CIF Project: Ashburton Lyndhurst Irrigation Scheme Stage 2

Grant No: 10/12

Last updated: April 2012

Contact details

Name of Applicant Group:  Ashburton Lyndhurst Irrigation Ltd
Contact Person: Jess Dargue, Scheme Manager
Address: Ashburton Lyndhurst Irrigation Ltd, 131 Alford Forest Rd, Allenton, Ashburton 7700
Telephone: 03-307 8382
Email: jess@alil.co.nz

Project details

Status: Finished
CIF funding:  $248,808 excl. GST
Proposed start date: 1 December 2010
Proposed finish date: 30 December 2011
Region: Canterbury
Related website links:
Other links:

ALIS-II Conceptual Design Report
ALIS Final Report
Shareholder Handout

Project description

The Ashburton Lyndhurst Irrigation Ltd (ALIL) is a farmer owned co-operative which currently irrigates in excess of 25,000 hectares in an area between Methven and Ashburton in Mid Canterbury. Water is sourced from the Rangitata (94%) and Ashburton (6%) Rivers. The Scheme has a water allocation of up to 13.1 cubic metres per second from the Rangitata Diversion Race (RDR) canal which runs along the foothills from the Rangitata River to the Rakaia River. Water is currently distributed from the RDR to the shareholders properties via a network of open channels (85% of area) and a gravity pressurised piped network (ALIS Stage 1, 15% of area).

In the last 5-10 years the scheme has seen a rapid move from border dyke irrigation to spray irrigation, currently the scheme is around 55% spray irrigated. This project is about designing a scheme upgrade for the remaining 85% of the area to improve the efficiency of water distribution and deliver water under pressure to the shareholders.

The issue/opportunity

Due to the success of the ALIL Stage 1 piping development, and the demand from many of our shareholders for a more reliable and pressurised supply it is important to determine the most favourable design for the upgrade to the remainder of the water distribution system.

There are a number of opportunities apparent from this project:

  • Potential to improve efficiency of distribution by 20%, allowing the water savings to become available to expand to irrigated area of the scheme.
  • Develop storage within the scheme to improve reliability of supply, which in turns allows shareholders to use their allocation more efficiently and effectively.
  • Improve the efficiency and speed of water distribution through the system, providing shareholders with water on-demand.
  • Potential to supply shareholders with water already at a sufficient pressure to run their irrigators without the need to use other energy supplies to pump their water to the required pressure.
  • Reduction of community energy (power and fuel) requirement due to pressure being created by harnessing gravitational energy.

The context/background

In addition to the opportunities stated above, the project offers a number of wider community benefits:

  • ALIL will use the water saved from improvements in delivery efficiency to expand the scheme into dry areas, both within and on the fringes of the scheme area (potential to increase irrigated area by 4,000 ha). This will bring significant benefits to these dryland farmers, generating more revenue, employing more staff and boosting the local economy.
  • The proposal to delivery water through a piped system is consistent with Ngai Tahu’s Freshwater Policy Statement 2000 (Strategy 20), which details a preference for efficient irrigation.
  • Scheme piping is consistent with the Canterbury Water Management Strategy.

Methods

It is proposed to engage Opus International Consultants to work alongside ALIL to design the scheme upgrade. Initially we plan to undertake a survey of all shareholders on a one–to-one basis to gather information regarding the piping proposal. This process will provide each shareholder with the opportunity to have their views heard in confidence, ask any questions they may have or air any concerns. The information gathered will be analysed to identify the demands of the shareholders in general so that the scheme upgrade and be focused around these demands.

The upgrade will be designed with the following key objectives;

  • Minimise water losses resulting from;

    − Inaccurate delivery (over delivery)
    − Leakage from distribution races
    − Evaporation (small amount)

  • Allow the sale of water gained from efficiency improvements to new shareholders
  • Supply water on-demand to properties

Further objectives from scheme upgrade;

  • Reduce pumping requirements to protect against future energy cost spikes.
  • Eliminate non-emergency by-wash and provide buffer storage to improve control of distribution within the scheme network.
  • Allow for staging of construction over several years.

It is envisaged that Opus will provide a breakdown of the various stages in the design process, from initial concept designs through to the option of a final detailed design report complete with tender documents. ALIL management, directors and staff plan to be heavily involved in the design process, having the ability to make judgements/decisions in the interests of shareholders at key hold points during the process based on the information produced, to ensure that the value for the shareholders is maintained throughout.

