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3

United States

Middle East

Ireland
Dublin
New bio-pharma
production facility
for Amgen

Iowa & Virginia


Cost management
of data centres
for Microsoft

Riyadh
Program management
for data centres, HQ
offices and retail stores
for Mobily

CONTENTS

1 Global Construction

4 United Kingdom

Developing Markets Offer Business


Development Opportunities

UK Market Review

38

UK Construction Output

39

15 Largest Construction Markets in 2010

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

15 Largest Construction Markets in 2020


Construction Output Growth Rates
in Developed Countries

Construction Output Growth Rates


in Emerging Markets

Index of International Construction Costs

Top 20 International Contractors

10

Top 20 International Design Firms

11

Global Ination %

12

Overview of Percentage Change in Global Output

12

Oil Production / Consumption Statistics

13

2 Europe

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 2012

47
48
48

European Market Review

16

2012 Olympics

Production Index in the Construction Sector

17

Euro vs Sterling

Construction Output - Annual Variation

17

Top 15 European Contractors

18

Top 15 European Design Firms

18

Middle East Market Review

52

Construction Cost - New Residential Building

19

GCC Hydrocarbon Dependence

52

Consumer Ination v Construction Ination

20

GCC Stimulus Packages

52

EU Labour Costs and Productivity

20

Value of Projects by Country

53

EU Procurement Timescales

21

Middle East Commodity Prices

54

EU Procurement Thresholds

21

Prices of Building Materials in Abu Dhabi

54

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

Middle East

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

Historical Property Performance Total Return %

25

Bruce Shaw Tender & Cost Indices

26

SCSI Tender Price Index

27

US Market Review

Consumer vs Construction Price Ination

27

Value of Construction Output Public / Private

63

Annual Numbers Employed in Construction

27

US Construction by Type of Work

63

Bruce Shaw Average Irish Construction Costs

28

Annual Construction Cost Index

64

Basic Hourly Wage Rates

30

US Regional Building Cost Index

64

Basic Hourly Wage Rates Mechanical & Electrical 30

Employment in Construction

64

The Top Irish Main Contractors

31

Change in U.S. Employment in Construction

65

The Top Irish Services Sub-Contractors Turnover

31

US Earnings in Construction

65

Annual Housing Completions

33

Top US Contractors

66

New Housing Completions by Type

33

Top U.S. Design Firms

67

SCSI Rebuilding Costs per sq.m

34

Euro vs. Dollar

67

Planning Charges

35

Fire Certicate Charges

35

BRUCE SHAW

HANDBOOK 2012

6 United States
62

10 South East Asia continued

Caribbean Market Review

70

General Statistics for the Caribbean

70

Caribbean Country Review


Bahamas
Barbados
Bermuda
Cayman Islands
Cuba
Curacao
Dominican Republic
Haiti
Jamaica
Puerto Rico
St Lucia
Trinidad & Tobago
Turks & Caicos Islands

71
71
71
71
71
72
72
72
73
73
74
74
74

Construction Costs

74

Average Cost Range

75

8 India

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

101

11 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

India Market Review

78

Top 20 Chinese Design Firms

109

Average Construction Costs

78

Currency Exchange Rates

109

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
Building Cost Index by Capital City
Building Cost Index & Consumer
Price Comparison
Dwelling Unit Commencements
Average Construction Costs
List of Tier 1 Main / Building Contractors
Currency Exchange Rates
New Zealand
New Zealand Market Review
New Zealand Key Statistics
Value of Construction Output
Numbers Employed in Construction
Dwelling Unit Commencements
Average Construction Costs

84
84
85
85
85
86
86

12 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

Ination Index

115

Building Cost Index & Consumer


Price Index Comparison

115

Construction Companies Active in Ghana

116

Currency Exchange Rates

116

13 Topical Issues
Energy and Power Generation

120

87
87
87
88
88
88

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

128

List of Tier 1 Main/Building Contractors

89

Currency Exchange Rates

89

14 About Bruce Shaw

10 South East Asia

Bruce Shaw

132

Cost Management

133

Project Management

137

93

Consultancy Services

138

Carrying Out Business Throughout the World

93

Health & Safety Consultancy

142

Singapore Market Review

94

Bruce Shaw Corporate & Community Activities

144

Value of Construction Output

94

Bruce Shaw Senior Personnel

146

Average Construction Costs

95

Our Clients

148

Currency Exchange Rates

95

South East Asia Market Review

CONTENTS

7 Caribbean

BRUCE SHAW

HANDBOOK 2012

BRUCE SHAW

HANDBOOK 2012

GLOBA L CONSTRUC TION 1

BRUCE SHAW

HANDBOOK 2012

GLOBAL CONSTRUCTION

Developing Markets Oer 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.

nancial crisis, a return to growth in 2013 will likely


prove too soon for those countries whose public
nances 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 scal stimulus particularly in relation to
infrastructure development.

The trading environment in many economies within


the Eurozone is dened by austerity and tightening
public nances 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.

Whilst continued year on year growth is also


predicted for the Australian construction market,
fears are being expressed that the signicant 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, its 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 2012. The changing politics
of a number of the Arab nations such as Egypt and
Libya may also see signicant growth as the new
governments seek to recommence stalled projects
and to implement social enhancement programmes
including the development of housing and
educational facilities.

BRUCE SHAW

HANDBOOK 2012

SECTION

One country to watch in 2012 is Russia which is


expected to see signicant market growth as natural
gas and oil production increase with a corresponding
increase in investment, infrastructure and
development for upcoming sporting events.

GLOBAL CONSTRUCTION

Demographic trends may also see notable growth in


South American and South East Asian markets albeit
at lower rates of expansion than those of the BRICs.
(Brazil, Russia, India and China).
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
as the developing economies forge ahead led by
China and India. Activity in the developed economies
will also accelerate during the same period led by the
US, Australia and Canada. For those European rms
operating in shrinking markets, the only way to thrive
will be to seek work in other jurisdictions. Recent
developments in the construction professional
services sector indicate that there is a growing
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

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15 Largest Construction Markets in 2020 $ 12.7 trillion (forecast)

BRUCE SHAW

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GLOBAL CONSTRUCTION

Output in China and India will continue to achieve


signicant growth albeit not in double digits and
it is possible that governments in both countries
will take action to cool their markets in the face of
rapidly increasing construction ination. China is also
facing signicant increases in property values and
whilst it is being said that what is being referred to
as Chinas Housing Bubble is different than those
observed elsewhere, quick action by the Chinese
government could signicantly reduce any risks
posed by such a bubble for the wider economy.

GLOBAL CONSTRUCTION

One country to watch


in 2012 is Russia which
is expected to see
signicant market growth
as natural gas and oil
production increase.

SECTION

GLOBAL CONSTRUCTION

Construction Output Growth Rates in Developed Countries

Average % pa Rates of Change

2005-2010

6.0

2010-2015(f)

2015-2020(f)

4.0

0
-2.0
-4.0
-6.0

-8.0
Western Europe

Northern America

Asia Pacic (Developed)

Construction Output Growth Rates in Emerging Markets

Average % pa Rates of Change

12.0

2010-2015(f)

2015-2020(f)

8.0

6.0

4.0

2.0

Source: Global Construction Perspectives and Oxford Economics

2005-2010
10.0

0
Eastern Europe

South and Central


America

Asia Pacic
(Emerging)

Middle East
and North Africa

Sub Saharan Africa

Index of International Construction Costs 2011


160
Source: Bruce Shaw

140

120

100

80

60

40

20

BRUCE SHAW

Switzerland

Japan

Sweden

France

Germany

UK

Australia

Italy

Ireland

USA

Spain

Greece

UAE

Poland

Czech
Republic

Hungary

Romania

China

India

HANDBOOK 2012

1
GLOBAL CONSTRUCTION

2.0

Source: Global Construction Perspectives and Oxford Economics

8.0

GLOBAL CONSTRUCTION

The Top 20 International Contractors

Revenue
$ bn

Firm

CHINA RAILWAY CONSTRUCTION CORP., China

76.21

CHINA RAILWAY GROUP, China

73.01

CHINA STATE CONST. ENGINEERING CORP., China

48.87

VINCI, France

45.11

CHINA COMMUNICATIONS CONST. GROUP, China

40.42

BOUYGUES, France

30.67

CHINA METALLURGICAL GROUP CORP., China

29.91

HOCHTIEF, Germany

28.98

10

GRUPO ACS, Spain

20.63

10

BECHTEL, U.S.A.

19.71

11

12

LEIGHTON HOLDINGS, Australia

18.51

12

16

EIFFAGE, France

17.73

13

14

FLUOR CORP., U.S.A.

17.19

14

13

FCC, Spain

16.06

15

26

SINOHYDRO CORP., China

15.88

16

15

SKANSKA, Sweden

14.64

17

18

SHIMIZU CORP., Japan

14.40

18

17

KAJIMA CORP., Japan

14.39

19

22

OBAYASHI CORP., Japan

13.68

20

27

SHANGHAI CONSTRUCTION GROUP, China

13.01

Source: Engineering News Record

Rank
2011
2010

Based on Total Firm Contracting Revenue

2011 ranking is based on 2010 construction contracting revenue.

The Top 20 International Contractors


Firm

HOCHTIEF, Germany

27.42

VINCI, France

16.56

BECHTEL, U.S.A.

12.50

BOUYGUES, France

12.43

SKANSKA, Sweden

11.63

SAIPEM, Italy

11.60

FLUOR CORP., U.S.A.

11.57

STRABAG, Austria

10.87

10

TECHNIP, France

7.94

10

11

FCC, Spain

7.46

11

13

CHINA COMMUNICATIONS CONST. GROUP, China

7.13

12

18

GRUPO ACS, Spain

6.56

13

BILFINGER BERGER, Germany

6.32

14

12

KBR, U.S.A.

5.86

15

15

CONSTRUTORA NORBERTO ODEBRECHT, Brazil

5.84

16

14

LEND LEASE GROUP, Australia

5.59

17

17

ROYAL BAM GROUP, The Netherlands

5.44

18

19

CONSOLIDATED CONTRACTORS GROUP, Greece

5.26

19

16

BALFOUR BEATTY, U.K.

5.16

20

22

CHINA STATE CONST. ENGINEERING CORP., China

4.87

2011 ranking is based on 2010 construction contracting revenue.

10

Revenue
$ bn

BRUCE SHAW

HANDBOOK 2012

Source: Engineering News Record

Rank
2011
2010

Based on Contracting Revenue from Projects Outside Home Country

SECTION

GLOBAL CONSTRUCTION

The Top 20 International Design Firms

Revenue
$ bn

Type of Firm

Firm

EA

AECOM TECHNOLOGY CORP., U.S.A.

5.92

EAC

URS CORP., U.S.A.

5.04

EAC

JACOBS, U.S.A.

4.75

EC

WORLEYPARSONS, Australia

3.65

EA

CH2M HILL, U.S.A

3.60

AMEC PLC, U.K.

3.40

EC

FLUOR CORP.,U.S.A

3.13

FUGRO, The Netherlands

3.00

EC

SNC-LAVALIN INTERNATIONAL, Canada

2.85

10

10

ARCADIS, The Netherlands

2.65

11

15

EC

M + W GROUP, Germany

2.36

12

13

TETRA TECH, U.S.A.

2.21

13

12

EC

BECHTEL, U.S.A.

2.17

14

11

EA

ATKINS, U.K.

2.14

15

14

EC

KBR, U.S.A.

2.01

16

17

EA

DAR AL-HANDASAH CONSULTANTS, Egypt

1.78

17

72

EC

BALFOUR BEATTY, U.K.

1.74

18

22

EC

CHINA COMMUNICATIONS CONST. GROUP, China

1.67

19

16

MOTT MACDONALD GROUP, U.K.

1.62

20

21

EC

HYDROCHINA CORP., China

1.53

2011 ranking is based on revenue for design services performed in 2010.


Key to Type of Firm: A architect; E engineer; C contractor

The Top 20 International Design Firms


Type of Firm

Firm

Revenue
$ bn

EC

WORLEYPARSONS, Australia

2.85

FUGRO, The Netherlands

2.83

EA

AECOM TECHNOLOGY CORP., U.S.A.

2.63

AMEC PLC, U.K.

2.46

EAC

JACOBS, U.S.A.

2.26

ARCADIS, The Netherlands

2.12

EC

FLUOR CORP., U.S.A.

2.06

EA

DAR AL-HANDASAH CONSULTANTS, Egypt

1.78

10

EC

KBR, U.S.A.

1.74

10

EC

SNC - LAVALIN INTERNATIONAL, Canada

1.67

11

11

EC

M + W GROUP, Germany

1.55

12

43

EC

BALFOUR BEATTY, U.K.

1.46

13

12

EC

TECNICAS REUNIDAS, Spain

1.29

14

13

EC

BECHTEL, U.S.A.

1.22

15

14

MOTT MACDONALD GROUP, U.K.

1.12

16

19

ARUP GROUP, U.K.

0.96

17

24

EAC

URS CORP., U.S.A.

0.94

18

62

AURECON, Singapore

0.93

19

16

TECHNIP, France

0.91

20

29

EA

ATKINS, U.K.

0.89

Source: Engineering News Record

Rank
2011
2010

Based on Revenue from Projects Outside Home Country

2011 ranking is based on revenue for design services performed in 2010.


Key to Type of Firm: A architect; E engineer; C contractor

BRUCE SHAW

HANDBOOK 2012

11

1
GLOBAL CONSTRUCTION

Source: Engineering News Record

Rank
2011
2010

Based on Total Firm Revenue

GLOBAL CONSTRUCTION

Global Ination 2011

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Overview of Percentage Change in Global Output

January 2012

2011

2012(f)

2013(f)

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%

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%

World output

5.2%

3.8%

3.3%

3.9%

12

BRUCE SHAW

HANDBOOK 2012

Source: International Monetary Fund

2010
Advanced Economies

Middle East & North Africa

Source: International Monetary Fund / www.global-rates.com

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SECTION

GLOBAL CONSTRUCTION

Oil Production
Country

Barrels /
Day

Rank
2011 2010

Country

Barrels /
Day

Saudi Arabia

10,520,000

13

11

Venezuela

2,375,000

Russia

10,130,000

14

13

European Union

2,276,000

United States

9,688,000

15

14

Norway

2,134,000

China

4,273,000

16

16

Algeria

2,078,000

Iran

4,252,000

17

17

Angola

1,988,000

Canada

3,483,000

18

18

Libya

1,789,000

Mexico

2,983,000

19

19

Kazakhstan

1,610,000

United Arab Emirates

2,813,000

20

21

Qatar

1,437,000

Brazil

2,746,000

21

20

United Kingdom

1,393,000

10

15

Nigeria

2,458,000

22

23

Azerbaijan

1,041,000

11

10

Kuwait

2,450,000

23

22

Indonesia

1,030,000

12

12

Iraq

2,408,000

24

24

India

954,000

Oil Consumption
Country

Barrels /
Day

Rank
2011
2010

Country

Barrels /
Day

United States

19,150,000

13

13

France

1,861,000

European Union

13,730,000

14

14

Iran

1,845,000

China

9,189,000

15

15

United Kingdom

1,622,000

Japan

4,452,000

16

16

Italy

1,528,000

India

3,182,000

17

17

Spain

1,441,000

Russia

2,937,000

18

18

Indonesia

1,292,000

Brazil

2,654,000

19

23

Singapore

1,080,000

Saudi Arabia

2,643,000

20

21

Netherlands

1,009,000
1,002,000

Germany

2,495,000

21

22

Taiwan

10

10

Korea, South

2,251,000

22

20

Thailand

988,000

11

11

Canada

2,209,000

23

19

Australia

960,800

12

12

Mexico

2,073,000

24

24

Venezuela

746,000

Source: CIA World Fact book

Rank
2011
2010

Note: 2011 rank is based on based on 2010 production / consumption levels

Staff / pictures

BRUCE SHAW

HANDBOOK 2012

13

1
GLOBAL CONSTRUCTION

3
4

Source: CIA World Fact book

Rank
2011 2010

14

BRUCE SHAW

HANDBOOK 2012

EUROPE 2

BRUCE SHAW

HANDBOOK 2012

15

EUROPE

European Market Review


Decit, 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
IMFs World Economic Outlook clearly states that
high public decits 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 nancing 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

Primark, Zaandam

16

BRUCE SHAW

HANDBOOK 2012

Governmental austerity measures


and nancing 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 nancial
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 prot 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.

SECTION

EUROPE

Production Index in the Construction Sector


Euro area, seasonally adjusted series
EU27, seasonally adjusted series

110

Source: Eurostat

115
Trendline
Trendline

EUROPE

105

100

95

90

85

80

11-2011

05-2011

11-2010

05-2010

11-2009

05-2009

11-2008

05-2008

11-2007

05-2007

11-2006

05-2006

11-2005

11-2004

05-2004

11-2003

05-2003

11-2002

05-2005

2005=100

75

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

Q4-10

Q1-11

Q2-11

Belgium

-3.1

5.4

2.3

Q3-11

1.3

Bulgaria

-8.3

-15.9

-13.4

-11.4

Czech Republic

-2.5

6.6

-4.9

-9.8

Denmark

-0.5

13.9

0.9

4.3

Germany

-1.3

34.5

5.2

4.8

Estonia

-4.7

34.6

11.5

25.5

Ireland

-22.4

-24.0

-21.5

N/A

Greece

-33.5

-37.3

-35.8

-8.3

Spain

-27.5

-36.6

-27.9

5.5

-5.4

2.8

-0.6

2.0

France
Italy

-1.2

0.5

-2.8

-4.9

Cyprus

-11.2

-7.9

-5.8

N/A

Latvia

-9.6

-15.1

-0.9

19.6

Lithuania

16.2

15.9

16.7

18.4

Luxembourg

-4.4

11.4

-1.1

-3.8

-10.5

-6.6

-9.5

-13.7

2.0

1.6

0.7

-0.6

Netherlands

-6.9

8.0

3.5

3.7

Austria

-3.8

-2.5

1.0

-0.6

Poland

11.7

17.9

19.7

15.1

Portugal

-9.3

-8.2

-7.7

-10.4

Romania

-7.1

-4.9

-4.1

8.0

Slovenia

-16.2

-25.3

-31.1

-25.5

Hungary
Malta

Slovakia

1.8

-3.7

-3.3

-3.0

Finland

16.4

16.6

7.9

9.8

Sweden

9.6

7.1

9.3

5.8

United Kingdom

10.7

7.7

3.4

0.5

EU Average

-3.8

0.6

-2.2

1.6

Building Average

-2.5

1.0

-3.1

1.3

Civil Engineering Average

-9.7

-1.8

1.7

2.7

BRUCE SHAW

HANDBOOK 2012

Source: Eurostat

Total

17

EUROPE

The Top 15 European Contractors

Turnover
bn

2011

2010

Firm

VINCI, France

34.21

BOUYGUES, France

23.26

HOCHTIEF, Germany

21.98

GRUPO, Spain

15.65

EIFFAGE, France

13.45

FCC, Spain

12.18

SKANSKA, Sweden

11.10

STRABAG , Austria

9.69

BALFOUR BEATTY, U.K.

