United States. Ireland. Middle East. Dublin. Iowa & Virginia. Riyadh. New bio-pharma production facility for Amgen

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3 3 United States Middle East Ireland Dublin New bio-pharma production facility for Amgen Riyadh Program management for data centres, HQ offices and retail stores for Mobily Iowa & Virginia Cost management of data centres for Microsoft

4 CONTENTS 1 Global Construction Developing Markets Offer Business Development Opportunities 6 15 Largest Construction Markets in Largest Construction Markets in Construction Output Growth Rates in Developed Countries 9 Construction Output Growth Rates in Emerging Markets 9 Index of International Construction Costs 9 Top 20 International Contractors 10 Top 20 International Design Firms 11 Global Inflation % 12 Overview of Percentage Change in Global Output 12 Oil Production / Consumption Statistics 13 2 Europe European Market Review 16 Production Index in the Construction Sector 17 Construction Output - Annual Variation 17 Top 15 European Contractors 18 Top 15 European Design Firms 18 Construction Cost - New Residential Building 19 Consumer Inflation v Construction Inflation 20 EU Labour Costs and Productivity 20 EU Procurement Timescales 21 EU Procurement Thresholds 21 Currency Movements - Euro vs Various European Currencies 21 3 Ireland Ireland Market Review 24 Value of Construction Output 24 Construction Output 24 Gross National Product 24 Construction Purchasing Managers Index Report 25 Historical Property Performance Total Return % 25 Bruce Shaw Tender & Cost Indices 26 SCSI Tender Price Index 27 Consumer vs Construction Price Inflation 27 Annual Numbers Employed in Construction 27 Bruce Shaw Average Irish Construction Costs 28 Basic Hourly Wage Rates 30 Basic Hourly Wage Rates Mechanical & Electrical 30 The Top Irish Main Contractors 31 The Top Irish Services Sub-Contractors Turnover 31 Annual Housing Completions 33 New Housing Completions by Type 33 SCSI Rebuilding Costs per sq.m 34 Planning Charges 35 Fire Certificate Charges 35 4 United Kingdom UK Market Review 38 UK Construction Output 39 Public Sector Output 39 Private Sector Output 39 UK Tender Price Index 40 UK Regional Tender Price Index 40 Resource Cost Index of UK non-housing building 41 Numbers of Employed & Self Employed in Construction 41 Standard Hourly Base Rates for Labour 42 Top UK Main Contractors 42 Top UK Architects 43 Top UK Engineering Firms 43 Bruce Shaw Average UK Construction Costs 44 House Building Starts and Completions 46 Average Procurement lead in times 46 The UK Housing Market Olympics 48 Euro vs Sterling 48 5 Middle East Middle East Market Review 52 GCC Hydrocarbon Dependence 52 GCC Stimulus Packages 52 Value of Projects by Country 53 Middle East Commodity Prices 54 Prices of Building Materials in Abu Dhabi 54 UAE, Bahrain and Qatar in Brief 55 Saudi Arabia in Brief 56 Saudi Arabia Key Budgetary Allocations 56 Saudi Arabia Housing Requirements by Region 57 Regional Building Cost Comparisons 57 Top 10 Infrastructure Projects in the GCC 58 Middle Eastern Design Firms 58 GCC Nations Main Contractors 59 GCC Single Currency Update 59 6 United States US Market Review 62 Value of Construction Output Public / Private 63 US Construction by Type of Work 63 Annual Construction Cost Index 64 US Regional Building Cost Index 64 Employment in Construction 64 Change in U.S. Employment in Construction 65 US Earnings in Construction 65 Top US Contractors 66 Top U.S. Design Firms 67 Euro vs. Dollar 67 2 BRUCE SHAW HANDBOOK 2012

5 7 Caribbean Caribbean Market Review 70 General Statistics for the Caribbean 70 Caribbean Country Review Bahamas 71 Barbados 71 Bermuda 71 Cayman Islands 71 Cuba 71 Curacao 72 Dominican Republic 72 Haiti 72 Jamaica 73 Puerto Rico 73 St Lucia 74 Trinidad & Tobago 74 Turks & Caicos Islands 74 Construction Costs 74 Average Cost Range 75 8 India India Market Review 78 Average Construction Costs 78 Construction Cost Indices 79 Top Infrastructure Companies in India 79 US Dollar vs. Rupee 79 9 Australia & New Zealand Australia Market Review 83 Australian Key Statistics 83 Australia Value of Construction Output 84 Building Cost Index by Capital City 84 Building Cost Index & Consumer Price Comparison 85 Dwelling Unit Commencements 85 Average Construction Costs 85 List of Tier 1 Main / Building Contractors 86 Currency Exchange Rates 86 New Zealand New Zealand Market Review 87 New Zealand Key Statistics 87 Value of Construction Output 87 Numbers Employed in Construction 88 Dwelling Unit Commencements 88 Average Construction Costs 88 List of Tier 1 Main/Building Contractors 89 Currency Exchange Rates South East Asia South East Asia Market Review 93 Carrying Out Business Throughout the World 93 Singapore Market Review 94 Value of Construction Output 94 Average Construction Costs 95 Currency Exchange Rates South East Asia continued Malaysia Market Review 96 GDP Growth Rate 96 Average Construction Costs 97 Currency Exchange Rates 97 Vietnam Market Review 98 GDP Growth Rate 98 Average Construction Costs 98 Currency Exchange Rates 99 Indonesia Market Review 100 Average Construction Costs 100 Currency Exchange Rates China China Market Review 105 China GDP Annual Growth Rate 105 Total Government Investment 106 Regional Building Cost Comparison 106 Shanghai Tender Price Index. 107 Top 20 Chinese Contractors 108 Top 20 Chinese Design Firms 109 Currency Exchange Rates Ghana Ghana Market Review 113 Ghana Key Statistics 113 GDP forecast 113 Value of Construction Output 114 Construction Output Growth Rate Forecast 114 Average Construction Costs 114 Inflation Index 115 Building Cost Index & Consumer Price Index Comparison 115 Construction Companies Active in Ghana 116 Currency Exchange Rates Topical Issues Energy and Power Generation 120 Financial Robustness of Contractors 122 Building Information Modelling (BIM) 124 The Changing Shape of Retail 126 Challenges for Consultant Project Managers within current market conditions About Bruce Shaw Bruce Shaw 132 Cost Management 133 Project Management 137 Consultancy Services 138 Health & Safety Consultancy 142 Bruce Shaw Corporate & Community Activities 144 Bruce Shaw Senior Personnel 146 Our Clients 148 CONTENTS BRUCE SHAW HANDBOOK

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7 GLOBAL CONSTRUCTION 1 BRUCE SHAW HANDBOOK

8 GLOBAL CONSTRUCTION Developing Markets Offer Business Development Opportunities Most of us will have heard the maxim which states that uncertainty is the only certainty there is. Not so many of us have heard the rest of this quotation from the great mathematician John Allen Paulos which goes on to state that knowing how to live with insecurity is the only security. For construction companies operating in many markets in Europe, uncertainty and insecurity on a level not seen since the great wars of the last century are now the norm and efforts are focused on surviving rather than thriving. The global construction market is forecast to grow by up to 5% in 2012 and the rate of increase is likely to outpace that of global GDP over the next 10 years. The trading environment in many economies within the Eurozone is defined by austerity and tightening public finances with the fate of the Euro itself being less than certain. The duration of this environment can now be measured in years rather than months and the impact on construction is plain to see as the growth trends across Europe in all construction sectors since 2008 have been negative. financial crisis, a return to growth in 2013 will likely prove too soon for those countries whose public finances are reliant on intervention and troika funds. Looking beyond Europe, the US market is likely to see improved conditions and some growth in 2012 although this will be hampered by ongoing difficulties for Developers seeking to secure funding for their projects and the shrinking of the value of the fiscal stimulus particularly in relation to infrastructure development. Whilst continued year on year growth is also predicted for the Australian construction market, fears are being expressed that the significant property price rises observed in recent years which have occurred on the back of commodities led economic growth could also be a bubble which will burst soon with inevitable consequences. Commentators in Australia hold opposing views as to what will happen next and what has to be done if anything to cool the market with many of the voices again echoing the refrain that this time, it s different. The Canadian market will also continue to grow strongly as it mirrors Australia with a commodities led boom albeit with less exposure to rising property values. Analysis of the recent contraction in European construction output indicates that the contraction was not evenly spread. In 2011 for example, we see Poland at one extreme experiencing upwards of 12% growth whilst at the other end, Spain saw their construction output contract by over 19%. Whilst many European nations have reached the bottom of their construction cycles hastened no doubt by the The Kingdom of Saudi Arabia and Qatar will continue to see strong growth in The changing politics of a number of the Arab nations such as Egypt and Libya may also see significant growth as the new governments seek to recommence stalled projects and to implement social enhancement programmes including the development of housing and educational facilities. 6 BRUCE SHAW HANDBOOK 2012

9 SECTION 1 GLOBAL CONSTRUCTION Output in China and India will continue to achieve Demographic trends may also see notable growth in significant growth albeit not in double digits and South American and South East Asian markets albeit it is possible that governments in both countries at lower rates of expansion than those of the BRICs. will take action to cool their markets in the face of (Brazil, Russia, India and China). rapidly increasing construction inflation. China is also The global construction market is forecast to grow facing significant increases in property values and by up to 5% in 2012 and the rate of increase is likely whilst it is being said that what is being referred to to outpace that of global GDP over the next 10 years as China s Housing Bubble is different than those as the developing economies forge ahead led by observed elsewhere, quick action by the Chinese China and India. Activity in the developed economies government could significantly reduce any risks will also accelerate during the same period led by the posed by such a bubble for the wider economy. US, Australia and Canada. For those European firms One country to watch in 2012 is Russia which is operating in shrinking markets, the only way to thrive expected to see significant market growth as natural will be to seek work in other jurisdictions. Recent gas and oil production increase with a corresponding developments in the construction professional increase in investment, infrastructure and services sector indicate that there is a growing development for upcoming sporting events. recognition of the need to expand global coverage and to diversify in terms of knowledge and skills. 15 Largest Construction Markets in 2010 $ 7.5 trillion 1 GLOBAL CONSTRUCTION 15 Largest Construction Markets in 2020 $ 12.7 trillion (forecast) Source: Global Construction Perspectives & Oxford Economics Source: Global Construction Perspectives & Oxford Economics BRUCE SHAW HANDBOOK

10 GLOBAL CONSTRUCTION One country to watch in 2012 is Russia which is expected to see significant market growth as natural gas and oil production increase.

11 SECTION 1 GLOBAL CONSTRUCTION Construction Output Growth Rates in Developed Countries Construction Output Growth Rates in Emerging Markets Average % pa Rates of Change (f) (f) Western Europe Northern America Asia Pacific (Developed) Average % pa Rates of Change (f) (f) Source: Global Construction Perspectives and Oxford Economics Source: Global Construction Perspectives and Oxford Economics 1 GLOBAL CONSTRUCTION Eastern Europe South and Central America Asia Pacific (Emerging) Middle East and North Africa Sub Saharan Africa Index of International Construction Costs Source: Bruce Shaw India China Romania Hungary Czech Republic Poland UAE Greece Spain USA Ireland Italy Australia UK Germany France Sweden Japan Switzerland BRUCE SHAW HANDBOOK

12 GLOBAL CONSTRUCTION The Top 20 International Contractors Based on Total Firm Contracting Revenue Rank Revenue Firm $ bn 1 1 CHINA RAILWAY CONSTRUCTION CORP., China CHINA RAILWAY GROUP, China CHINA STATE CONST. ENGINEERING CORP., China VINCI, France CHINA COMMUNICATIONS CONST. GROUP, China BOUYGUES, France CHINA METALLURGICAL GROUP CORP., China HOCHTIEF, Germany GRUPO ACS, Spain BECHTEL, U.S.A LEIGHTON HOLDINGS, Australia EIFFAGE, France FLUOR CORP., U.S.A FCC, Spain SINOHYDRO CORP., China SKANSKA, Sweden SHIMIZU CORP., Japan KAJIMA CORP., Japan OBAYASHI CORP., Japan SHANGHAI CONSTRUCTION GROUP, China ranking is based on 2010 construction contracting revenue. The Top 20 International Contractors Based on Contracting Revenue from Projects Outside Home Country Rank Revenue Firm $ bn 1 1 HOCHTIEF, Germany VINCI, France BECHTEL, U.S.A BOUYGUES, France SKANSKA, Sweden SAIPEM, Italy FLUOR CORP., U.S.A STRABAG, Austria TECHNIP, France FCC, Spain CHINA COMMUNICATIONS CONST. GROUP, China GRUPO ACS, Spain BILFINGER BERGER, Germany KBR, U.S.A CONSTRUTORA NORBERTO ODEBRECHT, Brazil LEND LEASE GROUP, Australia ROYAL BAM GROUP, The Netherlands CONSOLIDATED CONTRACTORS GROUP, Greece BALFOUR BEATTY, U.K CHINA STATE CONST. ENGINEERING CORP., China 4.87 Source: Engineering News Record Source: Engineering News Record 2011 ranking is based on 2010 construction contracting revenue. 10 BRUCE SHAW HANDBOOK 2012

13 SECTION 1 GLOBAL CONSTRUCTION The Top 20 International Design Firms Rank Revenue Type of Firm Firm $ bn 1 1 EA AECOM TECHNOLOGY CORP., U.S.A EAC URS CORP., U.S.A EAC JACOBS, U.S.A EC WORLEYPARSONS, Australia EA CH2M HILL, U.S.A E AMEC PLC, U.K EC FLUOR CORP.,U.S.A E FUGRO, The Netherlands EC SNC-LAVALIN INTERNATIONAL, Canada E ARCADIS, The Netherlands EC M + W GROUP, Germany E TETRA TECH, U.S.A EC BECHTEL, U.S.A EA ATKINS, U.K EC KBR, U.S.A EA DAR AL-HANDASAH CONSULTANTS, Egypt EC BALFOUR BEATTY, U.K EC CHINA COMMUNICATIONS CONST. GROUP, China E MOTT MACDONALD GROUP, U.K EC HYDROCHINA CORP., China ranking is based on revenue for design services performed in Key to Type of Firm: A architect; E engineer; C contractor The Top 20 International Design Firms Based on Total Firm Revenue Based on Revenue from Projects Outside Home Country Rank Revenue Type of Firm Firm $ bn 1 2 EC WORLEYPARSONS, Australia E FUGRO, The Netherlands EA AECOM TECHNOLOGY CORP., U.S.A E AMEC PLC, U.K EAC JACOBS, U.S.A E ARCADIS, The Netherlands EC FLUOR CORP., U.S.A EA DAR AL-HANDASAH CONSULTANTS, Egypt EC KBR, U.S.A EC SNC - LAVALIN INTERNATIONAL, Canada EC M + W GROUP, Germany EC BALFOUR BEATTY, U.K EC TECNICAS REUNIDAS, Spain EC BECHTEL, U.S.A E MOTT MACDONALD GROUP, U.K E ARUP GROUP, U.K EAC URS CORP., U.S.A E AURECON, Singapore E TECHNIP, France EA ATKINS, U.K Source: Engineering News Record Source: Engineering News Record 1 GLOBAL CONSTRUCTION 2011 ranking is based on revenue for design services performed in Key to Type of Firm: A architect; E engineer; C contractor BRUCE SHAW HANDBOOK

14 GLOBAL CONSTRUCTION Global Inflation 2011 Overview of Percentage Change in Global Output (f) 2013(f) Advanced Economies United States 3.0% 1.8% 1.8% 2.2% Euro area 1.9% 1.6% -0.5% 0.8% Germany 3.6% 3.0% 0.3% 1.5% France 1.4% 1.6% 0.2% 1.0% Italy 1.5% 0.4% -2.2% -0.6% Spain -0.1% 0.7% -1.7% -0.3% Japan 4.4% -0.9% 1.7% 1.6% United Kingdom 2.1% 0.9% 0.6% 2.0% Canada 3.2% 2.3% 1.7% 2.0% Emerging & Developing Economies Central & Eastern Europe 4.5% 5.1% 1.1% 2.4% Russia 4.0% 4.1% 3.3% 3.5% Middle East & North Africa 4.3% 3.1% 3.2% 3.6% China 10.4% 9.2% 8.2% 8.8% India 9.9% 7.4% 7.0% 7.3% Brazil 7.5% 2.9% 3.0% 4.0% Mexico 5.4% 4.1% 3.5% 3.5% South Africa 2.9% 3.1% 2.5% 3.4% January 2012 Source: International Monetary Fund / Source: International Monetary Fund World output 5.2% 3.8% 3.3% 3.9% 12 BRUCE SHAW HANDBOOK 2012

15 SECTION 1 GLOBAL CONSTRUCTION Oil Production Rank Country Barrels / Day 1 2 Saudi Arabia 10,520, Russia 10,130, United States 9,688, China 4,273, Iran 4,252, Canada 3,483, Mexico 2,983, United Arab Emirates 2,813, Brazil 2,746, Nigeria 2,458, Kuwait 2,450, Iraq 2,408,000 Oil Consumption Rank Country Barrels / Day 1 1 United States 19,150, European Union 13,730, China 9,189, Japan 4,452,000 Rank Country Barrels / Day Venezuela 2,375, European Union 2,276, Norway 2,134, Algeria 2,078, Angola 1,988, Libya 1,789, Kazakhstan 1,610, Qatar 1,437, United Kingdom 1,393, Azerbaijan 1,041, Indonesia 1,030, India 954,000 Rank Country Barrels / Day France 1,861, Iran 1,845, United Kingdom 1,622, Italy 1,528,000 Source: CIA World Fact book Source: CIA World Fact book 1 GLOBAL CONSTRUCTION 5 5 India 3,182, Spain 1,441, Russia 2,937, Indonesia 1,292, Brazil 2,654, Singapore 1,080, Saudi Arabia 2,643, Netherlands 1,009, Germany 2,495, Taiwan 1,002, Korea, South 2,251, Thailand 988, Canada 2,209, Australia 960, Mexico 2,073, Venezuela 746,000 Note: 2011 rank is based on based on 2010 production / consumption levels Staff / pictures BRUCE SHAW HANDBOOK

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17 EUROPE 2 BRUCE SHAW HANDBOOK

18 EUROPE European Market Review Deficit, the second most used word globally in 2011 according to the Global Language Monitor and indeed it could be argued that in Europe it became the most used word, followed closely by austerity and sovereign debt. These are not words that bode well for growth in 2012 in Europe. The IMF s World Economic Outlook clearly states that high public deficits and debt, lower potential output, and mounting market tensions are weighing on growth in much of advanced Europe. The impact of the various European governments austerity programmes has hit all areas of public expenditure, and in particular capital expenditure programmes. In addition, the debt crisis also impacts on the private banking system, and will lead to pressure on bank funding and the possible risk of another deep credit crunch. Governmental austerity measures and financing problems in the private sector have resulted in a decrease in building construction of 2.2% in the EU27 and a fall in civil engineering of 0.6% in the EU27. The austerity measures that are being implemented have impacted on the absorption rate of European Commission Cohesion and Structural Funds throughout the EU27, however more so in Central Governmental austerity measures and financing problems in the private sector have resulted in a decrease in building construction of 2.2% in the EU27. & Eastern Europe (CEE). The European Commission, in conjunction with the The European Investment Bank (EIB), is trying to provide support to member states in absorbing funds by using financial engineering initiatives. These initiatives provide opportunities for not only member states in fund absorption, but also private industry. It is now more necessary than ever, to seek out positives in the market place and increase industry sentiment. The fact is, whilst there are currently only a few, there are in existence, cash rich companies that are now moving in to the market place, seeking out and acquiring assets to develop. Whilst the halcyon days in terms of high fees and profit margins are gone, such movement in the construction industry indicates that the economic woes and uncertainty will come to an end, sooner rather than later and that more such companies will emerge from behind the parapet, the ultimate result being a more sustainable and evenly balanced industry. Primark, Zaandam 16 BRUCE SHAW HANDBOOK 2012

19 SECTION 2 EUROPE Production Index in the Construction Sector Euro area, seasonally adjusted series EU27, seasonally adjusted series Trendline Trendline Source: Eurostat EUROPE = Note: The production in construction index shows the output and activity of the construction sector. It measures changes in the volume of output on a monthly basis. Construction includes building construction and civil engineering. Construction Output Annual Variation % change compared with the same quarter of the previous year Total Q4-10 Q1-11 Q2-11 Q3-11 Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland N/A Greece Spain France Italy Cyprus N/A Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom EU Average Building Average Civil Engineering Average Source: Eurostat BRUCE SHAW HANDBOOK

20 EUROPE The Top 15 European Contractors Based on Total Revenue Rank Turnover Firm bn 1 1 VINCI, France BOUYGUES, France HOCHTIEF, Germany GRUPO, Spain EIFFAGE, France FCC, Spain SKANSKA, Sweden STRABAG, Austria BALFOUR BEATTY, U.K SAIPEM, Italy BILFINGER BERGER, Germany ROYAL BAM GROUP, The Netherlands TECHNIP, France SACYR VALLEHERMOSO, Spain FERROVIAL, Spain ranking is based on 2010 construction revenue The Top 15 European Design Firms Based on Total Firm Revenue Rank Revenue Type of Firm Firm bn 1 1 E AMEC, U.K E FUGRO, The Netherlands E ARCADIS, The Netherlands EA WS ATKINS, U.K EC BALFOUR BEATTY, U.K E MOTT MACDONALD GROUP, U.K E ARUP GROUP, U.K EC TECNICAS REUNIDAS, Spain E GRONTMIJ, The Netherlands E WSP GROUP, U.K E RAMBOLL GROUP, Denmark EC EGIS, France E MOUCHEL, U.K EC TECHNIP, France E POYRY, Finland 0.69 Source: Engineering News Record Source: Engineering News Record Note: 2011 ranking is based on revenue for design services performed in Key to Type of Firm: A architect; E engineer; EC engineer-contractor 18 BRUCE SHAW HANDBOOK 2012

21 SECTION 2 EUROPE Construction Cost - New Residential Buildings Index (2005=100) Belgium N/A Bulgaria N/A Czech Republic Denmark e Germany Estonia Ireland Greece Spain e France e Italy N/A N/A N/A N/A N/A Cyprus N/A Latvia Lithuania Luxembourg e N/A Hungary e Netherlands e Austria Poland N/A Portugal Romania e Slovenia Slovakia Finland Sweden e United Kingdom e N/A Turkey e Norway European Union Average Notes: N/A = Not available e = Estimated value Q1 Q3 Q1 Q3 Q1 Q3 Source: Eurostat 2 EUROPE Parklake Plaza, Bucharest BRUCE SHAW HANDBOOK

22 EUROPE Consumer Inflation v s Construction Inflation % 4% 3% Source: Eurostat 2% 1% 0% -1% -2% -3% -4% European Union Average Consumer Inflation New Residential Construction Cost EU Labour Costs & Productivity 2011 Country Productivity Cost / Hr Austria Cyprus N/A N/A Czech Republic Denmark Estonia 42 N/A Finland 75 N/A France Germany Greece Hungary Ireland Italy Latvia N/A 5.17 Lithuania N/A 4.86 Luxembourg Netherlands Poland Portugal Romania N/A 3.34 Slovakia Slovenia Spain Sweden UK Source: Productivity figures are from OECD for 2010 and based on GDP per hours worked for the whole labour market. Cost/Hr data source - Eurostat up to 3rd Qtr of 2010, except for: Netherlands 2nd Qtr Cost/Hr is for all construction employment types 20 BRUCE SHAW HANDBOOK 2012

