Page 1

The Journal of the Australian Institute of Quantity Surveyors

The

Building Economist

FEATURING

THE MEGA ISSUE

FLYING HIGH WItH MEGA AIRPORTS EXPLORING THE UPS AND DOWNS OF THE NEW BREED OF AIRPORT

TITANIC II

THINKING BIG WITH CLIVE PALMER

DIFFERENT DIRECTIONS AND BIG OPPORTUNITIES CONSTRUCTION PROFESSIONALS TAKING THIER WORKING LIVES IN NEW DIRECTIONS

SEPTEMBER 2013


I M P O R T A N T

W A R N I N G !

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The

Building Economist

10 16 28 22

THE ROLE OF THE QUANTITY SURVEYOR IN THE RESOURCES INDUSTRY Different Directions and BIG Opportunities BE speaks to Construction

Professionals that have taken their working lives in a different direction.

Managing Editor Jenna Harfield Executive Editor Emma Marshall Art Director Julian Brown - Nose to Tail Chief Executive Officer Michael Manikas

INSIGHT flying high with mega airports

The “aerotropolis” – new breed of airport – is looming as airports around the world are becoming bigger and better every year. BE hits the runways and explores the highs and lows of mega airports around the world.

CLIVE PALMER THINKS BIG WITH TITANIC II

Queensland’s Clive Palmer is cementing his place in history with a mega project of his own – the building of the replica ship Titanic II. Lynne Blundell discovers what the project is all about.

02 07 08 25 REGULARS 34 SEP 2013 C ON T EN T S

SNAp SHOT

FROM THE president

Nuts & bolts

QS KIT

SOCIAL

Contributions Articles relevant to construction economics and related subjects, pictorial material, letters etc are welcome. No responsibility is accepted for unsolicited material. All contributions should be addressed to the editor: Australian Institute of Quantity Surveyors, National Office, Level 6, 65 York Street, Sydney NSW 2000.

The Institute does not, as a body, hold itself responsible for statements made and opinions expressed in this Journal. All rights of translation and reproduction are reserved.

Tel: (02) 9262 1822 Fax: (02) 9279 1400 Email: editor@buildingeconomist.com.au www.buildingeconomist.com.au

Tel: (02) 9262 1822 Fax (02) 9279 1400

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Circulation 1000 print copies plus an online readership of over 18,000 and growing General and Advertising Australian Institute of Quantity Surveyors, National Office, Level 6, 65 York Street,Sydney NSW 2000. Tel: (02) 9262 1822 Fax (02) 9279 1400 Email: editor@buildingeconomist.com.au Artwork as a PDF is preferred. ISSN 0007-3431 Designed and printed for the Australian Institute of Quantity Surveyors (ACN 008 485 809) by Nose to Tail Pty Ltd

THE BUILDING ECONOMIST – September 2013 – 1


SNAPSHOT

COMMERCIAL OFFICE MARKET TAKES A TUMBLE According to the Property Council of Australia’s

is not surprising given subdued economic

Office Market Report, the average national vacancy

fundamentals and growth rates in white collar

rates across Australian CBDs has increased by two

employment having shrunk to a third of pre-GFC

percent in six months, with the worst hit being

levels.

Brisbane, where plummeting demand amid staff reductions in mining, public service and general

However, the report also predicted that until a

business saw vacancy rates jump from 9.3 per cent

massive amount of space hits the market in 2015,

to 12.8 per cent.

supply additions over the next two years are expected to come in below historic averages, relieving some

Property Council of Australia chief executive

downward pressure on the market.

officer, Peter Verwer, says the rise in vacancies

2 – THE BUILDING ECONOMIST September 2013


SNAPSHOT IN BRIEF

SUSTAINABLE FUTURE PLANNED FOR PARRAMATTA Parramatta City Council has become

to Lord Mayor of Parramatta, Cr

the first local government in Australia to

John Chedid will be “based on good

seek a Green Star – Communities rating,

urban design, that is environmentally

with its commitment to achieving a 5 Star

sustainable, has vast, vibrant, beautiful

Green Star rating for its $1.6 billion urban

public spaces and an effective integrated

renewal development project.

public transport system.”

Parramatta Square is a three hectare, mixed use development which according

WORK BEGINS ON $700 MILLION PERTH STADIUM WORKS

MORETON BAY RAIL LINK TO BE BUILT A

$650 million agreement with the federal government, state

government and Moreton Bay Regional Council will see Thiess Group build the Moreton Bay Rail Link. The project will include 12 kilometres of new track that

Pre-construction work on the $700 million

finish in time for the 2018 AFL season, and

will connect the greater Brisbane to the

Perth Stadium is underway after an official

will include a 60,000 seat capacity, state of

rapidly expanding Moreton Bay region.

sod turning ceremony attended by State

the art configuration and seating, variable

Premier Colin Barnett and Sport and

lighting, public transport access and a

Major work is expected to begin early

Recreation Minister Terry Waldron.

footbridge across the Swan River linking

next year and the new line is expected

the stadium with East Perth.

to be completed and operational by

Building on the Burswood Peninsula is

June 2016, with the cost of the link

expected to begin in December 2014 and

expected to amount to a total of $1.147 billion.

THE BUILDING ECONOMIST – September 2013 – 3


SNAPSHOT

CAIRNS CASINO A POSSIBILITY If approved, a $4.2 billion Macau-inspired resort and casino,

Queensland Deputy Premier Jeff Seeney confirmed that

known as the Aquis Great Barrier Reef Resort, could soon be

Aquis has earned preliminary approval with the project still

calling the Northern Queensland suburb of Cairns home.

to undergo environmental, social and economic assessments with the city. The proposal will also be subject to community

The 340 hectare complex aims to be a destination venue and

consultation.

will feature nine luxury hotels as well as entertainment and retail functions, including an 18-hole golf course, aquarium, theatre and a 13-hectare reef lagoon.

4 – THE BUILDING ECONOMIST September 2013


SNAPSHOT IN BRIEF

AN APOLOGY I

n last issue’s Nuts and Bolts an infographic was presented outlining

the influence of green. It contained an overview of each state and territories own green projects, but unfortunately the Australian Capital Territory was absent from this data. We would like to advise our readers that the ACT has 37 of the 542 Green Star Rated Projects within the country.

