Built Environment Economist - Australia and New Zealand June 2025

ADVANCING QUANTITY SURVEYING PROFESSIONALS

After 10 years with the Australian Institute of Quantity Surveyors (AIQS) I have made the decision to retire.

Over this time, I have been privileged to engage with both AIQS members and a broad cross-section of professionals across the construction industry. Since commencing in September 2015, I have thoroughly enjoyed my time as CEO and hope that I have made a meaningful contribution to raising the profile of the AIQS and the broader quantity surveying profession.

As is the case with professional associations, the achievement of initiatives associated with the Institute’s strategic goals would not have been possible without a supportive Board, Head Office staff and the many volunteer members who have contributed significant time and effort.

Being a membership-based organisation creates inherent difficulties when developing and implementing various standards, as not all members and stakeholders share the same view on every topic. Outcomes are achieved through considerable consultation and discussion (always with the pretext of adopting a position that is agnostic of any one person, company, political persuasion, trend or ideal), with a view to establishing a standard (educational, professional or technical) that is impartial, expert, transparent, can withstand external scrutiny, and are ultimately beneficial to both members and their clients.

Here, the AIQS Board, Chapter Councils, and various Committees have often had the unenviable task of agreeing on an outcome and position that is best for both the broader quantity surveying profession and the AIQS.

It has been heartening to see the rollout of the many initiatives associated with delivering the Institute’s Strategic Goals over the past ten years. These initiatives are raising the profile of the quantity surveying profession across Australia, which has been reflected by a significant uptake in membership over recent months and an increasing level of diversity of members.

Thank you to the AIQS Directors, members and other participants on the committees and working groups who have contributed significant amounts of time and expertise in developing submissions, standards, and Continued Professional Development (CPD), and helping to raise the profile of the quantity surveying profession. While AIQS has employed staff, the real ambassadors for the profession are its members and success cannot be achieved without your input.

Thank you also to the Head Office staff, who over the past ten years have worked tirelessly to deliver services for members and the betterment of the quantity surveying profession. I wish AIQS and all members all the very best for the future.

GRANT WARNER CEO

The Australian Institute of Quantity Surveyors

TĀKINA WELLINGTON CONVENTION & EXHIBITION CENTRE

Image: Jason Mann Photography

Tākina is Wellington’s celebrated new 18,000sqm Convention & Exhibition Centre. Built on a 5,500sqm site opposite the national museum, Te Papa Tongarewa, Tākina is New Zealand’s first convention centre to achieve a 5 Green Star NZ certified design and Asbuilt rating.

Gifted by local iwi Te Ati Awa Taranaki Whānui the name ‘Tākina’ means to invoke, connect, and bring forth - like Wellington’s famous winds, a metaphor for the building’s purpose of creating the magic of connection and innovating change.

Through exceptional teamwork, Tākina was delivered on time and materially on budget, despite being a complex civic project built during the COVID-19 pandemic.

Highlights include elegant architecture, close iwi involvement in the design, the adaptability of its numerous generous spaces which include the country’s largest gallery space, base-isolation and a structural diagrid for superior earthquake resilience, and features that reduce carbon emissions and energy use by 60-70%.

Built to attract international and domestic conferences and provide a dedicated space for touring international exhibitions, Tākina has already injected $83 million of spending into Wellington’s economy in its first two years of operations.

One of the most effective strategies to reduce embodied carbon is to build less. Tākina’s simple floor plate is configured to provide day-to-day efficiency and long-term flexibility and adaptability. Detailed life-cycle costanalysis studies during design informed the facade and building services systems.

This resulted in a highly efficient, wellinsulated facade, along with systems that recover heat from exhaust air, and actively respond to the building’s heating/cooling demands.

Steps taken to reduce embodied carbon during the design and build process include:

• Highly efficient rigid diagrid “box” structure enclosing the Ground Floor and Level 1: this uses less steel than traditional structural frames significantly reducing the building structure’s carbon footprint.

• Reducing the building’s peak heating/cooling loads reduces the embodied carbon of the building services’ elements. Strategies include decentralising the domestic hot water system, heat recovery in the air systems, and demandmanaged controls.

• Innovative material use: e.g. using lengths of Comflor in plenary spaces to provide seismic restraint for light fittings and air diffusers, reducing the amount of steel required to restrain these components individually.

KEY PROJECT DETAILS

PRACTICAL COMPLETION DATE 28th February 2023

VISUAL FEATURE

• Tākina’s electrical infrastructure was designed to accommodate a future roof-based photovoltaic system to reduce operational energy use further.

• Energy and water use information is displayed in the ground-floor foyer.

• A two-year tuning phase monitors and reduces operational emissions using the Btune platform which reads operational data and finetunes in real time.

Tākina has upgraded and stimulated a previously underutilised area of Wellington’s downtown, has contributed $83 million to Wellington’s economy, hosted over 76,000 delegates to 220 national and international exhibitions, banquets, meetings and is currently hosting its fifth international touring exhibition since its opening in June 2023.

Tākina continues to attract high-value visitors to New Zealand’s capital city and is playing a pivotal role in supporting local hospitality and tourism, particularly during the off-peak months.

BUILDING NAME Tākina Wellington Convention & Exhibition Centre

SITE AREA 5,500m2

GROSS BUILDING AREA 18,000m2

OWNER Wellington City Council

DEVELOPER Willis Bond

CONSTRUCTION COMPANY LT McGuinness

QUANTITY SURVEYOR Rider Levett Bucknall

ARCHITECT Studio Pacific Architecture

ENGINEERS Dunning Thornton Consultants, Beca, Mott McDonald, Holmes Fire, Tonkin + Taylor, Marshall Day, Stantec and RCP

Images: Jason Mann Photography

VISUAL FEATURE

As a New Zealand-first, SEFAR double-

glass improved thermal comfort, insulation, and energy efficiency.

glazed

VISUAL FEATURE

Being across the road from Te Papa, Tākina establishes a conference and cultural heart for Wellington through this precinct. A place for Wellingtonians, not just conference goers with the ground floor dedicated to this, with the Tangaroa exhibition gallery, a cafe, a public space, and a public walkway through the building connecting Cable and Wakefield Streets.

This article was provided by Wellington City Council and all images courtesy of Jason Mann Photography.

Its bold, sculptural design was seismically designed to maximise outlooks to Wellington’s celebrated waterfront. Concave and convex geometries foreshorten and lengthen the appearance of building bulk, emphasising a sinuous, wrapped form.

VISIONARIES

STEPHEN BALLESTY FAIQS, CQS

Built Environment Professional, In-Touch Advisory

“We shape our buildings, and afterwards our buildings shape us” Winston Churchill’s much-used 1941 quote referred to the need to rebuild and restore London in the face of WWII air raids. But this quote points to the simple truth that buildings are more than merely shelter.

Our Built Environment – including buildings, infrastructure, and utilities – provides for functional spaces, asset values, cultural heritage, and social interactions that contribute to wellbeing; it is a societal enabler that defines us.

We are all experiencing an ‘age of transformation’ that impacts our industry in many ways. Change is not just constant; it seems to be relentless. Just a few examples range from procurement arrangements and building information modelling (BIM), through data analytics, drones, and remote working to environmental, social and governance (ESG) reporting, big data, automation, climate change, mandatory disclosure, workplace

strategy, service delivery, and wellness principles. For many, the current focus is on the long-term implications of the circular economy and generative artificial intelligence (AI).

The role of the quantity surveying (QS) profession, historically concerned primarily with capital cost and contractual matters related to construction projects, continues to expand across sectors and throughout the facilities life cycle.

Routinely, the modern quantity surveyor’s input is being sought on whole-of-life issues on new developments and existing facilities alike, from procurement, life cycle cost planning, risk assessment, asset management, operational performance, carbon emissions, embodied energy, and value engineering. Changing stakeholder priorities, practice standards and increased automation of traditional QS tasks provide a diversity of new demands and opportunities for the QS profession in terms of the why, what, when, and how we contribute to the solutions.

Now in 2025, in the face of urgent global challenges, such as those framed by the UN’s Sustainable Development Goals (SDGs), our Built Environment industry finds itself grappling with the requirements for sustainability, resilience, and adaptability, and the need for liveability and affordability.

