Neelum Jhelum Hydroelectric Project: Construction of Tunnel System

Robert Magna: Principal Construction Engineer • MWH/Stantec

Peter Dickson: Global Geotechnical Practice Leader • MWH/Stantec

10th Annual Breakthroughs in Tunneling Short Course

CHICAGO | August 14-16, 2017

Outline

1 Introduction: Project Location and Key Features

2 Issues & Challenges

3 Introduction of TBMs 2 years into Project

4 Contractual Issues

5 Lessons Learned

Project Location and Key

Features

1

• Located in Lower Himalaya,

Jammu & Kashmir, Pakistan

• 969 MW run-of-river

hydroelectric project

• Resources – Neelum River,

tributary of Jhelum River

Project Location

• Design Engineering and CM

– also a JV

• MWH (Stantec) /Norplan

/NESPAK /ACE

• Owner – WAPDA (Govt of

Pakistan)

• Construction Contractor is

Chinese Consortium –

CGGC and CMEC

Key Players and Contracts

• Three Construction Lots

• Construction started 2008

• Estimated complete 2018

• Construction Cost - $ 2.75

billion - $5 billion

Tunnel Lengths (km)

Headrace

• Drill-blast 26.1

• TBM 21.5

Tailrace

• Drill-blast 3.5

Access Tunnels

• Powerhouse 2.5

• Construction 10.8

• Surge 3.2

67.6 km

(42 miles)

Essentially this is a

Tunnel Project

The Underground Power Station Complex

– Example of Tunnel Complexity

Tunnel Configurations

• Various tunnel profiles and lining types,

depending on hydraulic and structural

requirements

• Wide range of excavation methods

• Tunnel exc. = 8.00 m – 11.70 m (26’ to 38’)

• Almost exclusively classified as rock tunneling,

except short sections of soft ground (faults,

etc.)

Project Issues & Challenges

Technical & Non-Technical

2

Tunnel Alignment – Technical Challenges

• Complex Himalayan geology

• Weak rock units, severe deformation

• High seismic hazard - Active faulting

• High cover – convergence, rock burst

• Low cover – steel-lining, hydrojacking,

pre-exc grouting

Groundwater Ingress at High P and High Q

• 15 - 20 bars (200-300 psi)

• Potential for erosion of weaker materials

and washout of infills

• Potential to destabilize excavations

• High volume inflows, infinite recharge

• At any one location up to 15,000

l/min (4,000 gpm)

• Pre-excavation grouting required (5 km)

Tunnel Collapses and Major Water Inflow

• Four major incidents involving partial

tunnel collapse

• Major or exceptionally high water inflows

• Collapse remediation involved:

• Temporary concrete and backfill

plugs

• Staged grouting at pressures up to 50

bars

• Grouted pipe umbrellas for support

across areas of chimney failure

• Remote Site – Impact on Logistics

• Third World Location – Influencing:

• Logistics

• Labor

• Social/cultural/political issues

• Multiple languages

• First major tunnel project in country, largest civil works project

• Steep learning curve for Owner and country at large

• Construction Contract let too early, before design complete

• Financial Issues - Payments

Non-Technical Challenges

Introduction of TBMs 2 Years

into Contract:

3

TBM Variation Order

2 Years into Construction……

• Change 22 km of Twin Drill-Blast Tunnels to Twin TBM Tunnels

(72,200 lin ft)

• 8.5 m diameter (27 ft 10 in)

Issues - starters:

• Three different languages

• Three different currencies

• Existing Contract Base Year is 2007

• Work on the Twin Tunnel Change Starts in 2009

• Work on the Contractual Change (Variation

Order) Starts in 2011

• No TBMs planned or ordered

• No Camps to accommodate additional resources

• No Power Supply for TBMs

• No access to Site for TBM Main Bearing and Other Large TBM Components

• No TBM Tunnel Personnel

• No mechanism except the MOU for the Change.

