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C O N S T R U C T I O N

THE MAGAZINE FOR EUROPE’S CONSTRUCTION INDUSTRY www.construction-europe.comww.constru

GPSp35

Demolition & recyclingp43

Roadbuildingp27

A KHL Group publication December 2014-January 2015 Volume 25 Number 10


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CONTENTS

CONSTRUCTION EUROPE DECEMBER 2014JANUARY 2015

EDITOR Sandy Guthriee-mail: [email protected] tel: +44 (0)1892 786234DEPUTY EDITOR Neill Barston

e-mail: [email protected] tel: +44 (0)1892 786211EDITORIAL DIRECTOR Paul Marsden BSc EDITORIAL TEAM Lindsey Anderson, Alex Dahm, Lindsay Gale,Laura Hatton, Cristián Peters, Murray Pollok,D.Ann Shiffler, Chris Sleight, Euan Youdale

LAW & CONTRACT CORRESPONDENTVirginie Colaiuta

CECE REPORT Produced in co-operation with theCommittee for European Construction

Equipment

FIEC REPORT Produced in co-operation with theEuropean Construction IndustryFederation

PUBLISHER James King

PRODUCTION ANDCIRCULATION DIRECTOR Saara Rootes

PRODUCTION MANAGER Ross Dickson

e-mail: [email protected] tel: +44 (0)1892 786245

DESIGN MANAGER Jeff GilbertDESIGNERS Gary BrinklowGrace Pullinger

PRODUCTION ASSISTANT Louise Kingsnorthe-mail: [email protected] tel: +44 (0)1892 786246

SUPPORT SERVICES

Julie Wolstencroft

FINANCIAL CONTROLLER Paul BakerFINANCE DEPARTMENT Gillian MartinCREDIT CONTROL Josephine Day e-mail: [email protected] tel: +44 (0)1892 786250

BUSINESS DEVELOPMENTDIRECTORPeter Watkinson BA (Hons)

OFFICE MANAGER/ EVENTS COORDINATOR

Clare Grante-mail: [email protected] tel: +44 (0)1892 784088

CIRCULATION MANAGER Helen Knighte-mail: [email protected] tel: +44 (0)1892 786244

KHL TEAM

ADVERTISEMENT MANAGER David Stowe, UK Head OfficeDirect tel: +44 (0)1892 78 [email protected] Collett, UK Head OfficeDirect tel: +44 (0)1892 [email protected] PearmanTel: +33 1 45 93 08 [email protected] Fabio Potestà Tel: +39 010 570 [email protected] Posener, UK Head OfficeDirect tel: +353 86 043 [email protected], FINLAND, DENMARK, NORWAYPeter GilmoreTel: +44 (0)20 7834 [email protected] Emre ApaTel: +90 (0)216 302 [email protected]

GERMANY, AUSTRIA,SWITZERLAND, BENELUX ANDEASTERN EUROPESimon Battersby, UK Head OfficeDirect tel: +44 (0)1892 [email protected] Yao Tel: +86 10 6553 [email protected]

JAPANAkiyoshi Ojima Tel: +81 (0)3 3261 [email protected] ParkTel: +82 2 730 [email protected]/CANADAMatt BurkTel: +1 312 929 [email protected]

Jonathan CerveroTel: +1 312 929 3247

[email protected] Williams Tel: +1 312 680 [email protected]

MEMBER OF

ISSN 0964–0665© Copyright KHL Group 2014

Volume 25 Number 10 DEC 2014-JAN 2015

C O N S T R U C T I O N

Official publication date is the 15th of each issue month. Subscriptionrates for 1 year: £140, €180, US$250. Subscription rates per single copy:£14, €18, US$25. For further information please visit www.khl.com

Circulation audited by BPA Worldwide

NEWS & BUSINESS 4

WORLD NEWS 9

FINANCE & CE BAROMETER 15

LAW & CONTRACT 19

FIEC

21

CECE

22

EFCA 25

INTERVIEW 51

EQUIPMENT 53

SUBSCRIPTIONS 56

ON THE COVER

GOMACO‘s next

generation

Commander III.

See Roadbuilding

on p27

REGULARS C O N S T R U C T I O NTHEMAGAZINE FOREUROPE’S CONSTRUCTIONINDUSTRY www.construction-europe.com’ Y www.constru tit

GPSp35

Demolition& recyclingp43

Roadbuildingp27

A KH LGr oup pu bli cat io n D ecem ber 201 4- Jan uar y20 15 Volume25Number10

I N T H I S I S S U E

The paper in this magazine originates from timber that is sourced from sustainable forests, managed to strict environmental, social,and economic standards. The manufacturing mill has both FSC & PEFC certification, and also ISO9001 and ISO14001 accreditation.

KHL OFFICESUNITED KINGDOM HEAD OFFICEKHL Group LLCSouthfields, Southview Road, Wadhurst, East Sussex TN5 6TP.Tel: +44 (0)1892 784088 Fax: +44 (0)1892 784086 e-mail: [email protected]/ce

AMERICAS KHL Group Americas LLC

3726 East Ember Glow Way, Phoenix, AZ 85050, USA.Tel: +1 480 659 0578 Fax: +1 480 659 0678 e-mail: [email protected]

CHINA KHL Group ChinaRoom 768, Poly Plaza, No.14, South Dong Zhi Men Street,Dong Cheng District, Beijing 100027, P.R. China.Tel: +86 10 6553 6676 Fax: +86 10 6553 6690 e-mail: [email protected]

KHL SALES REPRESENTATIVES

ROADBUILDING 27

As road projects around Europe appear

to be growing in number, leading

manufacturers are producing a new

generation of machines to meet the

needs which will follow. Chris Sleight and

Sandy Guthrie investigate some of the

latest introductions

GPS 35

With GPS bringing many advances

in site processes for the construction

industry, wider European satellite

programmes hold the potential for

valuable commercial use. Neill Barston

takes a look at what the technology has

to offer

DEMOLITION & RECYCLING 43

Using one carrier for a number of

different front ends is an idea beingexplored by research and development

teams. Lindsay Gale, editor of CE ‘s

sister magazine Demolition & Recycling

International , and Sandy Guthrie look at

the possibilities

FEATURES


5/614 CONSTRUCTION EUROPE DECEMBER 2014JANUARY 2015

NEWS

2015World of Concrete

February 3 - 6, 2015

Las Vegas, US

www.worldofconcrete.com

Executive Hire Show

February 11-12, 2015

Coventry, UK

www.executivehireshow.

co.uk

Demolition Conference

Turkey

March 12, 2015

Istanbul, Turkey

www.khl-group.com/

events/demolition-

conference-turkey

Intermat 2015

April 20 - 25, 2015

Paris, France

www.intermat

construction.com

International Tower

Cranes Conference

May 27-28, 2015

London, UK

www.khl.com/itc

Plantworx

June 2 - 4, 2015Bruntingthorpe, UK

www.plantworx.co.uk

CTT 2015

June 2-6, 2015

Moscow, Russia

www.ctt-moscow.com

Bauma ConExpo Africa

September 15 - 18, 2015

Johannesburg, S Africa

www.bcafrica.com

ICEF – InternationalConstruction

Equipment Forum

November 2-3, 2015

Amsterdam, NL

www.icef.biz

EVENTS DIARY Mexican billionaire hastaken control of FCCCarlos Slim takes over from Esther Koplowitz as majorshareholder in Spanish-based contractor

Mexican billionaire Carlos Slim has taken control

of Spanish construction and infrastructure

group FCC, having agreed a deal with B 1998,

the company through which Esther Koplowitz previously

held 50.02% of the company.

Slim was at one point regarded as the richest person

in the world, and the deal was made through Control

Empresarial de Capitales SA de CV, which belongs to his

family.

A €1 billion increase in equity at FCC, with new shares

subscribed at a price of €7.5 per share, has been approved

by its board – equal to 133,269,083 new shares.FCC said the pre-emptive subscription rights to which

current shareholders are entitled would start to take

effect once the Spanish National Securities Market

Commission (Comisión Nacional del Mercado de Valores,

CNMV) had approved the documents relating to the

issue. The subscription ratio means 41 current shares

entitles the holder to subscribe 43 new shares.