These principles apply to all sectors, with ‘cost’ in all its forms remaining a key metric at all life cycle phases and project stages from planning and design, through construction delivery, to asset/facilities management of our Built Environment. The quantity surveyor’s skills in data capture, analysis, costing, and forecasting have never been more relevant in establishing budget certainty, managing risks, and delivering value. Hence, the quantity surveyor will continue to be an influencer in the making of informed decisions that contribute to achieving a more productive, sustainable, and liveable Built Environment for all.

PROCUREMENT FOR THE BRISBANE OLYMPICS

NAVIGATING THE FUTURE OF CONSTRUCTION

By Andy Day MAIQS, CQS

The upcoming Brisbane Olympics in 2032 represent a monumental challenge, but also an opportunity to revolutionise the way large-scale infrastructure projects are procured and delivered. As with any international event of this scale, delivering the required venues, transportation networks, and other infrastructure on time and within budget will be paramount.

This article will explore the procurement methods required to successfully deliver the Brisbane Olympics, focusing on modern strategies that aim to meet growing demand for speed, collaboration, sustainability, and costeffectiveness.

INDUSTRY GROWTH AND INEFFICIENCIES

According to McKinsey, global construction spending is expected to rise from US$ 13 trillion in 2023 to $22 trillion by 2040 at a compound annual growth rate (CAGR) of 3.2%. However, the industry has faced stagnant productivity over the past few decades, with just 10% improvement (0.4% annually) from 2000-2022 compared to 50% (2% annually) for the total economy and 90% (3% annually) for manufacturing.

Construction costs have been rising globally, with a 36% increase in Europe and a 52% increase in the United States from 2015-2023.

These increases reflect low productivity and growing complexity in projects, including the rise of brownfield projects (from 13% to 22% of projects from 20122022).

Technology uptake in construction has also been slow, further hindering productivity. Only 1% of revenues in the sector were historically spent on information technology (IT), much lower than other industries like automotive and aerospace.

While $50 billion was invested in AEC technologies between 2020 and 2022, productivity improvements are still lacking, with technologies primarily focused on control rather than productivity.

OLYMPICS

Another critical challenge is inefficiencies in construction design, such as a lack of standardisation and reliance on bespoke solutions. Modular components adoption has been slow, and industrialisation in construction has not progressed as expected. Labour market tightness results in bringing less experienced workers, further lowering productivity levels.

TRADITIONAL AND OUTDATED PROCUREMENT MODELS

Historically, the construction industry has relied on traditional procurement methods, where each stage of the project – design, tendering, and construction – was handled separately. This often involved a Design and Construct (DnC) model, where contractors bid on a project based on the designs provided. While the DnC model simplifies the process, it can create inefficiencies and cost overruns, especially in complex projects like the Brisbane Olympics, which demand high flexibility and adaptability.

One major flaw with traditional procurement methods is their rigidity. With the pressure to meet tight deadlines, the lack of early collaboration can hinder the development process, slowing down timelines and leading to mistakes that only appear during later phases of construction. The need for a more dynamic, adaptable model has never been more apparent, especially as the industry faces escalating costs, labour shortages, and increasing demand for sustainability.

Traditional procurement prioritises the lowest cost, often at the expense of quality, sustainability, and long-term value. This approach may lead to quality issues, delays, and risks.

Traditional procurement also often lacks transparency, making it difficult to track and evaluate processes, which leads to inefficiencies, corruption, and accountability issues.

The evolving global business environment, marked by rising protectionism, technological advancements, and changing customer expectations, has outpaced traditional procurement methods. These methods struggle to address emerging risks such as supply chain disruptions, cybersecurity threats, and sustainability requirements.

The demand for intelligent electrical devices, electric heating, and electric vehicle infrastructure has further highlighted the need for early engagement with technology vendors to manage supply and demand risks.

MODERN PROCUREMENT, ECI, AND COLLABORATIVE MODELS

A shift away from traditional procurement methods to more modern, flexible approaches is crucial for the success of the Brisbane Olympics. Modern procurement prioritises transparency, fairness, and accountability, helping organisations make better, data-driven decisions. Additionally, traditional methods rely on manual, time-consuming processes that can be automated with advanced technology, such as AI and digital platforms.

To address the limitations of traditional procurement, many organisations are adopting modern methods such as strategic sourcing, collaborative procurement, e-procurement, and supplier relationship management.

Modern procurement also recognises the importance of creating value beyond cost savings.

Organisations now aim to achieve strategic objectives such as innovation, sustainability, social responsibility, and risk mitigation. Traditional procurement, with its narrow focus on cost reduction, will not suffice to meet these broader, future-oriented goals.

One effective solution is the Early Contractor Involvement (ECI) model, which brings contractors on board early in the design phase. By including contractors during the design process, their expertise can be integrated from the start, resulting in more efficient designs, cost-saving measures, and a better understanding of potential challenges.

Furthermore, alliance or corporation models, which involve collaboration

By focusing on ECI, target cost contracts, and modular construction techniques, Brisbane can achieve the necessary speed and flexibility to meet the Olympic timeline.

between clients, contractors, and suppliers, can help mitigate the risks associated with traditional procurement. In these models, the parties involved share in both the rewards and risks of the project. This approach encourages collaboration rather than competition, fostering a more cohesive working environment.

For example, the Option C and Option D contracts used in the United Kingdom and for projects like the Borumba Pumped Hydro in Queensland serve as strong models for procurement.

The NEC4 Engineering and Construction Contract (ECC) Option C is the target cost main works contract with an activity schedule. The contractor prices activities based on actual cost plus a fee, resulting in a target price. The client makes interim payments on completion of each activity, and differences from the target price are shared according to an agreed pain/gain share proportion. This directly incentivises both parties to look for cost savings throughout the works.

Meanwhile, Option D is a target cost contract with a bill of quantities where the out-turn financial risks are shared between the client and the contractor in an agreed proportion. These contracts incentivise collaboration and cost control, ensuring that contractors and clients work closely to manage risks and maximise the value of the project. The use of target cost contracts, where the client and contractor agree on a target price for the project, helps to align interests and control costs.

MEETING THE SCALE OF BRISBANE’S CONSTRUCTION DEMAND

The Brisbane Olympics will require the construction of a vast array of venues and infrastructure. This includes the development of new stadiums, transportation networks, and rail systems, which will involve thousands of construction workers and contractors. The sheer volume of work required presents a challenge that must be met with an efficient and scalable procurement strategy.

One way to manage this complexity is by breaking down large, billion-dollar projects into smaller, more manageable contracts.

This approach ensures that different contractors can specialise in specific areas of the project, helping to streamline timelines and reduce risk while allowing for better oversight, greater flexibility, and more accurate budgeting.

For example, instead of awarding a massive contract for all the rail infrastructure, smaller contracts could be issued for individual segments or tasks, such as track laying, station construction, or electrification.

This would not only help to meet tight deadlines but also allow for specialised expertise, ensuring the project is handled by the best-suited contractors for each task.

LOOKING TO INTERNATIONAL EXPERTISE AND CASE STUDIES

Another key challenge that Brisbane faces as it prepares for the Olympics is the lack of skilled workers. The construction industry globally has been suffering from a shortage of skilled labour, and this is particularly acute in advanced economies like Australia. Given the scale and complexity of the infrastructure needed for the Olympics, it will be essential to bring in expertise to fill the gaps in engineering, design, and construction.

One effective way to do this is by bringing international workers to Australia to contribute to the Olympic infrastructure. However, housing and accommodation for these workers will need to be addressed.

A potential solution could be to build the Olympic Village first, as this facility will not only house athletes but also serve as accommodation for overseas construction workers and technical experts.

Additionally, the transfer of knowledge from international workers will ensure that Brisbane has access to the best construction practices can also be beneficial for developing a skilled workforce in Queensland that will continue to benefit from these experiences long after the Olympics are over.

The London 2012 Olympics utilised a combination of DnC contracts with ECI, as well as collaboration between contractors, clients, and suppliers. This helped the project stay within budget and on schedule, despite its complexity.

PROCUREMENT AND DELIVERY TO HIT THE OLYMPIC TIMELINE

The tight timeline for delivering the Brisbane Olympics presents another procurement challenge.

To ensure the project is delivered on time, modern procurement approaches that prioritise speed, flexibility, and collaboration are essential.

