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ISSUE 27

 A Greener

Buckingham Palace

How much would a new energy-efficient replica cost? See our back cover thoughts

Also in this issue: Al Ain Wildlife Park & Resort Singapore backs PPP Oman welcomes Asian Beach Games


CONTEnTS 4

T he Smithsonian Institution’s National Museum of African American History & Culture Taking its place on the National Mall, Washington, DC

6 Conservation & Development Al Ain Wildlife Park & Resort

BioPharma Networking 8  Collaborating on best practice in capital investment

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Greener Transport

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PPP in Singapore & Southeast Asia

Bus Rapid Transit plays a growing role

Singapore establishes itself as a PPP knowledge hub

Asian Beach Games 14 Oman plays host to the 2010 Asian Beach Games

 Bringing Efficiency to the Banking Estate 16 Maintaining the portfolio during recession

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Sustainability in Extra Care Housing Zero carbon is a key driver for older people’s housing

International Construction Intelligence 20  Highlights from our last International Construction Intelligence publication

Taking a Whole Life View of Carbon 22  Assessing the operational carbon impact

24 Epoch – Efficient Predictability & Control Industrial cost and performance management system

26 Public Sector Procurement Exploring recent procurement approaches

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A warm welcome to our latest edition of Solutions, which showcases some of our most exciting projects and innovative services. I very much hope you’ll find it of real interest. Economic conditions have remained challenging over the last six months, but it seems we’re now through the worst of the recession’s depths. The UK election has brought about a degree of uncertainty and we wait to see how this will play out, particularly in the construction sector. Recovery may not be as robust as we’d like, but I’m pleased to report that our business has continued to make the most of new opportunities thanks to the diverse nature of our work and our geographical spread. Our emphasis on maximising our skills, and investing in new services and products, continues to provide our clients with best value in a cost-constrained world. We’re currently involved with some really interesting projects, including the Al Ain Wildlife Park & Resort featured on page 6. On a recent trip to the Middle East, I had the privilege of visiting Al Ain and was inspired by this amazing project designed to not only showcase wildlife in its natural habitat, but also as a serious conservation and breeding programme for endangered species. The world of sport can also provide inspiration for us all and our support of our parent company Atkins, the official engineering design services provider for the London 2012 Olympic and Paralympic Games, complemented by our appointment on the Asian Beach Games, gives a new dimension and purpose to our work. Page 14 details our involvement in the Asian Beach Games, which

promises to put Oman further on the map as both a tourist and business destination. Ours is a people business and we’ve been looking at some collaborative drives to facilitate networking among our client base. In the biopharma sector our client conferences in New York and London were especially well received and this has led to our ‘communities of practice’ initiative, profiled on page 8. A chance for clients to step aside from the competitive nature of their core activities and share best practice around their investment programmes. The biopharma collaboration success has prompted us to explore this format in other sectors. I hope to be able to report more on this in future editions of Solutions. Our back cover story featuring Buckingham Palace, whilst tongue in cheek, reminds us that no one is immune from the effects of global warming or from the effort to increase sustainability. Not all older members of the community live in palaces, however, and on page 18 we explore some of the challenges of furthering the carbon agenda in the extra care housing sector. I’d like to once again thank you for your interest in Faithful+Gould. I hope that Solutions will spark your imagination and that you’ll want to know more. My team and I look forward to continuing to serve you in the best possible way.

Richard Hall CEO Worldwide Operations

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The Smithsonian Institution’s National

This is a challenging and exciting time for US museums. Huge changes in opportunity, public perception and expectation have led our museums and galleries to reassess and re-examine their values, purposes and priorities.

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Zoo, making it the world's largest museum complex. The NMAAHC’s 313,000 square feet building is located at the end of the prestigious National Mall in Washington, DC, 800 feet from the Washington Monument and next to the National Museum of American History.

Plans for the Smithsonian Institution’s new National Museum of African American History & Culture (NMAAHC), in Washington, DC, are underway after many years of discussion. Legislation for a national centre for the African American experience was first proposed in 1929. More modern efforts remained at the project proposal stage for almost 20 years, before legislation established the museum as part of the Smithsonian in 2003.

NMAAHC aims to promote the study and appreciation of African American history and culture and its impact on America, its people and the world. The museum will provide for the collection and study of artefacts and documents relating to African American life and for the establishment of programmes relating to lived experience, art, history and culture. Permanent and temporary exhibits will document the history of African American life through the periods of slavery, reconstruction, the Harlem renaissance, the civil rights movement and others.

The Smithsonian Institution is home to nineteen museums, nine research centres and the National

Even without a building, the NMAAHC has been an active enterprise for several years, incorporating a

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virtual museum online, exhibits in other parts of the Smithsonian and an archive of 1,800 recorded oral history interviews. This reflects the global museum community’s growing trend for maximising the potential of virtual access and social networking. Most museums are now using or exploring this model, alongside their traditional facilities, to offer access to visitors of all ages, backgrounds, nationalities and locations. The NMAAHC project is attracting considerable attention because of its location, the challenges of building in this historic area and the shrinking availability of land on the Mall. Technical issues include the water table underneath the Mall, a 50-foot setback ordered by the federal government after the 2001 terrorist attacks, utility issues in an open space, and the height of a structure within sight of the Washington Monument and the White House. With the site now assured – and with a budget of US$500 million from a mix of federal government and private benefactor funds – the project is now in the design phase. Six award-winning architects competed to design the signature building. The Smithsonian selected a joint venture of four architect firms: Freelon Group, Adjaye Associates, Davis Brody Bond Aedas and Smith Group. During the design competition Faithful+Gould was instrumental in setting the construction budget, providing cost estimating services for the winning team. We are now providing estimating, life cycle costing and cost advice during the design phase, which runs until early 2013. Construction of the museum is scheduled to be completed in 2015.

