ISSUE 31
CREATING EFFICIent buildings With Strategic Asset Management
Also in this issue: Launching new Paris office Revitalised college for Singapore First BIM project for UK government Kuwait & Saudi boost social infrastructure
CONTEnTS 4
Temasek Polytechnic College redevelopment in Singapore
Agile Working 6
Making property work harder
Kuwait Ministry of Public Works 8 Government invests in improved project management systems An Efficient Building is a Sustainable Building 10
Strategic asset management creates efficient property assets
OCTAL Oman 12
PET resin manufacturer expands manufacturing plant
Faithful+Gould Launches New Paris Office 14
Taking our total number of offices to 52 worldwide
16 Extra Care Housing
Demand for ‘extra care’ retirement housing is set to rise steeply
18
South East Asia’s Construction Outlook Encouraging All countries in the region are investing in healthcare and education
20
F irst BIM Project For UK Government
22
Improving Social Infrastructure in Saudi Arabia and Kuwait
MoJ leads the way with the first public sector scheme to be executed using BIM
Investing in housing, healthcare and education for young and growing populations
24 OCMS Change Management
No-surprises solutions for manufacturing programs/maintenance projects
26 Embodied Carbon
Front cover: First Base Ltd & The Blackstone Group, London N1
2
Issue thirty-one
Faithful+Gould authors RICS Embodied Carbon Guide, launched at Ecobuild 2012
Welcome to another edition of Solutions, where we share some of the interesting projects that Faithful+Gould is currently working on, and introduce innovative services that are making a difference to our clients. I very much hope you’ll find some of this relevant to your interests. We were delighted to win one of the most hotly contested industry awards, beating off competition to become Construction Consultant/Surveyor of the Year in the recent Building Awards. Our success was underpinned by our strong financial performance across both the UK and overseas markets, and our achievements with new work in the Middle East, France and Germany. The judges were especially impressed by our high level – 70 per cent – of our current work as repeat business. This accolade was a bright spot in the current difficult conditions, a fitting tribute to our team and the great work they do.
performance. Our article on page 10 outlines the way in which strategic asset management can return real efficiencies in client property portfolios. Page 8 profiles the project management service we’re providing to Kuwait’s Ministry of Public Works. The continued development of our PM services has led to this interesting opportunity to undertake a review of the Ministry’s existing organisation and the methods used to manage its projects. We foresee other governments in the Middle East watching closely to see how this works, in the light of growing needs for improved infrastructure throughout the region (see also our article on page 22, which looks at how Saudi Arabia and Kuwait are tackling this). Our regional presence continues to prosper, and we’re very pleased to have recently secured new office premises in Doha.
In other good news, I’d like to introduce our new Paris office, launched earlier this year and explored on page 14. We feel this is the ideal time to increase our mainland Europe visibility, so that we can better help clients with their local needs in France and throughout central Europe. Centrally located in the main business district in Paris, the office enables us to support clients in the pharmaceutical, industry and energy sectors, such as Michelin, and EDF on their nuclear new build programme.
South East Asia has felt the effects of the global financial crisis somewhat less than many other parts of the world. We’re excited about the growth potential here, building on the stable platform of our 20-plus years in the region. Page 18 considers the current construction outlook, while page 4 profiles Temasek Polytechnic, one of our education sector projects in Singapore. As we go to press, our new office in Suzhou has just opened, our fourth base in China, complementing our existing offices in Shanghai, Shenzen and Beijing.
We’re excited about our involvement with the UK government’s first project to be executed using BIM, discussed on page 20. The Ministry of Justice early adopter project will provide ‘lessons learned’ evaluation after each stage, in order that processes can be improved going forward. The public sector is driving this initiative, but we can expect to see increasing engagement within the private sector too.
Thank you for your interest in Faithful+Gould and I hope you’ll enjoy this edition of Solutions. I’d be delighted to hear from you if you have any comments or if you’d like to know more about any of our services or initiatives. You can also follow us on Twitter, join our LinkedIn discussion group or sign up for our bimonthly email communications if you’d like to keep your finger on the pulse of constructive expertise.
Throughout the life of assets in the built environment, the use of BIM will impact upon the performance and management of buildings. The BIM data and model outcomes can be used to ensure optimal asset
Donald Lawson, CEO Worldwide Operations
Issue thirty-one
3
Temasek Polytechnic
Campus redevelopment in
Temasek Polytechnic is expanding and improving its campus facilities, to cater for new courses such as aviation and aerospace engineering. Singapore places strong emphasis on its education system, to provide its people with the skills needed for a rapidly changing global economy. Over 70,000 students are currently attending one of Singapore’s five polytechnics, set up to train middle-level professionals to support the country’s technological and economic development.
4
Issue thirty-one
Starting with just four courses when it was first established in 1990, Temasek Polytechnic (TP) has matured as one of Singapore’s leading educational institutions. The polytechnic now offers 53 full-time diploma courses across applied sciences, business, design, engineering, humanities and social sciences, and informatics and IT. Situated in the east of the island, the campus sits on a 30-hectare plot of land fronting the Bedok Reservoir, catering for a student body of around 15,000. A Campus Masterplan which serves as a guide to strategise TP’s future campus development
Faithful+Gould is also working with Singapore’s Ministry of Education on several projects, as both primary and secondary education facilities undergo renewal throughout the country.
and upgrading plans was set up to meet the polytechnic’s short and long term goals. This also addresses the urgent need to provide new teaching facilities, to keep up with an expanding student population and anticipated enrolment increases in the future. The Masterplan clarifies and aims to build upon the strengths of the campus. Key features such as the signature views and spaces have been identified and are protected from further development while other potential areas have been earmarked for future growth and re-development, to improve connectivity in and around campus and to create more buzz. Faithful+Gould was appointed in 2009 as cost managers, to fulfil the Campus Masterplan vision. We are working on several new building developments, together with a range of refurbishment projects and planned maintenance of existing facilities. Services include feasibility studies, pre-contract and post-contract administration, procurement support and cost management.