This includes adopting flexible contract structures that can adjust as the project evolves, enabling quicker decisionmaking and reducing the time spent on procurement and contract negotiations.

By focusing on ECI, target cost contracts, and modular construction techniques, Brisbane can achieve the necessary speed and flexibility to meet the Olympic timeline. This approach also allows contractors to make early investments in labour and resources, ensuring that the project progresses smoothly and without costly delays.

This article was written by Andy Day MAIQS, CQS from Infravisory.

ALIGNING PROJECT COST

VALUE ENGINEERING OR COST REDUCTION?

By Chris Wragg MAIQS

It is a common theme when working on construction projects for the quantity surveyor to engage in value engineering options. But what is value engineering, and how does it differ from cost reduction? This is a subject experienced by many practicing quantity surveyors at the request of the employer, and with expectations that the quantity surveyor will ensure costs align with the employer’s available budget and project financing.

Value engineering has various definitions and interpretations, but is simply defined as achieving improved design, construction, and costeffectiveness. In undertaking value engineering exercises, a systematic method of improving the value of a project is adopted by reviewing and analysing costs, identifying opportunities for cost reductions, and ensuring that quality, specification, performance, and employer requirements are maintained. Materials, designs, the use of technology, and construction methods can all be considered to optimise performance without compromising functionality or prescribed standards.

But in reducing costs and attempting to maintain standards – are such requests considered value engineering, or are they merely an exercise to omit elements of the design? Or, to significantly reduce elements of the building and quality standards? In considering options of cost alignment within the budget, a different methodology can unconsciously evolve. Often misinterpreted as value engineering, this methodology is cost reduction

Being the custodian of the cost report, the quantity surveyor is best placed to identify where costs exceed budget and highlight elements requiring further evaluation.

VALUE ENGINEERING

Potential alternatives in construction methodology or different uses of materials can be identified that perform equally or better than those specified. Whilst such proposals can be welcomed and embraced as a viable and reasonable solution by the employer, the success of identifying and implementing cost-effective alternatives does not solely rest with the quantity surveyor. It is a collaborative exercise, involving all project stakeholders including architects, engineers, quantity surveyors, the employer, and the contractor.

The design team’s contribution is of paramount importance in the selection of alternative materials that adhere to specifications whilst providing aesthetic compliance, ensuring design intent is maintained. Designers can suggest alternatives for consideration, proactively seeking out value for money.

But what if they do not wish to compromise on their designs or specified materials? This is a common challenge, but through stakeholder engagement, clear communication, transparency in the cost report, and the demonstration of the positive effects of using alternative products, this challenge can be eased with the buy-in of designers and employers, generating sensible solutions for the project.

But what about cost reduction, and can this be considered a viable solution for aligning cost and budget? Cost reductions can be realised through the use of cheaper products and by compromising design and the employer’s requirements.

However, cost reductions may not bring any other benefit to the project other than to align cost and budget, and may reduce fabric quality and project standards.

Value engineering is not about cutting the work scope, downgrading the specification, reducing quality or functionality, or putting short-term cost savings ahead of the building’s longevity. Value engineering is about optimisation and adding value without compromising quality. Careful consideration must be provided when evaluating value engineering options. Many successful projects integrate the management of the asset into the design and construction phases and consider lifecycle costings and operational benefits when comparing value engineering options. Whilst elements of the work can undergo value engineering reviews, operational benefits such as early completion, revenue generation, and reductions in maintenance and operational costs may not be evident in the construction budgets but are crucial to consider in the decision-making process.

Value engineering must not be confused with cost reduction, and for an optimum project outcome, solutions must be identified as early as possible, clearly communicated, reviewed with all stakeholders and a decision made to implement value engineering into the works at the earliest stages of the development, and without affecting programme or delaying the project.

This article was written by Chris Wragg MAIQS from BWA Middle East.

NAVIGATING VARIATIONS

SURVEYOR’S LEGAL AND

By Doyles Construction Lawyers

Variations are an inevitable reality in the lifecycle of construction projects. Whether arising from design development, unforeseen site conditions, regulatory change, or shifts in client requirements, they represent a major source of risk and opportunity for all project participants.

For quantity surveyors, understanding both the legal underpinnings and the commercial management of variations is critical to safeguarding project outcomes. This article provides a practical guide to navigating variations with precision and confidence.

Additionally, most variations increase the value to the owner and earn an increased margin for the contractor if handled efficiently and effectively.

THE NATURE OF VARIATIONS

At its core, a variation is an agreed change to the work originally contemplated by the construction contract. Standard forms such as AS2124, AS4000, and ABIC define variations to include additions, omissions, or changes to the character, quality or extent of the works.

Not every change, however, constitutes a lawful variation:

1. Scope limitation: A variation must relate to the scope of the original project. A directive that fundamentally alters the purpose or character of the contract is not a true variation but requires a new agreement (Blue Circle Industries v Holland Dredging Co Ltd).

2. Omissions caveat: An omission may not be used to reallocate work to another contractor, even where the contract permits omissions, unless expressly authorised by a provision which does not offend against the Unfair Contracts legislation.

Quantity surveyors should... remain vigilant in distinguishing between permissible variations and changes that exceed the contractual framework.

Such conduct has been found to be a breach of contract (Carr v JA Berriman Pty Ltd).

Quantity surveyors should therefore remain vigilant in distinguishing between permissible variations and changes that exceed the contractual framework.

PROCEDURAL COMPLIANCE: THE CONTRACTUAL IMPERATIVE

Most standard contracts impose strict procedural requirements to give effect to variations:

• Written directions: Typically, only a superintendent or an authorised agent may instruct a variation, and instructions must be in writing.

• Notice requirements: Contractors often have a defined timeframe (for example, 7 or 28 days) within which they must notify the superintendent that they consider a direction to be a variation or that it will impact cost or time.

Failure to comply with these procedures can extinguish a party’s entitlement to claim, unless equitable doctrines such as estoppel or waiver or Unfair Contracts apply – as illustrated in Update Constructions v Rozelle Child Care Centre and BMD Major Projects v Vic Urban.

LEGAL

For quantity surveyors, ensuring that processes are strictly observed is a critical part of contract administration, as procedural non-compliance is often fatal to a variation claim, while punctual administration supports project morale.

VALUATION OF VARIATIONS: PRINCIPLES AND PRACTICE

The valuation of variations is often a matter of significant negotiation – and, occasionally, dispute.

The applicable approach depends heavily on the contract:

1. Contract rates and prices: Where available and applicable, contract rates must be applied to varied work.

2. Reasonable rates or prices: If no applicable rate exists, a reasonable price must be agreed or determined, often by reference to actual costs and practical margins.

3. Quotation processes: In contracts such as ABIC, variations are often priced by quotation prior to instruction.

Transparent cost breakdowns, detailed supporting evidence (including labour and materials records), and consistent variation registers are essential tools for quantity surveyors when substantiating variation claims.

Daywork, while sometimes necessary for urgent or indeterminate variations, should be approached cautiously and meticulously documented to avoid later disputes.

VARIATIONS AND TIME: MANAGING PROGRAMME IMPACTS

Variations can also affect project timelines, particularly where they impact the critical path. Where a variation causes delay, most standard contracts entitle the contractor to an Extension of Time (EOT), provided procedural requirements are met.

Quantity surveyors play a vital role in:

• identifying when variations may cause delay

• assisting in preparing or assessing extension of time claims, and

• ensuring accurate contemporaneous records are maintained to substantiate both delay and disruption costs, if necessary.

DISPUTE RESOLUTION AND SECURITY OF PAYMENT

Despite best efforts, variation disputes are common. Early negotiation and clear documentation offer the best chance of resolution. However, where necessary, quantity surveyors should be aware that Security of Payment legislation offers a powerful avenue for interim relief in respect of variation claims.

Importantly, under legislation such as the Building and Construction Industry Security of Payment Act 1999 (NSW), even disputed variations may be claimed, and adjudicators have the power to award payment where merited, notwithstanding procedural technicalities.

Understanding the interaction between contract procedures, legislative entitlements, and dispute resolution options allows quantity surveyors to better advise their clients and protect their financial position.

STRATEGIC CONSIDERATIONS: PLANNING FOR CHANGE

Given the inevitability of change, proactive strategies can mitigate the commercial risks associated with variations:

• Pre-contract strategies: Consider negotiating provisions for capped variations, pre-agreed rates for common changes, or clear and reasonable notification protocols.