9.40

10

11

SAIPEM, Italy

9.18

11

10

BILFINGER BERGER , Germany

8.18

12

12

ROYAL BAM GROUP, The Netherlands

7.44

13

13

TECHNIP, France

6.12

14

14

SACYR VALLEHERMOSO, Spain

5.27

15

15

FERROVIAL, Spain

4.92

Source: Engineering News Record

Rank

Based on Total Revenue

2011 ranking is based on 2010 construction revenue

The Top 15 European Design Firms

Revenue
bn

Type of Firm

Firm

AMEC, U.K.

2.58

FUGRO, The Netherlands

2.28

ARCADIS, The Netherlands

2.01

EA

WS ATKINS, U.K

1.63

EC

BALFOUR BEATTY, U.K.

1.32

MOTT MACDONALD GROUP, U.K.

1.23

ARUP GROUP , U.K.

1.04

EC

TECNICAS REUNIDAS, Spain

1.02

GRONTMIJ , The Netherlands

0.92

10

WSP GROUP, U.K.

0.83

11

11

RAMBOLL GROUP, Denmark

0.81

12

EC

EGIS, France

0.81

13

MOUCHEL, U.K.

0.73

14

14

EC

TECHNIP, France

0.70

15

13

POYRY, Finland

0.69

Note: 2011 ranking is based on revenue for design services performed in 2010. Key to Type of Firm: A architect; E engineer; EC engineer-contractor

18

BRUCE SHAW

HANDBOOK 2012

Source: Engineering News Record

Rank
2011
2010

Based on Total Firm Revenue

SECTION

2 EUROPE

Construction Cost - New Residential Buildings


Index (2005=100)

2010
Q3

Q1

2011
Q3

Q1

Q3

112.1

111.6

110.4

111.1

114.3

N/A

Bulgaria

N/A

140.8

143.6

139.9

144.1

142.3

Czech Republic

112.3

112.2

113.2

113.6

115.3

115.9

113.87e

114.0

114.4

115.7

117.6

120.5

Germany

107.0

108.9

110.4

111.7

114.4

115.6

Estonia

122.5

116.3

114.1

115.3

116.1

119.1

Denmark

Ireland

97.2

91.0

91.9

94.0

91.8

91.1

Greece

114.0

114.4

115.3

116.6

117.5

117.6

Spain

118.68e

118.7

119.4

122.3

125.6

127.0

France

116.51e

116.7

117.9

120.4

123.7

124.9

Italy
Cyprus

N/A

111.5

N/A

N/A

N/A

N/A

120.3

119.7

122.6

124.4

126.8

N/A

Latvia

185.0

161.9

158.4

152.5

162.6

159.8

Lithuania

128.0

118.0

112.9

116.1

114.5

121.0

Luxembourg

110.03e

111.2

111.0

112.0

112.5

N/A

Hungary

122.30e

124.7

124.9

123.1

124.0

125.7

Netherlands

113.26e

112.2

112.3

113.2

114.6

115.5

Austria

115.1

116.0

117.5

119.9

121.7

122.4

Poland

116.3

115.6

115.4

115.8

116.1

N/A

Portugal

111.2

111.7

112.6

113.8

114.8

115.3

Romania

141.50e

145.8

142.3

148.2

154.7

162.0

Slovenia

114.5

119.7

125.7

126.3

134.0

131.8

Slovakia

116.7

116.9

116.8

116.8

117.5

117.9

Finland

113.5

112.7

113.1

114.6

116.4

118.7

Sweden

118.31e

119.2

120.7

122.6

124.1

125.9

United Kingdom

101.20e

115.0

115.4

115.8

116.1

N/A

Turkey

135.40e

137.4

142.3

145.5

154.3

166.7

Norway

119.7

120.7

122.6

124.6

127.2

129.1

European Union Average

111.3

114.0

114.7

116.3

118.3

119.7

Notes: N/A = Not available e = Estimated value

Parklake Plaza, Bucharest

BRUCE SHAW

HANDBOOK 2012

2
EUROPE

Belgium

Source: Eurostat

2009
Q1

19

EUROPE

Consumer Ination vs Construction Ination 2008-2011


5%
Source: Eurostat

4%
3%
2%
1%
0%
-1%
-2%
-3%
-4%
2008

2009

European Union Average Consumer Ination

2010

2011

New Residential Construction Cost

EU Labour Costs & Productivity 2011


Country

Productivity

Cost / Hr

Austria

78

22.98

Cyprus

N/A

N/A

Czech Republic

46

7.57

Denmark

81

35.41

Estonia

42

N/A

Finland

75

N/A

France

91

27.46

Germany

84

22.95

Greece

53

13.21

Hungary

41

5.38

Ireland
Italy

100

26.15

69

21.86

Latvia

N/A

5.17

Lithuania

N/A

4.86

Luxembourg

118

20.26

Netherlands

92

22.10

Poland

39

6.69

Portugal

50

8.27

Romania

N/A

3.34

Slovakia

53

6.66

Slovenia

54

12.86

Spain

74

17.97

Sweden

78

33.14

UK

73

19.40

Source: Productivity gures 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

SECTION

EUROPE

EU Procurement Timescales 2012


Accelerated Restricted Procedure

Publish at least 52 days prior to date contract

Time Limit for Receipt of Expressions of Interest

notice is dispatched to avail of reduced time limits

/PUMFTTUIBOEBZTGSPNEBUFDPOUSBDUOPUJDF
is dispatched

(max. 12 mths).

Time Limit for Receipt of Tenders

Time Limit for Receipt of Tender

/PUMFTTUIBOEBZTGSPNEBUFJOWJUBUJPOUP
tender is dispatched

If no PIN: not less than 52 days


If PIN: General rule minimum time 36 days and in

Negotiated Procedure with Prior Publication

any case not less than 22 days from date contract

of a Contract Notice

notice is dispatched

Time Limit for Receipt of Application


/PUMFTTUIBOEBZTGSPNEBUFDPOUSBDUOPUJDF

Restricted Procedure

is dispatched

Time Limit for Receipt of Expressions of Interest


Not less than 37 days from date contract notice is

Negotiated Accelerated Procedure with Prior

dispatched

Publication of a Contract Notice

Time Limit for Receipt of Tenders

Time Limit for Receipt of Application

If no PIN: Not less than 40 days

/PUMFTTUIBOEBZTGSPNEBUFDPOUSBDUOPUJDF

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

is dispatched
Contract Award Notice
Time Limit for Receipt of Issue
EBZTGSPNBXBSEPGDPOUSBDU

EU Procurement Thresholds 2012

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

Source: www.etenders.gov.ie

Works

bodies outside the Utilities sector.


Utilities
Works Contracts /
Prior Indicative Notice
Supplies and Services

5,000,000

For entities in Utilities sectors covered by GPA

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


Croatian
kuna
HRK

Czech
koruna
CZK

Danish
krone
DKK

Hungarian
forint
HUF

Polish
zloty
PLN

2012*

1.96

2011

1.96

7.54

25.72

7.44

314.63

4.47

7.44

24.59

7.45

279.37

4.12

2010

1.96

7.29

25.28

7.45

275.48

3.99

2009

1.96

7.34

26.43

7.45

280.33

2008

1.96

7.22

24.95

7.46

2007

1.96

7.34

27.77

7.45

2006

1.96

7.32

28.34

2005

1.96

5.59

29.78

Romanian
leu
RON

Russian
rouble
RUB

Turkish
lira
TRY

4.34

40.83

2.40

4.24

40.88

2.34

4.21

40.26

2.00

4.33

4.24

44.14

2.16

251.51

3.51

3.68

36.42

1.91

251.35

3.78

3.34

35.02

1.79

7.46

264.26

3.90

3.53

34.11

1.81

7.45

248.05

4.02

1.81

26.38

1.68

Source: European Central Bank

Year

Bulgarian
lev
BGN

*Note: Based on January exchange rates

BRUCE SHAW

HANDBOOK 2012

21

2
EUROPE

Open Procedures

Source: www.etenders.gov.ie

Prior Indicative Notice (PIN)

22

BRUCE SHAW

HANDBOOK 2012

IRELAND 3

BRUCE SHAW

HANDBOOK 2012

23

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.

In November 2011 the Government published its


Infrastructure and Capital Investment Framework
for 2012-2016. 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.

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 prole failure of both construction and
consultancy rms.

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 t-outs for both
Irish and overseas occupiers. If global nancial
concerns can be overcome and some condence
recovered locally hopefully 2013 will see the start
of a slow recovery for the industry.

Value of Construction Output m 2000-2012


Source: DKM / Department of Environment, Heritage
& Local Government / Bruce Shaw

40,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000

2000

2001

2002

2003

DKM / Dept. of Environ. 10 Forecast

2004

2005

2006

2007

2008

2009

 Bruce Shaw Forecast

DKM
2010
(F)

BS
2010
(F)

BS
2011
(F)

BS
2012
(F)

Construction Output 2007-2011

Change in Value of Output (%)


Construction Output as % of GNP

2008

2009

2010 (f)

2011 (f)

38,601

32,593

18,048

11,733

8,500

0%

-16%

-45%

-35%

-28%

23.7

21.1

13.7

9.2

6.8

2007

2008

2009

2010

2011(f)

163,413

154,673

132,233

128,207

125,500

5.4%

-5.3%

-14.5%

-3.0%

-2.1%

Source: DKM /
Department of the
Environment /
Bruce Shaw

Value of Output at Current Prices (m)

2007

Gross National Product (GNP) 2007-2011

% Change in GNP

24

BRUCE SHAW

HANDBOOK 2012

Source: CSO /
ESRI

GNP at Current Prices (m)

SECTION

IRELAND

Construction Purchasing Managers Index Report June 2001January 2012


70

50 = no change on previous month

60

50

40

30
Increasing rate of contraction
20
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Ulster Bank Construction PMI

Dec-10

Mar-11

Jun-11

Sep-11

Dec-11

Jan-12

Total Activity (graphed above)

40.6

46.1

40.5

40.1

49.9

46.4

Housing

45.5

47.0

41.0

36.6

52.3

47.2

Commercial

41.7

47.0

42.3

44

49.8

51.3

Civil Engineering

30.2

43.3

32.8

37.2

42.9

37.7

Historical Property Performance Total Return % 19962011


15

600

% return per quarter

10
800

Source; IPD / SCSI

1,000

-5
Index Value (shaded area)

400

-10
200
-15

-20

Dec. 96
All Property Index

Dec. 01
All Property

Dec. 06
Retail

Office

BRUCE SHAW

Dec. 11
Industrial

HANDBOOK 2012

25

3
IRELAND

Source; Ulster Bank

Increasing rate of growth

IRELAND

Bruce Shaw Tender & Cost Indices


The rst 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 1990s 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 2012. In later
years we predict that prices are then likely to increase
generally in line with ination 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 ination.

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 reect the

actual costs of labour and materials while the latter


reect 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
reect 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 years Handbook
that they should look carefully at the nancial
strength of contractors and their ability to obtain
performance guarantee bonds before entering
into construction contracts.

Bruce Shaw Tender Price & Cost Indices 2001-2012


Source: Bruce Shaw

190
180
170
160
150
140
130
120
110
100
2001

2002

Average Tender Price

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012(f)

Construction Input Cost

Tender % 6

-2

-4

-12

-17

-6

Cost %

-2

-3

-2

-1

26

BRUCE SHAW

HANDBOOK 2012

SECTION

IRELAND

SCSI Tender Price Index 2001-2011

150
145
140
135
130
125
120
115
110
105
100
1h 2h
2001

1h 2h
2002

1h 2h
2003

1h 2h
2004

1h 2h
2005

1h 2h
2006

1h 2h
2007

1h 2h
2008

1h 2h
2009

1h 2h
2010

1h 2h
2011

2008

2009

2010

2011*

Consumer v Construction Price Ination 2001-2011


Source: CSO / Bruce Shaw

15%

10%

5%

0%

-5%

-10%

-15%

-20%
2001

2002

2003

Construction Price Ination

2004

2005

2006

Consumer Price Ination

2007

*2011 Consumer Price Ination gure based on Jan 11-Nov 11

Annual Numbers Employed in Construction (000s)


Source: CSO

280
260
240
220
200
180
160
140
120

BRUCE SHAW

HANDBOOK 2012

Jul-Sep 11

Apr-Jun 11

Jan-Mar 11

Jul-Sep 10

Oct-Dec 10

Apr-Jun 10

Jan-Mar 10

Jul-Sep 09

Oct-Dec 09

Apr-Jun 09

Jan-Mar 09

Jul-Sep 08

Oct-Dec 08

Apr-Jun 08

Jan-Mar 08

Jul-Sep 07

Oct-Dec 07

Apr-Jun 07

Jan-Mar 07

Oct-Dec 06

Jul-Sep 06

Apr-Jun 06

Jan-Mar 06

Oct-Dec 05

Jul-Sep 05

Apr-Jun 05

Jan-Mar 05

100

27

3
IRELAND

Source: Society of Chartered Surveyors Ireland

155

IRELAND

Bruce Shaw Average Irish Construction Costs 2012


The average construction costs table is generated using Bruce Shaws 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

Suburban Naturally Ventilated


Shell & Core

1,100

1,450

Developer Standard

1,200
150

Shell & Core


Developer Standard

Extra for Air Conditioning

per sq.m

10-15%

1,550

per sq.m

15-20%

300

per sq.m

1,450

2,050

per sq.m

15-20%

1,600

2,250

per sq.m

20-25%

City Centre Air Conditioned

Office Fit Out


95% Open Plan, No Catering

400

600

per sq.m

20-30%

75% Open Plan, Limited Catering

600

800

per sq.m

20-30%

60% Open Plan, Full Catering

800

1,200

per sq.m

25-35%

1,250

1,550

per sq.m

25-35%

950

2,600

each

Shell & Core

700

1,250

per sq.m

20-25%

Developer Standard

800

1,250

per sq.m

25-45%

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%

Corporate HQ
Open Plan Work Station
High Tech Industrial

Residential

Individual House Rebuilding Costs

UCD Science Centre South

28

BRUCE SHAW

HANDBOOK 2012

(see page 34)

Source: Bruce Shaw

Commercial Offices

SECTION

IRELAND

3
Average Costs

Cost Range

M&E

600

750

per sq.m

Unit Shops

800

1,200

per sq.m

10-15%
10-15%

Mall

1,400

2,500

per sq.m

20-25%

Retail Fit Out

1,100

1,550

per sq.m

25-30%

145,000

455,000

per hectare

Site Development Business Parks


Roads & Primary Services
Warehouses
Without Offices

550

700

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

930*

per sq.m

10-15%

Education
Primary Level (DOE Jan 11)
Second Level (DOE Jan 11)

930*

per sq.m

15-20%

1,300

2,100

per sq.m

20-25%

1,400

2,350

per sq.m

25-35%

250

600

per sq.m

Restaurant

1,500

2,250

per sq.m

25-35%

Cinema

1,200

1,950

per sq.m

20-30%

850

1,300

per sq.m

10-15%

1,900

2,600

per sq.m

20-35%

Third Level
Leisure
Hotel Building
FF&E

Sports Hall
Swimming Pool
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%

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 specications 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 ination.
* Basic Building Cost only (incl. VAT). External allowances of 12.5% and abnormal costs should be added.

BRUCE SHAW

HANDBOOK 2012

29

IRELAND

Anchor Unit

Source: Bruce Shaw

Shopping Centres

IRELAND

Blackrock Clinic

Basic Hourly Wage Rates


General Operative
Grade A

Grade B

Grade C

Grade D

1 October 2005

16.85

16.34

15.33

14.83

13.48

1 April 2006 (3%)

17.36

16.84

15.80

15.28

13.89

1 October 2006 (2%)

17.71

17.18

16.12

15.58

14.17

1 July 2007 (2.5%)

18.15

17.61

16.52

15.97

14.52

1 January 2008 (2.5%)

18.60

18.04

16.93

16.37

14.88

4 February 2011 (-7.5%)

17.21

16.69

15.66

15.14

13.77

Source: Registered Agreement for the


Construction Industry

Craftsman

Basic Hourly Wage Rate Mechanical & Electrical

1st October 2005

16.85

1st April 2006 (3%)

17.36

1st October 2006 (2%)

17.71

1st July 2007 (2.5%)

18.15

1st January 2008 (2.5%)

18.60

4th February 2011 (-7.5%)

17.21

Electrical
1 April 2004

18.98

1 April 2005

19.72

1 April 2006

20.39

1 April 2007

21.49

1 September 2009

22.03

1 January 2010

22.56

30

BRUCE SHAW

HANDBOOK 2012

Source: MEBSCA / ECA

Mechanical

SECTION

IRELAND

The Top Irish Main Contractors


Firm

Revenue m
2010

Revenue m
2011

2010

JOHN SISK & SON LTD

568.25

420.00*

BAM CONTRACTORS LTD.

270.30

250.00

WALLS CONSTRUCTION LTD.

169.04

180.00

P.J. HEGARTY & SONS LTD.

125.00

80.00

JOHN PAUL CONSTRUCTION LTD.

108.77

71.50

128.00**

60.00***

44.00

58.00

118.00

44.00

50.00

42.30

SIAC CONSTRUCTION LTD.

13

J.J. RHATIGAN & CO LTD.

ROADBRIDGE LTD.

11

BENNETT (CONSTRUCTION) LTD.

