Governments seek to achieve a very broad range of social, environmental and economic objectives on behalf of the community. This has seen an equally broad diversity of capital and infrastructure projects. Today, governments can utilise a number of mature and emerging project delivery methodologies to address this project diversity on a 'ft-for- purpose' basis. One of these methodologies is alliancing.
The number and value of government projects delivered through alliancing is significant and is increasing. The output of this Study is an opportunity for jurisdictions to learn from each other and ensure that they can continuously improve both the decision criteria, when to use the alliance delivery method, and the decisions on the structuring of that alliance, so that optimal VfM for taxpayers is delivered.
The Study has confirmed that alliancing can provide real benefits in the delivery of public infrastructure and has a place in the suite of other established procurement methods that are available to governments. This is welcome where it can demonstrably deliver incremental public value over other alternatives and reduces the cost of industry engaging with governments. The Study also identified key drivers of success in alliancing, including the value of a collaborative relationship between the project Owner, designers and contractors.
The Study also identified that the adoption of alliancing by government raises some matters which must be carefully managed in the interest of delivering value to the taxpayer. Alliancing is a very sophisticated development in delivering major infrastructure and agencies must fully understand the opportunities and tradeoffs that may be required. The Study identifies areas where the public sector must increase their capacity and capability to ensure optimal management and transparency of the public interest in alliance projects.
Practitioners could also consider how the success factors of alliancing, design and construct, public private partnerships (PPPs), early contractor involvement (ECIs) etc, can be applied to cross-fertilise to continuously improve each procurement method.
This Study is an important step in developing a national public sector approach intended to help agencies better understand how to pursue additional public value when undertaking alliances.
The Inter-Jurisdictional Alliancing Steering Committee October 2009
Founding membership and initiators of the Study:
Department of Treasury and Finance, Victoria (Chair, Nick Tamburro)
Department of Treasury and Finance, Western Australia
Treasury, Queensland
Treasury, New South Wales
Department of Treasury and Finance, Victoria (Executive Officer, Natalie Opie)