• Contingency planning: Maintain and advise reasonable project contingencies to accommodate legitimate variations without disrupting budgets.

• Variation management protocols: Implement structured systems for identifying, pricing, approving, and recording variations at every stage. Educate the parties as professionals to follow the contract and obtain without rancour their legitimate expectations.

By managing variations actively rather than reactively, quantity surveyors can help to protect project margins, maintain relationships, and support successful project delivery.

CONCLUSION

Variations are not merely an operational inconvenience; they are a fundamental feature of construction projects that require careful, disciplined management.

For quantity surveyors, success lies in combining a sound understanding of contractual rights and obligations with rigorous commercial practice.

By approaching variations with structure, foresight, and strategic insight, quantity surveyors play a pivotal role in steering projects through change, preserving both project viability and professional integrity.

This article was written by Jim Doyle from Doyles Construction Lawyers.

HOW DO YOU UTILISE YOUR SKILLS TO MAKE THE BUILT ENVIRONMENT MORE SUSTAINABLE?

DIMALKA DILSHANI MAIQS, CQS

Contracts

Administrator, McConnell Dowell Constructors (Aust.)

In today’s world, the construction industry is one of the key sectors responsible for a significant share of global carbon emissions. As a result, sustainability has shifted from being optional to essential, making quantity surveying (QS) skills increasingly critical in promoting environmental responsibility.

For instance, sustainable cost planning and life cycle costing can be utilised to highlight the applications of lowcarbon materials, passive design features and green technologies while making clients understand longterm cost efficiency in sustainable applications such as energy-efficient systems, durable materials, and renewable energy solutions over the higher initial cost which specifically benefits Australia’s varied climate zones constructions.

Pty Ltd

On the other hand, sustainable procurement and contracts administration is the key to maintaining sustainability throughout the construction phase which involves practices of advising on sustainable procurement strategies such as sustainability-focused bid evaluations which provide more opportunities for suppliers/contractors holding green credentials, recommending local materials suppliers by encouraging low emission transport methods which decreases the indirect costs. It also includes ensuring that sustainability requirements, such as waste minimisation and recycling targets related clauses are included in contracts.

Similarly, adopting reporting and benchmarking practices can be employed to track and report on the sustainability matrix, particularly in the construction phase, while promoting

circular economy principles to reuse materials for the future, reducing overall material wastage. Furthermore, risk and resilience planning practices can be utilised to evaluate the cost of climate adaptation measures and to identify sustainability-related risks within the budget, helping to prevent future cost overruns.

These evolving demands need a proactive integration of sustainability in the built environment, and QS skills aid in aligning financial planning with environmental objectives by reducing the overall industry’s environmental footprint. Hence, it’s clear that those skills have become crucial in the Australian construction industry, leading towards a resilient and sustainable future, where climate adaptation and sustainability targets are prioritised alongside financial effectiveness.

DRIVING STRESSED MEGAPROJECTS TOWARDS SUCCESSFUL COMPLETION

By Jery Johnson MAIQS

INTRODUCTION

Megaprojects usually come to a standstill mainly due to cost overruns over and above the approved budget, and schedule/time is at large without a clear target completion date with several risk exposures well above the risk tolerance level of the sponsor. The project data might show a significant or sustained deterioration of the project’s delivery performance. Early signs must not be missed and projects must be closely monitored for timely actions.

According to IPA (2024), the decision to ‘reset’ the program is a positive move that puts it back on a more balanced and controlled path, likely ensuring its value for money. The decision is typically made when there is a determination that the current approaches to not provide a credible way to deliver the program successfully. As a result, the program may become unable to achieve its objectives within the established parameters, such as:

• Using the current delivery approach

• Aiming to achieve its expected outputs and benefits

• Working within its expected risk levels and constraints

• Working within its master schedule

• Within its whole life cycle cost or funding envelope.

As a result, these projects will be halted until the project team, along with the financiers, can assess their true status.

They will take stock of the situation, make realistic forecasts, identify risks and challenges, and brainstorm best practices related to project governance and management. This will help them effectively manage planning processes, project control mechanisms, and project assurance activities.

To return the program to a deliverable state, it is essential to make significant changes to its objectives, delivery methods, benefits, and life cycle costs.

Broadly, a reset can be categorised in one of four ways (IPA, 2024):

1. Fundamental change to the delivery approach, timing, and outputs

2. Fundamental change to the delivery approach, whilst achieving the same outputs

3. Substantial change to the requirements and/or milestones, but the same approach to delivery

4. Significant or material revision of cost and timing estimates, but the same approach to delivery.

Not all programs that achieved a RED rating at a major milestone project reviews require a reset. Obtaining approvals for the revised but more robust budget and schedule, procurement and delivery strategies, governance and project management frameworks, etc., may be adequate to rectify the issues and move forward.

Oxford University (Prof. Bent Flyvbjerg, 2020) and IPA (2024) have published some similar guidelines on resetting major programs based on the six-step project management approach, such as:

Step 1: Acknowledge the need for significant changes by being completely honest about the current situation. Use the Discovery phase to identify and understand the challenges and complexities involved. Implement data-driven reference class forecasting to redefine milestones and update cost forecasts. Additionally, it is crucial to create an action plan to reset the project or program effectively.

Step 2: Reprogramming/rescheduling works – break the key milestones into smaller ‘inchstones’ for better monitoring and creating progress checkpoints.

Step 3: Implement an early warning system and project control mechanisms to detect potential issues and risks early. This will allow for swift action and close monitoring of the progress during the remaining reset period. It is essential to include key performance indicators across all functional areas, including finance and project management.

Step 4: Enhanced leadership and accountability – establish a reset team to review the project’s progress and make swift decisions and actions with clear duties and responsibilities assigned to team members.

6:

Close progress monitoring and control, risk management

MEGAPROJECTS

Step 5: Re-baselined schedule, budget, benefits, etc. Revise unrealistic timelines and financial plans to establish realistic objectives and targets. Develop accurate and detailed schedules and cost estimates to enhance deliverability. This process should ensure that the plans align with practical considerations, match available resources, and address any constraints.

Step 6: This is a critical stage where close project monitoring and control mechanisms are implemented. Risks are jointly mitigated and managed by both the project team and the reset/ recovery teams. Common practices include weekly meetings, site visits, a review of the critical path programme (with an emphasis on both the master schedule and the construction schedule), and the development of three-week look-ahead programs. The primary focus will be on the rebaselined targets, which are the key priorities.

RESEARCH METHODOLOGY

This research paper employs a case study approach, combining practice reflections with literature reviews and analyses of subject matter articles and guidelines published by leading institutions in the United States, United Kingdom, and Australia.

PROPOSED EDUCATED PROJECT MANAGEMENT METHODOLOGY

Drawing on hands-on experience from managing stressed and red-flagged projects to successful completion, the following steps have been proposed based on an analysis of over ten project case studies.

...It’s important to consider adding a financial interest charge for any delays in payments when the project resumes.

This assumes that the same main contractor, consultants, and subcontractors will be retained and re-engaged, reflecting the most common practice in the industry to minimise impacts of project delays and subsequent recommencements.

I SYSTEMATIC EXISTING CONDITIONS SURVEY

• Prepare works status drawings similar to the building conditions survey of dilapidation report, capturing mainly completed construction works to base the assessment of costs accordingly.

I ASSESSING ANTICIPATED FINAL COSTS (OUTTURN COSTS)

Assess and negotiate all professional service contracts to understand status of service completion and help assess the total professional fees.

Assess the total approved-forconstruction (AFC) of construction costs. There are three categories of costs to be calculated:

• Costs/fees incurred up to the point when the project was suspended or stalled (costs/fees incurred ‘A’)

• Costs of further works/services completed but not paid equal to outstanding payments (outstanding pay ‘B’), and

• Anticipated costs of completing remaining works/services (remaining cost ‘C’).

The calculation of cost A is straightforward and can be assessed from signed contracts, previous payment records, and payment certificates.

The calculation of cost B is also straightforward, but it’s important to consider adding a financial interest charge for any delays in payments when the project resumes. For instance, you might add 3% per year for each year of delay to account for interest charges. This percentage should be negotiated and agreed upon.

