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SOLUTIONS issue 34

Athens archaeological finds at

Stavros Niarchos FOUNDATION CULTURAL CENTEr

also in this issue: U.S. airport baggage handling Brazil builds competitiveness Emerging countries in nuclear energy sector Confluence Project Management joins Faithful+Gould


CONTENTS

Front cover: SNFCC, Athens

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Ready for the world stage

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A case of national importance

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India’s construction evolution

Brazil builds competitiveness

U.S. airport baggage handling

Expanding our project management services and expertise into India

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Nuclear power

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Athens unearthed

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Laying the foundations for successful learning

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Hong Kong’s bright future

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Project management in Qatar

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Crews control

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Buyer’s market

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Strengthening our brand

How can embarking countries estimate construction costs?

SNFCC construction project uncovers ancient artifacts

Strategic Facility Consulting assists higher education providers

Supporting Hong Kong’s active real estate and construction market

2030 National Plan and FIFA World Cup 2022 bring changes to construction market Time on Tools® helps facility managers achieve greater efficiency

Business is booming for U.A.E. shopping malls

Confluence acquisition augments our presence in Asia Pacific and the Middle East


VIEWPOINT I’m delighted to welcome you to another issue of Solutions, showcasing our constructive expertise across a wide range of projects and services.

construction is projected to remain buoyant. On page 4 we discuss the manufacturing opportunities playing a key part in Brazil’s economic potential.

We have an exciting new addition to the Faithful+Gould brand with the acquisition of Confluence, a project management consultancy with operations in Asia Pacific, the Middle East and India. Confluence augments and complements our existing business in these regions, strengthening our ability to service increasingly complex projects for our global clients.

We continue to make headway in the global nuclear energy arena, building on our traditional core strength in the industrial sector. With at least 45 countries actively exploring new nuclear power programs, clients, funders and governments are challenged to create robust program, procurement and cost management strategies. Page 10 discusses some of the lessons learned from a cost management perspective.

This is a very positive move for Faithful+Gould and it gives me great pleasure to welcome our new team of over 200, knowing that our two businesses offer a similar approach and ethos. Confluence also brings experience of some first-rate projects, including the complex logistical challenge of constructing and deconstructing the Singapore Grand Prix circuit. Take a look at the back cover for more information on how we’re working together.

My colleagues and I appreciate your interest in Faithful+Gould and we would be delighted to hear from you. If you’d like to know more about the projects or services profiled in Solutions, please contact any contributor by using the details on each page or via our website. We have a growing following on LinkedIn, Twitter and our blog, so please join us on those platforms to keep your finger on the pulse of constructive expertise.

Hong Kong is one such area to immediately benefit from the addition of the Confluence team. Faithful+Gould has a long association with Hong Kong, now enjoying a revitalized operation underpinned by strong client relationships and exciting projects. Read more about Hong Kong on page 16.

For further information, contact Donald Lawson at our London office. Scan the QR code for full details.

Our Brazil operations are fast diversifying, with projects in the energy, manufacturing and real estate sectors. This is an exciting time for Brazil, with the government realizing the importance of modernizing infrastructure to achieve long-term growth. Construction related to the FIFA World Cup and the Olympic Games will support all construction markets going forward and infrastructure

Donald Lawson, CEO Worldwide Operations

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ready for the

world Stage

For further information contact Carlos Nazario at our Rio de Janeiro office. Scan the QR code for further details.

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Brazil is a strong global competitor with good potential for sustainable growth and prosperity. The construction industry is reaping the benefits. The largest Latin American economy, Brazil has remained robust during world economic downturn. As host nation of the 2014 FIFA World Cup and 2016 Olympics, the country is further accelerating economic development to meet infrastructure needs. The Brazilian government has pledged to spend $69 billion improving Brazil’s transportation systems by 2014, while the infrastructure budget for the Olympics alone is $14.2 billion. These high-profile events, with their fixed deadlines, bring a new emphasis on regulation, risk assessment, quality and safety in the construction industry. The legacy impact should continue long afterward, as the country seeks to maximize its economic potential. The sporting events are just one growth driver in a country which has become an important global player. Mineral resources are extensive and the energy industry has been successfully developed. Brazil has transformed itself from a major oil importer to an important oil and gas producer in the region, as well as the world’s second-largest ethanol fuel producer. The pharmaceuticals industry is growing, attracting global pharma giants, and Brazil also has a diverse services industry. The manufacturing industries also play a vital role in Brazil’s prosperity. Steel, chemicals, petrochemicals, aircraft, automobiles and electrical goods all remain strong in an increasingly dynamic and competitive global arena. As a resource-rich nation with an attractive market for investment, Brazil now has an opportunity to significantly expand its global manufacturing competitiveness by developing its physical infrastructure and education system. Already the world’s biggest exporter of sugar, chicken, beef, and coffee, the outlook for the country’s agriculture and agribusiness markets is very optimistic. Large untapped reserves of land and water, together with farming technology and expertise, point to potential for significant further agricultural growth.

