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ISSUE 28

Driving the U.S. toward a more sustainable future

Also in this issue: U.S. Military leads healthcare reform Europe’s PPP catalyzes growth Singapore joins World Green Building Council Issue twenty-eight

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CONTEnTS 4

Wind Power Driving U.S. toward a more sustainable future

6 Middle East Distressed Assets Formulating a recovery strategy

8  Transforming Healthcare Department of Defense accelerates construction pace

Intermodal Transport Solutions 10 Transport infrastructure projects continue to perform well

 Brazil on the Threshold of Change 12 Faithful+Gould joined U.K. ministerial visit to world’s eighth largest economy

 U.S. Corporate Space Design 14 Transforming today’s workplace interiors

 Singapore’s Green Market Evolves 16 Singapore joins World Green Building Council

 PPP in Europe 18 A catalyst for growth as European economies strive toward recovery

20  Facilities Management Outsourcing Bringing efficiency benefits

22  Performing Arts Center at the World Trade Center Site Funding for Lower Manhattan’s cultural anchor

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I’d like to warmly welcome you to Solutions, where we highlight some of Faithful+Gould’s latest initiatives. I hope you’ll find something within these pages that captures your interest. Though the economic recovery has been slower than predicted, I remain positive about the industry’s future and Faithful+Gould’s ability to make a valuable contribution. We are fortunate to have a diverse global business, both geographically and in terms of sector spread, and this has certainly helped us to weather the storms of the last two years. New opportunities have arisen even in these leaner times, and our innovative construction management skills have played their part in meeting the challenges of a competitive and constrained market. Here in the U.S. we are experiencing longawaited healthcare reforms and it will be interesting to see how this plays out in both the government and private sectors. In the meantime the U.S. Military Health System has embarked on a huge program of military hospital and clinic construction and on page 8 we take a look at the challenges they face and how we are working to help resolve them. Sustainability is now a key driver for every sector and every client we work with, and our expertise and reputation in this area has continued to grow since our emergence as the first cost management consultancy to have both LEED assessors in the U.S. and BREEAM assessors in the U.K.

The U.S. energy sector has long been one of our concentrations and, with the major players increasingly investigating alternative sources, we are now transferring our technical and commercial expertise from the oil and gas, offshore and subsea sectors into the renewables market. On page 4 we outline the specific challenges facing the onshore wind sector. Additionally, our global sustainability and carbon management skills are active in all our business locations, and page 16 highlights our involvement with Singapore’s growing commitment to the sustainable built environment. The transport sector continues to be a strong performer and recipient of large amounts of stimulus funding. Our article on page 10 highlights the growing importance of intermodal hubs in promoting a major shift from private car use to alternative forms of transportation. I very much appreciate your interest in Faithful+Gould. If you are new to our business, I hope you’ll want to know more – my team and I would certainly be delighted to hear from you. If you’re already in touch with us, I hope we continue doing great work together in the future.

Richard Hall CEO Worldwide Operations

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Driving the U.S. toward a more sustainable future

Wind power is becoming a significant part of the diverse U.S. energy portfolio. With abundant wind resources available, increased usage will help stabilize energy costs, enhance energy security, and improve sustainability performance.

Recent renewable energy development in the U.S. has been motivated by a mix of federal- and state-level fiscal and regulatory policies. At the state level, renewable energy standards (RES), also known as renewable portfolio standards, have become increasingly popular. Today, over 50 percent of states and the District of Columbia have an RES on the books, and another five states have renewable energy goals that are not mandatory. In October 2010 a bipartisan group of senators proposed a national renewable electricity standard bill, calling for Congress to show long-term commitment to renewable energy. If the bill becomes law, state utilities would be required to generate a target minimum of 15 percent of their total energy output from renewable sources by 2021. According to the Department of Energy (DOE) Wind Technologies Market Report 2009 1, the U.S. was one of the world’s fastest growing wind power markets in 2009, second only to China. 2010 experienced a slight slowdown, given the combination of the economic crisis, lower wholesale electricity prices, and improved

energy conservation resulting in lower demand for energy generally. Most predictions show market resurgence in 2011 and 2012, as programs funded by the American Recovery and Reinvestment Act mature and as financing constraints ease. To date, all wind power installations in the U.S. have been located on land. However offshore technology represents a major opportunity, as revealed in the DOE’s National Renewable Energy Laboratory (NREL) October 2010 publication Large-Scale Offshore Wind Power in the United States: Assessment of Opportunities and Barriers. By 2012, the U.S. is likely to have its first offshore wind power plant and several more projects are planned. The NREL report finds that harnessing even a fraction of the nation’s potential offshore wind resource, estimated to be more than 4,000 gigawatts, could create thousands of jobs, help revitalize America’s manufacturing sector, reduce greenhouse gas emissions, diversify U.S. energy supplies, and provide cost-competitive electricity to key coastal regions. 1