10

14

COLLEN CONSTRUCTION LTD.

33.12

37.15

11

12

GLENMAN CORPORATION LTD.

27.80

28.50

12

G&T CRAMPTON LTD.

21.00

26.46

13

MDY CONSTRUCTION LTD.

23.44

20.00

14

15

LAING OROURKE IRELAND LTD.

25.12

16.10

15

BRIAN MCCARTHY CONTRACTORS LTD.

14.64

14.00

Notes:
* This gure is Irish turnover only. Total worldwide t/o gure for Sisk
in 2011 was 958m
** This gure is Irish turnover only. Total worldwide t/o gure for SIAC
in 2010 was 138m
*** This gure is Irish turnover only. Total worldwide t/o gure for SIAC
in 2011 was 177m

This gure is Irish turnover only. Total worldwide t/o gure for
Roadbridge in 2010 was 143m
This gure is Irish turnover only. Total worldwide t/o gure for
Roadbridge in 2011 was 175m

The Top Irish Services Sub-Contractors Turnover


Firm
2010

Revenue m
2010

Revenue m
2011

MERCURY ENGINEERING GROUP

204.23

265.00*

JONES ENGINEERING LTD.

121.36

150.00

DORNAN ENGINEERING LTD.

71.90

73.90

KIRBY GROUP ENGINEERING LTD.

57.91

64.84

SUIR ENGINEERING LTD.

49.85

52.16

L. LYNCH & CO. LTD.

33.64

46.17

WINTHROP ENGINEERING LTD.

38.32

37.74

DESIGNER GROUP

30.90

31.71

11

LYNSKEY ENGINEERING LTD.

17.62

23.00

10

12

ROTARY M & E SERVICES (IRELAND) LTD.

16.85

15.80

11

10

PRECISION ELECTRIC (IRELAND) LTD.

20.61

14.81

12

13

T. BOURKE & CO. LTD.

9.03

6.75

Source: Individual Companies Information / Companies Registration Office

Rank
2011

* This gure is Irish turnover only. Total worldwide turnover gure for Mercury Engineering Group in 2011 was 535m

BRUCE SHAW

HANDBOOK 2012

31

3
IRELAND

2011

Source: Individual Companies Auditors / Companies Registration Office

Rank

IRELAND

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

SECTION

IRELAND

Annual Housing Completions 20012011

2001

4,875

9.3%

2002

5,763

10.0%

2003

6,133

8.9%

2004

5,146

2005
2006
2007

6,671

Private

Total

47,727

90.7%

52,602

51,932

90.0%

57,695

62,686

91.1%

68,819

6.7%

71,808

93.3%

76,954

5,559

6.9%

75,398

93.1%

80,957

5,208

5.6%

88,211

94.4%

93,419

8.5%

71,356

91.5%

78,027

2008

6,801

13.1%

44,923

86.9%

51,724

2009

5,344

20.2%

21,076

79.8%

26,420

2010

N/A

N/A

N/A

N/A

14,602

2011

N/A

N/A

N/A

N/A

10,480

Total
52,202

New Housing Completions by Type 20012011


House

Apartment

2001

41,576

79.6%

10,626

20.4%

2002

45,657

79.7%

11,638

20.3%

57,295

2003

53,580

78.3%

14,839

21.7%

68,419

2004

60,448

79.0%

16,106

21.0%

76,554

2005

62,522

77.6%

18,035

22.4%

80,557

2006

73,073

78.6%

19,946

21.4%

93,019

2007

58,936

75.9%

18,691

24.1%

77,627

2008

38,513

75.0%

12,811

25.0%

51,324

2009

21,272

80.5%

5,148

19.5%

26,420

2010

12,514

85.7%

2,088

14.3%

14,602

2011

9,140

87.2%

1,340

12.8%

10,480

BRUCE SHAW

HANDBOOK 2012

Source: Department of the Environment,


Heritage & Local Government

Housing
Completions

33

3
IRELAND

Social

Source: Department of the Environment,


Heritage & Local Government

Housing
Completions

IRELAND

SCSI Rebuilding Costs per sq.m March 2011

Semi Detached

Typical
Size

Dublin
Area

Cork
Area

Galway
Area

Waterford
Area

Limerick
Area

70 sq.m

1,820

1,402

1,375

1,373

1,395

95 sq.m

1,743

1,320

1,295

1,304

1,316

95 sq.m

1,759

1,339

1,317

1,314

1,321

118 sq.m

1,738

1,319

1,301

1,291

1,277

Detached

118 sq.m

1,767

1,338

1,307

1,332

1,332

Detached Bungalow

146 sq.m

1,707

1,314

1,277

1,253

1,350

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 gures shown in the table are a minimum base cost guide for
your house insurance.

4.

House contents such as carpets, curtains, furniture, etc. are not


covered by the gures.

2.

5.

No allowance has been made for the cost of out-buildings, patios


or boundary walls. The gures do however allow for a concrete path
around the house, for driveway repairs and regrassing.

6.

The gures 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 ination during the duration of the policy and
the period between any loss occurring and reinstatement.

3.

The gures are based on estate type houses built since the 1960s.
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 ats because of
split responsibilities for shared areas. The insurance of apartments is
covered in the block service charge. Owners should conrm with their
management companies / agents that their apartment block has been
valued for insurance purposes, and that the insured value is current.
The gures assume a basic quality specication with normal
foundations, brick or block walls, concrete tiled roof, concrete ground
oor and timber rst oor, softwood ush 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 ttings, built-in
wardrobes, nishes and any other items not normally included
in an estate type house (e.g. re alarm).

St. Vincents Private Hospital

Citi Bank, City RDiL Project

34

BRUCE SHAW

HANDBOOK 2012

Source: SCSI

Terraced

No. of
Bedrooms

SECTION

IRELAND

3
IRELAND

Christchurch Cork, refurbishment and conservation of a listed building

Planning Charges 2012


Charge

Most Building Types

80 or 3.60 per sq.m whichever is greater

New Houses

65 for each dwelling

House Alterations

34

Golf Courses

50 per hectare

Outline Planning Permission

75% of full planning permission charge

Source: Local Planning Authorities

Class of Development

Maximum Scale of Charges for Planning Applications


Full Application Most Building Types

38,000

Outline Application Most Building Types

28,500

Retention Application

125,000

Fire Certicate Charges 2012


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 Certicate Application

2.90 per sq.m up to a maximum of 12,500

Option 4
A Regularisation Fire Safety Certicate Application

11.60/sq.m up to a maximum of 50,000

BRUCE SHAW

HANDBOOK 2012

Source: Local Planning Authorities

Type of Application

35

36

BRUCE SHAW

HANDBOOK 2012

UNITED KINGDOM 4

BRUCE SHAW

HANDBOOK 2012

37

UNITED KINGDOM

UK Market Review
After a number of challenging years in the UK
construction industry the prospects for 2012 do not
indicate any signicant improvement in activity. The
continued combination of factors such as the lack of
access to debt nance for development, the lack of
mortgage availability for new house purchasers, the
lack of grant funding from the HCA for affordable
homes, the UK governments continued reduction in
capital spending as well as rising ination continue to
keep the prospect of a sustained recovery subdued.

The south-east and particularly


London are enjoying signicantly
more activity.
The UK Government spending cuts announced in
late 2010 have begun to make a signicant impact
on the sector during 2011 and will continue to
do so through 2012. 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 2012.
The CPA has estimated that the value of work in the
sector will increase from 109bn in 2011 to 112bn
in 2012. 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 signicant
fall. The new work growth is mainly propped up by
a recent increase in private housing as well as some
signicant 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

38

BRUCE SHAW

HANDBOOK 2012

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 2013.
We are continuing to predict that the ongoing
lack of bank nancing 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 2012. In terms of regions, the
south-east and particularly London are enjoying
signicantly 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 prole 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.

SECTION

UNITED KINGDOM

4
UNITED KINGDOM

46-48 Grosvenor Gardens

UK Construction Output bn 2001-2012


Source: National Office for Statistics,
Construction Statistics Branch

140
120
100
80
60
40
20
0
2001

2002

New Work

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Repair & Maintenance

2010 Public 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

2010 Private Sector Output bn

New Housing 14.3


Infrastructure 7.8
Industrial 3.6
Education 2.2
Healthcare 2.1

BRUCE SHAW

Offices 6.1
Entertainment 4.7
Retail 5.6
Miscellaneous 2.6

HANDBOOK 2012

39

UNITED KINGDOM

UK Tender Price Index 2001-2012


Source: BCIS. Tender Price Indices National

300

250

200

150

100

50

0
2001

Tender %

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012(f)

7%

3%

15%

0%

3%

8%

-4%

-12%

-4%

9%

1%

UK Regional Tender Price Index 2011


Source: BCIS. Tender Price Indices Regional

215
210
205
200
195
190
185
East
Anglia

North
West

Scotland Northern
Ireland

Yorks &
Humber

Victoria Palace Theatre

40

BRUCE SHAW

HANDBOOK 2012

North
East

Wales

South
East

West
Midlands

East
Midlands

South
West

Greater
London

SECTION

UNITED KINGDOM

4
UNITED KINGDOM

Resource Cost Index of Non-Housing Building 2001-2012


Source: National Office for Statistics
Construction Statistics Branch

240

220

200

180

160

140

120

100
2001

2002

2003

2004

2005

2006

2007

Labour & Plant

Combined Index

2008

2009

2011

2012(f)

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
Source: National Office for Statistics
Construction Statistics Branch

2,700

2,600

2,500

2,400

2,300

2,200

2,100

2,000
Q1

Q2 Q3

2005

Q4

Q1

Q2 Q3

2006

Q4

Q1

Q2 Q3

2007

Q4

Q1

Q2 Q3

2008

Q4 Q1

Q2 Q3

Q4

Q1

Q2 Q3

2009

BRUCE SHAW

2010

Q4

Q1

Q2 Q3

Q4

2011

HANDBOOK 2012

41

UNITED KINGDOM

Standard Hourly Base Rates for Labour 2011


Base rate

Building Craft Operative

13.21

Building Skill Rate 1

12.59

Building Skill Rate 2

12.11

Building Skill Rate 3

11.32

Building Skill Rate 4

10.68

Building General Operative


Technical Plumber

9.90

Source: BCIS.
Standard Hourly Base Rates for Labour.

Job Type

19.06

HVAC Senior Craftsman

17.16

Electrical Technician

23.03

Mechanical Technician

23.03

The Top UK Main Contractors

42

Firm

Turnover
bn

BALFOUR BEATTY

6.74

LAING OROURKE

3.53

CARILLION

2.72

KIER

1.42

SKANSKA CONSTRUCTION

1.28

MORGAN SINDALL

1.25

BOVIS LEND LEASE

1.09

12

KELLER

1.07

10

COSTAIN

1.02

2010

2
3

10

BAM CONSTRUCT UK

1.01

11

14

WATES GROUP

0.98

12

11

INTERIOR SERVICES GROUP

0.97

13

45

BOUYGUES GROUP

0.94

14

GALLIFORD TRY

0.94

15

20

MACE GROUP

0.85

16

18

WILLMOTT DIXON GROUP

0.78

17

17

INTERSERVE

0.74

18

16

VINCI

0.72

19

21

BAM NUTTALL

0.69

20

13

NEWARTHILL (SIR ROBERT MCALPINE)

0.67

BRUCE SHAW

HANDBOOK 2012

Source: Building Magazine

Rank
2011

SECTION

UNITED KINGDOM

The Top UK Architects


Firm

Staff

FOSTER & PARTNERS

315

ATKINS

228

CAPITA SYMONDS

176

AEDAS

155

15

NPS PROPERTY CONSULTANTS LTD

128

3DREID

126

9=

ARCHIAL GROUP PLC

117

PRP ARCHITECTS

111

10

13

PM GROUP/DEVEREUX ARCHITECTS

90

11

9=

NIGHTINGALE ASSOCIATES

87

12

18

STRIDE TREGLOWN LTD

84

13

17

LEWIS & HICKEY LTD

82

BUILDING DESIGN PARTNERSHIP

360

14

16

PURCELL MILLER TRITTON LLP

79

15

20

PASCALL & WATSON ARCHITECTS

74

16

22

ALLFORD HALL MONAGHAN MORRIS LTD

66

17

23

FEILDEN CLEGG BRADLEY STUDIOS LLP

66

18

URS SCOTT WILSON

64

19

31

TP BENNETT

59

20

AECOM

58

Note: Ranked by number of Chartered Architects registered as of 2011

The Top UK Engineering Firms


2010

Firm

Staff

ATKINS

2,218

URS SCOTT WILSON

1,893

MOTT MACDONALD

1,705

JACOBS ENGINEERING UK LTD

1,135

ARUP GROUP LTD

1,118

AECOM

1,022

HALCROW GROUP LTD

990

CAPITA SYMONDS

691

PARSONS BRINCKERHOFF LTD

686

10

WATERMAN GROUP PLC

589

11

WSP GROUP PLC

372

12

RAMBOLL

369

13

10

WHITE YOUNG GREEN GROUP LTD

361

14

11

BURO HAPPOLD LTD

299

15

13

HOARE LEA & PARTNERS

260

16

14

W A FAIRHURST & PARTNERS

220

17

15

MACE

206

18

22

HILSON MORAN

150

19

16=

TPS

148

20

21

HURLEYPALMERFLATT

138

Source: Building Magazine

Rank
2011

Note: Ranked by number of Chartered Engineers registered as of 2011

BRUCE SHAW

HANDBOOK 2012

43

4
UNITED KINGDOM

2010

Source: Building Magazine

Rank
2011

UNITED KINGDOM

Bruce Shaw Average UK Construction Costs 2012


Average Costs

Cost Range

Over 20 storey offices premium grade facilities and common nishes


with lifts, provision for air conditioning, and sprinklers excluding
Developers CAT A tout

2,250

2,500

per sq.m

Over 20 storey offices A grade common nishes with lifts, provision


for air conditioning, and sprinklers excluding Developers CAT A tout

1,950

2,250

per sq.m

Up to 20 storey offices medium grade facilities and common


nishes with lifts, provision for air conditioning and sprinklers excluding
Developers CAT A tout

1,650

1,950

per sq.m

Up to 8 storey offices medium grade facilities and common nishes


with lifts, provision for air conditioning, and sprinklers excluding
Developers CAT A tout

1,200

1,550

per sq.m

Up to 2 storey offices - medium grade facilities and common nishes


with provision for air conditioning, no lift and no sprinklers excluding
Developers CAT A tout

800

1,050

per sq.m

Developers CAT A tout including raised oors, carpets, ceilings, fan coil
units with ducts and grilles, lighting and power distribution

300

500

per sq.m

Category B t-out from institutional Category A specication; standard


corporate accommodation; open plan 15 per cent offices

500

1,350

per sq.m

1,000

2,250

per sq.m

1,250

1,500

per sq.m

750

950

per sq.m

Category B t-out from institutional Category A specication; standard


corporate accommodation; banking / legal 50 per cent offices / cellular
Retail
Regional shopping complex high standard including major stores,
specialty shops and enclosed malls
Suburban supermarkets; excluding tout
Retail Park; shell excluding t-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

Single project home up to 250 sq.m medium standard, double brick


with normal site cost for at site

650

1050

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

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

150,000

per key

5 star hotel, multiple restaurants, public areas, air conditioning,


banqueting, wellness

300,000

450,000

per key

Super luxury 6 star hotel, multiple, public areas, air conditioning,


banqueting, wellness

500,000

650,000

per key

Residential

Hotels (New Build excluding FF&E)

44

BRUCE SHAW

HANDBOOK 2012

Source: Bruce Shaw

Commercial Offices

SECTION

Average Costs

UNITED KINGDOM

Cost Range

400

550 per sq.m

Up to 10m high warehouse basic standard, metal clad walls,


no sprinklers (over 5,000 sq.m)

400

500 per sq.m

Up to 10m high warehouse medium standard, precast walls,


no sprinklers (up to 5,000 sq.m)

450

600 per sq.m

Up to 10m high warehouse medium standard, precast walls,


no sprinklers (over 5,000 sq.m)

400

500 per sq.m

Up to 10m warehouse high standard, precast walls, sprinklers


(up to 5,000 sq.m)

600

750 per sq.m

Up to 10m high warehouse high standard, precast walls, sprinklers (over


5,000 sq.m)

450

600 per sq.m

Truck hardstand, 175 RC slab, drainage, line marking

100

150 per sq.m

Open bitumen car parking, drainage, line marking (30 sq.m/car)

100

150

per sq.m

Multi storey (above ground), concrete structure, lift, no mechanical


ventilation, no sprinklers (30 35 sq.m/car)

600

750

per sq.m

1,100

1,300

per sq.m

Tier Level 2 Fit out of existing shell, fully built (day 1 & 2), technical load
between 1,000-1,500 kW/sq.m

5,000

8,000

per
kilowatt
(IT load)

Tier Level 3 Fit out of existing shell, fully built (day 1 & 2), technical load
between 1,500-2,000 kW/sq.m

8,000

11,000

per
kilowatt
(IT load)

Tier Level 4 Fit out of existing shell, fully built (day 1 & 2), technical load
between 1,500-2,000 kW/sq.m

12,000

16,000

per
kilowatt
(IT load)

Car Parking

Underground, concrete structure, excavation, lifts, mechanical ventilation,


sprinklers (35 40 sq.m/car)

Data Centre
(excludes shell construction, incoming power & fibre upgrades,
comms equipment)

Approximate Regional Variance


Region
Wales
Midlands
East
South West
North

Factor
0.96
0.97
1.00
0.98
0.91

Region

Factor

South East
London
Scotland
Northern Ireland

1.09
1.12
0.96
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 specications for each type of building and do not account for any site abnormal costs.

BRUCE SHAW

HANDBOOK 2012

45

4
UNITED KINGDOM

Up to 10m high warehouse basic standard, metal clad walls,


no sprinklers (up to 5,000 sq.m)

Source: Bruce Shaw

Industrial

UNITED KINGDOM

House Building Starts and Completions 2001-2011


Source: National Office for Statistics

70,000
60,000
50,000
40,000
30,000
20,000
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 Q1

2001

2002

2003

Housebuilding Starts

2004

2005

2006

2007

2008

2009

2010

2011

Housebuilding Completions

Average Procurement Lead-in Times in Weeks


5

10

15

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 - Proled Metal
Faade 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
Notes: All times based on generic 5 storey 100,000 sq.ft. office block in city. As of July 2011.