Brazil’s domestic industry has faced challenges as a result of both foreign competition and historical internal restraints. Political and institutional shortcomings have improved in recent years, however, and the demands of a rising middle class have prompted the government to make progress with transportation, health and education services. Greater political accountability and more transparent public sector expenditure are now on the country’s agenda. Regulatory governance has improved, making the country more attractive to inward investors. Factors likely to influence Brazil’s manufacturing industry competitiveness in the next few years include its physical infrastructure, its skills resource and its energy competiveness. Increased economic stability has enabled heavy investment in new equipment and technology. Already relatively strong in technology and innovation, Brazil is now benefiting from the experience and skills brought into the country via global inward investors. In 2010, Faithful+Gould established a base in Rio de Janeiro in response to our global clients’ needs, after supporting projects in Brazil via our North America offices for several years. Our initial move into Rio underpinned our role as Project Management Office consultants for Michelin’s global capital investment program. We established strong local capacity, working with Castrol Brasil (a BP subsidiary) and GlaxoSmithKline among others in our global client portfolio. In 2013 we opened a base in Sao Paulo and we are now moving forward into other sectors such as agribusiness and hospitality. Our most recent commissions include cost management for a world-leading agribusiness company’s largest manufacturing project in Brazil, and project management for a leading global hospitality brand. We have built a sound understanding of project and cost management in many of the sectors that make up Brazil’s manufacturing and commercial construction markets and we anticipate increasing demand for this expertise.

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A case of national

importance

U.S. airports screen over a billion bags each year, a complex and highly visible national security activity. Screening has been at the heart of baggage handling systems since 2001, adding explosives detection systems (EDS) to state-of-the-art technologies that include sorting, conveying, tracking systems, bag storage and retrieval. Twelve years later, U.S. airports face the challenge of upgrading and implementing new technologies, while reducing their system costs and maintaining the highest security levels. Upgrades may involve an entirely new facility, the expansion of existing systems, or exploration of maintenance and operation. Design, manufacture, assembly and commissioning of baggage installation are specialist areas that need informed program, project and cost management. Faithful+Gould is currently providing this support on some interesting baggage handling commissions. We are working alongside the International Association of Baggage System Companies (IABSC), a body which provides a unified voice to the aviation industry, bringing standards, education, innovation, quality and economic benefits. Together we are collaborating with a group of baggage handling system designers and suppliers to improve efficiency and safety in airport baggage make-up rooms (post-screening holding area). The current emergency stop design has been in use for over 40 years and we believe there may be a more flexible and cost effective solution, using software rather than hard wiring, and still meeting national and local safety codes. We aim to reach a consensus on a design suitable for all baggage handling system specifications.

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We are also working with the IABSC and the Transportation Security Administration (TSA), to update the TSA Planning Guidelines and Design Standards (PGDS). The guidelines provide a standard requirement for security screening systems design across the U.S., shaping the design for baggage handling systems and incorporating an automated in-line screening system for checked baggage. Updating this standard requires input from the airline/airport operators of existing baggage systems and from the TSA’s technology experts. Our joint recommendations will be presented to the TSA by spring 2014. The 2002 Aviation and Transportation Security Act required all checked baggage to be electronically screened for explosives. To comply, airports around the country commissioned designers to provide fully automated baggage screening solutions which could be quickly implemented. Some of the 2002 systems are now reaching the end of their design life. In 2011, TSA shifted its focus to replacing aging machines (recapitalization), optimizing the equipment to meet current PGDS standards and increasing bag screening throughput. This recapitalization and optimization program requires close collaboration between TSA headquarters, local TSA staff, airports, airlines, baggage system designers and suppliers. Faithful+Gould has specific experience in this area. We managed a 30-month, $55m exemplary redevelopment program in Terminal 4 at JFK International Airport, modifying the

conveyor system to accept 10 new explosive detection systems machines. The baggage systems are complex and in 24-hour use. The terminal has a period of three hours after midnight when only a few planes depart, so most of the 25-plus mechanical and electrical tie-ins were scheduled at this time. Mitigation plans were put into place for the manual conveyance of baggage or an alternative conveyor, during the works. Similar programs will handle recapitalization and optimization at other U.S. airports, with security systems designers and suppliers following the JFK Terminal 4 model. They will conduct detailed pre-installation surveys of existing equipment and software (including any changes made since as-built documentation was developed); pre-install as much equipment as possible prior to the tie in, and, most importantly, have a contingency plan for bag conveyance without adverse operational impacts to terminal operators, airlines or passengers. Faithful+Gould is playing a major role in these efforts, working with several U.S. airports. We have partnered with architects, consultants and engineering firms since 2005 to provide aviation experts for site lead positions to coordinate the installation and testing of EDS machines. We understand the complexities of working in live, operational, business critical airports. We provide program management services for cost control and schedule management during the design, manufacturing, installation, commissioning and testing of large, automated inline security screening baggage systems. These services combine to achieve best value for our clients.


