Melbourne Water

Project Overview

Melbourne Water engaged TBH to strengthen its capital delivery assurance processes through the development of a robust cost benchmarking and Risk Management framework. The engagement aimed to improve cost forecasting accuracy, establish transparent risk-based contingency methodologies, and provide greater confidence in project investment decisions.

The program encompassed all major infrastructure projects within Melbourne Water’s capital portfolio, including treatment plant upgrades, pipelines, and network reliability initiatives. Prior to TBH’s engagement, cost data and risk assessments were performed inconsistently across projects, limiting Melbourne Water’s ability to benchmark cost performance and quantify uncertainty across its investment program.

TBH’s Role

TBH was appointed to provide specialist cost management and risk advisory services, developing an integrated cost benchmarking and risk management and, including Quantitative Risk Analysis approach, tailored to Melbourne Water’s delivery environment.
Key elements of TBH’s scope included:

• Cost Benchmarking Framework Development
  • Collected, normalised, and structured cost data from completed and in-progress projects to establish a reliable benchmarking dataset.
  • Developed cost accuracy productivity metrics, enabling comparative analysis across project types, scale, and delivery models
  • Developed benchmarks for each project type for indirect, risk allowances and owner’s costs.
  • Designed dashboards and analytical tools to visualise benchmark ranges and identify cost outliers.

• Risk Management Framework
  • Conducted a maturity assessment of current risk processes and tools
  • Developed a tailored risk management framework and tools for project and portfolio risk management including management of a portfolio risk pool
  • Provided training for standardising risk management and the new framework for the project management team

• Quantitative Risk Analysis (QRA)
  • Conducted integrated cost and schedule risk analyses (QCRA and QSRA) using @Risk and Primavera Risk Analysis.
  • Facilitated structured risk identification and quantification workshops with project managers, planners, and cost estimators.
  • Modelled contingency levels at P50 and P90 confidence intervals, aligning with Melbourne Water’s governance and approval thresholds.

• Integration and Assurance
  • Linked risk-adjusted cost forecasts with Melbourne Water’s investment evaluation and business case processes.
  • Delivered training and guidance materials to uplift internal capability in probabilistic risk assessment and benchmarking interpretation.

The TBH Difference

TBH’s methodology provided Melbourne Water with a transparent, evidence-based foundation for cost and risk decision-making across its capital portfolio.

• Data-Driven Cost Confidence – The benchmarking framework established consistent cost metrics across delivery models, improving early cost estimate accuracy and investment confidence.
• Risk-Adjusted Forecasting – The QRA approach allowed Melbourne Water to determine appropriate contingencies aligned to corporate risk appetite, improving budget reliability and funding certainty.
• Enhanced Governance – TBH’s reporting outputs and dashboards enabled senior management and the board to track project risk exposure and benchmark performance at portfolio level.
• Capability Uplift – TBH delivered targeted training to internal teams, embedding a repeatable and sustainable cost and risk analysis process.
• Transferable Insights – The benchmark data and methodologies developed through this engagement now inform Melbourne Water’s future project planning and procurement strategies.