Approval by the FCC board came after B 1998 agreed

the deal with Control Empresarial de Capitales SA de

CV. This involved the sale of its subscription rights in the

capital increase, which was equal to half.

The capital increase was said by FCC to represent the

culmination of its financial and operational stabilisation

process and the start of a new phase focusing on

operational profitability and renewed growth, particularly

for its environment and water businesses.

With the funds attained through the capital increase,

FCC said it hoped to bolster its equity situation, reduceits debt and improve its results by substantially reducing

its financial burdens.

Esther Koplowitz, often said to be the wealthiest

woman in Spain, is the daughter of the founder of FCC.

The board of directors of FCC is chaired by her daughter,

Esther Alcocer Koplowitz. ce

Juncker’s plan to kick-start Europe Transport infrastructure

is a key part of a new

European Fund forStrategic Investments

(EFSI) announced this

week by European

Commission President

Jean-Claude Juncker.

Presenting his

Investment Plan for

Europe at the European

Parliament in Strasbourg,

he said the €315 billion in

investment over the next

three years was designed

“to get Europe growing

again and get morepeople back to work”.

Juncker said, “If Europe

invests more, Europe will

be more prosperous and

create more jobs – it’s as

simple as that.

“The Investment Plan

we are putting forward

today in close partnershipwith the European

Investment Bank (EIB)

is an ambitious and

new way of boosting

investment without

creating new debt. Now

is the time to invest in our

future, in key strategic

areas for Europe, such

as energy, transport,

broadband, education,

research and innovation.”

He added, “I am now

counting on the EuropeanParliament and on

Member States to pitch in

and do their part to get

the new European Fund

for Strategic Investments

up and running as soon

as possible. Europe needs

a kick-start and today we

are supplying the jump

cables.”

He emphasised that

the money came on

top of European Union

programmes like theConnecting Europe

Facility.

FIEC (the European

Construction Industry

Federation) welcomed

the creation of the EFSI.

Johan Willemen, FIEC

president, said, “Even if

we could argue aboutthe amount of EU budget

and EIB money initially

mobilised in this fund,

this is not the point

today. The creation of

this leverage instrument

is very good news and a

very good signal for EU

and international private

investors.”

He added, “Moreover,

President Juncker is

absolutely right to target

long-term investment

for key EU infrastructure

projects on one hand,

and financing for SMEson the other. These two

priorities are very high on

FIEC’s agenda, as we have

stated in our manifesto

for action for the EU term

2014 to 2019.”

He added that in

addition to these two

priorities, projects in the

field of energy efficiency

should not be forgotten,

as they represented an

essential link to EU energy

and climate policy. ce

Juncker, “If

Europe invests

more, Europe

will be more

prosperous”


6/615CONSTRUCTION EUROPE DECEMBER 2014JANUARY 2015

NEWS

A major €100 million contract has

been awarded to BAM as part of an

initial phase of the £1 billion (€1.24

billion) North West Cambridge

development. The project, which

includes the creation of 352 homes for

Cambridge University staff and key

workers, will form the first element of

a new community named Eddington.

It will feature a range of retail units,

doctors’ surgery and the preliminary

works for an energy centre serving

the site. Work on the development– designed by Wilkinson Eyre and

Mole architects – is expected to start

this autumn, after winning planning

permission earlier this year. It is due

for completion in 2017.

■ PPP OFFER

Balfour Beatty has

rejected a bid for

its public-private

partnership (PPP)

portfolio made by John

Laing Infrastructure

Fund (JLIF) saying the

£1 billion (€1.26 billion)

fell significantly short

of its own view of the

value of the portfolio.

The UK contractor’s

directors’ valuation of

the PPP portfolio stood

at £1.05 billion (€1.33

billion), as at 28 June,

2014. However, it said

the group’s targeted

approach to sellingindividual assets as each

investment matured,

combined with the

current and expected

future strength of the

market, led the board

to conclude that the

realisable value of the

PPP portfolio continued

to be substantially more.

■ DREDGING UP

Boskalis Westminster

has raised its full-yearprofit outlook to €450

million in the wake of

major deals including

work on expanding the

Suez Canal. The Dutch-

based dredging and

maritime infrastructure

company’s latest trading

update confirmed

its order book had

increased to a total of

€3.3 billion. Its earlier

forecasts had been for

at least €366 millionprofit for 2014, but the

completion of a number

of existing projects had

enhanced its finances

further.

■ PROFIT RISE

Third quarter results

from French industrial

firm Bouygues have

shown an increased

year-to-date net profit

standing at €728 million.

This compared to €548million for the same

period for last year, with

its figures bolstered

by a 1% growth in

overall sales to €24.2

billion. The company’s

construction order

book also stood at a

€27.44 billion, which

was comparable to

its 2013 year-to-date

results of €27.42 billion.

It said that maintaining

a diverse portfolio of

construction activities

had been significant in

producing a relatively

stable performance in

spite of challenging

domestic conditions.

■ CEMENT SALE

Materials producer CRH

is reported to have

sold its stake in Turkishcement business, Denizli

Cimento, to Oyak Group.

The sale to the Turkish

conglomerate is said

to be valued at some

US$400 million (€320

million). It is speculated

that CRH is building up

its finances for future

acquisitions, possibly

the assets being put up

for sale as part of the

Lafarge-Holcim merger.

CRH’s involvement withDenizli Cimento dates

back to 2007. At that

time, the company

bought a 50% stake in

the business, which is

based in south-western

Turkey, from the other

partner in the business,

Eren Holdings.

■ OFFSHORE BOOST

Van Oord has acquired

Ballast Nedam Offshore

and will integrate itinto its Offshore Wind

Projects business

unit, saying it would

strengthen its leading

position in the north

west European offshore

wind market. The

acquisition consists of

the assets of Dutch-

based Ballast Nedam

Offshore, the dedicated

EPCI (engineering,

procurement,

contracting andinstallation) staff, heavy

lift installation vessel

Svanen and the 144MW

Westermeerwind

project.

BUSINESS NEWS

EBRD puts €40 million intofacility to support PPPs

The European Bank for Reconstruction & Development (EBRD) has created a €40

million Infrastructure Project Preparation Facility (IPPF).

This dedicated unit within the bank will prepare projects in line with EBRD policy

objectives, while providing expertise on public private partnerships (PPPs) and

commercialised projects for the bank’s clients.

The move follows a recent statement by the EBRD and seven other multilateral

infrastructure financers to the effect that infrastructure investment around the

world was lagging, not because of lack of funds, but because of a lack of viable and

well-prepared projects.

EBRD managing director for infrastructure Thomas Maier said, “Simply put, the

dearth of investment-ready projects has led to a widening gulf between what is

required and what is delivered. While infrastructure problems are global, solutions

are local.”

The IPPF’s objective is to improve the efficiency and replicability of infrastructure

projects for its clients and will be operated over an initial three-year period from

2015 to 2017. It is also hoped the IPPF will improve the quality of preparation

through consistent, market-proven structures that both the public and private

sectors will support. ce

New CEO at Hyundai EuropeA new chief executive

has been appointed at

Hyundai Heavy Industries

Europe – JC Jung has

been chosen to replace

SG Rhee, who has been

promoted to a position at


Korea.

Jung, formerly globalsales director for forklifts

in Korea, moves to the

European headquarters of


in Geel, Belgium.

He began his career as

an industrial engineer at

Hyundai.

He is now responsible

for both Hyundai

forklifts and the Hyundai

construction equipment

operation in the whole of

Europe.

One of Jung’s first

assignments will be to

launch the new Tier 4/

Stage IV-compliant range

of Hyundai excavators,

wheeled loaders and

forklift trucks into the

European market – the

first territory to launch

the new series.

He said, “In Europe,

some potential customers

have strong brand

preferences, and although

Europe is a highly

competitive, saturated

market, even their growth

can be realised for a

relatively new brand like

Hyundai.” ce

Jung to replace Rhee



NEWS

English road boostfrom government

€19 billion package is announced toincrease capacity and condition of roads

A £15 billion (€18.92 billion) plan which would triple levels of spending by the

end of the decade to increase the capacity and condition of England’s roads, has

been announced to Parliament in London.

