Kaibo Engineering January 2012 e-newsletter

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January 2012 Kaibo Group e-newsletter.

Kaibo Group is a Chinese based international construction management firm.

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Kaibo Engineering January 2012 e-newsletter

  1. 1. 1 X W ELCOME TO KAIBO Issue 1 Volume 1 2012 GROUP .......................... 1 X KAIBO CURRENT NEWS 1-1 X INDUSTY NEWS .......... 2-4 Kaibo GroupKaibo Group is an international project management(EPCM/PMC) company. Where we provide project man-agement and consulting services to owners and Chineseconstruction enterprises.2011 in focus forKaibo Group2011 was a another successful the event as he focused on theyear for Kaibo Group where we cooperation model betweenundertook engineering project contractors and engineeringmanagement and consulting consulting firms.works on projects in Australia, In 2011 we started an initiativeAfrica, Europe and Asia at a in sponsoring disadvantagedtotal value of over 4 Billion children in China and abroadUSD. These projects received a where we aim to provide a betterhigh degree of recognition from future through education. Thisall people involved from Gov- initiative is one of several Cor-ernment departments to the porate Social Responsibilityowners involved. projects we actively pursue for aDuring the course of the year better future for people not onlyCEO Mr. Sun delivered key in China but throughout thespeeches at various conferences world.and events with one in particular All at Kaibo Group look for-at 4th China International Con- ward to another challenging yeartractors Association (CHINCA) in 2012 and look forward towhich was widely heralded at working together with you. Current Projects Nigeria—We are the management contractor on a $162millionUSD railway contract where we are providing a full range of EPC Project Management services. Sudan—Providing project management services for a $500USD irrigation project where we oversaw the whole project process including tendering, contract negotiation, assisting contractors and maintaining effec- tive communication with the owner. Mongolia— Project managing a housing development contract. 1
  2. 2. 2 Q UICK N EWS The Growing Influence of Chinese Construction “CHINESE CONSTRUCTION FIRMS FACE SEVERAL PROBLEMS WHEN EXPANDING OVERSEAS, INCLUDING LACK OF RISK MANAGEMENT AND POOR CONTRACT MANAGEMENT, ฀฀CNPC signed a deal in THE PROFESSOR SAID. ONE EXAM- Afghanistan to win the PLE IS THE LIGHT-RAIL PROJECT IN country first ever Oil THE MUSLIM HOLY CITY OF MECCA bid. WHERE CHINA RAILWAY CON- ฀฀Qingdao Kingking STRUCTION CORPORATION Group to invest $100 million to develop BOOKED A 1.39 BILLION YUAN mines in Africa. (HK$1.66 BILLION) LOSS. “ ฀฀Pan-China Construc- tion win contract in Despite concerns about the US$1.81 billion in 2002 to are highly competitive, as no South Sudan to design quality of their work, Chinese US$19.75 billion in 2008. other country has more than a and construct new construction companies are Despite the tremendous in- 12 per cent share, said IDE- capital. winning more valuable interna- crease in contracts, there have Jetro. However, Chinese firms ฀฀CCEC signed $1.2bil- tional contracts to build every- been examples of poor-quality account for only three per cent lion for railways in thing from roads to railways. work or safety issues in certain of the equipment supply mar- overseas projects by Chinese ket in Africa and are almost Ethiopia. Richard di Bona, who runs a Hong Kong transport consul- construction firms in Qatar, non-existent in construction Ghana, Poland and Saudi Ara- consultancy in Africa. tancy, said China had signifi- bia, said an international engi- Chinese construction firms cantly expanded its assistance neering executive. face several problems when to developing countries, pre- Chinese construction firms expanding overseas, including senting Chinese firms with an have been able to win overseas lack of risk management and inside track into many projects. contracts because they offer lower prices that come with poor contract management, the professor said. One example is U PCOMING Although the value of interna- tional contracts won by Chi- financial support from Chinese state banks - such as China the light-rail project in the Muslim holy city of Mecca E VENTS nese firms dropped 6.5 per cent Exim Bank - which offer loans where China Railway Con- year-on-year to US$82 billion on generous terms, said the struction Corporation booked a in the first nine months of international engineering ex- 1.39 billion Yuan (HK$1.66 2010, the value of international