23 SECTION 2 EUROPE EU Procurement Timescales 2012 Prior Indicative Notice (PIN) Publish at least 52 days prior to date contract notice is dispatched to avail of reduced time limits (max. 12 mths). Open Procedures Time Limit for Receipt of Tender If no PIN: not less than 52 days If PIN: General rule minimum time 36 days and in any case not less than 22 days from date contract notice is dispatched Restricted Procedure Time Limit for Receipt of Expressions of Interest Not less than 37 days from date contract notice is dispatched Time Limit for Receipt of Tenders If no PIN: Not less than 40 days If PIN: General rule minimum time 36 days. This may be reduced in certain cases but in no circumstances less than 22 days from the date invitation to tender is dispatched Accelerated Restricted Procedure Time Limit for Receipt of Expressions of Interest is dispatched Time Limit for Receipt of Tenders tender is dispatched Negotiated Procedure with Prior Publication of a Contract Notice Time Limit for Receipt of Application is dispatched Negotiated Accelerated Procedure with Prior Publication of a Contract Notice Time Limit for Receipt of Application is dispatched Contract Award Notice Time Limit for Receipt of Issue Source: 2 EUROPE EU Procurement Thresholds 2012 Works Contract Notice 5,000,000 Threshold applies to Government Departments and Offices, Local and Regional Authorities and other public bodies. Supplies and Services Contract Notice 130,000 Threshold applies to Government Departments and Offices Contract Notice 200,000 Threshold applies to Local and Regional Authorities and public bodies outside the Utilities sector. Source: Utilities Works Contracts / Prior Indicative Notice 5,000,000 For entities in Utilities sectors covered by GPA Supplies and Services 400,000 For entities in Utilities sectors covered by GPA Note: The above thresholds are valid until 31 December 2013 Currency Movements Euro v Various European Currencies Bulgarian lev BGN Croatian kuna HRK Czech koruna CZK Danish krone DKK Hungarian forint HUF Polish zloty PLN Romanian leu RON Russian rouble RUB Year 2012* Turkish lira TRY Source: European Central Bank *Note: Based on January exchange rates BRUCE SHAW HANDBOOK

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25 IRELAND 3 BRUCE SHAW HANDBOOK

26 IRELAND Ireland Market Review The Irish construction industry peaked in 2007 with an output of over 38 billion. At 24% of GNP this was an unsustainable level. Since then the industry has declined rapidly as shown in the graph below. Bruce Shaw predicts that output in 2011 was approximately 8.5 billion and output in 2012 will fall further to approximately 7 billion. These levels of output represent 7% and 5.5% respectively of a much reduced GNP. The widely accepted norm for construction output is 12% to 13% of GNP so it is clear that the industry in Ireland has seriously over-corrected. By the end of this year output in the industry will have fallen by 82% from its peak. Unfortunately, the over-correction in output has lead to the loss of almost 200,000 direct and indirect jobs in the sector and inevitably the loss of many skills which will be needed again when eventually the industry returns to its more normal output levels. The over-correction has also resulted in contractors and sub-contractors tendering for the diminishing volumes of work available at prices which are below cost. This is an unsustainable situation for any period of time and is one of the major reasons for the high profile failure of both construction and consultancy firms. In November 2011 the Government published its Infrastructure and Capital Investment Framework for This shows a much reduced expenditure on the public side of 3.94 billion in 2012, reducing to 3.37 billion in 2013 and further reducing to 3.25 billion for the following three years. There is very little activity on the private side of the industry either. Commercial projects have been hampered by over-supply, lack of funding and delays and uncertainty related to NAMA projects. By the end of this year output in the industry will have fallen by 82% from its peak. Looking forward though, there are some glimmers of hope that 2012 will see construction output bottom out after 5 years of massive decline. The reduction in construction prices has been reversed, there is renewed investment by the multi-national technology and pharmaceutical industries and a gradual return of some private sector activity particularly in commercial office fit-outs for both Irish and overseas occupiers. If global financial concerns can be overcome and some confidence recovered locally hopefully 2013 will see the start of a slow recovery for the industry. Value of Construction Output m ,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 Source: DKM / Department of Environment, Heritage & Local Government / Bruce Shaw DKM 2010 DKM / Dept. of Environ. 10 Forecast Bruce Shaw Forecast (F) BS 2010 (F) BS 2011 (F) BS 2012 (F) Construction Output (f) 2011 (f) Value of Output at Current Prices ( m) 38,601 32,593 18,048 11,733 8,500 Change in Value of Output (%) 0% -16% -45% -35% -28% Construction Output as % of GNP Source: DKM / Department of the Environment / Bruce Shaw Gross National Product (GNP) (f) GNP at Current Prices ( m) 163, , , , ,500 % Change in GNP 5.4% -5.3% -14.5% -3.0% -2.1% Source: CSO / ESRI 24 BRUCE SHAW HANDBOOK 2012

27 SECTION 3 IRELAND Construction Purchasing Managers Index Report June 2001 January = no change on previous month 70 Increasing rate of growth Source; Ulster Bank 3 IRELAND 20 Increasing rate of contraction Ulster Bank Construction PMI Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Jan-12 Total Activity (graphed above) Housing Commercial Civil Engineering Historical Property Performance Total Return % , Source; IPD / SCSI % return per quarter Index Value (shaded area) Dec. 96 Dec. 01 Dec. 06 Dec All Property Index All Property Retail Office Industrial BRUCE SHAW HANDBOOK

28 IRELAND Bruce Shaw Tender & Cost Indices The first half of 2011 saw Irish construction tender prices bottoming out and the Bruce Shaw Tender Price Index, which is shown graphically below, shows that prices rose in the full year by 2%. Prices are still at levels not seen since the late 1990 s but it seems that the race to the bottom has halted. Contractors and sub-contractors have realised that below cost tendering is not sustainable in the long run, as evidenced by some well publicised company failures. Looking forward, all sectors of the industry, both public and private, remain very depressed with a shortage of work in all categories. This will mean that prices will remain very competitive but we predict that they will rise by a further 3% during In later years we predict that prices are then likely to increase generally in line with inflation from 2013/14 onwards. For Clients this means that project budgets spanning a number of years will once more have to allow for future tender price inflation. Contractors and sub-contractors have realised that below cost tendering is not sustainable in the long run It is important to distinguish between construction input costs and tender prices. The former reflect the actual costs of labour and materials while the latter reflect market trends of supply and demand. Irish construction labour rates, which remained unchanged since January 2008, were reduced by 7.5% in February 2011 after prolonged negotiations with the construction trade unions. The prices of some materials are reducing also but by less than might be expected since local manufacturers are experiencing smaller production volumes and imported commodities such as steel and copper reflect global demand. Overall the Bruce Shaw Construction Input Cost Index declined by 2% in 2011 and we predict that it will fall by a further 1% in 2012 and will then bottom out at that level. The small increase in tender prices coupled with the small decrease in construction input costs is shown as a narrowing of the gap between the two bars on the graph below and this is to be welcomed as a sign of reality starting to come back into the marketplace. However prices remain very competitive and we reiterate our advice to Clients from last year s Handbook that they should look carefully at the financial strength of contractors and their ability to obtain performance guarantee bonds before entering into construction contracts. Bruce Shaw Tender Price & Cost Indices Source: Bruce Shaw (f) Average Tender Price Construction Input Cost Tender % Cost % BRUCE SHAW HANDBOOK 2012

29 SECTION 3 IRELAND SCSI Tender Price Index Source: Society of Chartered Surveyors Ireland 3 IRELAND h 2h h 2h h 2h h 2h h 2h h 2h h 2h h 2h h 2h h 2h h 2h 2011 Consumer v Construction Price Inflation % 10% 5% 0% Source: CSO / Bruce Shaw -5% -10% -15% -20% * Construction Price Inflation Consumer Price Inflation *2011 Consumer Price Inflation figure based on Jan 11-Nov 11 Annual Numbers Employed in Construction (000 s) Source: CSO Jan-Mar 05 Apr-Jun 05 Jul-Sep 05 Oct-Dec 05 Jan-Mar 06 Apr-Jun 06 Jul-Sep 06 Oct-Dec 06 Jan-Mar 07 Apr-Jun 07 Jul-Sep 07 Oct-Dec 07 Jan-Mar 08 Apr-Jun 08 Jul-Sep 08 Oct-Dec 08 Jan-Mar 09 Apr-Jun 09 Jul-Sep 09 Oct-Dec 09 Jan-Mar 10 Apr-Jun 10 Jul-Sep 10 Oct-Dec 10 Jan-Mar 11 Apr-Jun 11 Jul-Sep 11 BRUCE SHAW HANDBOOK

30 IRELAND Bruce Shaw Average Irish Construction Costs 2012 The average construction costs table is generated using Bruce Shaw s Cost Database and sets out typical building construction costs. Our database is the largest construction cost database in Ireland. Average Costs Cost Range M&E Commercial Offices Suburban Naturally Ventilated Shell & Core 1,100 1,450 per sq.m 10-15% Developer Standard 1,200 1,550 per sq.m 15-20% Extra for Air Conditioning per sq.m City Centre Air Conditioned Shell & Core 1,450 2,050 per sq.m 15-20% Developer Standard 1,600 2,250 per sq.m 20-25% Office Fit Out 95% Open Plan, No Catering per sq.m 20-30% 75% Open Plan, Limited Catering per sq.m 20-30% 60% Open Plan, Full Catering 800 1,200 per sq.m 25-35% Corporate HQ 1,250 1,550 per sq.m 25-35% Open Plan Work Station 950 2,600 each Source: Bruce Shaw High Tech Industrial Shell & Core 700 1,250 per sq.m 20-25% Developer Standard 800 1,250 per sq.m 25-45% Residential Estate House (Approx. 100 sq.m) 950 1,200 per sq.m 10-20% Developer Standard Apartments 1,200 1,750 per sq.m 10-20% Individual House Rebuilding Costs (see page 34) UCD Science Centre South 28 BRUCE SHAW HANDBOOK 2012

31 SECTION 3 IRELAND Average Costs Cost Range M&E Shopping Centres Anchor Unit per sq.m 10-15% Unit Shops 800 1,200 per sq.m 10-15% Mall 1,400 2,500 per sq.m 20-25% Retail Fit Out 1,100 1,550 per sq.m 25-30% Site Development Business Parks Roads & Primary Services 145, ,000 per hectare Warehouses Without Offices per sq.m 8-12% With 10% Offices 650 1,000 per sq.m 10-15% Healthcare Acute Hospitals, Average Costs 2,200 2,550 per sq.m 20-30% Ward Blocks 1,850 2,200 per sq.m 20-25% General Operating Theatres 3,300 6,200 per sq.m 45-60% Nursing Homes 1,600 2,350 per sq.m 20-25% Accident & Emergency 2,300 3,300 per sq.m 25-30% Car Park Surface 1,000 1,250 per space Multi-Storey 8,200 16,500 per space Single Level Basement 11,750 26,050 per space Double Level Basement 15,350 33,700 per space Education Primary Level (DOE Jan 11) 930* per sq.m 10-15% Second Level (DOE Jan 11) 930* per sq.m 15-20% Third Level 1,300 2,100 per sq.m 20-25% Leisure Hotel Building 1,400 2,350 per sq.m 25-35% FF&E per sq.m Restaurant 1,500 2,250 per sq.m 25-35% Cinema 1,200 1,950 per sq.m 20-30% Sports Hall 850 1,300 per sq.m 10-15% Swimming Pool 1,900 2,600 per sq.m 20-35% Municipal Fire Station 1,750 2,100 per sq.m 15-25% Prison 1,600 2,300 per sq.m 20-30% Courthouse 2,350 3,000 per sq.m 20-30% Source: Bruce Shaw 3 IRELAND Note: Costs are based on January 2012 prices. Average costs as indicated should not be used for insurance valuation purposes. The costs are representative of typical specifications for each type of project. Unique designs or challenging sites may not be within the cost range shown. The rates shown are average construction build only costs and do not include VAT, professional fees or allow for future inflation. * Basic Building Cost only (incl. VAT). External allowances of 12.5% and abnormal costs should be added. BRUCE SHAW HANDBOOK

32 IRELAND Blackrock Clinic Basic Hourly Wage Rates Craftsman General Operative Grade A Grade B Grade C Grade D 1 October April 2006 (3%) October 2006 (2%) July 2007 (2.5%) January 2008 (2.5%) February 2011 (-7.5%) Source: Registered Agreement for the Construction Industry Basic Hourly Wage Rate Mechanical & Electrical Mechanical 1st October st April 2006 (3%) st October 2006 (2%) st July 2007 (2.5%) st January 2008 (2.5%) th February 2011 (-7.5%) Source: MEBSCA / ECA Electrical 1 April April April April September January BRUCE SHAW HANDBOOK 2012

33 SECTION 3 IRELAND The Top Irish Main Contractors Rank Firm Revenue m Revenue m JOHN SISK & SON LTD * 2 2 BAM CONTRACTORS LTD WALLS CONSTRUCTION LTD P.J. HEGARTY & SONS LTD JOHN PAUL CONSTRUCTION LTD SIAC CONSTRUCTION LTD ** 60.00*** 7 13 J.J. RHATIGAN & CO LTD ROADBRIDGE LTD BENNETT (CONSTRUCTION) LTD COLLEN CONSTRUCTION LTD GLENMAN CORPORATION LTD G&T CRAMPTON LTD MDY CONSTRUCTION LTD LAING O ROURKE IRELAND LTD BRIAN MCCARTHY CONTRACTORS LTD Notes: * This figure is Irish turnover only. Total worldwide t/o figure for Sisk in 2011 was 958m ** This figure is Irish turnover only. Total worldwide t/o figure for SIAC in 2010 was 138m *** This figure is Irish turnover only. Total worldwide t/o figure for SIAC in 2011 was 177m The Top Irish Services Sub-Contractors Turnover This figure is Irish turnover only. Total worldwide t/o figure for Roadbridge in 2010 was 143m This figure is Irish turnover only. Total worldwide t/o figure for Roadbridge in 2011 was 175m Rank Firm Revenue m Revenue m MERCURY ENGINEERING GROUP * 2 2 JONES ENGINEERING LTD DORNAN ENGINEERING LTD KIRBY GROUP ENGINEERING LTD SUIR ENGINEERING LTD L. LYNCH & CO. LTD WINTHROP ENGINEERING LTD DESIGNER GROUP LYNSKEY ENGINEERING LTD ROTARY M & E SERVICES (IRELAND) LTD PRECISION ELECTRIC (IRELAND) LTD T. BOURKE & CO. LTD * This figure is Irish turnover only. Total worldwide turnover figure for Mercury Engineering Group in 2011 was 535m Source: Individual Companies Auditors / Companies Registration Office Source: Individual Companies Information / Companies Registration Office 3 IRELAND BRUCE SHAW HANDBOOK

34 IRELAND Looking forward, there are some glimmers of hope that 2012 will see construction output bottom out after 5 years of massive decline.

35 SECTION 3 IRELAND Annual Housing Completions Housing Completions Social % Private % Total , % 47, % 52, , % 51, % 57, , % 62, % 68, , % 71, % 76, , % 75, % 80, , % 88, % 93, , % 71, % 78, , % 44, % 51, , % 21, % 26, N/A N/A N/A N/A 14, N/A N/A N/A N/A 10,480 Source: Department of the Environment, Heritage & Local Government 3 IRELAND New Housing Completions by Type Housing Completions House % Apartment % Total , % 10, % 52, , % 11, % 57, , % 14, % 68, , % 16, % 76, , % 18, % 80, , % 19, % 93, , % 18, % 77, , % 12, % 51, , % 5, % 26, , % 2, % 14, , % 1, % 10,480 Source: Department of the Environment, Heritage & Local Government BRUCE SHAW HANDBOOK

36 IRELAND SCSI Rebuilding Costs per sq.m March 2011 No. of Typical Dublin Cork Galway Waterford Limerick Bedrooms Size Area Area Area Area Area Terraced 2 70 sq.m 1,820 1,402 1,375 1,373 1, sq.m 1,743 1,320 1,295 1,304 1,316 Semi Detached 3 95 sq.m 1,759 1,339 1,317 1,314 1, sq.m 1,738 1,319 1,301 1,291 1,277 Detached sq.m 1,767 1,338 1,307 1,332 1,332 Detached Bungalow sq.m 1,707 1,314 1,277 1,253 1,350 Source: SCSI The table is a guideline based on a typical speculative built, estate type house in the Dublin, Cork, Galway, Waterford and Limerick Areas. Notes: 1. The figures shown in the table are a minimum base cost guide for your house insurance. 2. The figures are based on estate type houses built since the 1960 s. They exclude; (a) Properties with more than 2 storeys or with basements or habitable attics (b) One-off houses with special design features or period houses (c) Apartment / residential flats because of split responsibilities for shared areas. The insurance of apartments is covered in the block service charge. Owners should confirm with their management companies / agents that their apartment block has been valued for insurance purposes, and that the insured value is current. 3. The figures assume a basic quality specification with normal foundations, brick or block walls, concrete tiled roof, concrete ground floor and timber first floor, softwood flush doors and hardwood double glazed windows, painted plaster to walls, plastered ceilings, standard electrics and central heating. The sum insured should be increased to allow for better than average kitchen fittings, built-in wardrobes, finishes and any other items not normally included in an estate type house (e.g. fire alarm). 4. House contents such as carpets, curtains, furniture, etc. are not covered by the figures. 5. No allowance has been made for the cost of out-buildings, patios or boundary walls. The figures do however allow for a concrete path around the house, for driveway repairs and regrassing. 6. The figures allow for demolition costs, professional fees incurred in reinstatement and VAT at 13.5% on building costs and 21% on professional fees. 7. The amounts included for professional fees have been calculated to cover the following services: Building Surveyor / Architect and Quantity Surveyor. 8. The costs are based on building rates ruling in March 2011 and do not include for inflation during the duration of the policy and the period between any loss occurring and reinstatement. St. Vincent s Private Hospital Citi Bank, City RDiL Project 34 BRUCE SHAW HANDBOOK 2012

37 SECTION 3 IRELAND 3 IRELAND Christchurch Cork, refurbishment and conservation of a listed building Planning Charges 2012 Class of Development Most Building Types New Houses Fire Certificate Charges 2012 Charge House Alterations 34 Golf Courses Outline Planning Permission Maximum Scale of Charges for Planning Applications 80 or 3.60 per sq.m whichever is greater 65 for each dwelling 50 per hectare Full Application Most Building Types 38,000 Outline Application Most Building Types 28,500 Retention Application 125,000 Type of Application 75% of full planning permission charge Charge Option 1 Standard Application 2.90 per sq.m up to a maximum of 12,500 Option 2 A Seven Day Notice Application 5.80 per sq.m up to a maximum of 25,000 Option 3 A Revised Fire Safety Certificate Application 2.90 per sq.m up to a maximum of 12,500 Option 4 A Regularisation Fire Safety Certificate Application 11.60/sq.m up to a maximum of 50,000 Source: Local Planning Authorities Source: Local Planning Authorities BRUCE SHAW HANDBOOK

38 36 BRUCE SHAW HANDBOOK 2012

39 UNITED KINGDOM 4 BRUCE SHAW HANDBOOK

40 UNITED KINGDOM UK Market Review After a number of challenging years in the UK construction industry the prospects for 2012 do not indicate any significant improvement in activity. The continued combination of factors such as the lack of access to debt finance for development, the lack of mortgage availability for new house purchasers, the lack of grant funding from the HCA for affordable homes, the UK government s continued reduction in capital spending as well as rising inflation continue to keep the prospect of a sustained recovery subdued. The south-east and particularly London are enjoying significantly more activity. The UK Government spending cuts announced in late 2010 have begun to make a significant impact on the sector during 2011 and will continue to do so through This places more pressure on the private sector to make up the shortfall. After a dip during 2010 according to the Construction Products Association (CPA), the construction sector did actually increase its output in 2011 by around 4% but we expect a smaller growth of 2% to 3% in The CPA has estimated that the value of work in the sector will increase from 109bn in 2011 to 112bn in Since the peak in Q42007, data from the Office for National Statistics shows that orders for all new work have dipped in between but have now risen back to 2007 levels while the repairs and refurbishment sector has experienced a significant fall. The new work growth is mainly propped up by a recent increase in private housing as well as some significant infrastructure and energy projects. This also has led to a modest increase in construction employment. The Consumer Prices Index has now risen to 4.8% at the end of 2011 but like 2010, we have not seen in 2011 the increases in material costs translating into equivalently higher tender costs as contractors continue to absorb the bulk of increased costs before passing them on to Clients in tenders. For Clients wishing to commission construction work it continues to present a great opportunity to secure very competitive prices. We have seen tender prices largely remaining stagnant in 2011 and believe that in 2012, they will remain fairly static or increase modestly. However the compound effect of increases in raw materials, a potentially smaller supply chain and wage pressures is generating a belief that tender prices will begin to escalate slowly from early We are continuing to predict that the ongoing lack of bank financing for development along with stricter lending conditions will constrain speculative development in the commercial sector and will therefore continue to restrict growth in the private sector. Despite the negatives above, there are likely to be some bright spots. The modest pick-up in housing starts will enable some parts of the industry to enjoy increased activity in In terms of regions, the south-east and particularly London are enjoying significantly more activity while the other UK regions including Northern Ireland are seeing little improvement in activity. There is an anticipation that the optimism that will come from the London Olympic Games themselves together with some legacy projects may stimulate some increased construction activity in London and throughout the UK. The recovery in the commercial sector, particularly in London, should continue as a number of high profile projects have commenced and are due to start on site in the coming months. The commencement of the Crossrail on-site works and station upgrades and the HS2 announcement will bring some optimism to the Civil Engineering sector and while most of the Crossrail projects have been awarded, it will be some years until the HS2 impact will translate into construction activity. 38 BRUCE SHAW HANDBOOK 2012

41 SECTION 4 UNITED KINGDOM 4 UNITED KINGDOM Grosvenor Gardens UK Construction Output bn Source: National Office for Statistics, Construction Statistics Branch New Work Repair & Maintenance 2010 Public Sector Output bn 2010 Private Sector Output bn New Housing 4.8 Infrastructure 4.9 Industrial 0.1 Education 7.7 Healthcare 2.4 Offices 1.0 Entertainment 1.2 Retail 0.3 Miscellaneous 1.5 New Housing 14.3 Infrastructure 7.8 Industrial 3.6 Education 2.2 Healthcare 2.1 Offices 6.1 Entertainment 4.7 Retail 5.6 Miscellaneous 2.6 BRUCE SHAW HANDBOOK

42 UNITED KINGDOM UK Tender Price Index Source: BCIS. Tender Price Indices National (f) Tender % 7% 3% 15% 0% 3% 8% -4% -12% -4% 9% 1% UK Regional Tender Price Index Source: BCIS. Tender Price Indices Regional East Anglia North West Scotland Northern Ireland Yorks & Humber North East Wales South East West Midlands East Midlands South West Greater London Victoria Palace Theatre 40 BRUCE SHAW HANDBOOK 2012

43 SECTION 4 UNITED KINGDOM 4 UNITED KINGDOM Resource Cost Index of Non-Housing Building Source: National Office for Statistics Construction Statistics Branch (f) Combined Index Labour & Plant Materials The trend of low tender prices and overall increase in materials price is set to continue. A slow rise in steel and reinforcement prices combined with a decrease of 6% in labour costs which is forecast to continue in 2012 may offset the increase on general plant and building material prices. Number of Employed and Self-Employed in Construction: UK 000s 2,700 2,600 2,500 2,400 2,300 Source: National Office for Statistics Construction Statistics Branch 2,200 2,100 2,000 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q BRUCE SHAW HANDBOOK

44 UNITED KINGDOM Standard Hourly Base Rates for Labour 2011 Job Type Base rate Building Craft Operative Building Skill Rate Building Skill Rate Building Skill Rate Building Skill Rate Building General Operative 9.90 Technical Plumber HVAC Senior Craftsman Electrical Technician Mechanical Technician Source: BCIS. Standard Hourly Base Rates for Labour. The Top UK Main Contractors Rank Turnover Firm bn 1 1 BALFOUR BEATTY LAING O ROURKE CARILLION KIER SKANSKA CONSTRUCTION MORGAN SINDALL BOVIS LEND LEASE KELLER COSTAIN BAM CONSTRUCT UK WATES GROUP INTERIOR SERVICES GROUP BOUYGUES GROUP GALLIFORD TRY MACE GROUP WILLMOTT DIXON GROUP INTERSERVE VINCI BAM NUTTALL NEWARTHILL (SIR ROBERT MCALPINE) 0.67 Source: Building Magazine 42 BRUCE SHAW HANDBOOK 2012