The government said it was investing in more than 100 road schemes over this

parliament and next, 84 of which were said to be brand new. Nearly 2,100 new lane km

will be added over the next parliament on motorways and trunk roads.

The plans are published in the first ever Road Investment Strategy. They include £1.5

billion (€1.89 billion) of investment to add an extra lane onto key motorways to turn

them into smart motorways, which the government said would boost connectivity

between London, Birmingham, Manchester and Yorkshire.

Transport Secretary Patrick McLoughlin said, “Spending during the next parliament on

England’s roads network will be boosted further by maintenance funding worth morethan £10 billion (€12.61 billion) across the local and national road network.”

New projects will include a commitment of £2 billion (€2.52 billion) to make the entire

A303 and A358 to the south west of England dual carriageway, including a tunnel at the

Stonehenge prehistoric monument. ce

ICEF sponsors sign upVolvo Construction

Equipment has been

confirmed as a gold

sponsor and Liugong is

a silver sponsor for the

International Construction Equipment Forum (ICEF),

which takes place in Amsterdam, the Netherlands

from 2 to 3 November, 2015.

The event, organised by KHL, is a global meeting

place for buyers and users of construction equipment

and will include conference sessions, presentations

and panel discussions looking at the latest trends

and issues for equipment users worldwide.

A series of high-profile speakers have already been

confirmed for the event, including Scott Hazelton,

managing director of construction and industry

practices at IHS Global Insight; Anna Hyvönen,

executive vice president for Finland and Balticsat Ramirent; Carl Lockwood, senior vice president

for strategy and business development at Volvo

Construction Equipment; Michiel van Ramesdonk,

vice president for global fleet customer accounts

at De Lage Landen; Alex Schuessler, founder of

SmartEquip; and Nicolas Thizy, system application

specialist at Caterpillar.

The conference content will include presentations

and panel discussions on whole-life costing,

maintenance strategies and maximising residual

value, and the balance between equipment

ownership and outsourcing. Other topics will

include market trends and global opportunities for

equipment owners and users, technology trends,including machine control and telematics, fleet

management tools and strategies, equipment

financing strategies. The implications of regional

regulations (engine emissions) and global standards

will also be discussed.

In addition, the ICEF Awards will recognise

excellence in products, corporate performance and

individual dedication across the global construction

equipment industry. Entry forms can be downloaded

from the ICEF website.

ICEF 2015 will build on the already successful CEWEF

event, which was acquired by KHL from its founder,

mobile equipment technology

manufacturer, Groeneveld Group,which remains a key partner for ICEF.

For full details of ICEF, visit www.khl.

com/icef or scan the QR code.

KHL.COM

This month’s podcast for Construction Europe

will be available online within a few days of the

magazine’s publication. To listen, go to:

www.khl.com/audio-podcasts

Chernobyl jacking work finishes

JCB’s fastest backhoe loader

Novarka, a 50:50 joint

venture between Vinci

and Bouygues, has

completed jacking work

on the new connement

structure for the No 4reactor at the former

Chernobyl nuclear power

plant in Ukraine.

The reactor went

into meltdown on

April 26, 1986, and was

subsequently encased in

a concrete sarcophagus.

The new structure

comprises two semi-

arches, each of which

has undergone three

jacking operations since

November 2012. Thisfollowed remediation

work, excavation

and construction of

foundations at the

assembly area located

adjacent to No 4 reactor.

The next stage ofconstruction will

involve connecting

the two halves of the

connement structure

together, installing

ventilation, power supply

and control-command

systems and then

pushing the connement

structure over the

current sarcophagus.

Final placement of the

structure is due in 2017.

Following that, the sidewalls of the arch will be

installed, and other work

will be undertaken on

the structure to isolate

the reactor from the

outside environment.

This is scheduled forNovember 2017, and

completion of the new

structure will then allow

the existing No 4 reactor

sarcophagus to be

dismantled.

The project is nanced

by the Chernobyl Shelter

Fund, administered by

the European Bank for

Reconstruction and

Development (EBRD)

involving 43 donor

governments andorganisations. ce

JCB has beaten the

world record for the

fastest backhoe loader

in the world with its JCB

GT – originally designed

to perform high-speed

wheelies at racing events

– clocking 116.82km/h in

Australia.It has been confirmed

by Guinness World

Records as a new record.

JCB demonstration

driver Matthew Lucas

– nicknamed The Dig

during the attempt – was

the man who steered the

JCB GT to its world record

title.

The JCB GT that first

made its debut in 1988

was made of fibreglass

and aluminium and

powered by a V8 Chevvyengine. Normally based at

JCB’s world headquarters

in Staffordshire, UK, the

latest JCB GT has a loader

and excavator end made

out of aluminium. ce

Lucas and the

record-breaking

JCB GT


8/61

TO U G H W O R L D. TO U G H E Q U I PM E N T.www.liugong-europe.com

faceb ook.com / liugo nge uro pe

TOUGH WORLD TOUGH EQUIPMENT

LiuGong has been selling machines in Europe for

more than seven years. In June 2012 LiuGong

in the region.

LIUGONG FACTS

CONTACTUS OR OURDEALERS>>>


9/61



WORLD NEWS

MAURITIUS

A joint venture between Austria’s Stabag and

Greek harbour specialist Archirodon has won the

€90 million contract to extend the container port

at Port Louis, Mauritius. The project will be carried

out in four phases to allow the harbour to remain

operational while work is going on. Phase 1 will see

a new 244m berthing quay built on the sea bed,

following foundation work to construct a combi-wall

of tubular steel piles and sheet piles. The first phase

also includes the construction of corresponding

concrete structures, quay facilities, and the relocation

of three container cranes.

AZERBAIJAN

Bouygues Construction has signed its first civil

engineering contract in Azerbaijan. Its subsidiary

Bouygues Travaux Publics will carry out the €147

million contract to separate the red and green lines

of the Baku metro system at the 28 May station. The two lines currently share the same platform.

Bouygues Travaux Publics will construct two caverns

at a depth of 25m around the existing tubes, which

will make it possible to build the new tunnels.

CHINA

Sandvik Construction said it was targeting a 20%

growth in sales in China next year. The challenging

target was announced by Sandvik Construction

president Dinggui Gao at the Bauma China 2014

exhibition, which ran from 25 to 28 November.

The company said that despite an overall “flat”

construction market in China, it was confident that

it could achieve its 20% target through expansionin key sectors over 2015, including crushing and

screening.

SAUDI ARABIA

Liebherr has won the contract to supply four HC-L

series tower cranes to the Kingdom Tower project in

Jeddah, Saudi Arabia. Three 280 HC-L 16/28 cranes

and one 357 HC-L 18/32 Litronic will be supplied to

the project, with jib lengths of 40 to 45m and lifting

capacities of 11 to 12 tonnes at a radius of 35m. The

280 HC L luffing cranes will be used to build the side

wings of the Kingdom Tower, with hook heights

reaching some 400m. The 357 HC-L will be on the

main tower, with a hook height of some 1,000m.

NIGERIA

China Railway Construction Corporation (CRCC) has

won the US$12 billion (€9.79 billion) contract for

construction of the Nigerian Coastal Railway Project.

The 650km route will run between Calabar in the

East of the country to Lagos in the West, via Port

Harcourt, Warri and Benin City. CRCC says the project

is equivalent to 1,402km of single track railway.

INDIA

The Asian Development Bank (ADB) has approved a

US$350 million loan (€285 million) to upgrade district

roads in India’s Madhya Pradesh state. These fundswill cover 70% of the project cost of US$500 million

(€407 million), with the state government providing

the balance of US$150 million (€122 million). The

project – due to be completed in 2018 – will see the

upgrading of some 1,600km of major district roads.

WORLD IN BRIEF

According to the organisers of the Bauma China exhibition, numbers were up 8%

to 191,000 across the four days of the show – despite the ongoing downturn

that has hit the Chinese construction market.

