Construction Projects Finance and Insurance, Construction Leaders Magazine Feb2019

F E B R U A RY 2 0 1 9

Finance and Insurance for

Construction Projects

NEWS AECOM and Harvard Graduate School of Design envision Manila’s future in newly completed study

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KONE to equip Stage One of Melbourne Square mixed-use development in Australia

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CATERPILLAR AGAIN NAMED TO DOW JONES SUSTAINABILITY INDICES

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EDITOR‘S NOTE

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he construction industry can be a dangerous place to work, creating many health and safety challenges. This is why we think it is essential to work with a dedicated risk management team who have the expertise to advise on the best ways to mitigate risk during the construction process and beyond as the building is occupied.

Proactive Risk Management: The Insurer by the engineers’ side to advise and help prevent incidents Most insurance companies now provide risk engineering advice on best practices in health and safety on site, adherence to engineering standards, and/or compliance with applicable standards and regulations related to the protection of construction sites.

Health, Safety and Security is Paramount in Construction Projects

The parties at stake in a construction project form a complex ecosystem indeed! From a developer and lender point of view, project safeguards and financial security are fundamental to obtaining investment.

Insurance companies act both Risk engineers can provide as large investors and as risk auditing and testing of project transfer partners during the risk management as well as complex construction phase of support customers who require a new project. an independent organization to In line with these needs, the oversee contractors from a risk range of insurance products management perspective. has never been so wide or inaffordable. Along with a Construction Insurance and deed programme of proactive risk Risk Management: Why is the management, they form a powtool in reducing the risk to insurer one of the corner-stones erful both the insured and the insurof complex projects? er.

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Insurance Cover for Construction Projects: What Does It Protect?

Whether it’s a new construction, conversion or renovation, the main reason why insurance policies are sought in a construction project is to comply with the insurance requirements of the contract. In that view, the cover is usually taken in the joint names of the contractor and the principal.

CON TENTS

COVER STORY

NEWS

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Insurance cover for Construction projects: What Does It Protect?

AECOM and Harvard Graduate School of Design envision Manila’s future in newly completed study

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Proactive Risk Management: the Insurer by the engineers’ side to advise and help prevent incidents

KONE to equip Stage One of Melbourne Square mixed-use development in Australia

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Focus on Health and Safety

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CATERPILLAR AGAIN NAMED TO DOW JONES SUSTAINABILITY INDICES

Ensuring the

Construction is Insured Sponsored front cover story by AXA

Construction Insurance and Risk Management: why is the insurer one of the corner-stones of complex projects?

The parties at stake in a construction project form a complex ecosystem indeed! From a developer and lender point of view, project safe-

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guards and financial security are fundamental to obtaining investment. Insurance companies act both as large investors and as risk transfer partners

during the complex construction phase of a new project.

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COVER STORY

In line with these needs, the range of insurance products has never been so wide or indeed affordable. Along with a programme of proactive risk management, they form a powerful tool in reducing the risk to both the insured and the insurer.

Insurance companies act both as large investors and as risk transfer partners during the complex construction phase of a new project.

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Insurance cover for Construction projects: What Does It Protect?

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hether it’s a new construction, conversion or renovation, the main reason why insurance policies are sought in a construction project is to comply with the insurance requirements of the contract. In that view, the cover is usually taken in the joint names of the contractor and the principal.

It covers the construction project during the entire construction phase, and also during testing and after the handover, specific guarantees keep operating during the maintenance period. ‘All risks’ of material damage are embedded in these tailor-made policies for the construction industry: fire of course, but also natural events (flood, storm, earthquake, etc.), accidents during testing and commissioning, and even handling mistakes or faults in erection.

In fact, 80% of losses originate from a human error!

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COVER STORY

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ut material damage is not the only risk that contractors and principals face. In particular, during construction, events for which the contractor or the principal is liable can happen quickly. For that reason, construction policies also cover third party liability arising from damage to third party property or even bodily injury, occurring in direct connection

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with the construction works. On top of that, each project is different and dedicated covers are available case by case: covering the plant and equipment on site, the existing property of the principal, delay in start-up consecutive to a loss, specific interests of lenders and financing parties, project cargo for parts being transported on the construction site, temporary storage, or even the workmen

COVER STORY

compensation needed by the employer. At AXA, we offer a construction package, which covers and protects the needs of the relevant stakeholders, identified for each contract with the project team.