45 SECTION 4 UNITED KINGDOM The Top UK Architects Rank Firm Staff 1 1 BUILDING DESIGN PARTNERSHIP FOSTER & PARTNERS ATKINS CAPITA SYMONDS AEDAS NPS PROPERTY CONSULTANTS LTD DREID = ARCHIAL GROUP PLC PRP ARCHITECTS PM GROUP/DEVEREUX ARCHITECTS = NIGHTINGALE ASSOCIATES STRIDE TREGLOWN LTD LEWIS & HICKEY LTD PURCELL MILLER TRITTON LLP PASCALL & WATSON ARCHITECTS ALLFORD HALL MONAGHAN MORRIS LTD FEILDEN CLEGG BRADLEY STUDIOS LLP URS SCOTT WILSON TP BENNETT AECOM 58 Note: Ranked by number of Chartered Architects registered as of 2011 The Top UK Engineering Firms Rank Firm Staff 1 1 ATKINS 2, URS SCOTT WILSON 1, MOTT MACDONALD 1, JACOBS ENGINEERING UK LTD 1, ARUP GROUP LTD 1, AECOM 1, HALCROW GROUP LTD CAPITA SYMONDS PARSONS BRINCKERHOFF LTD WATERMAN GROUP PLC WSP GROUP PLC RAMBOLL WHITE YOUNG GREEN GROUP LTD BURO HAPPOLD LTD HOARE LEA & PARTNERS W A FAIRHURST & PARTNERS MACE HILSON MORAN = TPS HURLEYPALMERFLATT 138 Note: Ranked by number of Chartered Engineers registered as of 2011 Source: Building Magazine Source: Building Magazine 4 UNITED KINGDOM BRUCE SHAW HANDBOOK

46 UNITED KINGDOM Bruce Shaw Average UK Construction Costs 2012 Average Costs Cost Range Commercial Offices Over 20 storey offices premium grade facilities and common finishes with lifts, provision for air conditioning, and sprinklers excluding Developer s CAT A fitout Over 20 storey offices A grade common finishes with lifts, provision for air conditioning, and sprinklers excluding Developer s CAT A fitout 2,250 2,500 per sq.m 1,950 2,250 per sq.m Source: Bruce Shaw Up to 20 storey offices medium grade facilities and common finishes with lifts, provision for air conditioning and sprinklers excluding Developer s CAT A fitout Up to 8 storey offices medium grade facilities and common finishes with lifts, provision for air conditioning, and sprinklers excluding Developer s CAT A fitout Up to 2 storey offices - medium grade facilities and common finishes with provision for air conditioning, no lift and no sprinklers excluding Developer s CAT A fitout Developer s CAT A fitout including raised floors, carpets, ceilings, fan coil units with ducts and grilles, lighting and power distribution Category B fit-out from institutional Category A specification; standard corporate accommodation; open plan 15 per cent offices Category B fit-out from institutional Category A specification; standard corporate accommodation; banking / legal 50 per cent offices / cellular 1,650 1,950 per sq.m 1,200 1,550 per sq.m 800 1,050 per sq.m per sq.m 500 1,350 per sq.m 1,000 2,250 per sq.m Retail Regional shopping complex high standard including major stores, specialty shops and enclosed malls 1,250 1,500 per sq.m Suburban supermarkets; excluding fitout per sq.m Retail Park; shell excluding fit-out 850 1,250 per sq.m Fit out of small food store < 4,500 sq ft 2,000 2,250 per sq.m Fit out of large store with food and general merchandise < 50,000 sq ft 1,800 2,150 per sq.m Fit out of large full-range department store < 100,000 sq ft 1,950 2,750 per sq.m Residential Single project home up to 250 sq.m medium standard, double brick with normal site cost for flat site per sq.m 2 storey townhouse medium standard 900 1,250 per sq.m 2 storey townhouse high standard 1,050 1,500 per sq.m 3 storey apartments medium standard 1,050 1,300 per sq.m 3 storey apartments high standard, air conditioning 1,350 1,700 per sq.m Multi storey apartments medium standard 1,300 2,000 per sq.m Multi storey apartments high standard, air conditioning 1,750 2,750 per sq.m Hotels (New Build excluding FF&E) 2 star medium standard, minimal F+B / dining facilities, no air conditioning 25,000 35,000 per key 3 star hotel, restaurant, public areas, comfort cooling, no conferencing 40,000 50,000 per key 4 star hotel, restaurant, public areas, air conditioning, conferencing 120, ,000 per key 5 star hotel, multiple restaurants, public areas, air conditioning, banqueting, wellness 300, ,000 per key Super luxury 6 star hotel, multiple, public areas, air conditioning, banqueting, wellness 500, ,000 per key 44 BRUCE SHAW HANDBOOK 2012

47 SECTION 4 UNITED KINGDOM Average Costs Industrial Up to 10m high warehouse basic standard, metal clad walls, no sprinklers (up to 5,000 sq.m) Up to 10m high warehouse basic standard, metal clad walls, no sprinklers (over 5,000 sq.m) Up to 10m high warehouse medium standard, precast walls, no sprinklers (up to 5,000 sq.m) Up to 10m high warehouse medium standard, precast walls, no sprinklers (over 5,000 sq.m) Up to 10m warehouse high standard, precast walls, sprinklers (up to 5,000 sq.m) Up to 10m high warehouse high standard, precast walls, sprinklers (over 5,000 sq.m) Cost Range per sq.m per sq.m per sq.m per sq.m per sq.m per sq.m Truck hardstand, 175 RC slab, drainage, line marking per sq.m Source: Bruce Shaw 4 UNITED KINGDOM Car Parking Open bitumen car parking, drainage, line marking (30 sq.m/car) per sq.m Multi storey (above ground), concrete structure, lift, no mechanical ventilation, no sprinklers (30 35 sq.m/car) Underground, concrete structure, excavation, lifts, mechanical ventilation, sprinklers (35 40 sq.m/car) per sq.m 1,100 1,300 per sq.m Data Centre (excludes shell construction, incoming power & fibre upgrades, comms equipment) Tier Level 2 Fit out of existing shell, fully built (day 1 & 2), technical load between 1,000-1,500 kw/sq.m Tier Level 3 Fit out of existing shell, fully built (day 1 & 2), technical load between 1,500-2,000 kw/sq.m Tier Level 4 Fit out of existing shell, fully built (day 1 & 2), technical load between 1,500-2,000 kw/sq.m 5,000 8,000 per kilowatt (IT load) 8,000 11,000 per kilowatt (IT load) 12,000 16,000 per kilowatt (IT load) Approximate Regional Variance Region Factor Wales 0.96 Midlands 0.97 East 1.00 South West 0.98 North 0.91 Region Factor South East 1.09 London 1.12 Scotland 0.96 Northern Ireland 0.85 Notes: 1. All costs exclude VAT and professional fees. 2. Costs based on January 2012 prices. 3. Average costs as shown should not be used for insurance valuation purpose. 4. The costs are representative of typical specifications for each type of building and do not account for any site abnormal costs. BRUCE SHAW HANDBOOK

48 UNITED KINGDOM House Building Starts and Completions ,000 60,000 50,000 40,000 30,000 20,000 Source: National Office for Statistics 10,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q Housebuilding Starts Housebuilding Completions Average Procurement Lead-in Times in Weeks Piling (Rotary) Piling (Precast) Concrete Works Structural Steel Frames Cladding (Reconstituted Stone) Cladding (Natural Materials) Cladding (Metal Panellised) Cladding (Curtain Walling) Atrium Roofs Roof Finishes - Profiled Metal Façade cleaning equipment Brickwork Blockwork Metal doors Drylining Demountable Partitions General Joinery Specialist Bespoke Joinery Raised Floors Suspended Ceilings Architectural Metalwork Decorative Wall Coverings Internal Stone Floors & Walls Soft Floor Finishes Passenger Lifts (Non-standard) Escalators Mechanical Packages Ductwork Electrical Packages Controls Source: National Office for Statistics Notes: All times based on generic 5 storey 100,000 sq.ft. office block in city. As of July BRUCE SHAW HANDBOOK 2012

49 SECTION 4 UNITED KINGDOM The UK Housing Market 2012 Confidence in the UK housing market is at rock bottom and Britain faces a housing shortage of one million homes by 2015 if construction fails to match the ever growing population. Sales activity for housing has hit its lowest level in a decade. The RICS Housing Market Survey shows that sales were slightly higher than earlier in the year. New NHBC home registrations also fell in 2011 by 0.38% and London has found that the number of homes changing hands is at a third of levels seen during the property boom. This is despite the fact that London outperforms other UK regions and is forecast to continue to do so during However, prime sites are still scarce. The housing market is more buoyant in the south specifically in London, however the current mortgage market is dictating sales figures. Lenders are reluctant to lend which limits builders building and buyers buying. Despite this, house loans have grown since November 2011 and are expected to continue to grow in the months before March 2012; when first-time buyers will not be eligible to exemption from stamp duty. The Government introduced a Housing Strategy in November 2011 whereby it included a scheme to encourage more first-time buyers onto the property ladder as these had dropped from 40% of the market share to 23% since July It also proposed a 400m Get Britain Building Investment Fund aimed at tackling stalled sites with an aim of freeing up public sector land with the capacity to build 100,000 new homes. In 2011 only 103,000 new homes were built. However, projections show that with population growth, an increase of 232,000 new homes per year is needed. The Government intends to invest 4.5bn in their Affordable Homes Programme between 2011 and Approximately 146 providers will aim to deliver 80,000 new homes for Affordable Rent and Affordable Home Ownership with the help of Government funding of 1.8bn. The Land Registry statistics demonstrate that London is the only region in England and Wales to show an increase in its average property price over the last 12 months with a movement of +1.4%. The largest fall of -5.4% was experienced by the north east. Out of 33 London Boroughs, the City of Westminster showed the largest annual increase of +7.1% and Havering the largest decrease of -3.3%. Despite encouraging housing sales figures towards the end of 2011, the fragile state of the economy and instability in the Eurozone means the housing market faces another tough year ahead. 4 UNITED KINGDOM 38 Grosvenor Gardens Mews BRUCE SHAW HANDBOOK

50 UNITED KINGDOM 2012 Olympics On 27 July 2012 the world will be watching London as the opening ceremony of the 2012 Olympics is launched. This ceremony gives the world an opportunity to experience the artistic demonstration of Oscar award winning film director Danny Boyle and his creative team. It also gives our host city and the rest of the UK a chance to show off a rich and diverse culture. The Olympic Games will run from 27 July until 12 August, and the Paralympic Games from 29 August to 9 September. The 500 acre Olympic Park site comprises the main stadium, aquatics centre, smaller stadia and the Athletes Village. Westfield Stratford City sits next door to the Olympic Park, and with a total retail floor area of 1,883,700 sq.ft (175,000 sq.m) it is the largest urban shopping centre in Europe. Post Olympics, the Village is to be converted into homes targeted at key workers. Further housing, along with shops, restaurants and cafes will provide new amenities for the local community, while the stadium is to remain an athletic centre. It is hoped that the Olympic Games will offer our economy the upturn it needs to help bring it out of the recession. It has been predicted that the UK s prime housing market will surge as the 2012 Olympics attract new international buyers to the country. Primark, Stratford City Euro v Sterling Source: European Central Bank Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 Jan BRUCE SHAW HANDBOOK 2012

51 SECTION 4 UNITED KINGDOM It is hoped that the Olympic Games will offer our economy the upturn it needs to help bring it out of the recession. 4 UNITED KINGDOM

52 50 BRUCE SHAW HANDBOOK 2012

53 MIDDLE EAST 5 BRUCE SHAW HANDBOOK

54 MIDDLE EAST Middle East Market Review GDP in the Gulf Cooperation Council (GCC) countries is still largely based upon a hydrocarbon industry as illustrated in the graph below. In the UAE, the IMF forecasts real GDP to grow by 3.8% in 2012 and inflation to rise from a 2011 forecast of 2% to 3% in Moody s Rating Agency have reported a projected GDP for Bahrain at 3% for 2012, an increase of 1% from last year. This increase is reportedly due to the drilling of 200 new oil wells by Tatweer Petroleum over the past 3 years, with a further 3,000 wells planned in the next 20 years. Macro economic data indicates that construction activity in Saudi Arabia grew by 11.6% in 2011 with inflation estimated to be at 4.5% for Analysts predict a Saudi Arabian GDP growth forecast of 2.3% in 2012 sustained by high oil prices and production. The GCC region as a whole is projected to average real GDP of 5% in the next 5 years. A number of countries in the GCC have introduced stimulus packages recently, as set out in the table below. The overall value of construction projects in the region during 2011 is illustrated in the graph opposite. GCC Hydrocarbon Dependence (% of GDP) 100% 80% 60% 40% 20% Source: National Authorities and Deloitte Analysis 0 Bahrain KSA Kuwait Oman Qatar UAE Hydrocarbons Public Sector / Social Services Other GCC Stimulus Packages Country Package Amount ($m) % of GDP Main Package Contents Bahrain Provide cash transfers of $ 2,660 each to families Kuwait 4, Provide free staple food to citizens for the next 14 months together with cash transfers Oman Employment for 50,000 Omanis Source: MEED Insight Establishment of monthly unemployment benefit of $390 Saudi Arabia 96, Construct 500,000 housing units, build and expand hospitals Pay a two month salary bonus to state employees Increase public sector minimum wage by 19% Inject capital into specialised credit institutions to facilitate debt write offs and increase mortgage lending, provide affordable housing and extend social insurance and employment benefits Expand indefinitely the 15% inflation allowance for state employees that had been phased in over the past three years UAE 1, Infrastructure stimulus programme focusing on the Northern Emirates 70% increase in pensions for military personnel State subsidies for rice and bread 52 BRUCE SHAW HANDBOOK 2012

55 SECTION 5 MIDDLE EAST Value of Projects by Country 2011 Shown as a percentage of total: $1,206.3bn 5 Source: MEED Insight MIDDLE EAST National Holding Headquarters, UAE BRUCE SHAW HANDBOOK

56 MIDDLE EAST Middle East Commodity Prices Commodity prices were exceptionally volatile during 2011 as indicated in the table below. It is expected that the higher commodity prices will push construction material prices up. These material price increases will however be softened by competitive labour rates and tighter margins to acquire work, therefore suppressing construction inflation. A shortage of skilled labour in Saudi Arabia and Qatar coupled with inflationary pressures may also be factors that push already competitive rates upwards. In 2012, it is estimated that tender prices will rise at a sustainable pace in what are expected to be the busier markets of Saudi Arabia & Qatar. Tenders in the UAE and Bahrain look set to remain keen, as contracting companies compete aggressively for new work. It is expected that the higher commodity prices will push construction material prices up. Prices of Building Materials in Abu Dhabi Q compared to Q Percentage change Ref. Commodity Groups Q compared to Q Transport Equipment 30.1% 2 Aggregate & Sand 19.9% 3 Tiles & Marble 13.5% 4 Waterproofing Products 11.8% 5 Steel 11.0% 6 Roofing Materials 6.6% 7 Paints 6.1% 8 Wood 4.8% 9 Diesel no change 10 Concrete -2.8% 11 Power Cables -3.3% 12 upvc Pipework -4.1% 13 Glass -4.2% 14 Natural Stone -5.9% 15 Blocks -6.4% Source: Statistic Centre Abu Dhabi 54 BRUCE SHAW HANDBOOK 2012

57 SECTION 5 MIDDLE EAST 5 MIDDLE EAST Palm Island, UAE UAE in Brief The UAE construction market remained in recovery mode in 2011, continuing on from In the emirate of Abu Dhabi the Urban Planning Council continues to implement its 2030 urban plans encompassing Abu Dhabi city, Al Ain, and the Western Region, perhaps at a slower pace than originally envisaged. From our experience, private developers have been much less active in Abu Dhabi, resulting in a more measured level of residential and commercial construction. Dubai has recently approved a five-year plan that will involve the emirate investing AED1bn (US$272m) on its road network before the end of 2016, supplementing the US$3.6bn of road projects that are currently being built in the emirate. The first phase of the plan, which is expected to cost about AED150m, is expected to commence in As Client confidence in the hospitality sector improves, so too does demand for new hotels. This has been evidenced by Bruce Shaw who in 2011 were successful in securing a 600 bed signature hotel project on Palm Island. Bahrain in Brief As widely reported in the media, Bahrain experienced political unrest in 2011, this unrest having a notable impact upon construction activity in the country. Construction activity in Bahrain dropped by more than 80% when compared to the previous year however is expected to show some recovery in the construction industry. In January this year, Bahrain s Housing Ministry awarded the first PPP social housing scheme in the GCC. The US$550m project will provide 4,100 housing units. Reports indicate that the Bahrain government is currently planning a second phase of its PPP housing scheme. Qatar in Brief Qatar is the only country in the GCC to be ranked in the top 100 Doing Business index by the World Bank in The World Cup is only one part of Qatar s development goals. Its long term plan is the Qatar National Vision The newly created Central Planning Office will oversee the US$60bn infrastructure drive towards BRUCE SHAW HANDBOOK

58 MIDDLE EAST Saudi Arabia in Brief Saudi Arabia continues to be the leading economy within the GCC. In the table below, a brief summary is given of the key budgetary allocations for In the KSA, more than US$48bn worth of construction and infrastructure projects were awarded during the first three quarters of This represented a 125% increase over the same period in Saudi Arabia is facing a massive housing problem due to rapid population growth and an inflow of workers coming to the Kingdom, which is rolling out a US$400bn infrastructure spending plan. Private and public developers need to build about 275,000 units a year through 2015 to meet the country s demands for 1.65 million new homes. Saudi Arabia s population is expected to reach 30 million in 2017, double the figure 30 years ago. Analysis of the Kingdom s population growth to 2030 also shows the number will hit 36.5 million by the end of the period under review. This represents a near 40% rise compared to Saudi Arabia Key Budgetary Allocations 2012 Sector/Institution Allocation Value (US $) Education and Manpower schools in addition to 2,000 schools to be renovated, plus a further 2900 currently under construction Source: MEED Insight Health and Social Affairs new hospitals, plus a further 137 hospitals currently under construction plus a number of social centres and welfare offices Municipality Services 7.8 Intercity roads, intersection and bridges as well as sanitary and other environment related projects Transportation and Telecommunications 9.4 Includes 4,200 km of roads, along with King Abdullah Jizan Airport, 4 regional airports, port and railroad developments Water, Agriculture and Infrastructure 15.3 Water desalination plants and infrastructure projects in Jubail and Yanbu sewage networks. Total Budget Mobily Project, Saudi Arabia 56 BRUCE SHAW HANDBOOK 2012

59 SECTION 5 MIDDLE EAST Saudi Arabia Housing Requirements by Region Sources: National Development Plan; Bank Saudi Fransi / MEED 5 MIDDLE EAST Outline Construction Cost Comparisons With offices in the UAE, Bahrain and the Kingdom of Saudi Arabia, Bruce Shaw is successfully working on a large volume of projects within the GCC region. Tabled below is a summary of indicative construction costs. Regional Building Cost Comparison (USD/sq.m) 2012 Date: January 2012 Ref. Building Type Abu Dhabi, UAE Manama, Bahrain Riyadh, KSA from to Base* from to Index* from to Index* 1 Parking Podium Car Parking $ 590 $ $ 400 $ $ 550 $ Basement Car Parking $ 670 $ $ 550 $ $ 650 $ Sources: Bruce Shaw 2 Residential Sector Medium Quality - Villa Units $ 1,190 $ 1, $ 840 $ 1, $ 830 $ 1, Medium Quality - High Rise $ 1,100 $ 1, $ 1,000 $ 1, $ 980 $ 1, High Quality - Low Rise Aparts $ 1,270 $ 1, $ 1,270 $ 1, $ 930 $ 1, High Quality - High Rise $ 1,490 $ 1, $ 1,470 $ 1, $ 1,160 $ 1, Commercial / Office Sector **/*** Developer Standard / Investment Offices Low Rise - Medium Rise $ 810 $ $ 800 $ $ 830 $ 1, Medium Rise - High Rise $ 1,270 $ 1, $ 1,000 $ 1, $ 1,020 $ 1, Owner Occupier Standard Offices Low Rise - Medium Rise $ 1,060 $ 1, $ 870 $ 1, $ 980 $ 1, Medium Rise - High Rise $ 1,490 $ 1, $ 1,110 $ 1, $ 1,160 $ 1, Hotel & Leisure / Retail Sector Regional Shopping Centre ** $ 1,360 $ 1, $ 870 $ 1, $ 1,260 $ 1, Budget / 3 Star **** $ 1,410 $ 1, $ 1,270 $ 1, $ 1,390 $ 1, Star **** $ 2,420 $ 2, $ 1,990 $ 2, $ 2,230 $ 2, Star Resort **** $ 2,780 $ 3, $ 2,510 $ 3, $ 2,560 $ 3, Health Sector ***** District General Hospital $ 2,880 $ 3, $ 2,460 $ 3, $ 3,060 $ 3, Manufacturing Sector Light Industrial $ 550 $ $ 560 $ $ 450 $ Heavy Industrial $ 740 $ $ 600 $ $ 580 EC$ Notes: 1. All subject to site specifics, design and specification. 2. All exclude Land Acquisition Costs, External Works Costs & Professional Fees. * Base 100 = UAE; Index calculated on average of stated cost range ** Shell & Core Only; with public areas finished *** Excl. super high rise (Low / Medium = upto 15; High Rise +15; Super High Rise +45 storeys) **** Incl. FF+E; Excl. OS+E ***** Excl. Medical Equipment BRUCE SHAW HANDBOOK

60 MIDDLE EAST Top 10 Infrastructure Projects in the GCC Ranking Project Country Client 1 Surface Transport Master Plan 2 Qatar National Rail Scheme Project Value Status UAE Abu Dhabi Dept of Transport $25bn Design Qatar 3 GCC Rail Network Regional (GCC) QDREIC / Deutsche Bahn / Qatar Railways Development Company 4 Emirates Railway Project UAE Etihad Rail / Abu Dhabi Dept of Transport 5 National Freight & Passenger Railway 6 Kuwait National Railroad Network 7 Bahrain Rapid Transport Network Oman $25bn Design Governments of the GCC $16bn Design Supremen Committee for Town Planning $11bn $10bn Design Tender for Consultancy Contract Kuwait Ministry of Public Works $10bn Feasibility Study Bahrain Ministry of Works and Housing $8.09bn Feasibility Study 8 Kuwait Metro System Kuwait Ministry of Public Works $7bn Design 9 Mecca-Medina Railway Link 10 Jeddah Light Rail Transit - Tram Saudi Arabia Saudi Arabia Saudi Railways Organisation $6bn Construction Makkah Municipality $6bn Concept stage Middle Eastern Design Firms Tabled below is a selected list of design firms currently working within the GCC region. KEO ATKINS ARAB ENGINEERING BUREAU DEWAN MZ ARCHITECTS RMJM BURT HILL / STANTEC RW ARMSTRONG WOODS BAGOT NORR GROUP NAGA ARCHITECTS DWP GAJ AEDAS HOK FOSTERS & PARTNERS GENSLER AECOM HENNING LARSON CH2M HILL BURO HAPPOLD WSP DSA BSBG P&T GROUP BROADWAY MALYAN SOM 58 BRUCE SHAW HANDBOOK 2012

61 SECTION 5 MIDDLE EAST GCC Nations Main Contractors 5 Tabled below is a selected list of major contractors currently working within the GCC region. AL ARAB TRADING & CONTRACTING AL FUTTAIM CARRILION AL HABTOOR LEIGHTON AL HAMAD CONSTRUCTION & DEVELOPMENT AL JABER AL YAMAMA AL KAZEM GROUP AL LATIFIA TRADING AL REDWAN CONTRACTING AB V ROCK AL RAJHI CONTRACTING AL SHAFAR GENERAL CONTRACTING ALEC ARABIAN CONSTRUCTION COMPANY ARABTEC CONSTRUCTION ASCON BELHASA SIX CONSTRUCT CCC DUTCO BALFOUR BEATTY EL SEIF ENGINEERING & CONTRACTING KHANSAHEB CIVIL ENGINEERING KHOOHEJI CONTRACTORS LAING O ROURKE MIDMAC MURRAY & ROBERTS MUSHRIF TRADING & CONTRACTING NESMA & PARTNERS SAUDI BIN LADEN GROUP SAUDI OGER SEDAR TEEJAN GROUP MIDDLE EAST GCC Single Currency Update The future of the GCC single currency is still uncertain. In November 2011, the IMF said that the costs of having a single currency in the Gulf may outweigh the benefits. Although the majority of GCC citizens support the single currency, the name of the currency has not been agreed amongst the member states. Monetary policy frameworks and a common system of payments & settlements are yet to be put in place. Therefore it is unlikely that a single GCC currency will be active in the immediate future. The following table compares the US Dollar to the individual currencies of the GCC member states. Dollar vs. AED / BHD / SAR / KWD / QAR / OMR Country Currency Symbol Conversion from US $ Bahrain Bahraini Dinar BHD 1 USD = 0.38 United Arab Emirates Emirati Dirham AED 1 USD = 3.67 Saudi Arabia Saudi Riyal SAR 1 USD = 3.75 Source: Kuwait Kuwaiti Dinar KWD 1 USD = 0.28 Qatar Qatari Riyal QAR 1 USD = 3.64 Oman Omani Rial OMR 1 USD = 0.39 Note: Figures are based on January BRUCE SHAW HANDBOOK

