The Bilfinger Berger Project Investments Newsletter Issue 29 / July 2012

pi eyeTackling isolation and extreme weather conditions in the Northern Territory

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ARARAT DISAPPOINTS

It is always hugely disappointing when one of our investments has to be written down, and the impact of such events can send ripples far and wide.

So when our SPC on the Ararat prison project in Australia filed for insolvency early in June, the company entered a difficult period. Such events are extremely unusual, the last write down BBPI had to make was in 2006, but the consequences must be dealt with professionally, and the lessons learnt.

Our Australian team, together with strong support from the Bilfinger group, have been fighting hard to avoid this outcome for many weeks, but they were ultimately unsuccessful.

The reasons underlying the failure of this project are under investigation, and you can be sure that we will implement any measures necessary to prevent a recurrence.

In the meantime, our business will need to recognise a significant hit on our 2012 result, and we urge you all to do what you can to help us to recover this loss. Ultimately, the best solution is to continue to win good quality new investment, with first class delivery teams, whilst looking hard at our costs.

With your help, we can get through this setback, and continue to thrive. We know we can count on your support.

NICK DAWSONBBPI Joint Managing Director

Jürgen Bohn joined BBPI in early July as Director, Alternative Investments. As part of our new business strategy to actively pursue opportunities in renewable energy, Jürgen will head up the AI team in Europe and develop new business in this region.

“This is an exciting challenge for me because it is a completely new market for BBPI and it will be interesting working with BB sister companies to harness our capabilities,” said Jürgen.

Jürgen has extensive experience in the renewable energy sector, particularly in bio and geothermal energy. He has held management positions and has worked in project development and spent eight years in Africa during his career.

Prior to BBPI Jürgen was the General Manager for juwi Bio GmbH, where he built up their bio-energy business, and before that he worked at Siemens and Johnson Controls.

When asked what attracted him to BBPI he explained, “It was the combination of highly professional individuals in different countries working together with the common goal of growing an already successful business. I have been very impressed so far.”

In his spare time Jürgen spends it in the garden or practising his culinary skills and recently his two sons have started taking him BMX biking and roller blading.

As Jürgen will be moving from Munich to the Frankfurt area, walking and skiing in the mountains will no longer be as convenient, nevertheless there is a golf course very close to his new home…

NEW VENTURES IN ALTERNATIVE INVESTMENTS, ROLLER BLADING AND BMX BIKING

juergen bohn at the schengen forumThe event was hosted by Eversheds, who approached us to help them showcase a live PPP project and demonstrate best practice. The PPP pipeline in Poland includes a variety of transport and accommodation projects and the PPP model is increasingly being seen as a viable way to develop much needed infrastructure.

Representatives from the Polish government and municipal authorities were given an insight into how a LIFT project worked, including the increased public sector involvement. Nick Harris, Project Manager at BBPI, escorted delegates around the hospital site, who were particularly interested in the energy efficiency design of the building.

Finchley Memorial Hospital is located in a residential area in North London and will replace the existing hospital. It is part of NHS Barnet’s transformation of

local health services to meet future healthcare needs of the community. It will offer high quality services closer to home, thereby reducing the reliance on acute hospitals.

The redesign and delivery of primary and community-based care at the hospital will focus on services such as ambulatory assessment and specialised treatment, rehabilitation therapy as well as a community café with retail section. At the heart of the redesign is the commitment to embrace and promote sustainability, and to provide an environment that benefits the health and well being of the local community.

Finchley Memorial Hospital will be the fifth Primary Health Care facility delivered in the North London LIFT programme.

VIPs VISIT FINCHLEY MEMORIAL HOSPITAL TO POLISH UP THEIR PPP KNOWLEDGEBY MELISSA MA

A group of VIPs from the Polish Embassy were given a tour of BBPI UK’s newly built Finchley Memorial Hospital, part of the Barnet, Enfield and Haringey LIFT programme.

finchley memorial hospital

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For example, importing water and exporting grey water while a treatment plant is commissioned, using mobile networks for telephone and data communication while a fixed telephone line is implemented, and developing a supply chain to support the site’s geographic location by producing specialised materials interstate.