It is also worth focusing on ‘Delay in Start-Up’, also referred to as Advanced Loss of Profit (ALOP). In essence, the ALOP element covers clients against lost revenue following a physical loss under a construction policy. This financial security, although it is an optional cover which comes with a certain cost, is viewed as a very strong security, in particular by financing parties.

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Risk management services provide support and advice at every stage of a building’s life cycle

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COVER STORY

Proactive Risk Management: the Insurer by the engineers’ side to advise and help prevent incidents

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ost insurance companies now provide risk engineering advice on best practices in health and safety on site, adherence to engineering standards, and/or compliance with applicable standards and regulations related to the protection of construction sites.

Risk engineers can provide auditing and testing of project

risk management as well as support customers who require an independent organization to oversee contractors from a risk management perspective.

This can range from a small house building contract to some of the largest and most complex construction and engineering projects across the globe.

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COVER STORY Risk engineers are highly specialised in construction projects, and have generally been involved within the construction industry with experience in all aspects of Construction Risk Management.

Risk management services provide support and advice at every stage of a building’s life cycle. It can support those involved from the conception stage of a construction project and throughout its occupation and can play a key role in the risk management of the project.

The ALOP element covers clients against lost revenue following a physical loss under a construction policy.

Unlike other insurers, we at AXA do not outsource our risk management services. We have approximately 160 specialist risk engineers located worldwide and carry out all risk survey site inspections including power plants, industrial building as well as high rise residential building.

Focus on Health and Safety The construction industry can be a dangerous place to work, creating many health and safety challenges. This is why we think it is essential to work with a dedicated risk management team who have the expertise to advise on the best ways to mitigate risk during the construction process and beyond as the building is occupied.

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COVER STORY

AXA Risk Engineers can provide: • The skills in-house to provide • Advice on Modern Methods support during the initial dis- of Construction (MMC) and cussion with the design team BREEAM (the leading design and assessment method for • Surveys for contract works, sustainable buildings). Methwhether it’s a one-off project, ods of construction may be new a large phased construction to certain clients, but there’s project or a PFI contract every chance that we have experience of that method and • Experts who can give advice can give appropriate advice on problematic aspects of any building • Advise on security if we know that a site will become vulnera• Visits to site to suit customer ble. We work with our partners requirements during the build- to provide specialist temporary ing phase as the site changes high-security steel screens, and the risks evolve alarm systems and round-theclock monitoring with an emer• Third Party audits against gency call-out service.

Joint Code of Practice requirements -end-

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NEWS

AECOM and Harvard Graduate School of Design envision Manila’s future in newly completed study

AECOM, a premier, fully integrated global infrastructure firm, together with the Harvard University Graduate School of Design (GSD), hosted today a public forum to launch the exhibition of Manila: Future Habitations at the San Ignacio Church and Mission House.

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Centered on envisioning Manila’s future, the forum and exhibition are the culmination of Harvard GSD’s research of the 2018 Design Research Studio, launched in February with the Philippines’ capital as its subject.

NEWS

Today’s public forum engaged more than 300 key stakeholders in a discussion on how Manila can overcome and address its challenges to sustainable development and renewal, with a particular focus on the design of its human settlements, new types of dwellings, the connective tissue and common ground of cities, and the challenge of designing for the human condition against future tensions. It also highlighted the need to future proof and establish sustainable development in the identified areas in Manila.

“The aspiration for a more livable city was palpable when we were here in February for the first public forum. What this six-part studio collaboration has reiterated is that while each city has a unique history and character, the aspirations of its citizens and the challenges of its policymakers are universal and representative of so many of the world’s urban-centric issues, such as the economic drain of traffic congestion and homogeneity,” said Mohsen Mostafavi, Dean and Alexander and Victoria Wiley Professor of Design, Harvard GSD.

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NEWS

“The Southeast Asia Studio project has been a very successful and meaningful collaboration with the Harvard Graduate School of Design because we are shaping the mindsets of new and existing generations, through the students’ design research and the public forums. It is imperative that we consider the future through

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new eyes and from fresh perspectives. We hope that the insights and proposals gained from the bright minds in this design exercise will be beneficial to Manila,” said Sean Chiao, President, Asia Pacific, AECOM.

The Manila design studio illustrated urban design as jigsaw puzzle solving, and demonstrated how local coherence across four sites was achieved by considering beyond the challenges of individual sites.

opment. From re-programming the Port Area, to developing a construction framework for future housing expansion in Baseco, to addressing the wall at Intramuros, to rethinking connectivity across the Pasig River, the urban issues this studio focused are current pressing “The four sites of Intramuros, needs for Manila. However, Manila’s historic core, offer a many of these are also comseries of unique opportunities mon�, said Spela Videcnik, Defor examining contemporary sign Critic in Architecture, Hartopics in Manila urban devel- vard GSD.