We have worked alongside multiple stakeholders on these projects, liaising with the polytechnic’s estates and facilities management team, as well as the directors of the individual faculties, the Principal and the Board of Governors. There are multiple expectations, with each faculty having their own set of requirements and priorities. In addition, the buildings are designed with the aim of achieving Singapore’s Green Mark sustainability accreditation status. In addition to TP, Faithful+Gould is also working with Singapore’s Ministry of Education on new primary and secondary school developments, together with upgrading programmes on existing schools; National Technological Universities (NTU) on term contracts, and Singapore Institute of Technology (SIT) campus within TP. Our wider global educational experience encompasses schools, colleges and universities across the UK and US. For further information contact Salman Younus on +65 6227 6144 salman.younus@fgould.com
Issue thirty-one
5
Agile
Working MAKING PROPERTY WORK HARDER
6
Issue thirty-one
Both public and private sector organisations are looking closely at their real estate portfolios to ensure that they’re not carrying excess weight and that their space is configured for best use. The concept of agile working enables property holders to use their property assets to enhance their business, by getting the best from the interface between people and space. The way in which we work has changed, making the traditional view of the office as workplace less relevant to many organisations. The office may still retain its function as ‘the hub’, but changes in technology have facilitated new ways of working. Smarter workspace strategies can ensure that the space accurately reflects the business plan and actively enhances business performance As the UK’s largest landowner and tenant, central and local government is ripe for workspace strategy innovations. Estimates suggest that the total UK public sector estate is valued at £370 billion, with an annual running cost bill of £25 billion and carbon emission of around 20 million tonnes. With public spending reductions of over 25 per cent required over four years following the 2010 Budget, maximising efficiencies and adopting a transformational approach to the estate could help protect front-line public services. For local government, the challenge is how to alter the profile of their estate in order to capture the required cost savings. Private sector organisations face similar issues and opportunities. BT, for instance, is reported as saving £500 million per annum over the last two decades, as a result of rationalising its estate through a series of initiatives including an increased focus on space provision, occupation and utilisation. The decision to rationalise or reconfigure accommodation provides an ideal opportunity to deliver space that does more than simply
provide a place to work. Rationalised property and a rationalised workforce can be aligned to realise maximum benefit from both. Work settings can be aligned with the business vision and with the type of work undertaken by teams and individuals. Agile working is increasingly linked to a new breed of corporate workplace environments that engender a sense of community, collaboration and interaction. Changing the nature of the workplace environment and encouraging remote or flexible working strategies also brings challenges in terms of infrastructure, workspace design and management style. Significant culture changes may be needed to allow workers more freedom in choosing the location best suited to the task they are undertaking. The resulting mix of spaces will be different for each organisation, and will ideally follow a series of detailed assessments of the business vision, the way in which space is used, the range of ‘work styles’ and their frequency of use, the infrastructure available and its constraints. By taking all of these factors into consideration, organisations can move towards transformational change that allows workspace layout to support improvements in business performance. Faithful+Gould supports public and private sector clients in implementing innovative ways of working, contributing to culture transformation that ensures successful and lasting change. Our team has worked with local authorities to help them to future-proof their decisions. In the private sector, we are providing these services to a range of global pharmaceutical, chemical and financial corporations.
For further information contact Richard Morris on +44 (0)20 7121 2121 richard.morris@fgould.com or Martin Dancy on +44 (0)20 7121 2121 martin.dancy@fgould.com
Issue thirty-one
7
Kuwait
Government invests in improved project management systems
Kuwait’s drive to diversify its economy, through a combination of government investment and increased private sector participation, has placed infrastructure at the forefront of the country’s development plans. Like many of its GCC neighbours, the Kuwaiti government has outlined plans for significant state investment in transport, energy and social services infrastructure, also intended to stimulate activity in the wider private sector. Although government spending plans in recent years have been affected by political and parliamentary uncertainties, the public sector accounts for over 70 per cent of GDP. Much of Kuwait’s existing infrastructure is in need of renovation and replacement. The Ministry of Public Works (MPW) is responsible for managing the planning, design and construction of a large percentage of public sector capital projects throughout Kuwait. The Ministry aims to provide high quality standards, innovative construction solutions and cost effective projects which are delivered on time. The MPW has appointed Faithful+Gould (in conjunction with a local partner, Kuwait United Development and specialist sub-consultant CMCS) to undertake a review of its existing organisation and the methods used to manage its projects. The aim is to develop a tailor-made Project Control System (PCS), underpinning a more centralised and standardised approach to planning, design, procurement, construction and operation of built environment assets. The ensuing Project Management Office (PMO) capability will enable MPW to undertake ongoing control throughout the project lifecycle as well as enhance their
8
Issue thirty-one
ability to manage the maintenance of the facilities beyond completion of the project phase. Using a team of up to 45 project management specialists, we’ll begin the two and a half year project by undertaking a full gap analysis of the current situation. This will focus on perceived problem areas and shortfalls, together with potential solutions. Aligning the PMO service to MPW’s strategic business objectives will enable embedding of robust, transferable processes and procedures. These will maximise the capabilities of the existing organisation and will demonstrate international best practice. As part of the second phase, we’ll train 180 MPW staff to operate and manage projects using the new system. Finally, a comprehensive auditing and continued training phase will ensure that the newly embedded system is understood and fully functional. MPW will then take control of their new PMO system, based on Primavera professional project management software. The training of local professionals is vital to the success of this project and highlights MPW’s determination to embed the new system and practices into their construction industry. This is part of a wider initiative in Kuwait, where incoming consultancies are required to contribute to the country’s investment in training and professional development. On this project, the training will comprise 39 days of formal tuition, followed by 39 days of project-based training. Faithful+Gould offers PMO services globally in a wide variety of public and private sector commissions, encompassing real estate, construction, IT platform, facilities management, communication and change management and space management.