We have substantial and wide-ranging experience in the arts and heritage sector. Our US portfolio includes the Metropolitan Museum of Art, New York; Museum of Modern Art (MoMA), New York; the Getty Center, Los Angeles; Museum of Fine Arts, Boston; Clinton Presidential Library and Museum, Little Rock, AK; US Capitol Visitors Center, Washington, DC; National Museum of the American Indian, Washington, DC; American Museum of Natural History, New York; Austrian Cultural Forum, New York, and the National September 11 Memorial & Museum, and adjacent performing arts center, Ground Zero, New York. In the UK our work includes the British Museum, the Imperial War Museum and the Beaney Institute. Our global experience also includes the Museum of Tolerance, Jerusalem; the Guggenheim Museum, Abu Dhabi, and the Stavros Niarchos Foundation Cultural Center (SNFCC), Athens.

For further information contact Alan Wilson (US) on +1 703 684 6550 alan.wilson@fgould.com or Mathew Fenner (UK) on +44 (0)20 7121 2121 mathewfenner@fgould.com

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Recession may have slowed the rate of development in the Gulf States, but economic diversification looks set to continue and is expected to accelerate as markets recover. Whilst Dubai has seen aggressive growth, Abu Dhabi, the largest emirate and the UAE’s capital, has been steadily progressing ambitious plans to become the regional capital of culture.

Plan Abu Dhabi 2030 will mastermind growth over the next 20 years, aiming for a sustainable economy without sacrificing environmental and cultural heritage. The Plan pledges to respect the natural environment of coastal and desert ecologies. Cutting-edge developments in renewable energy are also underway, together with plans for an ecocity. Estidama, Abu Dhabi’s sustainability initiative, is a central focus and incorporates a regulatory framework, green building rating system and educational outreach schemes. Tourism and ecology are being brought together at Al Ain, a low-rise oasis city located 160 kilometres east of the Abu Dhabi capital, bordering Oman. Its name (“the spring” in Arabic) derives from its originally plentiful supply of fresh water. The surrounding district is a fertile agricultural area with many forts and archaeological sites and is also home to the UAE’s main university. Plan Al Ain 2030 intends to foster the authentic Arabic identity of Al Ain, balancing conservation and development, protecting endangered desert and mountain ecologies, conserving ground water resources and protecting natural habitats. Whilst limiting urban sprawl, Plan Al Ain 2030 proposes projects that exploit the existing economic wealth to develop renewable energy production and reduce the consumption of non-renewable resources. Work has already begun on developing the largest wildlife park in the Middle East, the Al Ain Wildlife Park and Resort (AWPR), into a world-leading commercially and environmentally sustainable resort. When complete, the AWPR will comprise over 900 hectares of land, and will incorporate the existing zoo established in 1968. At the centre

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of the completed development will be the World Deserts – a new wildlife exhibit and safari experience based around the eco-systems of Africa, Asia, Arabia and Central America. There are also plans to contruct villas, hotels, and mixed-use commercial, retail and recreational spaces. As part of the transformation into a wildlife resort, significant development is currently being undertaken to set the standards globally for conservation efforts. Growing rates of species extinction and habitat loss on a global scale means that wildlife conservation initiatives will become increasingly important. The AWPR will be managed for the protection, preservation and conservation of the wildlife collection and wildlife safari habitats. Integrating conservation, education, tourism, residential opportunities and commercial enterprises, the AWPR aims to help people to understand and experience life in a desert environment. The masterplan includes the Sheikh Zayed Desert Learning Centre which utilizes both active and passive sustainable design elements and is seeking an ambitious level of compliance with the Estidama Pearls rating method. The residential housing units and resort hotel were among the Estidama Pilot Projects which benefited from a series of workshops

conducted by the Abu Dhabi Urban Planning Council’s Estidama arm. The workshops explored ways of incorporating the Estidama New Buildings Guidelines into the current design, how to rate the project’s sustainability performance, the process of documentation and key milestones within the Estidama Pearls rating method.

Growing rates of species extinction and habitat loss on a global scale means that wildlife conservation initiatives will become increasingly important. Faithful+Gould is providing cost management and estimating services for the Al Ain Wildlife Park and Resort, working with a multi-national team of design and programme management consultants. We are also working on a further range of projects in Abu Dhabi. These include the residential Empire Tower on Al Reem Island and the Guggenheim Museum. Faithful+Gould has been active in the Middle East since 2004. Our regional headquarters are in the UAE, with offices in Dubai, Abu Dhabi, Qatar, Oman and Saudi Arabia.

For further information contact David Stapleton on +971 (0)4 405 9100 david.stapleton@fgould.com

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Biotechnology and pharmaceutical facilities – research and development laboratories, vivariums, pilot plants and manufacturing facilities – are complex buildings with stringent regulatory constraints. The BioPharma sector has traditionally proved relatively robust in times of recession, but nonetheless faces its own significant challenges in the current market. Intense pressure to develop new products and technologies while controlling costs and avoiding product recalls, fending off generics competition and creating shareholder value, combine to place heavy burdens on the industry. New facilities seek not only value for money, but also the flexibility to adapt as technologies advance. The sector’s approach to the challenges of the built environment is based on a drive towards achieving best practice. There is a growing recognition that collaboration in this area of capital investment planning can benefit all major companies in the sector. This transcends the issues of intellectual property and commercial competitiveness that naturally exist in the players’ core business areas. In 2008 we facilitated the first Faithful+Gould BioPharmaceuticals Conference, held at London’s Institute of Directors. Thirty pharmaceutical and biotechnology clients joined us to share best practice in the programme and project management of their planned investments in a variety of global locations.

