Final year Dissertation, AQS4270, Part 2

Salam and dear all, The following tips might be useful: 1. Establish a framework of objectivity 2. Do not impose your ideas / values on the subject. Let the evidence determine the shape of the investigation 3. Be very knowledgeable about what others (the experts) in the field think of the subject. Identify problems they raised, assess whether the problems raised are critical, examine whether their views are consistent or otherwise, then seek answers as to why, and assess if some aspects of the problems being raised can be investigated by you within the context of your intended research 4. As you become more aware of the subject, your interest will naturally increase… irrespective of the topic 5. See your supervisor on a regular basis, discuss and explain your views, inform him of your problems, highlights to him your areas of concerns, etc. 6. Adhere to the agreed timetable of tasks/meetings 7. Adhere strictly to the University’s rules and regulations on the preparation and submission of dissertation 8. There is no short cut; by occasionally seeing your supervisor with loose sheets of paper will not help… on the contrary such actions lead to more damage to the overall progress of the research. Put words on paper (not in your mind) and see how your research progresses Wassalam.

Transparency in government procurement

Salam and dear all, It has been reported that the Minister in the Prime Minister's Department Datuk Seri Nazri Abdul Aziz has called for the government to make public tender awards. He made the suggestion in effort to introduce transparency, to combat corruption and therefore instill public confidence in the way in which the business of public sector procurement is conducted (see report in http://www.nst.com.my 30th July 2009). 1. I consider the suggestion made by the Minister is most appropriate. 2. In fact, some form of public notification on the processes of tendering in the public sector is currently being practiced. For example, posting tender advertisements in major newspapers, displaying a list of tenders received and opened immediately after the time but on the same day of closing of tender by the office calling the tender on their noticeboards, i.e. by listing the tendered prices in the order of the tenders being opened but without the names of the respective tenderers. 3. In some cases, and almost always in the case of open tenders for projects funded by the international funding agencies such as the World Bank, public opening of tenders is the norm. 4.In a typical public opening of a tender, the office calling the tender will announce the date, venue and time a tender is to be opened. Members of the public are allowed to observe the entire procedures of tender opening: opening the tender box, announcing names of tenderers, their tender prices and durations, bid bonds if any, etc. Students, the above notes, especially on transparency, combating corruption and public confidence in the procurement of public sector projects could form basis for your final year u/graduate dissertation projects. Interested students may see me for discussions. Wassalam.

Interest rate stays at 2%

Salam and dear all, It has been reported that Bank Negara Malaysia (BNM) is maintaining its benchmark interest rate at 2%. 1. What is benchmark interest rate? The BNM's benchmark interest rate is the basis for banks in Malaysia to decide on their lending rates. 2. In addition, BNM also reported that the country's economic situation is improving with indicators such as industrial production index and retrenchment of worker showing a slower rate of decline. 3. Furthermore, factors such as the government's stimulus package, lower costs of borrowing, lower rate of inflation are indicators suggesting that Malaysia's domestic economy is improving. 4. In the context of the construction industry (specifically on procurement) with the benchmark interest rate staying at 2% the costs of construction (business) remained low and demands for property might pick up. Wassalam. Source: http://biz.thestar.com.my, 30th July 2009.

PFI in Malaysia

Salam and dear all, On 2nd March 2009 I participated in a workshop on PFI. The workshop was organized by the Faculty of Architecture, Planning and Surveying, UiTM Shah Alam. During the workshop I was appointed facilitator for group 2 (finance). The key findings of group 2 include:

Understanding the concepts of PPP and PFI

1. Malaysia introduced ‘Privatization’ and the ‘Malaysian Incorporated’ in the 1980s. These policies are seen as the foundation of PPP in Malaysia.
2. PFI was introduced in Malaysia under the 9^th Malaysia Plan (2006-2010).
3. PPP is not a new concept for it has long been practiced before the 1980s, for e.g. the supply of electricity by a private company in Perak and the tolled Slim River to Tanjong Malim trunk road (in the 1960s and 1970s respectively).
4. The current PFI in Malaysia is considered a ‘misnomer’ for it does not transfer all risks of a project to the private sector. The characteristics of the Malaysian PFI indicate that most of the risks are still in the hands of the public sector (see the 9^th Malaysia Plan).

