Construction Europe

Roadbuilding

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

Demolitionp35

GPSp42

International ConstructionEconomic Forum

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INCORPORATING CEWEF

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THE MAGAZINE FOR EUROPES CONSTRUCTION INDUSTRY www.construction-europe.comA KHL Group publication December 2013-January 2014 Volume 24 Number 10

CE 12 2013 Front Cover.indd 1CE 12 2013 Front Cover.indd 1 10/12/2013 15:31:2510/12/2013 15:31:25

RFind us online at www.cat.com/paving

facebook.com/CATPaving

youtube.com/CATPaving

CONFIDENCE

QEXC1769-01 2013 Caterpillar. All Rights Reserved. CAT, CATERPILLAR, BUILT FOR IT, their respective logos, Caterpillar Yellow, the Power Edge trade dress as well as corporate and product identity used herein, are trademarks of Caterpillar and may not be used without permission.

Feature Machine Drive Power (MDP)Accelerometer-based

Compaction Measurement

Measurement Depth* 30 - 60 cm (12 - 24 in) 1 - 1.2 m (3.3 - 4 ft)

Can be correlated with plate load test

Usable with smooth drum, padfoot, or padfoot shell kit

Usable on granular or cohesive material

Measures with vibratory system on or off

Exclusive Cat technology

* Dependent on soil type, moisture and other factors.

If you are measuring compaction with a soil compactor, your accelerometer-based system might be missing the mark.

Machine Drive Power (MDP) is a new, innovative soil compaction measurement technology available only from Caterpillar.

MDP measures closer to the depth of the lift with less variability than accelerometer-based systems, even on cohesive soils. That gives you condence that the soil you are compacting will support the load.

333

33

UNDERNEATH IT ALL

Ask your local Cat dealer about rental and purchase options for your next soil compaction job.

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3CONTENTS

CONSTRUCTION EUROPE DECEMBER 2013-JANUARY 2014

EDITOR Sandy Guthriee-mail: [email protected] tel: +44 (0)1892 786234DEPUTY EDITOR Helen Wrighte-mail: [email protected] tel: +44 (0)1892 786209EDITORIAL DIRECTOR Paul Marsden BSc EDITORIAL TEAM Lindsey Anderson, Alex Dahm, Lindsay Gale, Laura Hatton, Cristin Peters, Murray Pollok, D.Ann Shiffler, Chris Sleight, Euan Youdale

LAW & CONTRACT CORRESPONDENTVirginie Colaiuta

CECE REPORT Produced in co-operation with the Committee for European Construction Equipment

FIEC REPORT Produced in co-operation with the European Construction Industry Federation

PUBLISHER James King

PRODUCTION AND CIRCULATION DIRECTOR Saara Rootes

PRODUCTION MANAGER Ross Dicksone-mail: [email protected] tel: +44 (0)1892 786245DESIGN MANAGER Jeff GilbertDESIGNER Gary BrinklowDESIGN/PRODUCTION ASSISTANT Pippa Smithe-mail: [email protected] tel: +44 (0)1892 786207

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 DEVELOPMENT DIRECTORPeter Watkinson BA (Hons)

OFFICE MANAGER/EVENTS COORDINATOR Clare Grante-mail: [email protected] tel: +44 (0)1892 784088

CIRCULATION MANAGER Hayley Gente-mail: [email protected] tel: +44 (0)1892 786233

KHL TEAM

ADVERTISEMENT MANAGER David Stowe, UK Head Office Direct tel: +44 (0)1892 78 [email protected]

AREA SALES MANAGER: BELGIUM, THE NETHERLANDSAlister Williams, UK Head Office Direct tel: +44 (0)1892 [email protected]

AREA SALES MANAGER: UKLynn Collett, UK Head Office Direct tel: +44 (0)1892 [email protected]

FRANCEHamilton PearmanTel: +33 1 45 93 08 [email protected], AUSTRIA, SWITZERLANDSimon Battersby, UK Head OfficeDirect tel: +44 (0)1892 [email protected] Potest Tel: +39 010 570 [email protected]

SPAINMike Posener, UK Head Office Direct tel: +353 86 043 [email protected], FINLAND, DENMARK, NORWAY Peter GilmoreTel: +44 (0)20 7834 [email protected] ApaTel: +90 (0)532 214 68 18 [email protected] Yao Tel: +86 10 6553 [email protected] JAPANAkiyoshi Ojima Tel: +81 (0)3 3261 [email protected] CH ParkTel: +82 2 730 [email protected] Hynes Tel: +1 312 929 [email protected]

MEMBER OF

ISSN 09640665 Copyright KHL Group 2013

Volume 24 Number 10 DEC 2013-JAN 2014


Official publication date is the 15th of each issue month. Subscription rates 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

ICEF REVIEW 13

FINANCE & CE BAROMETER 16

LAW & CONTRACT 21

FIEC 23

CECE 25

EFCA 27

NEWS REPORT 50

EQUIPMENT 53

ON THE COVERThe S8 expressway under construction in Poland see Roadbuilding feature, page 29

REGULARS

Roadbuilding


Demolitionp35

GPSp42


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INCORPORATING CEWEF

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THE MAGAZINE FOR EUROPES CONSTRUCTION INDUSTRY www.construction-europe.comA KHL Group publication December 2013-January 2014 Volume 24 Number 10

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 OFFICE)KHL 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 LLC3726 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 7678 Fax: +86 10 6553 6690 e-mail: [email protected]

KHL SALES REPRESENTATIVES

FEATURESROADBUILDING 29Technology is becoming more and more important to the roadbuilding sector, helping boost efficiency as well as reduce costs. Helen Wright takes a closer look at some of the latest developments in the sector

DEMOLITION 35 The World Demolition Awards 2013 were organised by CE sister magazine Demolition & Recycling International. Editor Lindsay Gale takes a look at the Contract of the Year, and the other winners

GPS 42With more and more hardware about to be launched into orbit around the Earth, there are increasing numbers of ways to use the data this provides. Sandy Guthrie tunes in

INTERVIEW 49A partial demerger at Finnish company Metso is designed to allow the company to concentrate more on core parts of the business, according to CEO Matti Khknen. He spoke about this to Sandy Guthrie

CE 12 2013 Contents.indd 3CE 12 2013 Contents.indd 3 10/12/2013 15:32:3510/12/2013 15:32:35

4NEWS


2014Intermat Middle EastJanuary 14 - 16Abu Dhabi, UAEwww.intermatme.com

World of ConcreteJanuary 21 - 24Las Vegas, USAwww.worldofconcrete.com

ConExpo-Con/AggMarch 4 - 8, 2014 Las Vegas, USAwww.conexpoconagg.com

SMOPYC 2014April 1 - 5, 2014Zaragoza, Spainwww.smopyc.com

Samoter 2014May 8 - 11, 2014Verona, Italywww.samoter.com

APEX (Access Platform Exhibition)June 24 - 26, 2014Amsterdam, The Netherlandswww.apexshow.com

International Rental Exhibition (IRE)June 24 - 26, 2014Amsterdam, The Netherlandswww.ireshow.com

Hillhead 2014June 24 - 26, 2014Buxton, UKwww.hillhead.com

Bauma China 2014November 25 - 28, 2014Shanghai, Chinawww.bauma-china.com

bC India 2014December 15 - 18, 2014Delhi, Indiawww.bcindia.com

2015Intermat 2015April 20 - 25, 2015 Paris, Francewww.intermat construction.com

ConExpo Latin AmericaOctober 21-24, 2015Santiago, Chilewww conexpolatinamerica.com

EVENTS DIARY Finnish asphalt cartel has to pay damagesSettlement is reduced by more than 70% because of state involvement, according to court documents

F innish contractor Lemminkinen has been ordered to pay 48 million in damages, interest and legal expenses by the District Court of Helsinki to reimburse local authorities after being found guilty of acting as part of an asphalt cartel.

Six other defendants have been ordered to pay damages VLT Trading, NCC Roads, Skanska Asfaltti, SA-Capital, Rudus Asfaltti and Super Asfaltti up to the low single digit millions.

Lemminkinens was the largest, split into damages of 26 million, and interest and legal expenses of approximately 22 million.

The company expects to make a loss in 2013 as a result. However, the damages of 123 million that were originally sought from Lemminkinen were lowered after claims by the Finnish Transport Agency were rejected by the court.

The government had sought damages of 56.7 million, but the claim was dismissed as a result of evidence that it benefited from the cartel.