There was a clear recognition that the different business cultures represented, together with a variety of problem-solving approaches, could lead to greater efficiency and innovation. Following the success of this event, the second conference took place at the Sheraton Hotel, New York in 2009. Six key themes emerged from the New York workshops:  Risk management  Key performance indicators and metrics  Verification of processes  Estimating  Standard processes  Organisation Delegates were keen to continue their discussions on common challenges and constraints, and look at further opportunities for collaborative exploration. To facilitate this, we have set up six ‘Communities of Practice’ (COP) groups, each focusing on one of the key themes. Interested contributors from the BioPharma community can interact via a dedicated BioPharma SharePoint site, giving them access to forums, information and file sharing. The site will also be available for BioPharma clients who prefer to be ‘visitors’ rather than participants, enabling them to keep updated on the COPs’ progress. Faithful+Gould is long established in the BioPharma sector. We’re located in every primary location in the global biopharmaceuticals market, and continue to work closely with the top 15 players. Our next global BioPharmaceuticals Conference will focus on the COPs’ plans and progress to date. This is scheduled for autumn 2010 and details will be available shortly. If you are interested in networking, sharing best practice and exchanging ideas, please get in touch.

For further information contact Chris Taylor on +44 (0)1642 675136 chris.taylor@fgould.com

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There is a growing recognition that collaboration in this area of capital investment planning can benefit all major companies in the BioPharma sector.

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With greenhouse gas emissions from transport representing 21 per cent of total UK domestic emissions 1, building a greener future means that low carbon travel must become a priority. The new government wants lower emission buses to play a growing role. Financial support for the bus industry is being revised to further incentivise technological change, through modifications to the Bus Service Operators Grant. This scheme will provide grants of up to £30 million to encourage the uptake of low emission bus technology.

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There are several bus scheme options available and authorities will want to consider which will best provide their local transport solution. A key element in the decision-making process is the requirement to achieve a value for money solution that can support a business case. Bus Rapid Transit (BRT) schemes are often recommended by transport planners and have already been embraced in Germany, Brazil, Canada, Australia and the US. In the UK, BRT schemes are now attracting increasing interest as a viable sustainable option, comparing favourably with other forms of alternative transport such as Light Rapid Transit (LRT). Leeds, Bristol, Belfast, Cambridge and Dunstable have shelved initial

1 Low Carbon Transport: A Greener Future, Department for Transport, July 2009

http://www.dft.gov.uk/pgr/sustainable/carbonreduction/low-carbon.pdf


plans to develop LRT systems and are currently developing BRT based systems instead. Other UK locations have expressed an interest. In Ireland, Galway has also chosen the BRT route. Unlike LRT schemes, BRT technology is relatively simple and cheap to install. In the UK the planning and approval timeframe for transport projects can be protracted. The simpler the solution, the quicker it can pass through the planning process. There is a wide range of options available, from a dedicated route with priority traffic signals to a specially constructed dedicated bus corridor for adapted buses – known as a ‘guided busway’. The design of the guided busway prohibits its use by other vehicles and allows the bus to bypass congested roads, saving significant travel times. Buses using the busway are fitted with small guide wheels located immediately in front of the normal front bus wheels. On roads, the guided bus behaves like any other bus, but, on approaching congested roads, it enters the dedicated corridor. The smaller wheels guide the bus along the trackway. When the guided bus needs to get back onto the road, traffic lights are triggered to allow the bus priority. Both BRT and LRT bring significant commercial and environmental benefits but LRT schemes require substantial capital investment. This often prevents the development of tram/metro schemes in favour of the perceived cheaper guided or trolley buses. It can be argued that this is a very short-term view and that tram/metro schemes provide substantially more long-term regenerative benefits than bus schemes but this is difficult to quantify. In real terms, BRT offers lower capital and operating costs with high-quality service, at higher speeds than traditional buses. To encourage passenger take-up, bus schemes have to be perceived as an attractive, efficient and viable option. To facilitate this, BRT systems now include good quality bus shelters, real-time service information, CCTV, access for wheelchair and pushchair users, and bicycle racks.

Faithful+Gould works with transport planners at strategic level to understand the key issues, using our skills to develop solutions which offer optimum value and can support the business case. During implementation, we provide focused project management and cost management skills to deliver construction of the proposed solution. Our expertise in the transport industry is reinforced by strong links with our parent company Atkins, the largest consultant engineer in the UK transport sector. We are currently working on several UK bus schemes.

For further information contact Kevin McNealey on +44 (0)121 483 5483 kevin.mcnealey@fgould.com

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in Singapore and SouthEast Asia

The last five years has seen a steady increase in private investment in Southeast Asia’s infrastructure. Governments across the region have promoted PPP 1 programmes, with Singapore especially keen to establish itself as a PPP knowledge hub and project finance centre. Singapore was the first country in the region to launch a PPP programme. Although Singapore’s infrastructure was well developed, the government saw PPP as a way of bringing in specialist private sector expertise and efficiencies, and attracting more international players into the domestic market. Other countries in the region had a much stronger need for inward foreign investment to close the infrastructure gap. Despite many false starts, we are now seeing promising developments in some of these countries. The process was given a boost by the World Bank’s new Global Urban Strategy, launched at the inaugural Infrastructure Finance Summit in Singapore last year. As part of this new strategy, Singapore will offer its expertise in urban management to assist other governments. Singapore will help them develop

a regulatory and financing framework to prepare PPP projects for the market. The initial scheme involves projects in Vietnam, Mongolia and China, with other countries expected to follow. Thailand, the Philippines and Indonesia have also taken steps of their own to develop a PPP framework, with a view to testing the market’s appetite in the near future. Many of the consultants and advisors who worked on the Singapore projects are now involved in advising other governments on PPP frameworks, feasibility studies and corporatization programmes. PPP investment funds, including Gammon Capital, John Laing and Plenary, have set up office in Singapore and are now active in exploring PPP projects as future investment opportunities. 1

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Public Private Partnership: the design, construction, finance and operation of public facilities by a private sector consortium.