For further information contact Bob Pollard at our Los Angeles office. Scan the QR code for further details.

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INDIA’S

Construction Evolution The acquisition of Confluence has allowed Faithful+Gould to take confident steps in expanding our global project management services and expertise into India.

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ONGOING PROJECTS

DELHI

KOLKATA

DELHI: YPCC – Six-story retail and cinema complex Kings Court – 72 luxury apartments in 12-story tower and four-story townhouses HAD – Hyatt Andaz hotel with 400 rooms and 155 apartments IREO – Five residential towers, office block, Hyatt hotel, all 32 stories and retail center

MUMBAI

BANGALORE

CHENNAI

BANGALORE: Cityview – Four Seasons hotel of 32 stories and 284 rooms, 15-story office tower and 32-story residential tower of 150 apartments

Shangri La – Five-star hotel of 20 stories and 400 rooms Empyrean – 150 villas over 80 acres MUMBAI: Deutsche Bank – Head office fit-out of 86,000 sq ft KOLKATA: Forum Atmosphere – Twin towers of 35 stories linked by iconic bridge spanning 262 feet CHENNAI: Hyatt Chennai – 334-room hotel

The property market in India is progressively evolving in response to investors and their tenants’ needs. Cities such as Mumbai, Bangalore and Delhi have become global commercial centers with increasing demand for quality buildings. Design standards, quality finishes, reliability of utilities (power, water and telecoms) and sustainability with accreditations such as LEED are becoming essential attributes for long term building value. Investors and tenants are also demanding higher standards of health and safety during both construction and operation, in line with the corporate social responsibility requirements of global companies.

For further information contact Simon Chivers at our Delhi office. Scan the QR code for full details.

India is a unique market with its own characteristics, challenges and pitfalls. Project delivery in India has typically been characterized by a lack of confidence in delivery timescales, low quality and safety standards, and cost overruns. These aspects occur particularly when clients employ the delegated light touch approach and systems used in Europe and North America, which depend upon mature and integrated supply chains. Construction costs in India are between 40 and 60 percent of those in Europe and North America. The local variance is driven by the use of imported materials, because the

specification materials and typical detailing commonplace and economic in the West are not cost effective in India. Recent devaluation of the Indian rupee by 20 percent has led to significant increased costs in imported materials while local labor and materials costs have lagged slightly behind the Indian inflation rate. Project success in India requires property owners, investors and tenants to rethink their delivery approach, seeking greater efficiencies and aiming for global best practice standards. There is a lack of general contractors to provide project expertise from project initiation to completion, and this is driving demand for global best practice project/construction management services. Faithful+Gould’s acquisition of Confluence (read more on the back cover) enables further expansion of project management services in India. Confluence has built an established business covering the major regional centers, including Delhi, Bangalore, Mumbai and Kolkata. Our new joint operation has over 4,000,000 sq ft of projects under way on site, ranging from five-star hotels, high quality residential and retail developments to commercial offices, client fit-outs and manufacturing facilities. We are experiencing demand for expert skills in design co-ordination, value engineering, procurement and schedule control, project logistics, site safety planning, construction implementation and control. By combining global experience with local knowledge, quality, safety and scheduling can be improved and real value can be delivered. The Indian economy continues to expand as it catches up with the rest of Asia, creating demand for public and private infrastructure. Its growth is also attracting investment from multinational manufacturing companies keen to take advantage of India’s relative stability, inexpensive labor, large population and rising middle class consumer market. The combination of these factors creates an environment that we anticipate will underpin our continued growth in India.

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NUCLEAr POWER HOW CAN EMBARKING COUNTRIES ESTIMATE CONSTRUCTION COSTS?

More than 45 countries are actively considering introducing nuclear power in their future energy mix.1 Potential newcomers to the nuclear market include industrialized, emerging and developing nations. All face the challenge of evaluating commercial proposals from nuclear technology vendors, estimating the cost of construction and operating the new nuclear power plants. First-generation nuclear energy aimed to alleviate urban smog caused by coal-fired power plants, progressing to economical base-load electricity which reduced dependence on fossil fuels imports. Today’s drivers for nuclear build have evolved and are now focused on meeting increasing energy demand, helping reduce climate change, providing supply security and providing insurance against future carbon based fuel price exposure. Civil nuclear power now supplies almost 13.5 percent of global electricity needs, from reactors in 31 countries. Although the main growth is likely to come from