Court documents say that the National Board of Public

Roads (NBPR) and the Finnish Road Enterprise (FRE) participated in a cartel concerning work commissioned by the State from at least 1998. Representatives of the BNPR were said to have been aware of the existence of the cartel from as early as in 1994.

The BNPR was responsible for maintaining Finlands public roads and commissioning new work, while the FRE was responsible for construction. This structure was changed with the creation of the Finnish Transport Agency at the start of 2010.

In 2009, Finlands Supreme Administrative Court handed down fines totalling 82.55 million to the seven contractors after finding them guilty of operating the nationwide asphalt cartel between 1994 and 2002.

A spokesman from Skanska said it was still in the process of analysing how much the damages ruling would affect it, but it did not expect it to impact the overall 2013 group result.

Lemminkinen said the latest claims for damages were without foundation, while NCC also echoed this. All the contractors were given 30 days to submit an appeal. ce

Concern over environmental revisionsConcerns are being raised about the revision of the Environmental Impact Assessment (EIA) Directive and the amendments to it introduced at the European Parliament stage.

CEMBUREAU (the European Cement Association) said that the Non-Energy Extractive Industries Panel (NEEIP), of which it is a member, had raised several concerns regarding the revision of the EIA Directive and certain amendments that are being introduced at parliamentary stage.

According to CEMBUREAU, since the publication of the proposal of the European Commission to revise the EIA Directive, the NEEIP has consistently called for the current EIA regime to be streamlined. The aim of this is to achieve a clearer, more predictable

and less costly legislation, which also meets high environmental standards.

Nevertheless, the NEEIP said it was firmly opposed to proposals which disproportionately extended the scope of the EIA.

CEMBUREAU said that an example of this was that the NEEIP believed that the inclusion of exploration of mineral resources within the scope of the EIA would be disproportionate. It claimed that this was in the light of their low environmental impacts, together with the fact that exploration involved large investments without any revenue generated.

The NEEIP has also expressed its concern regarding proposals which would have a negative impact on the consistency of the EIA Directive, proper definition of criteria and

transposition, such as the inclusion of visual impact and subsoil proposals.

In addition, CEMBUREAU said that the inclusion of ex-post monitoring requirements in the EIA Directive was inappropriate. It said

that these requirements overlapped with other binding sectoral European Union instruments, including the Industrial Emissions Directive, the Mining Waste Directive, as well as the BAT (Best Available Technique) references. ce

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5NEWS

The team chosen for a 30,000m2 extension to the Hospital Hvidovre in Copenhagen, Denmark, will include international engineering and project management consultancy Royal HaskoningDHV.

The Hvidovre project is funded by the National Quality Fund (Statens Kvalitetsfond) and the Capital Region (Region Hovedstaden) to a total of DKK1.4 billion (187 million).

The new extension will include an emergency ward, a paediatrics ward, and obstetrics and cardiology departments.

The winning design team comprises Schmidt Hammer Lassen Architects and Aarhus Arkitekterne, Kragh & Berglund landscape architects, Sren Jensen consulting engineers, and Royal HaskoningDHV for structural design and building services.

The next two years will be spent creating a detailed design for the new hospital. The aim is to hand over detailed construction plans to contractors in 2016, with the new building scheduled for completion in 2020.

GRINDING ACQUISITION Metso has acquired Santa Ana de Bolueta (Sabo), a supplier of grinding media to the mining industry. Metso said the deal was intended to complement its current comminution wear parts offering to its customers in the sector. In 2012, Sabo had net sales of 40 million.

POLISH DEALChinese manufacturer Liugong has acquired components producer ZZN Transmission Plant. Located in Stalowa Wola, the ZZN factory is adjacent to Liugong Polands existing manufacturing facility, which it established through the acquisition of dozer manufacturer HSW a deal finalised in January 2012. ZZN has been supplying key parts like axles and gears for bulldozers, pipe-layers and loaders for HSW, which makes Dressta-branded equipment.

ORDERS UPContractor Bouygues construction businesses showed strong growth in new orders for the nine months to the end of September. Order intake at Bouygues Construction amounted to 8.6 billion, taking the order book to a record 17.7 billion at the end of September 2013, 4% higher than at the end of September 2012.Operating profit at Bouygues Construction was up by 49 million to 309 million in the first nine months of 2013.

EUROPEAN HEADQUARTERSKobelco Construction Machinery Europe (KCME) has opened a new European

headquarters in Almere, the Netherlands. The new office is one element of Kobelcos strategy to develop excavator sales under its own brand in Europe following the ending last December of the 10 year excavator joint venture with CNH. The 5,300m2 facility will serve as Kobelcos sales and marketing center, technical support, and spare parts distribution center, covering Europe, the Middle-East, Africa and CIS.

UK CHANGESSwiss-based Ammann is separating the plant and machine business of Ammann Equipment Ltd. It is selling its UK machine business to a new company, AY Equipment, in a management buyout, while it is moving its UK mixing plant business to an existing subsidiary, AmmannUK. Family-owned Ammann said it was strengthening its market position in the UK and Ireland. The machine business is being sold in a share deal to AYEquipment retroactively as of 1 October, 2013.

STRABAG CONFIDENTAustrian contractor Strabag has reported EBIT (earnings before interest and taxes) up to 40 million for the first nine months of 2013 a huge rise on the same period 12 months ago when a figure of 2 million was the result of a hit by non-recurring items. Strabags output volume for the first nine months of 2013 was 5% lower than last year at 9.6 billion. The company expects EBIT to grow to at least 260 million in the 2013 financial year.

BUSINESS NEWSConstruction award for MEPs introducedMembers of the European Parliament (MEPs) who are felt to have contributed effectively to the sustainability of the construction sector can be nominated for an award.

For the first time, the annual MEP Awards will have a category specifically for the construction industry, and it is to be sponsored by Construction Products Europe, which represents construction products manufacturers.

Construction Products Europe said that construction was one of the largest EU industrial sectors but was still facing hardship, and needed to be encouraged with a better EU policy framework.

It said that there was currently limited support and prominence for the sector within EU policy, although MEPs had started to become aware of how important and beneficial it was for the EU to have a well-supported construction sector.

In 2014, the EU Parliamentary Elections will take place and Construction Products Europe is sponsoring an award for Sustainable Built Environment at the 2014 MEP Awards. It said it hoped to mobilise more support for the award from the European Parliament.

The Awards will be presented in March, and nominations close on 17 Jan. More information about how to nominate an MEP can be found on the Construction Products Europe website, www.construction-products.eu. ce

New president for Volvo CEVolvo Construction Equipment has appointed Martin Weissburg as its new president,

The appointment will be effective from 1 January, 2014.

Currently president of the Volvo groups customer finance company, Volvo Financial Services (VFS), and a member of the group executive team, Weissburg will be replacing Pat Olney, who held the position since May 2011.

Olney announced in

October that he would be stepping down as president at the end of this year.

Weissburg has been president of VFS since 2010, a position which involved working in a close relationship with Volvo CE dealers. Prior to that he served as president of Volvo Financial Services Americas from 2005 to 2010.

Volvo said it had begun its search for a replacement for Weissburg. ce

Martin Weissburg will become president of Volvo CE, effective 1 January, 2014.



6NEWS


Volvo in 117 million deal for Terex haulersHaulers in 32 to 91 tonne range include both rigid and articulated models

Terex Corp has sold its UK rigid and articulated haulers business to Volvo Construction Equipment for US$160 million (116.6 million).The deal, which is subject to regulatory approvals, includes the Terex plant in Motherwell, UK, and a 25.2% share of Inner Mongolia North Hauler Joint Stock Co, which produces and sells rigid haulers under the Terex brand in China.

The acquisition will give Volvo CE a range of rigid haulers in the 32 to 91 tonne range, extending its coverage of the light mining sector. The Motherwell plant also makes three articulated haulers machines that Volvo already has, but which it said would provide opportunities for growth in emerging economies.

Terex, which has been manufacturing trucks at Motherwell for more than 30 years, said the business no longer fitted with its lifting and material handling business.

The business being sold reported revenues of $370 million (269.6 million) in 2012 with operating profits of $33 million (24 million), although profit levels have fallen this year, with the first nine months of 2013 seeing sales of $172 million (125.3 million) and operating profits of $5.5 million (4 million).

Outgoing Volvo CE president Pat Olney said, The addition of a well-respected range of rigid haulers extends the earthmoving options for customers involved in light mining applications at a time of renewed confidence in the sector.