For further information contact Paul Woutersen on +965 2295 8585 paul.woutersen@fgould.com
Issue thirty-one
9
An
efficient building is a sustainable building
As a key corporate resource, property assets consume significant capital and revenue expenditure. UK central government departments, government agencies, Scottish government and local authorities have all been affected by the Comprehensive Spending Review, as policymakers seek to reduce the public sector borrowing deficit. The private sector meanwhile continues to weather reduced levels of expenditure across the financial, retail, commercial and manufacturing sectors. Because of reduction in funding, both the public and private sectors need to make their assets work
10
Issue thirty-one
harder than ever. The property portfolio, typically representing as much as 25 to 30 per cent of overall costs, inevitably comes under scrutiny if not criticism, particularly given the historic levels of under-investment in many cases. In parallel, the sustainability agenda continues to challenge estate holders as businesses are expected to deliver the necessary reductions in emissions and waste, often with a backdrop of inefficient and wasteful
buildings. However these issues are too often sidelined and seen as impractical and/or costly. Our experience shows the need for strong business cases in the areas of energy efficiency, water and waste management and we have experienced the potential for very high returns on investment for energy efficient projects. Among our client base, however, we are finding that many organisations feel exposed in their sustainability efforts. They may be making bold CSR claims around sustainability, which need sound reinforcement to protect corporate reputation. In the past, investment in new property or major refurbishment would be the preferred mechanism for dealing with inadequate property assets. Current financial constraints, likely to continue for some time, mean that this option is less accessible and affordable. So what can be done to protect output and business requirements within a more constrained financial landscape? Strategic asset management planning, together with effective facilities management services, presents the ideal opportunity to address both issues. Operational efficiency, based upon a deep understanding of how support services should be delivered within a building, will contribute enormously to the effectiveness of the building in delivering a useful business environment. Proper management of space, its use, the logistics of materials handling (inbound and outbound logistics) and, very importantly, the specification procurement and management of maintenance and operational services can contribute enormously towards the efficiency of buildings. An efficient building is one where the space is available when required and suitable for its business purpose; this means
less wasted space being managed and secured with associated costs in heating and lighting. Our article on agile working (page 6) supports this approach. In addition the sensible specification and procurement of effective services will result in less input cost and fewer resources being expended needlessly. These strategic asset management activities can dovetail effectively with sustainability of buildings in use, embedding both into the business case. As well as effective and less wasteful building management, maintenance and operational practices, low-cost and no-cost environmental improvements can be identified. These lead to quick wins and to longer term improvements which help reduce operating costs, energy use, waste and carbon emissions. A recent energy audit conducted on a client’s headquarters building released energy savings of £500,000 per annum through revised maintenance practice. The audit identified heating systems ‘fighting’ cooling as both systems were running simultaneously, and Building Management Systems having been overridden, so that the building’s main plant was operating 24 hours per day, 7 days a week. This link between effective portfolio operation and environmental performance has long been understood by Faithful+Gould’s strategic asset management and sustainability team and we have many examples of effective FM services reducing cost and improving building and environmental performance. Faithful+Gould supports property portfolio holders in managing their assets in a sustainable way, to optimise performance and minimise expenditure. Our strategic asset management service ensures that our clients can maximise the use of their property, aligning this to their business goals. The outcome is an efficiently configured estate with well designed, efficiently procured and effectively managed services.
For further information contact Jim MacFarlane on +44(0)141 220 2000 jim.macfarlane@fgould.com
Issue thirty-one
11
PET OCTAL, the Middle East’s largest PET resin manufacturer and the world’s largest sheet manufacturer, is expanding its Oman-based manufacturing plant. Oman’s oil and gas reserves – though currently plentiful – are expected to deplete more quickly than those of its neighbours, and diversification of the economy is therefore a priority for the Sultanate’s government. Oman’s governmental policies and incentives have fostered an export culture and aided the private sector in developing export strategy. Given the GCC’s rich oil reserves, the region has been quick to develop the PET industry as part of a wider push to increase petrochemicals output. PET (polyethylene terephthalate) plastic is widely used for beverage bottles, food containers and product packaging, and most of the plastic is produced from petroleum.