46

BRUCE SHAW

HANDBOOK 2012

20

25

30

35

Source: National Office for Statistics

SECTION

UNITED KINGDOM

The UK Housing Market 2012

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 2012. However, prime sites
are still scarce.
The housing market is more buoyant in the south
specically in London, however the current mortgage
market is dictating sales gures. 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
rst-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 rst-time buyers onto the property
ladder as these had dropped from 40% of the market

share to 23% since July 2009. 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
2015. 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 gures 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.

38 Grosvenor Gardens Mews

BRUCE SHAW

HANDBOOK 2012

47

4
UNITED KINGDOM

Condence 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.

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 lm 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. Westeld Stratford City sits next door
to the Olympic Park, and with a total retail oor

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 UKs prime housing market will surge as the
2012 Olympics attract new international buyers
to the country.

Primark, Stratford City

Euro v Sterling 2005-2012


Source: European Central Bank

0.94
0.92
0.90
0.88
0.86
0.84
0.82
0.80
0.78
0.76
0.74
0.72
0.70
0.68
0.66
0.64

48

BRUCE SHAW

HANDBOOK 2012

Jan-12

Sep-11

May-11

Jan-11

Sep-10

May-10

Jan-10

Sep-09

May-09

Jan-09

Sep-08

May-08

Jan-08

Sep-07

May-07

Jan-07

Sep-06

May-06

Jan-06

Sep-05

May-05

Jan-05

0.62

SECTION

4 UNITED KINGDOM

4
UNITED KINGDOM

It is hoped that the


Olympic Games will
oer our economy
the upturn it needs
to help bring it out
of the recession.

50

BRUCE SHAW

HANDBOOK 2012

MIDDLE EAST 5

BRUCE SHAW

HANDBOOK 2012

51

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.

Macro economic data indicates that construction


activity in Saudi Arabia grew by 11.6% in 2011 with
ination estimated to be at 4.5% for 2012. 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.

In the UAE, the IMF forecasts real GDP to grow


by 3.8% in 2012 and ination to rise from a 2011
forecast of 2% to 3% in 2012.
Moodys 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.

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)


Source: National Authorities and Deloitte Analysis

100%

80%

60%

40%

20%

0
Bahrain

KSA

Hydrocarbons

Kuwait

Public Sector / Social Services

Oman

Qatar

UAE

Other

GCC Stimulus Packages


Package
Amount ($m)

Main Package Contents

398

1.5

Provide cash transfers of $ 2,660 each to families

Kuwait

4,320

2.5

Provide free staple food to citizens for the next 14 months together with cash transfers

Oman

825

1.25

Employment for 50,000 Omanis

96,600

16.7

Bahrain

Establishment of monthly unemployment benet of $390


Saudi Arabia

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 benets
Expand indenitely the 15% ination allowance for state employees that had been
phased in over the past three years

UAE

1,820

0.5

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

Source: MEED Insight

% of
GDP

Country

SECTION

Value of Projects by Country 2011

MIDDLE EAST

Shown as a percentage of total: $1,206.3bn

National Holding Headquarters, UAE

BRUCE SHAW

HANDBOOK 2012

53

MIDDLE EAST

Source: MEED Insight

#BISBJO
0NBO
,VXBJU
2BUBS
4BVEJ"SBCJB
6"&

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
ination.
A shortage of skilled labour in Saudi Arabia and
Qatar coupled with inationary pressures may
also be factors that push already competitive
rates upwards.

Prices of Building Materials in Abu Dhabi

54

Commodity Groups

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.

Q4 2011 compared to Q4 2010

Percentage change
Q4 2011 compared to Q4 2010

Transport Equipment

30.1%

Aggregate & Sand

19.9%

Tiles & Marble

13.5%

Waterproong Products

11.8%

Steel

11.0%

Roong Materials

6.6%

Paints

6.1%

Wood

4.8%

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%

BRUCE SHAW

HANDBOOK 2012

Source: Statistic Centre Abu Dhabi

Ref.

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.

SECTION

MIDDLE EAST

5
MIDDLE EAST

Palm Island, UAE

UAE in Brief
The UAE construction market remained in recovery
mode in 2011, continuing on from 2010.
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 ve-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 rst
phase of the plan, which is expected to cost about
AED150m, is expected to commence in 2012.
As Client condence 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.
2012 however is expected to show some recovery
in the construction industry. In January this year,
Bahrains Housing Ministry awarded the rst
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 2011. The World Cup is only one part of
Qatars development goals. Its long term plan is
the Qatar National Vision 2030. The newly created
Central Planning Office will oversee the US$60bn
infrastructure drive towards 2030.

BRUCE SHAW

HANDBOOK 2012

55

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 2012.
In the KSA, more than US$48bn worth of
construction and infrastructure projects were
awarded during the rst three quarters of 2011.
This represented a 125% increase over the same
period in 2010.
Saudi Arabia is facing a massive housing problem
due to rapid population growth and an inow 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
countrys demands for 1.65 million new homes.
Saudi Arabias population is expected to reach
30 million in 2017, double the gure 30 years ago.
Analysis of the Kingdoms 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 2010.

Saudi Arabia Key Budgetary Allocations 2012

Education and Manpower

Value (US $)
44.5

740 schools in addition to 2,000 schools to be renovated, plus a further 2900


currently under construction
Health and Social Affairs

23.1

17 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

100.1

Mobily Project, Saudi Arabia

56

BRUCE SHAW

HANDBOOK 2012

Source: MEED Insight

Sector/Institution Allocation

SECTION

MIDDLE EAST

Saudi Arabia Housing Requirements by Region

#BIB 
/BKSBO 
/PSUIFSO#PSEFST 

+B[BO
 

)BMM 

"TJS
 
.FDDB
 
2BTTJN
 

&BTUFSO
3FHJPO
 

.BEJOBI
 

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


Abu Dhabi, UAE

Manama, Bahrain

Riyadh, KSA

from

to

Base*

from

to

Index*

from

to

Index*

Podium Car Parking

$ 590

$ 720

100

$ 400

$ 480

67

$ 550

$ 650

92

Basement Car Parking

$ 670

$ 830

100

$ 550

$ 600

77

$ 650

$ 780

95

1 Parking

Sources: Bruce Shaw

Ref. Building Type

Date: January 2012

2 Residential Sector
Medium Quality - Villa Units

$ 1,190

$ 1,450

100

$ 840

$ 1,030

71

$ 830

$ 1,020

70

Medium Quality - High Rise

$ 1,100

$ 1,350

100

$ 1,000

$ 1,220

91

$ 980

$ 1,200

89

High Quality - Low Rise Aparts

$ 1,270

$ 1,550

100

$ 1,270

$ 1,400

95

$ 930

$ 1,130

73

High Quality - High Rise

$ 1,490

$ 1,810

100

$ 1,470

$ 1,625

94

$ 1,160

$ 1,420

78

3 Commercial / Office Sector **/***


Developer Standard / Investment Offices
Low Rise - Medium Rise

$ 810

$ 990

100

$ 800

$ 970

98

$ 830

$ 1,020

103

Medium Rise - High Rise

$ 1,270

$ 1,550

100

$ 1,000

$ 1,220

79

$ 1,020

$ 1,250

80

Low Rise - Medium Rise

$ 1,060

$ 1,300

100

$ 870

$ 1,070

82

$ 980

$ 1,200

92

Medium Rise - High Rise

$ 1,490

$ 1,810

100

$ 1,110

$ 1,360

75

$ 1,160

$ 1,420

78

Owner Occupier Standard Offices

4 Hotel & Leisure / Retail Sector


Regional Shopping Centre **

$ 1,360

$ 1,650

100

$ 870

$ 1,070

64

$ 1,260

$ 1,540

93

Budget / 3 Star ****

$ 1,410

$ 1,700

100

$ 1,270

$ 1,560

91

$ 1,390

$ 1,700

99

5 Star ****

$ 2,420

$ 2,950

100

$ 1,990

$ 2,430

82

$ 2,230

$ 2,710

92

5 Star Resort ****

$ 2,780

$ 3,400

100

$ 2,510

$ 3,070

90

$ 2,560

$ 3,120

92

$ 2,880

$ 3,510

100

$ 2,460

$ 3,010

86

$ 3,060

$ 3,730

106

5 Health Sector *****


District General Hospital

6 Manufacturing Sector
Light Industrial

$ 550

$ 670

100

$ 560

$ 680

102

$ 450

$ 540

81

Heavy Industrial

$ 740

$ 910

100

$ 600

$ 730

81

$ 580

EC$ 710

78

Notes: 1. All subject to site specics, design and specication. 2. All exclude Land Acquisition Costs, External Works Costs & Professional Fees.
*
**
***

Base Index @ 100 = UAE; Index calculated on average of stated cost range
Shell & Core Only; with public areas nished
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 2012

57

5
MIDDLE EAST

Sources: National Development Plan; Bank Saudi Fransi / MEED

+BXG 
5BCVL
 

MIDDLE EAST

Top 10 Infrastructure Projects in the GCC


Ranking

Project

Country

Client

Project
Value

Status

Surface Transport Master


Plan

UAE

Abu Dhabi Dept of Transport

$25bn

Design

Qatar National Rail


Scheme

Qatar

QDREIC / Deutsche Bahn / Qatar


Railways Development Company

$25bn

Design

GCC Rail Network

Regional
(GCC)

Governments of the GCC

$16bn

Design

Emirates Railway Project

UAE

Etihad Rail / Abu Dhabi Dept


of Transport

$11bn

Design

National Freight &


Passenger Railway

Oman

Supremen Committee for Town


Planning

$10bn

Tender for Consultancy


Contract

Kuwait National Railroad


Network

Kuwait

Ministry of Public Works

$10bn

Feasibility Study

Bahrain Rapid Transport


Network

Bahrain

Ministry of Works and Housing

$8.09bn

Feasibility Study

Kuwait Metro System

Kuwait

Ministry of Public Works

$7bn

Design

Mecca-Medina Railway
Link

Saudi
Arabia

Saudi Railways Organisation

$6bn

Construction

10

Jeddah Light Rail Transit


- Tram

Saudi
Arabia

Makkah Municipality

$6bn

Concept stage

Middle Eastern Design Firms


Tabled below is a selected list of design rms currently working within the GCC region.

KEO

HOK

ATKINS

FOSTERS & PARTNERS

ARAB ENGINEERING BUREAU

GENSLER

DEWAN

AECOM

MZ ARCHITECTS

HENNING LARSON

RMJM

CH2M HILL

BURT HILL / STANTEC

BURO HAPPOLD

RW ARMSTRONG

WSP

WOODS BAGOT

DSA

NORR GROUP

BSBG

NAGA ARCHITECTS

P&T GROUP

DWP

BROADWAY MALYAN

GAJ

SOM

AEDAS

58

BRUCE SHAW

HANDBOOK 2012

SECTION

MIDDLE EAST

GCC Nations Main Contractors


Tabled below is a selected list of major contractors currently working within the GCC region.

BELHASA SIX CONSTRUCT

AL FUTTAIM CARRILION

CCC

AL HABTOOR LEIGHTON

DUTCO BALFOUR BEATTY

AL HAMAD CONSTRUCTION & DEVELOPMENT

EL SEIF ENGINEERING & CONTRACTING

AL JABER

KHANSAHEB CIVIL ENGINEERING

AL YAMAMA

KHOOHEJI CONTRACTORS

AL KAZEM GROUP

LAING OROURKE

AL LATIFIA TRADING

MIDMAC

AL REDWAN CONTRACTING

MURRAY & ROBERTS

AB V ROCK

MUSHRIF TRADING & CONTRACTING

AL RAJHI CONTRACTING

NESMA & PARTNERS

AL SHAFAR GENERAL CONTRACTING

SAUDI BIN LADEN GROUP

ALEC

SAUDI OGER

ARABIAN CONSTRUCTION COMPANY

SEDAR

ARABTEC CONSTRUCTION

TEEJAN GROUP

MIDDLE EAST

AL ARAB TRADING & CONTRACTING

ASCON

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 benets. 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


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

Kuwait

Kuwaiti Dinar

KWD

1 USD = 0.28

Qatar

Qatari Riyal

QAR

1 USD = 3.64

Oman

Omani Rial

OMR

1 USD = 0.39

Source: www.xe.com

Country

Note: Figures are based on January 2012.

BRUCE SHAW

HANDBOOK 2012

59

60

BRUCE SHAW

HANDBOOK 2012

U N I T E D STAT E S 6

BRUCE SHAW

HANDBOOK 2012

61

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
at. The total dollar value of new starts in 2012 is
estimated to be $412 billion just up from a gure
of $410 billion in 2011. 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 2014.

2012 US construction starts will


remain essentially at.
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 2011.
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 months long trend of slight gains. These gains are
projected to continue as a recent survey by the
Associated General Contractors of America reported

Tempo 300 East 23rd Street, New York

62

BRUCE SHAW

HANDBOOK 2012

that 32% of construction rms 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:
 4JOHMFGBNJMZIPVTJOHJOXJMMJNQSPWF
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.
 .VMUJGBNJMZIPVTJOHXJMMSJTFJOEPMMBSTBOE
in units, continuing its moderate, upward trend.
 $PNNFSDJBMCVJMEJOHXJMMHSPX8BSFIPVTFT
and hotels will see the largest percentage
increases, but improvement for offices and
stores will be modest.
 5IFJOTUJUVUJPOBMCVJMEJOHNBSLFUXJMMTMJQBO
additional 2% in 2012, after falling 15% in 2011. The
tough scal environment for states and localities will
continue to dampen school construction, and the
uncertain economic environment will limit growth
in healthcare facilities.
 .BOVGBDUVSJOHCVJMEJOHTXJMMJODSFBTF 
following the 35% gain in 2011, as the low value of
the U.S. dollar continues to support export growth.
 1VCMJDXPSLTDPOTUSVDUJPOXJMMESPQBGVSUIFS
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.

SECTION

UNITED STATES

sector construction offsetting the decline in public


sector demand.

These details indicate that there is growing demand


in certain private market sectors but continued
weakness in other key sectors due to the end of
stimulus measures and a decline in demand for
public construction. Overall the market is projected
to remain stable with the growing demand for private

The US construction market remains very competitive


with 80% of construction rms reporting that they
expect bid levels to either stagnate or decline this
year. This comes in a market where material costs are
continuing to increase and contractors are
generating less revenue.

Value of Construction Output Public / Private $bn 2001-2011



1,000








800








600













2010

2011





400



Source: US Census Bureau

1,200









200

0
2001

2002

2003

Total Public Construction

2004

2005

2006

2007

2008

2009

Total Private Construction

US Construction by Type of Work 2011


Source: US Census Bureau

Source: US Census Bureau

Private Sector $ bn

Public Sector $ bn

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 2012

63

U N I T E D S TAT E S

 &MFDUSJDVUJMJUJFTXJMMSFUSFBU GPMMPXJOHB
jump in 2011.

UNITED STATES

Annual Construction Cost Index (1913 = 100)


Source: Engineering News Record

9,200
8,900
8,600
8,300
8,000
7,700
7,400
7,100
6,800
6,500
6,200
5,900
2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

US Regional Building Cost Index


Source: Engineering News Record

7,000
6,000
5,000
4,000
3,000
2,000
1,000

New York

Chicago

Philadelphia

Boston

San Francisco

Kansas City

Los Angeles

Minneapolis

Seattle

Detroit

St. Louis

Cleveland

Pittsburgh

Baltimore

Cincinnati

Denver

Dallas

Atlanta

New Orleans

Employment in Construction 2000-2011


000s
Source: Engineering News Record

7,800
7,600
7,400
7,200
7,000
6,800
6,600
6,400
6,200
6,000
5,800
5,600

64

BRUCE SHAW

HANDBOOK 2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

5,400

SECTION

UNITED STATES

Change in US Employment in Construction Jan. 10-Dec. 11


Seasonally Adjusted in Thousands

50






















U N I T E D S TAT E S




 






-50



-100



Dec-11

Nov-11

Oct-11

Sep-11

Aug-11

Jul-11

Jun-11

May-11

Apr-11

Mar-11

Feb-11

Jan-11

Dec-10

Nov-10

Oct-10

Sep-10

Aug-10

Jul-10

Jun-10

May-10

Apr-10

Mar-10

Feb-10

Jan-10

-150

US Earnings in Construction 2010


Average earnings of non-supervisory workers in construction, May 2010
$ / Hour

$ / Week

Construction of buildings

21.39

813

Non residential building

23.10

914

Residential building

19.47

707

Heavy and civil engineering construction

22.00

924

Utility system construction

22.31

941

Highway, street, and bridge construction

22.11

931

Other heavy construction

21.78

947

Land subdivision

18.73

702

Speciality trade contractors

21.99

835

Building equipment contractors

23.56

918

Building nishing contractors

20.87

783

Other speciality trade contractors

20.86

795

Building foundation and exterior contractors

20.54

747

BRUCE SHAW

HANDBOOK 2012

Source: BLS Occupational Employment Statistics

Industry

65

UNITED STATES

US Earnings in Construction 2010 continued


Median hourly wages of the largest occupations in US construction, May 2010
Buildings $ / Hour

Civil Engineering $ / Hour

40.08

40.62

Construction managers
First-line supervisors

28.51

28.41

Plumbers & pipetters

24.30

21.80

Electricians

22.01

23.10

Operating engineers

21.52

21.15

Carpenters

19.10

20.64

Masons & concrete nishers

18.08

17.17

Painters

15.45

17.45

Construction labourers

14.49

14.68

Source: BLS Occupational Employment Statistics

Occupation

Top 20 US Contractors
2010

Firm
THE TURNER CORP.

5.95

CLARK GROUP

3.75

THE WHITING-TURNER CONTRACTING CO.

2.78

18

PCL CONSTRUCTION ENTERPRISES

2.77

BALFOUR BEATTY CONSTRUCTION

2.75

GILBANE BUILDING

2.73

PERINI CORP.

2.49

SKANSEA USA

2.34

BOVIS LEND LEASE

2.32

10

27

KBR

2.28

11

FLUOR CORP.