The addition of TELs articulated hauler range will enhance our position in this segment, particularly in high-growth markets.

The transaction is expected to be fi nalised during the second quarter of 2014. ce

Demolition summit presentationsFull coverage, including articles and videos, of the World Demolition Summit and the 2013 World Demolition Awards is now available on khl.com.

The event attracted almost 300 international delegates to the NH Grand Hotel Krasnapolsky in Amsterdam, the Netherlands, on 31 October.

The conference consisted of a mix of reports detailing how some of the most challenging demolition projects from around the world were successfully carried out, along with papers covering more general topics of specific interest to the worlds demolition industry.

Footage of the speaker presentations, including demolition case studies from Robert Klotzbach from Environmental Resources Management, and Dick Green from IndEx independent explosives engineers, can be found at www.khl.com/videozone.

Other speaker videos include the presentation by Simone Bruni, president of Demo Diva Demolition, economist Dominic Swords, commercial director at Delair CFD Patrick Villard, and operations director at Fabio Bruno Construccoes Fabio Bruno Pinto.

Meanwhile, the 2013 World Demolition Awards celebrated the best that the demolition industry has offered its clients in the construction sector over the period from June 2012 to June 2013.

The top Award, Contract of the Year, went to Scottish contractor Hunter Demolition for the work it carried out in the heart of Glasgow, UK see the Demolition feature on page 35 of this issue.

For a full list of award winners and further coverage of the event, go to www.khl.com and search for World Demolition Summit. Scan the QR code at the end of this article to go straight to the award winners story.

KHL.COM

This months podcast for Construction Europe will be available online within a few days of the magazines publication. To listen, go to: www.khl.com/audio-podcasts

TEN-T challenge to EU states EU Member States are being challenged to commit to new TEN-T guidelines to connect Europe by road and rail, and to make certain that the projects happen.

FIEC (the European

Construction Industry Federation) said it recognised the opportunities created by the Connecting Europe Facility and the new TEN-T guidelines revealed in October.

European Union financing for transport infrastructure is set to triple for the period 2014 to 2020 to 26 billion, and new maps of the major trans-European corridors have been drawn up.

Thomas Schleicher, FIECs president, said, Whats crucial now is the Member States political commitment, in particular if you consider that the Council has softened the Commissions initial proposal for a binding target by 2030.

Member States now have to work seriously on the projects they have pushed forward.

Schleicher said he agreed with what MEP Brian Simpson said in his conclusions of the recent TEN-T Days 2013, namely that as long as Member States think purely at national level, the European Core Network will not happen. Member States have to start thinking European. ce

A 200 million (241.5 million) plan to regenerate a housing estate in West London, UK, has been approved, with more than 900 new homes to be built. The Havelock Estate in Southall was originally built in the 1950s and 1970s, and now Ealing Council has approved a masterplan put forward by Catalyst Housing, working with Pollard Thomas Edwards architects (PTEa). The approved proposals for Havelock will see 922 new homes built.


My Ammann Any job, any time.

For production volumes with large proportions of recyclingThe new Universal HRT has compact dimensions and sets new standards for processing high proportions of reclaimed asphalt. The parallel drum system is integrated into the concept, and its positioning directly above the mixer optimises material ow and minimises wear inside the recycling system.

For more information on compaction machines, mixing plants and pavers go to www.ammann - group.com

Workshop Supervisor Bjrn Latussek with his new Universal HRT 320/400 t/h.Workshop Supervisor Bjrn Latussek with his new Universal HRT 320/400 t/h.


9WORLD NEWS


NAMIBIA The African Development Bank (AfDB) has agreed a ZAR2.9 billion (249 million) loan to the Namibian Ports Authority (Namport) to finance the construction of a container terminal at Port of Walvis Bay. The Namport development is part of Namibias National Development Plan, which aims to position the country as a regional logistics hub by 2017.

GLOBALThe World Banks executive directors have approved a new framework for the way projects are procured. The Bank said its vision was, Procurement in Bank operations supports clients to achieve value for money with integrity in delivering sustainable developments. This could signal a change in several aspects of how the Bank awards contracts, and the stance it will take towards fraud and corruption. A key change in that in considering the economic value of bids, the Bank says in its proposal that it will consider initial price along with competitiveness, quality, life-cycle costs and benefits. This implies a move away from lowest price wins policies.

AFRICAThe Regional Rusumo Falls Hydropower Project has been awarded development funding from the African Development Bank and Nigeria Trust totalling US$113.3 million (83.4 million) to help finance part of the Burundi transmission line from the Rusumo Falls power plant. The Rusumo Falls project will increase renewable power generating capacity and access to electricity in Tanzania, Rwanda and Burundi. The three countries will share the power generated equally. The project has two components an 80MW hydropower generation plant, and transmission lines and substations. Construction of the transmission facilities is scheduled for completion by August 2018.

EAST AFRICAGround has been broken on a new US$4 billion (2.9 billion) rail link between the Kenyan capital Nairobi and the port city of Mombasa. The 500km scheme is due for completion in 2017, with China Road and Bridge Corporation (CRBC) the main contractor and the majority of the finance coming from the Export-Import Bank of China. The line is part of an ambitious international railway network planned for East Africa. There are plans for a network that will link major cities in Burundi, DR Congo, Ethiopia, Rwanda, South Sudan and Uganda, reaching more than 1,500km inland from Mombasa and as far as 1,500km north to the Ethiopian capital of Addis Ababa.

AFRICAThe African Development Bank (AfDB) has approved financing worth US$73.6 million (54.2 million) to Malawi and Zambia to support phase four of the 900km Multinational Nacala Road Corridor Development Project. The project is a continuation of the Nacala Road Development Corridor being supported by the AfDB in Mozambique, Malawi, and Zambia, respectively. Phase IV will include the rehabilitation of a 75km road between Liwonde and Mangochi.

WORLD IN BRIEF

GLOBAL

Results of corruption surveyAt the other end of

the scale, Somalia, North Korea and Afghanistan all scored less than 10 out of 100, and other low-ranked countries included Sudan, South Sudan, Libya, Iraq, Uzbekistan, Turkmenistan, Syria, Yemen and Haiti.

TI bases its findings on expert opinion of corruption in different countries, drawn from a range of sources and business surveys.

TI said the need for greater accountability was clear, and gvernments needed to turn pledges into actions.

Construction is one of the industries at greatest risk from corruption around the world.

According to consultantcy Grant Thornton, bribery, fraud and other illegal activities could cost the industry as much as US$860 billion (633 billion) per year 10% of its value. ce

Transparency International (TI) has released the results of its global public-sector corruption perceptions survey. As in previous years, the research shows a link between poverty and an increased risk of corruption.

The cleanest countries in the 2013 survey were Denmark and New Zealand, which scored more than 90 out of a possible 100 on the scale of perceived corruption.

PHILIPPINES

Industry aids typhoon reconstruction workBanks and equipment manufactures provide support after Typhoon Haiyan devastation

Emergency funding and equipment donations have been granted for the relief and reconstruction work being carried out in the Philippines following Typhoon Haiyan.One of the most powerful storms ever recorded on land, the typhoon made landfall

on the eastern and central islands of the Philippines on 8 November. It destroyed buildings, uprooted trees and sent a huge storm surge into coastal areas. Over 5,500 people are confirmed to have died, with more than 11 million affected.

The World Bank has pledged US$480 million (353 million) in assistance for the Philippines National Community Driven Development Project. The project will help typhoon-affected communities rebuild infrastructure such as water supplies, roads, schools and clinics, using retroactive financing.

The Asian Development Bank also granted a US$500 million (368 million) emergency loan as well as a US$23 million (17 million) grant for immediate relief to affected areas.

Meanwhile, manufacturers have also donated construction equipment to help with the recovery effort. JCB donated US$500,000 (367,919) worth of equipment a fleet of three backhoe loaders and 120 generators.

Hyundai donated US$200,000 (147,168) via the Korean Red Cross, together with a 21 tonne class excavator, a backhoe loader and operators. Doosan provided five 21.5 tonne DX225LCA excavators and one M200 wheeled loader. In addition, it provided KRW300 million (220,751), in co-ordination with the Korean Red Cross. ce

Scott Park has been named president & CEO of Doosan Infracore Construction Equipment (DICE). He will replace Tony Helsham, who retires in February, having held the position since 2010.