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Published August 2010


Meantime the wind power industry faces huge challenges in technology, materials, infrastructure, logistics, supply chain management and long build times. Driving down the costs will be a major challenge. Even though the cost of wind power has decreased dramatically in the past ten years, the technology requires a higher initial investment than fossil-fueled generators. As wind farms are often sited in remote locations, transmission lines must be built to deliver the electricity. Wind resource development may compete with other uses for the land and those alternative uses may be more highly valued than electricity generation. Faithful+Gould has many years’ experience of supporting clients in the constantly changing energy sector and we have forged strong relationships with major oil corporations and electricity providers. We are now successfully transferring many of our skills into the renewables market, enhanced by our previous experience in Europe which includes the U.K. industry’s offshore developments. We offer project management

and cost management services to financiers, utility companies and developers. We can also provide timely and concise reporting for those projects subject to public scrutiny, as the U.S. government continues to fund initiatives and seeks transparency on costs and value for investment. Recently we have supported clients with onshore wind, solar thermal electric, photovoltaics, combined heat and power (CHP)/cogeneration, and other distributed generation technologies projects. As new technologies emerge and become commercialized, our multidisciplinary team continues to develop its cutting edge consultancy role. Our ongoing renewable commissions include support to various hydro and wind renewable energy projects for Puget Sound Energy. We have also provided input on biofuels pilot projects sponsored by several major oil companies, and feasibility study support for steam and power generation (cogeneration) using waste heat and steam from existing refineries.

For further information contact Luis Pinto on +1 832 476 3300 luis.pinto @fgould.com Issue twenty-eight

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Middle East Distressed Assets Recovery Strategy As the fallout from Dubai’s real estate crash continues to impact the market, banks and developers are seeking clarity on distressed assets.

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The effect of the global financial crisis on Dubai’s property sector has been widely reported. Progress in debt restructuring at troubled state-owned investment company Dubai World, together with infrastructure projects now taking center stage, point towards a reshaping of the local construction industry as economic recovery begins. Dubai is forecast to emerge from recession this year with growth of 0.5 percent, thanks to recovery in the trade and tourism sectors, the International Monetary Fund has said. However with some 400 projects slowing dramatically or grinding to a halt at the height of Dubai’s real estate crash, the emirate will continue to feel the impact for some time. Future economic policy may emulate neighboring Abu Dhabi, which helped rescue the smaller emirate from financial distress. Abu Dhabi has traditionally taken a more measured approach to development of its own built environment. If Dubai follows Abu Dhabi’s lead, we can expect less investment in mega-projects and more focus on areas such as infrastructure and shipping. Dubai’s stalled projects are now seeing some gradual movement and confidence has been boosted by a major developer’s plans to return to market. But in the light of financial restructuring, the new construction approach is cautious, phased and scaled down. More attention is focused on robust preliminary feasibility studies before investment decisions are made. Infrastructure remains a relatively strong performer, with both transportation and utilities continuing, albeit at a slower pace. Dubai Metro is the forerunner to the rail expansion in the Middle East, with passenger and freight projects planned across the region. Investor confidence remains low and lenders are currently very cautious. Banks and other financial institutions are grappling with their high levels of

exposure to Dubai’s distressed projects. The UAE insolvency regime is for the most part untested and a multitude of different rules and procedures, with varying levels of enforcement, result in a complicated picture. Creditors face complex issues around land ownership, transfer of property ownership and absent investors. Banks and developers are therefore evaluating incomplete projects and seeking clarity on the best way forward. In general, the more construction stages already completed, the better the outlook. Projects and individual building plans are typically being reconfigured, often resulting in fewer stories or smaller developments in order to complete and achieve some return on investment. Faithful+Gould offers guidance and support with the key technical, commercial and contractual issues surrounding distressed assets. Our Middle East operation offers project evaluation audit services and project rescue recovery strategies. These services are provided within the context of our global due diligence experience and insolvency expertise gleaned in other jurisdictions. Where the recovery strategy leads to viable construction completion, we also offer cost management, project management and consultancy services for the continuation of developments. Distressed assets are also an opportunity for investment and our services can benefit clients who wish to explore this potential. Our global portfolio includes financial institutions, funders, distressed debt investors and developers.