• CGGC (Contractor) the only option

April 2011

• Memorandum of Understanding (MOU) between the Client & Contractor is executed in April of 2011 to recover schedule, “to the whole of the works”, the contractor proposed using 2 TBMs

• What the MOU outlines:

• Advance of funds to the Contractor to purchase the TBMs

• Parties shall negotiate a variation order

• Commercial Considerations

– Establishment of new payment items or adjustment to existing sums, rates, and BOQ quantities shall be agreed to by the Parties

Issues - continued:

Items Already in Progress by June, 2011

• TBM Procurement Bid for the TBMs

• Two Bidders HK & Robbins

• HK wins the TBM supply contract

• HFO Generator Procurement – 16 mw of power

• TBM Route From Docks to Site & Bridge Construction

• Proposal for Jhelum River Crossing

• Contractor initial proposal submitted for the whole

of the works for the Twin TBM Tunnels – Single Source

Next Steps

• Review Contractor proposal

• Review existing contract

• Meet the Client, NJC Staff, and the Contractor

• Begin Organization of the Variation Order• Payment Items

• Existing payment items that will be pertinent to the Variation Order

• New Items to be incorporated into the Variation Order

• Independent Estimate to verify the Contractor’s proposal

• Negotiations with the Contractor’s staff to:– Explain their proposal cost buildup

– Negotiate prices using the independent estimate vs. the Contractor’s proposal

• Develop a Measurement and Payment Section for the Variation Order

Variation Order

• 523 Unit Price Items

• 385 - Unit Price Items are to be escalated by the month and year the work is performed• Units – m, m2, m3, kg, pcs, ton, ls, day, hr, kwh

• Camp Construction

• Water Treatment

• Assembly Chamber Rock Excavation and Rock Support

• TBM Assembly

• TBM Mining

• TBM Mining Rock Support– Initial Rock Support - L1

– Secondary Rock Support – L2

• TBM Disassembly

• 65% paid in Local Currency (PKRs)• 35% paid in USD

• 138 Unit Price Items are paid in 2011 USD – Not

Escalated

• Equipment

– TBMs

– Assembly Chamber Cranes

– Shotcrete Batch Plant

– Electrical Components

– HFO Power Plants ( 4 each, 4 mw Mann generators)

– TBM Consulting

– Recruiting & Medical Expenses

– Additional Design Costs

Variation Order

Examples of Items EscalatedV-2.8 TBM Assembly

V-2.8.01Bridge Crane (TBM #1) (Need to install, and remove, in both the Assembly, and Disassembly Chambers)

each 2.0

V-2.8.02Bridge Crane (TBM #2) (Need to install, and remove, in both the Assembly, and Disassembly Chambers)

each 2.0

V-2.8.03 TBM #1 machine and backup assembly each 1.0

V-2.8.04 TBM #2 machine and backup assembly each 1.0

V-2.8.05 Erection of Stationary Conveyor Belt LS 1.0

V-2.8.06 Track Placement (up to TBM #1 assembly chamber) LS 1.0

V-2.8.07 Track Placement (up to TBM #2 assembly chamber) LS 1.0

V-2.8.08 Track Placement (TBM #1 Mining) m 11,205.0

V-2.8.09 Track Placement (TBM #2 Mining) m 11,205.0

V-4.1 TBM 1# Mining (57 m2) m 11205.0

V-4.1.01 Rock Excavation (Q2) m 672.3

V-4.1.02 Rock Excavation (Q3) m 5,042.3

V-4.1.03 Rock Excavation (Q4) m 4,482.0

V-4.1.04 Rock Excavation (Q5) m 1,008.5

V-4.1.05 Muck Transferring by Stationary Conveyor Belt & Dump Truck m3 638,685.0

V-4.1.06 Geological Forcasting days 890.0

V-4.1.07 Convergence Measurement Station (Max 3 Pins) pcs 28.0

V-4.1.08 Mutilpoint Borehole Extometer pcs 13.0

V-4.2 Initial Rock Support with TBM 1#

V-4.2.01Fully cement-grouted rock bolts, deformed bar. at the face.D=25 mm. Depth in rock 4.0m

pcs 56,709.0

V-4.2.02Fully cement-grouted expansion shell-anchored rock bolts, deformed bar.At the face.D=25 mm. Depth in rock 4.0 m