MANUFACTURING PLANT The Middle East’s largest PET resin manufacturer is OCTAL Petrochemicals, located in the port city of Salalah on the southern coast of Oman. The world’s largest PET sheet manufacturer, OCTAL already contributes around 10 per cent of Oman’s annual non-oil exports. OCTAL was formed in 2006 by a group of US and Omani investors. Since then OCTAL has migrated from a conventional manufacturing base to one that can handle the most advanced technologies in clear rigid packaging. The company is now further investing in its facilities, by completing a US$200million expansion of its manufacturing plant. Its largest production facility to date, the new plant will increase the company’s capabilities for the European, American and Asian food and consumer packaging markets. Scheduled for overall completion in July 2012, the plant will add an additional 527,000 tonnes per annum of PET bottle grade resin to OCTAL’s current production capacity to reach 927,000 tonnes per annum – making it the largest in the world on one site. Through the application of pioneering technologies, OCTAL has already set new global benchmarks for both product and environmental excellence and currently uses 67 per cent less electricity to manufacture DPET™ (Direct-to-PET) sheet and 38 per cent less energy for resin. In addition, 80 per cent of water used in the purpose-designed production facility is reused and all of OCTAL’s energy needs are derived from clean burning natural gas with its
12
Issue thirty-one
80
%
38
%
The electricity used to manufacture DPET™ sheet
67 LESS
LESS
energy for resin
of water used in the purposedesigned production facility is reused
%
on-site high efficiency burners consuming up to 20 per cent less gas than traditional PET plants. The PET produced is 100 per cent recyclable.
20
%
LESS
100
%
recyclable PET produced
gas consumed than traditional PET plants due to high efficiency burners.
completed without any lost-time-injury, thanks to stringent health, safety and environment practices.
Faithful+Gould’s team in Oman is providing programme management services throughout the project life cycle. We joined forces with our Faithful+Gould Singapore colleagues to reinforce the process engineering expertise needed on the project.
The project has also presented logistical challenges. The port of Salalah, Oman’s largest port, is playing an increasingly important role in the region, but is relatively isolated. OCTAL’s manufacturing process requires very heavy equipment, with the associated difficulties in transferring into the building.
One of the key challenges of this project is the extremely tight timescale, which means our 20-strong team is delivering the facility twice as fast as the previous phase. This will ensure successful delivery to meet the critical milestone dates for mechanical completion and testing of the systems, in order that production can start in May 2012. Safety and quality issues are also extremely important. To date, a total of 550,000 man-hours have been successfully
Faithful+Gould provides an integrated range of project management and cost management solutions to clients across many manufacturing sectors. We have a detailed understanding of the interface between the manufacturing process, incoming raw materials and finished product distribution. In the refining, chemicals and petrochemical industries, our client portfolio includes many major players both upstream and downstream, in the Middle East, US and UK.
For further information contact Martin Hunt on +971 4405 9100 martin.hunt@fgould.com
Issue thirty-one
13
Faithful+Gould
launches new office
Paris Faithful+Gould’s newest office opened in Paris in January 2012, close to the city’s opera district.
14
Issue thirty-one
A key step towards expanding our presence in France and central Europe, the new addition takes our total number of offices to 51 worldwide. The decision has followed an influx of opportunities, particularly within the pharmaceutical, energy and manufacturing sectors working with high profile clients such as ITER, Michelin and EDF. Energy is a key strategic sector for Faithful+Gould and we are working alongside one of its major players, EDF Energy. Our Paris office will underpin our relationship with EDF Energy in their home location. Faithful+Gould has been working with NNB Genco Ltd for the past two years. This joint venture company is owned 80 per cent by EDF and 20 per cent by Centrica and is the prospective licence holder to build and operate the UK’s new nuclear power stations. Twin nuclear power stations are planned for each of the two sites at Hinkley Point in Somerset and Sizewell in Suffolk. Our French portfolio also includes the ITER International Thermonuclear
Experimental Reactor project currently under construction in Provence. On this project we are working alongside Atkins, as part of the Engage consortium. Additionally we are supporting Michelin with their international programme of new tyre production facilities in China, India and Brazil. Our wider European client base includes several global biopharmaceuticals companies. We are experiencing healthy demand for our project controls services in this arena and also in the chemicals and electronics sectors. In these industries we are appointed on a diverse range of commissions in Germany, Belgium, Switzerland, Portugal and Poland. In addition we are supporting n.triple.a, a joint venture company established between Atkins Nuclear and Assystem to provide consultancy and engineering services to countries developing nuclear power as part of their energy mix. Our Paris office is housed in the same building as our parent company Atkins, which will offer further collaborative opportunities in the future.
For further information contact Ian Metcalfe on +44 (0)20 7121 2121 ian.metcalfe@fgould.com
Issue thirty-one
15
Extra
Care
Housing housing (predominately perceived as both an interim and a public sector option) or moving into some form of care home (often with surrender of housing equity).
Demand for ‘extra care’ housing and retirement community developments is set to rise steeply over the next 20 years. Amid uncertainty about the impact of the Health and Social Care Act and with the launch of the social reform white paper still awaited, the debate on social care for older people continues. Historic under-funding of social care and cuts to local government budgets have left the system in crisis. There is uncertainty about future investment in retirement housing in both the social and private sectors. Developers are concerned about planning and financial restrictions that prevent new and innovative forms of retirement housing; the private leasehold market is being held back by the housing slump. Choice in accommodation for older people has traditionally meant one of three options: remaining in their long-term family home (which may have become increasingly difficult to maintain or increasingly inaccessible); moving to sheltered
16
Issue thirty-one
Extra care housing, sometimes referred to as an assisted living community or sheltered housing with care, has developed as part of the changing housing landscape, and represents a relatively new model of ‘housing with care’ for older people. Private extra care housing offers older people a legal right to their own self-contained home, with the delivery of flexible 24 hour tailored care and support as and when they need it. All forms of extra care housing promote independence, allowing individuals to remain in control of their lifestyle with the private examples permitting retention of equity in their property. The benefits of extra care housing have been reinforced by the Dilnot Commission’s independent review of the funding of social care in Britain. In July 2011 the commission’s report highlighted that the current funding system is hard to understand, often unfair, unsustainable and in urgent need of reform. The report stressed the strong link between good housing and better health. This leads to fewer hospital admissions and less need for progression to institutional care, allowing the NHS to focus resources on those most vulnerable. The Dilnot Commission’s proposal for a capped care fee contribution from recipients, whilst potentially allowing partial retention of their housing equity, would cost the government £1.3billion to implement
the recommendations – the March 2012 Budget did not bring good news however. Despite the ageing population, construction of specialist retirement housing has waned since the mid-1990s. Construction of extra care housing has mirrored this trend, declining in recent recession years, with only around one per cent of households of pensionable age currently living in this type of housing.
