A new book on multi-national joint venture for construction

Salam and dear all, A new book, co-edited by me with colleagues Prof K. Kobayashi of Kyoto University of Japan, Prof G. Ofori of National University of Singapore and Prof S. Ogunlana of Herriot Watt University is now available. The book is published by Thomas Telford of London.

http://www.thomastelford.com/books/bookshop_main.asp?ISBN=9780727736512%20&BookTitle=Joint%20Ventures%20in%20Construction

Wassalam.

Special announcement on conferences in October 2009

Salam and dear all, The following conferences will be held in October 2009; 1. Inaugural Conference Construction in the Muslim World - IIUM, 21 Oct 2009 2. 5th International Conference on Multi-national JV for Construction Works - IIUM, 21-22 Oct 2009 3. 2nd CLECAP (Construction Law and Economics Circle Asia Pacific) Conference - IIUM, 23 Oct 2009.

Topic to be addressed include: 1. The state of construction in the Muslim World 2. Construction education in the Muslim World 3. Multi-national JVs for Construction Works 4. Training and education for construction experts in the Asia Pacific Region For details of the above conferences including registration and special registration rates for students (to attend either one or all three conferences) please download the brochure and registration form, now available at: http://www.constructioninthemuslimworld.blogspot.com Wassalam.

Final year Dissertation, AQS4270 Part 3

Salam and dear all, Generally, the steps to be followed are:

• Select a subject area or a topic to study (sources: published lists, self, proposed by others, past dissertations, project papers, etc)
• Approval (by supervisor – through consultations)
• Process of narrowing down the broad subject area into a specific aspect of the subject on which investigations will follow (the 'funnel' process)
• Literature review (time spent here is time saved later on). Why LR? To inform self about the subject, to up-date, etc. How? Consult books, (especially) journals, past dissertations, reports, newspapers, library search, etc. Make notes, photocopies and file them all. Do not worry about writing the initial chapters yet… read, examine, assess and make decision as to how to move forward. Benefits? The outcome of LR forms basis for the initial chapters of the dissertation and for the decisions on the methodology to be used and instruments to be employed for the research. By now, some form of method statement for the study should be available, i.e. the research questions, the structure of the dissertation and the methodology to be followed
• There should be a clear focus (if not go back to reviewing literature). You will be surprised at the amount of information you have gathered and the issues you have discovered. Sieve through the information and compile only those that provide clear indications of the problems (the research questions) and indications of availability/accessibility of data for the study
• If you have done sufficiently well thus far, you should by now be able to provide breakdown of your intended research, the refined research questions (or hypothesis) to be answered, and a much clearer method of investigation (that represents your personal input). Once these issues have been resolved, you should be able to operate with minimum supervision until completion
• The carrying out of the research: Data collection: laboratory investigation, questionnaires surveys (take extra care), interviews, systematic observations, case studies, etc.
• Analysis of data and interpretation of data
• Writing-up .... Complete.

Wassalam.

Interest rates and the construction sector: the link

Salam and dear all, In my posting on 29th July 2009 Interest rates stays at 2% students asked what does lower interest rates mean to the construction sector. The following represents my attempt at answering the question: 1. Lower interest rates means that costs of borrowing money is lower (interest rates is the most critical components of the costs of borrowing); 2. Lower interest rates also mean that returns from savings is also reduced; thus making it less attractive for people to deposit money in fixed deposits; 3. Items 1 & 2 above would (theoretically) in turn enable (more) people to borrow (more) money (although their income stays the same) and invest in properties (as owner-occupier, owner but not occupier including for the purpose of speculation). 4. But of course investing in properties is not the only option as people may want to invest in other modes such as in shares, etc. 5. The situation in 3 above would in turn improve demands for properties. 6. Increases in demands for properties would in turn enable developers to consider building new properties (or to refurbish/renovate) in order to meet the expected increases in demands. 7. The above phenomena would therefore be good for the construction sector as increases in demands for properties mean more properties would be constructed... construction activities lead to availability of jobs for workers and professionals, demands for construction materials, plant and equipment, etc. 8. But of course there are other factors that must be considered such as economic cycles, taste and preference, government policies, etc. Students should refer to basic texts on economics, property investments, etc or talk to your economics lecturers. Wassalam.

On knowledge content in construction

Salam and dear all, According to the Economic Planning Unit (EPU) knowledge content refers to the sum of human capabilities, leadership assets and experience, technology and information capital, collaborative relationships, intellectual property, information stocks and capabilities for shared learning and utilization that can be used to create wealth and foster economic competitiveness. In a Knowledge Content Study carried out in 2007 by the EPU they found that capacity for industries in Malaysia to generate new knowledge content continues to be low. The study identified the constraints being financial and lack of English speaking workers;

• Agriculture sector - limitations in financial and English speaking workers,
• Transport equipment and automotive sectors - limitations in ICT and skills,
• Telecommunications sector followed by the IT and chemical industries have the highest knowledge content,
• Agriculture, followed by the wood products and the construction sectors have the least knowledge content.