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countries where the technology is already well established, embarking countries may become significant players. Urbanization in lessdeveloped countries is re-shaping energy demand patterns, augmented by global population growth and a need to renew generating stock in the U.S. and E.U. Countries embarking on new nuclear power plants (NPPs) have much to consider. These are multi-billion mega projects of national importance, politically sensitive, with rigorous safety and security standards. Capital costs remain high, although global cooperative schemes and repeat production of new plants may drive construction costs down and further increase nuclear’s competitiveness. Employers face issues around public and government support, licensing, financing, grid

connection, labor, skills shortages, environmental compliance, organizing the fuel supply, agreeing on decommissioning arrangements, and multiple-stakeholder sites. Cost accuracy is a high priority from the outset. The cost estimate is a critical component for the business case, establishing a baseline from which performance can be measured. Estimates are best prepared using an informed scope, a realistic program and an astute procurement strategy, developed through a robust process that withstands scrutiny by stakeholders, funders and governments. KEY NPP ESTIMATE FACTORS •E  stimate accuracy reflects available level of scope definition and design, becoming more accurate as the engineering process proceeds. •S  takeholders need a full understanding of accuracy level and the associated risks. •B  enchmark data can support early estimates, but must be applied carefully following a normalization process. • The long-term nature of a new NPP project


For further information, contact Trevor Green at our Houston office. Scan the QR code for full details. necessitates a clear strategy for the assessment of escalation. • The estimate needs a mechanism for currency exchange fluctuations. •V  ariables include the site layout and facilities, and the off-site works needed (eg. marine off-loading, workers’ accommodation and transportation improvements). • As project details emerge, quantification is needed - design man-hours, volume of concrete, meters of pipes, electrical loops etc. NUCLEAR VENDOR TECHNOLOGY ASSESSMENT + SELECTION A detailed procurement strategy and process is vital, with multiple suppliers procured in a joint venture or an individual work package basis. Bids differ in terms of technology, commercial and execution matters, requiring a clear mechanism for evaluating the offers and associated risks. Risk assessment is important, as the high

contract prices and the long-term nature of NPPs force the employer to retain risks that are transferred to the supply chain on a typical engineering project. Uncertainties or exclusions within offers become risks to be owned and managed by the employer. The decision to select a vendor/delivery organization needs to be evidence-based and take account of price, whole life cost, political influences, technology experience, certainty of delivery, capability, overall capacity, in-country licensing, operating costs (including fuel) and impact on grid connection. The supply chain’s division of responsibilities need to be clearly understood, as does the responsibility for their coordination during design, construction and commissioning. The capital cost is undoubtedly the biggest influence on the business case as operating costs are relatively low - so a swift and accurate estimate shapes certainty of outcome.

Faithful+Gould has supported clients with estimating and ongoing cost management on many nuclear power projects, working with British Nuclear Fuels, British Nuclear Group, United Kingdom Atomic Energy Authority (UKAEA), British Energy, NNB GenCo, Horizon Nuclear Power, Centrica, Exelon and Ontario Power Generation. We are also contributing to thought leadership around the most effective cost management and procurement methodologies in this sector. Our most recent contribution was at the June 2013 Technical Meeting on Technology Assessment for Embarking Countries in the Nuclear Sector, organized by the International Atomic Energy Agency (IAEA) at the United Nations conference center in Vienna. The invitation to present at this event was extended via industry experts and IAEA affiliates though our relationship with major U.S. nuclear fleet operator Exelon. 1

World Nuclear Association.

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ATHENS UNEARTHED CONSTRUCTION PROJECT UNCOVERS ANCIENT ARTIFACTS

For further information, contact Martin Hirko at our Athens office. Scan the QR code for full details.

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Images: 26th Ephorate of Classical Antiquities


pyre areas and infant burials. Early bioarchaeological study of the skeletal material points to a population with interesting pathological conditions and traces of everyday hard labor. Some skeletons have metal bonds on their upper or lower extremities, and other evidence of maltreatment and possible execution. Interesting ceramic pots and other grave goods have also been found. The SNF is funding the restoration and study of the skeletal material, supervised by the 26th Ephorate of Prehistoric and Classical Antiquities, Greek Ministry of Culture, to discover more about the lives of the ancient inhabitants. Individuals’ origin, social stratification, family relationships, nutrition and diseases will be under scrutiny. Some of the artifacts will form an exhibition in the SNFCC’s canal building.

Exciting archaeological finds at the Stavros Niarchos Foundation Cultural Center (SNFCC) in Athens. One of the largest building construction projects in recent Greek history, the Stavros Niarchos Foundation Cultural Center (SNFCC) has a welcome impact on the local economy, providing jobs and infusing capital into a challenging economic landscape. The SNFCC is a donation to the Greek state by Stavros Niarchos Foundation (SNF). The project includes the construction and fitting out of new facilities for the National Library of Greece and the Greek National Opera as well as the creation of the 170,000m² Stavros Niarchos Park. Designed by Italian architect Renzo Piano, the complex is expected to open in early 2016, when the SNF will transfer control to the Greek state. The SNFCC Visitors Center, which is a light temporary structure and opened in October 2013, will operate until the SNFCC’s completion at the beginning of 2016. Two young Greek architecture students, AgisPanagiotis Mourelatos and Spyridon Giotakis,

were chosen by Renzo Piano as the winning designers, in the National Architectural Student Competition organized and funded by the SNF. The Visitors Center has simple design lines and a transparent form, which matches the aesthetics of the SNFCC. The center will provide information about SNFCC’s role, history and structure, and serve as a venue for cultural and educational events. The Faliron Delta is steeped in history, just 6km from the Acropolis, symbol of the classical spirit and civilization. Archaeological finds were discovered during construction at the 25-hectare SNFCC site, leading to a full excavation. Sections of an ancient road and a circular well with engraved clay plaques were unearthed. The construction of the well is dated in the Early Classical period (500 BCE) and was used until the Hellenistic period (323 BCE). Also discovered was a 700BCE-450BCE burial ground, containing 1059 graves, funeral