For further information contact Nigel Sale on +971 (0)4 405 9100 nigel.sale@fgould.com Issue twenty-eight

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Department of Defense accelerates construction pace In the midst of national healthcare reform, the U.S. Military Health System is addressing its own unique and persistent challenges. Within the wider healthcare arena, both government and private sector organizations are actively exploring longterm strategies to develop programs to renovate outdated buildings, and channel multi-billion dollar investment into new facilities. This is long overdue. The average U.S. hospital is over 27 years old, and most major military supported healthcare facilities are over 55 years. These aging facilities, together with two ongoing major wars and the continuing base consolidation program, have prompted the Department of Defense to embark on the biggest strategic implementation program of military hospital and clinic construction in recent history. Military healthcare encompasses a diverse range of programs, serving a military population of over 9.2 million, including active duty personnel and families, retirees and their families, and eligible veterans. The Department’s healthcare is provided at more than 530 Army, Navy, and Air Force military treatment facilities worldwide. The major military healthcare programs are primarily operated through the Department of Defense (DoD) and the Department of Veterans Affairs (DVA). The DoD covers active duty service members and retirees from all branches of the military and their families, while the DVA covers veterans and their eligible family members. Challenges center around the provision of a complex healthcare environment that demands increased emphasis on best practices while giving priority to 8

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military readiness. Rising costs are compounded by the expansion of benefits and the increased use of benefits by military retirees and the Reserve military components. Continued healthcare inflation, with TRICARE premiums and cost-sharing provisions that have remained static for nearly ten years, has contributed to financial pressures. Over the next five to seven years, the U.S. Army Medical Department (AMEDD) is entering the largest period of facility expansion in its history. DoD Transformation initiatives together with programs like Base Realignment and Closure (BRAC), Grow the Army (GTA), Host Nation and Medical Military Construction (MILCON), as well as continuing Sustainment, Restoration and Modernization (SRM) requirements, are generating new healthcare facility and medical research laboratory construction and renovation projects. The projects require various degrees of initial outfitting and transition services, with methodologies that underpin the increased volume and the short timescales of these turn-key facility support service functions. Initial Outfitting and Transition (IO&T) offers total turn-key program/project management and contracting support for the equipping and the transitioning of staff and patients nationwide and overseas. The methodology around IO&T has been refined over the past two years and provides the client with a more integrated and streamlined process. This is serving the military health system well, and is readily transferable to the private sector. It seems likely that government may adopt similar measures for capital programs for other departments. We might also see the private healthcare sector using this model for its development programs.


Over the past year, Faithful+Gould has been supporting several DoD multi-million dollar healthcare facilities in San Antonio, Texas, including the San Antonio Military Medical Center (SAMMC), Medical Education Training Center (METC) and Battlefield Health Trauma (BHT) Research Center. The BHT Research Center will integrate all of the combat casualty care research missions and functions from each service into a multi-faceted synergistic research center with a clinical foundation. In a Joint Venture partnership, we have recently received a $409 million global Multiple Award Task Order Contract (MATOC) to provide troop-ready IO&T services to AMEDD and the Health Facility Planning Agency (HFPA). We have begun work at Fort Lee, VA, as part of a contract task order. Additionally, we are a recent recipient of a Small Business $81 million MATOC to support AMEDD requirements.

The healthcare sector is at the heart of Faithful+Gould’s core business streams. Aside from our military healthcare portfolio, we have overseen construction and renovation projects, overseen the project management of relocation and transition projects, and completed facility condition assessment projects at healthcare facilities in more than two dozen states. We have been involved in some of the nation’s most prestigious healthcare projects, including facilities for cancer research and treatment, cardiovascular treatment and rehabilitation, children’s hospitals and outpatient surgeries, laboratories, medical office buildings and primary and secondary care facilities.

For further information contact Adam Shepherd on +1 571 403 8760 adam.shepherd@fgould.com

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Intermodal Solutions Transport infrastructure projects continue to be strong performers in the U.K., Europe, the Middle East and the U.S. As the financial squeeze continues, these projects are still seen as attractive due to their long-term regenerative benefits. With all countries exploring sustainability issues, transport projects are in a unique position as they are generally seen as efficient users of energy, producing little or no pollution at the point of use. One of the key challenges is to achieve a major modal shift in transport preferences by making intermodal journeys more attractive. Part of the solution lies in providing transportation hubs which allow effective interchange between different transport modes. By default, some modes of transport have become intermodal over time. The classic development of this is the airport. The concepts surrounding the ideas of the initial hub and spoke systems, pioneered in the U.S. in the 1950s, have come a long way and most airports