The study proposed measures to improve knowledge content;

• Upgrade skills training programme,
• Promote sector specific training programme for SMEs,
• More university-industry linkages... and in R&D.

In relation to the construction sector the findings are expected given the state of the construction sector: continuous dependence on foreign workers, low level utilization of capital, lack of R&D, very low level university-industry linkages, etc. Key players and stakeholders of the construction sector need to do more in order to move construction forward. Universities and the industry must work together to find newer ways of doing things, we need to change our mindsets, etc. Wassalam. Source: The New Straits Times, 27th August 2009, Biznews, pB4.

On claim, variation and re-measurement

Salam and dear all, Below is the press statement made by the Chairman of Port Klang Authority relating to the on-going issues on the PKFZ (taken from http://thestar.com.my/news/story.asp?file=/2009/8/11/nation/4495739&sec=nation, 11th August 2009). For students taking AQS 4152 the keywords are Quantity Surveyor and claims; AQS 3152 Quantity Surveyor, variations, re-measurement. THE members of Port Klang Authority (PKA) had a meeting this morning to deliberate on the report submitted by the Special Task Force set up on June 10, 2009 to look into the legal financial aspects of PKA and PKFZ following the release of the report by PricewaterhouseCoopers Advisory Services (PwCAS).

The members require more time to consider in detail the lengthy report by the Task Force but in the meantime have taken the following decisions.

The board has decided that the Quality Surveyors in the Task force continue to re-measure the value of the works performed by Kuala Dimensi Sdn Bhd (KDSB) in order to establish the real sum owing to the main developer. Presently, they have already identified a difference of at least RM93mil between the claims made by KDSB and their measurements. We believe there will be further differences in the re-measurement exercise.

We also deliberated on the instances of possible serious irregular claims, negligence, wrongdoings, and other irregularities identified, as well as the issue of the unenforceability of certain agreements on parts thereof. They include:

1. Evidence that the main developer had possibly made seriously irregular claims under the development Agreements, in particular, for the electrical infrastructure of the 33kv system worth RM55.8mil which have yet to be carried out on site, 33kv supply works and the civil infrastructure to PMU works worth RM83mil as TNB has rejected the proposal for KDSB to undertake the 33kv infrastructure and supply works.

2. In respect of claims for preliminaries of at least RM231mil under the Developmental Agreements, KDSB has not provided any documents to support the cost incurred as preliminaries.

KDSB should prove that each item in the breakdown of preliminaries was necessary and properly incurred before it is entitled to make a claim for it.

KDSB has also made claims for items which they are not contractually entitled to, for instance, claim for procurement of a performance bond and payment for insurance premiums, both totalling RM5mil.

3. In respect of KDSB’s claim for the variation works of RM62mil under ADW and NADW, there appears to be no basis for these claims and KDSB should justify this.

4. There appears to be an over-claim for the hotel works, wherein KDSB had claimed RM69.6mil compared to QS4’s valuation of RM44.7mil.

5. In respect of claims for professional fees, under development Agreement 3 (DA3), KDSB is only entitled to the actual fee and expenses incurred.

KDSB has not produced any invoices and payment vouchers for RM121.6mil of the fees allegedly incurred. In any event, the sum claimed by KDSB appears to be on the high side given the nature of the project.

6. KDSB may not be entitled to claim the sum of RM254.9mil as a claim for extra under DA3 because the purported revised works fall within the original scope of the envisaged under LA1 and not DA3 under which it claimed.

The board is very concerned that the amount in dispute totals hundreds of millions.

The board is considering the commencement of appropriate legal action against various parties.

Since there may be instances of irregular claims and taxpayers money involved the Board has authorised me to make a police report at the Klang police station tomorrow morning at 11am so that appropriate investigations are undertaken.

We will make further announcements from time to time.

1. My interest in this posting is purely academic: to expose students to the services of quantity surveyors, parties and issues that they could be dealing with.