2.14

12

HENSEL PHELPS CONSTRUCTION

2.06

13

10

MCCARTHY HOLDINGS

2.03

14

12

STRUCTURE TONE

1.83

15

15

M.A. MORTENSON CONSTRUCTION

1.83

16

11

JE DUNN CONSTRUCTION GROUP

1.80

17

16

SUFFOLK CONSTRUCTION CO.

1.67

18

13

HUNT CONSTRUCTION GROUP

1.55

19

14

BRASFIELD & GORRIE

1.50

20

17

MANHATTAN CONSTRUCTION GROUP

1.21

Note: Ranked by domestic revenue; 2011 ranking is based on 2010 revenue

66

Revenue $ bn

BRUCE SHAW

HANDBOOK 2012

Source: Engineering News Record

Rank
2011

SECTION

UNITED STATES

The Top 20 US Design Firms


Revenue
bn

Type of Firm

Firm

EA

AECOM TECHNOLOGY CORP.

5.92

EAC

URS CORP.

5.04

EAC

JACOBS

4.75

EA

CH2M HILL

3.60

EC

FLUOR CORP.

3.13

EC

AMEC

2.46

TETRA TECH

2.21

EC

BECHTEL

2.17

EC

KBR

2.01

10

12

EA

PARSONS BRINCKERHOFF

1.56

11

11

EA

HDR

1.50

12

15

EA

ARCADIS

1.36

13

10

EC

THE SHAW GROUP

1.21

14

13

EC

PARSONS

1.17

15

16

EAP

LOUIS BERGER GROUP

1.15

16

14

EC

BLACK & VEATCH

1.10

17

19

EA

HNTB

1.00

18

17

EC

MWH GLOBAL

0.92

19

26

WORLEYPARSONS GROUP

0.77

20

22

EAC

BURNS & McDONNELL

0.68

Note: 2011 ranking is based on revenue for design services performed in 2010. Key to Type of Firm: A architect; E engineer; C contractor; P planner

Exchange Rates: Euro v US Dollar 2006-2012


Source: European Central Bank

1.60
1.55
1.50
1.45
1.40
1.35
1.30
1.25
1.20
1.15
1.10
1.05

BRUCE SHAW

Jan-12

Oct-11

July-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

Jan-08

Jul-07

Oct-07

Apr-07

Jan-07

Oct-06

Jul-06

Apr-06

Jan-06

1.00

HANDBOOK 2012

67

6
U N I T E D S TAT E S

Source: Engineering News Record

Rank
2011
2010

68

BRUCE SHAW

HANDBOOK 2012

CARIBBEAN 7

BRUCE SHAW

HANDBOOK 2012

69

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 oer


opportunities to overseas consultants,
construction rms and specialist
subcontractors.
decades now and tourism, nancial services, light
industry and oil and mineral exploration have taken
on increasing importance. The greater portion of
Foreign Direct Investment ows 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 signicant Canadian investment in Cuba.
The region continues to offer opportunities to
overseas consultants, construction rms and
specialist subcontractors as there is limited
expertise locally. This would include some of the
other islands not specically 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


Capital

Population

GDP
Millions
US$

GDP
Per Capita
US$

GDP
Growth

Debt To
GDP Ratio

Unemployment

Bahamas

10,010

Nassau

313,312

7,538

28,700

0.50%

4.50%

7.60%

Barbados

430

Bridgetown

286,705

3,963

21,800

-0.50%

102.10%

10.70%

Bermuda

54

Hamilton

68,679

4,500

69,900

-6.20%

25.00%

2.10%

264

George Town

51,384

2,250

43,800

1.10%

30.00%

13.50%

Havana 11,087,330

57,490

9,900

1.50%

34.20%

1.60%

Cayman
Caymen
Islands
Cuba

109,820

Curacao

Willemstad

142,180

5,080

15,000

3.50%

N/A

N/A

Dominican
Republic

48,320 Santo Domingo

9,956,648

54,912

8,900

7.80%

36.80%

13.30%

Haiti*

27,560

Port au Prince

9,717,932

6,632

1,200

-5.10%

N/A

40.60%

Jamaica

10,831

Kingston

2,868,380

13,690

8,300

-1.10%

126.20%

12.40%

8,870

San Juan

3,989,133

93,520

16,300

-5.80%

60.70%

12.00%

606

Castries

161,557

985

11,200

0.80%

37.20%

20.00%

5,128

Port of Spain

1,227,505

20,590

21,200

0.00%

29.80%

6.40%

948 Cockburn Town

46,335

860

12,000

4.90%

N/A

10.00%

Puerto
Rico
St. Lucia
Trinidad
& Tobago
Turks
& Caicos

444

Note:
* Despite having beneted 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 2015.

70

BRUCE SHAW

HANDBOOK 2012

Source: Caribbean Community (Caricom) Regional Statistics Secretariat

Land Area
Sq. Km

Country

SECTION

7 CARIBBEAN

Caribbean Country Review

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 benets as a low tax jurisdiction and is home to
3,800 international businesses.

Bruce Shaw have had an oce


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

nancial 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 2009.
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
reect 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 nancial centre
with over 70,000 companies registered and a stock
exchange opened in 1997. 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 2007. 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 fty 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

BRUCE SHAW

HANDBOOK 2012

71

CARIBBEAN

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 2007. 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 signicant growth in the
recovery of the local economy.

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 signicant
opportunities for overseas construction rms.
Curacao
Curacao lies just 40 miles off the coast of Venezuela
and with the ne natural deep water port of
Willemstad the main industries include oil rening,
tourism and nancial 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 ights using the Lynx rocketplane
and to launch scientic research missions from
a new spaceport.
Construction costs in Curacao are considerably
lower than on most of the other Caribbean islands.

Marriott Hotel, Port au Prince

72

BRUCE SHAW

HANDBOOK 2012

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 2008. 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.

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 OBrien. 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 rst 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 2012. 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.
Jamaicas 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
2012. 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 diversied economy in
the region. It accounts for approximately 30% of the
regions 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 2012

73

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 liqueed natural gas, petrochemicals
and the steel industry. It is the Caribbeans 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 2013.
Turks & Caicos Islands
The economy is based around tourism, offshore
nancial services, shing 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 rms to rebuild specic 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

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
signicantly 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 signicant and sustained growth up to
2008 saw substantial increases in construction costs
followed by a relatively sharp decline from 2008 to
2011. 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
rms 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.

SECTION

7 CARIBBEAN

Average Cost Range US$/Sq.m


Cayman
Islands

Cuba

Dominican
Republic

Haiti

0.94

0.94

0.75

0.90

0.75

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

Low Rise Offices Shell & Core


(3 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

Low Rise Offices Fitted-Out


(3 storey)

2,395-3,000

2,250-2,815

2,250-2,815

1,800-2,250

2,160-2,690

1,800-2,250

Medium Rise Offices Shell


& Core(4-8 storey)

2,080-2,600

1,955-2,445

1,955-2,445

1,560-1,950

1,870-2,335

1,560-1,950

Medium Rise Offices Fitted-Out


(4-8 storey)

2,625-3,270

2,465-3,069

2,465-3,069

1,965-2,460

2,360-2,950

1,965-2,460

High Rise Offices Shell & Core


(8-12 storey)

2,275 -2,850

2,145-2,675

2,145-2,675

1,705-2,135

2,050-2,560

1,705-2,135

High Rise Offices Fitted-Out (8-12


storey)

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
1.15

Regional Index

0.90

0.90

0.90

0.74

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)

1,675-2,100

1,675-2,100

1,675-2,100

1,380-1,725

2,145-2,680

Low Rise Offices Fitted-Out


(3 storey)

2,160-2,690

2,160-2,690

2,160-2,690

1,770-2,215

2,750-3,445

Medium Rise Offices Shell


& Core(4-8 storey)

1,870-2,335

1,870-2,335

1,870-2,335

1,540-1,925

2,390-2,985

Medium Rise Offices Fitted-Out


(4-8 storey)

2,360-2,950

2,360-2,950

2,360-2,950

1,940-2,425

3,015-3,765

High Rise Offices Shell & Core


(8-12 storey)

2,050-2,560

2,050-2,560

2,050-2,560

1,685-2,100

2,620-3,270

High Rise Offices Fitted-Out (8-12


storey)

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 specics, design and specication
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 2012

75

CARIBBEAN

Bermuda

Source: Bruce Shaw

Regional Index

Barbados

76

BRUCE SHAW

HANDBOOK 2012

INDIA 8

BRUCE SHAW

HANDBOOK 2012

77

INDIA

India Market Review


With a population of just over 1.2billion, India is
the worlds largest democracy. In the past decade,
the country has witnessed accelerated economic
growth and emerged as a global player with the
worlds 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 countrys
competitiveness.

Investment in construction accounts


for nearly 11% of Indias GDP.
The Government of India has increased infrastructure
investments under the Eleventh Five Year Plan. With
Indias low taxation base only some 1516% of
GDP is collected as taxes in India compared to
25-40% in developed countries, the Government
based its 2011-2012 budget on projections of GDP

growth of 9% and average ination of 4%. However,


different officials have revised their expectations for
growth downwards, and for ination upwards since
then. The Chairman of the Prime Ministers Economic
Advisory Council expects growth to measure 8.2% in
FY2011-12, while ination would drop to around 6.5%
by end March 2012. The National Council of Applied
Economic Researchs Quarterly Review of the
Economy July 2011 pegs growth at 8.3% and ination
at 7.9% average for FY 2011-12.
Construction accounts for nearly 65% of the total
investment in infrastructure and is expected to be
the biggest beneciary of the surge in infrastructure
investment over the next ve years. Investment in
construction accounts for nearly 11% of Indias
GDP. 240 billion is likely to be invested in the
infrastructure sector over the next ve 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

Commercial Offices

City Centre Air Conditioned


Shell and Core (Low-Medium Rise)

27,000

To
30,000

Unit
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

Notes:
i
All subject to site specics, design and specication
ii
All exclude Land Acquisition Costs, External Works Costs &
Professional Fees

78

BRUCE SHAW

HANDBOOK 2012

iii

Regional variances across the country and from sector to sector

Source: Bruce Shaw

Cost Range INR


From

SECTION

INDIA

Construction Cost Indices


Buildings 2007=100

2010

2011*

Delhi

110.01

113.98

119.29

123.20

Mumbai

110.47

113.21

119.13

122.43

Chennai

110.49

113.46

119.92

123.97

Bangalore

106.99

109.32

117.85

123.63

Kolkata

109.42

112.12

118.63

122.69

Hyderabad

108.44

111.78

118.27

122.73

*2011 November Indices

Top Infrastructure Companies in India


LARSEN & TOUBRO

ERA INFRA ENGINEERING LTD

PUNJ LLOYD

RELIANCE INFRASTRUCTURE

JAIPRAKASH ASSOCIATES LTD

IRCON

LANCO INFRATECH LTD

PATEL ENGINEERING

NAGARJUNA CONSTRUCTION COMPANY

SOMA ENTERPRISES

IVRCL INFRASTRUCTURE & PROJECTS LTD

J KUMAR INFRA PROJECTS

SIMPLEX INFRASTRUCTURES LTD

GVK LTD

GMR LTD

IRB INFRASTRUCTURE DEVELOPERS LTD

GAMMON INDIA

AHLUWALIA CONTRACTS INDIA LTD

HCC

SPML INFRA LTD

Exchange Rates US Dollar v Rupee 2006-2012


Source: www.xe.com

54
53
52
51
50
49
48
47
46
45
44
43
42
41
40

HANDBOOK 2012

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Jul-10

BRUCE SHAW

Oct-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

Jan-08

Oct-07

Jul-07

Apr-07

Jan-07

Oct-06

Jul-06

Apr-06

Jan-06

39

79

INDIA

2009

Source: Construction Industry


Development Council (CIDC)

2008

80

BRUCE SHAW

HANDBOOK 2012

AUSTR ALIA & NE W ZEAL AND 9

BRUCE SHAW

HANDBOOK 2012

81

AUSTRALIA & NEW ZEALAND

The outlook for


the construction
industry appears
positive with
expected year
on year increases
in 2012 and 2013.
The outlook for the construction industry appears positive with
expected year on year increases in 2012 and 2013

Source: Australian Bureau of Statistics

SECTION

AUSTRALIA & NEW ZEALAND

Australia Market Review

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 scal
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 nancial 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 Governments
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
rst three years will be at a xed rate of $23/tonne.
The effect of this new tax is difficult to calculate at
this juncture but is expected to lter 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 reected in a continued highly
competitive tender market.

Australian Key Statistics 2009-2011


2009

2010

2011

GDP, current prices

U.S. $ Billions

GDP per capita, current prices

U.S. $ Units

987.1

1238

1507.4

44,602

55,150

66,984

Ination, average consumer prices

Annual % change

2.1

3.1

Population

Persons, Millions

22165.5

22541

22817

Current account balance

U.S. $ Billions

-42.03

-33.02

-32.80 (e)

BRUCE SHAW

HANDBOOK 2012

Source: www.abs.gov.au

Units

83

9
AUSTRALIA & NEW ZEAL AND

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 ination have been maintained
over the last year and remain relatively low at circa
5% and 3% respectively.

AUSTRALIA & NEW ZEALAND

Value of Construction Output (AUD $); Australia


Sector

2009-10

2010-11

AUD $m

AUD $m

AUD $m

44,146

43,854

44,447

Building Work
Residential
Private Sector
Public Sector

894

2,221

2,733

45,040

46,075

47,180

Private Sector

25,175

20,677

19,657

Public Sector

7,340

14,225

32,515

34,902

34,154

77,555

80,977

81,334

Private Sector

47,149

46,324

54,618

Public Sector

27,426

29,669

29,987

74,575

75,993

84,605

152,130

156,970

165,939

Non-Residential Building

Total Building

Source: Australian Bureau of Statistics

2008-09

Engineering Work
Engineering

Total Construction

Building Cost Index by Capital City


Source: Australian Institute of Quantity Surveyors

350

300

250

200

150

84

BRUCE SHAW

HANDBOOK 2012

Perth

AWA

Sydney

Apr-12(f)

Jan-12(f)

Jul-11

Melbourne

Oct-11

Apr-11

Jan-11

Jul-10

Oct-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Jul-08

Oct-08

Apr-08

Jan-08

Jul-07

Adelaide

Oct-07

Apr-07

Jan-07

Jul-06

Brisbane

Oct-06

Apr-06

Jan-06

Jul-05

Canberra

Oct-05

Apr-05

Jan-05

100

SECTION

AUSTRALIA & NEW ZEALAND

Building Cost Index and Consumer Price Index Comparison (June 2011)
230

210
200
190
180
170
160

AIQS BCI

Apr-11

Dec-10

Aug-10

Apr-10

Dec-09

Aug-09

Apr-09

Dec-08

Aug-08

Apr-08

Dec-07

Aug-07

Apr-07

Dec-06

Aug-06

Apr-06

Dec-05

Aug-05

Apr-05

150

CPI

Dwelling Unit Commencements


New Houses

New Other
Residential Buildings

Total
Dwelling Units

2008-2009

91,953

38,668

130,621

2009-2010

112,177

52,623

164,800

2010-2011

97,116

59,296

156,412

Source: Australian
Bureau of Statistics

Year

Average Construction Costs 2012: Australia

Commercial Offices City Centre Air Conditioned


Shell and Core (Low-Medium Rise)
Developer Standard (Low-Medium Rise)
Shell and Core (Medium-High Rise)
Developer Standard (Medium-High Rise)

Cost Range AUD$


To Unit

1,850
2,100
2,450
3,100

2,350
2,600
3,000
3,950

per sq.m
per sq.m
per sq.m
per sq.m

Residential

Developer Standard Apartments (medium standard)


Developer Standard Apartments (high standard)

1,950
2,600

2,450
3,500

per sq.m
per sq.m

Leisure

Hotel Building (Budget/3 Star)


Hotel Building (4/5 Star)

2,750
4,150

3,350
4,950

per sq.m
per sq.m

Education

Primary Level (up to 3 stories, no Air Conditioning)

1,450

1,850

per sq.m

Car Park

Surface
Multi Storey
Double Level Basement

2,800
22,500
27,000

3,100
27,000
48,000

Notes:
i All subject to site specics, design and specication
ii All exclude Land Acquisition Costs, External Works Costs &
Professional Fees

Sources;DCWC Pty Ltd / Bruce Shaw

From

per Space
per Space
per Space

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 2012

85

AUSTRALIA & NEW ZEAL AND

Source: Australian Institute of Quantity Surveyors

220

AUSTRALIA & NEW ZEALAND

List of Tier 1 Main / Building Contractors: Australia


AW EDWARDS

JOHN HOLLAND PTY LTD

BAULDERSTONE HORNIBROOK PTY LTD


BOVIS LEND LEASE PTY LTD

LAING OROURKE AUSTRALIA


CONSTRUCTION PTY LTD

BROOKFIELD MULTIPLEX PTY LTD

LEIGHTON CONTRACTORS PTY LTD

GROCON PTY LTD

ST HILLIERS PTY LTD

HANSEN YUNCKEN PTY LTD

WATPAC LIMITED

HUTCHINSON BUILDERS PTY LTD

THIESS PTY LTD

Australian (AUD $) Currency Exchange Rates


Source: European Central Bank

1.1
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1

AUD$/USD$

86

BRUCE SHAW

AUD$/EUR

HANDBOOK 2012

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

Oct-07

Jan-08

Jul-07

Apr-07

Jan-07

Oct-06

Jul-06

Apr-06

Jan-06

SECTION

AUSTRALIA & NEW ZEALAND

New Zealand Market Review

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

nancial 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 2012.
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.

New Zealand Key Statistics 2009-2011


2009

2010

2011

GDP, current prices

U.S. $ Billions

146.13

147.78

154.97

GDP per capita, current prices

U.S. $ Units

25,389

26,287

26,725

Ination, average consumer prices

Annual % change

1.8

Population

Persons, Millions

4,346,700

4,396,620

4,436,741

Current account balance

U.S. $ Billions

-11.3

-3.69

-3.772

Source: www.stats.govt.nz

Units

Note: Average exchange rate for 2011 used to convert from NZ$ to US$

Value of Construction Output: New Zealand NZ$m 2006-2011


9000
8000
7000
6000
5000
4000
3000
2000
1000
0

2006
Residential Buildings

2007

2008

2009

2010

2011

Non-Residential Buildings

BRUCE SHAW

HANDBOOK 2012

87

9
AUSTRALIA & NEW ZEAL AND

New Zealand like many other countries is still


recovering from the global nancial crisis. Overall
business condence remains low across the
majority of industry sectors which in turn is
hampering the construction industry. The negative
effects from the global nancial 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 2010. The weak currency
position against its Trans Tasman neighbour has had
an obvious effect on Australian trade, New
Zealands largest export/import market.