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now have extensive facilities for car parking and good public transport connections. This has now permeated extensively around the world, with transport hubs offering combinations of connections between bus, mass rapid transit, air, car (park & ride) and rail (both high speed and classic). However it is easy to get it wrong and there are numerous cases where, despite close proximity, intermodal transfers can be difficult. The key factors influencing the effectiveness of transport interchanges are:  The ability to change between the different modes  Logistical and operational factors: how well synchronized are services between different transport modes?  Physiological factors, notably the fear of crime  The functional quality of the physical design and layout, such as way finding and crowding management  The physical location of the interchange  The ease of access to/from the interchange and the availability of parking


Economic and social factors such as cost of travel  Appropriate amenities and journey experience for different passenger demographics, eg. business lounges  The commercial services at the interchange. 

The provision of effective transport and urban design solutions is a central element of sustainable development. In the Middle East a significant number of mega-projects are being implemented, which promote a modal shift from private car use to alternative modes. In the past these developments would have supported and encouraged private car use, resulting in worsening traffic congestion and environmental damage. At the core of such developments are transport interchanges which:  Increase and maintain accessibility to a variety of integrated travel modes  Optimize traffic and transport efficiency  Reduce congestion and associated environmental impacts

Are seen as an integral element of urban design and public realm concepts, sometimes acting as the brand for the scheme  Are cost-effective and financially viable in their construction and operation  Facilitate commercial development of the site and its surrounding area. 

Faithful+Gould has unprecedented knowledge and expertise within the transportation sector, reinforced by strong links with our parent company Atkins. Our global transport hub experience includes St Pancras International Station, Heathrow Terminal 5, Birmingham Airport International Interchange, Madrid Barajas Airport, Dubai Metro, South Africa’s Gautrain and the regeneration of Belfast’s Great Victoria Street bus/rail terminal. In the U.S. our portfolio includes the Anaheim Regional Transportation Intermodal Center, the Sacramento Airport and Intermodal Center, the San Francisco Airport and Multi-modal Center, JFK, Newark and Atlanta Airports.

For further information contact Carin Rautenbach on +1 562 314 4202 carin.rautenbach@fgould.com

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ON THE THRESHOLD OF CHANGE In August 2010 U.K. Secretary of State for Business Vince Cable led the delegation of 25 world-class U.K. companies to Brazil in the first ministerial visit between the countries since the May 2010 U.K. elections. Faithful+Gould was part of the delegation. Dr Cable engaged with business leaders and government representatives over four days in Sao Paulo, Brasilia and Rio de Janeiro. Co-chairing the annual Joint Economic and Trade Committee (JETCO) with his Brazilian counterpart Miguel Jorge, Dr Cable’s agenda was to build closer ties between the countries. Already projected to become the world’s fourth largest economy by 2050, Brazil is one of the most promising and exciting developing markets. Rich in natural resources, an economic giant and one of the world’s biggest democracies, the challenge now for South America’s most influential country is to internationalize. The strength of its emerging economy is an incentive to build trade and investment links to capitalize on financial prospects, Vince Cable said during his visit.

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Speaking at the Economist Emerging Markets 2010 Summit, the business secretary noted that, by 2014, Brazil’s economy will be larger than any European country. He said: “The bigger emerging countries – China, India and Brazil – have achieved very substantial growth and reductions in poverty levels based largely on an expansion of their domestic market and domestic savings.” With many major nations now recognizing Brazil’s status as a global player, the U.K. is encouraging industrial co-operation in sectors such as defense and security, energy and advanced engineering. Foreign investment in the country is also being boosted by the 2014 World Cup and the 2016 Olympics. Earlier this year, the Brazilian government announced that it would spend US$890 billion on upgrading the country’s infrastructure prior to hosting these major


Dr Vince Cable, U.K. Secretary of State for Business

“The strength of this emerging economy is an incentive to build trade and investment links”

sporting challenges. This will be much needed as Brazil has suffered a lack of consistent infrastructure investment and update for decades. Most reports acknowledge that there will be considerable pressure on all sectors if the shortfall in transport, leisure and hospitality facilities is to be overcome in time for 2014. Rio de Janeiro, the World Cup host city, will need around US$17 billion in public and private funds to stage it successfully. Forty percent of that sum is expected to be invested in transport, to improve Rio’s roads and rail network, and to boost the bus fleet and metro system. Aside from infrastructure problems, Brazil offers a sound proposition for many global investors, and 400 of the world’s 500 biggest companies are already operating here. With its mature engineering and technology pedigree, the availability of good resource will help convince multinationals that this is an

investment-friendly climate. The built environment is proving comparatively robust in recession, with Brazil as a whole well positioned to recover from the economic downturn. Faithful+Gould is supporting several multinational clients, including the biopharma, oil and gas, retail, leisure and manufacturing sectors, with their inward investment initiatives in Brazil. Our goal is to strengthen technical expertise, ensuring that proven best practice is instilled into our clients’ projects in Brazil.