Park was most recently global vice president of strategy, manufacturing strategy and total quality management (TQM) for DICE, a position he held since early 2012. He previously worked at Volvo Construction Equipment, a company Helsham was president of from 2000 to 2008.

Doosan manufactures compact construction equipment under the Bobcat brand as well as

heavier machinery under its own name. Other divisions include Doosan Infracore Portable Power, and the Montabert and Geith range of attachments.

Park moves from Volvo

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10

WORLD NEWS


INDIAThe World Bank has approved two loans totalling US$660 million (486 million) to support the development of Indias road network. The largest loan of US$500 million (368 million) will be put towards Indias National Highways Interconnectivity Improvement Project.

The scheme will upgrade and widen about 1,120km of existing National Highways to two-lane in the states of Bihar, Orissa and Rajasthan, and in less developed regions of Karnataka and West Bengal. A further US$160 million (118 million) loan will support the Rajasthan Road Sector Modernisation Project.

This scheme plans to construct 2500km of rural roads, connect around 1,300 villages, and also undertake preparatory studies for improving 700km of priority sections of the states highways.

COSTA RICA The Inter-American Development Bank is to lend US$400 million (294 million) to Costa Rica to upgrade its road and port infrastructure. The China Co-financing Fund for Latin America has also pledged US$50 million (36.8 million) for the project, which will repair or pave up to 110km of the national road network, widen 5km of roads from two to four lanes, and build or repair 19 bridges. The work will also include repairs to 400m of breakwater in ports.

UZBEKISTAN The Asian Development Banks (ADBs) has agreed a US$110 million (80.9 million) loan for a 100MW solar power plant in Samarkand, the capital of Samargand Province. The Uzbekistan Government has said that it aims to generate 21% of the countrys power from renewable sources, including solar, by 2031. It is hoped the new power plant, set to be the largest of its kind in Central Asia, will promote large-scale solar energy development in the country.

INDONESIAA US$400 million (294 million) loan from the Asian Development Bank has been approved to help improve infrastructure and transport regulations in Indonesia. The funds will be used to address weak transport connectivity and poor logistics, among other developments aimed at kick-starting its economy. Funding will also be invested into improving inter-island links between poorer eastern parts of the country with growth centres and markets in the west.

JORDANJordans JWPC Tafila Wind Farm project has received financial support worth US$220 million (162 million) representing almost 77% of the total cost according to the European Investment Bank. Jordan Wind Project Company is developing the 117MW wind farm and associated electrical facilities in the Tafila Governorate in Jordan.

The wind farm will run 38 turbines. Once fully developed, the project will account for almost 10% of the countrys renewable energy target by 2020 (1,200MW).

WORLD IN BRIEF

BRAZIL

Crane accident at stadiumTwo workers died when a crane collapsed on the construction site of the Arena Corinthians sports stadium, in So Paulo, Brazil.

The Liebherr lattice boom crawler crane collapsed while installing a prefabricated steel section of the roof

around lunch time on 27 November.

The cause of the accident was being investigated as CE went to press.

The incident may delay delivery of the completed stadium scheduled for 31 December. Arena Corinthians is due to host

the opening match and five further games in the 2014 football World Cup.

Covering a total area of 200,000m, the BRL800 million (289 million), 66,000-seater stadium is located near a metro and a train station in the heart of one of the citys favela (slum) districts. ce

GLOBAL

Demand for cement is still on the increaseSales are forecast to expand more than 5% a year between 2013 and 2017

W orldwide demand for cement could reach 4.7 billion tonnes in 2017, according to market research company Freedonia.Cement sales are forecast to expand by more than 5% a year between now and 2017, which represents a slight decline in pace from the 2007 to 2012 period.

However, for markets such as North America and Western Europe, which were hit hard by the global economic recession and therefore saw demand for cement stagnate or decline, cement consumption is expected to rebound sharply by as much as 6%.

Eastern Europe is also tipped by the Freedonia analysts to perform much better. But China, which has led demand for cement in recent years, will see levels decelerate. Despite this, it will still command more than 50% of all additional cement demand between now and 2017.

Product sales in China are projected to rise nearly 5% a year during this period still a healthy growth but down considerably on its double-digit pace of the last decade.Demand for cement in the rest of the Asia/Pacific region will accelerate.

According to Freedonia, the non-building segment of the global cement market is expected to outperform its counterparts, as governments in both developed and industrialising countries invest heavily in public infrastructure.

Blended cement is projected to account for 75% of all new product demand generated between 2012 and 2017. Despite losing market share, the forecast is for Portland cement still to be used extensively in higher-end applications. ce

The new terminal at Shenzhen Baoan International Airport, Guangdong, China, opened on 28 November, 2013. Designed by architects Massimiliano and Doriana Fuksas, the project the 1.5km long structure features internal and external double skin honeycomb that wraps the structure, with roof spans of up to 80m. Completed within three years, the terminal covers 500,000m2 and is the largest public building in Shenzhen. It will increase the capacity of the airport by 58%, allowing it to handle up to 45 million passengers per year.

CE 12 2013 World News.indd 10CE 12 2013 World News.indd 10 10/12/2013 15:35:4610/12/2013 15:35:46

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ICEF REVIEW


ICEF

INCORPORATING CEWEF

13CONSTRUCTION EUROPE DECEMBER 2013-JANUARY 2014

Construction is key

Inaugural ICEF welcomed 200

delegates, 2014 event location confirmed

Europe still holds a key position in world, he said. But we cannot sit back and watch the world. Europe must recover a sense of purpose and set out a plan of action that can be supported across the EU.

CONTRACTING AND MATERIALSSpeakers from the contracting and materials side of the industry also addressed delegates. They included Xavier Therin, vice president of land, mineral resources and mining at Lafarge Aggregates & Concrete, and Miguel Jurado Fernndez, general manager of contractor FCC Construccin.

Therin delivered a robust speech directed at equipment manufacturers. Id rather spend more on a machine and have something that is reliable and last longer, then have something that is cheap and cheerful but will last three years, he said.

As Lafarge branches out more and more into emerging markets, Therin said the cement producer expected the same standards in the equipment it used as in more mature markets.

What this means for suppliers is that we cant use second rate equipment because it is an emerging market, he said, adding that this expectation extended to the servicing and maintenance of machines.

For his part, FCCs Fernndez said the contractor was determined to continue to pursue international expansion in the wake of the bankruptcy of its Austrian subsidiary Alpine.

We purchased Alpine in 2007 to develop activities in foreign countries. Alpine started expanding very rapidly. It was risky and not profitable and, at the end of the day, it was a big failure. This year, in May, we decided not to continue with the subsidiary because it was unsustainable.

The main mistake was a very rapid growth in foreign markets without establishing knowledge of countries and situations first. We have to learn from this, he said.

However, that is not to say the contractor is giving up on its domestic market far from it. In Spain, for sure, we are going to maintain activity, and we are waiting for a recovery, which we see coming in the following years. We think that the worst has passed the economy is out of recession, Fernndez said.

Meanwhile, prominent figures representing the manufacturing industry also addressed the conference, including Zeng Guangan, president of Liugong Machinery.

Zeng spoke about the coming of age of Chinas construction equipment industry, and sought to dispel some of the stereotypes that exist about Chinese-made machines.

There is a stereotype of low cost and low quality in Chinese-built products, and while this idea existed 10 years ago and was right, today it has totally changed. There are many misconceptions about Chinese

The construction sector is of strategic importance in Europe, representing more than 10% of GDP and over 50% of fixed capital investment, according to former Spanish Prime Minister Jos Mara Aznar, speaking at Novembers International Construction Economic Forum (ICEF).

Some 200 delegates and speakers took part in the inaugural conference, awards ceremony and networking event.

Aznar made the keynote address at ICEF, which took place from 20 to 22 November in Amsterdam, the Netherlands, and was organised by CEs publisher KHL.

He said, The health of the European construction industry is the health of the European economy. Construction is the biggest industrial employer in Europe, with more than 20 million direct employees and affecting some 44 million workers Europe.

Aznar, who was in office from 1996 to 2004, also said he did not share view that Europe was condemned to a long period of decline.