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63 UNITED STATES 6 BRUCE SHAW HANDBOOK

64 UNITED STATES US Market Review The US Construction Market has still to see signs of recovery from the recession, with projections that 2012 US construction starts will remain essentially flat. The total dollar value of new starts in 2012 is estimated to be $412 billion just up from a figure of $410 billion in This certainly shows that the market is stabilizing after the losses of 2009 & 2010 but the backdrop for the construction industry is the weak US economy which continues to see slow employment growth and diminished funding from federal/state governments. Most contractors and construction economists do not see a return to healthy markets until 2013 or even US construction starts will remain essentially flat. There are however some encouraging signs of improvement in the US economy with the US unemployment rate reducing to 8.5% at the end of 2011 and continuing a positive change in US employment for the past 15 months in a row. The cumulative increase over this period has been 2.1 million jobs, with 1.6 million coming in Total construction employment now stands at 5,544,000, 46,000 higher than in December 2010 an increase of 0.8%. This is however far below its peak level of 7,726,000 in April 2006, but continues a month s long trend of slight gains. These gains are projected to continue as a recent survey by the Associated General Contractors of America reported that 32% of construction firms plan to add staff this year with only 9% reporting a decline. The 2012 Dodge Construction Outlook details the forecasts for each construction sector, as follows: in dollars, corresponding to a 7% increase in the number of units to 435,000 (McGraw-Hill Construction Dodge basis). This is still a low amount, as the excess supply of homes due to foreclosures continues to depress the market. in units, continuing its moderate, upward trend. and hotels will see the largest percentage increases, but improvement for offices and stores will be modest. additional 2% in 2012, after falling 15% in The tough fiscal environment for states and localities will continue to dampen school construction, and the uncertain economic environment will limit growth in healthcare facilities. following the 35% gain in 2011, as the low value of the U.S. dollar continues to support export growth. 5%, after a 16% decline in 2011, due to spending cuts and the absence of a multiyear federal transportation bill for highway and bridge construction. Tempo 300 East 23rd Street, New York 62 BRUCE SHAW HANDBOOK 2012

65 SECTION 6 UNITED STATES jump in sector construction offsetting the decline in public sector demand. 6 These details indicate that there is growing demand The US construction market remains very competitive in certain private market sectors but continued with 80% of construction firms reporting that they weakness in other key sectors due to the end of expect bid levels to either stagnate or decline this stimulus measures and a decline in demand for year. This comes in a market where material costs are public construction. Overall the market is projected continuing to increase and contractors are to remain stable with the growing demand for private generating less revenue. Value of Construction Output Public / Private $bn ,200 1, Source: US Census Bureau UNITED STATES Total Public Construction Total Private Construction US Construction by Type of Work 2011 Private Sector $ bn Source: US Census Bureau Public Sector $ bn Source: US Census Bureau Residential $236.3 Miscellaneous $10.6 Residential $8.4 Miscellaneous $19.0 Commercial $69.9 Infrastructure $103.6 Commercial $15.0 Infrastructure $116.2 Healthcare $29.4 Manufacturing $34.7 Healthcare $10.5 Water & Waste $42.8 Educational $13.4 Educational $70.6 BRUCE SHAW HANDBOOK

66 UNITED STATES Annual Construction Cost Index (1913 = 100) 9,200 8,900 8,600 8,300 8,000 7,700 7,400 Source: Engineering News Record 7,100 6,800 6,500 6,200 5, US Regional Building Cost Index 7,000 6,000 5,000 4,000 3,000 Source: Engineering News Record 2,000 1,000 0 New Orleans Atlanta Dallas Denver Cincinnati Baltimore Pittsburgh Cleveland St. Louis Detroit Seattle Minneapolis Los Angeles Kansas City San Francisco Boston Philadelphia Chicago New York Employment in Construction s 7,800 7,600 7,400 7,200 7,000 6,800 6,600 Source: Engineering News Record 6,400 6,200 6,000 5,800 5,600 5, BRUCE SHAW HANDBOOK 2012

67 SECTION 6 UNITED STATES Change in US Employment in Construction Jan. 10-Dec. 11 Seasonally Adjusted in Thousands UNITED STATES -150 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 US Earnings in Construction 2010 Average earnings of non-supervisory workers in construction, May 2010 Industry $ / Hour $ / Week Construction of buildings Non residential building Residential building Heavy and civil engineering construction Utility system construction Highway, street, and bridge construction Other heavy construction Land subdivision Source: BLS Occupational Employment Statistics Speciality trade contractors Building equipment contractors Building finishing contractors Other speciality trade contractors Building foundation and exterior contractors BRUCE SHAW HANDBOOK

68 UNITED STATES US Earnings in Construction 2010 continued Median hourly wages of the largest occupations in US construction, May 2010 Occupation Buildings $ / Hour Civil Engineering $ / Hour Construction managers First-line supervisors Plumbers & pipefitters Electricians Operating engineers Carpenters Masons & concrete finishers Painters Construction labourers Source: BLS Occupational Employment Statistics Top 20 US Contractors Rank Firm Revenue $ bn 1 1 THE TURNER CORP CLARK GROUP THE WHITING-TURNER CONTRACTING CO PCL CONSTRUCTION ENTERPRISES BALFOUR BEATTY CONSTRUCTION GILBANE BUILDING PERINI CORP SKANSEA USA BOVIS LEND LEASE KBR FLUOR CORP HENSEL PHELPS CONSTRUCTION MCCARTHY HOLDINGS STRUCTURE TONE M.A. MORTENSON CONSTRUCTION JE DUNN CONSTRUCTION GROUP SUFFOLK CONSTRUCTION CO HUNT CONSTRUCTION GROUP BRASFIELD & GORRIE MANHATTAN CONSTRUCTION GROUP 1.21 Source: Engineering News Record Note: Ranked by domestic revenue; 2011 ranking is based on 2010 revenue 66 BRUCE SHAW HANDBOOK 2012

69 SECTION 6 UNITED STATES The Top 20 US Design Firms Rank Revenue Type of Firm Firm bn 1 1 EA AECOM TECHNOLOGY CORP EAC URS CORP EAC JACOBS EA CH2M HILL EC FLUOR CORP EC AMEC E TETRA TECH EC BECHTEL EC KBR EA PARSONS BRINCKERHOFF EA HDR EA ARCADIS EC THE SHAW GROUP EC PARSONS EAP LOUIS BERGER GROUP EC BLACK & VEATCH EA HNTB EC MWH GLOBAL E WORLEYPARSONS GROUP EAC BURNS & McDONNELL 0.68 Note: 2011 ranking is based on revenue for design services performed in Key to Type of Firm: A architect; E engineer; C contractor; P planner Exchange Rates: Euro v US Dollar Source: Engineering News Record Source: European Central Bank 6 UNITED STATES Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 July-11 Oct-11 Jan-12 BRUCE SHAW HANDBOOK

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71 CARIBBEAN 7 BRUCE SHAW HANDBOOK

72 Caribbean Market Review The Caribbean has a total population of approximately 40 million and total GDP for the region has remained at around US$250bn in recent years. Tourism accounts for 90% of GDP on many of the islands and the industry employs an estimated 1.6 million people. It is not surprising then that with tourist numbers showing a return to growth in 2010/2011 that there are currently over 100 new hotel projects being developed and over 50 of these under construction in the Caribbean. A number of governments across the region have actively sought out investors. Incentives characterised by exemptions on import duties and reductions in stamp duty on property transactions are being offered. Many of the islands airports have been improved and expanded in recent years to cater for increased passenger numbers and there has been a push to utilise and exploit those airport capacities. A number of the governments are looking at proposals for further expansion of airport capacity to cater for the increase in numbers coming from neighbouring growth economies in Central and South America. Traditional Caribbean industries and in particular agriculture and the growing of sugar cane and bananas and associated industries like the production of rum have been in decline for some The region continues to offer opportunities to overseas consultants, construction firms and specialist subcontractors. decades now and tourism, financial services, light industry and oil and mineral exploration have taken on increasing importance. The greater portion of Foreign Direct Investment flows have been to those countries that are rich in natural resources such as gold, bauxite, oil petroleum, natural gas and alumina and Costa Rica, Dominican Republic and Trinidad and Tobago remain the major recipients. FDI remains at c.us$75bn annually in recent years most of which has come from the USA, China, the EU with significant Canadian investment in Cuba. The region continues to offer opportunities to overseas consultants, construction firms and specialist subcontractors as there is limited expertise locally. This would include some of the other islands not specifically mentioned above like Grenada, Antigua, Martinique, Bonaire, St. Kitts, St Vincent and the US and British Virgin Islands. Cuba remains probably the brightest prospect in this regard and strong signs of the regime becoming more open to development using foreign investment. General Statistics for the Caribbean Land Area GDP GDP GDP Debt To Country Sq. Km Capital Population Millions Per Capita Growth GDP Ratio Unemployment US$ US$ Bahamas 10,010 Nassau 313,312 7,538 28, % 4.50% 7.60% Barbados 430 Bridgetown 286,705 3,963 21, % % 10.70% Bermuda 54 Hamilton 68,679 4,500 69, % 25.00% 2.10% Caymen Cayman Islands 264 George Town 51,384 2,250 43, % 30.00% 13.50% Cuba 109,820 Havana 11,087,330 57,490 9, % 34.20% 1.60% Curacao 444 Willemstad 142,180 5,080 15, % N/A N/A Dominican Republic 48,320 Santo Domingo 9,956,648 54,912 8, % 36.80% 13.30% Haiti* 27,560 Port au Prince 9,717,932 6,632 1, % N/A 40.60% Jamaica 10,831 Kingston 2,868,380 13,690 8, % % 12.40% Puerto Rico 8,870 San Juan 3,989,133 93,520 16, % 60.70% 12.00% St. Lucia 606 Castries 161, , % 37.20% 20.00% Trinidad & Tobago 5,128 Port of Spain 1,227,505 20,590 21, % 29.80% 6.40% Turks & Caicos 948 Cockburn Town 46, , % N/A 10.00% Source: Caribbean Community (Caricom) Regional Statistics Secretariat Note: * Despite having benefited from debt relief in 2009 the earthquake in 2010 leaves Haiti totally dependent on outside aid to rebuild its economy. GDP growth for Haiti is expected to expand by 9% in 2011/2012 largely from reconstruction activity and is forecast to be at 6% by BRUCE SHAW HANDBOOK 2012

73 SECTION 7 CARIBBEAN Caribbean Country Review Bahamas The Bahamas is one of the wealthiest Caribbean countries with its economy heavily dependant on tourism and offshore banking. Tourism and manufacturing accounts for approximately 60% of GDP and directly or indirectly employs half of the labour force. Steady growth in tourism and a boom in construction of new hotels, resorts and residences promoted solid growth up to Recognising the decline in tourist numbers the government of the Bahamas actively pursued new investment and attracted US$2.50 billion in investment from China for the Baha Mar Cable Beach development with over 2,000 rooms. Following on from the decline in tourist numbers in recent years this development has already kick-started significant growth in the recovery of the local economy. Chinese investment has clearly been very important to the Bahamas and to the economies of a number of the Caribbean island nations in recent years. Barbados The Barbadian economy declined by approximately 2% in 2009 and again in 2010 as a result of the global slowdown and reduced tourism numbers although Barbados enjoys the highest rate of repeat visitors anywhere in the world. Tourism constitutes approximately 14% of the economy directly and 40% indirectly and employs 25% of the total workforce. The longer term commitment of the Government to spending on infrastructure development includes the expansion of the Grantley Adams international airport terminal, improvements to the road system, housing projects, water supply and health centres. Barbados also benefits as a low tax jurisdiction and is home to 3,800 international businesses. Bruce Shaw have had an office in Barbados for 15 years. A relatively slow recovery is evident with a number of hotels still at the early design stage on the South Coast. A number of commercial projects in the Warrens area are also in prospect with one or two Government projects nearing completion. Bruce Shaw have had an office in Barbados for 15 years and have been involved in a number of hotel and luxury residence developments in Barbados, Antigua and some of the neighbouring islands. Bermuda Bermudan residents enjoy the highest average per capita income in the world at US$70,000 GDP per person. The economy is primarily structured around financial services for international business. The relocation of a number of large US reinsurance companies following the 9/11 terrorist attacks and again following Hurricane Katrina contributed to its already established location as an international business centre. High quality luxury tourist facilities are also important to the economy. Following almost ten years of the boom in commercial office and top end condominium development in Bermuda these sectors of the market stalled dramatically in Interestingly a number of high end hotel projects completed in 2011 and there are plans for a St. Regis Hotel in Hamilton. There are a number of large infrastructure projects underway including work on a new causeway replacing the roadway severely damaged by a hurricane. Tender prices continue to reflect the downturn and are competitive. Cayman Islands No direct taxation on the three Cayman islands of Grand Cayman, Little Cayman and Cayman Brac make them an important offshore financial centre with over 70,000 companies registered and a stock exchange opened in Tourism still accounts for almost 70% of GDP and 75% of overseas currency earnings with most visitors coming from North America. There are plans to build a new cruise ship terminal area to boost cruise ship arrivals which have fallen below 1.8 million from a high of over 2 million some years ago. Cuba As the largest of the islands with a population of some 11 million Cuba is already a major tourist destination with increases in tourist numbers of almost 10% year on year since The gradual and planned continued relaxation of the restrictions on US tourists will have an enormous impact on the economy as the Government there also relaxes the restrictions of the last fifty years on both indigenous and international private enterprise. There has already been considerable Spanish, Chinese, Canadian and Qatari inward investment in tourism projects. The Tourism Ministry has announced a two-year plan to build 30 hotels with a total of 10,000 new rooms by means of joint ventures with companies from Spain and China. The Government has also been providing guarantees and greater security for foreign investors by allowing state-owned lands to be developed as golf resorts, hotels and marinas based on 99year lease arrangements. The Qatari Diar Real Estate Company commenced the construction of the 200-bed 5-star hotel at Cayo Largo del Sur as a joint venture with the Communist Government which is 7 CARIBBEAN BRUCE SHAW HANDBOOK

74 CARIBBEAN currently a mandatory requirement which is likely to be relaxed. It is estimated that 85% of the workforce in the construction industry are from overseas, mainly from Haiti and the Dominican Republic. The lack of investment in construction over the years has left Cuba with a serious shortage of skilled construction labour and management expertise which promises significant opportunities for overseas construction firms. Curacao Curacao lies just 40 miles off the coast of Venezuela and with the fine natural deep water port of Willemstad the main industries include oil refining, tourism and financial services. It commands one of the highest living standards in the Caribbean and has a well developed infrastructure. Construction costs in Curacao are considerably lower than on most of the other Caribbean islands. While not dependent on tourism it is a popular destination for Dutch tourists and redeveloped its airport near Willemstad in 2003 to accommodate increased tourist numbers. There are plans to further expand the airport to accommodate greater visitor numbers. From 2014 it is planned to run suborbital space tourism flights using the Lynx rocketplane and to launch scientific research missions from a new spaceport. Construction costs in Curacao are considerably lower than on most of the other Caribbean islands. Dominican Republic The Dominican Republic has a population of 10 million with a GDP of US$55 billion, the third largest in the Caribbean. Despite the global downturn the Dominican Republic saw a US$10 billion investment in the tourism sector in 2008 alone and has seen tourism numbers increase to almost 4.50 million per year from 4.30 million in Additional government spending on infrastructure and water supply projects is aimed at maintaining repeat visitor numbers. Much of the low cost labour supporting this steady growth in construction has been from Haiti on the other side of the island although stated Government policy has been to try and correct this situation to reduce local unemployment. Haiti The legacy of the 7.0 magnitude earthquake in January 2010 that killed roughly 300,000 people and devastated a huge proportion of the homes, buildings and infrastructure of the capital Port au Prince remain but there are some hopeful signs two years on. The election of new president Michael Martelly with two-thirds of the vote appears to have stabilised the fragile country with its high crime levels on the wane. Reinforcing national consensus and promising to speed up the decision-making processes Martelly is working with the international relief agencies and donors to ensure the resources needed to rebuild the country are well directed. The reconstruction of existing combined with the construction of new housing projects, schools and new teaching hospitals are welcome developments along with more recent signs of much needed inward investment in other areas. Marriott Hotel, Port au Prince 72 BRUCE SHAW HANDBOOK 2012

75 SECTION 7 CARIBBEAN 7 CARIBBEAN The construction of the E-power 30-megawatt power plant in Port au Prince, mineral exploration, expansion of the existing manufacturing facilities such as Grupo M who currently employ 6,500 Haitian workers at the Codevi industrial park are some of the recent positive developments. Two new hotels are planned for the Petion-Ville suburb of Port au Prince with a 105-room Best Western planned to open later this year. The announcement of a 173-bed Marriott to open in 2014 was made by former US president Bill Clinton and Marriott International president Arne Sorenson said This hotel is one more signal that Haiti is open for business. The Iron Market was destroyed in the earthquake and rebuilt and restored within 12 months owing to the commitment and generosity of Denis O Brien. It is Bruce Shaw are proud to have assisted in this rebuilding work. once again a bustling centre of local commercial activity and has been nominated for a Design Award of the Year award by the Design Museum. Bruce Shaw are proud to have assisted in this rebuilding work and look forward to working on the extension planned for later this year. Jamaica A new joint venture between the Japanese Marubeni Corporation, Korea East West Power Company and the Jamaican Public Service Company to develop a 480 megawatt power plant in St. Catherine starting shortly, for completion of Phase 1 in 2014 and Phase 2 in 2016 is one of the largest private sector developments in Jamaican history and will provide up to 2,000 much needed jobs during the construction phase. Following on the completion of the first phase of the new cruise ship terminal in Falmouth early in 2011 these projects have provided a much needed boost for the Jamaican construction industry. A new Marriott hotel and a Sandels City hotel are planned to start construction in Against that positive background expensive concrete and expensive raw materials imports and high domestic interest rates have further weakened demand in the housing and residential sector. Jamaica s Urban Development Corporation have been promoting urban regeneration for the Kingston Downtown area and Digicel Jamaica, the mobile phone operator, completed the refurbishment of the Coronation market in 2010 and work started on its new HQ building which is due for completion in mid Increases in GCT(VAT) and import duties will increase the cost of construction for investors unless exemptions can be negotiated. Puerto Rico Puerto Rico with a population of 4 million has the largest and most dynamic and diversified economy in the region. It accounts for approximately 30% of the region s GDP. With duty-free access to the US and tax incentives Puerto Rico has enjoyed inward investment from the US over the last 50 years but being linked so closely to the US economy it has seen GNP reduce by 2% in 2008, a further 3% in 2009, 2% in 2010 and results for 2011 are likely to show a levelling off. Major recent projects include the expansion of the Luis International airport, the Puerto Rico Convention BRUCE SHAW HANDBOOK

76 CARIBBEAN Construction Costs Centre and the Pan American Port Terminal. There are also a number of new hotels planned. St. Lucia St. Lucia has continued to attract foreign business and investment in its offshore banking and tourism industries. In contrast to many of its neighbours visitor numbers increased by over 11% in 2010 with more than 700,000 arrivals annually increasing closer to 800,000 in recent years. Tourism is the main source of foreign exchange. The construction industry remains more buoyant than many of its neighbours but delays in planned and much needed road improvements are likely to hold back development. Trinidad & Tobago Trinidad & Tobago has earned a reputation as an excellent location for investment for international businesses and has enjoyed one of the highest growth rates and per capita income in the region including Latin America. This has largely been driven by investment in liquefied natural gas, petrochemicals and the steel industry. It is the Caribbean s largest producer of oil and gas which make up 40% of GDP and up to 80% of exports. Not as dependent on tourism or agriculture as most of the other islands inward direct investment has continued to support and expand capacity in the energy sector and GDP growth has continued through 2008 to 2011 at close to or just below 3%. It is anticipated that it will continue to outperform the majority of the Caribbean due to its natural resources. Continuing the ongoing process of industrialisation the Government is promoting a US$1.40 billion integrated polypropylene complex to come on stream in 2012 and another alumina plant for Construction costs in the Caribbean generally are not as low or competitive as might initially be expected by new overseas investors. The strength of some of the labour unions have ensured that labour costs often remain relatively high despite the recent fall in overall demand. Most of the islands import virtually all of their construction materials as small individual markets cannot support cement, steel or other manufacturing industries. Deforestation in the past to make way for agricultural production also means that timber has to be imported on many of the islands. Import duties and taxes on imports vary significantly from island to island but they are universally high by US or European standards. This contributes to construction costs being comparable or higher than costs in the nearest US states of Florida and Texas. Exemptions from import duties and local taxes are very often central to feasibility for commercial projects. Costs appear to have stabilised during 2011 and are likely to remain stable for the next few years. A period of significant and sustained growth up to 2008 saw substantial increases in construction costs followed by a relatively sharp decline from 2008 to Costs appear to have stabilised during 2011 and are likely to remain stable for the next few years. A natural rebalancing of the market has taken place to a certain degree with reduced capacity in the industry as many of the bigger international construction firms withdrew from the Caribbean market with the downturn. We expect to see a number of these overseas contractors and specialist subcontractors return to the Caribbean and this should bring increased competition on larger projects. Turks & Caicos Islands The economy is based around tourism, offshore financial services, fishing and seafood exports. With its small population of 46,000 the construction industry has traditionally been focussed on high end housing, hotel and tourism related projects. There are two hospital projects proposed, one on Providentiales and one on Grand Turk with a combined value of approximately US$125m although these have been slow to start. The Governor recently announced plans to award contracts to local construction firms to rebuild specific buildings in Grand Turk using funds from the UK for Hurricane Disaster Recovery arising from the double impact of Tropical Storm Hanna and Hurricane Ike. 74 BRUCE SHAW HANDBOOK 2012