This figure topped the previous attendance in 2012 of 180,000 for the event held at

the Shanghai New International Expo Centre (SNIEC). It was the seventh time the event

has been held since its launch in 2002.

The team behind the show – which attracted, 3,100 exhibitors – has been quick to

quash rumours that this year’s event would be the last held at the venue, which is not

the case.

This was underlined with a new date of November 22 to 25, 2016, being set for the

next show in Shanghai.Among the stories from the event were new product launches from a number of

major manufacturers. This included Volvo Construction Equipment, SDLG and Liebherr,

that each exhibited new products at Bauma.

One of the headline releases included the first viewing of a new 50 tonne loader

from Liugong.

There were also new engines on show from many companies including Cummins,

Perkins and Deutz – which celebrated a milestone of 150 years of manufacturing at

the event.

Organisers Messe München said the 191,000 visitors came from 149 different

countries, and the number of international visitors was up 12%. After China, the top ten

visitor countries and regions abroad were Russia, Korea, Japan, India, Malaysia, Thailand,

Singapore, Taiwan, Hong Kong and Indonesia. ce

CHINA

Bauma show sets newattendance recordShanghai will remain venue for next show intwo year’s time, despite rumours to contrary

CHINA

Call for greater focus on healthand safety in construction

those that had been

in discussion with the

Chinese government on

delivering advances in

industry best practice.

He said that while

progress has been made

in recent years, therewas still considerable

work to be done

to deliver greater

legislation to achieve

safer construction sites

amid a series of “mega

projects” taking shape in

the region.

Lousberg said, “As

the largest company

operating here, I think

we in fact have a moral

obligation to lead on

health and safety, andto help the government

understand what other

countries have gone

through to improve their

work at height safety

rules.” ce

The forecast growth in

China’s construction

sector must be matched

by an increased focus on

improving health and

safety standards within

the industry, delegates at

this year’s InternationalRental Conference (IRC)

Asia heard.

That was the view of

Terex China president

Ken Lousberg, who said

the company was among



WORLD NEWS

PARAGUAY

The Inter-American Development Bank (IDB) has

approved a US$105 million (€85.6 million) loan to

finance the paving of a key route in Paraguay. The

San Juan Nepomuceno-Empalme Ruta Nacional

No 6 links the Departments of Caazapá, Itapúa and

Alto Paraná and the country‘s main river ports. The

scheme will see the construction, improvement

and paving of 84.7km of main roadway and 4.8km

of access roads. It includes a land registry and

the review of final engineering designs, including

adjusting the designs to technical criteria and

standards for road safety.

VENEZUELA

Holcim has received the final US$95.7 million (€77

million) compensation payment from Venezuela,

following the expropriation of its businesses in the

country in August 2008. The payment, the final

instalment in the total of US$650 million (€537million) compensation, had been due in September.

Holcim reported in October that it had not received

the funds. The payment relates to the forced

nationalisation of Holcim’s Venezuelan business in

August 2008. Following arbitration, the Venezuelan

government agreed in 2010 to pay €537 million

in compensation. This comprised an initial sum

of US$260 million (€212 million) and four annual

instalments of US$97.5 (€79 million).

GLOBAL

Volvo Construction Equipment has launched the

first in a series of engine conversion kits that allow

Volvo customers to resell their Tier 4 Interim/Stage IIIB machines outside the EU and US. Exhaust

aftertreatment systems on Stage IIIB and Tier 4

Interim engines require ultra low sulphur fuels to

work correctly. These fuels are not widely available

outside markets like the EU and US, so without being

adapted to run on high sulphur fuels, machines

operated in less regulated countries would quickly

break down. The Stage IIIB/Tier 4 Interim engine

conversion enables customers to resell their used

machines for use in less regulated countries. Kits are

now available for Volvo‘s A25-A40 articulated haulers

(fitted with D11, D13 and D16 engines) and the

L150-L250 wheeled loaders (D13 engine).

US

Demand for bricks, blocks and pavers in the US

is f orecast to rise 8.8% a year from a low base

in 2013 to US$8.9 billion (€7.25 billion) in 2018,

according to a new study by market research

company the Freedonia Group. The company said

growth would be a result of the broad construction

market recovery, although it added that the current

rebound in new house construction was particularly

significant. It noted that bricks were used most

intensively in single-family residential construction.

Forecasts analyst Mariel Behnke said, “Bricks, typically

made of clay, will see the most rapid growth of any

product, driven by the expected robust increases innew housing construction.” However, the Freedonia

Group said structural blocks were the biggest

segment of the market, worth US$2.95 billion (€2.39

billion) last year out of a total bricks, blocks and

pavers market of US$5.8 billion (€4.7 billion).

WORLD IN BRIEFUS

Construction market inyear-on-year gainSpending within America climbs to reach apositive position approaching 2015

Construction spending in the US was up 3.3% in the 12 months to the end of October,

compared to the same time last year, at US$971 billion (€783 billion). This was a 1.1%

increase from the 12-month rolling total to the end of September.

The year-on-year increase was driven by the private non-residential sector, which was

up 6.4% compared to a year ago. However, this component of construction was down

1.0% compared to the previous month.

Other growth areas included private residential construction, which was up 1.9%

compared to a year ago, and 1.3% compared to the previous month. However, these

gains were undermined by the public construction sector, which was down 2.3%

compared to a year ago. However, it was up 1.5% compared to the previous month –

the biggest month-on-month gain for any segment of the industry.Commenting on the figures from the US Census Bureau, Ken Simonson, chief

economist at the Associated General Contractors of America (AGC), said, "While overall

construction spending jumped by more than 1% in October, the gain followed two

months of stagnation. Public construction was the fastest-growing segment for the

month but the slowest-growing over the past year and for the first 10 months of 2014

combined.

“Conversely, private non-residential construction inched down from September to

October but has risen at double-digit rates – 11% – for the combined January through

October period. And private residential construction continues to grow very modestly,

with multifamily construction taking the lead on an annual basis." ce

MALAYSIA

Work starts on Star Development joint venture skyscrapers

Development project.

“We look forward to

continuing our support

for Malaysia’s growth and

development, having

participated in large

scale projects including

Petronas Twin Towers.

“Though challenging,

we are certain that by

working closely together

with our trusted partners

and maintaining a strong

emphasis on safety,

the project will be

successful.” ce

Samsung C&T has

started work on the

Star Development, a

project in Kuala Lumpur,

Malaysia.

The US$310 million

(€250 million) project

for Alpine Return, a

joint venture between

United MalayanLand and Symphony

Life, will comprise

residential, shopping and

entertainment facilities in

a complex including three

250m towers.

Once completed in

2019, the single 57-floor,

251m tower and two

58-floor, 265m towers

will be among the tallest

residential structures in

the country. They will be

built in Kuala Lumpur’sbusiness district, near the

Petronas Towers.

Samsung C&T president

& CEO Chi Hun Choi

said, “We are honoured

to be part of the Star


12/61

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16/61

FINANCE

15CONSTRUCTION EUROPE DECEMBER 2014JANUARY 2015

Year-end rally

It is common to see share

prices put on a steady and

concerted growth spurt in the

last ten weeks or so of the year,

and this seasonal surge could be

put down to many factors, from a

sense of goodwill and optimism

as the festive period draws close,

to the more cynical explanation

that traders try to pump-up their

portfolio gains to improve their

year-end bonuses.

Whatever the case, most

years see this year-end rally

continue through November and

December, on into the New Year,

until the financial results season

gets underway at the end of

January.

This often prompts a sell-off,

when it becomes apparent that

share prices have become over-

valued.Another interesting factor in

November is that share prices

went up despite the news that

the Japanese economy was

“officially” in recession. This was

not particularly surprising news

– GDP in Japan had fallen in

the second quarter of the year

following a sales tax hike, and

there was nothing to suggest

there would be a turnaround in

the third quarter. In fact, the third

quarter decline in GDP was not asbad as some had expected.