In mid-June, the project team hosted a site visit for VIPs, lenders and equity partners, who remarked on the unequivocal setup of the site and the temporary infrastructure which protects workers, materials and maintains high levels of security. This included clearly demarcated pathways for pedestrian and dangerous out of bound areas, the separation of heavy vehicles from light vehicles and pedestrian areas, and strategically placed potable water and toilets in satellite compounds.

“Controls are not stifling and workers are encouraged to use initiative. There’s no ambiguity about what goes where, or what safety standards are in place,” remarked BBPI Project Manager, Geoff Hayr.

“Our site is large with a tight programme. With so many visitors on-site including government representatives, consultants, lenders and equity providers, there is little time to teach them how the site functions. So, we designed the site and induction programme like an Apple iPad – user friendly without a complicated instruction manual,” said the project’s construction representative, Ingo Niemeier.

The safety and organisational standards on-site will be pivotal to the success of the Darwin Correctional Precinct and will signal ‘A New Era in Construction Standards’ for the Northern Territory once the red dust settles.

THE RISING OF RED DUST SETS NEW STANDARDS IN THE NORTHERN TERRITORY

Did you know?

• Most of Darwin’s 130,000 people are attracted to work opportunities through projects. Darwin Correctional Precinct is one of these, with an estimated peak resource demand of between 600 to 700 people later this year. The project currently has around 250 to 300 people on site on any given day.

• Darwin is known for its harsh climatic conditions with two distinct seasonal extremes; a dry period and a wet summer. The wet season lasts four months (Dec-Mar), up to 2,000mm of rain is not uncommon during this time and cyclone activity prevails.

• The location of the project is approximately 29km south east of the Darwin CBD – capital of the remote Northern Territory. The Territory covers an area of some 1,349,129 km2, around six times the size of Great Britain with a population of 212,000.

• Before commencing construction late last year, the site consisted only of Australian bush land with no infrastructure.

BY LIAN KILLE AND RICHARD ZANNER

At 7:30am, the characteristic red dust of the Northern Territory can be seen rising into the air. It is the arrival of some 250 staff which are now on site at the massive 300 hectare construction site of the Darwin Correctional Precinct.

In 2011, the Northern Territory Government had a vision of creating ‘A New Era in Corrections’. Now, after careful planning and well managed interfaces, the Government hopes the project will also represent ‘A New Era in Construction Standards’ under the recently introduced, national ‘Harmonisation’ OHS structure which focuses on high standards of construction safety and culture in relation to site organisation.

Geographically, the Darwin site is closer to major cities of Asia than to Australia’s own capital cities, the remoteness of which poses a myriad of unique and unprecedented challenges.

BBPI Project Director, Richard Zanner explained, “It reminds me of projects back in central Africa where careful planning was paramount as materials had a six week shipment time. A miscalculation in quantity or a damaged product could mean major delays. Additionally, the extreme temperatures add significantly to safety considerations.”

The isolation of the site and the lack of basic infrastructure have seen the team employ innovative measures for the fast-tracked project.

back row: lee walters (sbjv), campbell webster (nab), john priddis (cba), richard zanner (bbpi), charles mott (bbpi), grant miller (cba), adam cougle (cba), jason rackley (anz), graham whitson (bbpi), euan mcnair (west lb), peter bugden (nab), michael mineo (anz)front row: ben chadwick (cba), geoff hayr (bbpi)

A topping off ceremony took place to mark the occasion which saw approximately 200 hospital staff gather round the existing hospital entrance to sign a steel beam. This is not the tradition of topping off ceremonies; usually the construction team celebrate by pouring concrete into the last floor slab and capturing the event for prosperity. However with the last two floors of the hospital being constructed of steel, the team came up with the idea of painting the last beam pink and have all those involved in the delivery of the new hospital sign it.