AUSTRALIA & NEW ZEALAND

Numbers Employed in Construction (000s) 2008-2011


186
Source: www.stats.govt.nz

184
182
180
178
176
174
172
170
168

2008

2009

2010

2011

Dwelling Unit Commencements


Apartments

Houses

Total

2006

3,850

22,664

26,514

2007

2,368

23,366

25,734

2008

2,386

16,682

19,068

2009

1,482

12,717

14,199

2010

947

15,014

15,961

2011

1,093

12,436

13,529

Source: www.stats.govt.nz

Year

Average Construction Costs 2012: New Zealand

Commercial Offices City Centre Air Conditioned


Shell and Core (Low-Medium Rise)
Developer Standard (Low-Medium Rise)
Shell and Core (Medium-High Rise)
Developer Standard (Medium-High Rise)

Cost Range NZ$


To Unit

1,700
2,150
2,500
3,200

1,900
2,450
2,800
3,800

per sq.m
per sq.m
per sq.m
per sq.m

Residential

Developer Standard Apartments (medium standard)


Developer Standard Apartments (high standard)

2,400
2,800

2,700
3,300

per sq.m
per sq.m

Leisure

Hotel Building (Budget/3 Star)


Hotel Building (4/5 Star)

2,800
4,900

3,200
5,300

per sq.m
per sq.m

Education

Primary Level (up to 3 stories, no Air Conditioning)

1,800

2,200

per sq.m

Car Park

Surface
Multi Storey
Double Level Basement

3,500
24,000
31,500

5,700
26,500
33,250

per Space
per Space
per Space

All subject to site specics, design and specication

ii All exclude Land Acquisition Costs, External Works Costs &


Professional Fees

; New Zealand

88

BRUCE SHAW

HANDBOOK 2012

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

Source: Bruce Shaw

From

SECTION

AUSTRALIA & NEW ZEALAND

List of Tier 1 Main / Building Contractors: New Zealand


HAWKINS

MAINZEAL

BROOKEFIELD MULTIPLEX

NDZ$ Exchange Rates 2006-2012: New Zeland


1.0
Source: European Central Bank

0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1

NZD$/AUD$

NZD$/USD$

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

Oct-07

Jan-08

Jul-07

Apr-07

Jan-07

Oct-06

Jul-06

Apr-06

Jan-06

NZD$/EUR

BRUCE SHAW

HANDBOOK 2012

89

AUSTRALIA & NEW ZEAL AND

FLETCHERS

90

BRUCE SHAW

HANDBOOK 2012

S O U T H E A S T A S I A 10

BRUCE SHAW

HANDBOOK 2012

91

SOUTH EAST ASIA

Investing in
construction
in unfamiliar
territories
is a daunting
prospect.

SECTION

10

SOUTH EAST ASIA

South East Asia Market Review

10

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 reected 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)

Carrying out Business Thoughout the World


Starting
a Business

Dealing with
Construction
Permits

Registering
Property

Enforcing
Contracts

Resolving
Insolvency

Singapore

14

12

USA

13

17

16

15

UK

19

22

68

21

Malaysia

18

50

113

59

31

47

Vietnam

98

103

67

47

30

142

Indonesia

129

155

71

99

156

146

BRUCE SHAW

HANDBOOK 2012

Source: World Bank Group

Economy

Ease of
Doing Business

93

SOUTH EAST ASIA

South East Asia is sometimes hard to dene. 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.

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,
nancial 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

94

BRUCE SHAW



Private Sector

HANDBOOK 2012









SECTION

10

Average Construction Costs: Singapore

SOUTH EAST ASIA

To

Unit

n/a

n/a

per sq.m

2,500

2,750

per sq.m

n/a

n/a

per sq.m

Developer Standard (MediumHigh Rise)

2,900

3,150

per sq.m

Developer Standard Apartments


(medium standard)

1,950

2,150

per sq.m

Developer Standard Apartments


(high standard)

2,450

2,650

per sq.m

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,


no Air conditioning)

1,500

1,850

per sq.m

Car Park

Surface

n/a

n/a

per Space

26,000

31,500

per Space

n/a

n/a

per Space

Commercial Offices City Centre Air Conditioned


Shell and Core (Low-Medium Rise)
Developer Standard (Low-Medium Rise)
Shell and Core (Medium-High Rise)

Multi Storey
Double Level Basement
Notes:
i All subject to site specics, design and specication
ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees

SGD $ Currency Exchange Rates


Source: www.xe.com

0.85
0.80
0.75
0.70
0.65
0.60
0.55
0.50
0.45

SGD$/EUR

Jan-12

Jan-11

Jan-10

Jan-09

Jan-08

Jan-07

Jan-06

0.40

SGD$/USD$

BRUCE SHAW

HANDBOOK 2012

95

SOUTH EAST ASIA

From

Source: Barton Bruce Shaw

Cost Range SGD$

Residential

10

Key Rates Current at January 2012

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 gure
up to 7% is forecast for 2012, driven by both large
infrastructure projects and housing construction.
One concern here is the underlying rate of ination,
set to rise from 3.2% in 2011 to 3.5% or more in

2012. 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


































2

96

2
2


BRUCE SHAW

2

2

2
2


HANDBOOK 2012

2

2

2

2



2

2

2
2


2

2

2
2


Source: www.tradingeconomics.com
Department of Statistics Malay





SECTION

10

SOUTH EAST ASIA

10

Key Rates Current at January 2012

From

To

Unit

Shell and Core (Low-Medium Rise)

n/a

n/a

per sq.m

Developer Standard (Low-Medium Rise)

850

950

per sq.m

Shell and Core (Medium-High Rise)

n/a

n/a

per sq.m

Developer Standard (MediumHigh Rise)

1,100

1,200

per sq.m

Developer Standard Apartments


(medium standard)

400

500

per sq.m

Developer Standard Apartments


(high standard)

600

750

per sq.m

Hotel Building (Budget/3 Star)

1,200

1,500

per sq.m

Hotel Building (4/5 Star)

Commercial Offices City Centre Air Conditioned

Residential

Leisure

2,000

2,300

per sq.m

Education

Primary Level (up to 3 stories,


no Air conditioning)

300

400

per sq.m

Car Park

Surface

N/A

N/A

per sq.m

Multi Storey

350

400

per sq.m

Double Level Basement

500

550

per sq.m

Source: Barton Bruce Shaw

Cost Range US $

Notes:
i All subject to site specics, design and specication
ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees

Malaysian Ringgits (MYR) Currency Exchange Rates


0.35
Source: www.xe.com

0.30

0.25

0.20

0.I5

MYR/EUR

Jan-12

Jan-11

Jan-10

Jan-09

Jan-08

Jan-07

Jan-06

0.10

MYR/USD$

BRUCE SHAW

HANDBOOK 2012

97

SOUTH EAST ASIA

Average Construction Costs: Malaysia

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 gures) compared with China
at US$4,250 and Singapore at US$62,100. Within
two to three years the gure for per capita income
is set to at least double: this will only be achieved
if strict controls on trade and the ow 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 ght for rst place, China is at 91,
UK at Number 7).

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 ination
levels reaching 8-10%. This slowdown in growth
will be reected 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.

Vietnam GDP Growth Rate

Percentage Change in Gross Domestic Product





Source: www.tradingeconomics.com
General Statistics Office of Vietnam
























2

2

2

2

2

2



2

2



2

2

2

2



Average Construction Costs: Vietnam

2


Key Rates Current at January 2012

From

To

Unit

Commercial Offices City Centre Air Conditioned

Residential

Leisure

Shell and Core (Low-Medium Rise)

n/a

n/a

per sq.m

Developer Standard (Low-Medium Rise)

730

760

per sq.m

Shell and Core (Medium-High Rise

n/a

n/a

per sq.m

Developer Standard (MediumHigh Rise)

750

850

per sq.m

Developer Standard Apartments


(medium standard)

650

750

per sq.m

Developer Standard Apartments (high


standard)

800

950

per sq.m

Hotel Building (Budget/3 Star)

1,500

1,800

per sq.m

Hotel Building (4/5 Star)

1,850

2,050

per sq.m

475

500

per sq.m

Education

Primary Level (up to 3 stories, no Air


conditioning)

Car Park

Surface

n/a

n/a

per sq.m

Multi Storey

400

450

per sq.m

Double Level Basement

650

750

per sq.m

Notes:
i All subject to site specics, design and specication
ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees

98

BRUCE SHAW

HANDBOOK 2012

Source: Barton Bruce Shaw

Cost Range US $

SECTION

10

SOUTH EAST ASIA

10
SOUTH EAST ASIA

Vietnamese Dong Currency Exchange Rates


Source: www.xe.com


















EUR/VND

Oct-11

Jan-11

Jan-10

Jan-09

Jan-08

Jan-07

Jan-06



USD$/VND

BRUCE SHAW

HANDBOOK 2012

99

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 ve 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

2014. Ination of between 4% and 6% in 2011 is


expected to fall to 3.5% in 2012. The construction
industry contributed over 10% to the GDP in 2011,
but better performance was hampered by
inationary 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

From

To

Unit

n/a

n/a

per sq.m

Commercial Offices City Centre Air Conditioned


Shell and Core (Low-Medium Rise)
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 (MediumHigh Rise)

750

1,000

per sq.m

Developer Standard Apartments


(medium standard)

n/a

n/a

per sq.m

Developer Standard Apartments


(high standard)

800

950

per sq.m

Leisure

Hotel Building (Budget/3 Star)

800

1,000

per sq.m

1,000

1,200

per sq.m

Education

Primary Level (up to 3 stories,


no Air conditioning)

250

300

per sq.m

Car Park

Surface

n/a

n/a

per sq.m

Residential

Hotel Building (4/5 Star)

Multi Storey

n/a

n/a

per sq.m

Double Level Basement

n/a

n/a

per sq.m

Notes:
i All subject to site specics, design and specication
ii All exclude Land Acquisition Costs, External Works Costs & Professional Fees

100

BRUCE SHAW

HANDBOOK 2012

Source: Barton Bruce Shaw

Cost Range US $

SECTION

10

SOUTH EAST ASIA

10

Indonesian Rupiah (IDR) Currency Exchange Rates














EUR/IDR

Oct-11

Jan-11

Jan-10

Jan-09

Jan-08

Jan-07

Jan-06



USD$/IDR

BRUCE SHAW

HANDBOOK 2012

101

SOUTH EAST ASIA

Source: www.xe.com



102

BRUCE SHAW

HANDBOOK 2012

C H I N A 11

BRUCE SHAW

HANDBOOK 2012

103

CHINA

Chinas growth has


been around 10%
a year on average
over the past two
decades, making
it the worlds
second largest
economy, after
the United States.

The outlook for the construction industry appears positive with


expected year on year increases in 2012 and 2013

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 worlds population, nearly ve times more than
the United States, even though they both have
approximately the same geographical area.

11
CHINA

Bruce Shaw has established itself


in the market in China in conjunction
with our local partner.
down from 33% growth in 2010. Many
commentators estimate that this may fall by
a further 10% in 2012. In terms of oor 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.

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.

Whilst China plans to start building seven million


public housing units in 2012, this is down from
2011s 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.

Chinas growth has been around 10% a year on


average over the past two decades, making it the
worlds 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.

Annual growth in property investment was 12.3%


in December 2011, which marked a sharp
slowdown from Novembers 20.2%, a worrying
signal for a sector which represents some 13%
of total economic output.

Chinas investment in real estate development rose


28% to 6.17 trillion Yuan ($977.67 billion) in 2011,

China GDP Annual Growth Rate 2007-2012


14%
Source: National Bureau of Statistics

12%
10%
8%
6%
4%
2%

0%
2

2

2



2

2

2



2

2

2

2



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, Chinas Consumer Price Index (CPI),
a main gauge of ination, rose 4.1% in December
2011 from the previous year, hitting a 15 month low.

2

2

2

2

2

2



2

2



2

2


The countrys ination rate has remained


persistently high for a long time, and reached 6.5%
in July 2011. The CPI downward trend in late 2011
came as a great relief, but the annual ination rate
still reached a high level at 5.4% last year, exceeding
the Chinese Governments control target of 4%.

BRUCE SHAW

HANDBOOK 2012

105

CHINA

Total Government Investment in Trillion RMB


35
Source: National Bureau of Statistics

30
25
20
15
10
5

0
+BO%FD


+BO'FC


+BO.BS


+BO"QS


+BO.BZ


+BO+VOF


At the end of September 2011, the ministrys


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 2009.

+BO+VMZ


+BO"VH


+BO4FQU


+BO0DU


+BO/PW


+BO%FD


One such solid indication is the Governments


conrmation 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 2010.
This is the rst time for the Government to
announce a clear goal for the future railway
development which plays an important role in
the countrys 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.

1.0

Description

From
(US$)

To
(US$)

Beijing
Index

From
(US$)

To
(US$)

Hong Kong
Index

From
(US$)

To
(US$)

Index

Residential Sector

1.1

Medium Quality High Rise

$600

$850

100

$650

$900

107

$2,000

$2,400

303

1.2

High Quality High Rise

$900

$1,500

100

$950

$1,500

102

$2,200

$2,600

200

2.0

Commercial / Office Sector

2.1

Standard Specication
High Rise

$850

$1,050

100

$850

$1,050

100

$2,000

$2,400

232

$1,100

$1,500

100

$900

$1,600

96

$2,400

$2,800

200

2.2

High Specication High Rise

3.0

Hotel & Leisure / Retail Sector

3.1

Shopping Centre

$900

$1,400

100

$1,000

$1,500

109

$2,000

$2,500

196

3.2

Budget/3* Hotel

$900

$1,300

100

$1,000

$1,400

109

$2,400

$2,800

236

3.3

4/5* Hotel

$1,900

$2,400

100

$2,000

$2,800

112

$3,000

$3,500

151

Notes: Above costs are indicative only based on return tenders received. They include allowances for prot and preliminaries, but exclude land
acquisition and external works.

106

BRUCE SHAW

HANDBOOK 2012

Source: Bruce Shaw / Shanghai First Surveying Co. Ltd

Shanghai
Ref.

SECTION

Regional Building Cost Comparison January 2012

11

CHINA

11

continued

Outlined below are indicative construction costs for the varying sectors based on tenders received in the regions.

From
(US$)

To
(US$)

Guangzhou
From
(US$)

Index

To
(US$)

Index

Residential Sector

1.1

Medium Quality High Rise

$350

$550

62

$500

$700

83

1.2

High Quality High Rise

$700

$1,050

73

$800

$1,100

79

2.0

Commercial / Office Sector

2.1

Standard Specication High Rise

$700

$850

82

$750

$950

89

2.2

High Specication High Rise

$900

$1,400

88

$950

$1,450

92

3.0

Hotel & Leisure / Retail Sector

3.1

Shopping Centre

$600

$1,000

70

$700

$1,100

78

3.2

Budget/3* Hotel

$700

$900

73

$800

$1,100

86

3.3

4/5* Hotel

$1,500

$2,100

84

$1,600

$2,300

91

Notes: Above costs are indicative only based on return tenders received. They include allowances for prot and preliminaries, but exclude land
acquisition and external works.

Shanghai Tender Price Index. Multistorey Residential Building (2006-2011)


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 Q4 2011 down at an index of 118.
130
Source: Shanghai First Surveying Co. Ltd

127
124
121
118
115
112
109
106
103
100
97
2

2

2



2

2

2

2



2

2

2

2



2

2

2

2



2

2

2

2



2

2

2

2

2



Suzhou-Creek, Shanghai

BRUCE SHAW

HANDBOOK 2012

107

CHINA

1.0

Description

Source: Bruce Shaw / Shanghai First Surveying Co. Ltd

Chengdu
Ref.

CHINA

Top 20 Chinese Contractors

108

Revenue
$ bn

Firm

CHINA RAILWAY GROUP LTD.

71.66

CHINA RAILWAY CONSTRUCTION CORP.

71.02

CHINA STATE CONSTRUCTION ENGINEERING CORP.

48.89

CHINA COMMUNICATIONS CONSTRUCTION GROUP

39.64

CHINA METALLURGICAL GROUP CORP.

29.92

SHANGHAI CONSTRUCTION GROUP

13.01

DONGFANG ELECTRIC CORP.

6.68

SHANGHAI URBAN CONSTRUCTION (GROUP) CORP.

6.01

GUANGSHA CONSTRUCTION GROUP CO.

6.00

10

CHINA PETROLEUM ENGINEERING & CONSTRUCTION CORP.

4.97

11

CHINA NATIONAL MACHINERY INDUSTRY CORP.

4.82

12

ZHEJIANG CONSTRUCTION INVESTMENT GROUP CO.

4.69

13

HUNAN CONSTRUCTION ENGINEERING GROUP CORP.

4.10

14

CHENGDU CONSTRUCTION ENGINEERING CORP. GROUP

3.96

15

ZHONGTIAN CONSTRUCTION GROUP CO.

3.87

16

SICHUAN HUASHI GROUP CORP.

3.72

17

GUANGZHOU CONSTRUCTION ENGINEERING CORP.

3.63

18

YUNNAN CONSTRUCTION ENGINEERING GROUP CO.

3.52

19

SHAANXI CONSTRUCTION ENGINEERING GROUP CORP.

3.49

20

GUANGXI CONSTRUCTION ENGINEERING GROUP CO.

3.38

BRUCE SHAW

HANDBOOK 2012

Source: Engineering News Record

Rank

SECTION

11

CHINA

11

Top 20 Chinese Design Firms

HYDROCHINA CORPORATION

1.31

CHINA CHENGDA ENGINEERING CO.

0.99

CHINA POWER ENGINEERING CONSULTING GROUP CO.

0.89

CHINA RAILWAY ERYUAN ENGINEERING GROUP CO.

