Active community outreach and involvement is vital to the success of any major infrastructure project.
Support from the local community is vital to the success of any major infrastructure project, especially in an environment where PPPs may be subject to increased public scrutiny and possibly be perceived as controversial. In the Port of Miami tunnel project, both parties made it a priority to pro-actively involve the local communities in the project and use the project to address their needs. The parties agreed that in order for the project to succeed, it needs to have a notable impact that can be felt by the local community. As a result, the community engagement plan went beyond just media and public relations into delivering real economic, social and commercial benefits.
The community outreach plan involved three aspects: a) minimise nuisance to the local community caused by the construction works; b) identify opportunities to benefit the community through education and social activities; c) train and hire labour locally and use local contractors.
With the plan in place, the project managed to address the local community's social and economic concerns, and the challenges of their daily lives. A comprehensive traffic plan made in collaboration with the cities of Miami and Miami Beach ensured minimum effect on commuters. The inclusion of local programmes like the girl scouts and involvement in science, technology, engineering, and mathematics education mentorship helped the community with its social improvement initiatives. Finally, by upskilling local labour and the use of local contractors, the community was able to share in the economic benefits.
Collaboration between different levels of government may be required to successfully deliver large infrastructure.
The involvement of governments at four different levels (federal, state, county and city) was vital to the success of this project, from the structuring and signing through to implementation and operation. Joint funding and ongoing engagement and political support from different public bodies helped overcome challenges in construction, as well as improved community engagement.
Sharing of risks beyond the control of either party can have a positive impact on the working relationship between the parties.
It was recognised by both parties in this project that risks associated with O&M insurance cost changes are affected by global trends beyond their control. The risk was addressed proactively by both parties agreeing to share savings or cost increases in the premiums. This approach ensured a fair and optimised risk allocation and helped the relationship between the parties.
Involving the operations contractor during design and construction can assist from an operational perspective to ensure operations KPIs are understood and achievable.
The operations contractor should be involved during the design development and construction phase. As the party with the most expertise in operations, it will be able to suggest improvements which can reduce whole of life costs and help the service to be delivered to a high level. The structure of the PPP contract should incentivise the Project Company to do this regardless, however it is still important for the Procuring Authority to ensure it takes place. This may have more relevance if the operations contractor is not an equity investor in the Project Company. There may otherwise be a tendency for the considerations of the construction contractor to outweigh operational demands. In this project, the operations contractor was involved during the design and construction phase, which allowed it to highlight design deficiencies early enough for them to be rectified.
Early discussions on the interpretation and practicality of operations KPIs with the operations contractor can make for a smoother transition between construction and operations and help to avoid misunderstandings.
It is important that the parties reach agreement early on what each KPI means from an operational point of view, and how it will be measured. Agreement on the interpretation of the KPIs is key to minimising disputes relating to performance evaluations during the operations phase.
On this project, the operations contractor, in collaboration with the Project Company and the Procuring Authority, started reviewing the KPIs one year before the start of the operations phase to assess their achievability and predict any challenges. The main issue that the operations contractor raised was regarding incident response times. The Procuring Authority had made this a priority, however, based on the final design there was a question over whether the KPIs were achievable. The Procuring Authority managed this by analysing the resources that the operations contractor had described in its operations manual and assessing whether its concerns were valid. The Procuring Authority concluded that the KPIs for dealing with a breakdown of a large truck were too onerous, given that it would be difficult to bring a certain size of tow truck into the tunnel. The timings for this were then adjusted, while all other KPIs remained as prescribed in the PPP contract.
Upfront consideration of significant construction and financial risks through the establishment of a contingency fund enabled a satisfactory outcome after the risks materialised during the construction period.
Although in many PPP projects involving construction works the majority of the construction risks are allocated to the construction contractor, tunnelling projects can present particularly high risks in terms of unforeseen ground conditions, delays and cost increases. In this project, although a dispute occurred with respect to unforeseen ground conditions, the availability of a contingency fund enabled a successful outcome that was acceptable to both parties and the delivery of the project.
There are some risks, which although allocated to the Project Company under the PPP contract, will still need to be closely managed by the Procuring Authority to avoid reputational damage.
The construction contractor faced some challenges in terms of its full understanding of and compliance with federal laws and regulations, in particular labour laws. It is very important that the Procuring Authority ensures that the Project Company and its contractor are fully aware of the federal laws affecting the works. Regardless of the risk allocation, serious violations of labour or safety laws will have a negative impact on the project and all parties involved from a reputation point of view. The Procuring Authority was also liable for fines if any of its projects were not compliant with relevant laws and regulation. In this project, the construction contractor hired a labour union company to assist it in complying with the federal labour laws.
Both parties may need some time for adjustment between the construction and operations phases to settle into managing the operations phase obligations.
The Procuring Authority found the first three months of the operations phase to be the most challenging, as they presented a learning curve for both the Project Company team and the Procuring Authority team. During this period, many operational procedures and staffing requirements were adjusted to suit actual conditions.
At the start of operation, two full time staff members were appointed by the Procuring Authority and one was part time. Once the team became more familiar with the operations phase, the team was reduced to one full time employee and one part time employee.
Frequent (even weekly) meetings with all relevant stakeholders can assist the Procuring Authority to keep a close watch on the construction activities and manage any potential challenges.
The level of communication between the Procuring Authority and the Project Company stakeholders during construction was seen as beneficial to the project, in particular during periods of disagreement. Weekly meetings were held which included the Procuring Authority, the Project Company and the construction contractor, as well as representatives from city and county governments. These meetings were focussed on day-to-day issues arising. This helped the Procuring Authority to keep a close watch on the construction activities.
Dispute Resolution Boards may be costly to set up, however they can also be an effective way of settling disputes and have the advantage of reducing the risk of litigation.
A Dispute Resolution Board (DRB) was set up to resolve a dispute between the parties related to geotechnical challenges encountered by the construction contractor during tunnelling. The DRB is still used regularly on the project by the parties as a way to resolve disputes. It is costly to set up, however the parties have found it to be an effective way of settling disputes and it has the advantage of reducing the risk of litigation. The DRB also helps with dispute avoidance when used as a regular tool on this type of project. The parties meet with the DRB on a regular basis to discuss potential issues that could become disputes. These meetings are a forum for the Project Company and Procuring Authority to proactively resolve issues before they escalate into disputes.