77 SECTION 7 CARIBBEAN Average Cost Range US$/Sq.m 7 Barbados Bermuda Cayman Islands Cuba Dominican Republic Regional Index Hotels 5 Star, Urban 3,195-4,000 3,000-3,750 3,000-3,750 2,390-2,995 2,870-3,590 2,390-2,995 Hotels 5 Star, Low Rise Resort 3,465-3,950 3,260-4,075 3,260-4,075 2,595-3,240 3,115-3,890 2,595-3,240 Hotel, 3 Star, Urban 2,130-2,575 2,000-2,500 2,000-2,500 1,580-1,970 1,895-2,370 1,580-1,970 Hotel, 3 Star, Low Rise Resort 2,350-2,940 1,740-2,175 1,740-2,175 1,765-2,310 2,125-2,660 1,765-2,310 High End Residential Apartments 3,415-4,260 3,215-4,000 3,215-4,000 2,575-3,220 3,070-3,835 2,575-3,220 Standard Apartments 2,550-3,190 2,415-3,020 2,415-3,020 1,930-2,415 2,300-2,875 1,930-2,415 Low Cost Housing 1,980-2,475 1,870-2,330 1,870-2,330 1,485-1,865 1,780-2,230 1,485-1,865 Haiti Source: Bruce Shaw CARIBBEAN Low Rise Offices Shell & Core (3 storey) Low Rise Offices Fitted-Out (3 storey) Medium Rise Offices Shell & Core(4-8 storey) Medium Rise Offices Fitted-Out (4-8 storey) High Rise Offices Shell & Core (8-12 storey) High Rise Offices Fitted-Out (8-12 storey) 1,865-2,330 1,760-2,100 1,760-2,100 1,400-1,750 1,675-2,100 1,400-1,750 2,395-3,000 2,250-2,815 2,250-2,815 1,800-2,250 2,160-2,690 1,800-2,250 2,080-2,600 1,955-2,445 1,955-2,445 1,560-1,950 1,870-2,335 1,560-1,950 2,625-3,270 2,465-3,069 2,465-3,069 1,965-2,460 2,360-2,950 1,965-2,460 2,275-2,850 2,145-2,675 2,145-2,675 1,705-2,135 2,050-2,560 1,705-2,135 2,890-3,615 2,715-3,395 2,715-3,395 2,170-2,710 2,600-3,250 2,170-2,710 High Rise Headquarter Offices 3,170-3,960 2,970-3,710 2,970-3,710 2,375-2,970 2,850-3,565 2,375-2,970 Jamaica Puerto Rico St. Lucia Trinidad & Tobago Turks & Caicos Regional Index Hotels 5 Star, Urban 2,870-3,590 2,870-3,590 2,870-3,590 2,365-2,955 3,655-4,595 Hotels 5 Star, Low Rise Resort 3,115-3,890 3,115-3,890 3,115-3,890 2,570-3,205 3,985-4,980 Hotel, 3 Star, Urban 1,895-2,370 1,895-2,370 1,895-2,370 1,565-1,955 2,445-3,060 Hotel, 3 Star, Low Rise Resort 2,125-2,660 2,125-2,660 2,125-2,660 1,750-2,185 2,700-3,365 High End Residential Apartments 3,070-3,835 3,070-3,835 3,070-3,835 2,530-3,160 3,925-4,900 Standard Apartments 2,300-2,875 2,300-2,875 2,300-2,875 1,900-2,371 2,945-3,680 Low Cost Housing 1,780-2,230 1,780-2,230 1,780-2,230 1,465-1,830 2,275-2,845 Low Rise Offices Shell & Core (3 storey) Low Rise Offices Fitted-Out (3 storey) Medium Rise Offices Shell & Core(4-8 storey) Medium Rise Offices Fitted-Out (4-8 storey) High Rise Offices Shell & Core (8-12 storey) High Rise Offices Fitted-Out (8-12 storey) 1,675-2,100 1,675-2,100 1,675-2,100 1,380-1,725 2,145-2,680 2,160-2,690 2,160-2,690 2,160-2,690 1,770-2,215 2,750-3,445 1,870-2,335 1,870-2,335 1,870-2,335 1,540-1,925 2,390-2,985 2,360-2,950 2,360-2,950 2,360-2,950 1,940-2,425 3,015-3,765 2,050-2,560 2,050-2,560 2,050-2,560 1,685-2,100 2,620-3,270 2,600-3,250 2,600-3,250 2,600-3,250 2,140-2,675 3,315-4,150 High Rise Headquarter Offices 2,850-3,565 2,850-3,565 2,850-3,565 2,340-2,930 3,640-4,550 Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees iii Regional variances across the country and from sector to sector BRUCE SHAW HANDBOOK

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79 INDIA 8 BRUCE SHAW HANDBOOK

80 INDIA India Market Review With a population of just over 1.2billion, India is the world s largest democracy. In the past decade, the country has witnessed accelerated economic growth and emerged as a global player with the world s fourth largest economy in purchasing power parity terms. This growth has been placing huge demands on power supply, roads, railways, ports, transportation systems and water supply and sanitation. Bottlenecks in both urban and rural infrastructure have been eroding the country s competitiveness. Investment in construction accounts for nearly 11% of India s GDP. The Government of India has increased infrastructure investments under the Eleventh Five Year Plan. With India s low taxation base only some 15 16% of GDP is collected as taxes in India compared to 25-40% in developed countries, the Government based its budget on projections of GDP growth of 9% and average inflation of 4%. However, different officials have revised their expectations for growth downwards, and for inflation upwards since then. The Chairman of the Prime Minister s Economic Advisory Council expects growth to measure 8.2% in FY , while inflation would drop to around 6.5% by end March The National Council of Applied Economic Research s Quarterly Review of the Economy July 2011 pegs growth at 8.3% and inflation at 7.9% average for FY Construction accounts for nearly 65% of the total investment in infrastructure and is expected to be the biggest beneficiary of the surge in infrastructure investment over the next five years. Investment in construction accounts for nearly 11% of India s GDP. 240 billion is likely to be invested in the infrastructure sector over the next five to 10 years in power, roads, bridges, city infrastructure, ports, airports, telecommunications, which would provide a huge boost to the construction industry as a whole. Average Construction Costs Cost Range INR From To Unit Commercial Offices City Centre Air Conditioned Shell and Core (Low-Medium Rise) 27,000 30,000 per sq.m Residential Developer Standard Apartments (medium standard) 15,000 18,000 per sq.m Leisure Hotel Building (4/5 Star) 75,000 90,000 per sq.m Retail Shopping Centre 30,000 35,000 per sq.m Healthcare Hospital 35,000 40,000 per sq.m Warehouses Without Offices 10,000 15,000 per sq.m Source: Bruce Shaw Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees iii Regional variances across the country and from sector to sector 78 BRUCE SHAW HANDBOOK 2012

81 SECTION 8 INDIA Construction Cost Indices Buildings 2007= * Delhi Mumbai Chennai Bangalore Kolkata Hyderabad *2011 November Indices Source: Construction Industry Development Council (CIDC) 8 INDIA Top Infrastructure Companies in India LARSEN & TOUBRO PUNJ LLOYD JAIPRAKASH ASSOCIATES LTD LANCO INFRATECH LTD NAGARJUNA CONSTRUCTION COMPANY IVRCL INFRASTRUCTURE & PROJECTS LTD SIMPLEX INFRASTRUCTURES LTD GMR LTD GAMMON INDIA HCC ERA INFRA ENGINEERING LTD RELIANCE INFRASTRUCTURE IRCON PATEL ENGINEERING SOMA ENTERPRISES J KUMAR INFRA PROJECTS GVK LTD IRB INFRASTRUCTURE DEVELOPERS LTD AHLUWALIA CONTRACTS INDIA LTD SPML INFRA LTD Exchange Rates US Dollar v Rupee Source: Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 BRUCE SHAW HANDBOOK

82 80 BRUCE SHAW HANDBOOK 2012

83 AUSTRALIA & NEW ZEALAND 9 BRUCE SHAW HANDBOOK

84 AUSTRALIA & NEW ZEALAND The outlook for the construction industry appears positive with expected year on year increases in 2012 and The outlook for the construction industry appears positive with expected year on year increases in 2012 and 2013 Source: Australian Bureau of Statistics

85 SECTION 9 AUSTRALIA & NEW ZEALAND Australia Market Review The Australian economy continues to grow although it did suffer from set backs in early 2011 due to some natural disasters. The continued growth has been driven by a number of factors including strong investment and exports stemming from the continued mining boom. In addition, unemployment and inflation have been maintained over the last year and remain relatively low at circa 5% and 3% respectively. While the Australian economy remains in a strong position, the International Monetary Fund has noted some risks which could adversely affect the current economic position. These potential risks include global recovery stagnation, Asian growth stumbles including the impacting demand for commodities and also the potential risk emanating from fiscal restraints in the US and the Euro areas. The Australian construction industry which is an integral part of the overall economy is expected to grow further by circa 5-7% over the next year. While the building sector remains relatively stagnant, the engineering sector is predicted to support this increase. The government spending introduced through the recent stimulus packages (2008) in response to the aftermath of the global financial crisis are nearly all exhausted. The extent of this stimulus was the third highest amongst OECD countries and the delta in reduced government spending is expected to be taken up by the private sector. The introduction of the new Federal Government s carbon tax has resulted in great speculation in the construction market. The carbon tax is scheduled to be introduced on the 1st July 2012 and for the first three years will be at a fixed rate of $23/tonne. The effect of this new tax is difficult to calculate at this juncture but is expected to filter through the entire supply chain. The Australian dollar has continued to perform at record levels against the US dollar. The strong dollar has allowed for more competitive imports however it may be problematic for many exporters as they become less competitive. The outlook for the construction industry appears positive with expected year on year increases in 2012 and 2013 in the engineering/infrastructure sector however a more subdued increase is expected for the residential and non-residential sectors. This will be reflected in a continued highly competitive tender market. 9 AUSTRALIA & NEW ZEALAND Australian Key Statistics Units GDP, current prices U.S. $ Billions GDP per capita, current prices U.S. $ Units 44,602 55,150 66,984 Inflation, average consumer prices Annual % change Population Persons, Millions Current account balance U.S. $ Billions (e) Source: BRUCE SHAW HANDBOOK

86 AUSTRALIA & NEW ZEALAND Value of Construction Output (AUD $); Australia Sector AUD $m AUD $m AUD $m Building Work Residential Private Sector 44,146 43,854 44,447 Public Sector 894 2,221 2,733 45,040 46,075 47,180 Non-Residential Building Private Sector 25,175 20,677 19,657 Public Sector 7,340 14, ,515 34,902 34,154 Source: Australian Bureau of Statistics Total Building 77,555 80,977 81,334 Engineering Work Engineering Private Sector 47,149 46,324 54,618 Public Sector 27,426 29,669 29,987 74,575 75,993 84,605 Total Construction 152, , ,939 Building Cost Index by Capital City Source: Australian Institute of Quantity Surveyors Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12(f) Apr-12(f) Canberra Brisbane Adelaide Perth AWA Sydney Melbourne 84 BRUCE SHAW HANDBOOK 2012

87 SECTION 9 AUSTRALIA & NEW ZEALAND Building Cost Index and Consumer Price Index Comparison (June 2011) Apr-05 Aug-05 Dec-05 AIQS BCI Apr-06 Aug-06 CPI Dec-06 Apr-07 Dwelling Unit Commencements Year New Houses New Other Residential Buildings Aug-07 Dec-07 Apr-08 Aug-08 Dec-08 Apr-09 Aug-09 Dec-09 Apr-10 Aug-10 Total Dwelling Units ,953 38, , ,177 52, , ,116 59, ,412 Dec-10 Apr-11 Source: Australian Institute of Quantity Surveyors Source: Australian Bureau of Statistics AUSTRALIA & NEW ZEALAND Average Construction Costs 2012: Australia Cost Range AUD$ From To Unit Commercial Offices City Centre Air Conditioned Shell and Core (Low-Medium Rise) 1,850 2,350 per sq.m Developer Standard (Low-Medium Rise) 2,100 2,600 per sq.m Shell and Core (Medium-High Rise) 2,450 3,000 per sq.m Developer Standard (Medium-High Rise) 3,100 3,950 per sq.m Residential Developer Standard Apartments (medium standard) 1,950 2,450 per sq.m Developer Standard Apartments (high standard) 2,600 3,500 per sq.m Sources;DCWC Pty Ltd / Bruce Shaw Leisure Hotel Building (Budget/3 Star) 2,750 3,350 per sq.m Hotel Building (4/5 Star) 4,150 4,950 per sq.m Education Primary Level (up to 3 stories, no Air Conditioning) 1,450 1,850 per sq.m Car Park Surface 2,800 3,100 per Space Multi Storey 22,500 27,000 per Space Double Level Basement 27,000 48,000 per Space Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees iii The above costs are for projects based in Sydney. Regional cost variances occur for projects in Adelaide, Brisbane, Canberra, Melbourne, Hobart & Perth iv Regional variances across the states can vary from -9% to +15% BRUCE SHAW HANDBOOK

88 AUSTRALIA & NEW ZEALAND List of Tier 1 Main / Building Contractors: Australia AW EDWARDS BAULDERSTONE HORNIBROOK PTY LTD BOVIS LEND LEASE PTY LTD BROOKFIELD MULTIPLEX PTY LTD GROCON PTY LTD HANSEN YUNCKEN PTY LTD HUTCHINSON BUILDERS PTY LTD JOHN HOLLAND PTY LTD LAING O ROURKE AUSTRALIA CONSTRUCTION PTY LTD LEIGHTON CONTRACTORS PTY LTD ST HILLIERS PTY LTD WATPAC LIMITED THIESS PTY LTD Australian (AUD $) Currency Exchange Rates Source: European Central Bank Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 AUD$/USD$ AUD$/EUR 86 BRUCE SHAW HANDBOOK 2012

89 SECTION 9 AUSTRALIA & NEW ZEALAND New Zealand Market Review New Zealand like many other countries is still recovering from the global financial crisis. Overall business confidence remains low across the majority of industry sectors which in turn is hampering the construction industry. The negative effects from the global financial crisis have been further exacerbated with the recent natural disasters in the Canterbury Region, the full effect of these disasters is yet to be fully realised. In addition, the New Zealand dollar although performing well against the United States dollar has struggled against the Australian Dollar and recorded a decade low position in late The weak currency position against its Trans Tasman neighbour has had an obvious effect on Australian trade, New Zealand s largest export/import market. The construction market like the rest of the greater economy is still recovering from a peak in 2007/2008 in line with the effects of the global New Zealand Key Statistics financial crisis. The tender market across all regions of New Zealand and throughout each construction sector remains highly competitive and is expected to continue in a similar vein throughout The number of resource consents is expected to fall in 2012 however the New Zealand government has indicated the resource consent process requires an overhaul and streamlining which is expected to encourage future development. The tender market across all regions of New Zealand remains highly competitive. The construction outlook for 2012 is expected to be in line with the previous year with continued low growth however the true effect of the natural disaster and subsequent aftershocks may affect this outlook. 9 AUSTRALIA & NEW ZEALAND Units GDP, current prices U.S. $ Billions GDP per capita, current prices U.S. $ Units 25,389 26,287 26,725 Inflation, average consumer prices Annual % change Population Persons, Millions 4,346,700 4,396,620 4,436,741 Current account balance U.S. $ Billions Source: Note: Average exchange rate for 2011 used to convert from NZ$ to US$ Value of Construction Output: New Zealand NZ$m Residential Buildings Non-Residential Buildings BRUCE SHAW HANDBOOK

90 AUSTRALIA & NEW ZEALAND Numbers Employed in Construction (000 s) Source: Dwelling Unit Commencements Year Apartments Houses Total ,850 22,664 26, ,368 23,366 25, ,386 16,682 19, ,482 12,717 14, ,014 15, ,093 12,436 13,529 Source: Average Construction Costs 2012: New Zealand Cost Range NZ$ From To Unit Commercial Offices City Centre Air Conditioned Shell and Core (Low-Medium Rise) 1,700 1,900 per sq.m Developer Standard (Low-Medium Rise) 2,150 2,450 per sq.m Shell and Core (Medium-High Rise) 2,500 2,800 per sq.m Developer Standard (Medium-High Rise) 3,200 3,800 per sq.m Source: Bruce Shaw Residential Developer Standard Apartments (medium standard) 2,400 2,700 per sq.m Developer Standard Apartments (high standard) 2,800 3,300 per sq.m Leisure Hotel Building (Budget/3 Star) 2,800 3,200 per sq.m Hotel Building (4/5 Star) 4,900 5,300 per sq.m Education Primary Level (up to 3 stories, no Air Conditioning) 1,800 2,200 per sq.m Car Park Surface 3,500 5,700 per Space Multi Storey 24,000 26,500 per Space Double Level Basement 31,500 33,250 per Space i ii All subject to site specifics, design and specification All exclude Land Acquisition Costs, External Works Costs & Professional Fees iii The above costs are for projects based in Auckland. Regional cost variances occur for projects in Waikato / Bay of Plenty, Wellington, Remainder of North Island, Canterbury & Remainder of South Island ; New Zealand 88 BRUCE SHAW HANDBOOK 2012

91 SECTION 9 AUSTRALIA & NEW ZEALAND List of Tier 1 Main / Building Contractors: New Zealand FLETCHERS HAWKINS MAINZEAL BROOKEFIELD MULTIPLEX NDZ$ Exchange Rates : New Zeland Source: European Central Bank AUSTRALIA & NEW ZEALAND 0 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 NZD$/AUD$ NZD$/USD$ NZD$/EUR BRUCE SHAW HANDBOOK

92 90 BRUCE SHAW HANDBOOK 2012

93 SOUTH EAST ASIA 10 BRUCE SHAW HANDBOOK

94 SOUTH EAST ASIA Investing in construction in unfamiliar territories is a daunting prospect.

95 SECTION 10 SOUTH EAST ASIA South East Asia Market Review South East Asia is sometimes hard to define. In the context of this commentary, it is taken as countries bordering the South China Sea, particularly Singapore, Vietnam, Malaysia, and Indonesia. Although these countries are quite different politically and economically, they share a unique blend of low labour costs, freedom of trade, and natural resources, sitting across a gateway between East and West. Other than Singapore, these are developing countries but all rely quite heavily on exports of goods and services to the West, particularly the Eurozone and North America. Whilst the latter has seen some growth in the past twelve months, this has not been reflected in the Eurozone where the sovereign debt crisis has restrained all but Germany and France. The effect of this market contraction has (with the exception of Indonesia) seen a slow-down in GDP growth across the region: the global downturn has dampened growth. Investing in construction in unfamiliar territories is a daunting prospect. A very informative schedule of information on how difficult it is to carry out business across the world is published by World Bank Group, and the following extract gives food for thought: (UK & USA included for comparative purposes) 10 SOUTH EAST ASIA Carrying out Business Thoughout the World Economy Ease of Doing Business Starting a Business Dealing with Construction Permits Registering Property Enforcing Contracts Singapore USA UK Malaysia Vietnam Indonesia Resolving Insolvency Source: World Bank Group BRUCE SHAW HANDBOOK

96 SOUTH EAST ASIA Singapore Market Review Singapore has a very free economy, second only to Hong Kong in global stakes, but the economy is closely controlled by the governing Republic, balancing global downturn with local initiatives of public spending. Full year GDP growth in 2011 was approximately 5%, whilst the forecast for 2012 is much more modest at 2-3%. With a population of 5.18m, Singapore commands high GDP (SG$303.7bn in 2010) with manufacturing the highest sector, delivery 22%, and construction a more modest 4.5%. The value of construction output (at a peak in 2008), recovered in 2010 due mainly to private sector investment in hotels/ casinos, and strong residential growth to a total of SG$28bn, with a further increase in 2011 to SG$32bn, boosted by government contracts, particularly for infrastructure. Current forecasts for 2012 indicate a steep decline to between SG$21bn and SG$27bn. Because of the freedom of doing business, financial integrity and lack of corruption, Singapore continues to not only attract inward investment, but also to act as a springboard for businesses wishing to invest in other South East Asian countries, and there are government incentives to do so. This will help smooth out the decline in growth, and perhaps offer a safer way of investing off-shore. Value of Construction Output: Singapore SG$bn Source: Department of Statistics Singapore Public Sector Private Sector 94 BRUCE SHAW HANDBOOK 2012

97 SECTION 10 SOUTH EAST ASIA Average Construction Costs: Singapore Key Rates Current at January Commercial Offices City Centre Air Conditioned Cost Range SGD$ From To Unit Shell and Core (Low-Medium Rise) n/a n/a per sq.m Developer Standard (Low-Medium Rise) 2,500 2,750 per sq.m Shell and Core (Medium-High Rise) n/a n/a per sq.m Developer Standard (Medium- 2,900 3,150 per sq.m High Rise) Residential Developer Standard Apartments 1,950 2,150 per sq.m (medium standard) Developer Standard Apartments 2,450 2,650 per sq.m (high standard) Leisure Hotel Building (Budget/3 Star) 2,850 3,250 per sq.m Hotel Building (4/5 Star) 4,200 5,100 per sq.m Education Primary Level (up to 3 stories, 1,500 1,850 per sq.m no Air conditioning) Car Park Surface n/a n/a per Space Multi Storey 26,000 31,500 per Space Double Level Basement n/a n/a per Space Source: Barton Bruce Shaw SOUTH EAST ASIA Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees SGD $ Currency Exchange Rates Source: Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 SGD$/EUR SGD$/USD$ BRUCE SHAW HANDBOOK

98 SOUTH EAST ASIA Malaysia Market Review Like Singapore, its ex-colonial neighbour to the South, Malaysia presents a more mature face to the investment and construction markets. With a population of 26.6m and a GDP in excess of US$220bn, exports of electronics, textiles, petroleum, palm oil, and tourism help to maintain a robust construction market. Growth in construction fell from 5.1% in 2010 to 3.4% in 2011; but a figure up to 7% is forecast for 2012, driven by both large infrastructure projects and housing construction. One concern here is the underlying rate of inflation, set to rise from 3.2% in 2011 to 3.5% or more in The majority of construction opportunities lie in East Malaysia, and the focus of tourism has led to a rise in opportunities for resort and marina construction. Its ease of doing business ranking is 18 ahead of Germany (19), France (29), and way ahead of Vietnam (98) and Indonesia (129). This is in spite of the difficulty in obtaining construction permits, which can slow the pace of projects, whilst red tape makes starting a business as an inward investment opportunity a challenge. Malaysia GDP Growth Rate Percentage Change in Gross Domestic Product Source: Department of Statistics Malay 96 BRUCE SHAW HANDBOOK 2012

99 SECTION 10 SOUTH EAST ASIA 10 Average Construction Costs: Malaysia Key Rates Current at January 2012 Commercial Offices City Centre Air Conditioned Cost Range US $ From To Unit Shell and Core (Low-Medium Rise) n/a n/a per sq.m Developer Standard (Low-Medium Rise) per sq.m Shell and Core (Medium-High Rise) n/a n/a per sq.m Developer Standard (Medium- 1,100 1,200 per sq.m High Rise) Residential Developer Standard Apartments per sq.m (medium standard) Developer Standard Apartments per sq.m (high standard) Leisure Hotel Building (Budget/3 Star) 1,200 1,500 per sq.m Hotel Building (4/5 Star) 2,000 2,300 per sq.m Education Primary Level (up to 3 stories, per sq.m no Air conditioning) Car Park Surface N/A N/A per sq.m Multi Storey per sq.m Double Level Basement per sq.m Source: Barton Bruce Shaw SOUTH EAST ASIA Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees Malaysian Ringgits (MYR) Currency Exchange Rates Source: I Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 MYR/EUR MYR/USD$ BRUCE SHAW HANDBOOK

100 SOUTH EAST ASIA Vietnam Market Review Vietnam is regarded by many as a late starter in the commercial world. This single party communist state has interesting demographics. Within a population of just over 90m, the average age is 27.8 years, and the average per capita income is less than US$1,300 (2011 figures) compared with China at US$4,250 and Singapore at US$62,100. Within two to three years the figure for per capita income is set to at least double: this will only be achieved if strict controls on trade and the flow of money are relaxed, and the difficulty of doing business is eased. Currently in the ease of doing business league table Vietnam ranks 98 (Singapore and Hong Kong fight for first place, China is at 91, UK at Number 7). Vietnam GDP Growth Rate For the past decade, GDP has grown at an astonishing rate, and currently is second only to Singapore in growth rate. Growth is now forecast to slow, due to a combination of factors including higher commodity prices, devaluation of the Vietnamese Dong, and rising interest rates, to between 6 and 6.3% in 2012 but with inflation levels reaching 8-10%. This slowdown in growth will be reflected in the construction industry, with Government intervention and investment in key industries (including nuclear) softening the blow. Construction costs remain lower than other SE Asian countries, mainly due to the low cost of employment, which counters the high cost of imported raw materials. Percentage Change in Gross Domestic Product Source: General Statistics Office of Vietnam Average Construction Costs: Vietnam Key Rates Current at January 2012 Cost Range US $ From To Unit Commercial Offices City Centre Air Conditioned Shell and Core (Low-Medium Rise) n/a n/a per sq.m Developer Standard (Low-Medium Rise) per sq.m Shell and Core (Medium-High Rise n/a n/a per sq.m Developer Standard (Medium per sq.m High Rise) Residential Developer Standard Apartments per sq.m (medium standard) Developer Standard Apartments (high per sq.m standard) Leisure Hotel Building (Budget/3 Star) 1,500 1,800 per sq.m Hotel Building (4/5 Star) 1,850 2,050 per sq.m Education Primary Level (up to 3 stories, no Air per sq.m conditioning) Car Park Surface n/a n/a per sq.m Multi Storey per sq.m Double Level Basement per sq.m Source: Barton Bruce Shaw Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees 98 BRUCE SHAW HANDBOOK 2012

101 SECTION 10 SOUTH EAST ASIA 10 SOUTH EAST ASIA Vietnamese Dong Currency Exchange Rates Source: Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Oct-11 EUR /VND USD$/VND BRUCE SHAW HANDBOOK

102 SOUTH EAST ASIA Indonesia Market Review Indonesia is the largest country in this review of South East Asia, comprising an extensive land mass stretching from the Indian Ocean to Papua New Guinea. This landmass is broken into five large areas, plus numerous small islands. In area terms it is roughly 75% of the size of India, supporting a population of 239m. The majority of the population live in the capital (Jakarta), and commercial centres are located on the island of Java. Indonesia has the largest economy in South East Asia, and supports a GDP of US$706bn, which in the face of the same pressures as the other economies in the area has grown by 6.5% in 2011, and this pace of growth is forecast to continue until Inflation of between 4% and 6% in 2011 is expected to fall to 3.5% in The construction industry contributed over 10% to the GDP in 2011, but better performance was hampered by inflationary pressures on the price of basic raw materials, including cement, aggregates reinforcement, and structural steel. Indonesia does not score well in the ease of doing business league table, at 129. Notwithstanding this, growth is forecast to continue at a rate of 7.5% pa in 2012, attracting major inward investment, particularly in respect of large infrastructure projects (power generation, railways, manufacturing industries). Average Construction Costs: Indonesia Key Rates Current at January 2012 Commercial Offices Residential Cost Range US $ From To Unit City Centre Air Conditioned Shell and Core (Low-Medium Rise) n/a n/a per sq.m Developer Standard (Low-Medium Rise) n/a n/a per sq.m Shell and Core (Medium-High Rise) n/a n/a per sq.m Developer Standard (Medium- High Rise) 750 1,000 per sq.m Developer Standard Apartments n/a n/a per sq.m (medium standard) Developer Standard Apartments per sq.m (high standard) Leisure Hotel Building (Budget/3 Star) 800 1,000 per sq.m Hotel Building (4/5 Star) 1,000 1,200 per sq.m Education Primary Level (up to 3 stories, per sq.m no Air conditioning) Car Park Surface n/a n/a per sq.m Multi Storey n/a n/a per sq.m Double Level Basement n/a n/a per sq.m Source: Barton Bruce Shaw Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees 100 BRUCE SHAW HANDBOOK 2012

103 SECTION 10 SOUTH EAST ASIA Indonesian Rupiah (IDR) Currency Exchange Rates 10 Source: SOUTH EAST ASIA Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Oct-11 EUR /IDR USD$/IDR BRUCE SHAW HANDBOOK

104 102 BRUCE SHAW HANDBOOK 2012

105 CHINA 11 BRUCE SHAW HANDBOOK

106 CHINA China s growth has been around 10% a year on average over the past two decades, making it the world s The outlook for the construction industry appears positive with expected year on year increases in 2012 and 2013 second largest economy, after the United States.