SECOND TALLEST BUILDING IN THE WORLD STANDS UP Saudi Arabia’s Makkah Royal Clock Tower Hotel in Mecca has now been displaced as the world’s second tallest building as the final beam of Shanghai Tower has been put into place.

NEW DEVELOPMENT APPROVED FOR VICTORIA’S DOCKLANDS A

new $130 million mixed use hotel development has been approved

for the new Digital Harbour Precinct of Victoria’s Docklands. Designed by architectural firm Moull Murray, the 37-storey residential and hotel building will consist of 360 apartments, a 4.5 star, 176 room

Standing at 632 metres (2,073 feet), the building is aiming for LEED Gold certification from

Sheraton Four Points hotel, a 200-

the US Green Building Council as well as a China Green Building Three Star rating, with

seat restaurant, swimming pool, gym,

sustainability measures expected to deliver savings to the tune of 34,000 metric tonnes

conference centre and 255 car spaces.

in carbon emissions per year.

THE BUILDING ECONOMIST – September 2013 – 5


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FROM THE president

THE Mega ISSUE It has been a privilege to serve as National

November, which was agreed upon at the board

to work together to better the education and

President of the AIQS for the last two years. The

meeting held in conjunction with the inaugural

opportunities for our members in mainland

journey has passed very quickly and as I prepare

Infinite Value Awards. This has simplified and

China. In the improvement of the training and

to finish my tenure I would like to take this

streamlined the entry pathway into the AIQS and

development of QS’ off-shore we are ensuring

opportunity to reflect on some of the highlights

has made the conditions of membership more

that the integrity of the profession is upheld

and key achievements during this time.

in-tune with the global market.

globally and encouraging collaboration within

We have seen some extraordinary changes

Our marketing team, lead by Jenna Harfield,

for the AIQS. Firstly we moved the AIQS

conducted the first Infinite Value Awards

This brings us to the current time where we

headquarters from Canberra to Sydney. This was

program culminating in the gala dinner in

have just returned from India and Sri Lanka

not without its challenges and was confidently

Melbourne last November. It was a very

having signed an MOU with the Indian Institute

organized through Michael Manikas’ leadership,

successful event and is due to be repeated this

of Quantity Surveyors (IIQS) and visited a

after taking the reigns as CEO in February 2012.

year in Sydney. It has become a hotly anticipated

number of Universities with a view to eventually

occasion in the AIQS social calendar. My

accrediting their courses for Quantity Surveyors.

congratulations to our inaugural winners, the

The trip was made possible by a grant from

standard of entries was extremely high and

the Australia-India Council and was a fantastic

all nominees should be commended for their

opportunity to take advantage of.

We took this move as a symbolic beginning of a new era for the Institute and enjoyed the opportunity to host a grand opening of the new office in Sydney, which was attended by the Executive Committee and the Chapter

contribution to our profession.

the industry as a whole.

It has been an action packed two years and one

Presidents. We had around 100 members

It would be remiss of me not to acknowledge the

that I reflect upon fondly. I will finish my term

in attendance as well as Councillor Shayne

contribution of the Judges who had an enormous

as President by attending the Chapter AGMs in

Mallard from the City of Sydney, who marked

task in selecting the award winners. No doubt

October / November and in delivering a paper

the occasion with a welcome speech and the

this year’s esteemed panel will have their

at the International Chapter Conference in

appropriate amount of ceremony.

work cut out for them. I wish you all the best

Bangkok. I will then hand the reigns over to the

of luck and look forward to congratulating the

next President who is elected into the position at

successful contenders on the night!

the November Council meeting.

partners and affiliates. The first face-to-face

The year closed as quickly as it began and it is

I would like to take this opportunity to thank

meeting of all the international delegates was held

hard to believe that we are fast approaching

the AIQS staff in Head Office for their efforts

in Bangkok with Michael and myself in attendance.

the end of 2013. This year has seen The

in making these last two years run smoothly,

I also had the pleasure of attending the PAQS

Articles of Association being amended at the

especially with all the changes and challenges

conference in Brunei last July where we held a

Special General Meeting in April. The changes

encountered during the period. I would also take

meeting with the local AIQS members. There were

acknowledged a series of terms and conditions

this opportunity to the Directors and staff at

32 members who attended a Q&A session with

that needed to be modernized to align the

Davis Langdon an AECOM Company who have

four past or present AIQS Presidents (Trevor Main,

Institution to the modern day.

supported me during this period and picked up

On the whole, 2012 can be summarised as a time of travel and the chance to meet many of our global

Michael Manikas, Denis Lenard and myself).

In May I travelled to Dubai and Qatar to

the slack when I have been absent from the office.

October then saw the first international Chapter

visit members and sign a Memorandum of

It has been an honour to be a part of this growing

AGM in Kuala Lumpur and I managed to attend

Understanding (MOU) with the Philippine

community of Quantity Surveying professionals

all the National Chapter AGMs with the exception

Institute of Certified Quantity Surveyors, the

and I will watch the Institute continue to advance

(ironically) of my hometown, the QLD Chapter. I

Institute of Incorporated Engineers Sri Lanka

with interest over the coming months and years.

was very pleased with the feedback, especially

and Herriot Watt University. This, along with

from Canberra regarding the move to Sydney

the other global ties we enjoy, serves to further

and the performance of our new team. A step

strengthen our position overseas and promote

we all believe has been a success and hugely

the role of the QS on a wider scale.

beneficial to the overall operation of the AIQS.

The PAQS Board meeting and conference was

Gary McDonald

In terms of overall advancements, a new

held in Xian, China, and we also held meetings

President

membership structure was adopted in

with our Chinese counterparts where we agreed

THE BUILDING ECONOMIST – September 2013 – 7


NUTS AND BOLTS

sky stats To compliment our feature article on Flying High with Mega Airports, Nuts and Bolts looks at the biggest and best of airports around the world.