It was very much a carnival atmosphere; the hospital staff were excited about the prospect of moving into their new hospital next year and the hospital’s CEO, Marilyn Emery expressed her gratitude to Women’s College Partnership.

The audience included BBPI representatives, hospital staff, Premier Dalton McGuinty and Minister of Health and Long-Term Care Deb Matthews, who attended as a last minute surprise.

Once all the signatures had been captured, including the Premier’s, the steel beam was raised into position to a loud siren blast and applause.

The project itself has been split into two phases, with construction of Phase 1 to be complete in late spring 2013. Phase 2 starts in late summer 2013 which involves the demolition of the existing hospital followed by excavation across the footprint of the Phase 2.

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BY MARTIN CURRIE

Women’s College Partnership in North America, has now reached the highest point - fourteen levels - of the new hospital and celebrated this achievement in early June.

WOMEN’S COLLEGE HOSPITALHAS REACHED NEW HEIGHTS

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martin currie in front of the women’s college hospital

representatives from the women’s college partnership signing the pink beam

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NEW NAME, NEW ERABY DAMIAN JOY

The regional Away Days in recent months highlighted that BBPI is in transition to a new and exciting stage of its life. This includes our new name Bilfinger Project Investments, and our new business strategy.

These off site days also showed the great enthusiasm of the staff to help shape our strategy for that next stage. In May, at the Global Strategy Conference in Rüdesheim am Rhein, representatives from each team met to discuss the results of the Away Days. The conference was informed and entertained by video messages, presentations and newspaper story-boards explaining the views of the regions.

Important drivers of our strategy include: the newly-formed BBGI fund providing a means of recycling equity; BBSE has committed to re-invest equity to build a €400m portfolio; BBSE’s plans for aggressive growth of output and earnings will create synergistic

opportunities for BBPI; demand for infrastructure and the competitive environment are changing the types of opportunities in our different markets.

The conference concluded with an agreement on four pillars of BBPI’s strategy, which will be refined in focus and timing in each region:• Classic PPP in core markets• Classic PPP in neighbouring markets• Alternative Investments• Fee for services business.

More than ever before, BBPI now has a coherent strategy, a long-term business model and a clearer understanding of its position within BBSE. Within this framework, we can now focus on delivering the reliable results that our parent company, customers and partners have come to expect from us.

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Service delivery to third parties is becoming an increasingly significant part of our business. Asset Management services to the BBGI fund is a major new endeavour for us, defining new relationships and exposing us to a new culture.

We are also becoming recognised for the quality of our financial advisory skills, with a recently signed mandate with Julius Berger in Nigeria on the second Niger River Bridge project, with more to follow from JBN. Our existing relationship with Semperian on the British Embassy in Berlin continues, and the potential to offer the capabilities of the Pavest pro highway maintenance system to third parties is being explored.

BBPI’s Philip Newzella was invited to attend along with 40 senior delegates from the Saline Water Conversion Company (SWCC), the Authority responsible for most of Saudi-Arabia’s Water Desalination Plants. Entitled “Lifetime extension and efficiency enhancement of thermal power plants and MSF/MED desalination plants”, the purpose of the workshop was to introduce SWCC, a key client, to Bilfinger Berger’s technologies and tailor-made solutions for plants in Saudi Arabia.

Among other presentations, Philip Newzella gave a talk on project finance solutions including our AI’s integrated

approach offering. The presentations were well received and Deutsche Babcock Middle East is looking to continue with their impressive track record in the Middle East Region. For BBPI, it was a great opportunity to introduce our Integrated Solutions Approach directly to a key client.

For more information please contact:philip.newzella@pi.bilfinger.com

philip newzella addresses delegates

PHILIP PRESENTS INTEGRATED APPROACH SOLUTIONS TO KEY SAUDI CLIENTBY PHILIP NEWZELLA

Bilfinger Berger Power Services subsidiary Deutsche Babcock Middle East, hosted a workshop in Saudi-Arabia’s capital Riyadh in May.