But still, it was odd to see the

Nikkei 225 shoot up on the

confirmation that the Japanese

economy shrank for the second

consecutive quarter, but this is

exactly what it did. This broad

index of Japanese share prices

Company Currency Price Price Change Change

at start at end (%)

CEC Index 173.49 178.36 4.88 2.81%Acciona € 54.75 59.46 4.71 8.60%

ACS € 28.91 28.18 -0.73 -2.53%

Astaldi € 5.65 5.32 -0.33 -5.84%

Balfour Beatty UK£ 1.58 1.91 0.33 20.66%

Ballast Nedam € 2.49 3.08 0.59 23.63%

Bam Group € 2.09 2.25 0.15 7.31%

Bauer € 12.35 13.98 1.63 13.20%

Bilfinger € 50.36 36.87 -13.49 -26.79%

Bouygues € 26.19 29.96 3.78 14.42%

Carillion UK£ 3.30 3.44 0.14 4.21%

Eiffage € 42.63 38.90 -3.73 -8.74%

FCC € 15.27 11.58 -3.69 -24.17%

Ferrovial € 15.88 16.47 0.59 3.72%

Hochtief € 59.48 59.90 0.42 0.71%Salini Impregilo € 2.66 3.18 0.52 19.55%

Keller Group UK£ 7.89 8.42 0.52 6.65%

Kier UK£ 15.26 13.96 -1.31 -8.55%

Lemminkäinen € 11.33 10.70 -0.63 -5.56%

Morgan Sindall UK£ 6.82 6.35 -0.47 -6.89%

Mota Engil € 4.01 3.25 -0.76 -19.01%

NCC (B) SEK 216.50 229.20 12.70 5.87%

OHL € 23.15 21.81 -1.34 -5.79%

Peab (B) SEK 49.10 50.40 1.30 2.65%

Sacyr Vallehermoso € 3.62 3.07 -0.55 -15.26%

Skanska (B) SEK 144.10 159.50 15.40 10.69%

Strabag SE € 17.64 18.76 1.12 6.32%

Taylor Wimpey UK£ 1.17 1.34 0.17 14.44%

Tecnicas Reunidas € 39.10 36.00 -3.10 -7.93%Trevi Group € 3.14 2.72 -0.42 -13.32%

Veidekke NOK 65.00 65.75 0.75 1.15%

Vinci € 44.34 43.48 -0.87 -1.95%

YIT € 5.62 5.40 -0.22 -3.91%

Period: Week 43 - 48

was up more than 15% between

weeks 43 and 48.

The explanation seems to be

that growth in the markets came

on the expectation that there will

be a policy response to stimulate

growth. Eyes are on the Bank

of Japan to see if it is going to

step-up its already aggressive

programme of quantitative

easing, and it now seems likely

that a second tax hike planned

for next year will be pushed back.

Other stock markets were also

buoyant in December, though

not up as much as the Nikkei. The

DAX was strongest, up more than

CONTRACTORS

EQUIPMENT MANUFACTURERS


at start at end (%)

CEE Index 252.98 260.73 7.75 3.06%

Astec Industries US$ 36.37 39.27 2.90 7.97%

Atlas Copco (A) SEK 201.80 212.60 10.80 5.35%

Bell Equipment ZAR 13.90 12.19 -1.71 -12.30%

Caterpillar US$ 99.27 100.60 1.33 1.34%CNH Industrial € 6.26 6.25 -0.01 -0.24%

Deere US$ 85.17 86.62 1.45 1.70%

Doosan Infracore WON 10550 10100 -450 -4.27%

Haulotte Group € 12.31 12.11 -0.20 -1.62%

Hitachi CM YEN 2015 2557.00 542 26.90%

Hyundai Heavy Industries WON 100500 118500 18000 17.91%

Kobe Steel YEN 162 191 29 17.90%

Komatsu YEN 2428 2789 361 14.87%

Kubota YEN 1592 1874 282 17.71%

Manitou € 10.86 11.80 0.94 8.66%

Manitowoc US$ 19.33 20.14 0.81 4.19%

Metso € 26.24 24.60 -1.64 -6.25%

Palfinger € 17.95 19.00 1.05 5.82%

Sandvik SEK 80.65 77.00 -3.65 -4.53%Tadano YEN 1637 1703 66 4.03%

Terex US$ 29.45 28.70 -0.75 -2.55%

Volvo (B) SEK 86.65 82.35 -4.30 -4.96%

Wacker Neuson € 15.10 16.83 1.73 11.43%


Share prices around the world moved up in

November in what looked like the usual year-endrally, and despite – or maybe because of – news of

a recession in Japan. Chris Sleight reports


17/61

FINANCE

16 CONSTRUCTION EUROPE DECEMBER 2014JANUARY 2015


at start at end (%)

CEM Index 146.83 159.45 12.61 8.59%

Buzzi Unicem (Ord) € 10.98 11.90 0.92 8.38%

Cemex (CPO) MXP 16.21 17.25 1.04 6.42%

Cimpor € 1.65 1.34 -0.31 -18.89%

CRH € 17.56 18.81 1.26 7.15%

Heidelberg Cement € 53.60 60.52 6.92 12.91%

Holcim CHF 65.70 70.45 4.75 7.23%

Italcementi € 5.03 4.92 -0.11 -2.09%

Kone (B) € 32.68 36.87 4.19 12.82%

Lafarge € 53.43 56.23 2.80 5.24%

Saint-Gobain € 33.47 36.47 3.00 8.96%

Schindler (BPC) CHF 127.10 134.10 7.00 5.51%

Schneider Electric € 58.39 64.78 6.39 10.94%

Titan Group (Common) € 19.67 19.06 -0.61 -3.10%

Vicat Group (Common) € 53.42 60.15 6.73 12.60%

Wienerberger € 9.88 11.20 1.32 13.37%

Wolseley UK£ 32.32 35.80 3.48 10.77%


MATERIALS PRODUCERS

rising 4.95% to 195.21 points.

The contracting, equipment and

materials sectors were all up

between weeks 43 and 48, but

it was the materials sector that

led the way with an impressive

8.59% gain.

Plenty of companies in

the sector saw double-digit

gains over the course of the

five-week period, including

Heidelberg Cement, Kone, Vicat,

Wienerberger and Wolseley.

Many of the gains were linked

to financial results for the third

quarter of the year, which were

still being reported by some

companies as late as November.

Heidelberg Cement for example

said profits were up in the third

quarter of the year thanks to

better price realisation in North

America.It added that it did not plan to

bid for any of the assets being

sold as a result of the Holcim-

Lafarge merger.

The only real problem in the

sector was Cimpor’s 18.89% share

price decline between weeks 43

and 48.

This was linked to poor third

quarter results, which saw a net

loss reported as a result of falling

10%, while the Dow did well with

a 6.9% rise to hit another series

of all-time highs. The CAC 40 and

FTSE 100 were more subdued,

but still well in the black.

CONSTRUCTION SHARESNovember was a good month for

the construction sector, with the

CET Index for the broad industry

sales in some key markets, as well

as unfavourable currency effects.

Equipment manufacturers’

shares were much more of a

mixed bag during the five-week

period.

On the plus side, many of the

Japanese manufacturers saw

good gains, with their stock

rising with the general buoyancy

of the Nikkei. Hitachi, Kobe Steel,

Komatsu and Kubota all stood

out with strong gains.

On the down side, there were a

few losses in the sector. The most

notable was Bell Equipment,

which issued new profit guidance

in November highlighting that it

business was suffering due to the

weak global mining sector.

However, of greater impact

as far as the CEE Index for the

industry was concerned was thedownturn for high capitalisation

groups such as CNH Industrial,

Sandvik and Volvo.

As a result, the CEE’s gains for

the week 43 to 48 period were

limited to 3.06%.