pcs 11,140.0

V-4.2.03 Welded wire fabric fixed to rock bolts. At the face kg 453,870.0

V-4.2.04 Shotcrete Fibre Reinforced m3 14,348.0

V-4.2.05 Providing and installation of steel ring beam set 1,587.0

Examples of Items Not EscalatedV-1.1 Insurance, Bank Charges, Consultants

V-1.1.1 Insurance

V-1.1.1.01 Contractors All Risk (Check Scope of Risk Insurance) LS 1.0

V-1.1.1.02 Insurance Cost of Equipments LS 1.0

V-1.1.1.03 TBM Insurance LS 1.0

V-1.1.2 Bank Charges for Guarantees

V-1.1.2.01 Bank Charges for Guarantees LS 1.0

V-1.1.3 Cost of Feasilbility Study for Adopting TBM (Provisional Sum)

V-1.1.3.01 Cost of Feasilbility Study for Adopting TBM (Provisional Sum) LS 1.0

V-1.1.4 Cost of TBM Consulting and Related (Provisional Sum)

V-1.1.4.01 Cost of TBM Consulting and Related (Provisional Sum) LS 1.0

V-1.2 Procurement of TBM

V-1.2.01 TBM Purchase (CIF) LS 1.0

V-1.2.02 Custom Clearance Agent Fee LS 1.0

V-1.2.03 Inland Transportation (including access improvements) LS 1.0

V-1.2.04 Custom Clearance Fee LS 1.0

V-1.2.05 Reimbursement of Withholding Tax (6%) LS 1.0

V-1.2.06 Contractor Processing Fee: TBM Purchase Only LS 1.0

As per the MOU of April 2011

• Commercial Considerations• Establishment of new payment items or

adjustment to existing sums, rates and BOQ quantities shall be agreed to by the Parties

• Parties shall negotiate a variation order

• New payment items and a new BOQ for the variation order have been established, now all we have to do is negotiate new rates and sums

Contractual Issues4

The Negotiations

• Many items were negotiated but

there were four major areas that were

a challenge to reach a consensus on:

1. Contractor additional equipment which

was retained by the contractor but

purchased by the Client

2. Number of personnel manning the TBMs

3. TBM advance rates

4. Markup

Contractor Retained Additional Equipment

but purchased by the Client

• Non escalated items such as:– Cranes, ventilation systems, electrical systems

and batch plants

– The Contractor would retain possession but the Client paid for them

– TBMs remained the property of the Client

• Resolution:– A salvage value was applied to each piece

of equipment and the salvage value was deducted from the price in the BOQ

– Region VI - USACE Equipment rates were used to determine the salvage value

Number of Personnel Manning TBMs

• Contractor number and independent estimate number differed by a large amount which greatly affected the TBM mining rates.

– Contractor number was +/- two times the independent estimate.

• Resolution:

– The variation order TBM mining rates included the contractors number of personnel.

– A clause was added into the variation order that after 2,000 m of TBM mining the rates would be reassessed as to the number of personnel required to man the TBMs.

– The TBM mining rates would then be adjusted downward or remain as originally stipulated in the V.O.

TBM Advance Rates

Started:Contractor NJC

Ave Production Ave Production

Rock Classification m/day m/day

Q2 16.7 21.3

Q3 15.0 18.1

Q4 10.0 10.2

Q5 5.0 8.9

Ave. All Rock Class 11.7 14.6

Contractor NJC

Ave Production Ave Production

Rock Classification m/day m/day

Q2 16.8 16.8

Q3 15.0 15.0

Q4 11.0 11.0

Q5 5.0 5.0

Ave. All Rock Class 12.0 12.0

Resolution:

Markup

• Provisions of the main contract documents allow the contractor 41.3% markup

• Since this was a variation order and a unit price BoQwith the Contractor being paid for installed quantities and the client was purchasing equipment, it was determined that the risk factor was less for the Contractor and a lower markup would be applicable

• Resolution:

Contractor and Client agreed on 25% markup

Base Pk Rs to USD

Base Rate of De-escalation to

2006

1 USD – July 2011= 86.0024 Pk Rs.

This allows the de-escalation to 2006 of

all escalatable unit price items to be

brought back to the base year when

the contract was bid.