107 SECTION 11 CHINA China Market Review The Peoples Republic of China (PRC) is the most populous country in the world with more than 1.3 billion people located in East Asia, with the capital in Beijing. China represents approximately 20% of the world s population, nearly five times more than the United States, even though they both have approximately the same geographical area. Bruce Shaw has established itself in the market in China in conjunction with our local partner, Shanghai First Surveying Co. Ltd. with offices in Shanghai and Chengdu, providing full cost consultancy services to large multi-nationals including Hewlett Packard and Diageo. China s growth has been around 10% a year on average over the past two decades, making it the world s second largest economy, after the United States. However, the economic constraints in the US and in particular the Eurozone, has caused a weakening of the export sector and GDP is estimated to grow by 8.8% in 2012 compared to 9.3% in 2011, according to the Bank of China. China s investment in real estate development rose 28% to 6.17 trillion Yuan ($ billion) in 2011, Bruce Shaw has established itself in the market in China in conjunction with our local partner. down from 33% growth in Many commentators estimate that this may fall by a further 10% in In terms of floor area, property construction starts increased 16% to 1.9 billion square meters in 2011, a growth rate down sharply from 42% in 2010, according to the National Bureau of Statistics. Whilst China plans to start building seven million public housing units in 2012, this is down from 2011 s ten million units, which is due in part to the Governments measures to stabilise soaring prices including imposing credit restrictions and an increase in down payments and also as a result of a reduction in investment by developers. Annual growth in property investment was 12.3% in December 2011, which marked a sharp slowdown from November s 20.2%, a worrying signal for a sector which represents some 13% of total economic output. 11 CHINA China GDP Annual Growth Rate % 12% 10% 8% 6% 4% Source: National Bureau of Statistics 2% 0% The Gross Domestic Product (GDP) of China reached 47.2 trillion Yuan in 2011, 9.2% higher than 2010 calculating at comparable prices, according to economic data issued by the National Bureau of Statistics of China. In addition, China s Consumer Price Index (CPI), a main gauge of inflation, rose 4.1% in December 2011 from the previous year, hitting a 15 month low. The country s inflation rate has remained persistently high for a long time, and reached 6.5% in July The CPI downward trend in late 2011 came as a great relief, but the annual inflation rate still reached a high level at 5.4% last year, exceeding the Chinese Government s control target of 4%. BRUCE SHAW HANDBOOK

108 CHINA Total Government Investment in Trillion RMB Source: National Bureau of Statistics 5 0 At the end of September 2011, the ministry s outstanding debt increased to 2.23 trillion Yuan with its asset-liability ratio standing at 59.6%, according to official data released by the Government. Notwithstanding this debt the economy will be largely dependent on the Governments willingness to introduce a stimulus package to counteract the weak external demand and economic slowdown similar to the stimulus package introduced following the global recession in One such solid indication is the Governments confirmation that they plan to invest 400 billion Yuan in railway infrastructure construction in 2012, with an estimated completion of over 6,000 kms of new railway. However, whilst positive, this investment scale registered a slight decline from the total expenditure of 469 billion Yuan in 2011 and a marked decrease from over 700 billion Yuan in This is the first time for the Government to announce a clear goal for the future railway development which plays an important role in the country s social and economic development. Regional Building Cost Comparison January 2012 Outlined below are indicative construction costs for the varying sectors based on tenders received in the regions. Ref. Description From (US$) Shanghai Beijing Hong Kong To (US$) Index From (US$) To (US$) Index From (US$) To (US$) 1.0 Residential Sector 1.1 Medium Quality High Rise $600 $ $650 $ $2,000 $2, High Quality High Rise $900 $1, $950 $1, $2,200 $2, Commercial / Office Sector 2.1 Standard Specification $850 $1, $850 $1, $2,000 $2, High Rise 2.2 High Specification High Rise $1,100 $1, $900 $1, $2,400 $2, Hotel & Leisure / Retail Sector 3.1 Shopping Centre $900 $1, $1,000 $1, $2,000 $2, Index Source: Bruce Shaw / Shanghai First Surveying Co. Ltd 3.2 Budget/3* Hotel $900 $1, $1,000 $1, $2,400 $2, /5* Hotel $1,900 $2, $2,000 $2, $3,000 $3, Notes: Above costs are indicative only based on return tenders received. They include allowances for profit and preliminaries, but exclude land acquisition and external works. 106 BRUCE SHAW HANDBOOK 2012

109 SECTION 11 CHINA Regional Building Cost Comparison January 2012 continued 11 Outlined below are indicative construction costs for the varying sectors based on tenders received in the regions. Ref. Description From (US$) Notes: Above costs are indicative only based on return tenders received. They include allowances for profit and preliminaries, but exclude land acquisition and external works Chengdu To (US$) Guangzhou Shanghai Tender Price Index. Multistorey Residential Building ( ) Outlined below is the Tender Price Index for the Shanghai region based on tender returns. The base line index of 100 is taken as of Q1 2001, with a high of 123 in Q3 of 2008, with tender returns as of Q down at an index of 118. Index From (US$) To (US$) 1.0 Residential Sector 1.1 Medium Quality High Rise $350 $ $500 $ High Quality High Rise $700 $1, $800 $1, Commercial / Office Sector 2.1 Standard Specification High Rise $700 $ $750 $ High Specification High Rise $900 $1, $950 $1, Hotel & Leisure / Retail Sector 3.1 Shopping Centre $600 $1, $700 $1, Budget/3* Hotel $700 $ $800 $1, /5* Hotel $1,500 $2, $1,600 $2, Index Source: Bruce Shaw / Shanghai First Surveying Co. Ltd Source: Shanghai First Surveying Co. Ltd CHINA Suzhou-Creek, Shanghai BRUCE SHAW HANDBOOK

110 CHINA Top 20 Chinese Contractors Revenue Rank Firm $ bn 1 CHINA RAILWAY GROUP LTD CHINA RAILWAY CONSTRUCTION CORP CHINA STATE CONSTRUCTION ENGINEERING CORP CHINA COMMUNICATIONS CONSTRUCTION GROUP CHINA METALLURGICAL GROUP CORP SHANGHAI CONSTRUCTION GROUP DONGFANG ELECTRIC CORP SHANGHAI URBAN CONSTRUCTION (GROUP) CORP GUANGSHA CONSTRUCTION GROUP CO CHINA PETROLEUM ENGINEERING & CONSTRUCTION CORP CHINA NATIONAL MACHINERY INDUSTRY CORP ZHEJIANG CONSTRUCTION INVESTMENT GROUP CO HUNAN CONSTRUCTION ENGINEERING GROUP CORP CHENGDU CONSTRUCTION ENGINEERING CORP. GROUP ZHONGTIAN CONSTRUCTION GROUP CO SICHUAN HUASHI GROUP CORP GUANGZHOU CONSTRUCTION ENGINEERING CORP YUNNAN CONSTRUCTION ENGINEERING GROUP CO SHAANXI CONSTRUCTION ENGINEERING GROUP CORP GUANGXI CONSTRUCTION ENGINEERING GROUP CO Source: Engineering News Record 108 BRUCE SHAW HANDBOOK 2012

111 SECTION 11 CHINA Top 20 Chinese Design Firms Revenue Rank Design Firm Name $ bn 1 HYDROCHINA CORPORATION CHINA CHENGDA ENGINEERING CO CHINA POWER ENGINEERING CONSULTING GROUP CO CHINA RAILWAY ERYUAN ENGINEERING GROUP CO THE THIRD RAILWAY SURVEY AND DESIGN INSTITUTE GROUP CORPORATION CHINA RAILWAY SIYUAN SURVEY AND DESIGN GROUP CO. LTD CHINA CONSTRUCTION ENGINEERING DESIGN GROUP CORPORATION CHINA ARCHITECTURE DESIGN & RESEARCH GROUP SHANGHAI XIAN DAI ARCHITECTURAL DESIGN (GROUP) CO CHINA HUANQIU CONTRACTING & ENGINEERING CORPORATION CHINA PETROLEUM PIPELINE ENGINEERING CORPORATION CHINA UNITED ENGINEERING CORPORATION ARCHITECTURAL DESIGN & RESEARCH INSTITUTE OF TONGJI UNIVERSITY HYDROCHINA CHENGDU ENGINEERING CORPORATION CHINA NUCLEAR POWER DESIGN COMPANY (SHEN ZHEN) EAST CHINA INVESTIGATION AND DESIGN INSTITUTE CCCC HIGHWAY CONSULTANTS CO HYDROCHINA XIBEI ENGINEERING CORPORATION SHANGHAI MUNICIPAL ENGINEERING DESIGN INSTITUTE (GROUP) CO CCCC FIRST HIGHWAY CONSULTANTS CO Source: Engineering News Record 11 CHINA Chinese Yuan Renminbi (CNY) Currency Exchange Rates Source: European Central Bank Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 CNY/EUR CNY/USD$ BRUCE SHAW HANDBOOK

112 110 BRUCE SHAW HANDBOOK 2012

113 GHANA 12 BRUCE SHAW HANDBOOK

114 GHANA The Republic of Ghana is one of the fastest growing economies in the world. The outlook for the construction industry appears positive with expected year on year increases in 2012 and 2013 Source: Australian Bureau of Statistics

115 SECTION 12 GHANA Ghana Market Review The Republic of Ghana with a population of 24 million and a land area of 238,535 square kilometres is one of the fastest growing economies in the world. There has been a significant growth in real GDP from 4% in 2009 to 8% in 2010 and it is expected that circa 14% real GDP growth will be achieved in Inflation, which was previously high in Ghana, has stabilised with the Government s 2011 target of 9% likely to be achieved. The Industry Sector will record the highest output growth due mainly to the recent commencement of crude oil production. Growth in this sector is expected to exceed 30% in Other sectors, such as Services and Agriculture, are likely to achieve more modest growth rates. Historically, the Construction Sector represented 4% to 6% of GDP. With a 12% plus growth rate projected for the sector, construction is expected to represent over 10% of GDP from 2012 onwards. These growth expectations are reflected in Ghana s 2012 Budget which focuses on the provision of key infrastructure, particularly in the areas of: Construction is expected to represent over 10% of GDP from 2012 onwards. 12 GHANA Ghana Key Statistics Unit GDP at current market prices Million Gh 30,179 36,598 46,232 Million US$ 28,249 25,798 32,319 GDP per capita Gh 1,318 1,563 1,930 US$ 1,234 1,102 1,349 GDP growth rate % Inflation % Exchange Rate (Gh /US$) Gh per US$ Current Account Balance Million US$ (5,496) (3,380) (2,962) Population Persons, Millions Minimum Wage Gh Source: Ghana Statistical Service GDP (US$ billion current prices) Source: International Monetary Fund, World Economic Outlook Database 0 BRUCE SHAW HANDBOOK

116 GHANA Value of Construction Output (at constant 2006 prices) Year Million Gh Million US$ % of GDP ,016 1, % ,252 1, % ,739 1, % ,902 1, % ,949 1, % Source: Ghana Statistical Service Construction Output Growth Rate Forecast (based on constant 2006 prices) Construction Output Growth Rate 17% 14% 12% 12% Source: Ghana Statistical Service & Ghana Ministry of Finance and Economic Planning (Sept 2011) Average Construction Costs 2012: Ghana Key Rates Current at January 2012 Cost Range Gh From To Unit Commercial Offices City Centre Air Conditioned 2,400 2,700 per sq.m Shell and Core (Low-Medium Rise) 1,500 1,800 per sq.m Residential Developer Standard Apartments 2,000 2,500 per sq.m (medium standard) Leisure Hotel Building (4/5*) 2,200 2,600 per sq.m Retail Shopping Centre 1,700 2,400 per sq.m Education Third Level 1,900 2,400 per sq.m Healthcare Hospital 3,300 3,900 per sq.m Warehouses Without Offices 1,000 1,300 per sq.m Source: Bruce Shaw Notes: i All subject to site specifics, design and specification ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees iii Regional variances occur across the country and from sector to sector iv Gh per : BRUCE SHAW HANDBOOK 2012

117 SECTION 12 GHANA Inflation Index 12 60% 50% 40% 30% 20% 10% 0% Labour Cement Steel Building Cost Index & Consumer Price Index Comparison 45% 40% 35% 30% 25% 20% 15% Source: Ghana Statistical Office Source: Ghana Statistical Office GHANA 10% 5% 0% CPI BCI BRUCE SHAW HANDBOOK

118 GHANA Construction Companies Active in Ghana Arab Contractors Co. (Osman Ahmed Osman & Co) Ballast Nedam Ghana BV Big Aidoo Construction Company Bilfinger Berger AG China Int l Water & Electric Corp. China Jiangxi Corporation for IETC China Railway Engineering Corporation China Zhong Hao Ltd. Consar Ltd. De Simone Ltd. Energoprojekt Group PW Group GKL Ghana Ltd. Grinaker-LTA Ltd. Jiangsu Jianda Construction Co., Inc Jiangxi Zhongmei Engineering Construction Co. Justmoh Construction Ltd. Kamsad Construction Company Ltd. MSF International Royal BAM Group NV SADE CGTH Solel Boneh International Ltd. Taysec Construction Ltd. Exchange Rates Gh /US$ Source: Bank of Ghana Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec BRUCE SHAW HANDBOOK 2012

119 SECTION 12 GHANA 12 GHANA BRUCE SHAW HANDBOOK

120 118 BRUCE SHAW HANDBOOK 2012

121 TOPICAL ISSUES 13 BRUCE SHAW HANDBOOK

122 TOPICAL ISSUES Energy and Power Generation by Stephen Ashe On both a domestic and international front we are faced with major challenges regarding how we source and generate our energy supplies. Globally we have an insatiable requirement for energy and power and with an ageing current capacity and relatively low investment in future generation Government commitments to low carbon emissions power generation is set to take front stage in the coming years. There is now significant EU and government legislation which encourages investment in low carbon energy generation. We note however that a substantial part of energy generation will still come from mature technologies (coal, gas & nuclear) and it is important that we do not lose sight of the need to upgrade these facilities and introduce latest technologies. The main sources of energy are outlined below: Geothermal) Fossils Fossil fuels are fuels formed by natural processes. They contain high percentages of carbon and include coal, petroleum and gas. It was estimated by the Energy Information Administration that in 2007 primary sources of energy consisted of petroleum 36.0%, coal 27.4% and natural gas 23.0%, amounting to an 86.4% share for fossil fuels in primary energy consumption in the world. As supplies of fossils (in particular oil) have diminished prices have increased. This is not helped by some countries creating a false impression about the availability of capacity in order to manipulate prices on the wholesale markets. Generation from fossils is still the most economical source of power. However as supply diminishes and government legislation changes renewable energy sources are becoming more and more economically viable. Power Stations require a large initial construction investment. The costs have several components including: (EPC) This is the cost of the construction contract for building the plant. It includes the cost of designing the facility, buying the equipment and construction. A large part of the cost is the actual equipment. Costs Transmission and fuel delivery facilities (i.e. gas pipeline) Finance Charges Nuclear In a nuclear power plant the heat source is one or more nuclear reactors. The heat is used to generate steam which drives a steam turbine connected to a generator which produces electricity. Nuclear power plants typically have high capital costs for building the plant, but low direct fuel costs (with much of the costs of fuel extraction, processing, use and long term storage externalised). Cost estimates also need to take into account plant decommissioning and nuclear waste storage costs. Measures to mitigate carbon emissions may favour the economics of nuclear power but this needs to be set against the obvious safety concerns. Renewable Energy Renewable energy comes from natural resources such as wind, wave, sunlight and geothermal. About 16% of global final energy consumption comes from renewables. The share of renewables in electricity generation is around 19%, with 16% of global electricity coming from hydroelectricity and 3% from new renewables. Wind Wind power is growing at the rate of 30% annually, with a worldwide installed capacity of 194 gigawatts (GW) in 2010, and is widely used in Europe, Asia, and the United States. The graph on the next page sets out the global wind power cumulative capacity. As can be seen it has experienced major growth. Wave and Hydro Energy can be harnessed from water by large scale dams (hydroelectric dams) and from the ocean taking advantage of tidal flow. Hydroelectricity is the most common form of renewable energy accounting for 16% of global electricity consumption in The cost of hydroelectricity is relatively low, making it a competitive source of renewable electricity. Hydroelectricity also has considerably less C0 2 emissions than fossil fuels. 120 BRUCE SHAW HANDBOOK 2012

123 SECTION 13 TOPICAL ISSUES Global Wind Power Cumulative Capacity 13 Source: GWEC TOPICAL ISSUES Tidal power, also called tidal energy, is a form of hydropower that converts the energy of tides into useful forms of power mainly electricity. Although not yet widely used, tidal power has potential for future electricity generation. Solar According to a 2011 projection by the International Energy Agency, solar power generators may produce most of the world s electricity within 50 years, dramatically reducing the emissions of greenhouse gases that harm the environment. The solar thermal power industry is growing rapidly with 1.2 GW under construction as of April 2009 and another 13.9 GW announced globally through Biomass Biomass is plant matter used to generate electricity with steam turbines & gasifiers to produce heat, usually by direct combustion. Examples include forest residues (such as dead trees, branches and tree stumps), yard clippings, wood chips and even municipal solid waste. Biomass power plant size is often driven by biomass availability in close proximity as transport costs of the (bulky) fuel play a key factor in the plant s economics. Geothermal Energy Geothermal energy is thermal energy generated and stored in the Earth. Geothermal power requires no fuel (except for pumps), and is therefore immune to fuel cost fluctuations. However, capital costs are significant. Drilling accounts for over half the costs, and exploration of deep resources entails significant risks. At Bruce Shaw we understand the needs of today s power generation sector and have the experience to meet the challenges. Our specialist service includes: ibility studies and Cost Benefit Analysis management nagement and Risk Management We have a strong working relationship with a number of clients in the energy sector due to the level of expertise and service we provide. Whether you want to upgrade and enhance existing assets or develop new projects we are available to join your team. Some Bruce Shaw projects ower 50 MW Biomass Plant d 450 MW Gas Fired CCGT (Claim Management) Mayo Power BRUCE SHAW HANDBOOK

124 TOPICAL ISSUES Financial Robustness of Contractors by Willie Aherne Each year, billions are spent on contracts for the procurement of works, services and supplies. Poor contract performance due to deterioration in a contractor s financial position, or in a worst case insolvency, is increasing. This usually results in a loss of time or money even if bonds are in place. A significant additional hidden cost is the senior management time consumed while managing a difficult contract. Prevention is better than cure and so it is essential to undertake a thorough assessment of a contractor s financial robustness before entering into a contract in the first instance. The comprehensiveness of the assessment should be determined by the value and complexity of the contract. When assessing the financial robustness of a contractor, Bruce Shaw usually starts with a review of the contractor s financial statements with a particular focus on the following: Auditor s Report An unqualified audit opinion provides assurance that the financial statements of a contractor give a true and fair view and are representative of the state of its affairs. Qualified audit opinions are a cause for concern and require careful consideration. It is inherently assumed that a company carries on its business as a going concern, and will continue to do so in the near future unless there are specific reasons such as pending insolvency, liquidation or cessation of trade. Auditors frequently use an emphasis of matter paragraph within their audit reports to highlight certain parts of financial statements or directors reports relating to ongoing concern issues. This is understandable given the prevalence of difficult trading conditions, lower property values and the significant challenges in securing new or replacement credit lines from banks. Cashflow Strong cashflow is essential in any business. High projected turnover and profit become irrelevant if weak cashflow puts strain on a contractor s business. The issue is compounded if the contractor has insufficient credit lines or has few liquid assets on its balance sheet to carry it through a difficult period. Balance Sheet The balance sheet is a useful indicator of financial strength. While the quantum and quality of Net Assets enable an assessment of worth, the level of unencumbered assets, net current assets and cash balances provide a measure of liquidity and in turn a contractor s capacity to sustain a difficult trading period. Bruce Shaw also focuses on liabilities falling due in the near term, particularly bank debt which may need to be refinanced. 122 BRUCE SHAW HANDBOOK 2012

125 SECTION 13 TOPICAL ISSUES Profit and Loss The profit and loss account provides useful information on turnover, the profitability of a contractor, performance trends and exceptional items that have affected its business. Other The notes to the accounts sometimes highlight matters which may impact on a contractor s business. Examples of this include details of guarantees provided to group companies, contingent liabilities, pension liabilities, provisions, charges on assets, restrictions on cash balances, over reliance on a small number of customers or contracts, etc. The directors report or notes to the accounts may also provide information regarding the status of the contractor s order book. There will be instances where the assessment outlined above should extend to other group companies as a result of parent company guarantees or situations where a contractor is exposed to, or reliant on, the performance of another group company. Undertaking assessments in the manner outlined above should reduce the possibility of making awards to contractors that may subsequently have difficulties performing due to deterioration in their finances. On larger projects, it is equally important to continue to monitor a contractor s financial position post contract award to re-confirm its financial robustness or facilitate early remedial action should the need arise. 13 TOPICAL ISSUES The financial statements provided by contractors are often outdated and there is a risk that the underlying financial condition of a contractor may have changed substantially since its financial statements were approved. Hence, the financial analysis should include a review of the following where possible: Management or Interim Accounts These accounts can provide a useful update on its trading performance. Business Projections While business projections are difficult to verify, they do provide some, albeit limited, assurance on a contractor s future profitability. Contractor Declarations Declarations should be sought to confirm that there are no legal, tax or regulatory investigations or proceedings taking place, insurance or other claims pending, unreported contingent liabilities or losses arising, incidences of insurance applications being refused, etc. Details should be sought where such matters do arise. The following third party sources may provide further information on a contractor s financial situation: Source Companies Registration Office Benefits to the Assessment Process late filings are sometimes evidence of distress searches provide details of charges on assets Revenue Credit Ratings / Banker s Letter Performance Bonds / Insurance Media tax clearance certificates indicate that a contractor s taxes are in order at the date of issue these provide information on a contractor s credit quality third party evidence confirming availability provides some, albeit limited, assurance on financial robustness media news clips and articles may identify issues prompting further investigation BRUCE SHAW HANDBOOK