The calculation of cost C, which represents the actual cost to complete, will be based on negotiations with the main contractor. This will involve updated quotations from subcontractors for the remaining work, reflecting current market prices from both existing and potentially new subcontractors or suppliers.

It is important to obtain warranties for the entire completed works upon practical completion. Therefore, it is recommended to negotiate with existing subcontractors and suppliers to ensure they continue with the remaining works.

It is common practice to begin with a provisional target price in conjunction with the main contractor...

It is common practice to begin with a provisional target price in conjunction with the main contractor while considering various trades for the construction costs C (remaining works). This initial price will include fixed preliminaries and the contractor’s margin. Once full costs have been agreed upon, it’s preferable to confirm these costs with a lump sum price, ideally provided in a priced bill of quantities (BoQ) format, consistent with prior contract documentation.

I ASSESSING PROJECT SCHEDULES/ PROGRAMMES

The revised master schedule and delivery schedule will be agreed upon by the project team and main contractor in alignment with the subcontractors.

I AMENDED AGREEMENTS

Where timelines, costs, and designs have changed, new amendments to existing agreements may take the form of side agreements or addendum that clearly link to the previous agreements (this applies to all contracts and professional services agreements).

I CURRENT STATUS OF THE WORKS MATTERS

If the project has only reached the stage of completing the building structures or part of them, it is relatively straightforward to address the costs and schedules of subcontractors. In cases where contracts are already in place, subcontractors can be asked to update their contract prices. Alternatively, they may submit new competitive prices along with other bidders.

It may also be wise to explore a broader market of suppliers if the prices from existing suppliers are considered excessive.

Alternatively, if the project was suspended at an advanced stage, there will be a requirement to provide extensions of warranties for the installed or purchased mechanical, electrical and plumbing equipment, which may incur additional variation costs.

I VARIATIONS AND CLAIMS SETTLEMENT

Pending variations and claims will be processed according to best practices. It has been observed that numerous substantial variations and claims remain unresolved between the parties, leading to a new standstill in progress.

As a result, the reset team has established a pathway for escalating these pending and disputed variations and claims, ensuring direct involvement from key decision-makers in both the client’s and contractor’s organisations.

...It is recommended to retain the same subcontractors to expedite works on-site.

Weekly or fortnightly meetings should be held between the client’s and contractor’s teams, including top management. In some projects, assessment reports of the pending variations and claims were audited by expert consultants for independent review and recommendations.

This smooths the approval process, and variation works proceeded on-site without causing any further delays. Further, variations on the critical path programme for the projects were prioritised to reach an agreement, ensuring the forecasted project completion date was not jeopardised.

I AUTHORITY APPROVALS

Obtain updated authority approvals with new timelines if necessary and integrate the approval authority’s schedule with the master schedule. The approval authority list shall include all approvals required for the commencement of operations after achieving practical completion.

I WORK PROGRESS MATTERS

We may encounter situations where appointed subcontractors might have only carried out engineering design and shop drawings without any physical works executed on-site.

Again, it is recommended to retain the same subcontractors to expedite works on-site.

I BRAINSTORMING TO DECIDE BEST APPROACH

• A substantial number of planning meetings and workshops are required to brainstorm with the full project team to quickly achieve ‘business as usual’ status after recommencement of the project.

I AFTER SUSPENSION OF WORKS

If the project comes to a halt after achieving substantial progress (for example, over 30%), it is recommended to maintain the presence of the main contractor and a small team on-site for site cleaning and maintenance purposes. Consultants can be demobilised from the site until further notice, but they should conduct weekly or monthly visits to approve the main contractor’s timesheets and any other necessary documentation.

I UPDATING THE BUSINESS CASE

Once the project is re-baselined, the overall business case must be updated, including the cost-benefit analysis, to reflect new information regarding schedule, costs, design, safety, environmental impacts, economic and environmental, social, and governance (ESG) benefits.

Revamping the project design... is essential to future-proof the project.

I FUTURE-PROOFING INITIATIVES AND OPPORTUNITIES

Revamping the project design to incorporate any new and latest design provisions is essential to future-proof the project.

I SUPPLY CHAIN RELATIONSHIPS MATTER

At this stage, it is also common to reestablish supplier relationships (and also connect with new suppliers) and update framework contracts.

I SPONSOR’S RE-ORGANISATION

At this stage, the employer or sponsor must enhance their organisation capabilities and their project management capabilities to match the new environment, issues, and complexities.

I NEW PROJECT RESET TEAM DEPLOYMENT

The new project reset team must include professionals with sound project controls management experience together with additional expertise in procurement, project leadership, and contract and claims management.

I UPDATE PROJECT MANAGEMENT TOOLS AND DOCUMENT EVERYTHING

It is mandatory to update all project management documents such as the project management plan, design management plan, procurement strategies, project execution plan, stakeholder management plans, budget and cost reports, programme information, approvals (master, design, procurement, construction, authority), quality management plans, testing and commissioning plans, operation and maintenance plans, etc.

REFLECTIONS FROM EXPERIENCE:

5 SAMPLE CAST STUDIES AND KEY TAKEAWAY POINTS

I CASE STUDY 1: LUXURY 5 STAR RESORT

The project came to a halt at an advanced stage, with 85% works completed, but the main contractor was still on-site with his supply chain as well as consultants which made it easy to resume works.

An assessment of AFC indicated an additional cost exposure of $180-200 million, mainly including unapproved variations (where most of the works have been completed), and prolongation cost claims.

After the re-baseline of costs and schedules were complete, the project came under close monitoring by the owner’s and financier’s team over a one-year period and achieved successful completion.

The client had to obtain a new valuation to substantiate the additional costs.

An independent development monitor had to assess the cost variations and claims at a high level to verify and provide assurance of the additional costs.

Weekly progress review meetings were held on-site with the minutes of meetings published with agreed actions and required dates. Parties carried out site walks to witness the actual progress of the critical path works against the revised schedule.

The same financier continued to finance any additional budget required to complete the project.

A one-year final extension of time was approved to complete the remaining works.

Future-proofing initiatives were taken.

The cycle of cost and time overruns was jointly broken and the project baselines were reset, increasing the confidence to deliver against it.

I CASE STUDY 2: 5 STAR RESORT

This project was stopped at 80% progress, as finance stopped flowing.

The contractor financed on his own and completed an additional 5% worth of works before stopping work.

New financiers agreed to finance the project and buy out previous loan payments.

The project went through a value management and value engineering exercise to invest money to add value to the project assets, cut down unnecessary costs, and descope the project.

All subcontractors were retained.

The new scope of beach leisure works was added to the work in parallel, using a known contractor with a three-month schedule.

The project was re-baselined and achieved.

Variations were prioritised and implemented on-site as per the critical path schedule.

Critical third-party works progress was closely followed up and tracked. The critical works included the upgrading of the electrical substations and installation of new cables to provide required loading.

Future-proofing initiatives were taken.

I CASE STUDY 3: 4 STAR HOTEL

The project was halted at 90% progress.

New financiers were engaged to complete the project.

Value management and value engineering processes were carried out.

All subcontractors were retained.

The project was re-baselined and achieved.

I CASE STUDY 4: HIGH-END VILLAS AND RESORT PROJECT

The project slowed down at 60% progress of the villas due to cost variations but continued.

All packages went through value management and value engineering process.

The resort element was axed and postponed, with a new master plan of redesign to build additional luxury villas.

The open community estate was changed to a gated community, having an impact on the infrastructure cost contribution from the department of transportation and municipality.

The new individual villas had cost and pricing models developed to aid in setting up the sales prices.

The project was re-baselined and achieved.

Future-proofing initiatives were taken.

I CASE STUDY 5: MIXED-DEVELOPMENT PROJECT WITH TOWER

The project was halted at 95% progress.

A value engineering process was carried out.

The financier continued to finance the project towards completion.

Cost variations were prioritised and agreed upon.

A new project manager was appointed to manage remaining reset works.

The project was re-baselined and achieved.

Future-proofing initiatives were taken.

The conditions precedent in the finance agreement were not met. Pending fire life safety works were identified by a new building surveyor for priority implementation.

CONCLUSIONS

The process of resetting megaprojects or programmes is a comprehensive project management procedure typically executed by project managers who possess extensive knowledge and experience in the domain.

Some key takeaways here:

All projects had come to a standstill due to a pending agreement on variations, claims, and/or finance drawdown from the loan facility.