Add this expertise to Singapore’s solid presence of project finance banks, and it may seem that the government has succeeded in creating a project finance hub, without the need to have a pipeline of PPP projects of its own. However this view is not shared by the majority in the PPP community in Singapore, who are still looking for a new pipeline of opportunities in their own backyard. Singapore's largest and flagship PPP project is the Sports Hub. One of the first PPP projects to be rolled out, the Hub replaces the ageing National Stadium with a new 55,000-seat stadium and sports complex. Located on a 35 hectare site in Kallang, the Hub is expected to play a critical role in accelerating the development of Singapore’s sports industry. The credit crunch and rising construction costs caused some delays, but the project is now progressing again. The Institute of Technical Education (ITE) West project will be Singapore’s first successfully completed social infrastructure PPP project. ITE is the principal provider of technical education and a single campus in the new town of Choa Chu Kang, due to complete shortly, is replacing the current five smaller network campuses.

Faithful+Gould has been an active participant, playing a role in every social infrastructure PPP launched to the market. We are providing consultancy services on the Sports Hub and we are active on the ITE project. We have also worked on a PPP schools project for the Ministry of Education and a student hostel project for Singapore Management University. Our presence in Singapore for over 20 years has given us a thorough understanding of the public sector market, together with best practice from the private sector. We also have the support of our PPP colleagues throughout the global Faithful+Gould business, and can draw on their wider experience in facilitating the growth of PPP.

For further information contact Martin Riddett (Singapore) on +65 6227 6144 martin.riddett@fgould.com or Campbell Gray (UK) on +44 (0) 131 221 5600 campbell.gray@fgould.com

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Oman will play host to the 2010 Asian Beach Games, a multi-sport event regulated by the Olympic Council of Asia, to be held in December. Fourteen sports are on the programme: beach soccer, beach handball, beach kabaddi, beach sepaktakraw, beach volleyball, beach waterpolo, beach woodball, bodybuilding, jet-skiing, marathon swimming, sailing, tent pegging, triathlon and waterskiing. The event was first held in 2008 in Bali, Indonesia. The 2010 Asian Beach Games are expected to further raise Oman’s profile as a tourist destination. One of the region’s most economically and politically stable nations, and the oldest state in the Gulf Cooperation Council (GCC), Oman is geographically diverse. Its largely untouched coastline is formed by the Arabian Sea in the south and east, and the Gulf of Oman in the northeast. Attractions include mountains, deserts and the capital Muscat, with its forts, palaces and old walled city. Unlike other major tourism players in the region, Oman has actively avoided overbuilding, has not relied on foreign investment, and its construction industry has remained relatively stable during global recession. Infrastructure spending remains a priority for the government and continues to boost the economy. As with other Gulf nations, oil is the mainstay of Oman’s economy, providing a large chunk of GDP, but Oman is a modest producer compared to its neighbours. Agriculture and fishing are important sources of income but tourism is a major part of

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the diversification, reinforced by the government’s Vision 2020 economic plan. The population of three million includes 600,000 expatriates, but the current ‘Omanisation’ policy aims to increase the proportion of nationals in skilledlabour positions. The Games will be held in the one million square metre Al-Musannah Sports City, a coastal site 125 kilometres from Muscat. The Sports City provides a sports centre, marina, athletes’ village, public grandstand, hotels and other hospitality facilities. Infrastructure includes roads, car parking and associated supporting facilities to prepare for the influx of 50,000 spectators.


The 2010 Asian Beach Games will reinforce Oman’s recognition on a global scale, strengthen its reputation as an international sport and eco-tourism destination and create new economic opportunities.

Legacy is an important consideration for any major event host city, with locations typically seeking longterm benefits such as regeneration, tourism, economic positioning and transfer of knowledge. OMRAN, the government’s tourism development and investment arm, intends that the 2010 Asian Beach Games will reinforce Oman’s recognition on a global scale, strengthen its reputation as an international sport and eco-tourism destination and create new economic opportunities. Faithful+Gould is providing project, cost and construction management services for the construction of the Games’ facilities. In spearheading the aim for ISO Certification Standards for Health and Safety, our project management team has encouraged a culture change in

the site environment. We were especially proud when the site earned the safety accolade of one million hours incident-free. Health and safety will continue as part of the project’s legacy, as the government has now legislated for a minimum standard of compliance. Globally, our experience in the sports sector includes supporting our parent company Atkins, the official engineering design services provider for the London 2012 Olympic and Paralympic Games. We have been active in the Middle East since 2004 and we now have offices in Oman, Dubai, Abu Dhabi, Qatar and Saudi Arabia. Alongside the Asian Beach Games, our portfolio in Oman includes ports, highways, workers’ accommodation and commercial developments.

For further information contact David Stapleton on +971 (0)4 405 9100 david.stapleton@fgould.com

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Bringing efficiency to the

Recent turmoil throughout the worldwide financial markets has led many banks to make dramatic changes to the way they run their property portfolios. Some organisations have collapsed and others have consolidated in order to stabilise their balance sheets. This has led to millions of square feet becoming available and the financial sector having to review its occupation strategy across its retail and office estate.

Key aspects of any occupier strategy must include effective space and asset management in order to meet the budget ‘belt tightening’ required by both the market and regulatory pressures. Our ethos of true integration with our clients has allowed us to develop and deliver innovative responses to these pressures. We recently delivered a 350,000 square foot office which has been designed to an occupancy factor of 1.17 which is the sharing ratio of occupiers to desks – a real positive in space efficiency. But imaginative space planning and higher occupancy levels augment the pressure on asset condition and maintenance as the building use increases. As cash availability is tightened, both revenue and capital expenditure on any property portfolio must be focused to manage risk and drive value. We are bringing significant change to the approach taken by many of our finance sector clients, by demonstrating how web technology can improve process. This technology also assists in the delivery of detailed work programmes

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that are essential to ensuring the workplace environment is safe and temperature controlled. We are using the latest hand held technology to gather asset condition data. This informs maintenance budgets and provides real benefit, particularly when a true life cycle view of the asset is factored in. We believe that dynamic integration between scheduled condition surveys, immediate work programmes, and planned maintenance contracts will drive budget efficiency. We have invested in systems which allow us to deliver this integrated approach, essential when focusing limited cash on where it counts. This is especially appropriate when property portfolios continue to change through mergers and acquisitions This ongoing change can create a mismatch of property, resulting in a property portfolio that no longer matches the business needs, often with redundant buildings and land. We adopt a holistic approach to these redundant assets, treating them as valuable opportunities and with a view to producing maximum business efficiency.