One of the highlights was the keynote

address and question & answer session

from former Spanish Prime Minister Jos

Mara Aznar

Xavier Therin, vice president of land, mineral resources and mining at Lafarge Aggregates & Concrete, delivered a strong speech directed at OEMs

In a dynamic address, Zeng Guangan, president of Liugong Machinery, spoke about

the coming of age of Chinas construction equipment

CE 12 2013 ICEF Review.indd 13CE 12 2013 ICEF Review.indd 13 10/12/2013 15:37:2710/12/2013 15:37:27

14 CONSTRUCTION EUROPE DECEMBER 2013-JANUARY 2014

ICEF REVIEW

ICEF 2014 will be held from October 29 to 31 at the Gloucester Hotel in London, UK. More details are available at www.icef.biz, or by using a smart phone to scan the QR code.

manufacturing, he said. Zeng added that these kinds of

misunderstandings that Chinese companies produce poor quality machines, copy western designs and provide poor or no support would lead western companies to ignore the true progress of Chinese manufacturers.

INDUSTRY OUTLOOKComprehensive outlooks for the future of the construction industry came from various speakers at ICEF.

On the first day of the conference, Scott Hazelton, director of construction and industry at IHS Global Insight, forecast that construction growth would pick up in the coming years.

He said this would happen as the global economy emerged from the current soft patch, driven by spending in the non-residential sector.

The following day, delegates were presented with analysis and forecasts for global construction equipment markets from Paul Howard, European research analyst for Off-Highway Research.

Howard said global sales of construction equipment were likely to hit US$104 billion (76 billion) by 2017, compared to forecasted sales for 2013 of US$93 billion (68 billion), driven by a sustained recovery in North America and continued high sales volumes in China.

Other wide ranging topics affecting the global construction industry were also covered by the other high profile speakers on the programme at ICEF.

On 21 November, additional speakers included Trevor Sturmy, head of PPPs at HSBC in Europe and Sub-Saharan Africa, Jules Janssen, general manager of construction at Besix Belgium and treasurer of the EIC (European International Contractors), and Simon Rawlinson, partner and head of strategic research at EC Harris/Arcadis.

He was followed by Virginie Colaiuta, partner at Pinsent Masons, and Riwal CEO Norty Turner.

On 22 November, morning speakers included IronPlanet vice president of new business development Matt Bousky, Simon Purchon, business development director at Babcok Mobile Assets, and vice president of Trimbles heavy civil construction division Roz Buick.

The day was rounded off by Murray Pollok,

editor of CEs sister publication International Rental News, who discussed the prospects for the international rental sector.

Speaker presentations can be downloaded at www.icef.biz

Additional coverage, including videos, from the event, can be found by going to www.khl.com and searching for ICEF. ce

Record-breaking hotel wins Project of the YearBrookfield Multiplexs JW Marriott Marquis Hotel in Dubai takes the inaugural International Construction Project of the Year award at ICEF

The Brookfield Multiplex project for the JW Marriott Marquis Hotel in Dubai was the winner of the first ICEF International Construction Project of the Year award.

The award recognises a scheme which is worth US$100 million (73.6 million) or more, and is of international significance.

The winners of the inaugural ICEF awards were revealed at a gala dinner held on 21 November at the Hotel Okura in Amsterdam, the Netherlands, as part of the ICEF event.

The hotel is a twin tower complex that, at 355m, breaks the Guinness World Record for the worlds tallest dedicated hotel.

It was selected from a shortlist of five, and the panel of judges said the winning JW Marriott Marquis Hotel was an outstanding project that demonstrated a close working relationship between the construction team and other stakeholders, without compromising safety.

Meanwhile, the winner of the construction equipment innovation award was Caterpillar, for its 336E H hybrid excavator. The machine claims to use up to 25% less fuel compared to standard models by capturing waste kinetic energy via hydraulic accumulators, helping it optimise performance.

The judges said the hybrid machine was a fantastic innovation that dramatically cut costs using tried and trusted technology, with a short pay-back period.

The winner of the construction equipment innovation award for component or sub-system design was Liebherr for its PowerBoom technology for crawler cranes. The winning technology increases lifting capacity by more than 50% over the standard load chart.

The judges said the PowerBoom was as an example of innovative engineering that not only radically increased capacity and productivity, but did so in a way that was cost-effective and flexible for the customer.

International Construction Project of the Year award winners Graham Sonley (left) and David Miller (right) from Brookfield Multiplex, with Chris Sleight, editor of International Construction

Dubais JW Marriott Marquis

ICEF provided a chance to meet and talk

CE 12 2013 ICEF Review.indd 14CE 12 2013 ICEF Review.indd 14 10/12/2013 15:37:4710/12/2013 15:37:47

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FINANCE


Seasonal gains

S hare prices can often be seen climbing towards the end of the year, and there is more to this than the season of good will.

There is the obvious point that it is in many peoples interests to push prices higher as the year draws to a close. It improves fund managers figures for the year for one thing.

There also tends to be money flowing into the markets towards the end of the year, as interest payments are invested and other

money is locked-up in shares for tax purposes.

And of course there are the basic human and psychological factors. Investors tend to be in a good mood, and this positive sentiment is reflected in share prices.

This is most starkly illustrated by the gains the Dow put on in November and during early December, as it broke through the 16,000-point mark for the first time in its history. Its gain for the week 44 to 48 period

Company Currency Price Price Change Change at start at end (%)CEC Index 157.87 158.99 1.12 0.71Acciona 46.73 43.60 -3.13 -6.70ACS 24.17 23.61 -0.56 -2.32Astaldi 7.18 7.75 0.57 7.87Balfour Beatty UK 2.857 2.632 -0.225 -7.88Ballast Nedam 11.39 10.10 -1.30 -11.37Bam Group 3.94 3.50 -0.44 -11.07Bauer 18.00 18.86 0.86 4.78Bilfinger 81.77 83.85 2.08 2.54Bouygues 28.79 27.84 -0.95 -3.30Carillion UK 3.040 2.983 -0.06 -1.88Eiffage 43.73 41.09 -2.64 -6.04FCC 16.98 15.27 -1.71 -10.07Ferrovial 14.05 14.02 -0.03 -0.21Hochtief 66.81 64.90 -1.91 -2.86Impregilo 4.70 5.03 0.33 6.91Keller Group UK 10.510 10.220 -0.290 -2.76Kier UK 18.084 17.630 -0.454 -2.51Lemminkinen 14.78 15.60 0.82 5.55Morgan Sindall UK 7.920 7.750 -0.170 -2.15Mota Engil 3.39 4.62 1.23 36.40NCC (B) SEK 199.60 202.90 3.30 1.65OHL 30.90 39.53 8.63 27.93Peab (B) SEK 38.15 39.53 1.38 3.62Sacyr Vallehermoso 3.97 3.81 -0.16 -4.03Skanska (B) SEK 124.90 125.00 0.10 0.08Strabag SE 19.37 21.33 1.96 10.12Taylor Wimpey UK 1.102 1.061 -0.041 -3.72Tecnicas Reunidas 37.95 39.38 1.43 3.77Trevi Group 6.78 6.40 -0.38 -5.60Veidekke NOK 48.50 50.75 2.25 4.64Vinci 47.25 47.28 0.04 0.07YIT 9.56 9.44 -0.12 -1.26Period: Week 44 - 48

was 3.3%, which is good monthly growth.

Better still in percentage terms was the Nikkei 225, which put on more than 10% in the same period to finish week 48 at 15,655 points.

Although this was not a record like the Dow the highest the Nikkei has reached was a now scarcely-believable 38,916 points in 1990 it was the best the index has been for six years.