A new escalation mechanism was implemented to reach a swift agreement on pending variations and claims.

Third-party experts were engaged to vet the variations and claims assessments and provide assurance of their validity.

Variations were prioritised and agreed upon based on the critical path programme so the project completion dates were not jeopardised.

Value management and value engineering processes were carried out to increase value while reducing costs.

Parties took future-proofing initiatives (secured available opportunities) to enhance the robustness of the assets as part of the reset process.

The master schedule (including design, procurement, and construction schedules) is closely reviewed and updated using real-time information.

MEGAPROJECTS

Variations were prioritised... So the project completion dates were not jeopardised.

The authority approvals schedule, including no objection certificates, are required to commence operation after practical completion is integrated with the master schedule. The contractor’s procurement schedules were scrutinised almost daily and updated weekly.

During the post-reset period, weekly progress review meetings were organised to review the progress and facilitate timely completion.

A joint weekly progress site walkthrough was undertaken to witness and check on the progress of the critical path activities.

Dilapidation drawings and reports were produced to capture actual status of works prior to recommencement, which made the cost management and procurement processes much smoother.

A new valuation of the buildings was undertaken to ascertain whether the additional costs were worthy investments.

Action-oriented minutes of meetings were published with all action points and the dates of required actions for record and review during the subsequent meetings.

REFERENCES

IPA 2024, ‘Resetting Major Programmes’, Infrastructure and Project Authority of UK

Prof. Bent Flyvbjerg 2020, ‘Project Turnaround’ – High-speed Rail Project was doomed for failure, here’s how we fixed it’, Oxford Global Projects, Said Business School, University of Oxford.

This article was written by Jery Johnson MAIQS from Australian Built Asset Consultancy (ABAC).

REVOLUTIONISING HOUSING WITH AI AND MODERN METHODS OF CONSTRUCTION: A PATH TO NET ZERO

By Professor Tuan Ngo

The global construction industry is facing unprecedented challenges. As nations strive to meet their climate commitments, the built environment is under pressure to decarbonise. Simultaneously, we face an accelerating demand for affordable, high-quality housing driven by population growth, urbanisation, and increasing housing inequality. In Australia, the twin crises of climate and housing are compounded by labour shortages, rising construction costs, and material constraints.

In response to these challenges, a powerful convergence of Modern Methods of Construction (MMC) and Artificial Intelligence (AI) is reshaping the way we design and deliver buildings. With support from an international research grant under the Global Science and Technology Diplomacy Fund, we are leading a collaborative project across Australia and the Asia-Pacific that pioneers the use of Carbon-Neutral Modular Panels (CNMP). These panels, produced through digitally enabled manufacturing processes, represent a transformative innovation in sustainable construction, combining advanced materials, smart automation, and modular assembly.

This article outlines the key innovations, implications, and global significance of this initiative and why AI-enabled MMC will be central to the future of housing.

A NEW PARADIGM: OFFSITE, DIGITAL, SUSTAINABLE

Traditional construction processes are often slow, inefficient, and carbonintensive. On-site fabrication, weather disruptions, material waste, and skilled labour dependencies contribute to delays and increased costs.

These issues are particularly pronounced in the delivery of affordable housing, where budget constraints and speed are critical.

MMC offer a radically different model. By shifting a significant portion of construction activity to controlled factory environments where components are prefabricated using automation, robotics, and AI, MMC enables faster delivery, greater precision, and improved safety. Importantly, MMC is well suited to integrate low-carbon materials and circular economy principles, addressing environmental performance from the outset.

Our project builds on this paradigm by developing digitally manufactured modular panels that are:

• structurally robust and thermally efficient

• fire- and impact-resistant

• lightweight and easy to transport

• designed for disassembly and reuse.

Each panel is produced using a datadriven approach that optimises material composition and manufacturing conditions in real-time, significantly improving productivity, quality, and sustainability.

ARTIFICIAL INTELLIGENCE: THE BRAIN OF THE SMART FACTORY

At the heart of the innovation lies a real-time, AI-driven production system. By integrating environmental sensors, material monitoring, and production controls, the system constantly learns and adjusts its processes to maximise performance.

AI algorithms control:

• Batching and mixing of lowcarbon materials based on input characteristics

• Energy usage, dynamically shifting loads to periods of high renewable availability

• Curing processes, using electric heating to achieve early strength gain in under eight hours

• Quality assurance, detecting deviations and predicting maintenance needs.

These systems adapt continuously to external variables such as ambient temperature and humidity.

The result is a self-optimising, lowwaste, high-throughput manufacturing process that can produce up to three batches of CNMP panels per day, compared to just one with conventional methods.

This approach addresses one of the construction sector’s core limitations: its inability to scale rapidly and sustainably. By combining AI with modular construction, we create a repeatable, adaptable solution that can be applied in various contexts, from urban infill to remote regional housing.

DESIGNING FOR PERFORMANCE AND CIRCULARITY

A defining feature of CNMPs is their material innovation. The panels are made using low-carbon binders (including recycled aggregates and industrial by-products) that significantly reduce embodied emissions. Importantly, these material innovations support circular construction models. The panels are designed to be disassembled and reused, and production offcuts can be reintegrated into future mixes, contributing to zerowaste goals.

FROM LAB TO REAL-WORLD IMPACT

This is not just a theoretical or laboratory exercise. The project is structured around full-scale implementation and demonstration. Pilot manufacturing systems are being installed in Australia and across partner countries including Japan, Thailand, Vietnam, Malaysia, and New Zealand. These pilot sites enable us to test the technology in diverse climates, regulatory environments, and housing contexts.

A comprehensive whole-of-life assessment (LCA) is being undertaken across all pilot deployments.

This assessment tracks emissions and resource use from raw material extraction (cradle) to end-of-life disposal or reuse (grave). Using industry-standard tools, we are benchmarking the CNMP system against conventional precast and masonry solutions, producing thirdparty verified Environmental Product Declarations (EPDs) to support uptake by designers, developers, and governments.

We are also developing design guidelines and analytical models to support adoption by industry. These models include fire performance simulations, thermal efficiency assessments, and seismic testing data, providing end-users with confidence in the panels’ suitability for various building applications and hazard zones.

BUILDING REGIONAL CAPACITY FOR SUSTAINABLE INNOVATION

This research is built on strong international collaboration.

Teams across Asia-Pacific universities and research institutions are codeveloping and testing various components – from AI algorithms and renewable integration to materials engineering and policy frameworks. Together, we are building a transnational research and development ecosystem to drive innovation in sustainable construction.

Throughout the three-year project, a series of knowledge exchange activities are underway:

• International workshops on AI, carbon-neutral materials, and digital manufacturing

• Training programs for engineers, designers, and policymakers in MMC technologies

• Demonstration events to showcase real-world performance of CNMPbased systems

• Mentorship and research placements for PhD candidates and early-career researchers.

By fostering cross-border knowledge flows, we are accelerating the adoption of low-carbon MMC and helping build a globally connected workforce equipped to lead the transition to Net Zero.

THE BROADER IMPLICATIONS FOR THE BUILT ENVIRONMENT

This project illustrates a broader shift in how we conceive of construction – not as a static, site-bound process, but as a digitally enabled, rapidly deployable manufacturing system. It represents the next frontier in building technology: one that is data-informed, carbonconscious, and globally scalable.

For policymakers, it provides evidencebased pathways to support housing affordability, climate targets, and industry upskilling simultaneously.

For developers and contractors, it offers a model for reducing project risk, accelerating delivery, and differentiating in increasingly ESG-driven markets.

And for society at large, it offers a vision of a built environment that is not only smarter and more resilient, but fundamentally more sustainable.

LOOKING AHEAD: SCALING THE FUTURE

The opportunity before us is clear. With growing demand for clean, fast, and affordable housing solutions, the integration of AI and modern construction methods is no longer optional, it is essential. The CNMP system demonstrates that it is possible to scale quality housing while significantly reducing carbon emissions and material waste.

This article was written by Professor Tuan Ngo from The University of Melbourne.

EMOTIONAL INTELLIGENCE IN TEAMS

By EAP Assist

In the modern workplace, technical skill alone is no longer the most valuable asset a team member can bring to the table. Emotional intelligence, the ability to recognise, understand, and manage our own emotions while empathising with the emotions of others, has emerged as a defining factor for team success. High emotionally intelligent teams tend to be more collaborative, resilient and adaptable, qualities that are indispensable in today’s rapidly shifting work environments.