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“It is imperative that we consider the future through new eyes and from fresh perspectives.�

-Sean Chiao, President, Asia Pacific, AECOM.

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NEWS

The Intramuros Administration, the Philippine government agency with responsibility for administering the historic district, partnered with AECOM and the Harvard Graduate School of Design to sponsor and support the Manila Studio research project.

“We are excited to be part of the study, and to unveil what AECOM and the Harvard University Graduate School of Design are proposing as a different and enhanced future for Manila under this program. The research proposals provide valuable insights and practical solutions which can be considered for implementation.

We hope to increase livability and improve the quality of life of the Manila citizens through design,” said Guiller Asido, Administrator, Intramuros Administration.

Manila: Future Habitations is also the final part of the threeyear series on Southeast Asian megacities, following Jakarta and Kuala Lumpur, and the sixth year of the AECOM-Harvard GSD collaboration aimed at providing some of the GSD’s top students with exposure to the urban design challenges and opportunities resulting from the hyper-growth across Asia’s cities. The programme

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provides a platform for policy makers, urban planners and architects, and business leaders in the subject city to engage with each other and with new generations of talent on future development.

adjacent sites in Manila, covering the Port of Manila; the Baseco compound; the Pasig Riverfront; and the Intramuros.

It also showcase actual size housing prototype structures, scale models and graphic plans reflecting the studio reManila: Future Habitations search outcomes. will be open to the public from 28 September at the San Ignacio Church in Intramuros.

It features proposals for four

NEWS

KONE to equip Stage One of Melbourne Square mixed-use development in Australia

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ONE Corporation, a global leader in the elevator and escalator industry, has won an order to provide elevators and escalators to Melbourne Square Stage One in central Melbourne, Australia.

In what will be an iconic new precinct in the heart of South-

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bank, the Melbourne Square development will comprise a number of towers featuring retail, commercial residential and hotel accommodation.

NEWS

“We’re proud to be partnering with Multiplex and OSK Property on such a bold project to transform this inner city space into an urban hub,” says Axel Berkling, executive vice president, KONE Asia Pacific. “We see dense urban living as a step in the right direction for modern cities and look forward to co-creating solutions that make living and visiting Melbourne Square a safe and seamless experience.”

The towers at Melbourne Square Stage One are designed by award-winning Cox Architecture and feature a terraced podium that provides over 3,700 square meters of public realm and retail precinct. Construction of Melbourne Square Stage One commences in 2018.

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KONE has been selected to provide elevators and escalators for Stage One of Melbourne Square.

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NEWS

CATERPILLAR AGAIN NAMED TO DOW JONES SUSTAINABILITY INDICES

Caterpillar and its customers help build a better world with sustainability as the core.

Caterpillar Inc. (NYSE: CAT) has been named to the 2018 Dow Jones Sustainability Indices (DJSI), including both the World and North America indices. This marks the 19th time Caterpillar has been included in the DJSI.

to build a better world,” said Caterpillar CEO Jim Umpleby.

“A better world includes sustainable practices and products. As a core value, we are focused on embedding sustainability into the design, manufacture and delivery of everything we do. We’re proud of the “Caterpillar provides the progress we’ve made, and we solutions our customers use continually strive to improve.”

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NEWS

Some of the sustainability • A long history of and a strong successes that led to Cater- process for innovation in the pillar’s inclusion are: research and development of new and improved products • Fostering a diverse and inclusive culture that leverages em- • Improvements to operationployees’ unique talents, skills, al environmental performance abilities, backgrounds and ex- and management of environperiences mental practices

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“A better world includes sustainable practices and products.�

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NEWS

• Collaboration with suppliers to assess sustainability performance and identify improvement opportunities

• Commitment to communities around the globe, as well as the Caterpillar Foundation’s focus on poverty alleviation

• Public reporting and The annual DJSI process folthird-party verification of social lows a best-in-class approach, and environmental goals and evaluating numerous corporate progress economic, environmental and social performance factors.

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PRESS RELEASE

INTERIOR & DESIGN MANILA 2019 EMBRACES RESILIENCE OF DESIGN

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he Philippine Institute of Interior Designers (PIID) in partnership with Global-Link Exhibitions Specialist, Inc. (GESI) will be holding the 4th edition of Interior & Design Manila (IDMNL) at the SMX Convention Center, Mall of Asia Complex on March 7 to 9, 2019. This year, the event will be held back-to-back with Philippines International Furniture Show (PIFS) making it a complete showcase for all design enthusiasts.