Answering the questions on PFI (in the Malaysian context)

1. What are the financial options?

i) Conventional banking, ii) Islamic banking, iii) bond market, iv) public issue of shares.

2. Financial sector mature and ready to handle PPP?

Yes, based on the market’s ability to fund privatization projects since the 1980s but it is the question of size i.e. how much? and the need for transparency and clear guidelines on PFI.

3. Current credit crunch affects PPP?

Yes, in terms of a potential need for more PPP kind of projects as the government may not be able to afford investing in newer infrastructures but confidence of the financial and private sectors may not be good; they might adopt the ‘wait and see’ kind of attitude.

4. Drivers of PPP in Malaysia?

Mostly the government (as seen in the 9^th Malaysia Plan) but the private sector has a fair share in initiating projects that could be delivered through PFI.

5. Government reforms / policies?

i) Clear guidelines or even law on PFI is required, ii) more transparent PFI transactions, iii) public participation and iv) capacity building (training).

6. Subsidy for the private sector to uptake PPP projects?

May be difficult to give subsidy (given the current political, economic and social environments) but some forms of longer term fiscal and monetary policies may be possible (e.g. better tax regime and cheaper costs of borrowing money).

PFI financial modeling

Aspects to be included in the model are: i) Costs i.e. construction, financing and O & M, ii) interest rate, iii) IRR, iv) duration of the concession, v) government’s assistance and guarantees, vi) public attitudes, vii) PEST, viii) unitary charges.

Acknowledgement:

UiTM, IIUM, Workshop organizer, members of group 2, speakers, facilitator and all participants.

Wassalam. p.s. I am in the midst of publishing a book entitled Understanding PFI (with specific reference to Malaysia). Insyaallah, the book will be out in September 2009.

CPI Index June 2009

Salam and dear all, According to the Department of Statistics Malaysia (http://www.statistics.gov.my) the Consumer Price Index (CPI) for the period January-June 2009 increased by 2.5% when compared with the same period last year. A summary of the movement of the main groups are:

• Notable decreases: Transport - 5.3 per cent; Clothing & Footwear - 0.8 per cent and Communication - 0.5 per cent.
• Notable increases: Food & Non-Alcoholic Beverages + 7.2 per cent and Housing, Water, Electricity, Gas & Other Fuels + 1.6 per cent. Other increases were Alcoholic Beverages & Tobacco + 8.2 per cent; Furnishings, Household Equipment & Routine Household Maintenance + 4.4 per cent; Restaurants & Hotels + 4.0 per cent; Miscellaneous Goods & Services + 3.5 per cent; Education + 2.6 per cent; Health + 2.5 per cent and Recreation Services & Culture + 1.0 per cent.

The link between CPI and the construction industry is a potential topic for a dissertation. Wassalam. Source: http://www.statistics.gov.my

Final year Dissertation, AQS4270, Part 1

Assalamualaikum and dear all,

It's time of the year again. Yes it's when our final year students start thinking about their major undergraduate projects... where we at the QS Department, IIUM call it the final year dissertation (AQS 4270).

Preparing for an undergraduate dissertation in quantity surveying at IIUM involves research that is different from a normal coursework. It is different in many ways including:

• The way the subject is defined and approached
• Size
• Duration
• Presentation, and
• Assessment (see KAED / IIUM’s rules and regulations)

Research is about making inquiry, understanding and finding answers to the world’s phenomena, etc. in an un-biased manner.

In my opinion, modern research in quantity surveying should adopt the scientific (positivism) approach and should not be speculative, philosophical or theological in nature, although one or a combination of these elements may be present / involved.

