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Threats and Opportunities in a global Consulting Engineering market / industry

Kaj Möller, FIDIC Executive Committee, Contracts Committee (2011 – 2015)President, Sweco International AB

International Federation of Consulting EngineersFIDIC

The latest from FIDIC!Kaj Möller, FIDIC Executive Committee, Contracts Committee (2011 – 2014)

President, Sweco International AB

FIDIC Presentation

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

Vision: Enabling the development of

a sustainable world, as the recognised

global voice for the consulting

engineering industry

FIDIC Strategic Objectives

Be the authority on issues relating to business practicePromote the development of a global and viable consulting engineering industry

Represent globally the consulting engineering industryEnhance the image of consulting engineers

Promote qualityActively promote conformance to a code of ethics and to integrityPromote commitment to sustainable development

What FIDIC does

What FIDIC offers the industry

What are FIDIC’s governing principles

Introduction to FIDIC

General Assembly2 - 6 delegates per Member Association

Executive Committee9 elected members, including President, Vice-President and Treasurer

Secretariat11 staff, including Managing Director

Business Practice MembershipCapacity Building Risk & QualityContracts Sustainable Development Integrity

Young Professionals Presidents & Secretaries

Subscriptions

Committees

Forums

Task Forces

Introduction to FIDIC

ASPAC – Asia-Pacific Group

GAMA – Group of Africa Member Associationswith a FIDIC Regional Office in Dar es Salaam, Tanzania

AFRICA

ASIA-PACIFIC

Groups of Member Associations

Regional Federations

FEPAC

EFCA

Pan American Federation of Consultants

European Federation of Engineering Consultancy Associations

International Agencies

Keep the CE industry’s concerns on the agenda

Regular meetings as the industry’s voice The World Bank WBAsian Development Bank ADBEuropean Bank for Reconstruction and Development EBRDInter-American Development Bank IADBAfrican Development Bank ADBIslamic Development Bank IDB

Strategic partnershipsJoint activities to develop business practice

International Standards Organization ISOInternational Labour Organization ILOWorld Federation of Engineering Organizations WFEOUnited Nations Environment Program UNEPConfederation of International Contstruction Associations CICATransparency International TIFederation of Consultants from Islamic Countries FCICOrganisation for Economic Co-operation and Development OECD

Procurement & Business

Quality of Construction Informed PurchaserConsultant Selection Tendering ProceduresConflict of Interest Scope of Services DefinitionsReviewing the Work of Others Project DeliveryHIV-AIDS Consultants in Design-Build & PFIProvision of OMS ServicesProject Cost EstimatesQuality Management Risk ManagementProject Sustainability ManagementProfessional Liability InsuranceInsurance of Large ProjectsDispute Resolution

To be the Authority on Procurement and Business Practice

Procurement & Business Practice - Policies

The role of the consulting engineer in design-buildThe role of the consulting engineer during the execution of a projectSelection, engagement and remuneration of consulting engineers Projects in which consultants have a financial interest other than a normal fee

Transfer of technologyConsulting engineers and the environmentGuarantees, bonds and retentionsHIV-AIDS in the construction sector Consulting engineers and the environment The consulting engineer in turnkey projects Professional risk and responsibility Alternative dispute resolution Quality management Quality of ConstructionBusiness Integrity

Policy Statements and Resources

Informed purchaserCollateral warrantiesContingent legal feesThe expert witnessLimitation of liabilityTransfer of technologyConflict of InterestInformed purchaserBusiness Integrity Site safetyCopyright

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

Quality is Pre-eminent HarmonisationInformed Purchaser Liability to be limitedTransparency InsuranceCapacity building Life-cycle costsIntegrity Monitoring outcomesFair competition Design for safety

Procurement & Business Practice – Risk Management

Business Practice Guides

Risk Management Manual

Risk Management Primer

Professional Indemnity

Insurance

Professional Liability Insurance

Insurance of Large Projects

Managing Risk

Procurement & Business Practice- Quality Management

Quality Management System

GuideISO9001:2000 interpretation guideTraining kit

Business Practice guides

Quality of ConstructionQuality Based Selection

Procurement & Business Practice - Integrity

FIDIC Integrity ManagementSystem (FIMS)- Guide- Training Kit- User Survey- User Forum

Government Procurement Integrity Management System (GPIMS)

- Draft Guidelines

Business Practice- Code of Ethics- Policies

- Conflict of Interest- Anticorruption

Model Representative Agreement

Procurement & Business Practice - Sustainability

Environment Management Systems

Industry resource kitUrban resource kit

Project SustainabilityManagement

Guide

Business practice

GuideStrategySector Report

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

Procurement & Business Practice

Contracts & Agreements

- Client – Architect- Joint Venture- Sub-Consultant- 1999 Short, Construction, Plant & EPC/Turnkey

Business Practice

- Risk Management short guide- Definition of Services guide- Design for Safety guidelines- PSM Guidelines

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

International Training Programme

Contracts Manual English, French, German, Spanish, Arabic

Courses Workshops SeminarsProfessional Services Agreements x xPractical Use of FIDIC Contracts x x xClaims and Dispute Resolution x xDispute Adjudication Boards x x xContract Management x x x

Business Practice Manual English, French and Spanish

Business Development xBusiness Administration xRisk Management xQuality Management xBusiness Integrity Management x x xProject Sustainability Management x x x

International Training Programme

FIDIC Adjudicators

FIDIC President’s List of Approved Dispute Adjudicators

- For appointments to Dispute Adjudication Boards (DABs)- DABs mandatory for the MDB Harmonised Construction Contract

FIDIC organises:- Assessment Workshop - Recommended Training Courses- Appointments from List

FIDIC National Lists of Dispute Adjudicators

FIDIC organises:- Guidelines to Member Associations for establishing and maintaining lists.- www.fidic.org links.- Development of accredited national training courses and accredited trainers.