126 TOPICAL ISSUES Building Information Modelling (BIM) by Alan Fox Historically the methodology for the coordination and communication of construction project information was facilitated using standard software packages. Microsoft Excel, Word and 2D computer aided design software packages are still commonly used and are the principal applications in the toolkit of a design team. However there are limitations associated with using these applications which revolve around integration and coordination of data from different sources. Some issues that can occur include: documents could necessitate manual adjustment of other documents until construction commences The aforementioned issues and associated problems cost Clients, Consultants and Contractors time and money both directly and indirectly. The BIM process attempts to alleviate some of these problems by improving the general process. What is BIM? BIM is a business process supported by software that acts as a single coordinated database. This software is capable of storing the construction information for an entire project. At the forefront of the database is a 3D Model, which is a visual representation of the finished project. The building components or objects within the 3D Model carry their own individual properties such as geometry, material, quantities etc. cost, project and facilities management and provides a way to work concurrently on most aspects of building life cycle processes. Intelligent Input Engineers Architect Consultant Client Quantity Surveyor Contractor Co-ordinated Output 3D BIM MODEL 2D PLANS AND ELEVATIONS DOOR AND WINDOW SCHEDULES CONSTRUCTION DETAILS SPECIFICATIONS 3D RENDERING AND WALKTHROUGHS Benefits of BIM Apart from the obvious benefit of possessing a 3D model of the finished building, there are a number of other benefits, which include: generated automatically into one fully coordinated drawing building components ny changes made, will automatically be reflected in all other documentation and quickly ordering materials In an ideal world, a project will be fully designed and coordinated prior to commencing on site and BIM encourages this method of thinking. The graph on the next page shows the relationship between the traditional design process (3) and the preferred design process/bim (4). The BIM method of management is more practical and efficient. It eliminates many of the uncertainties that sometimes arise in the traditional design process and can effectively reduce the extent of additional costs and delays. 124 BRUCE SHAW HANDBOOK 2012

127 SECTION 13 TOPICAL ISSUES Traditional Versus Preferred Design Process Ability to impact cost Cost of design changes Traditional design process Preferred design process (BIM) and functional capabilities TOPICAL ISSUES PD: Pre-design SD: Schematic design DD: Design Development CD Construction documentation PR: Procurement OP: Operation It is important to note however that as with most software packages, the software is only as good as the information being fed into it. Implications for Quantity Surveyors With the introduction of BIM, the Quantity Surveyor will need to adapt and understand the BIM process and the capabilities of the associated software. Bruce Shaw recognise the importance of BIM and other IT Developments and have invested in software such as CostX to ensure we keep our competitive edge and continue to provide a first class service to our Clients. BIM allows the user to obtain automatic (BIM predefined) quantities and also measure any 3D shapes with CostX. So unlike, 2D drawings, BIM allows both manual takeoff and automatic import of quantities. This data can then be transferred to Cost Plans or Bills of Quantities. Major advantages of CostX include: drawings and 3D BIM to the drawings highlight changes s One of the biggest challenges for BIM is contractors, engineers and the architect on a common platform. Integrated Project Delivery (IPD) is the best solution. Integrated Project Delivery (IPD) Integrated Project Delivery (IPD) is a project delivery approach that integrates people, systems, business structures and practices into a process that collaboratively harnesses the talents and insights of all participants to optimise project results, increase value to the owner, reduce waste, and maximise efficiency through all phases of design, fabrication, and construction. Team leadership under IPD will vary from project to project depending on a number of considerations, such as contractual relationships and the skills of individual team members. The Integrated Project Coordinator (IPC) is primarily a facilitator, and may be a retained third party or one of the team members. In many cases the responsibilities will migrate. For example, the main designer may be the IPC during the design phases while the main contractor takes on that role as the project moves into construction. Given Bruce Shaws direct relationship with Developers / Clients and given our expertise in the construction sector, Bruce Shaw could very easily take the role of IPC in future projects. Although BIM is a relatively new technology, its prominence is increasing worldwide. According to the McGraw Hill Construction Smart Market Research Report published in 2010: The Business Value of BIM in Europe: Getting Building Information Modelling to the Bottom Line in the United Kingdom, France States and 36% of Western Europe have adopted BIM. In June 2011 the UK government published its BIM Working Party Strategy This report announced the Government s intention to require collaborative 3D BIM (with all project and asset information, documentation and data being electronic) on all its projects exceeding 5million by BRUCE SHAW HANDBOOK

128 TOPICAL ISSUES The Changing Shape of Retail by Paul Body The global recession and the advent of new technology are changing the demand for traditional retail space. Over the last years (up to the recession) retail expenditure growth was exceptionally strong, driven largely by high rates of borrowing, low inflation/ interest rates and strong house price inflation. The global recession has corrected such unsustainable growth and the forecast for the next 10 years is much lower. The retail sector is constantly evolving due to changing customer demands and more informed purchasing decisions. This is driving many retailers to consolidate their businesses. However this is having a negative input on the smaller retailers who cannot adapt to these demands and this in turn may bring on their demise and that of the traditional high street shop. Retail Globalisation Among developed countries, the UK continues to lead the world as the most international retail market. Europe maintains its ability to attract the worlds top retailers, with 60% of the worlds top 250 retailers having a presence in Europe. Although Europe continues to dominate, emerging economies such as China, Russia and the UAE have gained significant ground in the past 12 months. In the current climate diversifying and finding new areas of growth and profitability are key. Even as sales through traditional routes of physical stores decline, online retail sales have grown. As a matter of process, customers collect all sufficient information on product features, prices, warranties, availability and environmental impact and then compare these with competitors products, before purchasing. More time is spent researching on the internet about products they wish to purchase. Multi-channel It is an exciting time to expand into new markets with the influence of globalisation and the harnessing of technology like mobile phones, smart-phones, tablets and social media platforms creating a multi-channel shopping experience. A factor promoting multi-channel retailing is consumer tendencies to mix channels during their purchasing drive with a very particular way of choosing the product they want, how they want it and with a variety of delivery options. Some retailers have started implementing multichannel strategies, such as alternative delivery options, integrated customer service and aligned marketing efforts that facilitate both researching and buying across channels. Multi-channel consumers are spending more per visit than those who shop solely or on-line. Research shows: research in store. they have a physical presence. of them access the internet through their mobile device and 19% browse the internet once a week or more frequently. Social Media Networking The rapid evolution of social media networking sites such as Facebook and Twitter have also become important in terms of influence on customer behaviour and purchasing, habits that the retail industry needs to pay attention to. In a recent European Internet users survey 46% of users agreed 126 BRUCE SHAW HANDBOOK 2012

129 SECTION 13 TOPICAL ISSUES 13 that customer ratings and reviews help them decide whether or not to purchase a product or service. Therefore it is essential for retailers to adopt social media marketing practices. In the current climate, diversifying and finding new areas of growth and profitability are key. Social Retailing Notwithstanding the above, online shopping can be out there which combine technology and interaction creating an in-store experience that combines social networking and shopping. This has come to be known as Social Retailing. The Social Retailing technology uses an in-store three-paneled magic mirror that can send photos or videos of shoppers in outfit options to their friend s s, mobiles and social networking sites for instant opinions. The technology also allows customers to see what others have purchased, and also view similar options that are not in stock but can be purchased online and delivered to their homes. Future Outlook Even though retail sales showed signs of recovery towards the beginning of 2010, there is still scepticism regarding the retail outlook for the developed countries. Western Europe remains depressed, restrained by markets such as Ireland, Spain and the UK, which continue to face problems such as high government borrowing, household debt and unemployment. Despite this, global retail sales growth is expected in terms of volume growth with the global retail market expected to return to comparable pre 2008 levels by In summary, as Multi-channel shopping is continuing to take a greater slice of the retail spending cake, retailers will be forced to review their store portfolios. For the majority, a continued bricks and mortar presence is necessary but rationalisation is inevitable. TOPICAL ISSUES Traditional vs Online Retail Growth Source: EIU, Datamonitor, IMAP Traditional Retail Growth Online Retail Growth BRUCE SHAW HANDBOOK

130 TOPICAL ISSUES Challenges for Consultant Project Managers within current market conditions by David Wilson Construction activity in many European countries has remained in a depressed state over the last year. Many potential developments have been postponed due to market uncertainty, lack of funding, and central government cut backs. This has resulted in many Contractors, Sub-Contractors, Suppliers and Consultants being forced to cut costs and overheads, in order to maintain commercial viability in difficult market conditions. This scenario has led to significant challenges for Consultant Project Managers, given that construction related organisations now need to plan, design, fabricate, supply, construct and operate construction related projects with fewer and leaner resources than before. Characteristics emerging from these market conditions and corresponding challenges faced by Consultant Project Managers include the following: Contracting and Supply related organisations. perform to previous standards, due to knowledge and past experience being lost through redundancies, and/or non-replaced retirements. organisations. design. constraints, often accentuated by an elongated chain of approval within lending organisations, combined with compressed project time constraints that often emanate therefrom. on in the project cycle, as a means of reducing Client costs. reduction of on-site management, with right first time construction being more difficult to achieve. decreased demand, resulting in longer lead times for many materials, specialist goods and equipment. due to finer tolerances associated with just in time fabrication, and logistical problems linked to commercial conditions in Europe and further afield. costs, leading to increased challenges for cost and program management. inconvenience for Clients and Tenants. 128 BRUCE SHAW HANDBOOK 2012

131 SECTION 13 TOPICAL ISSUES 13 TOPICAL ISSUES Given this back-drop, Consultant Project Managers still need to deliver projects for their Clients within Time, Cost, Quality and Functionality constraints. Some of the measures adopted by Bruce Shaw in managing these changes and associated risks are outlined below: management resources within each organisation involved with the project, facilitating effective and efficient decision making. Successful project management requires a good understanding of on-going changes within the wider economy and construction industry. between organisations on a joint venture/ consortia basis, to fill the deficit of suitable managers and span the knowledge and experience gaps that have arisen. appointing Bruce Shaw as Project Managers early on in the project cycle, given the contribution we make in relation to project strategy, project planning, project risk management, and co-ordination of third parties, including funders and tenants. resourced to develop value driven solutions for the Client, with these obligations being reinforced at fee tender and pre-appointment stages. can realistically be procured, designed, fabricated and delivered within project constraints. addresses project risk in order to minimise program and cost related issues so easily encountered in this difficult market. implementation and management of Quality Control Systems on site. managing the increased risk of remaining snags between Handover and Project Close Out. Successful project management requires a good understanding of on-going changes within the wider economy and construction industry. Once current shifts and trends have been identified, and the project related risks understood, Bruce Shaw s Project Managers are well placed to put in place a strategy and plan that will enable the project to be successfully delivered for the Client. With our extensive experience across a wide range of sectors, working in a diverse range of regions and countries, Bruce Shaw looks forward to successfully managing our Client s projects throughout the challenging year ahead. BRUCE SHAW HANDBOOK

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133 ABOUT BRUCE SHAW 14 BRUCE SHAW HANDBOOK

134 ABOUT BRUCE SHAW Bruce Shaw Bruce Shaw is an independent international construction consultancy firm with over 40 year s experience, providing and supporting our clients worldwide with the full spectrum of our construction services through our Global network of offices. During the past year, Bruce Shaw has continued to grow, with the opening of offices in Vietnam and with major expansion into China. Our culture is to continue to build upon and improve these services throughout our network of offices and global resources. Our services are internationally accredited to the ISO 9001 quality standards and environmental standards. The Bruce Shaw organisation is structured into a multiplicity of dedicated project service teams with specific skill sets, which are tailored to the particular requirements of clients globally and project types. These teams include Quantity Surveying / Cost Management, Project Management, Safety Management, Consultancy and Procurement along with, Public Private Partnership Consultancy, Supply Chain Consultancy, Legal Technical Support and Insolvency Technical Support. Our dynamic teams have earned a reputation for managing projects with a range of quality services that consistently delivers on time and on budget. Our priority, through our solution driven approach, is to help our clients and their teams achieve their objectives and realize maximum value from their activities. We pride ourselves on the quality of our client care approach and this is reflected in the repeat commissions we are awarded, which accounts for 70% of our business. We are always on hand to support clients with expert advice and direction in such areas as: Bruce Shaw continues to be at the forefront in providing expert advice and services to our clients throughout all stages of projects. This in turn leads to faster project delivery, greater cost efficiency and maximum value for money from the built asset investment. Bruce Shaw use and invest in the latest technology to achieve superior accuracy, higher quality and faster delivery for our clients. Our specially developed in-house documentation and IT infrastructure is tailored to the specific needs of our clients and has been central to our success, which in turn leads to a faster project delivery, greater cost efficiency and maximum value for money. Bruce Shaw selects the highest calibre staff for our projects and our teams of professionals are amongst the highest regarded in the industry. We continue to promote and invest in our Graduate Training Scheme which provides practical experience for those wishing to prepare for their final examinations, such as the Assessment of Professional Competence, achieving chartered status to the Royal Institute of Chartered Surveyors (RICS), Society of Chartered Surveyors Ireland (SCSI), Chartered Institute of Purchasing & Supply (CIPS) or M.Sc in Strategic Procurement. 132 BRUCE SHAW HANDBOOK 2012

135 SECTION 14 ABOUT BRUCE SHAW Cost Management 1 Pre-Contract Stage 14 Initial Cost Advice / Feasibility Studies To obtain the best value for money, the viability of each project is carefully examined. Cost must be weighed against aesthetics, quality, space and time, and an acceptable budget agreed. Close collaboration at this stage between the project team members will bring maximum benefits to the client. Bruce Shaw leads this process and explores all impact on over 70% of overall development costs. The company offers experience across a range of feasibility studies, from high cost urban regeneration schemes to low-rise residential dwellings to luxury hotels. Budget Estimating & Cost Planning Bruce Shaw establishes the initial budget cost by reference to cost data derived from previous projects and by measurement and pricing of the key elemental quantities. The budget is allocated amongst the various building elements to establish limits within which each element is allowed develop. As the scheme progresses, each element is checked to ensure it remains within its limit and the overall scheme remains within budget. Our role is to challenge the design / design choices on behalf of the client, to ensure all cost limits are maintained / achieved. Whole Life Costing Bruce Shaw s approach to lifecycle costing considers and optimises the full range of costs which accrue from the construction of an asset right through its anticipated life span. Whole life costing is a key driver in both public and private sector works and is considered a necessity in PPP and PFI projects in terms of long-term operation, risk and the lifecycle replacement of key components. ABOUT BRUCE SHAW Value Engineering Value engineering is a cost management technique that seeks to balance cost, reliability and performance of materials with the most appropriate methods of construction to achieve maximum value. Bruce Shaw implements the most up-to-date value engineering techniques during a project s design stages to ensure that the most economicallyeffective solutions are adopted, consistent with the client s design and operational requirements. During the early stages of a project, Bruce Shaw convenes and chairs value engineering workshops, designed to ensure that a correct balance between cost and functionality is achieved and adopted by all parties. Bruce Shaw helps clients to establish the most cost-effective investment decision by focusing not only on the capital costs but on the total cost of the asset. This is done by undertaking a detailed exercise, ideally at initial design stage, to establish trade-offs on capital, maintenance and operations/ occupancy costs. As a serious player in the PPP/PFI market, Bruce Shaw can produce whole life cost models that incorporate an industry-accepted cost structure which is compliant with ISO Bespoke software incorporates BCIS and Bruce Shaw s own in-house data to inform decision-makers at all stages of a project. BRUCE SHAW HANDBOOK

136 ABOUT BRUCE SHAW Sample Benchmark Study Cost per MW Element for Data Centres 20,000,000 15,000,000 Source: Bruce Shaw 10,000,000 5,000,000 0 Dublin 1 Dublin 2 Western Western Dublin 3 Dublin 4 Dublin 5 UK (London) Paris Europe 1 Europe 2 Total for Soft Costs Total for Equipment Total for Electrical Total for Mechanical Total for CSA Benchmarking By identifying drivers for improving value, cost, time and quality, whilst still ensuring the best value is being achieved, benchmarking can play a significant role in informing the decision-making process. Bruce Shaw has developed one of the largest bespoke construction cost databases in Europe over the past decade. It is a central source of live project data and can be utilised to produce detailed elemental benchmarking studies at various stages of construction development (see graph above). In this way, the best possible international standards are met and value is achieved at early budget estimating and cost planning stages. Cost Benefit Analysis Government guidance for the appraisal and management of capital expenditure in the public sector requires that all capital expenditure proposals for projects over a defined monetary threshold should be subject to a Cost Benefit Analysis. Bruce Shaw s in-house team is experienced in preparing these reports and in developing a detailed assessment of capital costs, on-going operating costs, direct and indirect revenues, and the macroeconomic benefits and costs of proceeding with a project. Bruce Shaw also undertakes post project reviews for clients. Risk Assessment At all stages of the project we will review the relevant risks pertaining to that stage of the project. We utilise Quantitative Risk Assessment (QRA) techniques in assessing these risks. Risks may include construction cost overrun, programme risks, changes in legislation or unforeseen site difficulties. The results will be presented using the Risk software. This will present a combination of possible scenarios utilising a statistical simulation process and ensure informed decisions can be made at critical project junctures (see flow chart on facing page). Advice on Contract / Procurement Procedures Bruce Shaw examines all possible contract/ procurement options and advises on the most appropriate option for a specific project. Contractual/ tendering options include the traditional method of tendering, two-stage tendering, negotiated contracts, management contracts, design and construct contracts and construction management contracts. Bruce Shaw has no allegiance to any particular forms or methods of procurement and has current experience of all of the major options available. The company does not subscribe to a first past the post philosophy but in attainment of best value. Bruce Shaw advocates identifying, prior to selecting a procurement route, the key criteria and drivers for a project, which is typically a balance between programme control, the process for achieving cost certainty, equitable risk allocation, maximising off-site fabrication, specialist sub-contractor involvement and contemporary management principles. 134 BRUCE SHAW HANDBOOK 2012

137 SECTION 14 ABOUT BRUCE SHAW 14 ABOUT BRUCE SHAW Preparation of Contract Documentation Once the most appropriate Procurement Option has been selected, Bruce Shaw prepares the conditions under which contractors will tender the project including Preliminaries / General Conditions. We also provide advice on the adequacy of the levels of insurance, liquidated damages, dates for completion etc. Finally we prepare the tender documents including detailed Bills of Quantities, Instructions to Tenderers and Forms of Tender. 2 Post-Contract Stage Cost Control during Construction Bruce Shaw s integrated cost management systems provide the transition whereby its cost planning systems supported by risk and opportunity and contingency management are applied to on site cost management and control. One of the primary post-contract tasks is to financially manage the contractor in accordance with the terms of the contract and Bruce Shaw s strategy is simple - progressive close-out of risk and ensuring that the Final Account is agreed on a rolling basis with the Contractor, i.e. it is real time. By creating, at the outset, a strong working relationship with the Contractor, inviting him to contribute to the project process, respect and trust will be bred that will lay the foundations for a successful team ethos. Monthly risk-and-opportunity meetings at which contractor participation is encouraged is part of the Bruce Shaw approach. The risk and opportunity register is used as a primary post-contract cost management tool. BRUCE SHAW HANDBOOK

138 ABOUT BRUCE SHAW Valuation of Work Monthly valuations of work-in-progress are carried out in order to make stage payments to the contractor. This includes the physical measurement of the work on the site and materials delivered. Cash flow projections are provided to indicate the client s anticipated monthly expenditure throughout the construction stage. Change Management Central to cost control during the construction stage is the determination to complete the project within the original budget. Through accurate recordkeeping and good physical control in the field, Bruce Shaw continuously monitors changes and updates cost reports to show the current position to the client. If a cost over-run is projected, evasive action can be taken by making design adjustments to achieve cost reductions and so return the project to its planned budget. Settlement of Final Account Bruce Shaw negotiate with the Contractor to sign-off the cost of work as each element is complete. The advantage of this approach to the Client is that there is a rolling Final Account which can be speedily agreed upon project completion with no surprises. The further advantage to the Contractor is that he is paid in full for changes completed and agreed as the project proceeds. Central to cost control during the construction stage is the determination to complete the project within the original budget. Capital Allowances The vast majority of businesses incurring capital expenditure on the construction of commercial property can benefit from tax relief in the form of Capital Allowances, with the most widely available tax allowance being that incurred with expenditure on plant and machinery. Bruce Shaw can maximise clients capital allowances recovery levels and have valuations agreed by the relevant tax authorities as efficiently as possible. Enhanced Capital Allowances (ECAs) of 100% first year tax relief can be claimed by businesses on specific energy-saving equipment. The value of ECAs in the modern property environment is recognised by Bruce Shaw s Cost Managers as a significant benefit to businesses in writing-off the whole cost of their investment against taxable profit. Insurance Valuations Among the services provided by Bruce Shaw is building insurance valuations. The company provides support for insurers and loss adjusters who are preparing reconstruction cost appraisals for damaged buildings, as well as for property owners portfolios. Accurate valuations of rebuilding costs are essential in avoiding over-insurance and in minimising exposure to under-insurance. Bruce Shaw s building insurance valuations service can include property damage assessment, scope of works recommendations, review and re-inspection of claims, risk management, closing assistance and mediation/arbitration. Accurate insurance valuations ensure sufficient cover, minimise premiums, facilitates negotiations with tenants, validates against published benchmark data and provides information for the asset database. 136 BRUCE SHAW HANDBOOK 2012

139 SECTION 14 ABOUT BRUCE SHAW Project Management Bruce Shaw offers a professional, personal and comprehensive Project Management service to all its clients. The company s policy and natural inclination is to work very closely with clients on a personal level, building up a relationship based on trust and openness. This creates a strong working bond, and greatly assists in progressing projects on a daily basis and, in particular, in resolving the many challenges which construction projects generate. A key element in the success of a project is developing a full understanding of the drivers behind an organisation, and the motivation for the project in hand. Through gaining this understanding, a project can be effectively addressed, to ensure the client s objectives are not only met, but exceeded. Our team of professional Project Managers are amongst the most experienced in the industry, and have worked on a wide variety of landmark projects worldwide. It is this breadth of experience that enables us to take a fresh and pioneering approach in establishing a strategic framework to address the unique requirements of every project, however large or small. Throughout a project lifecycle, our project managers employ a range of bespoke management tools to control the project delivery, including: Programme / Scheduling Management Very early in a project we will look to establish the key milestones for a project and develop a Master Programme which underpins the timescales for the delivery of each phase. Risk Management We identify all risks which are specific to each project, assess the implications in terms of cost, time and quality, identify a course of action to mitigate the risk and allocate responsibility for resolution. The Risk Register is treated as a live document, and maintained throughout the project lifecycle. Change Management We employ a structured, documented Change Management system which allows fully informed decisions to be made by the Client in advance of the change arising. Client Decision Management It is essential to the success of a project that the Client is aware of the decisions and approvals which are required of them. We implement a documented system of advising the Client of these issues in advance, and tracking the timely close-out of these decisions and approvals throughout the project. Re-Engineering Management Bruce Shaw has expert experience in assisting organisations who are relocating, expanding, downsizing and re-organising. We advise on strategies to ensure seamless transition specific to the constraints and opportunities unique to each project, and manage these strategies to successful conclusion. Our typical Project Management services include: Assist in preparing the Project Brief appointment Provide total co-ordination 14 ABOUT BRUCE SHAW BRUCE SHAW HANDBOOK

