That $6bn TenderBook..., page-224

I have been mystified by the apparent absence of a work package to cover the rail construction for the Koodaederi project, and I now think that registrations of interest (ROI) for the work has not yet been published, and that ROI will be be called for, and the contract executed, in the second half of calendar-year 2019 when sufficient aspects of the survey work package have been completed.

The Survey Services Mine and Rail work package has a Forecast Award Date of February 2019. Its Package Description is:

The Scope of Services covers the provision of labour, plant and equipment, materials, management, supervision and other things necessary to carry out the EPCM survey services to facilitate construction of the Mine and Rail Scope of Work.

Suppliers wishing to be considered must be able to demonstrate their ability to complete the following tasks:

• provision of survey crew(s) to perform day-to-day survey duties for the mine and rail development as directed by the Engineer;
• establish new and/or verify existing primary survey control points;
• verify and check detailed construction set out by other site contractors work during the project stages and/or as directed by the Engineer;
• verify, check and peg as necessary, all boundaries including tenure, Aboriginal heritage, environmental, ground disturbance and any other areas of restricted access;
• supply of all vehicles and equipment for the performance of the services; and
• verification and agreement of project digital terrain model.

I have loosely valued the Rail Construction work package at between $250–$300 million. Roy Hill rail construction contract was initially stated to be worth $620 million for 330km. The 170km rail require for Koodaederi is just over half the length, but it may be easier terrain.

The Roy Hill time-to-construct was estimate to take twenty months, so for the want of a number, I assume that the Koodaederi Rail Construction work package should take ten to twelve months. If mining is to commence in early 2021, the rail construction should commence in early 2020. The Koodaederi Rail Construction work package ROI should hence be published in the second half of calendar year 2019, an the contract awarded later in 2019.

I think that this work would be limited to very few contenders, and RIO's contracts negotiating team would want to get the best outcome by working within the optimum rail-construction windows of the the contenders. For example, to start when suppliers' other rail-construction commitments are nearing completion, which would optimise the fleet an the teams required to do the work. A give-and-take style negotiation to get an optimum result should conduce to RIO issuing the ROI as early as possible.

This is a work package that I would expect to be won by NWH, unless it is so committee to other projects, or good alternative prospects, that it bids a high price to cover the hassle and cost of handling this job too. Winning the contract at a viable price within a suitable time frame is a nice-to-have, rather than the sine qua non of NWH's financial wellbeing, because if NWH does not win the job, it would be because it has won, or will win, something else. I only wrote this post because I looked into the missing rail-construction work package out of curiosity, rather than that it is super important.