The contracting sector was

even more mixed, with a series of

striking gains and losses. On the

positive side, Balfour Beatty saw

a 20.66% rise in its share price


18/61

FINANCE

17CONSTRUCTION EUROPE DECEMBER 2014JANUARY 2015

RESERVE CURRENCIES

Beginning End Change Change

of period of period (%)

British Pound 0.7884 0.7954 0.0070 0.89%

Japanese Yen 136.82 147.66 10.84 7.92%

Swiss Franc 1.2063 1.2032 -0.0031 -0.26%

US Dollar 1.2652 1.2434 -0.0218 -1.72%

EUROPEAN CURRENCIES

British Pound 0.7884 0.7954 36.8700 0.89%

Bulgarian Leva 1.9559 1.9559 0.0000 0.00%

Czech Koruna 27.728 27.624 -0.104 -0.38%

Danish Krone 7.4460 7.4408 -0.0052 -0.07%

Hungarian Forint 308.35 306.52 -1.82 -0.59%

Norwegian Krone 8.3180 8.7522 0.4342 5.22%

Polish Zloty 4.2251 4.1795 -0.0456 -1.08%

Romanian Lei 4.4213 4.4374 0.0161 0.36%

Swedish Krona 9.1797 9.2739 0.0942 1.03%

Swiss Franc 1.2063 1.2032 -0.0031 -0.26%


Index Beginning End Change Change

of period of period (%)

CEE (Equipment) 252.98 260.73 7.75 3.06%

CEM (Materials) 146.83 159.45 12.61 8.59%

CEC (Contractors) 173.49 178.36 4.88 2.81%

CET (Total) 186.00 195.21 9.20 4.95%

Dow 16678 17828 1150 6.90%FTSE 100 6407 6668 261 4.07%

Nikkei 225 15292 17590 2298 15.03%

CAC 40 4149 4359 211 5.07%

DAX Xetra 9039 9960 37 10.19%


VALUE OF €1

KEY INDEXES

Confidence still weak

Sentiment on European construction activity

remained weak in November, partly due

to seasonal factors, according to the

latest CE Barometer survey.

The most notable change

from October’s results was that

sentiment about current activity

levels dropped into negative

territory. Last month a positive

balance of +0.9% of respondents

said they were busier in October

than in September. However, in this

month’s results, that figure fell to a

balance of -5.5%. The balance figure is the

percentage of positive responses, minus the

percentage of negative ones.

A downturn in November is fairly common with the CE Barometer

as the weather worsens in Europe with the onset of winter. Withthis measure of confidence already weak in October, it was perhaps

unsurprising that a negative result came back in November.

However, this was the first time the month-to-month measure of

sentiment has been negative since August 2013, so it also points to

underlying market weakness.

In contrast, respondents to the survey were more bullish about

future prospects. After a pronounced dip in September, this

measure of confidence strengthened in November for the second

month running. At a balance of +31.5%, it was very firmly in positive

territory.

However, the backward looking measure of confidence was less

convincing. Asked how activity levels in November compared to a

year ago, a balance of only +6.5% of respondents said things were

better. Granted, this was an improvement from the figure of -0.9%seen in October, but it was not exactly an emphatic result.

This mixed bag of results took the CE Climate, an overall measure

of sentiment, to a balance of +10.5%, this was a small step up from

October’s figure of +9.7%, but along with September’s +11.5%, it

was still significantly below the +20% to +35% figures that had been

seen earlier in the year. ce

CE BAROMETER

Another interesting corporate

development in November

was with FCC. Although on the

face of it, the 24.17% fall in the

company’s share price looks

alarming, this was a result of the

diluting influence of 133 million

new shares being issued.

These were sold to Control

Empresarial de Capitales SA de

CV, a corporate entity controlled

by Mexican billionaire Carlos Slim

for a total of €1 billion. The dealhas given him a majority stake

in the company, while reducing

diluting Spanish billionaire, Esther

Koplowitz’s former controlling

stake.

FCC said it would use some €765

million of the proceeds of the sale

of new shares to pay-down debt.

CURRENCIESNovember was particularly

notable for the big slide in

the value of the Japanese Yen.

Between weeks 43 and 48 it lostclose to 8% of its value against

the Euro.

This was of course driven by the

news that Japan had fallen into

TAKE PART The survey, which takes just a one minute to complete, is open to

all construction professionals working in Europe. The CE Barometer

survey is open from the 1st to the 15th of each month on our

website.

■ Full information can be found at www.cebarometer.eu

R E C E S S I O

N

BOO M

U P

T U R N

D O W

N

T U R

N

companies an unfair edge in

export markets. Therefore, this

sudden slide in the value of

the Yen is likely to have some

ramifications for international

trade relations.

OUTLOOKBarring any major international

events, the normal expectation

would be for share prices to

continue their steady climbthrough to Christmas, the New

Year and beyond.

However, a correction in

January or February is also part

of this seasonal pattern, and it too

should be expected. ce

recession, along with the concern

that this would lead the Bank

of Japan to another aggressive

round of quantitative easing.

This “printing of money” to buy

assets may have the positive

effect of stimulating the economy

and breaking a deflationary

spiral, but the downside is that it

weakens the Yen.

A weak Yen would be welcomed

by export-oriented Japanesecompanies as it increases their

profits and/or revenues in foreign

markets.

Such swings in currencies excite

international tensions, as they

can be seen as giving Japanese

in the five-week period, which

was linked to an advance from

infrastructure investor John Laing

to buy the company’s portfolio of

privately-financed infrastructure

concessions. The deal could be

worth UK£1 billion (€1.27 billion).

Similarly, Ballast Nedam was

up 23.63% on the news that

Van Oord would buy its offshore

construction business. Although

the sale price was not disclosed,

Ballast Nedam said the sale woulddeliver a significant profit.

But on the downside for the

sector, there were some big

losses. Most worrying was

Bilfinger’s 26.79% slide. This came

as the company issued its fourth

profit warning of the year at the

start of November, and said it

expected to make a net loss for

the year.

The company has instal led

Eckhard Cordes, a former

executive at Daimler and

CEO German retailer Metro, aschairman of Bilfinger, replacing

Bernhard Walter. The hope is

clearly that this veteran executive

can steady the company.


19/61

HIGH PRODUCTION FROM THE GROUND UP.

Vermeer, the Vermeer logo and Equipped to Do More are trademarks of Vermeer Manufacturing Company in the U.S. and/or other countries.

© 2014 Vermeer Corporation. All Rights Reserved. EQUIPPEDTODOMORE.com



LAW AND CONTRACT

often used interchangeably but

they have different meanings.

The concept of “impartiality”

is connected with bias for or

against one of the parties, and

is therefore a question of a state

of mind, whereas the concept

of “independence” addresses

the personal, professional and

financial relationships between a

decision-maker and a party.

In reality, of course, there is a

considerable overlap between

the two terms since a lack of

independence is effectively

relevant only if there is doubt as

to the impartiality, or bias, of the

decision maker.

CHALLENGED

Although the definition of

impartiality differs depending onwhich set of rules are applied to a

dispute, it is generally considered

that decision makers can be

challenged for bias.

The English courts have defined

bias as “an attitude of mind which

prevents the judge from making

an objective determination of the

issues that he has to resolve” in the

case of the Director General of Fair

Trading v Proprietary Association

of Great Britain, also known as

Re Medicaments, in 2001. The

courts draw a distinction betweentwo types of bias – actual and

apparent.

“Actual bias” exists where, for

example, it is established that

a decision maker has reason to

prefer one outcome of the case to

another, or reason to favour one

party rather than another.

However, in practice, findings of

actual bias are rare because of the

difficulties of proof.

Therefore, the other distinction

of bias – known as “apparent bias”

– is a more common basis for

attacking judicial or quasi-judicial

decisions.

Apparent bias describes thesituation where circumstances

exist which give rise to a

reasonable apprehension that the

decision maker may have been,

or may be, biased, set out in Re

Medicaments, 2001.

For example, there would

be a real danger of bias, if, in

a case where the credibility of

any individual were an issue to

be decided by the judge, he had

in a previous case rejected the

evidence of that person in such

outspoken terms as to throwdoubt on his ability to approach

such person’s evidence with an

open mind on any later occasion.

This was set out in Locabail (UK)

Ltd v Bayfield Properties Ltd and

Another in 2000.

Apparent bias may arise in a

number of different factual

scenarios, and some of these are

not as clear-cut as the example

just given.