An undergraduate dissertation in quantity surveying involves inquiry, analysis and synthesis, discussion of conclusions and referencing of source material.

On the one hand, doing the dissertation is not to be taken lightly; sufficient time and effort must be allocated for its accomplishment but on the other hand, is not a task that is highly complicated as if doing it would drive one to many sleepless nights or intolerable stress.

One should select a subject that is of interest to him/her and read journal articles, proceedings, books, past years' projects, newspapers, etc in order to learn more about the subject. Talk to your lecturers, friends and seniors. Learn how to focus on specific areas of the subject.

Remember to start as early as possible and to start with reading... undergraduate dissertation is not about preparing questionnaires for a survey or complicated statistical analysis; although a questionnaire survey may become the main tool to be used in the collection of primary data and/or a form of statistical analysis may be employed to give meanings to the data collected.

Wassalam.

Reforms in construction procurement

Salam and dear all,

The government’s effort to take the economy out of the current recession includes a series of reforms in construction procurement and allocating a sum of RM67billion to fund 2 stimulus packages (RM7 billion and RM60 billion respectively). On the former, efforts related to construction procurement currently under consideration and/or are being implemented include:

• Improvement in efficiency and quality of spending through competitive bidding
• Cutting back on discretionary expenditure
• New ways to monetise Government assets which include land, buildings and facilities
• Liberalization of rules and regulations relating to the award of contracts and procurement of services such as: 1) quotation limit for goods and services is now increased from RM200,000 to RM500,000, 2) Class F contractors awarded projects under the stimulus package are now eligible to apply for payment to commence work amounting up to 10% of the contract value or a maximum of RM20,000, whichever is lower, 3) appointment of consultants and approving consultancy fees for development projects, studies pertaining to physical and non-physical projects as well as environment and land surveys works has been delegated to procurement boards and quotation committees at the respective ministries and agencies, 4) tender advertisement period shortened to 14 from 21 days previously, 5) setting up of a Project Management Unit (PMU) at the finance ministry to manage the day-to-day operational issues of project implementation.

The Finance Ministry secretary-general Tan Sri Dr Wan Abdul Aziz Wan Abdullah said that the economy may see more positive growth and recovery during the 4^th quarter of 2009 and early next year respectively.

Source: http://biz.thestar.com.my/news/story.asp?file=/2009/7/20/business/4346779&sec=business, 20^th July 2009.

Wassalam.

Students, improve your English

Salam and dear all, This post is not related to the current issue of switching the teaching of math and science back to Malay/Chinese/Tamil. Instead this post supports the calls for our students (and lecturers too) to improve their English. In his article 'Only good teachers can save our country' (The Star, 14th July 2009 available on: http://biz.thestar.com.my/news/story) Choong Khuat Hock wrote: A Jobstreet.com survey of 3,000 employers revealed that 56% said the main stumbling block when hiring fresh graduates was their poor command of English, versus 0.7% who cited poor command of Bahasa Malaysia as a difficulty in hiring. In a study of written works of 24 undergraduate construction students Sufi Khairuddin and Khairuddin (Proceedings of MiCRA 2008, pp560-569, IIUM) observed that:

• spelling error is very common,
• students failed to distinguish the differences in usage of words that have similar sounds but different meaning and application, e.g. 'sit' written as 'seat',
• syntax error is most widespread,
• students have serious difficulties in communicating their thoughts in written form.

Examples of errors:

1. ... and i felt asleep...
2. March spelled as Mac
3. ... I have to seat for the final exam...
4. ... you will accept my reason and my apologize...
5. I promise did not do the same mistake in the future...
6. ... I am failed to attend your class in evening session...
7. ...I would like to seek your apologize for not attending...
8. ...I would like to apologize you because not informing you that I've...

I hope students make use of the opportunities, while on campus, to improve their command of English. Wassalam.