Variation Order Agreement on Price

2011 – USD $413,117,300.00

Per Agreement on 2012-03-30 Conference Call July 5, 2012

SUBJECTTBM VO - COST COMPARISON: NJC vs CGGC Use June 2011 Benchmarks:

ITEMESCALATABLE & NON-ESCALATABLE ITEMS Avrg Fx Rate per Various Web Sites 86.0024

DATEJuly 5, 2012 De-Escalation Factor per IPC #42 43.80%

Headrace Tunnel Design Change: Tender Contract Drill & Blast Mining to TBM Mining

By NJC By CGGC

Rs (Varies) 2011 US $ Rs (Varies) 2011 US $

Work Added to Original Scope for TBM VO22: Escalatable Items in 2006 Rs: Rs 22,015,791,390 $ 255,990,430 Rs 22,015,791,390 $ 255,990,430

Provisional Sum (For Escalation on Work Added through November 2015): Rs 13,513,287,858 $ 157,126,869 Rs 13,513,287,858 $ 157,126,869

Subtotal of TBM VO22 Escalatable Items Through November 2015: Rs 35,529,079,248 $ 413,117,300 Rs 35,529,079,248 $ 413,117,300

Variation Order Cost to Contract

2015 – USD $335,275,816.00

PROJECTED COST TO CONTRACT FOR TBM VO22: R1

Per Agreement on 2012-03-30 Conference Call July 5, 2012

SUBJECTTBM VO - COST COMPARISON: NJC vs CGGC Use June 2011 Benchmarks:

ITEMESCALATABLE & NON-ESCALATABLE ITEMS Avrg Fx Rate per Various Web Sites 86.0024

DATEJuly 5, 2012 De-Escalation Factor per IPC #42 43.80%

Headrace Tunnel Design Change:

Tender Contract Drill & Blast Mining to TBM Mining

By NJC By CGGC

Rs (Varies) 2011 US $ Rs (Varies) 2011 US $

Work Added to Original Scope for TBM VO22: Escalatable Items in 2006 Rs: Rs 22,015,791,390 $ 255,990,430 Rs 22,015,791,390 $ 255,990,430

Provisional Sum (For Escalation on Work Added through November 2015): Rs 13,513,287,858 $ 157,126,869 Rs 13,513,287,858 $ 157,126,869

Subtotal of TBM VO22 Escalatable Items Through November 2015: Rs 35,529,079,248 $ 413,117,300 Rs 35,529,079,248 $ 413,117,300

Work Added to Original Scope for TBM VO22: Non-Escalatable Items 2011 US$: $ 158,090,290 $ 158,090,290

TOTAL EXPENDITURES for TBM VO22 (Through November 2015): Rs 35,529,079,248 $ 158,090,290 Rs 35,529,079,248 $ 158,090,290

Credit to Contract for Escalatable Work Deducted from Original Scope due to TBM VO22:-Rs 12,495,929,436 ($145,297,450)-Rs 12,495,929,436 ($145,297,450)

Provisional Sum (For Escalation on Deducted Work through November 2015): -Rs 7,794,769,322 ($90,634,323)-Rs 7,794,769,322 ($90,634,323)

Subtotal of Work Deduction Credit to Contract Through November 2015: -Rs 20,290,698,758 ($235,931,774)-Rs 20,290,698,758 ($235,931,774)

PROJECTED NET INCREASE TO CONTRACT FOR TBM VO22 THROUGH NOVEMBER 2015: Rs 15,238,380,490 $ 158,090,290 Rs 15,238,380,490 $ 158,090,290

NOTES: 1) Escalation is based on the factors used in PC-1: 10% pa on the Local Payment Component (65%), and 2.5% on the Foreign Payment Component (35%)

2) Escalation Provisional Sums, additions and deductions, are based on Note #1, and on the TBM Mining durations in the CGGC Schedule dated April 23, 2012

August, 2012

• After three years of discussions, planning, negotiation and surmounting numerous challenges (2009 to 2012) the TBM Variation Order is executed by the Client and the Contractor

• TBM Mining of the Twin Tunnels begins

in February of 2013 and is completed

in May of 2017 - Four years

Six years total from inception to

completion

With the cooperation of all stakeholders,

means and methods of construction for the

twin headrace tunnels were changed to

accelerate the schedule to ensure that the

client could generate power at the earliest

possible date

Nothing is impossible!

Questions?