In the English courts, in order

to establish apparent bias

successfully, an aggrieved partymust apply the current test set

in Re Medicaments, 2001, “The

court must first ascertain all the

circumstances which have a

bearing on the suggestion that

the judge was biased. It must then

ask whether those circumstances

would lead a fair-minded and

informed observer to concludethat there was a real possibility,

or a real danger, the two being

the same, that the tribunal was

biased.”

This is known as the “fair-

minded observer” test, and the

courts in England have held that

it applies to adjudicators and

arbitrators (Amec Capital Projects

Ltd v Whitefriars City Estates Ltd

in 2004, and Locabail (UK) Ltd v

Bayfield Properties Ltd in 1999).

BARRIERSHowever, there are barriers to

be aware of for a party seeking

to challenge a decision on the

grounds of a breach of natural

justice.

Not only have the courts

expressed difficulties in applying

the test for bias – for example

Lanes Group plc v Galliford Try

Infrastructure Ltd (t/a Galliford

Try Rail) in 2011 – but more

importantly they have suggested

that except in the plainest

of cases, it will only lead to asubstantial waste of time and

expense (Carillion v Devonport

Royal Dockyard in 2005).

Despite these warnings, there

appears to be little doubt that

some parties in a dispute will

use challenges as a tactic for

disrupting proceedings.

This is particularly the case

in international commercial

arbitrations where the reality is

that parties can gain advantages

by bringing challenges, even

when they have little chance ofsucceeding.

Since challenges on the

ground of bias are becoming

increasingly common, this area

of jurisprudence is likely to

develop. ce

Legal challenges made

on the grounds of bias

Pinsent Masons LLP is the world’s leading construction law firm

with a true infrastructure and energy sector focus. Pinsent Masons

LLP is ranked No 1 for construction law by all legal directories in theUK. It is an international law firm with offices across Europe, the Gulf

and Asia.

■ For more information on any legal or contractual issue, please

contact Virginie Colaiuta at [email protected]

or +44 (0)20 7490 6498.

Impartiality is a fundamental principle. Tom Andrews, solicitor at the

London office of Pinsent Masons, discusses court room bias

In English law, the rules of

natural justice dictate that

every party has the right to a

fair hearing before an impartial

tribunal, and such rules are

considered so fundamental in a

fair legal system that a failure to

observe them should render a

decision null and void.

Therefore, a decision-maker

should at all times conduct

themselves in a manner in

accordance with these rules,

and this includes ensuring that

they do not place themselves in

a position where they may be

perceived to be biased.

This obligation is reflected in

s.108(2)(e) of the Housing Grants,

Construction & Regeneration

Act 1996, and reiterated in most

adjudication rules, providing thatan adjudicator is required to be

impartial.

Impartiality is also an inalienable

standard in international

commercial arbitrations, serving

to protect parties against

arbitrators being influenced, or

biased, by factors other than

those related to the merits of the

case.

The LCIA Rules, for example,

require that all arbitrators be and

remain at all times “impartial and

independent” of the parties. TheseRules, in particular, go further and

state that “no arbitrator, whether

before or after appointment, shall

advise any party on the merits or

outcome of the dispute”.

There is a distinction to be

drawn between challenges for

lack of independence and those

for a positive bias. The terms are

Bias: ‘An attitude

of mind which

prevents the

judge from

making an

objectivedetermination of

the issues that

he has to resolve’


21/61

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22/6121

FIEC


Taking a good look at

Junker’s Christmas gift

FIEC

Avenue Louise 225,

B - 1050 Brussels, Belgium.

Tel: +32 2 514 55 35;

e-mail: [email protected]

www.fiec.eu

European Commission President Juncker’s plans for €315 million in

investment provides FIEC with some reasons to be delighted

President Juncker’s Christmas

gift to the European Union

came in late November,

with not less than €315 billion in

investment for Europe, but it is

interesting to study it more closely.

Assembled over the summer, the

idea is to create a new European

Fund for Strategic Investments

(EFSI), with €5 billion coming from

the European Investment Bank

(EIB) and a guarantee of €8 billion

from existing EU funds designed

to secure a contribution of €16

billion from the institutions.

The €8 billion guarantee will

be over a three-year period from

the Connecting Europe Facility

(€3.3 billion), Europe’s research

programme Horizon 2020 (€2.7

billion) and “budget margin” or

unused funds, worth €2 billion. The resulting EFSI fund of €21

billion is expected to allow the

EIB to go to market and issue

about €60 billion in bonds, cash

that is then expected to trigger a

total of €315 billion in loans over

the period 2015 to 2017 – €240

billion for long-term investment in

infrastructure and €75 billion for

SMEs and mid-cap firms.

Therefore, according to the

best case scenario, the leverage

effect could achieve a ratio of

1:15 – every Euro in public moneyinvested in the fund would raise

€15 in private investment. The

President of the EIB, Werner Hoyer,

however, described this scenario

as conservative.

It follows the general principle

mentioned by Commissioner

Pierre Moscovici some time ago,

that is, that public money would

be used only where necessary,

while private money would be

mobilised as much as possible.

At a time where public budgetsare under pressure in the vast

majority of Member States,

this is a question of common

sense. However, regarding the

mobilisation of private money,

we can have doubts about the

leverage effect presented as

“conservative” by Hoyer.

But Juncker’s plan relies a lot on

the regeneration of confidence

among EU and international

private investors, so that he

should, at least, have the benefit of

the doubt. And more specificallyconcerning the construction

sector, there are even some good

reasons to be delighted.

Indeed, Juncker made clear that

the money generated should

be mobilised in priority towards

infrastructure projects, notably

transport, energy and broadband,

as well as renewable energy and

energy efficiency.

WISH LIST

For that purpose, Member States

have been asked to presenttheir wish list, so the task force,

composed by the European

Commission, the EIB and

representatives of the Member

States, can prepare a pipeline of

projects ready to start.

With the obsolescence of

infrastructure networks and

the poor shape of the built

environment in most EU

countries, it is good news that

Juncker’s plan aims at realising

the projects which are necessary

in the general interest of the EUand its citizens, with the final goal

of achieving competitiveness and

sustainability.

Invited by the task force, FIEC

had the opportunity to present

its priorities for investment. In

particular, FIEC put forward four

eligibility criteria – the projects

supported in the investment

plan should respond to the EU’s

general interest (economic, social

and territorial cohesion), prove

general efficiency and a good

socio-economic return, be readyto start, and tackle environmental

matters.

On the basis of these eligibility

criteria, investment should be

channelled towards infrastructure

projects.

On the other hand, investment

would be channelled towards

projects in the built environment

– in particular renovation and

maintenance of public and

private buildings.

GOOD AND BAD NEWSClearly, Juncker’s priorities are in

line with FIEC’s, but the overall list

for the pipeline of projects is far

from being set in stone, which is

both good and bad news.

It is good because there remains

room for fine-tuning to make sure

that the construction sector’s

priorities are properly taken into

account. It is bad because it gives

time for all other stakeholders to

push forward their own priorities

and try to get a share of the cake.

When asked by the task forceabout the main current barriers

to investment and possible

solutions, FIEC addressed four

points – constrained public

resources in the frame of the

Stability & Growth Pact, a

problematic legal environment,

difficult access to financing for

projects and companies, and

loopholes in the preparation of

the projects.

While the rules of the Stability

& Growth Pact ensure that

budgetary discipline is respected,they impose a counter-productive

austerity on Member States,

without distinguishing between

investment for growth and jobs,

and current spending. However,

austerity is not an end in itself.

Juncker is encouraging Member

States to put money in the EFSI

by excluding this money from the

calculation of their public deficit.

Several countries are already

interested, but as the EFSI does

not foresee any specific quote per

sector or per country, this mightdeter other Member States from

adding their own money.

Therefore, FIEC advocated

that all national public funds

mobilised for co-financing in the

framework should benefit from

the maximum flexibility laid down

in the Stability & Growth Pact, so

that they should not be included

in the calculation of public deficit.

For financial players, the new

prudential rules of Basel III and

Solvency II have had a dissuasive

effect for long-term investment bybanks and insurance companies,

considering infrastructure and

real estate assets particularly.

Of course, such prudent rules

are necessary, unless they kill

long-term investment. Therefore,

specific asset classes should be

created for infrastructure and real

estate projects.