“ Unless retirement housing is attractive and fits with lifestyle choices, it is likely to decline”
The demand is clearly there, but in the light of government cuts, who is going to pay for this? Different models, formats and approaches by which extra care housing might be developed are under the spotlight for all social housing providers. The capital financing of developments and provision of funding advice for individuals remains uncertain, but it seems likely that the next wave of provision will be in the independent sector or at least in mixed tenure schemes. Nearly 80 per cent of older people currently own their own home, estimated collectively to hold over £1 trillion in equity. New funding models could potentially allow people to use their largest asset, their home, to fund their retirement housing and care. Developing strategic direction for extra care housing will require partnerships across a range of agencies. Key stakeholders include health, social services and housing authorities, planning, funders, community leisure, transport, independent sector providers (both building and care providers), voluntary agencies, current and potential users and their carers. Faithful+Gould has a strong presence in the housing sector and in the provision of services for a variety of care and extra care models. We have over 30 years’ experience of supporting a range of registered social landlords, local authorities and private developers throughout the UK. We help our clients navigate a route through the funding challenges and on to achieving best value in capital and operational cost planning. For further information contact Mark Bugler on +44 2920 358014 mark.bugler@fgould.com
Issue thirty-one
17
South East
Asia
Construction outlook encouraging
The effects of the global financial crisis have been felt less in South East Asia than in many other parts of the world. Countries such as Singapore, Indonesia, Malaysia and South Korea and have all registered growth in the range of three to six per cent in 2011. The prospects for economic growth in 2012 are good, although a return to the very high levels seen in the past is not expected. Indonesia, by far the most populous country in the region, is expected to grow by around 6 per cent in 2012, Malaysia by 4 per cent, South Korea by 3.4 per cent and Singapore by 3 per cent. The prospect of a Eurozone meltdown seems to be receding and a mild recession in Europe will have limited impact on the economies in South East Asia, which increasingly look to China as the main engine of growth. So what does this mean for the construction industries in these markets? First let’s look at demand for goods and services, and then at the way in which this demand is going to be met.
18
Issue thirty-one
Having benefited from many years of sustained growth, dating back almost uninterrupted to the 1996 Asian financial crisis, and from the growth of an increasingly affluent middle class, many countries in the region are experiencing an increase in domestic demand which is helping to drive up demand for services and goods. Strong examples of this are education and healthcare. Asians are well known to place great emphasis on the value of education and the resources that are expended on this sector are therefore very significant. All countries in the region are looking to upgrade their educational systems. Higher education is attracting investment locally, and Singapore is among the countries which are funding improvements in higher education facilities (see page 4, article on Temasek Polytechnic). In response to the demand for improved standards and facilities, an increasing number of overseas educational establishments are appearing in the region, such as in the Iskandar Development zone
in southern Johor, Malaysia. The Philippines government meanwhile is looking to use the PPP model of procurement to upgrade a large number of its public sector schools. Similarly, healthcare demand is growing. This is being driven by growth in disposable incomes and also demographic changes. Countries such as Singapore, for instance, are now experiencing an increasingly ageing population, where economic advancement has led to an increase in life expectancy. The market is responding to this demand both in the private sector, where private hospitals are being set up in many countries, and in the public sector, where different forms of procurement strategies are being explored as a way of meeting the growing needs. On the supply side, the construction industries in the region are faced with a reasonably strong and consistent demand for their services, although this is of course subject to the changes in demand as market sectors experience different cycles. One of the major challenges facing governments in the region is the
provision of infrastructure to support economic growth and to meet the aspirations of their citizens. There is growing awareness that infrastructure needs cannot be met solely from government revenue and many countries, such as Indonesia, the Philippines and Vietnam, are looking to utilise private investment. They are supported in this by institutions such as the World Bank and Asian Development Bank which are funding studies into how projects can be brought to market in such a way as to attract private funds. However, there are a number of obstacles in the way of this process which will have to be cleared before private funding can make a significant difference to the infrastructure gap in the region. Faithful+Gould has had an office in Singapore for over 20 years, supporting a wide variety of public and private sector projects in the region. We are involved with a variety of procurement models in the education sector including PPP projects, using both our local experience and our wider global PPP expertise to facilitate the growth of this model.