Focusing more on what the country needs, the organizers of IDMNL 2019 will implement a new theme for this year: Resilience of Design: Future Spaces.

According to Resilient Design Institute, resilient design is defined as the intentional design of buildings, landscapes, communities, and regions in order to respond to natural and manmade disasters and disturbances-as well as long-term changes resulting from climate change. “Each day is not just about the design we do for our clients, we also would like to make a difference in helping them live in a beautifully resilient home”, shared IDr. Gino Lim, Exhibit Chairman. “Resilient design should be given more emphasis not only from us designers, but politicians, engineers and city planners as well.”

“Interior & Design Manila is the Philippines’ sole exhibit curated specifically to help our lo-

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For its 4th edition, the organizers of Interior & Design Manila decided to focus its theme to what our fellow countrymen needs the most - Resilience of Design: Future Spaces. “Each day is not just about the design we do for our clients, we also would like to make a difference in helping them live in a beautifully resilient home”, shared IDr. Gino Lim, Exhibit Chairman.

The expo will run from March 7 to 9 at the SMX Convention Center, Mall of Asia Complex, Pasay City. Interested visitors may register at www.gesi.com.ph/IDMNL to secure a free 1-day visitor pass. For more information, visit the event’s official Facebook page @IDMNL. cal interior designers be updated with the latest trends and updates in the industry including the implementation of resilient design,” stated Patrick Lawrence Tan, CEO of Global-Link. “That’s why we are very fortunate to work with PIID in putting together such a meaningful event which is sure to open up countless doors of opportunities for the growth of our country’s design industry.”

The 4th edition of Interior & Design Manila 2019 will feature a pavilion of never-before-seen concepts for the modern home arranged by selected members of the Philippine Institute of Interior Designers. The expo will run from March 7 to 9 at the SMX Convention Center, Mall of Asia Complex, Pasay City. Interested visitors may register at www.gesi.com.ph/IDMNL to secure a free 1-day visitor pass. For more information, visit the event’s official Facebook page @IDMNL.

The exhibit is expected to show off a showcase of the latest trends from GRM Biowood Interiors Corp., Landlite Philippines Corp., La Casa Deco, Global Trend Building Materials Specialist, Big Pix Graphics Systems, FerCui Ventures Corp., Ashton Technologies Corp., CT-Eidiya Enterprise, Mobler Enterprises, Teresa Marble Corp., Woodcaretech Marketing Philippines, Yuyukorea.co.kr., CSI Philippines, LC5 and Mach Enter-

prises, Rich Graphix Brand, S2mit Corp., Timbermate – HMT Industries Corp., and a lot more.

Selected members of the PIID will also be presenting never-before-seen concepts for the modern home and to complete the industry experience, the organizers will also bring in an international CPD convention and workshop with prominent design gurus flying in from around the globe where dele-

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PRESS RELEASE

gates can elevate their profession- gesi.com.ph/IDMNL or Facebook al portfolio and get CPD points. page @IDMNL. For more information about the CPD Convention and Workshop, visit the official website of PIID at www.piid.org.ph. For exhibit inquiries, contact Global-Link at (02) 893 -7973. You may also visit Interior & Design Manila’s official website www.

be the biggest event, but we assure you to deliver the best design-led trade event put together in the IDMNL 2019 is also supported country and no other event even by the Chamber of Furniture In- comes close.” added IDr. Lilia De dustries of the Philippines (CFIP), Jesus, National President of PIID. Cebu Furniture Industries Foundation (CFIF), Pampanga Furniture Industries Foundation (PFIF) and United Architects of the Philippines (UAP). “IDMNL may not

The 4th Interior & Design Manila will be featuring an international Continuing Professional Development (CPD) Convention and Workshop Space where world renowned speakers flying in from around the globe will share their expertise on the latest trends and issues in today’s design industry. The conference themed Resilience of Design: Future Spaces is expected to draw in hundreds of Interior Designers to the show. For the schedule, topics, fees and further info on the said conference, visit Philippine Institute of Interior Designer’s website at www.piid.org.ph.

Interior & Design Manila will run from March 7 to 9 at the SMX Convention Center, Mall of Asia Complex, Pasay City. For more information, visit the event’s official website at www.gesi.com.ph/IDMNL or Facebook page @IDMNL.

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