Alongside the archaeology, the SNFCC project progress has continued. Construction works have been ongoing for a year and there are now 600 workers on site. Faithful+Gould has shaped the careful scheduling and management needed to support the works, yet minimize project delays during the archaeological investigations. This disruption to the historical record needed sensitive and expert handling by the archaeology team of 70. The artifacts were recorded in situ and then removed, allowing methodical ground clearance in small sections. Weekly archaeological progress meetings with the contractor ensured good communication and informed sequencing. Although this is a region where construction timescales are typically relaxed, the project has successfully remained on schedule. The cost impact has been mitigated by our proactive risk management strategy, defined at project outset. Faithful+Gould is providing project management, program management, cost management and LEED certification coordination services for the SNFCC.

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LAYING THE FOUNDATIONS FOR

SUCCESSFUL LEARNING

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Strategic Facility Consulting helps higher education providers attract students by maintaining a more inspiring environment on squeezed budgets. Higher education is an increasingly competitive environment, where institutions vie with each other to attract students. Higher tuition fees have led to more discerning students who expect an inspiring environment that offers quality, connectivity, safety and security. Students and their families are not the only ones seeking value for money. Universities and colleges face tough decisions in balancing their budgets in a climate of funding cuts and falling endowments. Estate management may sit low on the priority list, with both capital and maintenance programs often constrained until student/faculty satisfaction and retention are affected. Delayed capital projects typically place strain on existing facilities. Maintenance tends to be the poor relation, with backlogs quickly mounting up. Faithful+Gould’s Strategic Facility Consulting (SFC) service empowers public and private higher education estate holders, enabling good stewardship of resources. We help facilities professionals assess the estate’s current performance levels and we provide options for improvement. The SFC service is tailored to individual needs and is suitably pitched to meet the client’s goals for the exercise, avoiding a too high-level or too granular approach. Beginning with a facility condition assessment, we develop objectives and fee constraints as the basis for an estate strategy that meets current and future needs. Our methodology is differentiated by its analytical approach, using qualitative

assessment that interrogates facility failure points. We ask ‘what if…?’ when considering options, and our estimators provide accurate costs. This is a much deeper view than a typical ‘statistical useful life’ equation, leading to recommendations based on code, condition, efficiency and risk. Outcomes usually include a switch from reactive to proactive capital and maintenance spending. Clients find that they can do more with less money, by making smarter choices and targeting their spending toward their highest priorities. Our recommendations can also play a role in obtaining funding, showing credible data that supports the funding application. We support our clients in making best use of the data we’ve collected, so that they can continue to make informed decisions. Higher education clients use our SFC service in different ways, depending on their needs. Georgia Tech is an interesting example of SFC utilized for maximum long-term benefit. Our relationship with the university began four years ago, when we evolved its condition assessment program, assessing a very diverse portfolio of buildings. With buildings ranging from more than 100 years old to former Olympic buildings and everything in between, Georgia Tech has faced many challenges on the way to developing its current forward-thinking facilities approach. We have supported the university with a range of projects including the library, which had multiple problems including mechanical, electrical, structural, plumbing and fire protection issues.

Our SFC exercise explored and costed the options, comparing the investment needed to maintain the existing library, versus a renovation project that better suited current and future needs. The assessment provided data that could be used to seek donor funding for renovation and the university successfully launched the project, with construction now under way. We have also developed an integrated asset management system for Georgia Tech, creating a tool that can be used going forward as we update the condition assessments every five years. The asset management system collects large amounts of data from the buildings, and makes the data easy for the university to access, utilize and manipulate. Georgia Tech can link this data with maintenance, operations and funding processes, so that the system works hard for them. SFC has the potential to transform the approach to capital and maintenance projects. In addition to higher education, we are successfully using the service to benefit clients in the healthcare and aviation sectors.

For further information, contact Ben Dutton at our Washington DC office. Scan the QR code for full details.

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Faithful+Gould is supporting Hong Kong’s active real estate and construction market.