Tim Horner represented Faithful+Gould on the August 2010 trade delegation to Brazil.

For further information contact Tim Horner on +1 832 476 3300 tim.horner@fgould.com Issue twenty-eight

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Cost versus value in

The cost of U.S. corporate workspace continues to be closely scrutinized, as companies seek to create more productive office environments while saving on operating expenses. Most organizations are pushing for more efficient offices and thus less space to rent. With contemporary office efficiency focused on flexibility that supports and enhances organizational change, considerations range from consolidating existing locations to implementing new energy/sustainability principles. Space efficiency measures are even more applicable if a company’s space is deemed under-utilized or unsuited to the organization’s current operating solutions. When evaluating new space or re-fit, a culture shift may spearhead the design process, or may occur as a result, changing the way employees work. Offices are increasingly expected to reflect the organization’s mission and define their culture, integrating corporate identity and inspiring rather than just housing the workforce. Private offices, once a customary requirement that most clients insisted on, are largely superseded by open design plan. This design transition is intended not only to be more appealing in terms of form and function, but also to enable a more collaborative and productive workplace. Improved space utilization also fits into this model. A greater percentage of today’s employees are spending more time away from their office workplaces and companies are beginning to quantify the non-utilization of this valuable office space. This is especially pertinent for companies providing consulting services, where employees may be at their desks for only 20-30 percent of the working week. Increased corporate relocation of employees can also affect space utilization patterns. 14

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These culture changes have led to increased demand for a flexible workplace environment and a renewed interest in hot desking, where desks are shared by different employees. Hot desking can achieve a 20-30 percent reduction in overall office operating expenses. The creation of shared spaces is an important element associated with promoting open communication and collaboration. These include cafés, soft landing conference areas, private meeting rooms, lounges, and quiet rooms. An environment that supports interaction is the goal, although it’s not enough to simply assume this will happen as a result of the layout. The most successful organizations involve the workforce in the design planning, taking account of how different task groups work, the influence of generational demographics, and the balance of social and private workspace. A more flexible workspace environment may also Achieve increased interaction and collaboration between colleagues  Improve creativity and idea exchange  Increase company branding through sharing ideas and daily activity  Improve space utilization and daily enjoyment of shared work areas  Lessen energy consumption and increase sustainable initiatives  Create a clearer work/life balance  Support the growing office needs of a mobile global workforce  Maintain employee satisfaction, improve talent acquisition and retention. 

A move toward open spaces is frequently part of an organization’s plan to embrace more egalitarian principles of working. Avoiding the downsides of rigid hierarchies and promoting inter-generational knowledge


transfer may be a priority. There are still distinct sector and geographical differences in workplace standard expectations for office size and environment, but this is changing. Even law firms, for instance, traditionally favoring a visibly hierarchical layout, are beginning to see the cost and culture benefits of more innovative open space. Hybrid workspaces, with a combination of cellular and open, may offer the best solutions for some organizations. There is a significant fixed cost attached to making the space design changes for a more open environment. In addition to structural costs, aesthetics – including fixtures, finishes, furnishings and lighting – may also be more expensive once they become highly visible. But although upfront investment costs are generally higher, companies will save a substantial amount in the long run. Open office space encourages closer teamwork, resulting in increased worker efficiency and productivity.

Historically, a company’s space is its second highest expense after payroll. Considerations include rent, construction, furniture, equipment and utility costs associated with operating the space. Currently we are seeing increased attention paid to whole life costs, as opposed to capital cost only, together with a growing recognition that best value should be balanced with investment in employee productivity. Flexibility is also an important driver, with organizations more aware of their future work modes and their supporting technological needs. Space which can be easily reconfigured may be more cost-effective in the long run. Faithful+Gould has extensive experience in supporting clients on the cost management of their corporate interiors. We also work alongside leading architectural practices to help clients achieve best value from design inception onward.