Quantity Surveyors as the key advisers

Salam and dear all, The article below is taken from http://www.hbp.usm.my/HBP06/Programmes/QS/qs_transformation.htm. The original source is as indicated.

The QS transformation

01 March 2006

Ross Davies

http://www.rics.org/Builtenvironment/Quantitysurveying/Quantitysurveyors/biz_qs0306.html

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Recent years have seen quantity surveyors become the key advisers on construction and development strategy; but they must continue to reinvent themselves to remain at the top, says Ross Davies in RICS Business.

Quantity surveying? It’s a great life," enthuses Chimwemwe Lungu. "If I had to sum up in one word why I think it’s a great life, then that word would be ‘opportunity’ – opportunity to travel, opportunity to earn good money and, above all, opportunity to be involved in a great variety of projects."

Lungu is a Senior Cost Manager at Turner & Townsend. Although only 26, she has had a successful start to her career, having been named Young Achiever of the Year at December’s QS News awards. And she is already putting something back into the profession through her mentoring of APC candidates.

Quantity surveying is on a roll – a big hitter in virtually every aspect of construction management and strategic property consultancy. But this was not always the case: the profession has had to work hard over the last 30 years to achieve the elevated status that it now enjoys.

So what caused this rise in the profile and importance of the profession?

Ed Badke, Director for Construction and the Built Environment at RICS, provides a summary: "QSs were once involved mostly with the measuring and valuing of construction work being carried out under a building contract," he says.

"They were handed the architect’s drawings, advised on likely costs, drew up tender documents itemising the work to be carried out, helped to let the construction contacts, valued work as it proceeded and prepared final accounts.

"Two large changes then came about that shook up this situation," continues Badke. "Firstly, in the early 1980s, QS firms found themselves facing severe fee competition.

Secondly, their clients began looking for new ways of managing contracts." It even began to look as if the QS might no longer be needed at all.

However, quantity surveying firms set out to tackle these changes using a very proactive approach. Many chased new business overseas, for example during the construction boom in the Middle East.

And, importantly, they began to extend the range of services that they offered to clients.

At first this meant developing project management services, followed by the provision of development appraisals, lifecycle costing, facilities management and other services.

Also required was a more collaborative approach to construction and an end to the contractor’s traditional game of treating the contract sum as his starting-point and then squeezing additional money out of the work.

At the same time, clients were looking for designs that already reflected the limits of the budget, rather than waiting for the QS to point out likely cost overruns later.

The result was that the QS stepped forward, and today provides complex, solution-based services on a scale that few could have imagined.

Although QSs do still provide traditional services, this is now throughout the world, and today they service new industries and offer a wider spread of services to a wider spread of clients. This is opening up new commercial possibilities for QSs, whether working for companies, client groups, contractors or other advisory and consulting firms.

Client relations

Ronan Champion, a partner at EC Harris who has carried out an in-depth study of change in the quantity surveying profession, says that the relationship between QSs and clients has also changed dramatically.

"Thirty years ago or less, clients used to select a quantity surveyor like they used to hire a carpenter," he says. "QSs were selling their trade."

And now? According to Simon Birchall, Managing Director of Bucknall Austin: "Today we work in a world in which our customers, both in the public and private sectors, are being challenged to do more for less, and supporting them to do that is our opportunity."

Birchall explains how the QSs of today are providing clients with strategic advice at a much higher level than was previously the case: "Twenty years ago, we might be employed to advise on the cost of a single building.

"Today, the major QS firms are also being called in higher up the corporate agenda to help the client do more for less.

"That can be by advising on how best to manage the entire estate or, at the strategic level, to advise the client on how its property portfolio might be better aligned with customer objectives. Strategic advice at entire capital programme level will entail issues such as prioritising spending, whether to outsource and whether to develop buildings or to let somebody else do it and lease them."

And it is not just in providing over-arching strategic advice that quantity surveyors have developed – they have also made a number of specialised areas of practice very much their own.