WHY EMOTIONAL INTELLIGENCE MATTERS IN TEAMS

Team dynamics hinge on communication, trust and conflict resolution. Emotional intelligence is the bedrock of all three. When team members can tune into their own emotional states and regulate them effectively, they’re better equipped to contribute constructively rather than reactively. And when they’re attuned to others’ emotions, they can respond

with empathy and respect, creating psychological safety that enhances creativity and cohesion.

REAL-WORLD EXAMPLE: GOOGLE’S ‘PROJECT ARISTOTLE’

Google famously conducted an internal study called Project Aristotle to uncover what makes a team effective. Surprisingly, the most successful teams weren’t necessarily those with the highest IQs or most capable individual contributors.

WORKPLACE CULTURE

Instead, they had one thing in common: psychological safety; a direct outcome of emotional intelligence. In these teams, members felt safe to take risks, admit mistakes, and be vulnerable with one another. That sense of safety stems from an emotionally intelligent culture where listening, empathy and emotional regulation are both encouraged and expected.

KEY AREAS OF EMOTIONAL INTELLIGENCE AND THEIR IMPACT ON TEAMS

I 1. SELF-AWARENESS

When team members understand their emotional triggers and strengths, they can better manage how they show up at work. For instance, a project manager who realises they become impatient under stress can proactively take steps to stay calm during tight deadlines.

I 2. SELF-MANAGEMENT

This involves controlling impulsive behaviours and maintaining professionalism under pressure. A team leader who receives critical feedback but doesn’t react defensively models emotional maturity and keeps morale steady.

I 3. SOCIAL AWARENESS (EMPATHY)

The ability to sense what others are feeling, even without words, can prevent misunderstandings. For example, a team member noticing a colleague’s body language shift in a meeting might check in privately, diffusing tension before it escalates.

I RELATIONSHIP MANAGEMENT

Highly emotionally intelligent team members manage conflict well, give constructive feedback and inspire others. This creates a collaborative spirit that is essential in high-stakes or cross-functional teams.

PRACTICAL TIPS TO IMPROVE EMOTIONAL INTELLIGENCE

Whether you’re an individual contributor or a team leader, emotional intelligence is a skill you can strengthen over time. Here are a few strategies:

• Practice active listening: Focus fully on the speaker, ask clarifying questions and reflect your understanding to them. This builds trust and reduces miscommunication.

• Label your emotions: Instead of saying, “I’m fine” when you’re not, try to accurately name your emotional state. For example, “I’m frustrated because I felt overlooked.” Naming emotions reduces their intensity and opens the door for honest dialogue.

• Develop empathy: Try to view situations from others’ perspectives. Before jumping to conclusions, ask yourself, “What else could be going on for them?”

• Pause before reacting: Take a short mental break like a deep breath or go on a short walk before responding to difficult situations.

• Seek feedback: Ask colleagues how they experience you in team settings. This takes courage but provides crucial data for growth.

HOW LEADERS CAN FOSTER A CULTURE OF EMOTIONAL INTELLIGENCE

Creating a team culture where emotional intelligence is the norm, not the exception, requires intentionality. Here’s how to embed it:

I MODEL VULNERABILITY

Leaders set the emotional tone. When they admit mistakes, express emotions appropriately, or acknowledge stress, they permit others to do the same.

I NORMALISE FEEDBACK

Encourage regular, two-way feedback, and not just during performance reviews. Use tools like ‘start/stop/ continue’ conversations to keep feedback constructive and balanced.

I TRAIN FOR IT

Offer workshops or coaching on emotional intelligence, communication skills, or conflict resolution. Teams often assume these skills are innate, but they can and should be taught.

I BUILD IN REFLECTION TIME

Create space for emotional checkins during meetings. A simple “How are you feeling today on a scale from 1–10?” can surface unspoken tension or burnout and help people feel seen.

I REWARD EMOTIONAL SKILLS

Recognise and reward behaviours like collaboration, empathy and calm conflict resolution, not just results. This signals that emotional intelligence is part of the performance equation.

ANALYSING DISRUPTION ON CONSTRUCTION PROJECTS

By Paul McArd FAIQS, CQS

WHAT IS DISRUPTION?

ANALYSING DISRUPTION

Disruption is an interference that disturbs or slows down a contractor’s usual working methods, leading to reduced efficiency. Disruption is not the same as a delay, however, a disruption can cause a delay.

Disruptive events have a direct impact on work, leading to reduced productivity through factors such as insufficient or altered site access, work performed out of sequence, or design modifications. Additionally, they can cause indirect consequences like overcrowding of workers, inefficiencies from disorganised work groups, heightened overtime leading to fatigue or recurrent training requirements, further diminishing productivity.

...It is essential to apply analytical methods to determine the impact on productivity...

Ultimately, lost productivity will have a financial impact, which in turn gives rise to disruption claims in pursuit of compensation.

WHEN DISRUPTION HAS OCCURRED

When disruption has occurred, it is critical to understand the extent of the disruption, the cause, and the impact. To understand the full picture, a disruption analysis must be conducted.

Disruption goes beyond the variance between planned and actual outcomes.

When analysing disruption in construction projects, it is essential to apply analytical methods to determine the impact on productivity and resulting financial losses. Disruption goes beyond the variance between planned and actual outcomes.

...Contractors must present their claim and supporting analysis with a reasonable level of certainty...

The goal of a disruption analysis from the contractor’s perspective is to showcase lost productivity and additional expenses due to disruption events that the employer is liable for, to secure appropriate compensation.

Compensation is only considered for the consequences of disruption events assigned to the employer. Productivity losses linked to other factors should be excluded from any claims.

Causes like poor supervision, planning, re-work, subcontractor coordination issues, and tendering errors don’t automatically justify compensation for disruption.

DISRUPTION ANALYSIS METHODS

To initiate a disruption analysis, contractors must assess productivity trends over time, identify affected work activities, and review financial implications.

Accurate project documentation is crucial, and if seeking compensation for disruption, contractors must present their claim and supporting analysis with a reasonable level of certainty required by the employer, adjudicator, or arbitrator according to the law.

ANALYSING DISRUPTION

Even on simpler projects, contractors must conduct some level of analysis to estimate productivity losses caused by disruption events where the employer is accountable.

There are three major groups of disruption analysis methods that can be classified as follows:

1. Project practice-based

2. Industry-based, and

3. Cost-based methods.

PREPARING A CLAIM

A disruption claim aims to show a decrease in productivity, resulting in additional costs that wouldn’t have occurred without the disruptive events the employer causes.

There is no set way to prepare a disruption claim; instead, a tailored approach is required, leaving the claimant to determine how best to provide a reasonable assessment of the disruption caused.

As a minimum, you need to demonstrate the following in a disruption claim: events that entitle it to loss and expense, identifying the events that caused disruption, and that the disruption cause loss and/or expense.

The claim should reflect the difference between achievable and actual productivity levels impacted by disruption events where the employer is at fault.

Original tender assumptions should not be automatically regarded as the baseline for productivity.

As a minimum, you need to demonstrate the following in a disruption claim:

• Events that entitle it to loss and expense

• Identifying the events that caused disruption, and

• That the disruption caused loss and/or expense.

...It is crucial to identify the precise activities and events that have experienced disruption and demonstrate... How this disruption occurred.

COMPENSATION

Compensation can be sought for disruption within the limits set by the contract or if there is a legal basis for it.

Ideally, compensation for disruption due to variations should be agreed upon in advance or shortly after completion of the work.

Disruption caused by other employerresponsible events should be reimbursed based on actual reasonable costs incurred, plus a feasible profit margin, if allowed under the contract.

The financial impact of lost productivity is felt when executing the affected tasks. However, not all reduced productivity is eligible for compensation.

...Contractors need to quantify the losses incurred, backed by contemporaneous records.

The contractor can only seek compensation for disruption within the boundaries of the contract terms or under applicable legal grounds.

Not all contract forms explicitly cover compensation for disruption, but they address events that could disrupt unforeseen ground conditions or delays in approvals.