For further information contact Ron Agababian on +1 917 421 1447 ron.agababian@fgould.com

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GREEN MARKET EVOLVES Global green building leaders met in Singapore for the World GBC International Congress in September 2010, hosted by the Singapore Green Building Council. Although not a newcomer to the sustainable built environment, Singapore has reinforced its efforts this year, with the Singapore Green Building Council (SGBC) achieving Established Member status with the World Green Building Council. Building and Construction Authority (BCA) Green Mark New Build Version 4 launches in December 2010, further refining the country’s sustainable construction requirements. Globally, the first green building rating tools, BREEAM and LEED, are gradually being replaced, where appropriate, by locally developed systems that are better aligned with local building codes and conditions. As well as Singapore’s Green Mark, examples include Green Star in Australia, Germany’s DGNB, LEED Canada, LEED Brazil, and the Estidama Pearl Rating System in Abu Dhabi. This trend toward local and regional rating tools looks set to continue, but these will increasingly use common core metrics for measuring carbon, waste and water, enabling meaningful performance comparisons. Driven by the tropical climate, Singapore’s built environment faces different challenges to those found

2nd Green Building Masterplan

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Public Sector Taking the Lead


in the U.K. or U.S. Air conditioning is a major contributor toward Singapore buildings’ consumption of nearly half of the country’s total end-use electricity. The BCA Green Mark Scheme, launched in 2005, focuses heavily on energy efficiency as a result. The scheme has made considerable strides since 2008’s requirement for all new developments or major retrofitting works with a gross floor area greater than 2,000m2 to reach Green Mark (GM) Certified level. In 2009 the Inter-Ministerial Committee on Sustainable Development announced its target to achieve 80 percent green buildings in Singapore by 2030 as part of the second Green Building Masterplan. This included some significant public sector initiatives, such as new public projects with an air conditioned area greater than 5000m2 being required to achieve GM Platinum, and existing public buildings with air conditioned area greater than 10,000m2 required to meet GM GoldPlus by 2020. Various government incentive schemes have been launched including the GM GFA scheme, which allows developers a greater floor area than generally allowed if certain GM criteria are achieved. GM Existing Building is a S$100 million scheme offering co-funding to incentivize works in existing buildings, and the S$20 million GMIS New Buildings does the same for new building works. Green Mark New Build Version 4, for release in December 2010, places much greater emphasis on passive design through natural ventilation and day lighting. This is complex in Singapore with its heat, strong solar radiation and torrential rainfall. Many of the usual alternatives to air conditioning are unsuitable: high humidity and low wind speeds make evaporative cooling ineffective; ground temperatures of 20-30°C 30m below ground make earth cooling ineffective; night ventilation is impractical due to

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Spurring the Private Sector

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Furthering the Development of Green Building Technology

humidity and resultant mold growth, and thermal mass is impractical due to very low diurnal variations. The market is working within these constraints however. We are currently seeing a much stronger focus on the use of ventilation simulation analysis to maximize the use of available wind velocity, wind direction and temperature differentials, capitalizing on natural ventilation.

For further information contact Hannah Feddon (Singapore) on +65 6227 6144 hannah.feddon@fgould.com or David McNamara (U.S.) on +1 832 476 3300 david.mcnamara@fgould.com

Faithful+Gould is providing professional services on a number of Green Mark projects in Singapore, some of which are ambitiously targeting dual ratings. This can bring considerable challenges. A current commercial fit-out project is targeting to achieve both Green Mark Platinum and LEED Platinum. Achieving LEED in this case is particularly complex, because of the disparity in regulation standards between the U.S. and Singapore. These difficulties make it imperative for clients to define their sustainable objectives and choose a green building rating tool very early on in the project. This allows maximum time to clarify any disparities with the relevant certifying authorities. The development of the green market in Singapore is also encouraging the supply chain to make more green products available locally. The Singapore Environment Council, a member of the Global Ecolabelling Network, has run the Singapore Green Labelling Scheme since 1992. This scheme covers a wide range of building and non-building related products. The SGBC launched the Singapore Green Building Product Certification initiative in September 2010. This scheme relates to building materials and supports the supply chain in achieving and certifying safe, healthier, efficient and sustainable building products. Faithful+Gould’s global sustainability expertise includes a dedicated team working in Singapore, which also serves the surrounding Asia Pacific region.

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Building Industry Capabilities Through Training

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Profiling Singapore and Raising Awareness

6 Imposing Minimum Standards

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A catalyst for growth as European economies strive toward recovery The quality of a country’s infrastructure can have a profound impact on its prospects for sustained economic growth. The recent effects of the 2008-09 banking crisis have left most advanced western economies facing substantial reductions in public sector capital spend. Many are struggling to restrain excessive borrowing resulting from falling tax revenues as a consequence of negative growth. One of the many challenges facing governments today is how to balance competing demands to reduce spending while continuing to invest in improving the quality of infrastructure.