We see that access to financing

is particularly difficult for projects

of intermediate size and for SMEs.

FIEC advises here to mutualise

projects in order to create a criticalmass that is more attractive to

investors, to revise the risk sharing

models between the private and

the public sector to ensure the

right balance, and to take more

into account the socio-economic

benefits of a project, to make it

more attractive for investors.

With the withdrawal of

traditional banking solutions, all

reasonable alternatives need to

be considered, such as schemes

for combining public and private

financing better, innovativefinancial instruments like project

bonds, a more systematic and

harmonised use of the “user pays”

and “polluter pays” principles,

as well as schemes like energy

performance contracts. ce


23/6122

CECE


Winning in Europe was

topic for CongressEric Lepine, CECE president and

managing director at Caterpillar

France, said, “If you’d ask me what

to take away from this Congress,

it is the concept of being agile.

We’ve broken the word down

in five key concepts, one for

each letter – A for Adaptation;

G for Global; I for Inspiration

and Innovation; L for Lean; and

E for Engaged, and in particular

engaged people.”

Lepine stressed that the sector

must be agile to cope with three

main challenges – regulation,

and in particular environmental

legislation; the global economy

and unpredictable markets; and

the need to innovate, to be well

aware of technologically.

He underlined that the sector

was committed to continuing toplay its role in society, and that

others – in particular EU policy

makers – should play theirs too.

“We urge the European

Commission to confirm and

even upgrade its target to lift the

share of industrial production in

Europe’s GDP to 20% by 2020.

The EU governments should then

endorse this in their economic

spring summit in 2015,” he said.

“Investment in infrastructure

in Europe will be necessary,

too. CECE welcomes theannouncement from the

new Commission President,

Jean-Claude Juncker, about

a forthcoming investment

package of €300 billion.”

High-level speakers from the

industry gave insights to the

audience on how to improve the

agility of the sector and how to

win in Europe.

With one of the key messages

of the plenary session, Mark

Sweeney, vice president of

Caterpillar, said companiesneeded a combination of

competitiveness factors – right

footprint, right processes and

right product – to win in Europe.

Rikard Mäki, director of

technology, planning and public

funding at Volvo Construction

Equipment, put the accent

on communication between

site and machines, between

machines themselves, and

on the optimisation of site

management. Automation

can help reduce total cost ofownership. The real challenge of

automation of machines will be

to deliver to customers a product

customised for their needs.

Director of research and

innovation at the Belgian

Building Research Institute Johan

Vyncke explained the viewpoint

of contractors. “The future is

already out there”, he said, “and

automation and GPS controls are

the key for contractors, to ease

their daily working life”.

Karel Huijser, general managerand vice president EAME access

equipment at JLG manufacturing

Europe described the complexity

of partnerships in business and

the match between leadership,

manufacturing, funding and

research. He said the key words

for a successful leadership are

accountability, efficiency and

shared values, added Huijser.

INNOVATIONAnother focus of discussion

was the different aspects ofinnovation. According to

industry experts, innovation

is more than products, parts

and components. Innovation

is the way things are done, in

manufacturing processes, in

product design, in meeting

customer requirements, by

learning from other industries.

There are a lot of smart

technologies, and the industry

is clever in combining these

technologies like, for example,

the virtualisation of products,processes, production means

and information, the cross-

linking of manufacturing

resources and information, or

the continuous optimisation of

machine processes.

CECE Secretariat

Diamant Building –

Bd A Reyers 80

B – 1030 Brusselswww.cece.eu

Tel:+32-2-706 82 26

Fax: +32-2-706 82 10

AEB

www.aebrus.ru

AGORIA

www.agoria.be

ANMOPYC

www.anmopyc.es

APCEMP

www.apcemp.pl

CEA

www.coneq.org.uk

CISMAwww.cisma.fr

COMAMOTER

www.comamoter.it

FMIB-CWM

www.fme.nl

IMDER

www.imder.org.tr

SACE

www.sace-se.org

SVSS

Teknologiateollisuus

www.techind.fi

UCOMESAwww.ucomesa.it

Unacea

www.unacea.org

VDMA

www.vdma.org/construction

How to operate successfully in an agile world was the theme of the 2014

CECE Congress, where discussions focused on handling today‘s challenges

Over 200 industry

representatives took

part in the 2014 CECE

Congress in Antwerp, Belgium,

on October 15 to 17 – an event

co-organised with the Belgian

industry federation Agoria.

The theme of the Congress,

Construction Equipment Industry

in an Agile World, resonated well

with the audience.

The skill s people will need

in the industry will change in

about five to 10 years. It is for the

education system to feed people

with the right skills and improve

collaboration of traditional

engineering and IT knowledge.

With IT becoming more andmore important in the factories,

on the construction sites and

in services, there is the unique

opportunity to turn the picture

of a former “dark” industry into a

young and challenging industry

for young people.

Product innovation is

frequently a collaborative

effort, and seldom done by

one company. The challenge

for the people is to find each

other. For example, OEMs need

to find the right suppliers, orteams that are different in terms

of philosophies, culture or skills

have to find ways of working with

each other. Jobsites need to be

re-designed – the opportunity is

there to work with the designers

and to look for a more collective

approach, and to reduce overall

cost of infrastructure.

There obviously seems to be

a lack of communication at

all levels. In the end, it is the

customer who drives the value

chain and it is he who is theultimate king. The Congress

heard that optimisation along

the value chain seemed to be

the biggest challenge, and that

the technology to facilitate this

was not yet there.

It is too short-sighted for

people to think that the smart

factory will also mean that there

is a smart value chain. What the

sector needs is to trigger each

other to better understanding.

Thi s is som ething the

construction equipment industrycan learn from the car industry,

which in many aspects is 10 years

ahead.

The CECE-CEMA Summit next

year will be held from 22 to 25

September in Brussels. ce


24/61

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26/6125

EFCA


About EFCA

The European Federation of Engineering

Consultancy Associations (EFCA) has member

associations in 24 countries, and is the sole

European federation representing the engineering and related

services industry, which employs one million staff, the majority ofwhom are highly skilled in a breadth of disciplines.

European Engineering consultancies provide €150 billion

engineering consulting services per year for about €1,300 billion

investments in buildings, infrastructure and industrial complexes.

EFCA represents FIDIC in Europe. www.efcanet.org

Lifecycle improvements

from buying into BIMThe advantages of 3D modelling are increasingly winning over thesceptics, and are bringing the various parts of a project together

and English, so it’s reaching many

others. The authorities agreed

to implement it from 2013, even

before aspects of the handbook

had been completely approved –

because it works.”

ADVANCED DESIGN

Explaining what BIM was, she

said, “It’s a system designed to

bring every player in a major

contract together.

“Instead of depending

on drawings of a proposed

engineering scheme, this is

built on 3D design, with real

modelling. It means you can

assess the project from every

angle. You do need to build the

model because when you design

something you are trying to

optimise the product as well. Soit is extremely important that all

of the information you have been

thinking about is included.”

She said that if was possible to

carry out “crash control” before

building to ensure everything

worked. “Everything is in view, so

all the possible flaws appear,” she

explained.

“You can check traffic signs,

spot any overlap of water and

sewer connections. You can see

underground – spot the trench

which is going to be built at aparticular level, and avoid at the

very first hurdle any potential

problems later on in the project.

“That applies to maintenance as

well. It all ensures that we think

about the lifecycle – therefore

taking more care about the model

reaps rewards for the whole life of

the project.”

While it is the designers who

create the models in detail,

the contractors also use BIM at

the earliest stages of planning,design, construction and

maintenance.

“It is the contractors who are the

most important,” added Tøndel.

“Once they buy into the idea, the

whole process can unfold.”

She cited one contractor, who

had made the discovery.

“He gave an example of where

he had a tender with a total of

1,091 drawings required. When

he prepared a tender he would

spend all of his time on the

drawings. In this case, he alsoreceived an informative model as

well as the drawings.”

She said, “When he first used

the BIM approach he was worried

because he didn’t things were

moving very fast

ce december 2014 - january 2015

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