THE BEST

01–10

1. SINGAPORE CHANGI AIRPORT 2. INCHEON INTERNATIONAL AIRPORT 3. AMSTERDAM SCHIPHOL AIRPORT 4. HONG KONG INTERNATIONAL AIRPORT 5. BEIJING CAPITAL INTERNATIONAL AIRPORT 6. MUNICH AIRPORT 7. ZURICH AIRPORT 8. VANCOUVER INTERNATIONAL AIRPORT 9. TOKYO INTERNATIONAL AIRPORT (HANEDA) 10. LONDON HEATHROW AIRPORT

THE BUSIEST 01

THE BUSIEST 02

HARTSFIELD–JACKSON ATLANTA INTERNATIONAL AIRPORT

BEIJING CAPITAL INTERNATIONAL AIRPORT

ATLANTA, GEORGIA, UNITED STATES

CHAOYANG, BEIJING, CHINA

PASSENGERS PER YEAR

PASSENGERS PER YEAR

THE BUSIEST 06

THE BUSIEST 07

LOS ANGELES INTERNATIONAL AIRPORT

PARIS CHARLES DE GAULLE AIRPORT

LOS ANGELES, CALIFORNIA, UNITED STATES

MITRY-MORY, ÎLE-DE-FRANCE, FRANCE

63,687,544

61,611,934

95,462,867 81,929,689

PASSENGERS PER YEAR

PASSENGERS PER YEAR

SOURCE: SKYTRAX

WORLDWIDE:

SOURCE: IATA

PASSENGERS 2011 2,800,000,000 COMMERCIAL PLANES 2011 34,000

WORLD’S MOST EXPENSIVE: DUBAI WORLD CENTRAL INTERNATIONAL HONG KONG INTERNATIONAL AIRPORT

$33,000,000,000 $28,000,000,000


THE BUSIEST 03

THE BUSIEST 04

THE BUSIEST 05

LONDON HEATHROW AIRPORT

TOKYO INTERNATIONAL AIRPORT

O'HARE INTERNATIONAL AIRPORT

HILLINGDON, LONDON, UNITED KINGDOM

OTA, TOKYO, JAPAN

CHICAGO, ILLINOIS, UNITED STATES

70,038,857

67,788,722

67,091,391

THE BUSIEST 08

THE BUSIEST 09

THE BUSIEST 10

DALLAS-FORT WORTH INTERNATIONAL AIRPORT

SOEKARNO-HATTA INTERNATIONAL AIRPORT

DUBAI INTERNATIONAL AIRPORT

DALLAS-FORT WORTH, TEXAS, UNITED STATES

CENGKARENG, TANGERANG, BANTEN, INDONESIA

GARHOUD, DUBAI, UNITED ARAB EMIRATES

58,591,842

57,730,732

57,684,550

PASSENGERS PER YEAR

PASSENGERS PER YEAR

PASSENGERS PER YEAR

PASSENGERS PER YEAR

THE BUSIEST 31 SYDNEY AIRPORT

SYDNEY, NEW SOUTH WALES, AUSTRALIA

PASSENGERS PER YEAR

PASSENGERS PER YEAR

THE BUSIEST 50

37,342,798

PASSENGERS PER YEAR

TULLAMARINE INTERNATIONAL AIRPORT

MELBOURNE, VICTORIA, AUSTRALIA

29,431,084

PASSENGERS PER YEAR

SOURCE: Airports Council International (ACI)


Flying High with Mega Airports Considered the gateway to a country, airports around the world are becoming bigger and better every year. Millions are spent by governments and private construction companies as they attempt to put their airports on the map. With around 3 billion passengers taking flight every year, there is an increasing need to go beyond a simple airport concept and create a new breed of ‘aerotropolis’. BE hits the runways and explores the highs and lows of mega airports around the world. 10 – THE BUILDING ECONOMIST September 2013


Insight

When heading off overseas, whether on business or pleasure,

restaurants, cafes, bars, hotels and even recreational facilities.

airports are a necessary evil. Long lines and time wasted waiting

Not one to shy away from a bit of competition, the Middle East

to check in and go through the security gates, customs checks

is in a race to create the next mega travel destination with Abu

and the dreaded lost baggage can all feature in our negative

Dhabi, Qatar and Dubai all building new and improved facilities.

airport experiences. However, as passenger numbers keep

In fact, the Al-Maktoum International Airport in Dubai is

increasing – currently estimated to be around 3 billion per year

expected to overtake the Hong Kong International Airport (HKIA)

– airports are spreading their wings to make room and create a

as the most expensive airport in the world when it becomes fully

more positive travel experience.

operational in 2027.

Airports are now growing into the new ‘aerotropolis’ becoming

Whilst HKIA entered the Guinness Book of World Records for

destinations in their own right, featuring extensive shopping,

its *$20 billion construction, it will be surpassed by Dubai’s

THE BUILDING ECONOMIST – September 2013 – 11


golf courses and even residential housing

targeted by the three cities of Europe and

valued at $750,000, as well as an airfield

Asia is only set to rise by more than 120

that can handle the latest superjumbo

million passengers annually by 2031 –

jets. This will be no ordinary airport that

well below the new planned capacity.

much is clear. Also competing in the race to build the biggest and best airport, Abu Dhabi and Qatar are using state government money and pouring billions of dollars into this fast-expanding global aviation market. Glitzy indoor waterfalls will soon welcome more international traffic than London’s Heathrow Airport by 2015. With two-thirds of the world’s population within an eighthour flight time, these new aerotropolis’ will have the ideal geography to attract these millions of passengers. Speaking earlier this year about the new Abu Dhabi airport, Tony Douglas, Chief Executive of state-run Abu Dhabi Airports Co said “It will be instantly recognizable, like the Sydney Opera House or the Effiel Tower. It won’t be like any other airport you have been to.”

proposed airport, which falls within a 54-mile planned “city-within-a-city”

“Not everyone can be as successful as they are expecting,” said Mr Blondel. Not to be left behind, Australia has grown its own aerotropolis in sunny Queensland. Brisbane International Airport is Australia’s largest capital city airport by land size, the third largest on passenger numbers and the second busiest airport in Australia in relation to aircraft movements. Consistently recognised as a leading airport nationally and internationally, including being ranked as Australia’s No. 1 airport for quality of service nine years in a row by the Australian Competition and Consumer Commission (ACCC) Brisbane is continuing to grow. It has over 50 construction and planning projects currently in delivery, including recently unveiling the final piece of

Big promises from the Middle East have

its $350-million Domestic Terminal

been met with caution from others within

Upgrade, as well as expanding its apron

the aviation sector.

and taxiway network, commencing early

and is forecast to cost $33 billion for its

An aviation specialist at management

infrastructure alone. Current plans reveal

consultancy Arthur D Little, Mathieu

an expansive plot that can accommodate

Blondel has been quick to point out that

hotels, shopping centres, two 18-hole

the total traffic between the main route

12 – THE BUILDING ECONOMIST September 2013

works on their New Parallel Runway (NPR) and developing its 2014 Master Plan, a 20-year look-ahead for the business. It has been one busy year for Brisbane and it’s set to get even busier.