The picture in Europe was more mixed. On the positive

CONTRACTORS

EQUIPMENT MANUFACTURERS

Company Currency Price Price Change Change at start at end (%)CEE Index 246.29 251.18 4.89 1.99Astec Industries US$ 33.81 36.28 2.47 7.29Atlas Copco (A) SEK 179.80 181.00 1.20 0.67Bell Equipment ZAR 23.99 20.49 -3.50 -14.59Caterpillar US$ 83.36 84.92 1.56 1.87CNH Industrial 8.71 8.30 -0.41 -4.71Deere US$ 82 84 2 2.88Doosan Infracore WON 14450 12950 -1500 -10.38Haulotte Group 9 10 1 9.76Hitachi CM YEN 2040 2172 132 6.47Hyundai Heavy Industries WON 250000 266000 16000 6.40Kobe Steel YEN 172 177 5 2.91Komatsu YEN 2109 2109 0 0.00Kubota YEN 1436.00 1724.00 288.00 20.06Manitou 13.90 13.74 -0.16 -1.15Manitowoc US$ 19.46 20.84 1.38 7.09Metso 29.00 29.80 0.80 2.76Palfinger 27.20 28.07 0.87 3.20Sandvik SEK 88 91 3 3.25Tadano YEN 1331.00 1421.00 90.00 6.76Terex US$ 34.95 36.68 1.73 4.95Volvo (B) SEK 83.25 85.90 2.65 3.18Period: Week 44 - 48

The traditional end-of-year rally was in evidence as 2013 drew to a close, and while there was some benefit to the construction industry, the sector seems to have reached a plateau, writes Chris Sleight

In fact, the FTSE is close to its all-time high, reached in

December 1999 at the height of the dot.com boom, of 6,804 points

CE 12 2013 Finance.indd 16CE 12 2013 Finance.indd 16 10/12/2013 15:39:5010/12/2013 15:39:50

FINANCE


Company Currency Price Price Change Change at start at end (%)CEM Index 151.13 151.70 0.57 0.38Buzzi Unicem (Ord) 12.77 12.54 -0.23 -1.80Cemex (CPO) MXP 13.86 14.51 0.65 4.69Cimpor 2.70 2.63 -0.07 -2.59CRH 17.90 18.66 0.76 4.25Heidelberg Cement 58.06 57.37 -0.69 -1.19Holcim CHF 67.60 65.40 -2.20 -3.25Italcementi 6.55 6.37 -0.19 -2.82Kone (B) 64.95 67.00 2.05 3.16Lafarge 50.98 51.87 0.89 1.75Saint-Gobain 38.75 39.04 0.30 0.76Schindler (BPC) CHF 129.00 126.50 -2.50 -1.94Schneider Electric 62.05 61.82 -0.23 -0.37Titan Group (Common) 20.10 22.00 1.90 9.45Vicat Group (Common) 55.05 53.57 -1.48 -2.69Wienerberger 12.60 12.28 -0.32 -2.55Wolseley UK 33.610 33.060 -0.550 -1.64Period: Week 44 - 48

MATERIALS PRODUCERS

spent ten weeks moving in this relatively narrow band.

The same goes for the component parts of the CET Index the three individual measures for contractors, equipment manufacturers and materials producers share prices which have not seen particularly dramatic movements for several weeks.

The possible exception is the CEC Index for contractors share prices, which has continued to edge gently upwards. It finished week 48 at 158.99 points the best it has been since June 2010, but still a good ten points away from the post-crisis high seen in April of that year.

Between weeks 44 and 48, the modest 0.71% gain for the CEC belied some much more significant swings for its component companies. There were double-digit losses for the Dutch pair of Ballast Nedam and Bam, along with Spains FCC. However, Mota Engil and OHL stood out for their steep gains, and there was also a 10% improvement for Strabag.

Overall the sector was fairly equally divided between

companies whose share prices lost ground and those that gained over the month.

However, as the moderate 0.71% gain for the CEC illustrates, risers just outweighed the fallers.

The picture and result was similar in the materials sector, where the CEM Index put on just 0.38% in value over the four weeks.

side, the DAX Xetra managed a 4.18% gain. However, the CAC 40 slipped 0.29% and the FTSE 100 was down 1.75%.

But putting this in context, the current level around 6,600 points is about where the FTSE has been for most of the fourth quarter, and you would have to go back to mid-2007 to see similar levels.

In fact, the FTSE is close to its all-time high, reached in December 1999 at the height of the dot.com boom, of 6,804 points.

Given that the winter rally often extends beyond the festive period into the New Year, it is not impossible that the FTSE will mimic the Dow in the weeks to come and set a new high-tide mark.

CONSTRUCTION SHARESThe CET Index for the European construction industry has moved in a similar way to the FTSE for most of the fourth quarter.

This is to say that it has hit something of a plateau and has remained fairly flat between 180 points and 185 points. Although there was a net gain of 1.12% for the CET between weeks 44 and 48 the longer view is that it has

>


FINANCE


Again, the sector was split between companies enjoying rising share prices and those seeing them fall the stand-out being Titan Cements 9.45% gain.

Unlike the CEC, the CEM has already overtaken its previous post-crisis high thanks to a slow but steady rally over the last 18 months.

Another year or so of the same sort of growth, and the CEM could get back to its all-time high level close to 190 points. However, making long-term predictions in uncertain times would be very foolhardy.

DYNAMIC EQUIPMENTCompared to the contractor and materials sectors, the equipment industry had a dynamic month on the stock markets, although its 1.99% gain between weeks 44 and 48 was nothing to get too excited about.

As one might expect, some of the best gains came from Japanese companies, which were

RESERVE CURRENCIES Beginning End Change Change of period of period (%)British Pound 0.8459 0.8281 -0.0178 -2.10Japanese Yen 132.94 139.44 6.50 4.89Swiss Franc 1.2308 1.2306 0.000 -0.02US Dollar 1.3560 1.3546 -0.0014 -0.10 EUROPEAN CURRENCIES British Pound 0.8459 0.8281 -0.0178 -2.10Bulgarian Leva 1.9559 1.9560 0.0001 0.01Czech Koruna 25.78 27.43 1.643 6.37Danish Krone 7.4587 7.4599 0.0012 0.02Hungarian Forint 294.86 303.89 9.02 3.06Norwegian Krone 8.0780 8.3130 0.2350 2.91Polish Zloty 4.1759 4.2005 0.0246 0.59Romanian Lei 4.4349 4.4349 0.0000 0.00Swedish Krona 8.7898 8.8863 0.0965 1.10Swiss Franc 1.2308 1.2306 -0.0002 -0.02Period: Week 44 - 48

Index Beginning End Change Change of period of period (%)CEE (Equipment) 246.29 251.18 4.89 1.99CEM (Materials) 151.13 151.70 0.57 0.38CEC (Contractors) 157.87 158.99 1.12 0.71CET (Total) 181.99 184.03 2.03 1.12Dow 15546 16059 513 3.30FTSE 100 6731 6614 -118 -1.75Nikkei 225 14202 15655 1454 10.23CAC 40 4300 4288 -12 -0.29DAX Xetra 9034 9411 377 4.18Period: Week 44 - 48

VALUE OF 1

KEY INDEXES

Sentiment holds steadyThe results of the November CE Barometer survey were almost unchanged from October, providing a fourth straight month of fairly robust confidence in the European construction sector.

The overall climate edged up from Octobers balance figure of +19.9% to +21.9%. The balance figure is the percentage of positive responses, minus the number of negative ones.

A significant change in November was a big leap in the number of respondents saying activity levels were higher than a year ago. This measure of confidence was up at a positive balance of +19.4%, compared to the low single-digit figures of August, September and October. Indeed, this was the highest this measure has been since late 2011. It was this leap in confidence that pulled up the composite CE Climate figure to +21.9%.

Once again there was a lot of optimism about prospects over the next 12 months, although at a balance of +35.5%, sentiment was a little weaker than in September and October.

At a balance of +10.8%, the picture for improvements in month-on-month activity in November was similar a score comfortably in positive territory, but down a little from October, when the figure was +13.4%.

With a fourth month of improving figures for the CE Barometer, the recovery in the European construction sector seems to be taking root. The increased optimism about future prospects is particularly encouraging. ce

CE BAROMETER

pulled-along by the buoyancy of the Nikkei. Kubota stood out with its 20.06% gain, and the only real disappointment was Komatsu, which showed no net improvement over the month.

Over all, the sector had a positive four weeks, with only Bell, CNH, Doosan and Manitou losing ground. However, most gains were fairly subdued single-digit improvements, especially for the high capitalisation companies like Caterpillar, Deere and Volvo, which set the tone for the sector.

CURRENCIESNovember was mixed for the Euro. It gained ground against most European currencies, along with the Japanese Yen, but there were small slides against the Dollar and Swiss Franc, and a more pronounced 2.10% drop against the Pound.

In fact, the relationships between the Euro and the Pound, Dollar and Franc have not been too volatile this year.

The significant movement has come against the Yen, which is

TAKE PARTThe 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

RECESSION

BOOM

UP

TU

RN

DO

WN

TURN

Investors will probably be

toasting a profitable 2013.

The FTSE is up nearly 10% on the year, the Dow 20% and the Nikkei 225

over 45%

now at its weakest against the Euro since late 2008.

The collapse of the Yen over the last 18 months has been striking, falling from 1=JPY95 in mid-2012 to the current level, close to 1=JPY140. That is approaching a 50% fall in value.

