C&L, Cranes & Lifting, Features

Transitioning from crane hire to crane contracting

South Australian crane hire company, Crane Services sought the expertise of GBA Projects to help transition the business from a crane hire to a crane contracting business. Cranes and Lifting magazine spoke to Andrew Munckton from Crane Services and Matt Betros from GBA Projects about the relationship.

Two South Australian businesses came together 12 months ago to explore opportunities in the states burgeoning construction sector. Today, Crane Services and GBA Projects are expanding rapidly, building dynamic teams as well as a solid pipeline of projects.

“Crane Services has gone from being a crane hire business charging a ‘depot to depot’ hourly rate and moved into contractor roles as a construction business and entering into ‘lump sum’ contracts, there’s a big difference,” said Andrew Munckton, Business Development Manager.

Two years ago, Crane Services acquired a specialist team and with a wealth of knowledge in specialist rigging, machinery movement and relocation they’ve proved to be a great asset for the business.

“Initially, the team worked on minor projects, but these kept getting bigger and we saw an opportunity to become a full, turnkey service provider. So rather than just providing a crane we now offer a turn key and full service solution for the construction sector,” he said.

Currently, Crane Services is working on a number of large construction packages in various capacities including the bridge and circular installation on the Northern Connector project, the Oaklands Crossing Grade Separation project for the Public Transport Projects Alliance and working with other contractors at Gateway South.

The Oaklands Crossing project is a $174 million project being jointly funded by the Australian Government – $95 million, the State Government – $74 million and the City of Marion – $5 million. Crane Services is operating in varying capacities with a 400t Grove lifting the Super T’s and the pedestrian bridge and various sized Frannas, 40t 80t and 100t doing varying work. Some of the complexities include interfacing with the public and working in a high traffic area and being a residential area there’s tight access.

Crane Services has one the largest crane fleets in South Australia.

“Each crane is fairly unique in their own way. A 100t crane, whether it’s a Grove, Tadano, Liebherr, has its own niche qualities and applications where they will be better suited,” said Mr Munckton.

“We have a large fleet which includes Grove, Liebherr, Tadano, Kato and other brands including Terex. We focus on the SA market with regional depots in Ceduna, Barrossa Valley and we are about to set up a depot in Whyalla. We see huge opportunities up through the Upper Spencer Gulf area. SA is a big growth opportunity for us with plenty of ongoing work throughout the state.

According to Mr Munckton, having the knowledge and support of GBA Projects has really helped the business navigate the contracts. The provision of scheduling, planning and general commercial advice, are areas that where it doesn’t have expertise, but with the help of GBA it is having successful outcomes.

“We’ve engaged GBA to assist us with all our scheduling, so the more work we have the more complex the works programs becomes, with a lot more information and a lot more to follow up on. GBA assist by keeping us on the front foot and ensuring we get everything right,” he said.

GBA Projects, Managing Director Matt Betros, thinks the Crane Services situation is fairly unique.

“You wouldn’t expect an equipment supplier to use contract administration, planning and scheduling services. But it’s worked out to be a beneficial relationship with good success stories.”

“Typically, GBA would be engaged prior to the tendering phase or even prior to the construction works because we need to get in up front to plan the work so it can be administered properly,” he said.

GBA Projects specialises in planning, scheduling project controls and contract administration. It’s a niche sub section of project management and for the last 34 years it has been dealing with delay, disruption and contract disputes when things go wrong. GBA has worked on major portfolios with companies like BHP, Santos and Sydney Water.

“We find that if you don’t plan the work properly, you end up in dispute and the dispute can cost an arm and a leg to resolve. Having a business like GBA engaged up front with a specialist skill set, takes a lot of pressure off the project managers and construction managers allowing them to focus on the delivery,” said Mr Betros.

What happens when you get planning and scheduling wrong

At a recent conference for the Australian Institute of Project Management, KPMG provided a presentation on the results of a recent survey. Of the 7000 survey participants only 23% of projects actually succeeded and of those projects that were evaluated, 30% met the time budget and 36% made budget.

“When you look at those factors you’ve got to ask yourself why? I deal with the GC21 standard form of contract, which is a NSW Government form of contract. This contract doesn’t actually force a contractor to plan their work properly,” said Mr Betros.

GBA has had instances where it appears the schedule has been put together by a novice scheduler and the plan just doesn’t work. The estimate for remaining durations are completely incorrect and a position is quickly reached where the contract starts to fail and the programme is used as a commercial tool as opposed to a project management tool, which means the loss of ability to track the progress of the works.

The majority of joint ventures and larger consortiums actually fail internally because they separate their communications. One team provides the design, another the construct, another the oversight and management, it isn’t really governed by one form of project management and even if it is, the influence of the project management office doesn’t filter down to the lower levels of the management team.

“You have a “Swiss cheese model” with an inability to plan, inability to manage, inability to govern and couple this with short time frames, your left to overlap your design and construction works and end up not knowing the full design of your project until you finish designing it mid way through your construction,” said Mr Betros.

“Most construction claims occur off the back of having limited design information so projects haven’t been planned well in the first place. It’s a systemic failure that’s occurred for the past 34 years that we’ve been in business and no one has actually learnt anything. And when you consider that by 2023 New South Wales will be spending $16 billion per year on infrastructure, it’s worth asking how many more projects are going to go into dispute,” he said.

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