FINAL THOUGHTS

For contractors to increase their chances of success when claiming disruption, it is crucial to identify the precise activities and events that have experienced disruption and demonstrate, on a cause-and-effect basis, how this disruption occurred. Additionally, contractors need to quantify the losses incurred, backed by contemporaneous records.

Contractors frequently cite intertwined disruptive events to explain disruptions, justify productivity losses, and seek compensation for impacted tasks collectively.

While isolating losses tied to individual disruptive events can be challenging, it is possible with a forensic approach. Before pursuing a global claim, it is essential to thoroughly assess the associated risks and dedicate time and effort to a forensic analysis.

This article was written by Paul McArd FAIQS, CQS from Accura Consulting.

DISPUTES

MANAGING MULTI-CONTRACT DISPUTES WITH A MULTI-PARTY AGREEMENT

With the rise of megaprojects, it has become increasingly common for projects to be delivered under several head contracts, rather than just one. Recent examples include the three Sydney Metro lines, the North East Link project, the Borumba Pumped Hydro project, and the Marinus Link.

The multi-contract delivery model enables the project owner to create contract packages of a size that the market can more easily digest, thereby promoting greater competition for each package. It can also spread risk across a bigger pool of contractors and enable certain works to commence more quickly.

The primary downside of a multicontract strategy is the contract interface risks that it creates for the owner. For example, the activities of one head contractor can delay or disrupt another head contractor, resulting in claims by the latter against the project owner for extensions of time and/or additional costs.

This often results in multi-contract disputes, as the owner responds to the initial claim by bringing a corresponding claim against the head contractor who has caused the delay or disruption.

The project owner ends up in separate dispute resolution proceedings with each head contractor, as required by the dispute resolution process in each contract.

If the parties have chosen dispute resolution processes other than court litigation, the project owner may not be able to consolidate the two proceedings into a single proceeding, resulting in additional cost, complexity, and inconvenience for the project owner, as well as ‘gap risk’ from different determinations in each process.

Obtaining the agreement of all parties to consolidate related dispute resolution proceedings after a dispute has arisen is usually impossible. Accordingly, project owners are increasingly looking to manage the risk of multicontract disputes by asking each head contractor to sign up to a multi-party agreement at the time of award of their head contract, under which they consent to the consolidation of related dispute resolution proceedings.

An approach that is finding favour with astute project owners involves:

• Establishing a single dispute board that can assist the parties to proactively and amicably resolve issues that could otherwise escalate into significant disputes

• If a dispute is referred to the dispute board for a formal decision, enabling the dispute board to invite all relevant parties to make a submission and to thereafter issue a decision that binds all relevant parties (absent a notice of dissatisfaction), and

• Requiring any related arbitrations that are commenced if a party is dissatisfied with the dispute board’s decision to be consolidated.

By adopting arbitration as the final step of the dispute resolution process and carefully selecting the substantive law that governs the contracts, the project owner can opt out of proportionate liability legislation, including potentially in jurisdictions that don’t permit contracting out, given the High Court’s Tesseract decision.

Finally, a multi-party agreement also provides a contractual vehicle for achieving other desirable outcomes on multi-contract projects, such as governance arrangements and bonus regimes that facilitate greater collaboration between project participants.

This article was written by Owen Hayford from Infralegal.

UNDERSTANDING ASSETS AND COSTS BUILDS CERTAINTY FOR BTR INVESTORS

By Joshua Knaggs

Greater clarity about federal and state housing policies and new tax incentives are spurring momentum in Australia’s build-to-rent (BTR) sector. Despite this lowering of the commercial barriers to BTR, many developers and investors still lack confidence. Unlike traditional build-to-sell (BTS) developments where the focus is on upfront sales revenue, BTR projects demand a different perspective, where long-term control of ongoing capital and operational costs is crucial for ultimate financial viability and long-term sustainability.

THINKING LONG TERM, RIGHT FROM THE START

Developers and owners of BTR properties need to forecast a range of metrics to be able to determine what rents will be required to balance their ongoing property costs and achieve their desired return on investment.

BTR facilities must be designed with a clear focus on long-term costs as well

as maintaining the right level of quality and amenity to attract and retain tenants.

Detailed reviews during the project design stage could prevent costly problems before they become entrenched. For example, by prioritising systems with straightforward maintenance, easy access, and manageable compliance and warranty requirements, designers can enhance the long-term success of the BTR outcome.

ASSET KNOWLEDGE AND COST ANALYSIS ARE KEY TO SMARTER DECISIONS

To gain confidence in the success of a BTR project, the fundamental asset management strategy of knowing your assets becomes paramount.

Investing early in a detailed asset register is the foundation for understanding value – now and into the future.

The asset register supports asset tax depreciation schedules, helps to inform cost-effective maintenance procurement, and enables identification of assets with statutory compliance obligations. It also provides a means of monitoring costs at a granular level to aid decision making on future projects and, as a tracking document, can support ongoing calibration of lifecycle modelling.

Another key advantage of the asset register is facilitating sales if used as a due diligence tool for prospective buyers.

...Developers and owners can make strategic decisions that balance capital expenditure with ongoing operational efficiency.

Whole-of-life costing is a powerful tool for modelling and forecasting the expenditure required for preventive and corrective maintenance over the asset’s lifespan.

It’s important to consider the expected replacement cycles, ongoing inflation and cost escalation, while also considering opportunities for costsaving measures.

Through informed whole-of-life cost analysis, developers and owners can make strategic decisions that balance capital expenditure with ongoing operational efficiency. For example, while high-performance HVAC systems may have a higher upfront cost, their lower energy consumption

Condition assessments... Ideally should extend to the building’s energy performance, structural integrity and resilience...

and extended lifespan could result in substantial savings over time. Similarly, using durable, low-maintenance materials may reduce long-term costs of repair and replacement and minimise tenant disruption.

COMPREHENSIVE CONDITION ASSESSMENTS UNDERPIN CERTAINTY

Maintaining accurate asset knowledge is a continuous process. The evolving condition of all the building’s assets needs to be regularly assessed and documented in the asset register, which becomes a living document making it a dynamic, up-to-date resource.

An effective way to ensure that the overall condition of the building’s assets is regularly updated is for contractors who are undertaking planned maintenance activities to report on the ongoing condition of assets using a standard metric of condition grading.

Condition assessments should not only cover the building’s mechanical, electrical and plumbing (MEP) systems and its fire safety and compliance, but ideally should extend to the building’s energy performance, structural integrity and resilience too.

For prospective buyers or sellers of an established BTR property, transparent and detailed condition assessments will build greater confidence in the current condition and value of the BTR property, supporting a realistic estimate of what it may cost to keep the property in good condition over the longer term and underpinning credible projections of when that spending should occur.

DIGITAL ASSET MANAGEMENT TOOLS BUILD CONFIDENCE

The rise of BIM, digital twins, IoT sensors and predictive analytics is revolutionising proactive building maintenance – which is key to maximising a BTR property’s value over time. Going digital allows property managers to identify potential failures before they escalate into costly repairs.

Going digital allows property managers to identify potential failures before they escalate into costly repairs.

By consolidating maintenance history, energy performance data and repair trends, investors and property managers can make more informed decisions about their capital expenditure and operational strategies.

Going digital can also enhance the tenant experience, facilitating smoother collaboration and information flow between tenants and facility managers.

DE-RISKING BTR FOR A RESILIENT ASSET CLASS

When a BTR property is thoughtfully designed, well constructed, appropriately maintained, and continues to align with tenant expectations, it is on a solid foundation for stable, long-term financial appreciation.

BTR investors who fully understand all the assets that make up the facility – supported by rigorous condition assessments, whole-of-life methodologies and digital tools – can have greater certainty and confidence of achieving their desired returns from investing their capital in the BTR sector, while also providing more options for renters in Australia’s housing crisis.

This article was written by Joshua Knaggs from WT Partnership

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BUILDING COST INDEX

JUNE 2025

THE BUILDING COST INDEX IS PUBLISHED IN THE PRINT VERSION OF THE BUILT ENVIRONMENT ECONOMIST.

IT CONTAINS DATA THAT CAN BE USED AS A PREDICTOR FOR THE ESTIMATED TIMES FOR DESIGN AND CONSTRUCTION AND INCLUDES A SUMMARY OF THE PAST, PRESENT AND ESTIMATED FUTURE CONSTRUCTION COSTS.