ecutive. billion) loss. contracts won by Chinese Chinese construction firms are "The Chinese companies real- firms in 2009 was 10 times highly competitive in Africas ize they cannot indefinitely civil works sector but not in expand overseas on the basis of more than 2000, according to equipment supply or construc- cheap work and cheap financ- the China International Con- tion consultancy, said the Insti- ing alone," said the executive. tractors Association. By the tute of Developing Economies end of September 2010, the of the Japan External Trade cumulative total of interna- Organization (IDE-Jetro). le fromro This article is from tional contracts won by Chi- From 2004 to 2006, Chinese scmp.com. Written by mp.com. mp.com Written itte www.scmp.com. Written by firms accounted for 31 per cent n Shih Shi Toh Han Shih nese firms was US$642 billion, of civil works contracts in 3rd IIICF—24—25 of May. according to the association. Africa awarded by the World In Africa, the value of Chinese Bank and African Develop- construction projects jumped SCET—May ment Bank. Such a percentage more than tenfold from indicates Chinese companies 2
  3. 3. 1 W ORKING WITH K AIBO G ROUP PANAMA CONTRACT The China Communication Con- The Chinese company partnered , London-based ARUP at US$8.5 struction Company has won a with a U.S.-based engineering and a second U.S. firm, Ty Lin contract from the Panama Canal consultancy, Louis Berger Group, International at US$9.6 million. We Endeavour to work Authority to design a third bridge The Panama Canal Authority headquartered in Morristown, with all stages of the con- spanning the Panama Canal. estimates the new bridge will New Jersey. struction project providing The CCCC submitted the lowest double cross-canal traffic capac- The five competitors were Pa- world class management, bid for the project at US$4.66 nama’s TYPSA Principia with a ity when it is completed in 2014, consulting services, and million, securing the contract bid of USUS$4.9 million, Puente scheduled to coincide with the project management. over five competitors, according de Colon at US$7.2, U.S.-based completion of the canal expan- We also provide training to Xinhua. URS Holdings at US$6.1 million, sion. sessions to help your com- pany achieve the best re- sults in dealing with Chi- nese enterprises C ONTACT K AIBO G ROUP SINGAPORE CONTRACT China Railway 11 Bureau has elevated MRT viaducts. The Tuas West Extension is an won the last two civil con- other is for the construction of extension of the East-West tracts of Singapore’s Tuas the elevated Tuas Crescent Line from Joo Koon station, West Extension mass rapid station and approximately consisting of a 7.5km twin- Address: B1502, Vantone transit (MRT) project. The 2.4km of MRT viaduct, which tracked MRT viaduct, four Center, Chaoyang District, contracts have a combined will be integrated with part of above-ground stations and a Beijing (100020) value of US$390 million. a 4.8km of road viaduct. depot. Tel: (+86)10-59073235 One involves the construction When completed, the road Construction will start in Email: info@kaibogroup.com of elevated stations at Tuas viaduct will provide motorists January 2012 and is targeted Web: www.kaibogroup.com West and Tuas Link stations an alternative to the busy Pio- to complete in 2016. and approximately 2.2km of neer Road. 1
  4. 4. 4 Is project management a standard or cultural process? Does the emergence of an international stan- veloping and maintaining it. This gives him/ PMO fearlessly reporting schedule slippage or dard, and the internationalization of other her a competitive advantage as well as the cost overruns at a meeting almost untenable. standards including the dozen or more transla- ability to avoid conflict, both of which are The information needs to be subtly conveyed tions of the PMBOK* Guide mean project beneficial to the outcome of the project.” and the actions agreed before the meeting to management is a standard process across all But this is not just an East/West issue; we maintain the integrity of the group. Depending cultures and societies, or do we need cultural experienced two very different approaches to on your viewpoint, nemawashi can be thought versions of the PMBOK Guide similar to the safety management during a major project of as ‘dealing under the table’ western or as a current industry extensions? review in Pakistan. The hierarchal and proce- type of smoothing ‘finding the root of the I ask this question as the ISO committee final- dural culture of the Indian sub-continent was problem and using some Delphi technique to izes the draft of ISO 21500, A Guide to