HONG KONG’s bright future Strategically located in the center of Asia and with an economy characterized by low taxation and free trade, Hong Kong positions itself as the business, trading, finance and services hub for the region. With rivals Singapore and China gathering strength, Hong Kong is working hard to maintain its competitive edge. The construction market is currently extremely active, with a focus on infrastructure and new commercial and residential space in previously industrial areas. Infrastructure is especially buoyant, with significant investment in rail, metro, highways/tunnels, aviation and ports. Projects range from several new subway lines and a high-speed railway between Hong Kong and neighboring Guangdong province, to a cruise ship

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terminal at the city’s old airport, and a bridge, among the world’s longest, connecting Hong Kong with Macau. A large affordable housing program is under way, to support the rapidly growing population, and the commercial sector looks encouraging for some time to come.

Exhibition Center, together with a range of projects in the wider region: Credit Suisse’s new office ONE@Changi City in Singapore, for instance. Confluence also brings notable experience in the data center industry, serving Hong Kong’s thriving financial and logistics sectors.

Faithful+Gould is helping to underpin Hong Kong’s success, with several interesting projects ongoing. Our efforts are further strengthened by the addition of the Confluence project management business (see back cover). Established in 1996, Confluence has built a solid reputation as an industry leader in the delivery of projects in all sectors. Hong Kong examples include Deutsche Bank ICC, the Intercontinental Hotel and the Hong Kong Convention and

The government has a new focus on redevelopment of existing buildings, as a sustainable and space-efficient strategy. This is encouraging less developed parts of the island to open up to new business use, with supporting infrastructure progressing in tandem. Aberdeen is one example where change of use of building stock plays an important part, together with improved accessibility thanks to an MTR extension. Faithful+Gould’s pioneering cost,


For further information contact Henry Stevens at our Hong Kong office. Scan the QR code for further details.

project and program management expertise in redevelopment/change of use is being utilized in Aberdeen, on a hotel project with Hind Group. This 162-room boutique hotel is being created in a transformed 26-story former light industrial building and is due to complete in early 2014. Innovations in value management and procurement, driven by the Faithful+Gould team, have realized 30 percent savings off the hotel’s original contract price. Our redevelopment and hospitality sector expertise is also being utilized at a leading international dining and recreational club in Hong Kong. Against a background of rising expectations and affluence in Hong Kong, the club is seeking to maintain a competitive edge

in upgrading its facilities. The club’s country site, set on 3.5 acres in Tai Tam and overlooking the South China Sea, is undergoing refurbishment, together with the 30,000 sq ft town club house at Exchange Square, in Hong Kong’s Central district overlooking Victoria Harbor. The club’s executive center is also being refurbished, with Faithful+Gould providing program management for the club’s real estate portfolio. In the commercial sector, we are engaged on an interesting project for KGK Group, a specialist international mining and retail corporation with its roots in the diamond industry. Our project and cost management services support KGK’s new headquarters in Kowloon, due for completion in January 2014, and requiring office space, display

areas for uncut stones and retail jewelry, as well as security facilities. In recent weeks, we have focused on bringing together the expertise of Faithful+Gould and Confluence, resulting in a robust brand embodied by our integrated team of 29 in Hong Kong. We combine highly reputed client and sector knowledge, providing both project management and cost management strength. Our varied project portfolio also includes joint projects in partnership with our parent company Atkins, who play a key role in the planning, design and construction supervision of some of the largest and most complex multi-disciplinary projects in Hong Kong and the region.

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PROJECT MANAGEMENT IN

QATAR

Qatar’s National Vision 2030 outlines ambitious plans to transform its built environment in a market undeterred by global downturn. The government’s economic diversification strategy over the last few years has been to promote sustainable tourism by improving transport infrastructure and creating new attractions. The successful bid to host the 2022 FIFA World Cup has intensified the pace of development. The Qatar 2022 FIFA World Cup program (Q2022) has an overall focus on sustainable legacy, with more than $140 billion to be invested in transport infrastructure over the next five years. The new airport, roads and metro system will support the influx of

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World Cup visitors and benefit the country for years to come. The next five years are therefore crucial for the country’s ability to deliver its projects. Developers in the region and beyond are attracted by the scale of opportunity, but there are significant challenges ahead, all exacerbated by the speed of proposed development. This is a less mature market than the U.A.E. and construction practices are rooted in local business culture and traditions. To date, most developers are local and are only just beginning to engage with global best practice concepts. Construction costs are escalating, driven by higher prices of materials, a huge demand for skilled workers, and higher cost of living.

Project management is the cornerstone for successful delivery of projects in all countries. Qatar’s government has demonstrated its understanding by putting in place a national project management initiative called QNPM, based on global practice, and in line with Faithful+Gould’s project management best practice standards. QNPM includes planning, training and support. Although used successfully on large-scale public sector projects, smaller projects have yet to embrace the methodology. On mega projects, early project management involvement is essential for best results, ideally pre-design and pre-appointment of the design and construction team.


Qatar’s 2030 National Plan and the FIFA World Cup 2022 bring major changes to a small construction market. Good project management is the way forward.

For further information, contact Charles Kadri at our Doha office. Scan the QR code for full details.