FIDIC World Consulting Engineering Conference

Sustainable Solutions in a Changing World

International Federation of Consulting EngineersPresident Pablo Bueno, SpainVice President Jae-Wan Lee, Korea

Secretariat FIDICWorld Trade Center 2Geneva AirportBox 311 CH-1215 Geneva 15 SwitzerlandTel: +41 22 799 49 00Fax: +41 22 799 49 [email protected]

ManagingDirector Enrico Vink

Threats and Opportunities in a global Consulting Engineering market / industry


Threats and Opportunities (for Norway) in a global Consulting Engineering market / industry


Threats and Opportunities in a global CE industry


In a market where Price / Quantity meets, based on the demand and supply mechanism, the domestic situation in Norway can only go one way………..


Increased competiton!


If you want an indication of what is going to happen?

Take a look at Sweden!


And the politicians are doing what they can!

EU Commission established think-tank to find answers to:

• Why does the service sector in EU not work as one single market?

• Which political measures are needed?

• How can we meet competition from outside the EU?


The Nordic construction and eng. market

So, are the competitors (contractors) coming?“North ring road Stockholm” – one main contractor Bilfinger (GER).

“Copenhagen Cityring” – main civil contractor Salini Construttori (ITA).

Olkiluoto 3 Nuclear power plant”, Helsinki. EPC contractor Areva (FRA) / Siemens (GER).


But you need to know the market you are entering! (dr.dk, August 27th 2013)


So, are the competitors (consultants) coming?

“Bypass Stockholm”

A 22 km long section of the freeway ring-road around Stockholm, with some 18 km in tunnels.

Employer, Swedish National Transport Authorities.

Total Project budget app 3 BEUR.

Main engineering design agreement (25 MEUR) awarded at app. 40 EUR / h to a supplier with bulk engineering provided from Poland.


So, are the competitors (consultants) coming?

Copenhagen “Cityringen”

A15.5 km long new subway line with 17 new sub-surface stations

Client, Metroselskabet I/S through Municipality of Copenhagen, Danish State and the Municipality of Frederiksberg.

Main Civil (EPC) Contract won by Italian Contractor Salini Construttori.

Salini procured Detailed Design services at app 55 EUR / h from Italian Engineering Consultants.


But new markets aren´t always that easy to enter……


Engineers from Spain, Ireland, Italy and even Greece will not sit still.


The new global industry, including the European economic melt-down, has impact on domestic business as well as export business!






Cant we just neglect export business and concentrate domestically?

Problem is that our Clients are also going global, and are looking world-wide for engineering expertise.

In order to win at home, we need to be top class not only on a National market, but more on a Regional or European market.

If we add on what ITS can do for remote engineering & design, the scenario becomes even more clear.


Well, if it is going to be us……what is needed?


The days of time-based engineering assignment in a “protected” domestic market are (almost) gone. How to win in our home market?

Differentiate the Offer and use all strings, when doing business

• Use off-shore low cost suppliers for services less compensated for. If India was the 2010´s off-shore supplier, who is next? East Africa, SE-Asia, Sweden?

• Separate engineering from design. (High skill/value content vis-à-vis low)

• Identify your niche expertise to enter. The most common business in our industry is expansion of an existing business


How to win in global competition:

Identify our comparable advantages:

• Unique capability;

• Multi-disciplinary, capacity;

• Strong international presence;

• Local establishments;

• Advantages thanks to local authorities, government decisions, funds;

– Waste Management (Sweden)– Renewable Energy (Sweden)– Bio, Methane, gas (Sweden)– Sustainable City Urban Planning– ?? (Norway)

• Advantages due to mother nature.– Physical location – logistics business– Climate - Data centers– Topography - Hydropower– Geology - underground in hard rock– ?? (Norway)


Strong International references!On of Sweden´s success stories - Export


Affärsmöjlighet

Intresse & m

ottaglighe

t

Atlas Copco

Scania

SKF

Volvo ABABB Ludvika

Alfa Laval Södra Cell

SSAB

OutokumpuVattenfallGetinge

Husqvarna

Swedish Match Ericsson

Electrolux

Autoliv

Assa Abloy

Osäkra / avslutadeAFFÄRSFO

KUS NU

BYGG RELATION

HÅLL KONTAKTEN

BEVA

KA

HögLåg

Låg

Hög


Use your business advantages (in export)


Business Development

• Manufacturing industry is moving towards servitization:

– Rolls Royce aviation engines.

– CAT construction equipment.

• Watch out for Facilities Management sector! E.g 50 / 50 BOT contracts for energy efficiency in buildings.

What is our next business innovation?


The obvious questions are:

Who will win these contracts?

• Follobanen

• InterCity-triangelet

• Ringeriksbanen

• Sørlandsbanen

• E6 Svinesund-Trondheim

• E16 Riksgränsen-Bergen/Olso

• E39 Kristiansand-Trondheim

And why?


Half empty or half full?

Strong(est) public finances;

High educational standards;

Somewhat aging infrastructure systems;

New government;

A world class petro-chemical industry and its spin-offs;

Heavily investing energy industry

Increased international competition;

Lack of resources in the industry;

Domestic cost level.


Thank you for your attention!

Date post:	12-Feb-2018
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