Implementation of Facility Management

in PPP/PFI

- A Case Study at Universiti Teknologi MARA (UiTM) PPP/PFI Campus

Presented by:

Mohammad Shahrizal Mohammad Idris CBIFM

Executive Director

Global Facilities Management Sdn Bhd

Date: 13 October 2016

SEMINAR PENGURUSAN FASILITI SEKTOR AWAM 2016

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Public-Private Partnership

Initiative

UiTM PPP/PFI Project

Lesson Learned

AGENDA TODAY

PART 1Public-Private Partnership Initiative

4PUBLIC-PRIVATE PARTNERSHIP (PPP)

In the Malaysian context, PPP generallyincludes Privatisation and Private FinanceInitiatives (PFI). Privatization methodsinclude;

Sales of Asset or Equity Corporatisation Land Swap Build-Operate-Transfer (BOT) Build-Operate-Own (BOO) Outsourcing or Management Contract Leasing

5PRIVATE FINANCE INITIATIVE (PFI)

• PFI is a procurement method primarily meant to reduce the burden of CAPEX for public projects.

• Key elements of PFI are financing, construction & facility management.

• Projects are developed, financed and operated by the private sector.

• Compensation is via gradual payments over long term, typically 20-30 years, after which the asset ownership is transferred to the government.

As for Private Finance Initiatives (PFI), the methods include:

• Build-Lease-Transfer (BLT)

• Build-Lease-Maintain-Transfer (BLMT)

• Build-Lease-Maintain-Operate-Transfer (BLMOT)

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Concession Company

Public Private Partnership UnitJabatan Perdana Menteri

Work carried out under Concession Agreement

Equity Investor

Project Development Consultants & Advisors

Ministry of Higher Education / UiTM

Campus Construction Works

Facility Management Services

Debt Provider

Dividend

Investment

Repayment

Debt

Concession Agreement with SLA & Charges

Facilitate Concession Agreement Negotiation

PPP/PFI MODEL FOR UITM CAMPUS

Concession Period 3 years construction + 20 years maintenance

PART 2UiTM CAMPUS DEVELOPMENT

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Concession Agreement Between Government of Malaysia andUniversiti Teknologi MARA (UiTM) and Concession Companies forthe Development of UiTM Campus.

10 UiTM Branch Campuses / 3,000 – 5,000 students per campus.

3 years for development and 20 years for maintenance.

3 in Selangor, 2 in Sarawak, 2 in Negeri Sembilan and 1 each inPerak, Johor and Malacca.

FM advisory & consultancy contributes in project planning,facility budgeting, design review, procurement, constructionmonitoring and transition process.

Maintenance works during campus operations were detailed outin Service Delivery Manuals (SDM). These documents defined thepolicies, scope or works, service levels, delivery processes andprocedures.

Project Title

Location / Users

Period

Location

Sope of FM Services

PROJECT BRIEF

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ADMINISTRATION

/ MANAGEMENT

PLANNING &

DEVELOPMENT

BUSINESS

SUPPORT

MAINTENANCE

& REPAIRS

FACILITY

OPERATION

PROJECT

MANAGEMENT

• Space Planning & Relocation• Customer Help Desk• Data & record management

• New development planning• Development of policies & guidelines• Facility budget planning• Facility operational planning• Manpower resource planning

• General administration • Procurement management• Inventory management • Car Park management• Event management• Communication

• Asset acquisition or disposal• Building extension or alteration• Building refurbishment• System or installation upgrade

• Waste management• Domestic animal & pest control• Energy, water & gas Supply • Safety, health & environment• Disaster prevention & recovery

• Architecture, civil & structure• Engineering systems /

installations• IT & Communication systems• Landscape & ground keeping• Cleaning & hygiene control

FM SCOPE OF WORK

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Generally there are 3 types of Concession Charges:

– Availability Charges: This payment for the space availability charges made for UiTM to carry out teaching & learning activities. It is normally constant throughout the concession period. This payment is made on monthly basis.