It is of course good news for

Japanese exporters, because it makes their products cheaper and/or more profitable in the Eurozone.

OUTLOOKIf the markets follow the usual form, their rally should continue into the New Year.

The air is not usually let out of the balloon until full-year results start to be published in late January.

In the meantime, investors will probably be toasting a profitable 2013. The FTSE is up nearly 10% on the year, the Dow 20% and the Nikkei 225 over 45%.

Even the construction sector, which has not benefited from the safe haven status that attracts money to these blue-chip stock market indicia, is looking good to finish the year in the black, with the CET up about 6.5%. ce


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LAW AND CONTRACT

government is responsible for the acts of its predecessor, despite a change in regime.

It could also be possible to rely on Bilateral Investment Treaties (BITs) concluded between two states, and Multilateral Investment Treaties (MITs). These allow the investor to start arbitration proceedings against the State of Libya when it has suffered a loss of its investment.

Libya has signed and ratified BITs with several states, including Austria, Belarus, Belgium and Luxembourg, Bulgaria, Cyprus, France, Germany, Italy, Portugal, Russia, Serbia, Spain, Switzerland and Turkey.

Under these BITs, Libya has undertaken to give full protection and security to investments made by foreign individuals and companies.

Certain BITs are less prescriptive than others with regard to the nationality of the foreign investor and its owners.

The BIT between Libya and the Belgo-Luxembourg Economic Union simply requires that an investor company be resident and have its registered office in one of the contracting states.

The BIT between Libya and Austria, however, allows Libya to deny any of the protections set out in the BIT to an Austrian

company which is owned or controlled by an investor from a third party state, and where the Austrian company has no substantial business activity in Austria.

BITs containing these types of clauses prevent investors registered in countries which do not have BITs with Libya from obtaining treaty protections through subsidiaries based in countries which have ratified a BIT with Libya. The wording of each BIT and MIT will need to be carefully scrutinised to ascertain the extent of the protections.

PROTECTIONSThe protections that are commonly offered are against direct and indirect expropriation and nationalisation, unfair andinequitable treatment, discriminatory treatment with respect to local or other foreign investors and restrictions in fund transfers.

BITs and MITs often ensure protection and security against civil unrest, insurrection, armed conflicts, revolution, war and other similar situations.

For example, the BIT between Libya and the Belgo-Luxembourg Economic Union provides that losses through war or other armed conflict, revolution, or state of national emergency must be compensated to the same extent as losses suffered by investors of the most favoured nation.

The BIT between Libya and Austria, however, provides further bases on which most favoured nation protection must be afforded, including insurrection, civil disturbance, acts of God and force majeure.

A similar protection is offered by the Agreement on the Promotion, Protection & Guarantee of Investments among member states of the Organisation of Islamic Co-operation (OIC).

The OIC is an organisation of Islamic countries which aims to strengthen ties among its members. Libya is a member state and has ratified the OIC Investment Agreement.

The protections afforded by the OIC Investment Agreement are available to firms established within the signatory states.

A recent award has been rendered in favour of a Kuwaiti investor against Libya on the basis of a Unified Agreement. In Mohamed Abdulmohsen AlKharafi & Sons Co v State of Libya & others (2013), the foreign investor began arbitration against some Libyan state entities for the cancellation of a large tourism project in Tripoli, which had become bogged down in disputes with local land-owners.

The Arab Investment Court, composed of three arbitrators, awarded the claimant US$9 million (6.62 million) mostly for loss of profit and opportunity.

The court said that the cancellation of the contract by governmental decree was contrary to Libyan investment law and also amounted to the freezing or confiscation of assets, contrary to Article 9 of the Unified Agreement.

Of further note, the arbitrators also held that the Unified Agreement constituted an integral part of Libyan law, and that Article 3(2) of the Unified Agreement operated so as to supersede any conflicting provisions of Libyan law.

However, the Unified Agreement is quite strict in terms of nationality of the investors, who may take advantage of the investment protections that it offers. A company must have the nationality of an Arab State, which is party to the LAS, and cannot be owned directly or indirectly by a non-Arab citizen or company. ce

Protecting investments amid unrest in Libya

I n the two years since the fall of the Gaddafi regime, Libya has seen the emergence of a fragile central government in Tripoli.

The continued uncertainty over the countrys political future, along with severe disruption to the hydrocarbon production chain, has led to predictions of a contraction in Libyas economy of up to 5% in 2013.

The post-war redevelopment of the countrys infrastructure may nevertheless provide a tempting opportunity for foreign investors and contractors. Options areavailable for protecting investments of those who may have suffered losses arising out of the regime change, and of those considering Libya as a potential destination.

Investors dealing directly with the Libyan government may have negotiated specific clauses into their contracts, which provide for protection, indemnification and compensation for damages or losses arising out of the regime change or other hostilities.

Where such contracts were signed before the fall of the previous regime, they will still be capable of being enforced against the new government. This is due to the operation of the international legal principle of the continuity of states, by which a

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23

FIEC


Progress in reducing legislative burdens

FIECAvenue Louise 225,B - 1050 Brussels, Belgium.Tel: +32 2 514 55 35;e-mail: [email protected]

While regulation at EU level is important and a necessity in many areas, it is often accused of hindering businesses. FIEC examines efforts to tackle this

At the beginning of October 2013, the European Commission presented a new Communication introducing some further steps to make EU legislation better and lighter.

This Communication is part of the more general smart regulation approach, or Regulatory Fitness & Performance Programme (REFIT), from the European Commission, initiated in 2012.

The aim is to review the entire stock of EU legislation, in order to identify burdens, inconsistencies, gaps or ineffective measures, and to make the necessary proposals to follow up on the findings of the review.

The completion of the EU Single market led to the adoption of various marketing standards. In the case of fruits and vegetables, for instance, the aim was to facilitate trade on the basis of fair competition, help producers to meet consumer expectations and keep unsatisfactory products off the market.

Many rules were adopted over the years, and by 1996 a total of 36 fruit and vegetables were regulated by specific marketing standards. These, however, were heavily criticised for being unnecessarily complex and leading to food waste, with fruits and vegetables with non-conventional shapes and sizes being excluded from the market.

This led the Commission to review and simplify the existing rules. As a result of the simplification efforts undertaken in 2008, these marketing standards have been brought down to a set of 10 specific rules in force today.

It is clear that, whereas regulation at EU level is important and a necessity in many areas, it is often accused of hindering businesses, especially SMEs, and of interfering in citizens daily lives by generating too much red tape.

POLICY REFORMSIn response to these concerns, the Commission initiated major policy reforms, leading to more than 600 initiatives since 2005, aimed at simplifying or recasting existing legislation and to the withdrawal of over 5,500 legal acts.

This, according to the Commission, corresponded to a reduction of 26% in the administrative burden for enterprises between 2007 and 2012, equivalent to savings of 32.3 billion per year.

These initiatives included the adoption of the Services Directive, which has led to the elimination of hundreds of discriminatory, unjustified or disproportionate national requirements hindering the principle of free provision of services within the Internal Market.

It also fuelled the move towards a fully electronic VAT invoicing system, which will save time and money for enterprises.

There are also other important legislative initiatives for simplification and burden reduction for enterprises which are of particular relevance for the construction sector. These initiatives include the revision of the Public Procurement Directives.

This revision included, among others, provisions to require the acceptance of self-declarations for selection purposes and only the winning bidder will have to submit complete evidence as well as a gradual transition to e-procurement.

Companies would be able to consult tender opportunities online and submit their offers electronically, which simplifies the process and increases transparency.

As part of this overall screening exercise, the Commission launched a number of so-called fitness checks studies on existing legislations. Such checks are comprehensive policy evaluations assessing whether the regulatory framework for a specific policy sector is fit for purpose.

They aim in particular to identify excessive regulatory burdens, overlaps, gaps, inconsistencies and/or obsolete measures which may have appeared over time.

Their findings serve as a basis for drawing policy conclusions on further legislative developments.

One of these fitness checks covers the entire EU legislation on Occupational Safety and Health (OSH) that is the Framework Directive and its 23 related directives, which are currently being submitted to a full evaluation.

The conclusions of this assessment should be available towards the end of 2015.

While waiting for these conclusions, the European Commission decided not to table for the moment new legislative proposals which were being prepared, such as the ones in the fields of Muscular-Skeletal Disorders (MSDs) and of Respirable Crystalline Silica.