We help our clients explore their project’s viability, define the investment needed and ascertain how best value can be achieved. Objectives and expectations can then be well understood and communicated through the stakeholder body and the supply chain going forward. Faithful+Gould’s experience in Qatar is that good project management helps alleviate many of the problems that the country’s construction faces. We use informed procurement, risk management and scheduling strategies to deliver projects in a timely and cost-effective manner. Our role progresses to monitoring and managing the contract, program and budget, ensuring high

performance, minimizing claims and delivering our client’s goals. Materials import is via Doha’s under-capacity port (while waiting for completion of the new port) and delivery is via a heavily congested road system, so careful and realistic scheduling is vital. Our risk assessment helps clients to understand the issues around contractor quality and capability, ensuring the resource is available in a market constrained by shortages of qualified operatives and labor. We also find that experience is needed to navigate ministries, local authority and utility approvals as these can be very unclear. We have a growing portfolio of projects in

Qatar, including Shaza Kempinski hotel where we are providing project and cost management services, and Lusail Light Rail Transit (LRT) system, where we provided cost management services. We are developing a suite of standard forms of contract for a Qatari government procurement program, and we are also working with our parent company Atkins to support Qatar’s Central Planning Office in their aim to implement best practice systems. Faithful+Gould has identified Qatar as a core growth area for our Middle East operation. We are committed to providing support for the nation and all our work is closely aligned with the 2030 vision.

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®

USE TIME ON TOOLS FOR MORE EFFICIENT

CREWS control Building maintenance costs are rising and budgets are shrinking, forcing facility managers to do more with less. The first rescue strategy often suggested to cash-strapped facility managers is downsizing the maintenance operation. However, downsizing typically reduces service quality, producing unwanted business consequences such as increased employee turnover and more sick days. Greater efficiency is the next typical suggestion for a leaner and fitter organization, and it is certainly a step in the right direction. The challenge for many organizations is that the level of detail required for informed decisions to increase efficiency is simply not available. Without a detailed understanding of what is happening on the ground for the facilities maintenance operation, the wrong conclusions may be drawn. Time on Tools® allows facility managers to quantify and understand exactly what maintenance crews are doing – and should be doing. Firstly, the tool determines the nature and extent of barriers that reduce efficiency. Aided by the Time on Tools® findings, analysis and conclusions, a plan to mitigate those barriers can be formulated. Best of all, as average costs can be applied to the data, an informed estimate of potential savings can be determined. Any process improvement initiative needs a way to measure its success. Time on Tools® provides a yardstick to measure current

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status against historical industry data. Benchmarking comparisons allow the effectiveness of mitigation initiatives to be measured against industry best practices. Our experience has shown that facilities maintenance crews have historically averaged a working time of only 44 percent of a shift, or three and a half hours out of an eight-hour shift. That’s four and a half hours per day on work authorization and distribution, travel, waiting on tools and materials, and on breaks. Travel time is usually a significant factor in this equation – and, of course, this can be affected by the location or layout of the facility. Inefficient work distribution can exacerbate travel issues by crews running around in circles rather than considering work locations when planning the day’s activities. The majority of logistics delays tend to be related to materials distribution, tools being generally carried with the crews. Planning materials requirements well in advance, as well as optimizing the location and stock volume of lay-down / storage areas, is a vital part of the overall process but one that is often ignored. Time on Tools® highlights the magnitude of these and other areas of inefficiency for individual businesses and allows owners to make informed decisions that can help increase working time by 20-25 percent.

A collaborative environment is the key to success for this exercise. The maintenance crew’s opinions are actively sought and valued. These are reported anonymously and non-confrontationally to the owner, eliciting constructive feedback and alleviating any union objections. We identify barriers to efficiency without making judgments about which party, owner or crew, is responsible. This sets the scene for objective exploration and improvement. Faithful+Gould originally developed Time on Tools® as part of our productivity analysis and benchmarking services for refineries and chemical facilities. We have successfully utilized this service for major owners in this sector, including BP, ExxonMobil, Shell, Tesoro and Valero. Building on this industrial heritage, as these best practice methodologies and strategies have matured, we are taking them into other sectors. The biotechnology, pharmaceuticals, high-tech manufacturing, real estate and retail industries are now seeing the benefit of Time on Tools®. To date, we have completed over 850 full-shift Time on Tools® studies, equivalent to nearly 20 years of man-hours observed, for owners across the U.S. The National Research Council (NRC) recommends that annual maintenance funding should total two to four percent of the physical plant replacement value. On a replacement value of $1 billion, even a 10 percent increase in Time on Tools® Working Time would equate to savings of $3 million. This is a realistic prospect for clients using our service.


For further information, contact Dan Leng at our Los Angeles office. Scan the QR code for full details.