Insight

More than 21 million people travel through

invested $1.3 billion in airport

first of its kind for an Australian airport.

BNE each year and forecasts show that

infrastructure. Over the next 10 years, it

Assessing this plan against best practice

passenger numbers are expected to

plans to inject over $2 billion, including

benchmarks for liveability, economic

rise from 21,500,000 in 2012 to around

the redevelopment of its International

prosperity, environmental sustainability,

48,700,000 in 2033/34, and the Brisbane

Terminal, multiple airfield upgrades,

design excellence, governance and

Airport Corporation is quick to recognise

access road upgrades and a number of

innovation will help the airport lay claim to

the importance of correct planning now.

new commercial buildings and facilities.

being Australia’s most sustainable airport.

“It will be instantly recognizable, like the Sydney Opera House or the Effiel Tower. It won’t be like any other airport you have been to.” (Abu Dhabi) “Over 20,000 people currently work at

However, whilst many could see this

Speaking at the recent announcement,

the airport precinct every day with this

constant development and growth into a

Brisbane Airport Corporation’s Property

number expected to exceed 50,000 by

mega airport as an assault on Australian

General Manager, Renaye Peters said,

2029 - the size of a regional town – with

landscape, the Brisbane Airport

“Our vision for this plan has always

tens of thousands either directly or

Corporation is quick to point out its

been to create a vibrant centre for

indirectly reliant on airport activity as a

commitment to sustainability. Combining

commerce, innovation and recreation and

source of employment,” says a Brisbane

green principles and the concrete of

an internationally recognised model of

Airport Corporation spokesperson.

runways is not easy, but Brisbane Airport

sustainable development.”

“This level of growth demands that we plan ahead to ensure appropriate and sustainable infrastructure and services, such as roads, terminals and technology are in place.” Since its privatisation in 1997, the Brisbane Airport Corporation has

has registered its Property Development Master Plan to achieve a Green Star – Communities PILOT rating from the Green Building Council of Australia.

“We welcome the opportunity to be involved in initiatives such as this pilot as it expands upon the environmental sustainability measures already in place, for example

The Property Development Master

the use of potable water and reduction in

Plan was released in 2012 as a 50-

electricity consumption, and will strengthen

year vision for the land which can be

Brisbane Airport’s reputation as Australia’s

developed around Brisbane Airport, the

green airport,” Ms Peters continued.

THE BUILDING ECONOMIST – September 2013 – 13


Whilst it may seem that this constant

The public planning inquiry for Terminal

“After half a century

airport expansion is getting too big,

5 was the longest in UK history and the

of vigorous debate but

the development and growth of these

current discussions of how to expand

little action, it is clear the UK

gateways is a necessity - just look at

Heathrow to meet with demand have

desperately needs a single hub

London’s Heathrow Airport.

included demolishing the airport completely

airport with the capacity to provide

and building a new airport elsewhere – a

the links to emerging economies which

plan estimated to cost around £70 billion

can boost UK jobs, GDP and trade. We are

and take years to complete. On the other

showing how that vision can be achieved

hand, the Board of Airline Representatives

whilst keeping the impact on local

Europe’s busiest airport has been stuck for years in the constant struggle between the “if, how and where” to grow,

“We are showing how that vision can be achieved whilst keeping the impact on local residents to an absolute minimum” all whilst trying to service the constantly increasing numbers of passengers travelling down its runways and through its doors.

have stated that they could build a new

residents to an absolute minimum,”

runway for £18 billion and when combined

adds Matthews.

with the two current runways, would provide sufficient capacity to meet demand at least

From its humble beginnings, transforming from a Royal Air Force base during the Second World War, to London’s new civil airport in January 1946, London Heathrow Airport has now grown to include the recently opened Terminal 5 and sees over 67

until 2040.

travel becomes increasingly possible for more people, and as countries compete

Heathrow has since submitted three

for the almighty tourist dollar, airport

options to the Airport Commission which

development and expansion is getting

would see the third runway placed to the

bigger, better, and taking off. As the

north, north west or south west of the

Middle East targets opulence, Australia

existing airport.

looks towards sustainability, and the UK

million passengers travel through the

For the Chief Executive of Heathrow,

airport annually on services offered

Colin Matthews, this solution is the

by 90 airlines travelling to over 180

simplest and best.

destinations in over 90 countries.

As the world is getting smaller, air

“Our passenger figures underline the

By the time Heathrow celebrated its

UK’s urgent need for a single hub airport

60th anniversary in 2006 it had handled

with the capacity to meet the demand for

around 1.4 billion passengers on over

links to emerging economies. The best

14 million flights. However, these

solution for taxpayers, passengers and

impressive statistics have not been

business is to build on the strength we

without challenges.

already have at Heathrow.”

14 – THE BUILDING ECONOMIST September 2013

looks for room, of which of these stands to become a global success story - only time will tell. * All costs outlined in this article are in AUD.


Insight

THE BUILDING ECONOMIST – September 2013 – 15


Clive Palmer Thinks BIG with Titanic II It does not get much bigger than the Titanic. From its actual size, to its reputation, the Titanic has a place in history. Now, Queensland’s Clive Palmer is cementing his place in history with a mega project of his own – the building of the replica ship Titanic II. Lynne Blundell discovers what the project is all about and whether it really is “go big, or go home” for this mega ship.