Other fitness checks concern legislation about equal treatment in social security as well as waste

and chemicals not covered by REACH, the Directive on Renewable energy.

Of course, part of the legislative burden depends on how EU legislation has been transposed and applied at national level.

Therefore, the Member States will be invited to contribute to the initiative by providing all the relevant information.

MONITORINGIn future, any legislative proposal from the European Commission should be accompanied, together with the implementation plan, by an assessment containing the objectives and the indicators for the monitoring and evaluation of the performance of the proposed measure.

The Commission is also committed to collaborating with Member States during the transposition phase, in order to facilitate the exchange of best practice.

Finally, this REFIT initiative has to be seen as a rolling programme. Therefore, in order to keep track of the proposals throughout the legislative process, the Commission will publish an annual REFIT scoreboard.

The aim is to monitor the content of the amendments decided at EU level, and the impact at Member States level with regard to effective simplification and burden reduction.

The scoreboard will show cases where the co-legislator in other words, the European Parliament and the Council of Ministers deviates from a real simplification proposal as submitted by the Commission.

In addition, it will show cases where the implementation by the Member States adds regulatory burden or does not allow business to reap the full benefits of burden reduction decided at EU level. ce

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25

CECE


The industry is calling for immediate action

That is why the two European associations for the construction equipment (CECE) and the agricultural machinery industry (CEMA) invited industry representatives and EU-politicians to attend a summit at the European Parliamnent in Brussels in October.

Those who had expected fierce debates to take place had to wait almost until the end of the event. This was mainly because there was widespread consensus among all participants of the summit on the goals of European industry policy, however not on the measures to be taken to reach these goals.

KEYNOTE SPEAKERSThe keynote speakers from the political side were Amalia Sartori, Member of the European Parliament and chair of the very important committee for industry, research and technology, as well as Massimo Baldinato, member of the cabinet of Antonio Tajani, vice president of the European Commission.

They each underlined the importance of competitive industrial production for the European community.

Last year, the European Commission formulated a laudable and ambitious goal to raise the share of industrial production in Europes GDP to 20% by 2020. Both construction equipment and agricultural machinery companies welcomed the fact that this topic has now climbed up on top of the European agenda.

The figures on industrial competitiveness presented by the Commission in October served as a first indicator on where the journey has taken Europe so far. However, rather than moving towards the 20% mark, the share of industrial production in the EU

once again slid downwards from 15.5% a year ago to 15.1% in the summer of 2013.

With domestic demand remaining weak in most Member States, a sharper drop was only prevented by strong foreign demand which resulted in a number of recovery gains owing to exports outside the EU.

Notwithstanding this positive aspect, recent developments are still a major worry from an international point of view. The consistent decline of the EUs manufacturing output on a global scale has remained unstopped, which means that for the first time the EUs share will fall behind Chinas in the very near future.

The industry is clear about what can be done, calling for less regulation, less bureaucracy, more coherent legislation, more and better market surveillance, and higher budgets for education, training and infrastructure.

European legislation must foster innovations and not stifle them, claimed Stefan Top, for example.He is managing director of AVR, a medium-sized manufacturer of agricultural machinery. And Cem Peksaglam, CEO of Wacker Neuson, highlighted that in order to bring a normal hydraulic hammer to the market, a stack of paper more than 300mm tall has to be filled in for a single product.

One of the major tasks for politicians was to create a fair competitive environment in Europe, said Eric Lepine, CEO of Caterpillar France.

This was not the case since there are still many machines coming to the European market that do not comply with the conformity requirements of the EU. This is because market surveillance is not applied properly in each national state.

According to industry representatives, the position of

CECE SecretariatDiamant Building Bd A Reyers 80B 1030 Brusselswww.cece.eu Tel:+32-2-706 82 26Fax: +32-2-706 82 10AEB www.aebrus.ruAGORIA www.agoria.beANMOPYC www.anmopyc.esAPCEMPwww.apcemp.pl CEAwww.coneq.org.ukCISMAwww.cisma.fr COMAMOTERwww.comamoter.it FMIB-CWMwww.fme.nlIMDERwww.imder.org.trSACEwww.sace-se.org SVSS

Teknologiateollisuuswww.techind.fiUCOMESAwww.ucomesa.itUnaceawww.unacea.orgVDMAwww.vdma.org/construction

The CECE-CEMA Summit saw a great deal of consensus among participants on the goals of European industry policy, but not on the measures to be taken to reach them

S trong and competitive industrial production in Europe is seen as crucial by CECE it creates and secures jobs and prosperity.

This is seriously threatened by over regulation and an unlevel playing field for global market players in Europe, and the industry is calling for immediate action.

policy makers in the EU is far from how the industry is working.

Industry speakers pointed out on two or more occasions that construction equipment and agricultural machinery could not be compared to cars, and that a mutual dialogue was vital for politicians to understand better sector-specific needs and challenges.

Therefore, the associations urged company representatives to intensify dialogue and contact with their individual MEPs.

ACTION PLANThe sectors have summarised their positions and claims in a manifesto with a ten-point action plan for strong industrial production in Europe.

By doing this, the industries underlined that they are committed to playing an active role in reaching the target of the European Commission.

CEMA President Gilles Dryancour, while handing over the manifesto to MEP Malcolm Harbour, said, We call on the EU to make industrial competitiveness the centre of EU policymaking, and this is our contribution.

Strong and competitive industrial production in Europe is essential to drive Europe out of recession and keep our common economic area wealthy and economically successful.

Both industries claimed again that as global competition was fierce, the EU needed to set the right framework conditions for them to deliver growth, create jobs and compete at international level.

The CECE-CEMA summit, with more than 300 participants from the industry and its partners as well as from EU institutions, is held every two years in Brussels. The next CECE Congress will be in Antwerp next October. ce

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27

EFCA


About EFCAThe European Federation of Engineering Consultancy Associations (EFCA) has member associations in 26 countries, and is the sole European federation representing the engineering and related services industry, which employs one million staff, the majority of whom are highly skilled in a breadth of disciplines.

European Engineering consultancies provide 100 billion engineering consulting services per year for about 1,300 billion investments in buildings, infrastructure and industrial complexes.www.efcanet.org

Changing priorities for contract awardsCost will no longer be the number one consideration if a new EU Directive on public procurement is passed. EFCA explores the potential changes

where cost is king. In fact, that process actually penalises you if you offer more, because that pushes the price up and you wont get the work anyway.

OPPORTUNITYThe new directive brings into play key areas which offer every creative, innovative and dynamic consultant engineer the opportunity to show their true potential to bring a project to life.

The idea should be to enhance what the client is looking for, and not to feel that all good ideas must be sacrificed to price considerations.

De Koning continued, It promotes positive thinking about so many aspects of a project from issues of durability and sustainability, long-term planning, life-cycle criteria, the environment, not to mention the chance to put forward not just risk analysis but opportunity analysis.

"This is the very opposite of only looking at the risks what can go wrong, yes, but also what can go better.

De Konings own company, Witteveen+Bos, has become very familiar with BVP. Before we started using it as our method for bidding for tenders, we thought we were always considering the

client and their position first and foremost.

But in drawing up an opportunity analysis, as BVP stipulates, we were forced to think even more about the client to put ourselves in their position, to think about what their real interests, risks and opportunities were.

In fact, we have now said that even if we are getting procurement from a client who doesnt use BVP, we will use it. It puts you in a mind-shift and it would be very difficult to go back as it would feel like a backward step in quality.

RECENT BIDThe method worked well for Witteveen+Bos in a recent bid to provide the engineering design for a major underground car park project in the Dutch town of Leiden. This is a historic city, with many complicating factors for building under the town.

It provided us with a chance to show our innovative approach and a bit more creativity than our competitors, de Koning said. In fact, our cost proposal was substantially higher than the cheapest. Our price was 50% higher than the lowest price we were third in a row.

But BVP allows for the monetarisation of the proposal as well. The client marks the quality criteria planning, risk, opportunity analyses with a score. That is translated into Euros, which is then deducted from your actual price. So you end up with a mixed combination between the real price and what I call a monopoly Euro price for each bid.

A second advantage of the BVP method, according to de Koning, is the introduction of a pre-award phase. This stage of the procurement process is a time for the client and the successful

bidder to work through some of the opportunity analysis together, and settle on which elements to bring into the project.

The relationship with the bidder remains very formal at this stage, not personal, de Koning said. But it is another extremely valuable way of ensuring only the best and most appropriate piece of the con

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