International Federation of Consulting Engineers Collaboration in the Consulting Markets Riga Conference, 24 May 2013 Enrico Vink, FIDIC MD

FIDIC Presentation Vision: Enabling the development of a sustainable world, as the recognised global voice for the consulting engineering industry Founded in 1913 Headquarters in Geneva Mission:Work closely with stakeholders to improve the business climate in which members operate and enable them to contribute to making the world a better place to live in, now and in the future

Representing 1.5 million CE professionals in 94 countries Introduction to FIDIC 60,000 consulting firms Representing 1.5 million CE professionals in 94 countries

- Civil Engineering, Architecture Consulting Engineering Industry Consulting Engineering US$ 627 b - Civil Engineering, Architecture & Engineering Services: 80% - Industrial Consultancy: 20% Supplied by CE Industry: 54% Industry staff : 1.5 million Consulting Firms: 60,000 Construction Cost: US$ 6,300 b

Global characteristics Consulting Engineering Sector Global characteristics International market place for consulting engineering is becoming more competitive: export-led recovery in many countries has given rise to many new players seeking work firms are becoming more international and their workforces more multinational and mobile developing world is embracing knowledge intensive professional services by leveraging technology and offering low-cost solutions

Global characteristics Consulting Engineering Sector Global characteristics Role of Consulting Engineer becoming more critical: Life cycle costing strategy more common Sustainability principles to apply to projects Design assumptions require a new and more comprehensive approach Pending global shortage of skills * Selection of Consultant critical

FIDIC Strategic Objectives What FIDIC does Represent globally the consulting engineering industry Enhance the Image of consulting engineers Support the development of Young Professionals What FIDIC offers the industry Be the authority on issues relating to Business Practice Promote the development of a Global and viable consulting engineering industry What are FIDIC’s governing principles Promote Quality Actively promote conformance to a code of Ethics and to Integrity Promote commitment to Sustainable development

FIDIC Principles High Standards Quality Services Performance Know how Integrity Best Bractice Standard contract documents Policies and guidelines Fair allocation of risks & responsibilities Capacity Building International co-operation Training and transfer of know-how Manuals Quality Services Value for the client Cost efficiency Impartiality Selection by Ability Quality of proposals Skills and experience Fair remuneration Sustainability Long-term perspective Respect for the environment Project-level focus

FIDIC Activities Publications Annual Conferences Training Provide a meeting place for clients, contractors and consultants involved in development International Agencies Keep the consulting engineering industry’s concerns on the agenda Strategic partnerships Liaison Maintain communication between members, committees and other organisations Publications Establish best practice procedures Publish contracts for the infrastructure industry Training Capacity building for the consulting industry in both developed and developing economies www.FIDIC.org Distribute updated information and services to members and society

Groups of Member Associations Introduction to FIDIC Groups of Member Associations GAMA Group of Africa Member Associations www.fidic.org.gama ASPAC Asia-Pacific group www.fidic.org.aspac Regional Federations FEPAC Panamerican Federation of Consultants www.fepac.org.br EFCA European Federation of Engineering Consultancy Associations www.efcanet.org

Introduction to FIDIC Membership Spread GAMA 17 members ASPAC 22 members EFCA 23 members FEPAC 12 members OTHER (Nth America, Gulf, Non EU Europe etc) 20 members PROSPECTS 15 countries

Procurement Dominates the FIDIC Agenda Regional Cooperation Procurement Dominates the FIDIC Agenda MDBs & Bilateral Agencies WTO GPA Uncitral Model Procurement Law EU Directives National Country Systems FIDIC Represents Global Best Practice Supporting all Regional Groups, lobbying, resources etc More national support & capacity building

What Drives Procurement? Procurement & Business Practice - Policies What Drives Procurement? Public Accountability? Transparency? Fitness for Purpose? Economics & budgets? Track record On time delivery? Qualifications? CVs?

What Should Drive Procurement? Procurement & Business Practice - Policies What Should Drive Procurement? Value for money Quality of solution Environment Millenium Development Goals Capacity Building Sustainability Integrity But, what is “QUALITY”?

Procurement & Business Practice Quality Procurement Procurement policies and practices seem back to front Define clearly the desired outcomes (in human terms, not technical) Determine how to achieve these outcomes FIDIC’s PSM and SOW can assist Best practice principles Green procurement Integrity Sustainability Social accountability Capacity building Poverty Alleviation

Procurement & Business Practice - QBS Quality Based Selection Quality is paramount in the selection of consultants, and Quality Based Selection is the recommended method for procurement. The fees paid to a consultant are a small fraction of the total project life-cycle cost, and yet the consultant’s work is key to the project success. Best practice principles Purchasers are dictated by so-called “objective” criteria. They fear “subjective” assessments of the “softer” criteria. QBS allows a focus on the “softer” issues: - sustainability, integrity, training. How can the industry assist?