For instance, several discrete land parcels may be amalgamated to create a more valuable and efficient business-focused land bank. This can free up additional vacant land which can then be prepared for disposal. This view delivers tangible savings and improvements in space utilisation, operating and maintenance budgets, increased energy and reduced carbon emissions and an overall reduction in user charges. Faithful+Gould has a global team of property and facilities management professionals with comprehensive experience of asset maximisation. We can advise on how best to align the portfolio to meet the organisation’s needs and how to reduce both capital and operating costs of the estate, maximising the value of redundant assets. We understand that organisations vary in their in-house property expertise. We work alongside clients’ estates and facilities departments where appropriate or we can take the lead if required. We have achieved effective results for a diverse range of clients in a variety of sectors, including finance, pharmaceuticals, energy and central government.

For further information contact Rod Bisset on +44 (0) 131 221 5600 roderick.bissett@fgould.com

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in EXTRA

CARE Zero carbon is one of the key aspiration drivers for successful older people's housing, according to a report published by the Housing our Ageing Population Panel for Innovation (HAPPI1). 25% mandatory improvement in carbon emissions (Code for Sustainable Homes [CSH] Level 3) will be required. This will increase to a 44% reduction (CSH 4) by 2013, reaching ‘zero carbon’ by 2016 (CSH 6). The Zero Carbon Hub is a public/private partnership established in 2009 to co-ordinate delivery of low and zero carbon new homes. To explore the feasibility of delivering a minimum energy efficiency standard for zero carbon homes, the Hub’s task group has looked at three areas: form and fabric, building services and lighting. Each specialism has researched and reported on energy modelling, architectural detailing and ‘buildability’ issues. The scope of the energy efficiency standards includes space cooling and heating, energy demand based upon the passive response of the building fabric, building detailing, air tightness, thermal mass and orientation.

The demand for ‘extra care’ housing and retirement community developments is set to rise steeply over the next 20 years. As we move towards the target of ‘zero carbon’ housing, Registered Social Landlords (RSLs) are becoming more proficient at meeting their sustainability responsibilities and private developers will increasingly follow suit. Extra care housing provides a key opportunity for exciting and innovative approaches. The recent Communities & Local Government (CLG) consultation paper Sustainable New Homes – The Road To Zero Carbon 2 highlighted important future legislation. Following the October 2010 Part L requirement, a

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The fabric performance group recommended that a typical mid terrace property or four-storey apartment block (often utilised for extra care retirement homes) aiming for zero carbon, should have a maximum energy demand of 39 kWh/m2/yr, based upon SAP 2009 modelling. For a typical detached, semi-detached or end of terrace house the figure is 46 kWh/m2/yr. This is considered realistic and achievable in practice, based on currently available specifications and materials. These practical Fabric Energy Efficiency Standard ‘headline’ figures are expected to replace the current elemental performance specifications and form the basis of the forthcoming revised Code for Sustainable Homes. Code for Sustainable Homes is fine for assessing individual flats, but is not necessarily suitable for older people’s extra care developments where more than


A sustainable way of thinking benefits everyone, but older people in particular. As we get older, we are less able to control our own body temperature and get too hot or too cold more easily. Because we spend more time at home, we spend more money on lighting, heating and cooling, unless our homes are well designed  1.  

10% of the total floor area is communal space. In these cases the BREEAM multi-residential model can be used, taking into account the whole building envelope. Before consideration of the building form or renewable energy technologies, pre-feasibility site assessment studies should be developed, taking into account natural land topography, solar orientation and the local microclimate. This will determine optimum building orientation, maximising natural ground modelling and opportunities for passive solar and thermal gains. Cost benefit appraisals over the lifetime of the building should also be carried out. These give the building developer information on the most suitable renewable energy technologies. Options include ground or air source heat pumps, biomass boiler plant, solar thermal and photovoltaic arrays. A cost benefit appraisal also takes account of any grants or revenue from government led initiatives such as the current ‘feed in tariff’ (FIT) arrangements. Faithful+Gould has recently carried out best practice research on this topic for the Department of Health. As a result we authored a technical briefing paper for the Housing Learning and Improvement Network, Extra Care Housing: Designing, Assessing and Delivering Sustainable Homes. As licensed Code and BREEAM assessors, project managers and cost consultants, we provide significant input into feasibility designs. We carry out cost appraisals of sustainable older people’s housing developments, enabling project teams to apply a structured assessment approach. Our client base includes local authorities, ALMOs, LIFTCos, RSLs, care developers, Private Finance Initiatives, SPVs and financial institutions.

For further information contact Roger Standish on +44(0)113 306 6600 roger.standish@fgould.com

1 www.homesandcommunities.co.uk/Housing-Ageing-Population-Panel-Innovation 2 www.communities.gov.uk/publications/planningandbuilding/futureofcodeconsultation

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International

As the world shows early signs of recovery from the worst economic downturn for over 70 years, our latest International Construction Intelligence publication looked at some local construction markets. These were some of the highlights. United Kingdom Construction prices have fallen approx 16 per cent from the peak of 4th Quarter 2007, with recovery in the Tender Price Index (TPI) not expected until 2nd Quarter 2011. New work output fell by approx 13 per cent during 2009 with the construction industry continuing to be hit hard as the UK economy spent the whole of 2009 in recession. Recovery in the sector is likely to be led by private invested works as the public funded works are expected to be cut back as the UK seeks to deal with the level of public debt. The private residential and commercial sectors have shown increases in output in the last Quarter of 2009 with all public sector works seeing a reduced output to previously reported figures.