For further information contact Martin Riddett on +65 6227 6144 martin.riddett@fgould.com
Issue thirty-one
19
First
BIM
Project FOR UK GOVERNMENT
Building Information Modelling (BIM) is increasingly being adopted across the construction industry. This collaborative, integrated working process is expected to revolutionise the construction sector, redefining the relationships between construction professionals. In January 2012, Government Chief Construction Advisor Paul Morrell stated that BIM is now on an unstoppable course, adding, ‘There will be spectacular change – we are only just beginning to understand the scale of what can be achieved and the amount of waste that can be eliminated from the system.1’ The Government Construction Strategy, published in May 2011, included plans for a phased roll-out, mandating ‘fully collaborative 3D BIM as a minimum by 2016’ for public sector projects. The Ministry of Justice (MoJ) is leading the way with the first public sector scheme to be executed using BIM. As part of its new £2.4billion framework, the MoJ requires that constructors bidding on its
20
Issue thirty-one
Strategic Alliance Agreements must demonstrate their ability to use BIM on all projects by 2013. This first ‘early adopter’ project is for HM Young Offenders Institute at Cookham Wood, Kent, a key custodial establishment for the south east. The works will expand the existing accommodation at the prison to provide new cellular accommodation and a new education facility. Faithful+Gould has been commissioned by the MoJ to provide project management consultancy services on the scheme. Faithful+Gould has been instrumental in guiding our client through the procurement process to ensure that the project outcomes are met. Overall the expectation is that essentially the use of BIM will enable this project, and those in the pipeline, to be built with an optimal design, construction and operating solution. Minimising waste is an inherent benefit that reinforces the MoJ’s existing ‘lean programming’ philosophy and implementation. The BIM process facilitates the building up of a library of standard COBie2 data which can also be used on future MoJ project designs. The COBie data will be used to inform the decision
‘ The first early adopter project delivered in line with the Government Construction Client Group BIM Working Party Strategy Paper’
Upon project completion, the data and model outcomes can be used to ensure optimal asset performance. The COBie captured data will allow the MoJ to explore and closely monitor their asset usage: how the systems are operating, and when and why they need maintaining. Modelling for better user outcomes, and the ability to feed this data back to inform future projects, underpins the real client value proposition. Faithful+Gould was responsible for ensuring that the tender information and contract documents exactly reflected what the client required from the Constructors with regard to BIM. To this end we helped to draw up BIM Client Requirements documentation, enabling the project to go to tender two weeks earlier than planned. We facilitated Constructor Briefing sessions during the tender period to ensure that these requirements were fully understood by all tenderers. Our role has also included devising project programmes which encompass the BIM processes,
and enabling the client and design teams to better understand how the BIM interfaces and deliverables tie in with the ‘traditional’ project processes. Ongoing, we will be taking this first project through each project and BIM stage, providing ‘lessons learned’ evaluation after each stage for our client, in order that processes can be improved going forward. As well as leading on the first government project to be constructed using BIM, we are also active at strategic and policymaking level. Simon Raine of Faithful+Gould was involved in the original working party that led to the March 2011 Government BIM Strategy Paper. The working party’s efforts will contribute to drafting of the PAS (Publicly Available Specification) on BIM, which will lead to the first British Standard document on BIM. Morrell was speaking at the Chartered Institute of Marketing Construction Industry Group chairman’s debate
1
For further information contact Jane Foulkes on +44 (0)20 7121 2121 jane.foulkes@fgould.com
Construction Operations Building Information Exchange data
2
Courtesy of: HLN Architects
making process and to provide a library of useful data throughout the entire project lifecycle.
Issue thirty-one
21
Saudi Arabia and Kuwait
Improving
Social
Infrastructure
Governments in the Middle East are stepping up to the challenge of delivering much needed social infrastructure. In a departure from the predominantly real estate focus of previous years, the GCC countries are currently investing in housing, healthcare and education for their young and growing populations. Saudi Arabia and Kuwait are actively exploring ways of improving and investing in their social infrastructure. Both countries are experiencing a shortage of housing for their expanding young populations. Market focus is therefore shifting away from high-end residential development towards affordable housing,
22
Issue thirty-one
with demand primarily concentrated in the metropolitan areas. The long awaited enactment of Saudi’s mortgage law is also expected to act as a catalyst for the domestic real estate sector, widening funding options for middle and lowmiddle income groups. Saudi’s Ministry of Housing, established in 2011, intends to work alongside the private sector to meet the shortfall. Healthcare facilities have also come under the spotlight for both countries. Increasing life expectancy, together with the Middle East’s high prevalence of non-communicable diseases such as cardiovascular disease, diabetes and obesity, are putting considerable pressure on existing systems of care. Preventative and primary care are therefore seen as priority areas for the future.
In Saudi the Ministry of Health covers more than 60 per cent of healthcare expenditures and is encouraging more private sector involvement. In Kuwait the healthcare sector is undergoing rapid expansion, with the government currently spending an additional US$178 million to upgrade existing hospitals. Another key focus area is education. The privateschool market is growing rapidly, presenting opportunities for investors and school operators. A combination of demographic factors, a desire for higher quality education to international standards, and GCC parents’ increased willingness to pay for education, are driving this market. In higher education, the Saudi universities are collaborating with various international universities, aiming to promote world-class standards in the Kingdom. The Middle East governments are now placing more emphasis on planning of cohesive community facilities. In the past, developers have often failed to ensure adequate public transportation to jobs, schools and shopping or to develop local amenities. This is gradually changing through the use of masterplanning techniques to allow integration of social infrastructure into city and community planning. Governments in the Middle East are increasingly turning to the private sector for support in developing and delivering large scale projects. There is huge
potential and growing appetite for Public Private Partnership (PPP), which has to date been popular in the services and utilities sectors. Both Kuwait and Saudi are now exploring ways of mobilising PPP to develop their social infrastructure. A range of economic, social and political motivations exist for the development of PPPs, including the sharing or apportionment of risk, the integration of specialist skill sets, culminating in improved efficiency, as well as the provision of a recognised investment vehicle conducive to the attraction of private sector investment. The Middle East impetus is less funding-related and more focused on PPP’s key role in delivering projects more efficiently. PPP also promotes knowledge transfer to the local economy and Kuwait in particular is actively keen on this (see page 8, article on Kuwait’s Ministry of Public Works). The long-term commitment from international and local companies is critical to the development of PPP facilities and their successful operation. Like other countries that have achieved success with PPP, the Middle East will need to build its own specific PPP models based on local requirements. Faithful+Gould is active in both Kuwait and Saudi Arabia, where we anticipate growing demand from government ministries for support in their capital investments programmes. In Saudi, we are based in Riyadh, Jeddah and Al Khobar.