2. Audit report on the PKFZ was made public on 28th May 2009 (see for example The Star 28th May 2009).

3. See also Bernama reports (http://www.bernama.com/bernama/v5/newsbusiness.php?id=431766 10th August 2009:

Kuala Dimensi Sdn Bhd, the turnkey developer of Port Klang Free Zone (PKFZ), is appealing to the public at large not to come to any conclusion on the PKFZ issue. This is in view of the company not being given the opportunity to rebut or defend any findings by the Special Task Force set up to investigate the legal and financial aspects of the project. Its deputy chief executive officer, Datuk Faizal Abdullah said Monday, during the two months when the task force was commissioned, Kuala Dimensi was never once called upon to rebut or defend any findings made by the task force. These reports and findings were made unilaterally, he said in a statement. Denying possible fraud, negligence, wrongdoings and irregularities identified, he said the allegations were unjust on their part without taking into consideration Kuala Dimensi's good reputation built over the years... Wassalam.

Special Announcements: Procurement Conferences in October 2009

Salam and dear all, The Procurement and Project Delivery Systems Research Unit (PPDSRU), IIUM will be hosting the following events in October 2009, insyaallah.

1. Inaugural Conference, Construction in the Muslim World (CMW), 21st Oct 2009 (1/2 day event).
2. 5th International Conference, Multinational JVs for Construction Works, 21st to 22nd October 2009 (in association with Kyoto University Graduate School of Engineering).
3. 2nd Construction Law and Economics Circle, Asia Pacific or CLECAP Conference, 23rd October 2009 (in association with Kyoto University Graduate School of Management).

Experts from Malaysia and elsewhere will be speaking on the state of construction in the muslim world, international multi-national JVs for construction works, construction law training, education and in practice, etc. As the organizer (in association with our partners) PPDSRU is putting together an attractive package (registration fees, proceedings, meals, etc) for students and others to attend all 3 events. Those interested to submit a paper please do so on or before 30th August 2009. Brochures calling for participants with details of all 3 events will be out soon and the conferences' websites are being updated (see Journal and Conferences announcements section of this blog). Students interested in helping with the organizing of the conferences or participating in the conferences may see me soonest possible. Aspects related to the courses AQS54152, AQS3152, AQS3140 etc are going to be touched / discussed during the conferences. CPD points (pending approval) and certificate of attendance will be given to all participants. Wassalam. Prof. Sr. Dr. Khairuddin Abdul Rashid. Head PPDSRU Chair Inaugural CMW Conference Co-Chair, 5th International Multinational JVs for Construction Works Co-Chair, CLECAP

Standard code for quantity surveying

Salam and dear all, The call made by the Board of Quantity Surveyors Malaysia and the Institution of Surveyors Malaysia to establish a central product classification or CPC code (see NST, 7th August 2009, Biznews B9) is commendable; but in so far as the quantity surveying profession is concerned is long overdue. Given that demands for quantity surveying services are on the rise in Malaysia and elsewhere, and liberalization of the world's economy continues; the need for quantity surveyors, cost engineers, construction economists and the likes to establish a common platform such as the CPC code when dealing with matters related to their professional services at national and international levels and when dealing with colleagues from the allied professions is considered critical. In addition, having such a CPC code would facilitate getting the services of quantity surveyors to be recognized formally by national and world bodies; the latter includes the United Nations, WTO, etc and this in turn would facilitate compilations of data on type of services offered, value and other related statistics. Wassalam.

On A(H1N1)

Salam and dear all, The following FAQs, taken from the WHO (http://www.who.int/csr/disease/swineflu/frequently_asked_questions/what/en/index.html), would assist us in good personal hygiene and insyaallah help curb the spread of A(H1N1). "What can I do? Updated 11 June 2009 What can I do to protect myself from catching influenza A(H1N1)? The main route of transmission of the new influenza A(H1N1) virus seems to be similar to seasonal influenza, via droplets that are expelled by speaking, sneezing or coughing. You can prevent getting infected by avoiding close contact with people who show influenza-like symptoms (trying to maintain a distance of about 1 metre if possible) and taking the following measures:

• avoid touching your mouth and nose;
• clean hands thoroughly with soap and water, or cleanse them with an alcohol-based hand rub on a regular basis (especially if touching the mouth and nose, or surfaces that are potentially contaminated);
• avoid close contact with people who might be ill;
• reduce the time spent in crowded settings if possible;
• improve airflow in your living space by opening windows;
• practise good health habits including adequate sleep, eating nutritious food, and keeping physically active.

What about using a mask? What does WHO recommend?

• If you are not sick you do not have to wear a mask.
• If you are caring for a sick person, you can wear a mask when you are in close contact with the ill person and dispose of it immediately after contact, and cleanse your hands thoroughly afterwards.

When and how to use a mask?

• If you are sick and must travel or be around others, cover your mouth and nose.
• Using a mask correctly in all situations is essential. Incorrect use actually increases the chance of spreading infection.

May Allah swt shower us with His blessings for our effort, insyaallah. Wassalam.