Ireland Investment in construction and employment within the sector has reduced by 30 per cent and 40 per cent respectively. Central government expenditure on construction will reduce by EUR 1 billion to

Industrial Building Parities/Index, UK Base Index: February 2010 Index City Parity Range Exchange Rate/Currency Index United London 0.93–1.07 1.00 GBP 100.0 Kingdom Ireland Dublin 1.23–1.41 1.13 EUR 116.6 USA Chicago 1.31–1.51 1.53 USD 92.2 China Shanghai 6.17–7.38 10.45 CNY 64.8 Singapore Singapore 1.83–2.13 2.16 SGD 91.8 UAE Dubai 4.76–5.7 5.62 AED 93.1

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EUR 6.5 billion in the coming year. Materials and wages have reduced by 3 per cent in the last twelve months. All sectors are declining, particularly residential housing which has declined by an estimated 60 per cent in the last year. The most important feature for the industry this year is the launch of NAMA (National Asset Management Agency) which the Irish government set up to take ownership of properties (many yet to complete) from large developers who have defaulted on loans to banks. Good value and capacity are in abundance.

USA The construction industry will continue to suffer from the effect of the recession in 2010. Unemployment in the construction industry is about 18 per cent. Construction put in place will be down about 3 per cent this year after falling 15 per cent in 2009. Residential construction, which typically leads a recovery, could increase about 4 per cent this year after falling 14 per cent last year. The non-residential segment will be down about 6 per cent in 2010, but healthcare and education should fare better.

China The country’s economic recovery is gaining momentum. There has been a strong rebound in the domestic economy, fuelled by the government’s stimulus package (GBP 357.6 billion), which has boosted demand for steel, cement and other materials. Confidence in China as a top investment location is beginning to return, and we expect this to encourage foreign companies to continue their inward investment in China.


Singapore

UAE

The Singapore economy resumed expansion since the third quarter of last year. This greatly helped the sentiment in the property market generally, especially when the regional power house of China is registering large percentage growth figures. The construction industry provided Singapore with some growth over the last two years, whilst the overall economy was often contracting. The residential market is now in robust health and the government has recently introduced new measures in an attempt to cool some of the speculative pressure in the market. This improved sentiment is translating into new projects being launched and keen bidding for plots of land as they become available.

The outlook for 2010 is modest with GDP growing 2 per cent to 4 per cent. Abu Dhabi will drive the growth with Dubai levelling off or contracting further. Based on this and the ongoing global conditions, the construction market in the area is likely to follow the patterns of 2009, with continued pressure on prices and lower volumes of work than experienced in pre-2009. Faithful+Gould’s International Construction Intelligence publication combines leading economic indicators, our own research, and our local knowledge of tender prices and market conditions. Subscribe to our communications via our website www.fgould.com

For further information contact Adrian Malone on +44 (0)207 121 2121 adrian.malone@fgould.com

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The case for change The UK government consistently reports that buildings are responsible for between 40-50% of the UK energy consumption (this is reinforced by the Carbon Trust and DEFRA). However, the government’s Low Carbon Construction Innovation & Growth Team’s (IGT) Emerging Findings report challenges this figure and suggests that 40-50% is only a portion of the construction industry’s emissions. It suggests

Fig. 1 Total Carbon Emissions attributed to the construction industry Materials or Product Manufacture

Distribution

Assembly on site

Refurbish/ Demolish

we need to move from reporting only the operational emissions to addressing the ‘whole life carbon’ (including embodied carbon) of buildings and constructed assets, as shown in Figs. 1 and 2. The IGT Emerging Findings report also sets out how the UK will achieve the CO2 emissions targets set out in the Climate Change Act 2008, in the form of the ‘Low Carbon Transition Plan’. In this plan almost every proposition represents a market opportunity for all sectors of the construction industry. So the Low Carbon Transition plan is virtually a business plan for the construction industry for 2010 to 2050.

Taking a whole life view of carbon

Design

To achieve low whole life carbon buildings, the industry and its clients will need to work in a more integrated and collaborative way. This will require a cultural shift from focusing on appraising construction projects based on initial capital costs, to a more robust assessment on a whole life basis.

In Use:

Fig. 2 Estimate of the carbon footprint of UK construction 2007 Sub-Sector

Greenhouse Gas Emissions Mt CO2e

% of total Carbon Footprint

Design

<0.1

<1%

Manufacture

39.8

13%

Distribution

6.1

2%

Operations on-site

4.5

1%

In Use

255.9

84%

Carbon Footprint Total

306.3

100%

Taking the whole life carbon into account would mean assessing the operational, or ‘in use’ carbon impact as well as the embodied carbon emissions. This may include, for example, ways of reducing the energy and therefore carbon consumption from the lighting, air conditioning, heating and ICT systems. Fig. 4 shows an example of embodied carbon in a typical office construction.

Source; HM Government Low Carbon Construction Emerging Findings (Spring 2010 Report)

Simplified and standardised methods of whole life carbon assessments Fig. 3 BSI pas 2050 Raw materials

Manufacture

Distribution/ retail

PROCESS MAP STEPS FOR BUSINESS-TO-CONSUMER

Raw materials

Manufacture

Distribution to business customer

PROCESS MAP STEPS FOR BUSINESS-TO-BUSINESS GOODS

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Issue twenty-seven

Consumer Use

Deconstruct

Various Green Building Councils around the world are calling for a global agreement to standardise carbon metrics for measuring and reporting the sustainability performance of buildings. To address the problem of embodied carbon the UK government’s Technology Strategy Board has allocated over £4 million of funding for innovation research into design and decision tools for low impact buildings. Fourteen consortia have just been given the funding to respond to this challenge.