16 – THE BUILDING ECONOMIST September 2013


Clive Palmer doesn’t believe in doing things by halves - he is a big man with big ideas. Right now he is fully occupied with two of these – running for Federal Parliament as leader of the recently formed Palmer United Party and building a 21st century replica of the Titanic due to set sail in 2016. The Queensland mining magnate

shipping company CSC Jinling,

announced his plans to build the Titanic

with Finnish naval architecture firm

II through his shipping company Blue

commissioned to do the design.

Star Lines in April 2012, just weeks after a memorial cruise to mark the 100th anniversary of the sinking of the Titanic. In March this year the global launch event of the replica ship took place in New York, the city to which the original ship was headed

When asked by The Building Economist what had inspired him to build the replica ship, Palmer says it was seeing the James Cameron blockbuster ‘Titanic’ that sowed the seeds of his interest.

when it sank in the North Atlantic Ocean

“When I read more about the Titanic I

in 1912.

was just fascinated by the story and the

Palmer is following the original design of the Titanic as closely as possible, from the plush interiors through to the extravagant menu – a menu that has been produced by

opulence of the first class section on the ship and the sheer courage shown by the passengers and crew in the face of adversity,” says Palmer.

the 68 chefs already employed. Passengers

He also believes the project will bring

will also be provided with period clothing

wider benefits beyond fulfilling the whims

from 1912 if they really wish to indulge a

of wealthy passengers.

passion for the era, and no telephones or televisions will be on board.

“Titanic II will be built in China by CSC Jinling Shipyard and will have a massive

Having recruited some of the best global

effect on the Chinese cruise industry. The

powerhouses in maritime construction,

Chinese are in the top 70 per cent in the

the Titanic II is being built by Chinese

world for building container vessels but in

THE BUILDING ECONOMIST – September 2013 – 17


the bottom two per cent for providing passenger vessels. We thought

“The fact is this ship is looking to attract a very different audience to

a great way for the Chinese to break into the luxury ship building

most cruises. The cruise industry is no different to any other industry

market and give the Europeans some healthy competition would be

– there is a wide range of customers and many different types of

to build a 21st century version of the Titanic,” says Palmer.

cruises,” says Jardine.

Having recruited some of the best global powerhouses in maritime construction, the Titanic II is being built by Chinese shipping company CSC Jinling, with Finnish naval architecture firm commissioned to do the design. Brett Jardine general manager of the Cruise Lines International

CLIA was flooded with enquiries from North America when the

Association (CLIA) Australasia says the project will attract a niche

project was announced. This is not surprising, says Jardine, as North

audience, adding extra diversity to the cruise industry.

America accounts for 60 per cent of the cruise industry’s clientele.

18 – THE BUILDING ECONOMIST September 2013


“It’s a very mature market and we’re still an emerging market

and weighing approximately 40,000 tonnes. The new Titanic by

here,” Jardine says.

comparison will be 20 percent larger than the original, coming in at

But the growth in Australian demand for cruises over the past

55,000 tonnes.

decade has been significant, according to the CLIA’s latest report. Ten years ago 100,000 Australians went on cruises. Last year it was 700,000 and the CLIA forecasts it will rise to one million passengers in four years. “A lot of that growth is because of awareness,” says Jardine. “Since the GFC consumers are very savvy about good value and cruises are very good value compared to a lot of other types of travel.” CLIA has been in communication with Clive Palmer and Blue Star Lines regarding the Titanic II project. As part of the international association the Australian branch has a strong regulatory and educational role. While it is not compulsory for companies to become members, Jardine says the vast majority of cruise companies choose to. “At the end of the day we are strong advocates for passenger safety, as are our members,” says Jardine. Safety is one area where the Titanic II diverges from the original Titanic. This time there will be more than enough lifeboats for every passenger, unlike the original, which had 16 wooden lifeboats, enough to carry only 1178 of the 2224 passengers. The Titanic sank after hitting an iceberg on April 15, 1912 and 1,514 passengers and crew died. Unlike the original owners of the Titanic, Clive Palmer does not see his ship as invulnerable. “Anything will sink if you put a hole in it,” he quipped at the New York launch of the project. The original Titanic was commissioned by White Star Line and was the largest liner in the world at just under 270m long, 53m high

THE BUILDING ECONOMIST – September 2013 – 19


Modern safety regulations and economic considerations mean that

Throughout 2015, Blue Star Line is accepting applications for a

the there are several major differences between the original Titanic

number of positions – including captain.

and the Titanic II, including: • An additional safety deck between C and D decks for modern lifeboats and marine evacuation systems

However, this project has not been without criticism. Many have described the idea of a commercialised replica of the Titanic as “insensitive” and “a mockery of the memory of those who died”,

• New escape staircases in addition to the original staircases

whilst others have called Clive Palmer an “eccentric billionaire” and

• A greater beam for enhanced stability

called the creation of Titanic II an inflated publicity stunt.

• Use of welding rather than riveting • A bulbous bow for higher fuel efficiency • Stabilisers to reduce roll • Diesel engines rather than the original coal-fired steam engines

Whatever the reasons behind the build of Titanic II – whether as a recreation of a momentous piece of history or a mere publicity stunt – it will no doubt be an enormous challenge and something to behold.

• New service elevators and an air conditioning room

The new Titanic by comparison will be 20 percent larger than the original, coming in at 55,000 tonnes. The replica will retain the three classes of travel and passengers can choose to spend all six days in one class or two days in each. Palmer is not prepared to reveal how much the project will cost but it has been estimated in some media reports to be around 400 million British Pounds (AU$664 million). In addition to the luxury, Palmer hopes passengers will experience a “ship of peace and love.” More than 50,000 people have already registered to go on the maiden passenger voyage from Southampton to New York – like the original – scheduled for 2016. “From the media and public response to the global launch we had in New York in March and other events in Britain, it looks like being one of the biggest global events of 2016. There will be hundreds of thousands of people lining the shore when Titanic II reaches New York,” says Palmer. With tickets expected to go on sale in 2015, Blue Star Line has indicated that even before construction has begun, around 40,000 people have registered their interest with half a dozen offering more than a million dollars to be part of the maiden voyage. Adjusted for inflation, a first class ticket back in 1912 would have set you back $57,000 - with some of the suites going for over $100,000. However, those looking for a cheaper way to be aboard Titanic II’s maiden voyage can apply to work on the ship.