Project Update:  June 2012

Working with Water Infrastructure Group (WIG) towards Guaranteed Maximum Price (GMP)

This process has been on-going throughout this period and has worked really well, involving the three parties; ALIL, Opus and WIG.  The option of incorporating the lower section of the Stage 1 pipe into the Stage 2 has been investigated which would provide extra capacity in the upper Stage 1 area and allow those shareholders to buy more water.  This option also provides for additional capacity for the lower Stage 1 area, again creating potential for "new" water to be delivered into those areas.

We have also developed a pressurised delivery system for a small group of shareholders who are currently supplied directly off the RDR.  This group was originally excluded from Stage 2 due to the lack of potential for gravity pressurisation.  A design has been developed for this group which delivers their water to their property boundaries at 40 metres pressure from one central pump station via a pipe network.  The inclusion of this group has meant that all ALIL shareholders now have a design proposal to delivery their contract water on a constant flow basis at a minimum pressure of 40 m head.

Shareholder Meetings

Planning, preparation and presentation of information to the shareholders were the priority leading up to and during the Shareholder Meetings in May.  Having come to a landing on the preferred design and initial investigations around the integration of the Stage 2 network with the existing Stage 1 piped network it was important to present this information to shareholders.  The meetings were planned carefully to ensure that a clear message was presented which explained why the scheme need to be upgraded, how we had gone about the process and what the recommendations were.  The main presentations were held three times to allow shareholders some flexibility as to when they attended.  The presentations were as follows:

  1. John van Polanen (ALIL Chairman) - The need for change, the objectives of the scheme upgrade and a summary of the overall process.
  2. Jess Dargue (ALIL Scheme Manager) - The changing requirements of shareholders, why the scheme needs to be upgraded and the experiences from the Stage 1 Pipeline Development.
  3. Nick Adams (Opus) - The role of Opus and a summary of the design process.
  4. Brendan Hawes (Water Infrastructure Group, WIG) - The design evolution/optimisation and presentation of preferred design.
  5. George Brown (ALIL Director) - Presentation of project costs and explanation of how these costs have been calculated.
  6. John van Polanen - ALIL Board's recommendation and open meeting for discussion.
  7. Question & Answer Session - Questions were taken from shareholders and directed towards one of the presenters or design engineers dependent on the nature of the question.

Meetings closed but shareholders were encouraged to stay on for refreshments and a chance to speak individually to the ALIL Directors or members of the design team.  WIG were well represented at each meeting with several design engineers available to answer any specific questions.

The Shareholder Meetings were well attended; the presentations went well and created some interesting discussion during the question and answer session.  On the whole the feedback from the shareholders was very positive, the design logic was well received and even those shareholders perhaps less interested in the pressurised supply understood the need for change and the suitability of the preferred design to meet current and future demands.  It became apparent during the initial three meetings that a meeting aimed directly at the smaller block shareholders would be beneficial, to allow them to relay their thoughts without perhaps feeling under pressure from some of the larger shareholders.

A Small Block Shareholder Meeting was held one evening the following week.  It was very well attended and again although perhaps the advantages of a pressurised supply for this group were harder to prove an economic basis, the need to upgrade the scheme and the suitability of the design to meet those requirements was well understood.

A fifth meeting specifically for those shareholders in the existing Stage 1 piped area and also the group supplied water under pressure by the Ledgerwood's Road Turbine was held to put forward some options for those shareholders in terms of charging them for additional upgrades required for their areas and the option of moving to one charge for all ALIL shareholders.

Including all five meetings we have had 78% of the shareholders represented (179 of the 230 total).

Progress since Shareholder Meetings

Using the feedback from the Shareholder Meetings the ALIL Board have focused their effort in the following key areas:

Finance

Sub-Committee set up to investigate financing options in more detail including:

  • Liaising with banks regarding proposal and estimated borrowings.
  • Investigating options for charging shareholders for development.
  • Interest rate and exchange rate risk.
  • Insurance during construction and on completion of project.

Detailed Design

Nick Adams (Opus) commissioned to assist with some detailed design work in association with Jess Dargue and the WIG design team.  It has become apparent that until we have a very good enough understanding of exactly what the design offers we can't be certain that the costs put forward are realistic, and so cannot commit to a contract award.  Detailed design work investigating:

  • Telemetry Control Architecture
  • Farm off-take design and functionality
  • Pond sizes and locations
  • Mainline pressure reducing valve design
  • Detailed pipe routes and delivery point locations
  • Air valve design and location

Scheme Pond sites

A Sub-Committee has been established to liaise with the farmers at the preferred scheme pond locations.

Stock Water

A Sub-Committee has been established to work with Ashburton District Council (ADC) to investigate the option of incorporating ADC stock water delivery into the proposed delivery system.