CO2

Scope 3: Other indirect GHG emissions

Business travel by air

Scope 2: INDIRECT

Scope 2: Energy indirect GHG emissions

Paper consumption

SF6

Scope 1: Direct GHG emissions

CH4

N2O

PFCs

Scope 3: INDIRECT

Scope 1: DIRECT

Employee business travel

Company vehicles

Purchased Electricity for own use

Product use

Heat

Business travel by car

HFCs

Waste disposal

Production of purchased materials

Own cars Electricity

Own oil/gas use

Taking a whole life view of carbon will require more code development, but an avalanche of new policies, reports and initiatives should be avoided as this may prove too complex for industry to successfully adopt. Instead there is a need for standardised practical methodologies for assessing whole life carbon of buildings, which the relevant parties can be suitably trained to use. Publicly Available Specification (PAS) 2050 (See Fig. 3), prepared by BSI and co-sponsored by Carbon Trust and Defra, provides a standard for assessing the life cycle greenhouse gas emissions of goods and developments. ISO 15686 part 5 and its UK supplement the ‘Standardized Method of Life Cycle Costing in Construction Procurement’ only briefly covers the life cycle costing of carbon. However the second supplement, BS8544, is currently being drafted for ‘Life Cycle Costing In Use’. This will tackle the issue of assessing carbon and provide guiding principles, instructions and practical worked examples. The Royal Institution of Chartered Surveyors (RICS) new rules of measurement (Part 3) for operations and maintenance are also being drafted with inputs from industry interest groups. This will include how to measure, cost and report on embodied and operational emissions during the cost estimating, cost planning and procurement stages of a project.

Fuel combustion

Contractor owned vehicles

Outsourced activities

Making the business case work is the answer to low carbon There is a huge market opportunity to impact on how the hundreds of billions of pounds are spent and to help reshape the industry into a more integrated, collaborative and progressive force. This would make a radical impact on the whole life carbon performance of all buildings in the future.

For further information contact Andy Green on +44 (0)20 7121 2121 andy.green@fgould.com

Transitions to low carbon and high performance should be seen as part and parcel of the same challenge. To take advantage of this, the construction industry needs to develop a shared sense of purpose and a clear vision of the future so it can play a leadership role in the move to low carbon. Businesses must take up the mantle! This is the answer to achieving the UK carbon targets by 2050 – coupled with encouraging real innovation in cutting CO2 emissions and skilling the industry to achieve this. Operational Carbon

Fig. 4 E mbodied carbon in a typical office construction

Embodied Carbon Walls and partitions

Roof M&E, ventilation and fit-out

2.1%

0.9%

10.7% If the focus is to now to shift from reporting operational emissions only, to taking a whole life view of carbon, then it is imperative that the construction industry establishes practical ways of: 1. Setting the assessment boundary. This is the boundary put around what is included in the assessment. 2 Allocating responsibilities to the relevant design/ construction/facilities parties in the process and ensuring that they are accountable.

Diesel used in plant machinery and office electricity

Cladding

8.4%

5.2% Electricity used in on-site offices

Vehicle deliveries

4.2%

1.8%

Raised floors

Lifts

1.2%

4.6% Concrete works

Waste

1.8%

Piling

4.1%

18%

Steel for frame, infrastructure and stairs

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Efficient Predictability and Control Many major research and manufacturing companies have large capital facilities portfolios, but struggle to effectively and proactively cost manage their projects and programmes. This is in part because the significant investments made in Enterprise Resource Planning (ERP) systems, such as SAP, Maximo, Oracle and JDE, initially preclude more focused project and programme solutions which would address the specific requirements for best practice project management.

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Issue twenty-seven


The high-value process of maintaining capital facilities can take its toll on both the balance sheet and the bottom line, and generally ERP systems are optimised around high-volume processes like procurement and accounting. This shortcoming is because these systems are not primarily focused on helping the capital project and maintenance groups manage costs, but to provide consistent accounting and procurement support. In many ways the lack of understanding around the requirements and the discipline of project cost management has been confused with accounting and project finance, and has generally concluded, erroneously, that financial tools will do the job. Where clients are charged with predicting and controlling facility capex and opex costs in a cost efficient manner, their teams may be too busy manually extracting, disentangling, reassembling, manipulating and formatting masses of data on a daily and weekly basis to notice that the budgets are at serious risk of overrun. Although MS Excel has traditionally been used for cost engineering purposes, our experience is that professional cost engineers add most value when managing costs proactively rather than being enslaved by collation and manipulation of numbers. For the last five years, Faithful+Gould has supported industrial clients in redressing this imbalance via our enterprise cost management system, Epoch. Epoch’s core role is to help track and control all post-sanction cost, hours, quantities and progress, providing clients with Efficient Predictability and Control     TM. Epoch supports the Control of budget, funding reserves (contingencies, management reserves and supplemental funds), contractual commitments, all types of change and trend, work in progress (WIP), approved spend and accruals. All of this underpins its primary role of helping improve the Predictability of total and time-phased cost forecasts. As well as these predictability and control goals, Epoch provides clients with significant time savings. These are derived from automatically loading data from multiple intertwined ERP and project controls systems, via our proprietary data ETL (extract, transform, load) process. The resultant efficiency gains routinely eliminate 20-60% of the weekly workload for a cost engineer, permitting a balance of cost savings and allowing more time to be spent on forecasting and analysis.