20 – THE BUILDING ECONOMIST September 2013


The Original Titanic Tonnage

46,328 gross tonnage

Length

268 metres (882 ft, 8 inches)

Beam

28 metres (92.5 ft)

Draught

approx 34 ft

Decks

9

Installed power

Engines: 2 reciprocating 4 cylinder,

triple expansion, direct - acting,

inverted engines: 30,000hp 77 rpm.

1 low pressure Parsons Turbine:

16,000hp 165rpm

Boilers

29 (24 double ended and 5 single ended

Furnaces 159 providing total heating surface of

144,142 sq ft

Steam pressure

215 P.S.I.

Propulsion

3; Centre turbine: 17 feet; Left/Right

wings: 23 feet 6 inches

Speed

23 knots

Capacity

3547 passengers & crew

Titanic II Tonnage

56,000 Gross tonnage

Length

269.15 m (883ft)

Beam

32.2 m (105ft 8in)

Draught

7.5m (24ft 7in)

Decks

10

Installed power

Engines: 2 x Wärtsilä 12V46F, 2 x Wärtsilä

8L46F; 48,000 kW (64,0000 hp)

Propulsion

Diesel-electric with three azimuth thrusters

Speed

24 knots (44km/h; 28mph maximum)

Capacity

3,335 passengers & crew

THE BUILDING ECONOMIST – September 2013 – 21


Different Directions and BIG Opportunities Do you dream of working on something as exciting as the Euro Disneyland project in Paris, and not simply by dressing up as Mickey Mouse, or how about side stepping into the banking or petroleum

With their qualifications in hand, many new gr aduates from Construction related disciplines can make the assumption that there are only a fe w tr aditional career paths open to them in the building and construction sector, Quantity Surveying be ing one of them. However, big opportunities, new experiences and a vast choice of roles are open to any gr aduate equipped with the core skills that Quantity Surveying and related tr aining brings. BE explores the consider able prospects available and speaks to some QS’ and Construction Profe ssionals that have taken their working lives in a different direction.

sectors? Have you ever wanted to work in mining? Then it seems becoming a quantity surveyor is the way to go. Traditionally, quantity surveyors juggle the construction costs and contracts on any major construction work. From office blocks, industrial projects, and hospitals, to schools and infrastructure projects, a QS can be found “crunching the numbers”. In fact, according to a recent report by BIS Shrapnel, quantity surveyors are in huge demand in Australia, New Zealand, South Africa and the UK. The report also stated that by 2016 Australia will need 8,948 surveyors, growing to 9,501 in 2019, which could potentially open up around about 1,500 jobs in this country alone. However, graduates with building and construction related degrees don’t have to stick to just the one sector. Diversity is possible. Although the industry has suffered from slowed growth in recent times and projects have been put on hold due to the global financial crisis, the role of a QS is still an essential one - they have the responsibility of ensuring a company meets its financial targets on its projects after all. The responsibilities and abilities of a QS in general, have also evolved over time, with their roles expanding to involve risk analysis, environmental services measurement & costing, project management, and technical auditing. This up-skilling and expanding of a QS’ core skills now offers more to the market beyond the construction sector.

22 – THE BUILDING ECONOMIST September 2013


Other organisations and sectors are now waking up to the broad

Working for Bechtel in 2000 further helped cement her skills and

range of a QS’ expertise and competence and for new graduates,

continue with her change of direction.

their working life will not be the same as generations before them. The world is their oyster, and new experiences and opportunities are now knocking on their door.

“As a Claims Analyst, I was able to take my project controls skills one step further – to use project data to help explain schedule delays and cost overruns within the framework of contractual entitlement.”

When Joy Pechet left college she followed the usual path, performing various controls functions on large construction projects, including project scheduling, cash flow analysis, budget preparation, and cost variance analysis. Her early work at Walt Disney Company, Euro

As a claims analyst, Joy was required to analyse productivity changes on a project, in order to develop a “cause and effect” analysis that can help explain cost overruns and schedule delays. Part of this process is in understanding whether the productivity assumptions at

Whether you are building in concrete and steel, bits and bytes or nucleotides and kilobases the fundamentals are the same. Disneyland and Hughes Aircraft provided the knowledge she needed to take a step into the world of construction claims.

the time of bid were valid, which includes the number of crews, the crew size, and construction method, and how effectively these initial

“Without this early experience in the world of being a Quantity

productivity assumptions were translated into a time schedule.

Surveyor, the preparation of delay, disruption and acceleration claims would have been much more difficult,” says Joy.

“A solid QS background is essential for developing effective delay and disruption claims,” adds Joy. “This profession is all about interpreting

Now inspired by the creativity of a project, American Joy Pechet is

events. There are many ways to interpret these events, and two people

just one of these individuals who have applied their speciality of

may interpret them differently. So, the creative aspect is very important,

using cost, schedule and contract information to develop assertive

that is putting together the data in a way that reasonably tells the story of

and defensive claims across all types of construction projects, both

the sequence of events.”

large and small.

Stephen Damiani, founder of Mission

Massimo Foundation, and family.

THE BUILDING ECONOMIST – September 2013 – 23


Joy now has the best of both worlds, working for Hyundai Engineering

Whilst the past four years have been incredibly challenging for Stephen,

and Construction in Dubai as a Claims Manager and Quantity Surveyor.

the foundation along with dedicated clinicians and researchers, have

“Construction happens all over the world, so it was a great way to satisfy my desires to work internationally. It also satisfied my hopes of helping poorer countries develop necessary infrastructure to advance their societies both economically and politically,” says Joy. Whilst Joy has used her QS background to travel the world and step into new and exciting projects, others have stepped away from the traditional construction sector completely – whilst still taking their learning from Quantity Surveying with them

made a world-first breakthrough of obtaining a confirmed genetic diagnosis for his son and many other children around the world. However, this is just the first step on a long road to develop a treatment and just maybe even a cure for this debilitating condition. As a result of his efforts so far, Stephen has been invited to represent Australia on the Global Leukodystrophy Initiative (GLIA). Stephen is now turning his attention to using his QS background for their first key fundraising initiative this year - a sub-orbital flight with tickets now available for the draw to win a spot on the exclusive flight. From

Driven by personal circumstances when his son was diagnosed with

take off, to breaking the sound barrier, to re-entry and landing, this flight

a white matter disorder broadly known as Leukodystrophy, Stephen

is a once in a lifetime for many.