Project Update:  February 2012

Selection of Preferred Tenderer

Following the completion of the tender assessment process and subsequent meetings with Opus and the ALIL Board and Management, Tyco were selected as the Preferred Tenderer on the 22nd Dec 2011.

An initial assessment showed that Fulton Hogan's tender to be less favourable than the other two tenders with both Total Eden's and Tyco's tenders being particularly strong in all areas. Detailed assessments of their tenders were undertaken with Tyco's finally selected as preferred over Total Eden's tender.

The tender assessment was completed successfully in accordance with the standards and criteria that had been set for price and quality. The selected tender was at a cost higher than sustainable for the scheme but this was a conscious decision and the procurement process accommodated the risk of a high price by having an optimisation phase before a decision to take the scheme to the shareholders, and thereafter award a contract, was needed.

Working with preferred Tenderer towards Guaranteed Maximum Price (GMP)

Once Tyco were selected as Preferred Tenderer, they were made clearly aware that their tender price was too high for the project to progress, and that the next most competitive tenderer was waiting in the wings, desperate for an opportunity to work with us.  This approach set the scene for a productive optimisation phase.

The partnership approach and trust which was engendered during the interactive tender process has continued through to this optimisation phase with the preferred tenderer. A process which itself is progressing especially well with several design iterations being finished now and all undertaken in a non-adversarial environment, which you might not expect when you are looking to reduce costs whilst keeping levels of service. All of which is being conducted in a professional and controlled manner. The formalised backstop if this didn't work was to approach the next most competitive tenderer.

The optimisation process has involved a series of meetings at management and board level;

1. Design Team – Weekly meetings and ongoing communication

Brendan Hawes Tyco – Design Engineer
Matt Stanford  Tyco – Design Engineer
Nick Houghton Tyco – Design Engineer
Nick Adams Opus – Design Engineer
Jess Dargue ALIL

 

2. ALIL Board – Feedback/ Design Concept Review

The Tyco/Opus/ALIL team has periodically presented information to the ALIL Board to allow them to provide feedback on the design.

Current design position

Design optimisation has reached a landing on the combination of existing open channels, storage/ buffer ponds and gravity pressurised pipelines.

Options for integration of Stage 2 network with existing Stage 1 network are currently being considered as part of the optimisation process.


Project update: October 2011

Expression of Interest

Expressions of Interest (EoI) submissions closed on 15 July and seven submissions were received, either from individual companies or consortium groups. An extensive assessment process (as detailed in the EoI) was completed and three parties were selected for the tender process. The submissions were assessed on four main attributes:

1. Project Team Experience
2. Project Team Track Record
3. Project Team’s Resources
4. General

The first three attributes are pretty self explanatory, the 4th 'General' attribute was an assessment of how well the submitters had understood what the project involved, what the key issues were and how they intended to tackle the project.

The submissions were assessed by John Leatherbarrow and Nick Adams of Opus and Jess Dargue of ALIL. Each assessor marked each attribute for each submission alone, then the assessors came together to discuss any areas of disagreement until an agreement was reached. This approach resulted in a very thorough assessment, providing sound grounds to select the preferred submissions for the tender process.

Tender Process

Tender documents released 26 August.

The tender documents clearly established the ground rules for the tender process and within an environment with many variables managed to provide a very level playing field for the tenderers to be assessed.  They were also designed to create and encourage an interactive process between the tenderers and the client (ALIL and Opus representatives), allowing ideas and thoughts to be discussed throughout the process to help the tenderers reach a solution that was suitable in the eyes of the client.

Tender Briefing Meetings 1 September

Having had the documents for a week the tenderers were asked to attend a Tender Briefing meeting on 1 September.  This provided an opportunity for the tenderers to raise any questions about the tender process or ask for clarification where necessary. Each tenderer was met individually.  The remainder of the tender process was clearly explained, and tenderers were given the opportunity to ask for additional meetings at any point to those already planned if required.

Tender Progress Meetings 22 September

Four weeks after the tender documents were released, and half way through the tender period the tenderers were asked to present their design solutions. This provided an opportunity for the tenderers to get some feedback from ALIL and Opus as to whether they were heading in the right direction, or to direct them towards a preferred option if they were considering different approaches. ALIL representatives were briefed beforehand by John Leatherbarrow on the purpose of the meetings, which was to comment on the solutions proposed rather than to offer solutions.

Once again, these meetings were held on a one to one basis, with strict confidentiality rules clearly established. These rules were clearly laid out at the start of each meeting which provided the tenderers with the confidence to speak openly about their solutions without being concerned about giving their ideas away.  This approach worked extremely well.

