Strategic Tender - Coal Haulage Services

Lachlan Brown
Heavy Industry
Strategic Procurement
February 23, 2024
$20m +
cost avoidance
contract value

Client Problem

The mining operation transports its product coal from the Coal Handling Preparation Plant (CHPP) the Train Load Out (TLO) via road trains to be loaded onto coal trains to go to the port. With the incumbent not performing to expectations, the site had a requirement to test the market for provision of bulk off-road coal haulage services.

Caliba Solution

Due to the strategic nature of the services for the site, Caliba was engaged to manage the complete tender process from market assessment, scope definition through to execution of final contract.

After an initial market assessment, it was determined there was enough capability and capacity in the market to warrant a tender process. However, following the release of the tender to a selection of prequalified suppliers it became evident that there were capacity constraints in market to deliver the required services in time, and there was a high likelihood for an increase in rates.

With the incumbent bid being the most competitive and being able to provide continuity of service, a multi-year extension was negotiated with the incumbent. The new agreement mitigated the risk of a gap in the critical services and avoided a cost increase of over $20m over the life of the extension.

A plan was put in place to improve the services delivered by the incumbent including new KPIs and incentive payments.

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