Damiani changed direction and set up the not-for-profit organisation

Mission Massimo Foundation named after his son Massimo. Whilst this may be a big change for some, to Stephen “the fundamentals of Quantity Surveying have never been far from front and centre.”

According to Stephen, the foundation chose to offer a sub-orbital flight due to the fact that when his son was first diagnosed and they began this long journey, it all seemed like science fiction. Now the aim is to use this out of this world experience to fund more research and raise awareness

“Quantity Surveying has traditionally been viewed as a profession but it

of the condition and to turn this science fiction into science fact! To

is also a set of learned disciplines no different to marketing or finance.

transform this unbelievable challenge into reality, Stephen knows he can

Quantity Surveying may have its roots in construction engineering yet

fall back on everything he learnt as a Quantity Surveyor.

its structured disciplines are equally relevant across other industries,” says Stephen.

“Almost twenty years ago using a table digitiser to measure a Bill of Quantities, I never thought I would be sending someone into space to

After completing a Bachelor of Planning and Design / Bachelor of

accelerate medical research,” says Stephen. “The logic frameworks

Building, Stephen worked at WT Partnership in Melbourne for his

and structured thinking instilled through tertiary training and

cadet year and professional year before his personal life changed his

professional practice as a Quantity Surveyor have certainly played a

professional one.

significant role in achieving these incredible outcomes.”

Doing a complete 360 Stephen is now the President of the Mission

It is easy for graduates and successful quantity surveyors to stick to

Massimo Foundation and spends his days researching his son’s

the same old career path but big opportunities await those who look

condition and working with the world’s best genetic researchers to

for them. From construction to space, the possibilities can be out of

continue and aid their work.

this world!

Be the first QS in space with the Mission Massimo Foundation You can now purchase tickets into a strictly limited draw of 250 tickets for a truly life changing experience. In the next few weeks, the Mission Massimo Foundation will be giving someone the chance to experience a magnificent view, and in the process raise some much needed funds for medical research. Their ground-breaking initiatives and research into rare lifethreatening conditions that affect the formation of myelin, a complex fatty substance that acts as an insulator around nerve fibres in the brain much like electrical wiring, and have already changed the lives of dozens of children and given families hope for the future. Visit www.missionmassimo.com to find out more.

24 – THE BUILDING ECONOMIST September 2013


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THE BUILDING ECONOMIST – September 2013 – 25


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THE BUILDING ECONOMIST –september 2013 – 27


THE ROLE OF THE QUANTITY SURVEYOR IN THE RESOURCES INDUSTRY

Henriette Cronje discusses the value of the QS in the resources sector verses a traditional office environment and explores whether opportunities for QS’ are really being utilised to their best potential.

Henriette Cronje is Senior Site QS on the Gorgon LNG project on Barrow Island, WA for the Kellogg Joint Venture Group where she has worked since 2010. As the world’s biggest LNG project currently under construction, Gorgon is equal to 25 “mega projects”, a perfect fit for this being the MEGA issue. Having worked in both the PQS sector and the Resources Industr y for a number of years, I have been exposed to the differences in these two ver y diverse worlds: As a QS professional in the traditional construction environment, life consisted of working long hours, with tight

28 – THE BUILDING ECONOMIST September 2013


Henriette Cronje

deadlines, big responsibilities and high levels of stress, all

people of var ying nationalities and learn about the different

in return for fairly average pay packets. Luckily there were

cultures, habits, religions, languages and political ideologies

always the weekends to look for ward to.

of those nationalities.

In the resources world, life is ver y different: – laidback in a lot

My first exposure to the Mining & Resources world left me in

of ways with less day to day stress. The big difference is the

awe of the many and varied fields of specialisation within the

longer working days, often 7 days a week on a roster system

industr y and the processes and procedures that interlink and

and the assigned work tends to be more detail & analytically

support detailed reporting structures. The technical jargon of

orientated. It results in less work/life balance in exchange

the mining world consists of a multitude of abbreviations which

for better pay packets. There are also more opportunities to

take time to become accustomed to.

see the world, albeit remote locations with sometimes limited infrastructure. It also affords the opportunity to work with

THE BUILDING ECONOMIST – September 2013 – 29


IS THE TRUE VALUE OF OUR TRAINING BEING UNIVERSALLY RECOGNISED? It didn’t take me long to realise that the essence of

concise tender documentation, performing tender evaluation

construction work was exactly the same whether in the mining

and more.

sector or the traditional construction world: at the end of the day it was still earthworks, foundations, and structures, all as before but with more emphasis on the systems such as piping, mechanical, electrical & instrumentation. After a while, I adjusted to working with a broader team of professions like estimators, cost engineers, contracts administrators, planners & schedulers, systems and cost auditors, asset allocation departments and so forth. Ver y soon the realisation dawned on me that our QS background and training cover most, if not all of these fields – we could be considered super CA’s or super cost analysts.

We have a truly unique background and tr aining, in that we can build the bridge, so to speak, between what has been built on site and the $-value or earned manhours it represents. None of the other professionals have this formal multidiscipline ability or skill. The QS essentially becomes the link between the Project Controls and Contracts Departments – we literally have a foot in each world. The resources industr y in general is usually unaware of

Our QS background encompasses the physical, financial and contr actual aspects of construction work from inception to final account. I have found that in some cases the companies work within a silo system due to the various roles and departments (Contracts, Project Controls, Cost Engineering, etc) working independently from each other. This implies that although the detail work may be impeccable, the ability to see the overall ‘big picture’ risks being lost. Quantity Sur veyors have the ability to pull together the detail information, documented by all the departments, to present a clear over view of the respective contracts in term of cost, earned man-hours, productivity, schedule, contractual matters and finally highlight any associated risks that may become apparent.