Pro- quite different to the ‘team/group’ culture of circulate around the stakeholders to build ject Management. The PMBOK Guide is pro- the Chinese engineering company building the consensus’ eastern. There is no right or wrong duced in 12 official and several unofficial project. In this ‘culture clash’ the Pakistani in culture: the Chinese ran an incredibly suc- translations but language is only one dimen- engineers were focused on documented safety cessful Olympics, Japanese industry domi- sion of culture. To effectively manage pro- nates in many areas, and South Korea has a jects within a specific culture do the long history of successful project delivery. PMBOK’s processes need adaptation? The key question is how much additional The original trigger for this column was the value could a cultural adaptation of PMBOK collapse of a series of ‘binding agreements’ in Guide contribute to the development of pro- 2004 between Fortescue Metals Group Ltd ject management in these and other cultures? (FMG), and some Chinese engineering com- There are advantages to a standardized world panies to build a new iron ore mine, railway wide view of project management and there and port (worth billions of dollars). The deal are advantages to developing culturally rele- fell through when parallel negotiations around vant adaptations. The approach favored by an equity stake in Fortescue collapsed and the Robert Higgins (another contributor final appeal to the High Court over the matter “GUANXI CAN to Advising Upwards) is to clarify and sim- is due shortly. plify the PMBOK to transform it into a dia- In an Western context, there were separate RATE AS HIGHLY mond of knowledge. Like a diamond it needs negotiations and the collapse of one should AS TECHNICAL to be discreet, clear and hard. The ideas in a not have impacted the other. In a Chinese robust, clarified, PMBOK can be translated context, the relationship is what matters and COMPETENCE” easier. Clear ideas spread naturally by com- the failure of one aspect of the relationship munication, and because culture is a shared damages all aspects of the relationship. What procedures, the Chinese engineers and build- system of beliefs or values based on a com- this case does highlight though, is the impor- ers were focused on developing a group un- mon understanding of these ideas, having one tance of ‘culture’ when dealing with stake- derstanding of the risk through discussion and robust and clear PMBOK is the greatest holders. observation to make sure no one in their strength for creating a global project manage- Khor Soon Kheng, founder of Asia ICT Pro- closely knit team was put at risk of injury; ment culture. From this base, project manag- ject Management Malaysia, believes they saw the paperwork as superfluous. Both ers can use the baseline culture of project good Guanxi (a philosophy dealing with any sides took safety seriously; the approach em- management to create common ground in a network of relationships among various par- bedded in culture to achieving the ‘safe out- multi-national teams and adapt to the other ties who cooperate and support one another in come’ was quite different. aspects of culture in any location. the Chinese business/project world) is criti- Similarly managing issues effectively is cul- An alternative perspective suggests processes cally important to the successful delivery of turally sensitive. In Japan, the concept of ne- that are not culturally effective get ignored or projects involving Chinese organizations from mawashi (pre-arrangements) moves conten- bypassed, devaluing the overall value of the bidding through to handover. tious items forward so there are no disagree- ‘body of knowledge’. With both the 5th Edi- “Guanxi can rate as highly as technical com- ments in meetings. Even making a decision tion of the PMBOK Guide and ISO 21500 in petence and price in decision making and has can be seen as a failure; decisions should development, I feel we need to have more a significant influence on procurement, Khor emerge from the group rather than be imposed discussion around implementation of the says. “Guanxi is intensely personal: while it on the group by a project manager. ‘knowledge’ within cultures. Can one size fit can be shared and reflected onto the organiza- As the Japanese proverb says, ‘the nail that all? tion a person works for, the individual ‘owns’ sticks up gets hammered down’. Conse- This article was taken from www.cio.com.au, his/her Guanxi and has to invest time in de- quently, nemawashi makes ideas such as a written by Dr. Lynda Bourne. 4

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