0.70

THE THIRD RAILWAY SURVEY AND DESIGN INSTITUTE GROUP CORPORATION

0.54

CHINA RAILWAY SIYUAN SURVEY AND DESIGN GROUP CO. LTD.

0.52

CHINA CONSTRUCTION ENGINEERING DESIGN GROUP CORPORATION

0.51

CHINA ARCHITECTURE DESIGN & RESEARCH GROUP

0.44

SHANGHAI XIAN DAI ARCHITECTURAL DESIGN (GROUP) CO.

0.38

10

CHINA HUANQIU CONTRACTING & ENGINEERING CORPORATION

0.34

11

CHINA PETROLEUM PIPELINE ENGINEERING CORPORATION

0.28

12

CHINA UNITED ENGINEERING CORPORATION

0.26

13

ARCHITECTURAL DESIGN & RESEARCH INSTITUTE OF TONGJI UNIVERSITY

0.25

14

HYDROCHINA CHENGDU ENGINEERING CORPORATION

0.25

15

CHINA NUCLEAR POWER DESIGN COMPANY (SHEN ZHEN)

0.24

16

EAST CHINA INVESTIGATION AND DESIGN INSTITUTE

0.20

17

CCCC HIGHWAY CONSULTANTS CO.

0.20

18

HYDROCHINA XIBEI ENGINEERING CORPORATION

0.20

19

SHANGHAI MUNICIPAL ENGINEERING DESIGN INSTITUTE (GROUP) CO.

0.19

20

CCCC FIRST HIGHWAY CONSULTANTS CO.

0.18

Chinese Yuan Renminbi (CNY) Currency Exchange Rates


Source: European Central Bank

0.16

0.15

0.14

0.13

0.12

0.11

0.10

0.09

CNY/EUR

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Jul-10

Oct-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

Jan-08

Oct-07

Jul-07

Apr-07

Jan-07

Jul-06

Oct-06

Apr-06

Jan-06

0.08

CNY/USD$

BRUCE SHAW

HANDBOOK 2012

109

CHINA

Revenue
$ bn

Design Firm Name

Source: Engineering News Record

Rank

110

BRUCE SHAW

HANDBOOK 2012

G H A N A 12

BRUCE SHAW

HANDBOOK 2012

111

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

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 signicant 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 2011.
Ination, which was previously high in Ghana, has
stabilised with the Governments 2011 target of 9%
likely to be achieved.

12

Construction is expected to represent


over 10% of GDP from 2012 onwards.

GHANA

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 reected in Ghanas 2012 Budget
which focuses on the provision of key infrastructure,
particularly in the areas of:

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 2011. Other sectors, such
as Services and Agriculture, are likely to achieve more
modest growth rates.






&MFDUSJDJUZ 0JMBOE(BT
8BUFSBOE4BOJUBUJPO
3BJMXBZT 3PBET BOE1PSUTBOE
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Ghana Key Statistics

GDP at current market prices

GDP per capita

2008

2009

2010

Million Gh

30,179

36,598

46,232

Million US$

28,249

25,798

32,319

Gh

1,318

1,563

1,930

US$

1,234

1,102

1,349

GDP growth rate

8.4

4.0

7.7

Ination

16.5

19.3

10.8

Exchange Rate (Gh/US$)

Gh per US$

Current Account Balance

Million US$

Population

Persons, Millions

Minimum Wage

Gh

1.07

1.42

1.43

(5,496)

(3,380)

(2,962)

22.9

23.4

24.0

2.3

2.7

3.1

Source: Ghana Statistical Service

Unit

GDP (US$ billion current prices)


"DUVBM

60

Source: International Monetary Fund, World


Economic Outlook Database

70
'PSFDBTU

50
40
30
20
10

0














BRUCE SHAW





HANDBOOK 2012

113

GHANA

Value of Construction Output (at constant 2006 prices)


Million Gh

Million US$

% of GDP

2006

1,016

1,104

6.20%

2007

1,252

1,332

7.20%

2008

1,739

1,625

8.00%

2009

1,902

1,339

6.20%

2010

1,949

1,373

5.90%

Source: Ghana Statistical Service

Year

Construction Output Growth Rate Forecast (based on constant 2006 prices)

Construction Output Growth Rate

2011

2012

2013

2014

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

Commercial Offices

To

Unit

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


(medium standard)

2,000

2,500

per sq.m

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

Notes:
i All subject to site specics, design and specication
ii All exclude Land Acquisition Costs, External Works Costs
& Professional Fees

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iii Regional variances occur across the country and from sector
to sector
iv Gh per : 2.2

Source: Bruce Shaw

Cost Range Gh
From

SECTION

12

GHANA

12

Ination Index
60%

40%

30%

20%

10%

0%
2004
Labour

2005
Cement

2006

2007

2008

2009

2010

Steel

Building Cost Index & Consumer Price Index Comparison


45%
Source: Ghana Statistical Office

40%
35%
30%
25%
20%
15%
10%
5%
0%
2004
CPI

2005

2006

2007

2008

2009

2010

BCI

BRUCE SHAW

HANDBOOK 2012

115

GHANA

Source: Ghana Statistical Office

50%

GHANA

Construction Companies Active in Ghana


Arab Contractors Co. (Osman Ahmed Osman & Co) GKL Ghana Ltd.
Ballast Nedam Ghana BV

Grinaker-LTA Ltd.

Big Aidoo Construction Company

Jiangsu Jianda Construction Co., Inc

Bilnger Berger AG

Jiangxi Zhongmei Engineering Construction Co.

China Intl Water & Electric Corp.

Justmoh Construction Ltd.

China Jiangxi Corporation for IETC

Kamsad Construction Company Ltd.

China Railway Engineering Corporation

MSF International

China Zhong Hao Ltd.

Royal BAM Group NV

Consar Ltd.

SADE CGTH

De Simone Ltd.

Solel Boneh International Ltd.

Energoprojekt Group

Taysec Construction Ltd.

PW Group

Exchange Rates Gh/US$ 2004-2011


1.80
Source: Bank of Ghana

1.60
1.40
1.20
1.00
0.80
0.60
0.40
0.20

116

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Dec-11

Dec-10

Dec-09

Dec-08

Dec-07

Dec-06

Dec-05

Dec-04

0.00

SECTION

12

GHANA

12
GHANA

BRUCE SHAW

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117

118

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T O P I C A L I S S U E S 13

BRUCE SHAW

HANDBOOK 2012

119

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 signicant 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:
 'PTTJMT DPBM PJM QFBU

 /VDMFBS
 3FOFXBCMF 8JOE )ZESP 8BWF 5JEBM 4PMBS 
Geothermal)
 0UIFS #JP.BTT #JP'VFMBOE8BTUFUPFOFSHZ

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:
 -BOE$PTUT

 0XOFST 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 nal 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 ow.

 &OHJOFFSJOH 1SPDVSFNFOUBOE$POTUSVDUJPO
(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.

120

BRUCE SHAW

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Hydroelectricity is the most common form of


renewable energy accounting for 16% of global
electricity consumption in 2010. The cost of
hydroelectricity is relatively low, making it a
competitive source of renewable electricity.
Hydroelectricity also has considerably less C02
emissions than fossil fuels.

13

SECTION

TOPICAL ISSUES

13

Global Wind Power Cumulative Capacity

(MPCBM$VNVMBUJWF$BQBDJUZ (8
















































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 worlds 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 2014.

Biomass
Biomass is plant matter used to generate electricity
with steam turbines & gasiers 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

















At Bruce Shaw we understand the needs of todays


power generation sector and have the experience to
meet the challenges. Our specialist service includes:
 'FBTibility studies and Cost Benet Analysis
 7BMVF&OHJOFFSJOHBOE-JGF$ZDMF$PTUJOH
 4USBUFHJDQSPDVSFNFOUBEWJDFBOETUBLFIPMEFS
management
 $POUSBDUBEWJDF
 1SFBOE1PTUDPOUSBDUDPTUDPOUSPM
 1SPKFDU.Bnagement 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


 .BZP1ower 50 MW Biomass Plant
 )VOUTUPXO.8(BT5VSCJOF
 -BOFTCPSPVHI.81FBU'JSFE1MBOU
 4IBOOPOCSJEHF.81FBU'JSFE1MBOU
 4PVUIFSO*SFMBOd 450 MW Gas Fired CCGT

in the plants economics.

 &BTU8FTU*OUFSDPOOFDUPS)7%$$BCMF1SPKFDU
(Claim Management)

Geothermal Energy

 &4#/FUXPSLT$PSL)BSCPVS$BCMF$POUSBDU

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 uctuations. However, capital costs
are signicant. Drilling accounts for over half the
costs, and exploration of deep resources entails
signicant risks.

Mayo Power

BRUCE SHAW

HANDBOOK 2012

121

TOPICAL ISSUES



Source: GWEC



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 contractors nancial 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 signicant 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 contractors
nancial robustness before entering into a contract
in the rst instance. The comprehensiveness of the
assessment should be determined by the value and
complexity of the contract.
When assessing the nancial robustness of a
contractor, Bruce Shaw usually starts with a review
of the contractors nancial statements with a
particular focus on the following:
Auditors Report
An unqualied audit opinion provides assurance
that the nancial statements of a contractor give
a true and fair view and are representative of the
state of its affairs. Qualied 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 specic
reasons such as pending insolvency, liquidation or
cessation of trade.
Auditors frequently use an emphasis of matter
paragraph within their audit reports to highlight

122

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HANDBOOK 2012

certain parts of nancial statements or directors


reports relating to ongoing concern issues. This is
understandable given the prevalence of difficult
trading conditions, lower property values and the
signicant challenges in securing new or
replacement credit lines from banks.
Cashow
Strong cashow is essential in any business. High
projected turnover and prot become irrelevant if
weak cashow puts strain on a contractors
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 nancial
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 contractors 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 renanced.

SECTION

Other
The notes to the accounts sometimes highlight
matters which may impact on a contractors
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 contractors order book.

TOPICAL ISSUES

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 nances.
On larger projects, it is equally important to
continue to monitor a contractors nancial
position post contract award to re-conrm its
nancial robustness or facilitate early remedial
action should the need arise.

The nancial statements provided by contractors are


often outdated and there is a risk that the underlying
nancial condition of a contractor may have changed
substantially since its nancial statements were
approved. Hence, the nancial 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 contractors future protability.
Contractor Declarations
Declarations should be sought to conrm 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 contractors nancial situation:
Source

Benets to the Assessment Process

Companies Registration
Office

late lings are sometimes evidence of


distress
searches provide details of charges on
assets

Revenue

tax clearance certicates indicate that


a contractors taxes are in order at the
date of issue

Credit Ratings /
Bankers Letter

these provide information on a


contractors credit quality

Performance Bonds /
Insurance

third party evidence conrming availability


provides some, albeit limited, assurance
on nancial robustness

Media

media news clips and articles may identify


issues prompting further investigation

BRUCE SHAW

HANDBOOK 2012

123

13
TOPICAL ISSUES

Prot and Loss


The prot and loss account provides useful
information on turnover, the protability of a
contractor, performance trends and exceptional
items that have affected its business.

13

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:
 %JTDSFQBODJFTCFUXFFOWBSJPVTDPOTUSVDUJPO
documents
 "NJOPSDIBOHFUPBOZPOFESBXJOHPSEPDVNFOU
could necessitate manual adjustment of other
documents
 4PNFDPPSEJOBUJPOJTTVFTNBZOPUCFJEFOUJFE
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
nished project. The building components or objects
within the 3D Model carry their own individual
properties such as geometry, material, quantities etc.
#*.BMTPFYUFOETCFZPOEBEESFTTJOHJTTVFTTVDIBT
cost, project and facilities management and provides
a way to work concurrently on most aspects of
building life cycle processes.

Co-ordinated
Output

2D PLANS
AND ELEVATIONS

Intelligent
Input

DOOR AND WINDOW


SCHEDULES

Engineers
Architect
Consultant
Client

CONSTRUCTION
DETAILS

3D BIM MODEL

Quantity
Surveyor
SPECIFICATIONS

Contractor

3D RENDERING
AND WALKTHROUGHS

Benets of BIM
Apart from the obvious benet of possessing a 3D
model of the nished building, there are a number of
other benets, which include:

 $IBOHFTDBOCFFBTJMZUSBDLFEBOEQSJDFE

 4FDUJPOTBOEFMFWBUJPOTPGUIFCVJMEJOHDBOCF

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.

generated automatically
 %SBXJOHTGSPNWBSJPVT%FTJHO5FBNTBSFNFSHFE
into one fully coordinated drawing
 "VUPNBUJDJEFOUJDBUJPOPGDMBTIFTCFUXFFO
building components
 "ny changes made, will automatically be reected
in all other documentation
 $PTU&TUJNBUFTDBOCFQSPEVDFEBDDVSBUFMZ
and quickly

124

BRUCE SHAW

HANDBOOK 2012

 $POUSBDUPSTDBOFBTJMZFYUSBDURVBOUJUJFTGPS
ordering materials

SECTION

13

TOPICAL ISSUES

&PSU&FDU

Traditional Versus Preferred Design Process

13

TOPICAL ISSUES

5JNF
1%

4%

%%

$%

13

$"

01

Ability to impact cost


and functional capabilities

Cost of design changes

Traditional design process

Preferred design process (BIM)

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 rst class service to our Clients.
BIM allows the user to obtain automatic (BIM
predened) 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:
 %JSFDUNFBTVSFNFOUGSPNTDBOOFE 1%' $"%
drawings and 3D BIM
 1PXFSGVMTQSFBETIFFUCBTFEXPSLCPPLTMJWFMJOLFE
to the drawings
 "CJMJUZUPDPNQBSFESBXJOHTBOEBVUPNBUJDBMMZ
highlight changes
 &YUSFNFMZFDJFOUBOEBDDVSBUF
 /PSFRVJSFNFOUGPSQBQFSDPQJFTPGESBXJOHs
One of the biggest challenges for BIM is
DPMMBCPSBUJPOCFJOHBCMFUPHFUBMMUIFDPOTVMUBOUT 
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
BOE(FSNBOZPGUIFJOEVTUSZJOUIF6OJUFE
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 Governments intention to require collaborative
3D BIM (with all project and asset information,
documentation and data being electronic) on
all its projects exceeding 5million by 2016.

BRUCE SHAW

HANDBOOK 2012

125

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 15-20 years (up to the recession) retail expenditure
growth was exceptionally strong, driven largely by high rates of borrowing, low ination/
interest rates and strong house price ination. 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 signicant
ground in the past 12 months.
In the current climate diversifying and nding new
areas of growth and protability 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 inuence of globalisation and the harnessing
of technology like mobile phones, smart-phones,

126

BRUCE SHAW

HANDBOOK 2012

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:
 PGBMMPOMJOFUSBOTBDUJPOTJOWPMWFETPNF
research in store.
 3FUBJMFSTFOKPZIJHIFSPOMJOFTBMFTJOBSFBTXIFSF
they have a physical presence.
 PG6,DPOTVNFSTIBWFBNPCJMFIBOETFU 
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 inuence 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

SECTION

13

TOPICAL ISSUES

13
TOPICAL ISSUES

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 nding new areas of growth
and protability are key.

Social Retailing
Notwithstanding the above, online shopping can be
EVMMBOEVOJOTQJSJOHIPXFWFSUIFSFBSFPQQPSUVOJUJFT
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 outt options to their friends emails, 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 2012.
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.

Traditional vs Online Retail Growth


















Source: EIU, Datamonitor, IMAP










Traditional Retail Growth







Online Retail Growth

BRUCE SHAW

HANDBOOK 2012

127

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 signicant 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:

combined with compressed project time


constraints that often emanate therefrom.
 1SPKFDU.BOBHFSTCFJOHDPNNJTTJPOFEMBUFS
on in the project cycle, as a means of reducing
Client costs.
 2VBMJUZDPOUSPMTUBOEBSETESPQQJOHEVFUPB
reduction of on-site management, with right
rst time construction being more difficult
to achieve.
 3FEVDFEQSPEVDUJWJUZSVOTCZ4VQQMJFSTEVFUP

 *OBEFRVBUFNBOBHFNFOUSFTPVSDFTXJUIJO%FTJHO 
Contracting and Supply related organisations.
 (SFBUFSJODJEFODFPGPSHBOJTBUJPOTGBJMJOHUP
perform to previous standards, due to knowledge

decreased demand, resulting in longer lead times


for many materials, specialist goods and
equipment.
 -BUFEFMJWFSZPGTQFDJBMJTUHPPETBOENBUFSJBMT 

and past experience being lost through

due to ner tolerances associated with just in

redundancies, and/or non-replaced retirements.

time fabrication, and logistical problems linked

 *OFDJFOUEFDJTJPONBLJOHXJUIJOQSPKFDUSFMBUFE
organisations.

further aeld.

 3FEVDFEGPDVTPOEFMJWFSJOHWBMVFFOHJOFFSFE
design.
constraints, often accentuated by an elongated
chain of approval within lending organisations,

BRUCE SHAW

 $PNQFUJUJWFUFOEFSMFWFMTJOBNBSLFUXJUISJTJOH
costs, leading to increased challenges for cost

 -BTUNJOVUFBQQSPWBMTCZ$MJFOUTEVFUPGVOEJOH

128

to commercial conditions in Europe and

HANDBOOK 2012

and program management.


 &MPOHBUFEEFTOBHHJOHQFSJPETBOEBTTPDJBUFE
inconvenience for Clients and Tenants.

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:
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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.
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between organisations on a joint venture/
consortia basis, to ll the decit of suitable
managers and span the knowledge and
experience gaps that have arisen.
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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

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can realistically be procured, designed, fabricated
and delivered within project constraints.
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addresses project risk in order to minimise
program and cost related issues so easily
encountered in this difficult market.
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implementation and management of Quality
Control Systems on site.
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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 identied, and the project
related risks understood, Bruce Shaws 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 Clients projects throughout the
challenging year ahead.

funders and tenants.


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resourced to develop value driven solutions for
the Client, with these obligations being reinforced
at fee tender and pre-appointment stages.

BRUCE SHAW

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A B O U T B R U C E S H A W 14

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131

ABOUT BRUCE SHAW

Bruce Shaw
Bruce Shaw is an independent international
construction consultancy rm with over 40 years
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 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 reected in the repeat
commissions we are awarded, which accounts for
70% of our business.