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The Public Private Partnerships (PPP) model of procurement which evolved from the Private Finance Initiative (PFI) developed in the early 1990s in the U.K., has increasingly found favor with European governments facing the challenges outlined above. In the first half of 2010, the volume of infrastructure investment financed through PPP in Europe rose 19 percent to €25.7 billion on the same period in 2009. Western Europe remains the dominant region for PPP, accounting for over 50 projects with a combined value of €14.9 billion. One of the largest projects to reach financial close was the Karolinska Hospital in Sweden. At a capital cost of €1.4 billion, the project represents the world’s largest PPP healthcare project. Faithful+Gould acted as Technical Advisor to a syndicate of twelve banks comprising commercial lenders and two multilateral institutions, the European Investment Bank and the Nordic Investment Bank.


In addition to Scandinavia, the Benelux region is enthusiastically embracing PPP. The Flemish provincial government in Belgium recently structured an ambitious project to redevelop over 200 schools during the next six years, in an arrangement which includes shared equity participation from both the public and private sectors. Meanwhile, work continues on transactions which have already reached financial close, including a scheme to develop new transport facilities in the form of bus hubs in the cities of Brugge, Zomergem and Overrijse, where Faithful+Gould is acting as Technical Advisor to the lending banks. The Netherlands, too, is a strong exponent of the process, using PPP across a wide range of sectors and most recently to develop new custodial facilities in a €100 million (£89 million) project outside Amsterdam.

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In Eastern Europe, the volume of projects financed under PPP rose to a record €2.8 billion in the first half of 2010. Roads projects in particular are benefitting from the use of private capital, with the Moscow-St Petersburg highway at €1.7 billion as the largest PPP project globally to reach financial close in the period. The former Soviet states of Latvia and Lithuania are also exploring the use of PPP procurement, having identified a number of ‘pathfinder’ projects in the education sector. Sovereign credit risk remains a potential issue in some of the emerging Eastern European markets and this may be holding back further growth, but the ambition and appetite for PPP procurement in those regions is becoming increasingly apparent. In the Americas, the current economic climate has facilitated the development of the PPP market by highlighting the lack of public funds to both maintain existing infrastructure and meet a growing deficit. The Canadian market is very active in both transportation and accommodation, with project models similar to those found in the U.K. With aid from quasi-governmental organizations that promote the use of PPPs, growing expertise and a CAD$1.2 billion Crown Corporation PPP fund, an estimated 10-20 percent of all infrastructure spending is procured via PPP. While the U.S. model remains in the early stages of its growth, PPP procurement is currently attracting significant attention.

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1: Karolinska Hospital, Sweden 2: President of the European Council, Herman Van Rompuy

Several transportation projects are underway, such as the US$2.7 billion LBJ Freeway in Texas. To date, Faithful+Gould has been involved in several North America PPPs including the Long Beach Courthouse Project (CA), King Edward Memorial Hospital (Bermuda), and multiple projects in British Columbia including the CAD$240 million new headquarters for the Royal Canadian Mounted Police.

For further information contact Ryan Brady on +1 602 445 3570 ryan.brady@fgould.com

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Market changes and budgetary pressures are forcing organizations to re-examine their core business activities and support operations.

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Creating and maintaining an efficient working environment represents an enormous overhead and significant ongoing investment of managerial time and resource. Many companies are exploring Facilities Management (FM) outsourcing to achieve a leaner, more efficient organization that can concentrate on core business and reduce operating costs. Research within our current client base suggests that organizations explore outsourcing options for a variety of reasons, often beginning with cost reduction, together with the potential to convert fixed costs to variable costs. There may be insufficient management time available to devote to the existing in-house operation or its improvement, and difficulty in retaining sufficiently qualified staff. The switch to outsourcing brings advantages including cost savings of ten to twenty percent, improved service delivery by specialist FM Service Providers, better attraction and retention of staff by the Service Providers, improved management of existing resources and transformational initiatives. The added value of consultancy expertise is another attraction, as is the potential for better procurement opportunities for an asset refresh. Successful FM outsourcing hinges on strong leadership, with decision-makers empowered to manage resources, balance the program’s priorities and focus on the business benefits realization. Good stakeholder management and communication are vital, together with clear service levels and governance. Benefits management should also be considered, as FM outsourcing is typically highly visible – end users notice changes to food services, environmental conditions and housekeeping immediately. It is therefore important to monitor how the initial foreseen benefits will remain intact and of value to the organization. Thorough interrogation of the service provision market is needed, to ensure delivery

