work teams about the relevance of activities, a
time chain chart programming occurred to allow the appliance of programs
-
Graphical representation was provided by schematic completion diagrams or
programs.
-
Photographs were taken of all important works on site more than two times
per week to document the progress at that moment. This type of photograph
was called ‘Myth-buster’
Eastlink was delivered on budget and construction completed 5 months ahead of
schedule. The construction cost was $ 2.5 billion and it was opened to traffic on 29 June
2008.
According to the magazine EastLink: Melbourne’s motorway masterpiece the
ConnectEast’s managing director, John Gardiner, said ConnectEast is proud of the high
quality finish and urban design of the motorway. In addition, the community response to
East Link has been extremely positive, with the vast majority of neighbours happy,
commuting times reduced, and local industry has been especially pleased at time and cost
savings realized on deliveries and distribution from the first weeks of its operation.
2.2.
Contracts and tender process
According to Zhang (2016) there are some steps to define a contract. Firstly, it
is needed to have intention to make a legal relationship between the participants. A
valuable consideration is important and a reciprocity in terms of offer and acceptance. In
addition, the contract must create legal obligations for each part.
Zhang (2016) still points that there are some contracts called by the nature of
remuneration which are fixed price contract and cost- plus contract.
At
type, there are two subdivisions which are Lump Sum and Schedule of rates.
the
first
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In lump sum cases, all the works are done by the contractor for a quantity
amount of money which should cover all costs, overheads, risk contingencies and profit.
In addition, the scope is essentially very well defined.
In schedule of rates contracts, the work done by the contractor will be measured
by the unit price rates. This means that the work is scheduled and the price will be taken
by actual quantities used until that moment. This contract is very well used when the
extent of the work is unknown and the prices may be adjusted due to variations of market,
for instance.
Cost-plus is subdivided in two main areas, cost-plus fixed fee and cost-plus fixed
percentage. Firstly, the first normally is used to reimburse actual costs and also a fee to
cover other payments off-site. Normally, this payment is a percentage in the initial
predicted cost of the project. For the second type the cost is to reimburse actual costs and
off-site cots as much as the first type. However, the fixed fee is usually a percentage of
the actual project cost.
According to ConnectEast media release (2004), the type of contract between
ConnectEast and John Holland and ConnectEast and Thiess was fixed-price with a fixedterm contract for the design and construction of the road. As the project is really big and
there is an enormous quantity of unknown quantities with will be needed in some parts of
the project the most likely type of fixed-price contract is the schedule of rates. This type
may be chosen because of the size of the project and the complexity of its procedures in
each step on the scope.
The Open Tendering process was used in the East Link project. It is commonly
used by government agencies to ensure fair accountability of public funds and to avoid
accusations of favouritism. It is known as a way to promote competitive and fair bids.
The tendering process depends on nature of contract, complexity of the construction,
expertise needed and several reasons. But usually for the government project all over the
world, is tend to make open tender to ensure the procurement and works to be done in
fairly manner without prejudice.
The open tender is one of the types of tendering that commonly used in this
world. It allows any interested contractor to tender. Therefore, it gives opportunity for an
unknown contractor to compete for the work. It is a traditional method of tendering,
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familiar to all sector of the engineering and construction industry. Client will obtain the
bargain possible.
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REFERENCES
Alam, Q., Kabir, M. H., & Chaudhri, V. (2014). Managing Infrastructure Projects in
Australia: A Shift From a Contractual to a Collaborative Public Management
Strategy . Administration & Society , 46(4), 422-449.
Department of Treasury and Finance Public Private Partnerships, 2008, “Projects –
Eastlink” [ONLINE], http://www.dtf.vic.gov.au/Infrastructure-Delivery/Publicprivate-partnerships/Projects/Eastlink, Viewed 21/03/16
EastLink,
2014,
“EastLink
–
Motorway
Info”
[ONLINE],
http://www.eastlink.com.au/MOTORWAY, Viewed 21/03/16
Estache, A., & Philippe, C. (2012). The impact of private participation in infrastructure
in developing countries: Taking stock of about 20 years of experiance.
Gardiner, John (March 2006). "In the Headlights". EastLink News. ConnectEast.
p. 2. Vehicles travelling at reasonably consistent speeds use less fuel ... emissions
are all reduced by betterand more consistent speeds.
Greeman, A. (2009), “Eastlink: Melbourne’s Motorway Masterpiece”, 1st ed, World
Highway Magazine
Greeman A.,' The initial plans', EastLink: Melbourne’s motorway masterpiece, pp.16.
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