Asset management services continue after

disposal

Highway rehab programme developed

Asset management services for 35 facilities

Financial advisory mandate for Niger

bridge PPP

Four financial advisory mandates for BBPI led

consortia

CAN WE BE OF SERVICE?

We are developing a significant services portfolio, fully in line with our strategy. Outsiders recognise our skills and the quality of our people, so we must make sure that we

continue to provide a top quality service to our existing customers, develop new ones, and continue to build up a strong customer led ethos.

new starters

BBPI Holding

After four months on a temporary contract, we are pleased to announce that Sonja Noll has joined BBPI permanently as Nick Dawson’s personal assistant.

Steffen Mohr joined as Company Secretary mid April replacing Cornelia Fritsch.

BBPI Europe

Jürgen Bohn joined the Wiesbaden office on 2nd July as Director for Alternative Investments.

Gary Shaw joined the Belfast team in June as Assistant Project Manager.

After six months working for BBPI Maidenhead, we are pleased to announce that Carol Buley has joined permanently as Project Accountant.

BPI North America

Deborah L’Hirondelle joined in June as Project Administrator for Kelowna and Vernon Hospitals project.

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OLYMPIC TORCH RELAY PASSES THROUGH THE NORTH SCHOOL

pi life

The Olympic Flame stands for peace, unity and friendship. It will be carried by 8,000 truly inspirational Torchbearers as a build-up to the games in London and it will be passing through The North School, one of BBPI’s Kent schools.

The Olympic Flame will arrive at the school at 11.00am on 18th July with all of its entourage. The handing over ceremony will last 15 minutes and the torch will be on its way again heading towards the south coast. BBPI has been asked to help with security and on the day Jane Anderson, Project Manager for Kent Schools, and Amanda Jeff, Schools Events Co-ordinator, will act as stewards to help ensure the safety of children and spectators.

Head teacher Lesley Ellis commented, “This is a wonderful opportunity for the students and demonstrates the high regard the London Organising Committee Olympic Games, Kent County Council and Ashford Borough Council have for the North School.”

Jane Anderson said, “This is a once in a lifetime opportunity and we are very excited about the occasion.”

The Flame will travel to within an hour of 95 per cent of people in the UK, the Isle of Man, Guernsey and Jersey during the 70-day Torch Relay. It will enable local communities to showcase the best their area has to offer.

11th PPP ANNUAL CONFERENCE

This year on 8th May participants of the private, public and legal sector met at the ConVent in Frankfurt to discuss the current opportunities and obstacles for the PPP sector in Germany. Volker Ellenberg led a panel of 5 participants including representatives from the Ministry of Transport, DEGES, Eurovia Infrastructure GmbH to discuss the theme “PPP transport infrastructure capabilities.”

In May BB PICS and BBPI Europe were successful in their re-audit for ISO9001:2008 accreditation for their Quality Management System (QMS). This included the creation and first audit for BBPI UK.

The ISO 9000 family of standards are related to quality management systems and designed to help organizations ensure that they meet the needs of customers and other stakeholders. The standards are published by ISO, the International Organization for Standardization, and are available through National standards bodies while meeting statutory and regulatory requirements.

Acquiring accreditation will benefit BBPI in many ways, for example:

• Pre-qualify for bids: many clients expect bidders to be accredited and can even fail those who are not accredited.

• It formalises the work we do, making it easier to change and improve things in the future.

• More effective and easier training for new staff on how the business operates.

• Provides a framework for feedback.

Martin Pugh commented, “This is a great opportunity for us to engage in the business and to move it forward, in big and small ways, as well as demonstrating to key stakeholders that we are a well organised, forward-thinking company.”

BBPI UK ACQUIRES ISO9001:2008 ACCREDITATION

www.pi.bilfinger.com

EDITORIALpi eye is published quarterly.

Editors: Nick Dawson, Melissa MaProduction Design: Chrystel Melhuish

Please send feedback and contributions to:melissa.ma@pi.bilfinger.co.uk +44 (0)1628 503437

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northern territory secure facilities project, australiafront cover: richard zanner, bbpi project director, operations