Our services are internationally accredited to the ISO


9001 quality standards and 14001 environmental
standards.

We are always on hand to support clients with expert


advice and direction in such areas as:

The Bruce Shaw organisation is structured into a


multiplicity of dedicated project service teams with
specic 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.

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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 specic 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
nal 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

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HANDBOOK 2012

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 1111'*
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.

SECTION

14

ABOUT BRUCE SHAW

Cost Management

14

1 Pre-Contract Stage

ABOUT BRUCE SHAW

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 benets to the client.
Bruce Shaw leads this process and explores all
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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.
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 projects design
stages to ensure that the most economicallyeffective solutions are adopted, consistent with the
clients 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.

Whole Life Costing


Bruce Shaws 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.
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 15686-5. Bespoke
software incorporates BCIS and Bruce Shaws own
in-house data to inform decision-makers at all
stages of a project.

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HANDBOOK 2012

133

ABOUT BRUCE SHAW

Sample Benchmark Study Cost per MW Element for Data Centres


Source: Bruce Shaw

20,000,000

15,000,000

10,000,000

5,000,000

0
Dublin 1

Dublin 2

Total for Soft Costs

Western
Europe 1

Western
Europe 2

Total for Equipment

Benchmarking
By identifying drivers for improving value, cost, time
and quality, whilst still ensuring the best value is being
achieved, benchmarking can play a signicant 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 Benet 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 dened monetary threshold
should be subject to a Cost Benet Analysis. Bruce
Shaws 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 benets
and costs of proceeding with a project. Bruce Shaw
also undertakes post project reviews for clients.

134

BRUCE SHAW

HANDBOOK 2012

Dublin 3

Dublin 4

Total for Electrical

Dublin 5

UK (London)

Total for Mechanical

Paris

Total for CSA

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 latest @ 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 ow 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 specic 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 rst 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.

SECTION

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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.

One of the primary post-contract tasks is to


nancially manage the contractor in accordance
with the terms of the contract and Bruce Shaws
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.

2 Post-Contract Stage
Cost Control during Construction
Bruce Shaws 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.

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 2012

135

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
ow projections are provided to indicate the clients
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 eld, 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.

136

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HANDBOOK 2012

Capital Allowances
The vast majority of businesses incurring capital
expenditure on the construction of commercial
property can benet 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% rst
year tax relief can be claimed by businesses on
specic energy-saving equipment. The value of ECAs
in the modern property environment is recognised by
Bruce Shaws Cost Managers as a signicant benet
to businesses in writing-off the whole cost of their
investment against taxable prot.
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 Shaws 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.

SECTION

14

ABOUT BRUCE SHAW

Project Management

14

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 clients
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.

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 specic 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
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Risk Management
We identify all risks which are specic 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.

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appointment

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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.

Provide total co-ordination

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.

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137

ABOUT BRUCE SHAW

Bruce Shaw offers a professional, personal and


comprehensive Project Management service to all its
clients. The companys 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.

ABOUT BRUCE SHAW

Consultancy Services
Bruce Shaw provides a wide range of project
support services and independent services ranging
from nancial to investment, including Public Private
Partnerships, to legal support and procurement.

"EWJDe 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

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.

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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 nancial efficiencies and improved
performance.

3FTPMWing contractual disputes or, if unsuccessful,


managing formal resolution process, e.g.
mediation, arbitration, legal proceedings

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.

Public Procurement Consultancy

Our key procurement & supply chain management


services include:
 8IPle life procurement activities
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tender management, evaluation, recommendation
and award
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138

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procedural manuals
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contract and award notices

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.

SECTION

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 2014.

Following the consultation process, the changes now


proposed include:
 4JNQMJFEQrocedures 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
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ABOUT BRUCE SHAW

 4JNQMJDBtion of information obligations at


pre-qualication stage including self-declarations
on the fulllment of selection criteria, with only the
successful candidates/tenderer(s) being required
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 -JNited scope for negotiation being introduced to
improve the quality of an offer, but there would be
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 5IFQSPNotion of e-procurement. It is planned
to achieve full electronic communication in
public procurement within two years of the
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through dividing projects into Lots and lower
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 "OBUJPOal 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 ght 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.

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purchase of new innovative services, goods and
works, provided they can be delivered to agreed
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improved and no longer being conned to
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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
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BRUCE SHAW

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139

14
ABOUT BRUCE SHAW

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 simplication 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 signicance
and introducing better safeguards to prevent
corruption, favoritism etc.

14

ABOUT BRUCE SHAW

Framework Agreements
Framework Agreements are agreements between
one or more purchasers and providers, which set
out the terms and conditions governing specic
contracts to be awarded throughout the term of
the agreement (max.4 years).
Bruce Shaws 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 nal delivery
and operation.
For private sector clients, Bruce Shaw provides
bid management support on design, build, nance
and operate/maintain projects, with an extensive
scope of works which includes coordinating tender
submissions through to acting as SPV Manager
and Employers 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
Shaws business allows it to fully consider market
trends in construction, nance 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 todays competitive
marketplace, efficiency is the key for the successful
and protable management of any organisation.
The rst challenge though, comes in identifying
inefficiencies or where a business can be impoved,
followed by the challenge of implementing new
initiatives through smooth transition.

140

BRUCE SHAW

HANDBOOK 2012

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 dened ways of working.
Services include:
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monitoring of control measures
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contract arrangements
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of co-ordinated duties documentation
Independent Certier / Technical Adviser
As an independent certier, Bruce Shaw works as
a technical advisor to leading nancial institutions
seeking due diligence on development proposals
prior to formal commitment of funding. The
companys initial report comprises a review of all
the projected costs and examines various aspects
of the projects viability.
Bruce Shaws 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
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and review of construction progress against
budgeted cost and schedule.
Financial Assessment of Contractors
Bruce Shaw undertakes comprehensive nancial
analysis of contractors and service providers in the
construction industry. Our in-house team of
chartered accountants are suitably qualied to
review nancial statements, credit ratings, nancial
projections, company lings and other publicly
available data. This review process should assist with
determining the adequacy of contractors resources
to remain going concerns and full contractual
obligations. For the public sector, in addition to
undertaking nancial reviews, Bruce Shaw can also
prescribe the nancial information requirements and
criteria for tender pre-qualication processes and the
subsequent awarding of public contracts.

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 companys 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 dened 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 Shaws 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 nancial
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
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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 2012

141

ABOUT BRUCE SHAW

Health & Safety Consultancy


Bruce Shaws 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 signicant 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.

As CDM Coordinator (CDMC), our role is to:


On Appointment
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they must take to comply with CDM Regulations
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Throughout the Project
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designers and contractors
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enable them to comply with their duties
Design Stage
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 $PPSEJOBUFaspects of design work
Tender Stage
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Design and Principal Contractor team

Services Provided
Bruce Shaw services include:
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safety legislation
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$POTUSVDUJPO4BGFUZ.BOBHFNFOU TBGFUZBVEJUJOH
and compliance
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2007

Construction Stage
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Construction Health and Safety Plan
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Health and Safety implications of any
signicant change in design
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Handover Stage
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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.

Current Trends in Health & Safety in Ireland

Our Approach to CDM Co-ordinator in the UK

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.

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.

142

BRUCE SHAW

HANDBOOK 2012

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.

SECTION

Standards

Reputations
and Standings

Project Works

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,
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:
 4BGFUZMFHJTMBUJPOSFMBUJOHUPDPOTUSVDUJPOQSPKFDUT
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

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.
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 veriable safety management systems and
procedures this is not always a clear cut process
and there are indirect responsibilities which may
not be fully appreciated.

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placed on senior managers in charge of work
places out
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employer, design, contractor, landlord etc

Safety Legislation

Standards H&S

Make Appointments
Assess Competence
Company Standards

Client
Company

Set Requirement
Inuence Safety

Provide
Information

Best Practice
Communications

BRUCE SHAW

HANDBOOK 2012

143

14
ABOUT BRUCE SHAW

Best Practice
Directors & Managers

ABOUT BRUCE SHAW

Green Energy
The change to sustainable and new energy sources
bring their own, sometimes signicant 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
identication and procurement of supporting
information to be able to make that assessment.

Legislation
Clients
in Construction

14

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 Childrens Sunshine Home
The Childrens 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 Childrens Hospital
Self Help Africa

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
1939. 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 OMara was the Project Director for this
project and continues to be involved in various
Rose Project projects on an ongoing basis.

BRUCE SHAW

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 patients 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

St. Michaels House

144

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.

HANDBOOK 2012

Movember
During November each year, Movember is
responsible for the sprouting of moustaches on
thousands of mens 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 mens health, specifically
prostate cancer. Neil Vaughan our Bruce Shaw
Project Manager Director took part and together
with the team raised 645.

SECTION

ABOUT BRUCE SHAW

White Collar Boxing Event


In November 2011, two members of our Dublin staff;
Aidan Tuite and Alex ODonnell 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 ODonnell recording a Knock-out.
A significant amount of money was raised for a
number of charities including; Our Ladys 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.

Over the Wall


Bruce Shaws 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 Shaws 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.

BRUCE SHAW

HANDBOOK 2012

145

14
ABOUT BRUCE SHAW

Joyce Country Challenge


On the 5th July 2011, Des OBroin 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 Irelands hidden gems,
the circuit of Lough Nafooey. All monies raised went
to the Galway/Mayo Hospice.

14

ABOUT BRUCE SHAW

Bruce Shaw Senior Personnel

146

John Ballance
john.ballance@bruceshaw.com

Paul Kehoe
paul.kehoe@bruceshaw.com

Paul Body
paul.body@bruceshaw.com

Peter McHale
peter.mchale@bruceshaw.com

Paul Boylan
paul.boylan@bruceshaw.com

John McIlwaine
john.mcilwaine@bruceshaw.com

Colm Buckley
colm.buckley@bruceshaw.com

Andrew Murray
andrew.murray@bruceshaw.com

Gerard Campbell
gerard.campbell@bruceshaw.com

Des OBroin
des.obroin@bruceshaw.com

Philip Cleary
philip.cleary@bruceshaw.com

Saran OByrne
saran.obyrne@bruceshaw.com

Felix Collins
felix.collins@bruceshaw.com

Brendan OMara
brendan.omara@bruceshaw.com

Steven Cooke
steven.cooke@bruceshaw.com

Frank OSullivan
frank.osullivan@bruceshaw.com

Rennie Dalrymple
rennie.dalrymple@bruceshaw.com

Chris Patrick
chris.partick@bruceshaw.com

Patrick DArcy
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

BRUCE SHAW

HANDBOOK 2012

SECTION

14

ABOUT BRUCE SHAW

Willie Aherne
willie.aherne@bruceshaw.com

Tony Madden
tony.madden@bruceshaw.com

Stephen Ashe
stephen.ashe@bruceshaw.com

Chris Matthews
chris.matthews@bruceshaw.com

Michel Brosnan
micheal.brosnan@bruceshaw.com

Brian McCay
brian.mccay@bruceshaw.com

John Butler
john.butler@bruceshaw.com

Pat McDevitt
pat.mcdevitt@bruceshaw.com

Paul Butler
paul.butler@bruceshaw.com

Oliver McGuckin
oliver.mcguckin@bruceshaw.com

Gary Comerford
gary.comerford@bruceshaw.com

Eamon OConnor
eamon.oconnor@bruceshaw.com

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.woulfeanagan@bruceshaw.com

Tony Kelly
tony.kelly@bruceshaw.com

Daniel Wright
daniel.wright@bruceshaw.com

14
ABOUT BRUCE SHAW

Kevin Kinsella
kevin.kinsella@bruceshaw.com

BRUCE SHAW

HANDBOOK 2012

147

ABOUT BRUCE SHAW

Our Clients
Abbott International

Digital Realty Trust

National Asset Management Agency (NAMA)

ABN Amro

Dublin Airport Authority

National Development Finance Agency

Albany Properties

Durkin Estates

Aberdeen Asset Managers

Easons

National Institute for Bioprocessing


Research and Training

Al Khozama Management Company

Elan

National Maternity Hospital

Al Sharq Investments

Electric Ireland

National Roads Authority

A&L Goodbody

Electronic Data Systems

National University of Ireland

Allied Irish Bank

Ellier Developments

Natwest Bank

Anderson Group

Equity Bank

Nissan

Aramco Overseas

Espirit

Northern Bank

Arnotts

Fluor

Novartis

Arthur Cox

Fujitsu

O2

Aryzta AG

Four Seasons Hotels

Office of Public Works

Amgen

Gatwick Airport Limited

Bahrain Bay Developments

Glen Dimplex Group

Bahrain Tourism Company

Green Property Company

Ballymore Properties

Greencore

Bank of Ireland

Grosvenor

Bank of Scotland

Guidant

Barratt Homes

Hampstead Homes

BD Medical

Harcourt Developments

B&Q

Hard Rock Caf

Belfast Harbour Commissionaires

Hayward Gallery

Belfast International Airports

NBOS

Bellway Homes

Health Services Executive

BIH Housing Association

Hewlett Packard

Bloom Developments

Hilton Hotels

Bord Gis Eireann

Hochtief PPP Solutions Ltd.

Bovis Lendlease

Howarth Homes plc

Blood Transfusion Services Board

Hypo Real Estate Holding AG

British Land

IBM

British Museum

iGuzzini SPA

British Telecom

ING Real Estate

Burger King

Institutes of Technology, Ireland

ByrneWallace

Intel

Caelum Developments

Investec Bank

Castlelands Construction

Irelandia

Castlethorn Construction

Irish Aviation Authority

St. Lukes Hospital

CB Richard Ellis

Irish Prison Service

St. Vincents Hospital

Central Bank & Financial Services Authority


of Ireland

Johnson & Johnson

Tamouh Investments

John Lewis Partnership

Chase Manhattan

Taylor Wimpey

JP Morgan Chase

Chartered Accountants Ireland

The Savoy Group

Childrens University Hospital

King Abdullaziz City for Science


and Technology

Titanic Quarter

Church Commissioners for England

KPMG

Citibank

Krediet Bank

City & Country

Laganbank Development

Communicorp

Lambeth College

County & City Councils, Ireland

Lancer Asset Management

Ulster Bank

County & City Councils, U.K.

Lidl

Ulster Rugby

Cork University Hospital

Mace

United House

Credit Suisse

Macquarie Capital

University of Ulster

Crest Nicholson

Marks & Spencer

Victoria Dock Developments

Crosbie Properties

Mary Immaculate College

Victoria Palace Theatre

Dalkia

Matheson Ormsby Prentice

Visa Europe

Daunton Soar

Mater and Childrens Hospital

Ward Homes

David Lloyd Leisure

McCann Fitzgerald

Warner Chilcott

Dell

Menolly Homes

Wates Group

Department of Education & Science Ireland

Mentor Graphics

Westeld Shopping Towns

Depfa Bank

Merrill Lynch

Whitbread

Deutsch Bank

Merrion Hotel

William Ewart Properties

De Vere Estates

Ministry of Foreign Affairs

William Fry

Deloitte

Microsoft

Willis Insurance

Diageo

Mobily

Windsor Motors

Digicel

Morrison Homes

Wyeth Medica

148

BRUCE SHAW

HANDBOOK 2012

Oger International
Park Developments
Parkway Properties
Paul Newman New Homes
Pedra Developments
Pepsi
Premier Group WLL
Pzer
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

Translink
Treasury Holdings
Trinity College Dublin
UCD
University College Dublin

Bruce Shaw
working in 150 cities
in over 40 countries.

Office Locations
BAHRAIN
Building No 1468
P.O. Box 10963
Manama
T +973 17 746 892
F +973 17 746 893

DUBLIN
Kestrel House
Clanwilliam Place
Dublin 2
T +353 1 661 4711
F +353 1 661 4722

SAUDI ARABIA
Akaria, Building 16, Olaya Street
P.O. Box 67718, Riyadh 11517
Kingdom of Saudia Arabia
T +966 (0) 1215 1857
F +966 (0) 1215 1862

BARBADOS
West Coast Mall
Holestown St. James
Barbados
T +1 246 432 7957
F +1 246 432 7958

INDIA
B - 278 Ground Floor
Chitranjan Park
New Delhi - 110019
T +91 11 26273625
F +91 11 26275929

SHANGHAI
No. 617 Da Lian Rd. (w)
Ming Yao Building
Shanghai, P.R. China
T +86 21 6587 0216
F +86 21 6587 0185

BELFAST
Murrays Exchange
1 Lineld Road
Belfast BT12 5DR
T +44 (0)28 9032 1056
F +44 (0)28 9023 0940

LIMERICK
Bruce Shaw House
6 Hartstonge Street
Limerick
T +353 61 493 515
F +353 61 493 516

SINGAPORE
No. 1 Grange Road
#09 02 Orchard Building
Singapore 239693
T +65 6298 5833
F +65 6294 1609

BUCHAREST
Clopotarii Vechi Street No. 18
Sector 1 Bucuresti
Romania
T +40 312 294 200
F +40 312 294 210

LONDON
Artillery House
11-19 Artillery Row
London, SW1P 1RT
T +44 207 799 1100
F +44 207 799 1101

SYDNEY
Level 4 56 Clarence Street
Sydney, NSW 2000
Australia
T +61 432 368 120
F +61 2 9922 6017

CORK
Hanover House
South Main Street
Cork
T +353 21 427 4474
F +353 21 427 6415

MANCHESTER
Pall Mall Court
61-67 King Street
Manchester, M2 4PD
T +44 161 618 1811
F +44 161 618 1100

UNITED ARAB EMIRATES


5th Floor Corniche Tower
Corniche Road, P.O. Box 7127
Abu Dhabi, UAE
T +971 2 627 0088
F +971 2 627 0087

NEW YORK
275 Madison Avenue
6th Floor
New York 10016
T +1 212 878 8818
F +1 212 878 8817

VIETNAM
Level 6 Melinh Point Tower
2 Ngo Duc Ke St District 1
HCMC Vietnam
T +84 8 3520 2785

PARIS
9 / 11 Alle de lArche
Paris La Dfense 92671
France
T +33 1 70 92 37 91
F +33 1 49 97 1700

www.bruceshaw.com