For further information contact Campbell Gray on +971 (0)4 405 9100 campbell.gray@fgould.com
Issue thirty-one
23
CHANGE Management NO-SURPRISES SOLUTION Most major manufacturing organisations have significant facilities portfolios to manage and maintain. Many experience challenges in the effective and proactive cost management of their capital programmes and maintenance projects. In this sector, governance and control are vitally important but typically problematic. Clients are seeking a no-surprises methodology – with the emphasis on transparency, predictability of cost and schedule, and uninterrupted business operation. Over the last ten years, Faithful+Gould has supported industrial clients via our best practice industrial cost and performance management system, Epoch. Epoch was developed in-house and has successfully enabled
24
Issue thirty-one
clients to efficiently improve cost predictability and control throughout the project lifecycle. The system has been continually refined, adding innovations based on client feedback and the latest technology. When our client base highlighted a gap between the core project controls tools dealing with estimating, scheduling and cost management, we set out to address this by introducing centralised standards in change management.
Courtesy of: BP, PLC.
OCMS
As a result, our first OCMS (Online Change Management System), an Epoch module, went into production three years ago. Historically, change management had been conducted via Excel- or Word-based methods, typically backed by a bundle of printouts of design documents, estimates, notes and sketches. Clients had experienced the disadvantages of these bundles of documents, which could take many days or even weeks to make the trip around Operations, Engineering, Planning/Scheduling and Project Management. This unsatisfactory process also meant that the cost engineer using Epoch had only a partial view of the cost impact of change. In such an environment, surprises in the form of late forecast overruns were inevitable. Our OCMS system was added to Epoch to facilitate centralised standards in change management. This removes delays, offering greater efficiency, cost accuracy and a higher degree of predictability. OCMS is a browser-based Change Request (CR) submission and workflow tool which allows project stakeholders to submit change requests online. These are automatically routed to stakeholders assigned to pre-defined roles based on the client’s individual business rules. As OCMS is fully integrated with Epoch, the cost impact of changes can be automatically reflected in cost forecasts. Our team of IT consultants – all project managers and cost engineers – begin the process by facilitating the completion of the OCMS configuration workbook. Supporting a high degree of configurability, this workbook is built in Excel for ultimate portability among stakeholders. Client benefits include: a highly intuitive swim lane format that clearly communicates the flow of an electronic change request a table of project roles and role assignments for each project
a delegation of authority (DOA) matrix to allow clients to specify financial and other approval levels searchable lists for change categories and types, based on clients’ own standard lists notification matrix, enabling notifications based on the client’s extended project organisation
Next, our technical team enables OCMS configuration and deployment, completing a delivery process that typically takes four to six weeks, including training and roll out. Bottleneck avoidance is a key issue and we have designed the system to cope, via these features: unlimited number of role-based delegates on a project-by-project basis individual delegates to allow stakeholders to assign approval rights for all of their projects to one individual out-of-office feature that automatically invokes CR re-routing to delegates ’Ball-in-Court’ view that allows all project stakeholders to see each pending CR in the work flow and who has the current action automated email notifications and reminders when tasks remain pending after a client-defined waiting period one-click access to your personal queue of outstanding actions which features prominently on the OCMS home page
Client feedback for OCMS has been extremely positive. Those who have adopted OCMS for all projects in their organisation have described significantly elevated transparency across the portfolio and an end to cost surprises. As one key OCMS client commented, ‘The main benefit of OCMS to Michelin is being transparent across the globe in the management of change, with all changes being routed to France for review and approval in one common system.’ Bruno Batisse, Michelin Global PMO Programme Manager.
For further information contact Mark White on +1 832 476 3300 mark.white@fgould.com
Issue thirty-one
25
RICS
Embodied
Carbon GUIDE LAUNCHED AT ECOBUILD 2012
Ecobuild 2012 saw the RICS and Faithful+Gould present draft standards and guidelines for the measurement of embodied carbon. Ecobuild, the world’s leading event for sustainable design, construction and the built environment brought together more than 57,000 industry professionals in March 2012 at London’s ExCel conference and exhibition centre. The seminar sessions featured high profile politicians, cutting edge industry experts and commentators – including Faithful+Gould‘s Director of Sustainability, Sean Lockie.
Sean Lockie, Ecobuild 2012
Sean has long argued that a truly sustainable built environment focuses not only on operational carbon, but also on the reduction of embodied carbon – the impact of CO2 emissions generated during the manufacture, transport and construction of building materials, together with end of life emissions.
26
Issue thirty-one
Sean’s team has recently authored the RICS draft standards and guidelines on measuring embodied carbon, and his Ecobuild seminar session explained the scope of the guildlines and how they will facilitate calculation, quantification and mitigation of these emissions. This work was commissioned by the RICS in response to the UK government’s request for guidelines for the measurement of embodied carbon. The draft details an approach to early stage carbon accounting and acts on recommendations set out within the UK government’s low-carbon construction action plan. It is hoped that the approach will give industry the necessary ‘rules’ to be able to calculate and mitigate carbon in construction in a consistent way. The economic viability of embodied carbon management relies on having the right tools for the job. In parallel with our strategic role on the RICS guidance, Faithful+Gould has invested in
the future of our own cost planning tools, to allow quantification and calculation of embodied carbon.