Procurement & Business Practice - QBS Life-Cycle Cost and Impact on Project Success The procurement phase has the greatest impact on the life-cycle cost of the project, yet it is the least costly component.

Procurement & Business - FIDIC To be the Authority on Procurement and Business Practice Quality of Construction Informed Purchaser Consultant Selection Tendering Procedures Conflict of Interest Scope of Services Definitions Reviewing the Work of Others Project Delivery HIV-AIDS Consultants in Design-Build & PFI Provision of OMS Services Project Cost Estimates Quality Management Risk Management Project Sustainability Management Professional Liability Insurance Insurance of Large Projects Dispute Resolution

Procurement & Business Practice - Policies Policy Statements and Resources The role of the consulting engineer in design-build The role of the consulting engineer during the execution of a project Selection, engagement and remuneration of consulting engineers Projects in which consultants have a financial interest other than a normal fee Transfer of technology Consulting engineers and the environment Guarantees, bonds and retentions HIV-AIDS in the construction sector The consulting engineer in turnkey projects Professional risk and responsibility Alternative dispute resolution Quality management Quality of Construction Business Integrity Informed purchaser Collateral warranties Contingent legal fees The expert witness Limitation of liability Transfer of technology Conflict of Interest Business Integrity Site safety Copyright

Procurement & Business Practice - Sustainability Project Sustainability Management Guide to the principles of sustainable projects using recognised indicators State of the World Tools to define priorities and make informed decisions on: Economic factors Social factors Environmental factors Comprehensive guide to rating systems

Professional Services Agreements FIDIC publishes model agreements for professionals services: - Client/Consultant - Joint Venture - Sub-Consultant - Representative

Works Contracts – Rainbow Collection FIDIC publishes internationally recognised forms of contract for infrastructure works. More than 40,000 copies supplied each year

FIDIC Contracts - MDB Harmonised Construction Contract Since May 2005 Multilateral Development Banks use the FIDIC MDB Harmonised Construction Contract Adopted by bilateral development agencies (Australia, France, Japan, Korea, …) MDB Supplement to Contracts Guide available

Business Practice Training Manual Procurement & Business Practice - Capacity Building Business Practice Training Manual - Training modules with resource kits Applicable in developed and developing countries International Training Programme - Events co-organised with Member Associations Based on Guide to Practice manuals Accredited Trainer Development Programme - Trainers available locally and international International standards Training Suppliers - Recognised Training Centres: China, India, Jordan Accredited Training Suppliers

Training Modules - The consulting industry Procurement & Business Practice - Training Modules Training Modules - The consulting industry - Organising a consulting firm - Administration of the firm’s activities - Business development - Human Resources Management - Financial Management - Client relationships and communications - Project execution - Risk Management - Quality Management - Business Integrity Management - Performance Management Each module specifies: - Content - Resources - Case studies

Global Characteristics Global Outlook and Trends - 1 Global Characteristics population growth 7 billion today 8 billion by 2040 more need for basic infrastructure Global problems warming/climate change water scarcity & energy shortages transport pressures pressure of urbanisation

Regions Hot Spots Developing Countries and Emerging Economies Emerging Regions & Hot Spots Regions Developing Countries and Emerging Economies Significant opportunities in Africa, South America and Asia Hot Spots Energy, Mining, Water, Transport, (Urban Planning) Most international projects with multiple players Cross border activity increasing

In the current economic context Consulting Engineers can provide: Market Conclusion In the current economic context Consulting Engineers can provide: Innovative solutions to global challenges, working closely with governments and multilateral institutions in defining new foundations for economic growth. Knowledge-based and technology-driven industry, playing a key role in making globalisation work for everyone. Share international best practices, and enhance collaboration in all regions

In the current economic context Consulting Engineers can: Market Conclusion In the current economic context Consulting Engineers can: Standardise best practices; Differentiate skills and experience; Partner to influence debate on investment, procurement, sustainability and integrity; Speak out and tell their story Attend THE Major Event in 2013………

Quality of Life – Our Responsibility FIDIC World Consulting Engineering Conference Quality of Life – Our Responsibility

International Federation of Consulting Engineers President Geoff French, UK President Elect Pablo Bueno, Spain Secretariat FIDIC World Trade Center 2 Geneva Airport Box 311 CH-1215 Geneva 15 Switzerland Tel: +41 22 799 49 00 Fax: +41 22 799 49 01 fidic@fidic.org www.fidic.org Managing Director Enrico Vink