Mitchell Shire Council in central Victoria expects to save up to $220,000 over ten years, following its decision to purchase a crawler excavator for its works unit. A cost utilisation analysis by Council officers, which went back a number of years, revealed that substantial savings were possible by breaking with tradition and purchasing this item of plant.
Mitchell Shire is one of Victoria’s fastest growing municipalities and this growth is driving the expansion of road maintenance, construction and landfill programs. Flexible access to an excavator was identified as a major factor in the continued success of these programs.
Mitchell CEO, Bill Braithwaite said few municipalities own and operate plant equipment of this kind, so it was considered vital that the tender was widely publicised to ensure vigorous competition among tenderers.
“After wide advertising and publicity, we received 12 serious tenders,” he said. “The changeover cost of the received tenders ranged from $148,000 to $253,000, however even the most expensive proposal would still have delivered a saving of $100,000 compared with the ongoing hire costs.”
Council operators out excavators from the four most competitive tenders through rigorous tirals and evaluated them against 15 key criteria to come to a final decision. The net cost to Council for the 21.7 tonne, water cooled, Hyundai crawler excavator it selected was $148,000.
Bill Braithwaite said in the past, Council hired an excavator to complete works, costing $47.50 per hour for 1,200 hours a year.
“The cost of continued hiring over a ten year period was calculated at around $570,000, with the cost of owning and operating the successful tender coming
in at only $350,000,” he said. “This represents a significant saving in terms of Mitchell’s annual budget of around $35 million.”
The savings rely on efficient scheduling of works to maintain a high useage rate. The machine’s current useage rate is around 95 per cent, and Council has projected that it will not drop below 90 per cent.
Bill Braithwaite said the acquisition will deliver substantial savings to ratepayers, while giving Council a greater construction and maintenance capacity, combined with greater flexibility.
“Council will now have an excavator available wherever and whenever it’s needed, and ratepayers will save money at the same time,” Bill Braithwaite said.
Council also recently purchased an elevating works platform and water tanker, based on a similar analysis showing increased usage and efficiencies.
Equipment being considered for future purchase includes a wood chipper and one or more additional water tankers.
For further information contact Daniel Scoullar at Mitchell Shire Council on
(03) 5734 6359.