Ronan Champion’s own specialism of dispute resolution is one such area. "Nowadays, QSs act for parties in adjudication and litigation support, as expert witnesses, as mediators and as court-appointed experts or arbitrators," he says.

"And they have had to up their game, too, as the courts are now concerned to see that professionals enter the market with a thorough understanding of the relevant rules and procedures, as well as sound competence in their primary profession."

Technologically minded

Joe Martin, Executive Director of RICS’ Building Cost Information Service (BCIS) has witnessed the changes to the profession first-hand. "When I came into quantity surveying", he recalls, "the architect was the kingpin, the adviser on a project, and the QS took the crumbs from his table."

But as clients’ needs grew more complex, the QS moved up the food chain to become the lead consultant. This was partly due to the fact that many architects preferred to remain as the designer rather than become the project manager, says Martin.

The QS’s principal tools have also moved on from a scale rule and the architect’s drawings to ever more sophisticated electronic information management systems.

"As a practitioner, what you are selling these days is your skill in interpreting all the new data that is available and applying it for your client," says Martin. Practitioners certainly need to keep abreast of information and IT developments in today’s world where vast amounts of information are available at the press of a button.

He says that BCIS, with its huge database of costs covering more and more areas of practice, is often there with the data before surveyors realise how useful it can be.

"A few years ago, we were pushing whole-life costing data," says Martin, "but it took the Private Finance Initiative to interest some quantity surveyors in questions like how much it will cost to clean a building in 25 years’ time."

Protecting the profession

Although he is at the leading edge of IT himself, Joe Martin counsels QSs against getting so sharp that they cut themselves.

He advises surveyors to be careful not to chase the high-end services at the cost of parting company with the procurement work that was the basis of the profession’s fortunes. "Lose that function," he says, "and it may lead to losing your foothold entirely with some clients."

And there are other sectors who also have a foothold with clients who would be only too happy to move into areas of advice that are currently the domain of quantity surveyors.

Joe Martin cites as an example the purchasing professionals who belong to the Chartered Institute of Purchasing and Supply: "They can say ‘OK, if we’re buying the plastic cups and the paper, then buying a building is just part of the same procurement process – we’ll just write a specification and send it out’.

"Any QS worth his or her salt, however, will say that, like buying an IT system, one of the biggest causes of trouble in construction is the specification, particularly if the client is unsure of what he or she wants.

"Nobody is better placed than a QS in advising a client on his or her needs, but other kinds of purchasing professionals have powerful positions in the organisations of some customers."

Other professions also represent a threat to the work of QSs, for example accountants and management consultants who offer quantity surveying services. They may employqualified surveyors, of course, but dedicated QS firms will have to compete with them for staff.

RICS’ Ed Badke also observes the threat posed by the encroachment of other professions, and says that although quantity surveyors are currently seen as being indispensable construction and strategic advisers, they will have to keep on reinventing themselves if it is to be they, and not other disciplines, who continue to find high-value services to meet the evolving needs of clients.

"QSs may have to change as much over the next 10 years as they have over the last 30 if they are to exploit the opportunities and deal with the challenges that are already taking shape," he says.

"The profession managed such a transformation when demand for the old-style quantity surveyor slackened, and they may have to manage it again."

Recruitment timebomb?

Another challenge is ensuring that sufficient numbers of high-quality new recruits continue to enter the profession. "The situation is a bomb that’s already ticking," says Rob Tovey, RICS Director of Education.

"Although from 2001 onwards the number of people taking QS and construction management courses increased dramatically, the number of graduates coming forward has yet to do more than replace the baby-boomers – those born after the Second World War who are retiring now."

With huge projects such as Heathrow’s Terminal 5, London’s Crossrail link and the Olympics in Beijing and London, the opportunities for QSs, both in the UK and overseas, are piling up.

But there is a danger that there will not be enough QSs available to exploit these. The recession of the early 1990s reduced the number of jobs and traineeships offered, and interest in degree courses faltered.