Tenders Closed 20 October

Three tenders for the upgrade of the current race delivery system were received on 20 October from Fulton Hogan, Total Eden and Water Infrastructure Group (Tyco).

Each tender was assessed according to the documented criteria. It was decided to invite two of the three tenderers to present their tender to the ALIL Board and Management as well as the Opus team. The third tender was not ruled out at this stage but it was felt the others offered better solutions, so the focus moved to these at this point.

Tender Presentation Meetings 2 November

Both parties presented their solutions and were questioned on the designs offered, and the costs around those designs. A number of points were raised on each of the designs which required some further work and clarification from each design team. These points were documented by Opus as a Notice to Tenderer and have since been addressed by each tenderer.

Tender Assessment

Following the responses to the last Notice to Tenderer the preferred design option from all three tenderers will be assessed using the criteria as documented in the tender documents. John Leatherbarrow and Nick Adams of Opus, along with Jess Dargue of ALIL will undertake the assessment in the next few days.
Each tender will be evaluated according to the following parameters:

  • Capital Cost: 20%
  • Net Present Value Calculation: 40%
  • Suitability of proposed solution: 20%
  • Proposed project methodology and programme: 20%

Following the results of this assessment Opus will produce a detailed report which will include their recommendation for a preferred tenderer.


Project Update: June 2011

Expression of Interest document

Since the last report dated 20th June 2011 the Expression of Interest (EoI) document was issued on the 23rd June, available to contractors in New Zealand and Australia via the Tenderlink website. To date over 60 companies have downloaded the document. EoI's must be returned by Friday 15th July, several companies have already confirmed their intent to submit an EoI.

Site Visits

Two site visits were held, one on the 30th June, and the second on the 6th July. 12 companies were represented in total over the two site visits. Ashburton Lyndhurst Irrigation Ltd (ALIL) Scheme Manager, Jess Dargue led the visits which allowed the parties attending to see a number a key sites around the scheme network and develop a greater understanding of what the project involves. The EoI document also invited companies to visit the scheme unaccompanied, in their own time.

Specimen Design & Contact Document

The Opus team are continuing to work on the specimen design and contract document, with the input of ALIL management.


Project Update: February 2011

Data Collection

The Data Collection Milestone involved a survey of 200 shareholders. This survey involved a questionnaire sent to all shareholders, which was then completed during a meeting with each individual shareholder. The survey collected essential information required for the design work, such as the property development plans, the required water deliver flow rates and the required point of delivery. The majority of this survey work was undertaken in December 2010, with the majority of remaining surveys, data processing and analysis completed by the end of January 2011. A small number of shareholders have yet to complete the survey, but the area involved is less than 1% of the project area. With the majority of the data collected by the end of January it was possible for the Opus team to continue with the conceptual design work.

Conceptual Design Report

The Conceptual Design Report was completed on the 13th June 2011. The report presents a range of options for Ashburton Lyndhurst Irrigation Ltd (ALIL) to allow the identification of the options for the next stage in the design process which would provide the greatest benefit to the scheme.

The design team are focused on ensuring that the water allocated from the Rangitata Diversion Race (RDR) is to be used in a practical efficient manner delivered through an optimal design solution.

The design options covered a range from a completely piped system to an upgrade of the existing open channel system. The priorities of the scheme upgrade will focus on options that maximise the value for shareholders on a cost benefit basis. The results of the survey work also provided information on the specific requirements of the shareholders which has resulted in the design work being focused around providing a gravity pressurised piped supply via a network of open channels, buffer ponds and pipes.

Opus have recommended in the Conceptual Design Report that ALIL commission Opus to complete the next stage, being the Design Model Optimisation, which would include developing a performance specification, produce optimised designs for say two key preferences and refine the engineer's cost estimate for these.

The ALIL Board have decided to change direction at this hold point towards a Design Build & Operate (DBO) tender process, and have commissioned Opus to complete this process, including an expression of interest, production of a specimen design, development of tender document and completion of the tender assessment to the point where a preferred tenderer is able to offer a guaranteed maximum price for providing an irrigation system.

The main reason to go for the design build approach was because it was felt that it was very important to allow the main contractors the ability to use their innovation and experience to deliver the smartest solutions as economically as possible, rather than leaving them out of the picture until the design solution was already finalised. The design build approach also allows the contractors to take ownership in the design and have confidence that it is the best solution, rather than having to follow specifications already dictated by others.

It is also very important to ensure that the design delivers to expectations. It was felt that by commissioning Opus to complete the design, build and operate tender process ALIL would ensure that the DBO contracts would be tailored to deliver the required performance and standards of the project.

 

Last Updated: 16 August 2013

Contact MPI

for general enquiries phone

0800 00 83 33