Embodied carbon has finally reached the mainstream agenda and it seems likely that it may become mandatory in the future. As methodologies develop and data sources improve, we may see the introduction of some form of taxation if projects exceed typical benchmarks or planning gain if projects do well, perhaps through the granting of more floor area.
Every cost plan we produce can now be accompanied by an embodied carbon estimate alongside our cost management plan. This will enable clients to manage their whole life carbon across their businesses in a consistent, comparable way. We had an excellent response to our pilot initiative. Clients were keen to trial the tool as a way of understanding and meeting their sustainability obligations in a cost effective manner. Consequently our pilot studies are already showing useful results for organisations in the developer, retailer, utilities and banking sectors. Clients have acknowledged added value gains, such as the benefits of embodied carbon analysis/mitigation when dealing with planning issues and CSR reporting.
It is important to note however that the approach suggested in the guide is not a full life cycle assessment with emissions built up from first principles. Instead the intention is to enable initial embodied carbon issues to be addressed as part of the standard cost management role. As Sean commented, ‘RICS wanted to try to mainstream embodied carbon, so in order to do this we had to take a more high level approach. Our trials have shown that 80 per cent of the carbon is found in only 30 per cent of the building elements, so we are confident that this approach will make embodied carbon accessible to the quantity surveyor and they will have a meaningful role in improving the sustainability outcomes on projects’.
Some public sector organisations have already started to include embodied carbon quantification and mitigation on their projects – the Environment Agency, Highways Agency and Network Rail for example. Brighton and Hove City Council require it to be calculated on all building applications.
For further information contact Sean Lockie on +44 (0)20 7121 2121 sean.lockie@fgould.com
Total embodied carbon (tonnes carbon dioxide equivalent) Foundation Ground floor construction Frame Upper floors External walls Roof Roads, paths and pavings Basement retaining walls Internal walls and partitions Floor finishes Ceiling finishes Wall finishes Windows and external doors
366 222 205
411
177 168 141
733 444
354 281
201
89 57 113 62 89 46
65
14 21 56 53
Baseline After applying embodied carbon reduction measures
“ Every cost plan we produce can now be accompanied by an embodied carbon estimate. This will enable clients to manage their whole life carbon across their businesses in a consistent, comparable way.”
Issue thirty-one
27
MEET ANOTHER ONE OF OUR SUCCESSFUL PROJECTS
UK and europe Aberdeen Athens Belfast Birmingham Bristol Cambridge Cardiff Colchester Dublin Edinburgh Epsom Exeter Glasgow Leeds London Newcastle upon Tyne Nottingham Oxford Paris Southampton Stockton-on-Tees Stoke-on-Trent Swansea Tunbridge Wells Warrington
HER NAME IS HANNAH. Hannah, a recent graduate of the London South Bank University has already gained broad experience across an impressive portfolio of clients. Hannah is currently assisting in the Managing Agent role at the International Maritime Organisation Headquarters in London. Not one to rest on her achievements, Hannah is now working towards her APC examinations in November. Faithful+Gould is one of the world’s leading construction project and cost management consultancies, and we’re proud of being an integral part of some of the world’s most iconic engineering and construction projects. But some of the projects that we are most proud of are our staff. That’s because we offer some of the best learning, travel and career opportunities in the sector.
+44 (0)1224 620202 +30 210 724 1311 +44 (0)28 9089 5870 +44 (0)121 483 5483 +44 (0)1454 663000 +44 (0)1223 814200 +44 (0)2920 485181 +44 (0)1206 732100 +353 (0)1890 8600 +44 (0)131 221 5600 +44 (0)1372 753121 +44 (0)1392 813100 +44 (0)141 220 2200 +44 (0)113 306 6600 +44 (0)20 7121 2121 +44 (0)191 272 5150 +44 (0)115 957 4800 +44 (0)1865 734100 +33 142 68 50 65 +44 (0)23 8033 8835 +44 (0)1642 675136 +44 (0)1782 222233 +44 (0)1792 641185 +44 (0)1892 510500 +44 (0)1925 238300
NORTH AMERICA Atlanta Boston Chicago Dallas Houston Los Angeles Minneapolis New Orleans New York Orlando Philadelphia Phoenix Portland San Francisco San Juan Seattle Toronto, ON Washington, DC
+1 404-874-3638 +1 617-423-5548 +1 312-655-8510 +1 972-818-7275 +1 832-476-3300 +1 562-314-4200 +1 612-338-3120 +1 832-476-3378 +1 212-252-7070 +1 407-875-0707 +1 215-789-2040 +1 602-445-3570 +1 503-747-2455 +1 415-781-6677 +1 609-403-7870 +1 206-664-6360 +1 416-644-5098 +1 703-684-6550
MIDDLE EAST Abu Dhabi Doha Dubai Kuwait Oman Riyadh
+971 2627 0500 +974 466 9209 +971 4405 9100 +965 2295 8585 +968 2456 0478 +966 1462 8770
ASIA PACIFIC Hong Kong Shanghai Singapore
28
Issue thirty-one
+852 2810 4928 +86 21 6080 2100 +65 6227 6144
FSC Logo to be added by MBA