– Maintenance Charges: This payment is for the provision of operation & maintenance services as specified in the Service Delivery Manual (SDM) developed by UiTM and Concession Company. The payment is on monthly basis and rate is revisable every 5 years intervals.

– Maintenance Reserve Fund: Fund jointly managed by UiTM and Concession Company as sinking fund for major works involving replacements of total/partial installation (due to reaching maximum life span/beyond economical repair, wear & tear, unscheduled failures) and refurbishment.

CONCESSION AGREEMENT - Charges

11CONCESSION AGREEMENT – Key Features

• Concession Agreement to be read together with Service Delivery Manual (SDM) as follows:

o SDM 1 – O&M Delivery

o SDM 2 – Performance Deduction

o SDM 3 – Safety Health and Environment

o SDM 4 – Facility Management System

o SDM 5 – Maintenance Reserved Fund

o SDM 6 – Variation Order

o SDM 7 – Facility User Guide

• The approach is performance based, where concessionaire is required to meet agreed KPIs as stipulated in the Concession Agreement.

• Failure to perform the Maintenance Work in accordance to SDM, UiTM have the right to:

– Impose relevant demerit points penalty

– Deduct such amount from the maintenance Charges

– The maintenance works may be awarded/sub-contracted to a 3rd party (competent service provider)

PART 3LESSON LEARNED

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To assist clients in establishing the Asset and Facility Management Plan throughout their organisation

To provide Asset and Facility Management Solutionstowards optimising overall business performance

To enable clients to develop and sustain effective built environment Functionality at all time

OBJECTIVES OF FM IN PPP/PFI

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PROJECT DEVELOPMENT STAGES

IMPLEMENTATION CYCLE

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Identification of strategic direction

Policies and process FM planning FM systems

Compliance to standards Facilitates continual improvements Sustainability

Elevation of FM function status Personnel development

Operational readiness Transition and handover Performance management

FM/development best practices

Exposure to experts

Reduced disruption Smoother transition Better satisfaction Suitable facility (for

tenants)

Cost effective operation Risk mitigation Financial preparedness Reduced retrofits/rework Improved ROI

Facility design optimisation

Life cycle approach FINANCE

CUSTOMER

PROCESS LEARNING& GROWTH

FM ADVISORY & CONSULTANCY CONTRIBUTIONS

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NO ELEMENTS SPECIFICATIONS QUANTIFIABLE BENEFITS

1Energy

ConsumptionEnergy saving programs Up to 5-10% reduction in electricity bill

2 Human Resource

Training development cost Usually up to 2% of staff salary

Career path of existing FM staff No longer burdened with staff career development

Absenteeism / low worker productivity

Indolent workers can be phased out

Reduced absenteeism by at least 45%

Higher worker productivity by as much as 16%

3 SafetyAccidents

OHSAS processes & management systems are designed

to reduce accidents

Insurance claim Less insurance claims & reduced liability

COMMERCIAL BENEFITS

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NO ELEMENTS SPECIFICATIONS QUANTIFIABLE BENEFITS

4Building Life Cycle

Costs

Asset/equipment preservation Up to 25% reduction in life cycle costs

Extended life time Up to 18% cost savings of equipment

5 Risk

Ad hoc remedial expenditure Reduced to practically zero

Fixed price for outsourced services Zero impact from economic fluctuation

Passed to an external party Flexibility in selecting an outsourcing partner

6 Service QualityProfessional services governed by

industry standards & best practises

Maximise occupant & visitor comfort

Realised aesthetic value of the building

Immediate access to innovations in FM

COMMERCIAL BENEFITS

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Unable to meet customer’s expectations

Cost escalation concerns over long-term

Need improvement on local supplier and contracting support

Technological obsolescence

Personnel lack of FM competencies

Non-standardised service delivery by FM providers

Poorly constructed infrastructures

CHALLENGES

Should you need further information, please do not hesitate tocontact us at e-mail: gfm@globalfm.com.my or refer to our website: www.globalfm.com.my

THANK YOU

QUESTION & ANSWER SESSION