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buyer’s

Market

BUSINESS IS BOOMING FOR U.A.E. SHOPPING MALLS

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Retail has been one of the fastest-growing industries in the Middle East region for the last decade, remaining buoyant during global downturn and with plenty of scope for future activity. As the GCC region’s second largest sector, retail makes a major contribution to economic diversification and development. The retail culture has evolved from traditional outlets to today’s large shopping malls, hypermarkets and supermarkets, with an influx of premium and luxury brands to the region. Increased populations, urbanization, indigenous and expatriate wealth, strong household consumption and a growing tourism sector continue to provide ideal conditions for growth.

The larger developments target broad lifestyle appeal, going beyond shopping to improve the total mall experience. They act as a social hub for families and friends, offering air-conditioned environments with food and beverage, cinemas, bowling etc. These leisure and entertainment offers are core drivers of retail footfall and have become more competitive and ambitious, with the more innovative attractions ranging from skiing and aquariums to indoor sky diving and children’s educational play centers.

The U.A.E. has led the way in this sector and the more mature markets such as Dubai still have ample opportunity for neighborhood malls and mini-malls. As the population grows further and new leisure attractions draw more tourists in, additional large-scale shopping is likely to develop. Abu Dhabi has traditionally lagged behind, with high spenders typically heading for Dubai for shopping trips, but this is now starting to change. Deerfields Town Square and The Galleria have opened in Abu Dhabi this year, with several more in the planning process, amounting to an estimated further one million square meters of retail space between 2013 and 2017.1 Saudi Arabia, Qatar and Kuwait are also buoyant.

In this competitive arena, developers differentiate on scale, quality, accessibility and the introduction of new brands to the locality. Anchor stores are especially important for the major malls, as demonstrated by the recent arrival of Bloomingdales and House of Fraser in Abu Dhabi, an international first store for both companies.

The arrival of international brands continues to drive diversity and intensify competition for space in the premier malls. This is no longer the place for bargains and the market therefore focuses on its luxury offer and lifestyle positioning. In a region where the climate can limit outdoor entertainment, visiting the mall has become a recreational activity.

In more mature markets, a mall’s popularity decreases over time as new offers appear. Footfall lessens, tenant mix decreases and the mall typically slides into a secondary market position. We are now seeing a lot more refurbishments coming to market – in Dubai, for example – with owners often adding new leisure offers to revitalize their business proposition and recapture/retain their customers. Faithful+Gould has developed a hub of specialist expertise from our Dubai office, collaborating with our regional offices to work with clients in each country. Our strengths include an excellent understanding of the Middle East retail sector, which enables us to support clients from the

earliest speculative stages. Clients often need very early estimates where only a piece of land exists, and we are able to provide these together with ideas for the building, infrastructure and carparking planning. We also work with tenants, managing enhancements to meet corporate global brand standards in smaller units as well as large department stores. We leverage buying efficiencies to lower overall costs and also review fit-out timescales, as even a week’s saving on a small store brings an earlier return on investment. Increasingly we support global clients in their multiple locations, including global brands like Nokia and RBS. We provide a full pre- and post-contract project and commercial management service, for new land owners as well as experienced developers. Many clients ask us to help them verify their budgets in order to obtain funding and to calculate projected profits. We can also bring lease advisors on board. Our understanding of the sector is underpinned by solid benchmarking data which enables us to challenge and interrogate development plans, ensuring that our clients’ interests are protected and best value is achieved. Our track record includes a range of retail and mixed use developments throughout the region. 1

Jones Lang LaSalle.

For further information, contact Donal O’Leary at our Dubai office. Scan the QR code for full details.

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Strengthening

our brand

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U.K. AND EUROPE

In October, Atkins acquired Confluence, a project management business employing over 200 people with operations in Singapore, Hong Kong, Abu Dhabi and India. Confluence is an international consultancy offering services in project and construction management, and specialist programming and planning. The company has built a solid reputation as an industry leader in the delivery of projects in all sectors including leisure facilities, commercial developments, residential, hotels, corporate real estate, data center and mission-critical facilities, retail and mixed-use developments. Some of their iconic projects include the Singapore Grand Prix, where they are the engineering project manager; Marina Bay Sand Integrated Resort, Singapore; Yas Island Hotel, Abu Dhabi; The Index Building, Dubai, and a host of other projects for Indian developers and international investment banks such as Deutsche Bank, Credit Suisse and American Express. The acquisition complements Faithful+Gould’s project and cost management consultancy

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business, augmenting our presence in the commercial, retail and hospitality sectors. It’s also an important further step in the delivery of our strategy to increase our regional focus and grow our business in Asia Pacific and the Middle East. This leverages our capability to effectively manage and deliver increasingly complex projects for our global clients. Guy Scott, Executive Chairman of Confluence (pictured above right), reports to Donald Lawson, Faithful+Gould’s Chief Executive Officer (pictured above left), and joins the leadership team. Confluence will be integrated under the Faithful+Gould brand and the Confluence management team will have an integral role in the combined business, bringing their highly reputed client and sector knowledge and complementary regional presence, capability and capacity.

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Solutions - Issue 34 (Americas)