140 ABOUT BRUCE SHAW Consultancy Services Bruce Shaw provides a wide range of project support services and independent services ranging from financial to investment, including Public Private Partnerships, to legal support and procurement. Procurement & Supply Chain Management Bruce Shaw Procurement and Supply Chain teams have a track record working with clients in both the public and private sector. An extensive knowledge and understanding of property whether capital expenditure or maintenance and operations allows Bruce Shaw to provide strategic advice on how to achieve and maximise financial efficiencies and improved performance. We recognise the importance of engaging with stakeholders and developing supplier relations to drive value through intelligent procurement and sourcing, while identifying solutions, which combine best practice with security of performance and deliver best value. Our key procurement & supply chain management services include: le life procurement activities curement tender management, evaluation, recommendation and award et intelligence e and guidance on general public procurement issues, including compliance with procurement rules and guidelines: the EC Treaty and E.U. procurement directives, international agreements, national regulations and guidelines procedural manuals ing contractual disputes or, if unsuccessful, managing formal resolution process, e.g. mediation, arbitration, legal proceedings contract and award notices Public Procurement Consultancy Business needs to be supported by high quality procurement practices and supplier relationships which deliver best value in terms of quality/price balance, timely delivery, sustainability etc. Public procurement is also subject to mandatory adherence to public procurement rules. These are contained in the Treaty on the Functioning of the European Union (TFEU) and additionally, where contract values exceed EU thresholds, the European Procurement Directives and National Regulations transpose these directives into national law. Update on EU Public Procurement In late December 2011, the European Commission published the text of its proposals for the new procurement directives to replace the current directives on public and utilities procurements. They have also published the text of a proposal for a directive on the award of concession contracts which is seeking to introduce competition in the award of high value contracts in this category. 138 BRUCE SHAW HANDBOOK 2012

141 SECTION 14 ABOUT BRUCE SHAW The European Commission hopes that, by the end of 2012, these proposals will be adopted and that they will come into force in Member States by June The background to this initiative was that the European Commission considered that the procedures needed to be modernised due to factors such as the current economic situation and demands for procurement to be more environmentally friendly, focused on social standards and to be more innovative. During 2011, the Commission carried out a consultation process with public procurement stakeholders to evaluate the impact and effectiveness of current EU procurement and aspects that need to be changed. The Commission considered that it was important to consult widely with those involved in day-to-day procurement. The Commission published a green paper in January 2011 (Towards a More Efficient European Procurement Market) which highlighted a number of areas for possible reform such as simplification of the procedures, particularly for small local and regional governments, easier cross-border bidding, improved access for European companies to markets outside the EU, customising the rules for services of particular social significance and introducing better safeguards to prevent corruption, favoritism etc. Following the consultation process, the changes now proposed include: rocedures for regional and local contracting authorities whereby they would be permitted to publish a general notice for their planned procurements for the next year rather purchase of new innovative services, goods and works, provided they can be delivered to agreed improved and no longer being confined to ited class of social services being introduced with particular rules for contracts in excess of 500,000. Where the contracts are of lower value, Member States would be able to determine the tion of information obligations at pre-qualification stage including self-declarations on the fulfillment of selection criteria, with only the successful candidates/tenderer(s) being required ited scope for negotiation being introduced to improve the quality of an offer, but there would be otion of e-procurement. It is planned to achieve full electronic communication in public procurement within two years of the ditional measures being introduced to facilitate roved access to public procurement for SMEs through dividing projects into Lots and lower al oversight authority being appointed which would be in charge of monitoring and control of public procurement. It would be able to provide immediate feedback on the functioning of the policy and the potential weaknesses in national legislation and practice. It would also be used to reinforce the fight against corruption and favoritism with contracting authorities being obliged to transmit the text of concluded contracts, over certain values, to the oversight body, which will have power to scrutinise these contracts. Many of the features of the public procurement proposals will also apply to the utilities directive proposal which will also include changes that only apply to the utilities sector. 14 ABOUT BRUCE SHAW BRUCE SHAW HANDBOOK

142 ABOUT BRUCE SHAW Framework Agreements Framework Agreements are agreements between one or more purchasers and providers, which set out the terms and conditions governing specific contracts to be awarded throughout the term of the agreement (max.4 years). Bruce Shaw s specialist division advises a wide range of both public and private clients on the structuring and implementation of appropriate procurement structures, including suitable framework agreements. The division establishes and manages such agreements and call-off processes or provides professional support, as required. Framework agreements allow for the awarding of individual contracts in a manner that is quicker and less costly than would be the case with separate procurements. Normal public procurement rules, including European Treaty principles, apply to establishing a framework agreement. Call-off contract proposals must be evaluated using the award criteria declared at the establishment of the framework. PPP / PFI Consultancy Bruce Shaw provides a range of specialist services to public and private sector clients covering all facets of PPP/PFI projects, from initial concept and business case development through to final delivery and operation. For private sector clients, Bruce Shaw provides bid management support on design, build, finance and operate/maintain projects, with an extensive scope of works which includes coordinating tender submissions through to acting as SPV Manager and Employer s Agent. The company also assists in bringing consortia together and identifying the right partners for design, construction, facility management and equity sponsorship. For public sector clients, Bruce Shaw offers expert knowledge of all forms of PPP, assisting them with structuring projects and then bringing them to market. The multi-disciplinary nature of Bruce Shaw s business allows it to fully consider market trends in construction, finance and consortia appetite for taking risks. Client support includes preliminary and detailed appraisal of projects and value-for-money analysis. Business Solutions Bruce Shaw is aware that in today s competitive marketplace, efficiency is the key for the successful and profitable management of any organisation. The first challenge though, comes in identifying inefficiencies or where a business can be impoved, followed by the challenge of implementing new initiatives through smooth transition. At Bruce Shaw we provide the expertise, experience and innovation to identify, undertake and deliver such services as Procurement and Supply Chain Management, Supply Base and Performance Management and Business Solutions. The Management Services team has a proven record of working with clients on both large and small projects, to drive efficiencies through smarter procurement, streamlining and integrating processes and introducing defined ways of working. Services include: monitoring of control measures contract arrangements of co-ordinated duties documentation Independent Certifier / Technical Adviser As an independent certifier, Bruce Shaw works as a technical advisor to leading financial institutions seeking due diligence on development proposals prior to formal commitment of funding. The company s initial report comprises a review of all the projected costs and examines various aspects of the project s viability. Bruce Shaw s advisory team highlights risk areas and, where appropriate, recommends actions to mitigate or remove the impact on the project. Services provided by Bruce Shaw include: scope and review of construction progress against budgeted cost and schedule. Financial Assessment of Contractors Bruce Shaw undertakes comprehensive financial analysis of contractors and service providers in the construction industry. Our in-house team of chartered accountants are suitably qualified to review financial statements, credit ratings, financial projections, company filings and other publicly available data. This review process should assist with determining the adequacy of contractors resources to remain going concerns and fulfil contractual obligations. For the public sector, in addition to undertaking financial reviews, Bruce Shaw can also prescribe the financial information requirements and criteria for tender pre-qualification processes and the subsequent awarding of public contracts. 140 BRUCE SHAW HANDBOOK 2012

143 SECTION 14 ABOUT BRUCE SHAW 14 ABOUT BRUCE SHAW Environmental Services / Sustainability Consultancy Bruce Shaw provides the full spectrum of construction cost consultancy services to clients seeking to develop projects using sustainable technology solutions and clients delivering engineering and construction projects in the renewable energy sector such as wind, hydro, biomass and solar. The company s approach is based on the provision of real-time analytical cost information to inform decision-makers at all stages of project delivery. An integrated design process that includes sustainability and renewable energy solutions at the outset enables Bruce Shaw to provide defined cost advice on the impact of BREEAM, LEED, CRC, ECAs and others. Specialist teams provide advice on many sustainable energy-efficient technologies and initiatives such as biomass boilers, BMS, CHP, RHIs, solar heating and wind turbines, to name a few. Clients availing of this service include public and private sector organisations across all construction types such as commercial buildings, energy generation, high tech manufacturing, IT and pharmaceuticals. Dispute Resolution Support Technical support to those involved in legal action or Alternative Dispute Resolution forms an integral part of Bruce Shaw s consultancy services, with advice on all aspects of dispute resolution such as mediation, conciliation, adjudication, arbitration and full litigation. Bruce Shaw interface with clients and their other consultants legal or advisors to provide all technical support, information and reports to assist in the resolution of any dispute. Senior staff members have acted as Expert Witnesses by preparing status reports, as well as strategic, technical and financial assessments and appraisals. Insolvency Support / Bond Recovery Drawing on its expertise in cost management, value engineering and project management, Bruce Shaw provides technical support on various insolvency cases. In the case of a construction-related receivership, examinership or liquidation process, Bruce Shaw explores the opportunities available to maximise recovery of amounts due through the application of expert knowledge in construction, contracts, remedies, value engineering processes and bonds and collateral warranties. In providing specialist support services to insolvency professionals and bond providers, Bruce Shaw can provide valuations on construction works contractor claims and determine the likely recovery. For employers, Bruce Shaw provides detailed investigation and analysis of data, transactions, interim valuations, defective works and diverse claims. For contractors, the company assists in the preparation and negotiation of the technical elements of contractual claims and accurate bills of quantities. BRUCE SHAW HANDBOOK

144 ABOUT BRUCE SHAW Health & Safety Consultancy Bruce Shaw s Health & Safety team specialises in providing a range of services in design safety management, as well as construction safety management which involves assessing and evaluating contractors performance on health & safety. Safety legislation places significant duties and responsibilities on employers, contractors, designers and clients engaged in construction projects and Bruce Shaw has extensive experience in working with these parties to ensure workplaces are designed and managed with safety in mind. Bruce Shaw provides advice and guidance on all aspects of health & safety legislation, design safety co-ordination, safety auditing and compliance. These services extend across a wide range of sectors including retail, commercial, residential, industrial, healthcare and education. Services Provided Bruce Shaw services include: safety legislation and compliance 2007 As CDM Coordinator (CDMC), our role is to: On Appointment they must take to comply with CDM Regulations Throughout the Project designers and contractors enable them to comply with their duties Design Stage aspects of design work Tender Stage Design and Principal Contractor team Construction Stage Construction Health and Safety Plan Health and Safety implications of any significant change in design Health and Safety File Handover Stage Our services can be tailored to suit individual clients and project needs, both for one-off projects or through establishing long-term client relationships. Whether new build construction work, building refurbishment, term services, maintenance or facilities management, Bruce Shaw work closely and efficiently with Clients management and project teams, liaising with the Health and Safety Executive where necessary. Our Approach to CDM Co-ordinator in the UK We act as a key project advisor in respect of CDM Co-ordination. We believe that the role is one of compliance and requires an in depth knowledge of the construction process, careful attention to detail, an ethos of assessment, recording of salient information and the desire to ensure that performance and quality are paramount. Current Trends in Health & Safety in Ireland While fatalities and serious injuries are down from previous levels the issues affecting health & safety and the implications for everyone involved in the construction industry are changing and need to be watched. The reduction in fatalities and serious injuries is to be welcomed with the acknowledgement that even one accident is too many. The improvements are not only due to reduced numbers in the industry but also to a collective and sustained emphasis on improving the safety management culture or to put it simply, the way we do things around here. 142 BRUCE SHAW HANDBOOK 2012

145 SECTION 14 ABOUT BRUCE SHAW Clients in Construction Directors & Managers Project Works Legislation Standards Best Practice Reputations and Standings Health & Safety Culture Safety in design and planning forms the bedrock of effective safety management. In many cases this is accurate and meaningful information getting the right information to the right people at the right time. This is a collective process driven by the Project Supervisor (Design Process) (PSDP) together with designers and other parties, Green Energy The change to sustainable and new energy sources bring their own, sometimes significant safety issues which can only be addressed from a very early stage far earlier than with current requirements. The risks are varied and while not new have to be assessed and evaluated differently particularly in regard to the identification and procurement of supporting information to be able to make that assessment. Competency in Health & Safety The levels of competency (in health & safety) are and have been for some time on an upward spiral. Requirements in regard to health & safety as well as individual actions are subject to on-going change. A knowledge of legislation is rarely sufficient it is the ability to transfer legislative requirement to a particular issue or situation together with the standard of practice that is key. Risk assessment remains the cornerstone to this process. 14 ABOUT BRUCE SHAW There are a number of key issues to keep an eye on in 2012: Legislation & Responsibilities Ireland still possesses one of the most demanding legislative frameworks in Europe. While much of the safety legislation is EU led there are particular issues and requirements in Ireland which make legislation and the responsibilities important: is included in a number of pieces of legislation which directly affect a range of people including the client company, designers, contractors and safety professionals placed on senior managers in charge of work places out employer, design, contractor, landlord etc Ghost Estates, Empty Sites and Buildings Defunct sites and buildings are a case in point of trends in health & safety - current issues of this nature demand require their individual assessment (in regard to their status) under employer led law as well as their status as workplaces. An understanding and clarity of control and responsibility of all workplaces is fundamental to safety in Ireland and Irish legislation, supported by meaningful and verifiable safety management systems and procedures this is not always a clear cut process and there are indirect responsibilities which may not be fully appreciated. Safety Legislation Make Appointments Assess Competence Company Standards Standards H&S Client Company Set Requirement Influence Safety Best Practice Communications Provide Information BRUCE SHAW HANDBOOK

146 ABOUT BRUCE SHAW Bruce Shaw Corporate and Community Activities Bruce Shaw strives to be an active and responsible contributor to the communities we work in. As such, Bruce Shaw makes corporate contributions to charitable organisations on an ongoing basis. Below are some of the charitable organisations and events that are supported by Bruce Shaw and its employees. Bruce Shaw also actively encourage our employees to participate in various charity events throughout the year, these have included: Irish Kidney Association The Irish Kidney Association Focus Ireland Over the Wall The Children s Sunshine Home The Children s Fund for Health Barnardos Flora Marathon Marie Curie Cancer Care MyCharity Ltd. National Maternity Hospital Niall Mellon Township Orbis Plane Pull Preda Foundation Temple Street Children s Hospital Self Help Africa St. Michael s House In addition to charitable donations Bruce Shaw has also provided pro-bono services to worthy charitable organisations; most notably to the Rose Project for the building of the new Bwaila Maternity Hospital in Malawi. The 100-bed facility is situated in the capital Lilongwe and replaced a rundown facility built in As 30% of expectant mothers in Malawi are HIV positive, part of the role of the new facility is to prevent the high rate of HIV transmission from mother to child. Bruce Shaw Group Chairman Brendan O Mara was the Project Director for this project and continues to be involved in various Rose Project projects on an ongoing basis. In July 2011, Liam Goggin, Senior Surveyor with Bruce Shaw, took part in the 180Km Ring of Kerry Charity Cycle in aid of the Irish Kidney Association. With the generous help of Bruce Shaw Liam and his dometiques raised in excess of 5,000 for this worthy cause. The Irish Kidney Association provides help and support to patients and the families of those going through renal failure, subsequent organ transplant and throughout the patient s life. They also administer the National Organ Donor Card Scheme. We would urge all to consider becoming an organ donor and to Give the Gift of Life Movember During November each year, Movember is responsible for the sprouting of moustaches on thousands of men s faces in Ireland and around the world. Men must start off at the beginning of the month clean shaven and then grow a moustache for the entire month. The aim of which is to raise vital funds and awareness for men s health, specifically prostate cancer. Neil Vaughan our Bruce Shaw Project Manager Director took part and together with the team raised BRUCE SHAW HANDBOOK 2012

147 SECTION 14 ABOUT BRUCE SHAW Joyce Country Challenge On the 5th July 2011, Des O Broin and Tony Kelly of Bruce Shaw took part in the 5th annual Joyce Country Hillwalking Challenge which gave them the opportunity to walk one of Ireland s hidden gems, the circuit of Lough Nafooey. All monies raised went to the Galway/Mayo Hospice. Over the Wall Bruce Shaw s London office staff participated in the London Marathon in April 2011 and Standard Chartered Great City Run in July 2011, raising 5,170 for Over The Wall, a charity that provides residential activity camps for children affected by serious illness. Over the last four years, Bruce Shaw s London office has raised nearly 15,000 for this amazing charity. In 2012 the London team will participate in the Standard Chartered Great City race again. White Collar Boxing Event In November 2011, two members of our Dublin staff; Aidan Tuite and Alex O Donnell participated in a White Collar Boxing Event for Charity. The lads spent two months in intensive training for the fight, and on the night, both were successful in their respective bouts, with O Donnell recording a Knock-out. A significant amount of money was raised for a number of charities including; Our Lady s Hospital for Sick Children in Crumlin, and MS Ireland. A large and very vocal contingent from Bruce Shaw attended on the night to cheer the lads on. 14 ABOUT BRUCE SHAW BRUCE SHAW HANDBOOK

148 ABOUT BRUCE SHAW Bruce Shaw Senior Personnel John Ballance Paul Kehoe Paul Body Peter McHale Paul Boylan John McIlwaine Colm Buckley Andrew Murray Gerard Campbell Des O Broin des.obroin@bruceshaw.com Philip Cleary philip.cleary@bruceshaw.com Saran O Byrne saran.obyrne@bruceshaw.com Felix Collins felix.collins@bruceshaw.com Brendan O Mara brendan.omara@bruceshaw.com Steven Cooke steven.cooke@bruceshaw.com Frank O Sullivan frank.osullivan@bruceshaw.com Rennie Dalrymple rennie.dalrymple@bruceshaw.com Chris Patrick chris.partick@bruceshaw.com Patrick D Arcy patrick.darcy@bruceshaw.com Rosni A Rahman rosni@bartonbruceshaw.com.sg Richard Fogarty richard.fogarty@bruceshaw.com Patrick Ryan patrick.ryan@bruceshaw.com Niall Greene niall.greene@bruceshaw.com Derry Scully derry.scully@bruceshaw.com Hainah Haiyon Hainah@bartonbruceshaw.com.sg Neil Vaughan neil.vaughan@bruceshaw.com James Henderson james.henderson@bruceshaw.com Aidan Walsh aidan.walsh@bruceshaw.com Richard Joyce richard.joyce@bruceshaw.com David Wilson david.wilson@bruceshaw.com 146 BRUCE SHAW HANDBOOK 2012

149 SECTION 14 ABOUT BRUCE SHAW Willie Aherne Tony Madden 14 Stephen Ashe Micheál Brosnan John Butler Paul Butler Gary Comerford Chris Matthews Brian McCay Pat McDevitt Oliver McGuckin Eamon O Connor eamon.oconnor@bruceshaw.com ABOUT BRUCE SHAW Ray Condell ray.condell@bruceshaw.com Colin Park colin.park@bruceshaw.com Jonathan Cooke jonathan.cooke@bruceshaw.com Jasmine Quek Jasmine.quek@bartonbruceshaw.com.sg Niall Cox niall.cox@bruceshaw.com Michael Riordan michael.riordan@bruceshaw.com Aideen Gannon aideen.gannon@bruceshaw.com Andy Smyth andy.smyth@bruceshaw.com Steve Harper Steve.Harper@bruceshaw.com Joanne Surgeon joanne.surgeon@bruceshaw.com Niall Harrington niall.harrington@bruceshaw.com Elizabeth Thomlinson elizabeth.thomlinson@bruceshaw.com Austin Hickey austin.hickey@bruceshaw.com Elaine Ting Elaine@bartonbruceshaw.com.sg Jenny Johnston jenny.johnston@bruceshaw.com Mark Wearen mark.wearen@bruceshaw.com Mark Keane mark.keane@bruceshaw.com Terence Woulfe-Flanagan terence.woulfeflanagan@bruceshaw.com Tony Kelly tony.kelly@bruceshaw.com Daniel Wright daniel.wright@bruceshaw.com Kevin Kinsella kevin.kinsella@bruceshaw.com BRUCE SHAW HANDBOOK

150 ABOUT BRUCE SHAW Our Clients Abbott International ABN Amro Albany Properties Aberdeen Asset Managers Al Khozama Management Company Al Sharq Investments A&L Goodbody Allied Irish Bank Anderson Group Aramco Overseas Arnotts Arthur Cox Aryzta AG Amgen Bahrain Bay Developments Bahrain Tourism Company Ballymore Properties Bank of Ireland Bank of Scotland Barratt Homes BD Medical B&Q Belfast Harbour Commissionaires Belfast International Airports Bellway Homes BIH Housing Association Bloom Developments Bord Gáis Eireann Bovis Lendlease Blood Transfusion Services Board British Land British Museum British Telecom Burger King ByrneWallace Caelum Developments Castlelands Construction Castlethorn Construction CB Richard Ellis Central Bank & Financial Services Authority of Ireland Chase Manhattan Chartered Accountants Ireland Children s University Hospital Church Commissioners for England Citibank City & Country Communicorp County & City Councils, Ireland County & City Councils, U.K. Cork University Hospital Credit Suisse Crest Nicholson Crosbie Properties Dalkia Daunton Soar David Lloyd Leisure Dell Department of Education & Science Ireland Depfa Bank Deutsch Bank De Vere Estates Deloitte Diageo Digicel Digital Realty Trust Dublin Airport Authority Durkin Estates Easons Elan Electric Ireland Electronic Data Systems Ellier Developments Equity Bank Espirit Fluor Fujitsu Four Seasons Hotels Gatwick Airport Limited Glen Dimplex Group Green Property Company Greencore Grosvenor Guidant Hampstead Homes Harcourt Developments Hard Rock Café Hayward Gallery NBOS Health Services Executive Hewlett Packard Hilton Hotels Hochtief PPP Solutions Ltd. Howarth Homes plc Hypo Real Estate Holding AG IBM iguzzini SPA ING Real Estate Institutes of Technology, Ireland Intel Investec Bank Irelandia Irish Aviation Authority Irish Prison Service Johnson & Johnson John Lewis Partnership JP Morgan Chase King Abdullaziz City for Science and Technology KPMG Krediet Bank Laganbank Development Lambeth College Lancer Asset Management Lidl Mace Macquarie Capital Marks & Spencer Mary Immaculate College Matheson Ormsby Prentice Mater and Children s Hospital McCann Fitzgerald Menolly Homes Mentor Graphics Merrill Lynch Merrion Hotel Ministry of Foreign Affairs Microsoft Mobily Morrison Homes National Asset Management Agency (NAMA) National Development Finance Agency National Institute for Bioprocessing Research and Training National Maternity Hospital National Roads Authority National University of Ireland Natwest Bank Nissan Northern Bank Novartis O 2 Office of Public Works Oger International Park Developments Parkway Properties Paul Newman New Homes Pedra Developments Pepsi Premier Group WLL Pfizer Pricewaterhouse Coopers Primark / Penneys Queens University of Belfast Redrow Homes Ritz Carlton Roads Service Northern Ireland Royal Dublin Society Royal Sun Alliance Salvation Army Santana Residential Park Saudi Arabia Ministry of Education Saudi Aramco Saudi Oger Ltd. Sentry Hospitality Serco Shelbourne Senior Living South Eastern Education & Library Board St. Luke s Hospital St. Vincent s Hospital Tamouh Investments Taylor Wimpey The Savoy Group Titanic Quarter Translink Treasury Holdings Trinity College Dublin UCD University College Dublin Ulster Bank Ulster Rugby United House University of Ulster Victoria Dock Developments Victoria Palace Theatre Visa Europe Ward Homes Warner Chilcott Wates Group Westfield Shopping Towns Whitbread William Ewart Properties William Fry Willis Insurance Windsor Motors Wyeth Medica 148 BRUCE SHAW HANDBOOK 2012

151 Bruce Shaw working in 150 cities in over 40 countries. Office Locations BAHRAIN Building No 1468 P.O. Box Manama T F DUBLIN Kestrel House Clanwilliam Place Dublin 2 T F SAUDI ARABIA Akaria, Building 16, Olaya Street P.O. Box 67718, Riyadh Kingdom of Saudia Arabia T +966 (0) F +966 (0) BARBADOS West Coast Mall Holestown St. James Barbados T F INDIA B Ground Floor Chitranjan Park New Delhi T F SHANGHAI No. 617 Da Lian Rd. (w) Ming Yao Building Shanghai, P.R. China T F BELFAST Murray s Exchange 1 Linfield Road Belfast BT12 5DR T +44 (0) F +44 (0) LIMERICK Bruce Shaw House 6 Hartstonge Street Limerick T F SINGAPORE No. 1 Grange Road #09 02 Orchard Building Singapore T F BUCHAREST Clopotarii Vechi Street No. 18 Sector 1 Bucuresti Romania T F LONDON Artillery House Artillery Row London, SW1P 1RT T F SYDNEY Level 4 56 Clarence Street Sydney, NSW 2000 Australia T F CORK Hanover House South Main Street Cork T F MANCHESTER Pall Mall Court King Street Manchester, M2 4PD T F UNITED ARAB EMIRATES 5th Floor Corniche Tower Corniche Road, P.O. Box 7127 Abu Dhabi, UAE T F NEW YORK 275 Madison Avenue 6th Floor New York T F VIETNAM Level 6 Melinh Point Tower 2 Ngo Duc Ke St District 1 HCMC Vietnam T PARIS 9 / 11 Allée de l Arche Paris La Défense France T F