Epoch provides clients with significant time savings, resulting in a balance of cost savings, and allowing more time to be spent on forecasting and analysis. Successful users include Michelin, a leading tyre manufacturer, and a major oil company. These two corporations have many differences yet they face similar challenges, which reinforces the fact that the aforementioned problems are not unique to a company or even a market sector. Michelin presented some interesting challenges. Due to capital expansion in China, Brazil and India, with only one application and database instance, our US-based support function has extended its reach into the Asia Pacific time zones by establishing a second helpdesk in Shanghai.

A major oil company has been a long-standing Epoch user, and the last twelve months has seen adoption extend to all five US refineries. The Faithful+Gould technology allows new sites to easily benefit from their predecessors’ investments and developments.

Faithful+Gould’s industrial cost and performance management system offers support to all clients with significant maintenance and capital programmes The system’s success is based upon considerable client-side study and experience, leading to the development of Epoch to represent best practice, governance and control from the client perspective.

For further information contact Chris Taylor (UK) on +44 (0)1642 675136 chris.taylor@fgould.com or Mark White (US) on +1 832 476 3310 mark.white@fgould.com

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As the UK economy emerges from recession, the public sector may still be waiting for the full effects. Capital expenditure programmes are already coming under increased pressure and scrutiny, with all public sector areas expected to work together and contribute to significant procurement savings. As part of the Operational Efficiency Programme, published by the Office of Government Commerce (OGC), the public sector is already committed to making savings of £5.7 billion by 2011-12 and £7.7billion by 2013-14. Collaborative Procurement is proposed as the springboard to ensure these savings are realised.

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Issue twenty-seven

Collaborative Procurement ensures that the public sector can benefit from its significant scale by channelling its expenditure via aggregated, pangovernment procurement strategies. By 2011 central government has a target to ensure that 80% of all procurement is channelled through Professional Buying Organisations (PBO) and other collaborative strategies; the wider public sector is set at 50%. Faithful+Gould’s research has found that the average cost for individual clients to run an EU compliant process to procure construction consultancy services is £63,000. The average time taken is 73 days. Using pan-government framework agreements presents a ‘quick win’ opportunity for cost and time savings. Faithful+Gould is appointed on a range of public sector frameworks including Buying Solutions, the


Credit: Martine Hamilton-Knight

David Wilson Library, University of Leicester

largest PBO. Whilst OGC sets procurement policy and best practice to help the UK public sector to achieve value from its spending, Buying Solutions delivers procurement solutions for nationally sourced commodity goods and services to customers in both central civil government and the wider public sector. However it has no formal ‘mandate' and therefore has to ‘earn' its customers. Buying Solutions has teamed up with Improvement & Efficiency South East (IESE) to provide a pangovernment framework agreement that will support public sector organisations in procuring the full spectrum of professional construction consultancy services. The framework agreement offers:  Approved industry best practice  Increased commercial leverage  Greater choice and flexibility  Up to twelve industry supplier experts  Faster speed to market This framework agreement brings together project management, design and a number of ancillary technical services intended to assist clients in delivering a wide range of property related projects. The service package can be used as a comprehensive ‘one-stop shop’ consultancy solution or as a schedule of specialist elements. These can be purchased in isolation or in any bespoke combination according to client need. This offering is accessible to any public sector body, enabling the procurement of construction consultancy services on any project of any value. Clients can

procure through a ‘single source’ appointment using pre-agreed fee rates or alternatively run a minicompetition with selected suppliers. IESE framework manager Grant Alexander comments: “You can have a consultant working on your project within weeks of tendering. Consultants selected to this framework are recognised as ‘best in class’ and have a both local and national presence. Clients can benefit from having individually tailored teams of professionals with experience relevant to their particular sector.” Faithful+Gould together with Atkins are also able to offer design and surveying services as the sole partner under the Scape National Design Team Framework. The Scape framework agreement enables all public sector organisations to procure design and surveying services without the constraints of the usual OJEU procedures. This results in dramatically reduced procurement times and costs, with earlier building occupation. Scape System Build is a local authority controlled company, comprising Derby City, Derbyshire County, Gateshead, Nottingham City, Nottinghamshire County and Warwickshire County Councils. An excellent example of an authority maximising PBO benefits is Surrey County Council, where Faithful+Gould has been appointed to lead the proposed works at St. Martin’s Church of England Primary School in Epsom. The project comprises extensions and alterations to provide new Foundation Stage accommodation for 60 children. We will be providing project, cost, design and engineering services.

For further information on Buying Solutions contact Stephen Hateley on 0207 121 2876. stephen.hateley@fgould.com For further information on Scape, contact Shaun Lunn on +44 (0)115 957 4800 shaun.lunn@fgould.com

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north america

Ever wondered how much it would cost to build a green version of Buckingham Palace? The Queen’s London residence is said to cost £2.2million in fuel bills each year, but Faithful+Gould calculated that a new energy-efficient replica could be built for £320 million.

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Our assessment of Buckingham Palace was part of a review of famous UK monuments, commissioned by the Chartered Institute of Building’s magazine, Construction Manager. Our replica palace would take three and half years to build, using the latest methods and materials. We calculated that the new palace would emit 400 cubic tonnes of CO2 per year less than the original.

Double glazing systems would replicate the 760 traditional windows, cutting heat loss by half. We would add photovoltaic panels, heat recovery systems and ground source heat pumps (subject to tube lines, escape tunnels and nuclear bunkers!). Grey and rainwater water harvesting could reduce potable water consumption dramatically.

The preservation of the palace’s heritage characteristics was the most important consideration. But a traditional appearance could conceal substantial levels of insulation in the walls, floors and loft space which should pay for itself in two years. The insulation would cut heat loss by up to 90% compared to an un-insulated building.

The original purchase, build and extension costs, incurred between 1761 and 1913, total around £33 million in today’s terms. This included 19 state rooms, 78 bedrooms, and 52 principal bedrooms. If Her Majesty wants to update, our team is ready to help with a cost effective plan!

Issue twenty-seven

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Solutions - Issue 27 (RoW)