1. Presented by: Ian Massey
26th Annual FIDIC GAMA Conference, Kampala Serena Hotel, Kampala, Uganda
ARE EUROCENTRIC PROJECT IMPLEMENTATION STRATEGIES APPROPRIATE FOR THE AFRICAN ENVIRONMENT? IF NOT, WHAT CAN BE DONE ABOUT IT?
Presented by: Ian Massey
FIDIC Presidents List Adjudicator
International Service Providers
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2. Carrying out projects in Africa is demanding
Skills availability
Materials of an acceptable standard
Logistics
Infra Structure development:
Short term job opportunities
Enhance skills transfer
Heightened expectations from local stake holders
Funded by various agencies
Designed and supervised by funding community
Not necessarily attuned to multi-cultural challenges
Can lead to frustrations and conflict
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3. Introduction
It is vital that the implementation strategy adopted on a Project in Africa provides a platform where these risks and expectations are accommodated.
The FIDIC suite:
Designed for international contracts
Assume competency is available
Standard risk allocation fair and reasonable
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4. One of the challenges facing the promoter and designer is to anticipate risks
When unanticipated risks manifest themselves
No mechanisms in place
Adversarial contracts
Unfavourable environment
Underpricing
Poor performance
Escalation of claims and disputes
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5. Introduction Scarcity of work and an overtraded industry can lead to:
Underpricing
Poor performance
Escalation of claims and disputes
Resources diverted to resolve peripheral issues
Unsatisfactory project outcome
A collaborative implementation and more realistic risk sharing strategy needs to be adopted
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6. Introduction Collaborative Contract Forms “Alliance”
Memorandum of understanding
Objectively measured against a predetermined performance profile
Standard Forms
FAC-1
NEC4 Alliance Contract
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7. Introduction Alliances are not a new concept:
Exploitation of the North Sea Oil Fields
Applying Alliancing savings in cost and time
Assets exploited successfully
Lessons learned such as increased maintenance and running costs
Track forward 20 years:
Refurbishment contracts
Christchurch, New Zealand
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8. What is significant:
Integrate stake holders into the planning and management process.
Community in Christchurch was used as the source of skilled resources
Better communications with the community
Brown Fields Projects
Residents have to be decanted to allow refurbishment
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9. Introduction
The objective of this form is to drive down costs and make money
In the African context there are other benefits:
Greater community involvement
Sustainable job creation
Skills development
Generally improved value
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10. Introduction The Process The Two Stage Open Book
Early appointment of a full project team
Commitment from Client
Client invites team members
Tier 1 Contractors and Consultant teams compete
Bidders chosen based on:
Capacity / Capability / Stability / Experience
Strength of their supply chain / Profit/fees/overheads
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11. Introduction The Process continued The Adjudication criteria:
Technical Capacity and Competence
Cultural fit
Commercial Terms
Price
Successful Tier 1 team appointed
Detailed proposals on cost
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12. Introduction Two-Stage Open Book model reduces industry bidding costs
Faster mobilization
Single Integrated team
Tier 1/2 engagement
Deadlines for design and risk contributions
Agreed fixed price and risk profile before Construction Phase
Client-led processes
Committee made up of Alliance members
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13. Introduction Proactive risk management
Clause 8.3 of the FIDIC Red Book 1999 enhanced
Risks reallocated, where a Party to the Alliance is in a better position to manage
Cultural fit needs to be assessed
Alliance unfriendly behavior should not be tolerated
Flexibility
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14. Introduction
Proven benefits of Two Stage Open Book and Supply Chain Collaboration
Cost Savings
Cost Competition and Control
Improved Design
Risk Management
Time Management
Extended Warranties
Sustainable Solutions
Stakeholder Consultation
Appointment of SMEs and Local/Regional Businesses
Employment and Skills Commitments
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15. Thank you for attending.
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