Western Power signs new alliance agreement
Release Date: 04 April 2008
Western Power today announced a new alliance agreement with Downer EDI Engineering and Tenix Alliance. The alliance will provide Western Power with guaranteed resources and will assist it in meeting the demands associated with Western Australia's booming levels of growth.
The alliance will have a potential value of more than $250 million in the first full year of operation.
The main goal of the alliance is to minimise the impact of the rising cost of materials and the skilled labour shortage being experienced by business in WA.
The alliance agreement covers capital works for both the transmission and distribution networks. The agreement, which is effective from today, will run for a period of five years, with an option to extend for a further five.
Western Power's Managing Director Doug Aberle said this arrangement was a new approach for Western Power that signalled a commitment to working collaboratively with industry in long-term contracts that will deliver the works program.
"In WA alliances have already been adopted by organisations such as the Water Corporation and are used by eastern states utilities as an efficient method of delivering major infrastructure programs.
"Alliance models are particularly effective at increasing efficiencies in an economic climate where demand outstrips supply for labour and materials, which is WA's current environment.
"Western Power's traditional approach of using a tender process to secure best prices is a model best suited a situation where supply outstrips demand.
"We believe it will be more effective to develop longer term collaborative arrangements where both parties involved in an alliance gain efficiencies and have greater certainty of supply and greater certainty of work respectively.
"This will be a pain-share gain-share arrangement with transparency of accounting.
Mr Aberle said the alliance should provide significant commercial benefits for Western Power.
Staff from all three companies will be involved in the delivery of work which includes design, engineering, supervision management, construction and commissioning of transmission and distribution infrastructure that is allocated to the alliance.
Western Power will announce details of another similar alliance arrangement during April.
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