While applications for quantity surveying courses have recently shot up by more than two-thirds, and there’s more interest in RICS-accredited courses, it all takes time to feed through into a ready supply of recruits.

This could have a range of effects, from employers paying for school-leavers to graduate as surveyors to ‘offshoring’, whereby cheaper, overseas qualified staff are hired and remain based overseas rather than in the UK.

Unless and until more students qualify in construction subjects, employers will have to plug the gaps in the ranks with young graduates who did not choose such courses when they went to university.

"The way I see it, the current skills gap must make quantity surveying a very attractive career option to any school-leaver looking to go to university or graduate who could undertake a Masters conversion course," says Rob Tovey.

Turner & Townsend’s Chimwemwe Lungu feels that employers should work more closely with schools and universities to help attract more young people into the industry, including offering placements to students as part of their course.

She cites her own firm as an example: "Turner & Townsend actively works with education institutions," she says. "The firm helps to review university course content and bring a much-needed employer’s perspective.

"It is also embarking on a series of presentations to schools to promote careers in the industry to school-leavers and their careers advisers."

Quantity surveyors have come a long way in the past 30 years. Where will they be in another 30 years?

Well, if employers, universities and RICS pull together to attract sufficient numbers of new entrants, and if today’s professionals work hard to stave off competition from other sectors and continue to adapt to changing client needs then there is no reason why the profession cannot still be top of the tree in construction and development advice in the future.

It will certainly be interesting to see where the profession goes next.

This article appeared in RICS Business, March 2006.

Wassalam.

How to become a Registered QS with BQSM?

Salam and dear all, Documents published by BQSM and available on the www (please copy-paste) provide information on the procedures to be followed to enable graduate quantity surveyors to be registered with BQSM. http://www.bqsm.gov.my/bqsm/a_public/Images/pdf/route%20to%20QS(a-c).pdf http://www.bqsm.gov.my/bqsm/a_public/images/pdf/LORQ%20January%202009%20For%20Advance%20Entry.pdf Under the Quantity Surveyors Act 1967 only persons registered as quantity surveyors with BQSM are allowed to practice quantity surveying in Malaysia. Wassalam.

Observations on the current contracting scenario in Malaysia

Salam and dear all, On the basis of a presentation by one of the keynote speakers and the subsequent discussions during the recent 8th MiCRA Conference in Penang, the followings are areas considered worthy for further discussions/research:

• The contracting industry has a very large number of contractors. As of June 2008 there are 63,813 contractors registered with CIDB.
• The use of new technologies such as IBS and 'silent' piling system requires high capital investments but most contractors are unable to secure sufficient funding. On IBS for example, in the public sector the government allows contractors to provide 2 tender prices: price based on IBS and price based on conventional construction. Key issues on IBS include that not all projects can use / are using IBS therefore the use is not widespread, it is expensive to use IBS (but the trade-offs are in terms of speed of construction, quality and less dependent on labour), and the monopolistic nature of the supply of IBS technologies, parts and components.
• Contract administration is ineffective and highly inefficient. For example contractors are seldom paid on time [the delays are in months rather than days or weeks], settlement of contract accounts take years rather than months. Contractors face difficulties to finance the construction phases of projects. The requirements of the laws related to the environment are demanding but provisions in the tender/contract documents are not clear. More often than not issues related to the environments are left entirely to the contractors to sort out. Examples: the mosquito menace and dengue fever; poor health, safety and sanitation; pollution, etc on construction sites.
• It is mandatory for contractors to be registered with CIDB. In addition, for public jobs they are also required to register with the PKK. Further, most GLCs and other client organizations maintain their own system of registration. The existence of multiple registration requirements are costly and bureaucratic.
• Complains on the readiness of graduates entering the industry.

Students, especially those in the final year and are looking for topics for the final year project papers, may see me for further discussions. For other possible topics please refer to my research interests as indicated in 'view my complete profile'. Wassalam.