Over the past two decades, the GCC has established a reputation for delivering ambitious megaprojects that push the boundaries of what can be achieved. Despite the ambition to drive forward with development agendas, change is needed to deliver projects. Also, the Covid-19 pandemic has amplified the challenges facing project delivery. Despite the challenges, this disruption of the pandemic provides an opportunity for the GCC projects industry to rethink its approach.
MECN speaks with By Paul Raphael, senior manager (ME) at Atkins Acuity, a member of the SNC-Lavalin Group, about enhancing project delivery and efficiency in the GCC.
“Throughout 2020, the pandemic encouraged people and companies to collaborate to overcome the challenges of remote working and social distancing. In particular, the crisis has accelerated the adoption of new digital and online technologies. Many project client bodies have expressed a desire to work more closely with their construction suppliers to mitigate the impact of the pandemic on their projects,” says Raphael.
Defining common goals
The starting point for solving many of the challenges facing projects in the GCC today is establishing a collaborative environment. Through a more balanced distribution of project risk with shared project objectives, stakeholders will find that developments are delivered much more efficiently, with minimal overruns. An integrated project programme with aligned objectives and incentives for all project parties encourages people to view projects holistically, considering the scheme’s whole-life value rather than seeing it through the narrow lens of their specific contract deliverables.
Choosing the right project
Large-scale projects that involve “layers” both internally (within the client organisation) and externally (other project stakeholders such as contractors, subcontractors, consultants, designers, etc.) require significant collaboration. These are high-risk projects that involve significant financial and legal complexity that needs to be jointly shared. These projects are of strategic importance to communities and have commercial and reputational value to the owner and potential stakeholders. In addition, the projects have interdependencies where the outcome of the project being delivered has a significant impact on another project or deliverable that is critical to the overall program to the client.
Defining the parameters
The value for money (VfM) for a project can be determined by understanding the whole-life costs and what benefits can be achieved from the project. This can be achieved by identifying the key performance indicators (KPIs) to deliver the VfM in fairness to all parties and establishing the performance indicators and risk-reward mechanisms to maximise the key result areas (KRA’s). Adopting a one-team mentality will help define equal pain and gain share with owner and non-owner participants (NOPs). It is also key to regularly adjust and re-adjust the outcomes based on project ‘health checks’ and tighten the benchmarks through continuous improvement for standardised projects.
Identifying the right stakeholder
Select contractors that are willing to be transparent and share the risk and rewards of collaboration. Contractors must have the expertise to steer a project towards efficient delivery and positive outcomes. Clearly define project roles through contracts that can be established between each party and the client, with horizontal agreements between stakeholders for joint works. Effective collaboration requires a shift in culture and attitudes from traditional contractual behaviours. This can be made effective through workshops and training of resources to educate the stakeholders on collaborative practices.
Owner and stakeholder involvement
For effective outcomes, the client team needs to provide the best representatives to participate in the collaborative process. There is a significant investment of time required by client and project stakeholders for joint project leadership and management. Top-level leadership commitment is required to drive the necessary cultural change and enable effective decision making.
Optimising the scope
Unclear or poorly – defined project requirements in the early phase of a project are also significant contributors to project overruns, creating delays as clients are forced to reassess their requirements as clashes or uncertainty over specifications emerge during later stages. Ideally, the fewer design changes, the better it is for the project. But where there are changes made, the earlier they can be introduced, the simpler it is to incorporate them into the existing programme and mitigate their impact on potential costs and time overruns.
It is more effective to conduct value management exercises during the early design stages of a project when different design solutions exist than it is to carry out on-site value engineering actions, where options are more limited and likely to be more disruptive and costly.
Setting up an alliancing culture
The role of the project integrator is critical to collaborative contracting. The project integrator works with the client to develop the overall project delivery plan. This includes designing suitably incentivised contracts for all project participants that clearly define their respective scope and deliverables in line with the plan. In short, the project integrator facilitates maximum collaboration between all parties by aligning all parties pain and gain share in line with the client’s goals.
Early-stage collaboration with the project integrator and concept design team can establish early control of project requirements to shape the incentives for project participants. This is achieved by setting up an alliance culture combined with a comprehensive management plan and structure from the outset of a project.
Designing the collaboration model
Collaborative models require a greater communication and transparency level, with every participant working towards a common goal. Pure alliancing models represent a big departure from traditional contracts in the GCC, where construction contracts are generally based on FIDIC forms of contract designed to favour one party. A more balanced approach is needed where the existing FIDIC forms can be made bespoke with collaborative principles from NEC 4 Alliance (UK) contracts and/or National Alliance Contracting guidelines (Australia), thereby a middle path is achieved. A legal perspective is required to ensure FIDIC contracts can be amended to make room for alliancing arrangements. At an organisational level, the contracts could be signed as a multi-party contract or between each party and the owner, with an addendum specifying collaboration and an Alliance Management Team (AMT) structure. A collaborative model combines features of a pure alliance model and elements of a FIDIC design & build contract, resulting in a palatable contract for both parties involved.
Forming a modular mindset
A critical decision that can be taken early in a project with the designer and contractors working closely and collaboratively with the client is balancing the modularisation of the design right without compromising the client’s aesthetic requirements. This can be done with expert contractor input on the best construction methods and supplier information on materials. This allows the designer to optimise project constructability through repeated elements, such as repeated floor plan, standard details, stacking building services, among others.
This establishes design efficiencies for the supply chain without compromising the development vision. Similarly, the asset operator and maintenance contractor’s involvement during the design stage will allow designers to include operations & maintenance (O&M) considerations to mitigate late disruptive changes once the asset has been handed over.
Transforming to the digital way
Digital technology is the key enabler of closer collaboration between parties from different phases of the project lifecycle, as well as improving the coordination of multiple teams in real-time. Through early collaborative working by the consultant, contractor and integrator, the client can mitigate further project risks by defining technology requirements at an early stage and integrating these into the project. This will help inform clients and facilitate early decisions, especially for BIM, digital twins, and cloud-storage solutions, which have a role to play throughout an asset’s life cycle.
A single project management plan available to all and source of current project information in the cloud make work more efficient and minimise abortive works and wastage by parties working with out-of-date drawings and information. This supports the integrated project delivery approach of a collaborative model.