Quantity Surveyors can contribute and achieve a lot more for their Clients than they are given credit for in terms of cost control, cost savings, cost forecasts, cost analysis, asset allocation, cost audits and risk assessment.

these unique QS skill sets and often we are pigeon-holed into

All Clients/developers are ultimately profit driven, which

a role as ‘measurer of progress on site’. This is especially

fundamentally involves effective cost control from the ver y

true working for American owned companies, which is

early planning stages of a project right through to the final

understandable since they do not have QS as a profession in

account, together with schedule/time control, adhering to the

their countr y. Companies influenced by the British education

terms of the respective contracts within the overall project.

system have a slightly better understanding of our skills, yet we remain mostly under-utilised in this sector. At the current time Quantity Sur veyors tend to only be used in post contract work or when contracts have become uncontrolled or unmanageable and there is a need to analyse costs and claims with a view to limit the damage. Whilst some ver y valuable work has been delivered in the claims consulting field, our worth is as relevant in the initial planning stages of the project - a time when our ser vices are often overlooked. The QS can provide real value assisting or undertaking estimating, performing cost option analysis, strategic planning, choosing procurement routes, preparing clear and

30 – THE BUILDING ECONOMIST September 2013


IS THE POTENTIAL FOR QS JOB OPPORTUNITIES IN THE RESOURCES MARKETS BEING UTILIsED? Whilst job ads may not mention Quantity Sur veying as a pre-

working histor y with the traditional resources clients and are

requisite or even as a possible requirement, our background

ver y well regarded in the industr y.

enables us to perform many of the professional roles available – most of time we are better qualified and skilled than many people with general degrees in commerce or engineering. My experience has been that recruiters for resources projects are often ignorant of our abilities and therefore we don’t get the job opportunities that we are most suited to.

However, what about our own young, upcoming Quantity Sur veyors? Are they being made aware of the massive opportunities for QS’s in the resources sector? We should encourage them to explore the many and varied possibilities in this industr y.

It is my opinion that The Mining and Resources industry needs elevated exposure as to our abilities and skills. We need to demonstrate our competencies and abilities to the various industries and explain the benefits that a Quantity Surveyor can achieve for the Client. We may need to rethink how to achieve this – maybe by having speaking opportunities at the mining conferences, stalls at mining exhibitions and even participating in career expos. On a more politically sensitive note, many Quantity Sur veyors currently being employed in the resources industr y come to Australia under the 457 Visa system. Quantity Sur veyors trained in the Philippines, India & Sri Lanka have a long

THE BUILDING ECONOMIST – September 2013 – 31


ARE WE SUFFICIENTLY PROTECTING THE QS MARKET SPACE?

QUANTITY SURVEYOR QUO VADIS?

In recent years, Accountants have started entrenching

swiftly in order to stay ahead of the game.

The current construction and resources markets are fairly

themselves in areas that are traditionally the QS’s market space. They are encroaching in a field where they have neither

We Quantity Sur veyors should do a lot more to market

the formal training nor the competency to be. It is worth acknowledging that Accountants are being engaged by Clients who place a high value on being able to say that the work has

ourselves (as PQS Companies and/or individuals)

effectively by: - Elevating, exposing and building our profile in the

been audited by a well regarded Tier 1 Accounting firm.

construction and resources industries

However Accountants have started cashing in on this and are

- Demonstrating our competencies and abilities to

expanding their ser vices to Clients. They have been known to

achieve better outcomes for our Clients

process and control construction cost, analyze and allocate cost into cost codes and asset classes.

- Utilising all job opportunities in the current

My experience has been that Accountants check and reconcile

diverse industr y markets, whether it mentions

numbers, without having an understanding of what the numbers

QS as a requirement or not

mean and whether those numbers are actually correct. This

- Protecting our share of the construction

is largely due to their lack of basic knowledge about the

cost market from other professionals, less

fundamentals of construction costs: i.e. how it is derived at, how

experienced in construction

it is broken down and how it should be analyzed for progress

- Attracting young people to our world by

verification, final account or asset allocation purposes. A further surprising fact is that Accountants have much higher charge-out rates than the typical QS professionals – this is despite the fact that we have similar years of study required for our degrees as well as similar structures regulating entry into the registered or chartered worlds of our respective professions.

demonstrating the diversity of the profession As far as the disparity in the charge-out rates is concerned, this may be a systemic problem in the Australian construction world. However, that does not mean that we have to accept it. With increased exposure in the industr y and by proving our worth

A bit of market research highlighted the discrepancy between

to our Clients, this should follow as the next step.

the charge-out rates¹ of Accountants and Quantity Sur veyors.

Ultimately, it is up to us!

We are looking at a ±40% disparity – the higher the level of seniority the bigger the difference in the charge-out rates.

Once again we return to the question of whether or not we are effectively promoting ourselves as construction cost professionals – it seems not!

One last thought to leave in your midst: LIFE IS CHANGE. GROWTH IS OPTIONAL. CHOOSE WISELY ²

32 – THE BUILDING ECONOMIST September 2013

2. Quote by William Somerset Maugham

changing markets by ensuring we have the ability to adapt

1. I have nothing against Accountants per se – in fact, two of my children are accountants. With a family consisting of accountants, QSs and a builder, we have some lively family conversations, discussions and disagreements

volatile. The only certainty is change. We have to embrace the


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THE BUILDING ECONOMIST – September 2013 – 33


SOCIAL

NSW EOFY Drinks Friday 5th July 2013 Stacks Taverna, Darling Quarter, Sydney

If you have held or attended an AIQS event in your area and want to feature it in the Social Pages please send the event details and photographs with the names of who is in the picture to editor@buildingeconomist.com.au

34 – THE BUILDING ECONOMIST September 2013


Social

QLD Annual Charity Golf Day Wednesday 7th August 2013 St Lucia Golf Course, Hillstone Proudly supporting those affected by Multiple Sclerosis

THE BUILDING ECONOMIST – September 2013 – 35


The Building Economist - September 2013 - The Mega Issue  

The Journal of the Australian Institute of Quantity Surveyors