capability. Global estate holders will be affected by the significant differences in labor laws in each country, impacting on service provision. Globally, we are seeing clients focusing on bundling of contracts into a single source for delivery of hard services and likewise for soft services. Clients with a limited portfolio size are increasingly opting for total FM provision via a specialist medium sized regional provider. Sectors experiencing the greatest growth in FM outsourcing include government and manufacturing, where clients are using a cross business/departmental model to source the optimum services from focused and efficient providers, ensuring value for money for both buyer and sellers. Faithful+Gould utilizes program management, specialist FM subject matter expertise, procurement, risk management and change management techniques to design and implement a well-planned outsourcing process. Our sector specialists strive for a full understanding of our clients’ culture and aspirations, and this is key to achieving cohesive and workable solutions. We combine strategic and operational implementation of FM outsourcing solutions, clearly translating clients’ requirements to the FM service market, and facilitating the establishment of productive and lasting relationships. For some clients, we mastermind the entire FM outsourcing transaction, from defining scope to mobilizing operational changes. For others, we contribute to the FM outsourcing lifecycle at the individual organization’s most critical stages. Our experience spans global facilities management and outsourcing projects, typically with large real estate portfolios and complex day-to-day facilities operations. Effective results have been achieved for clients in the pharmaceutical, finance, energy and government sectors, with our costs absorbed within the benefits realized.

For further information contact Chris Baxter on on +1 917 421 1411 chris.baxter@fgould.com Issue twenty-eight

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Performing Arts Center at the

World Trade Center site Governor David A. Paterson, Mayor Michael R. Bloomberg and Assembly Speaker Sheldon Silver have announced the agreement to create a $100 million fund for the Performing Arts Center at the World Trade Center site with federal funds directed to Lower Manhattan.

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Issue twenty-eight


The Performing Arts Center is part of the Master Plan for the redevelopment of the World Trade Center and is expected to serve as a cultural anchor for Lower Manhattan. The October 2010 news was greeted with widespread enthusiasm. “Our collective desire to put $100 million towards the development of the Performing Arts Center at the World Trade Center site makes clear that the cultural venue is a critical part of the ongoing revitalization of Lower Manhattan,” said Mayor Bloomberg. The new World Trade Center will provide downtown New York with a significant economic boost, and comprises commercial space, a modernized and more convenient transportation system, and cultural and commemorative destinations. As well as the Performing Arts Center, the World Trade Center plan includes five new skyscrapers (1, 2, 3, 4 and 5 WTC); National September 11 Memorial & Museum at the World Trade Center; the World Trade Center Transportation Hub, and a retail complex. In 2004, the internationally renowned Joyce Theater was selected to be a prime tenant in the Performing Arts Center. Since that time, the Lower Manhattan Development Corporation has worked closely with the Joyce Theater, the City of New York, the Port Authority, and other stakeholders to develop a design for a center capable of hosting a broad range of performing arts and suitable for the complicated confines of the World Trade Center site. Frank Gehry’s design for the Performing Arts Center includes a 1000-seat theater, a secondary theater, rehearsal spaces, classrooms, a public café, outdoor plazas and administrative space. Earlier this year, IMAGE CREDIT: dbox, courtesy of Silverstein Properties

construction began on the foundations and utilities of the facility. Faithful+Gould was selected to provide program management, cost estimating and pre-construction services for the Lower Manhattan Development Corporation (LMDC) and subsequently the New York City Economic Development Corporation (NYCEDC) for the Performing Arts Center. This is in addition to the similar role we performed at the adjacent World Trade Center Memorial and Museum. We have broad and varied experience in the arts and heritage sector. Our U.S. 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 Visitor Center, Washington, DC; National Museum of the American Indian, Washington, DC; National Museum of African American History and Culture, Washington, DC; American Museum of Natural History, New York, and Austrian Cultural Forum, New York. Our global experience also includes the British Museum and the Imperial War Museum, U.K.; Museum of Tolerance, Jerusalem; the Guggenheim Museum, Abu Dhabi; the Sheikh Zayed National Museum, Abu Dhabi, and the Stavros Niarchos Foundation Cultural Center (SNFCC), Athens.

For further information contact Tom Jaske on +1 212 252 7070 tom.jaske@fgould.com Issue twenty-eight

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Solutions - Issue 28 (North America)