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Monday, 3 September: 10.30 — 17.00

FORUM

SUSTAINABLE CONSTRUCTION

José Louis Vega
European International Contractors (EIC), President

The contractor, like every other individual, has the obligation to conserve the environment to the best of his ability. The fulfillment of this obligation, however, in case of applying for a publicly tendered project, can lead to a significant disadvantage if competitors disregard environmental aspects when calculating their bids. It must therefore be provided that the desired amount of "environment" by the client is well defined prior to the tendering procedure. As these aspects will lead to higher "up front" costs, which cannot be borne by the contractor, changes, especially concerning the performance of public procurement will have to take place.

I am very honoured and grateful of being invited by FIDIC to give the contractors' view on sustainable construction. We shall see that not always the contractors and the engineers have different opinions.

In the entire construction supply chain, the contractors are last in line.

Their is no common definition of sustainability Ours is the following:

Construction is sustainable when it considers not only economic aspects, but the ecological, social and cultural ones and the needs of future generations.

Four questions:

1. How relevant is Sustainability for the construction industry?
2. Why is it so difficult to achieve Sustainable construction?
3. What would contractors expect from a "greener" policy?
4. What incentives would exist to promote sustainable construction?

A Final Issue: Export Credit Insurance Agencies requirements

1st Question: How relevant is Sustainability for the construction industry?

The construction sector is the world's largest industrial employer. In the EU, construction account for 7.5% of total employment, 26% of industrial employment.

Sustainability in construction is affected by the way in which built facilities are procured, constructed, operated and finally demolished, ( the cycle of Sustainable construction).

Some indicators: the creation, use and disposal of built facilities consume more raw materials by weight (50%) than any other sector.

The built environment has the largest share of greenhouse gas emissions (40%) in terms of energy end usage.

Measured by weight, construction and demolition activities produce Europe's largest waste stream (45%), most of which is recyclable.

Sustainable construction faces a challenge greater than that of any other industry.

2nd Question: Why is it so difficult to achieve sustainable construction

Professor David Cadman: "Vicious circle of blame" (rather a chain)

It is the society as a whole who has to demand (and pay for) Sustainability.

Most of construction activity is simply the carrying out of instructions.

The ability of constructors to influence Sustainability is seriously constrained by tender documents and national legislation.

Philanthropy cannot be expected: competitive bids

It is not the consulting engineers role to first step out of the circle, but they are closer to clients and can educate them is Sustainability.

First step is to be taken by the demand side: national governments and public bodies are the larger clients. Procurement policies

EU Commission is reviewing: Article 6 of the Treaty of Amsterdam

Awarding criteria: price but clearly including Sustainability Requirements. Other criteria may become more complex and subjective.

3rd Question: What would constructors expect for a greener construction policy?

Procurement procedures: coherent, fair and transparent

Following principles must remain essential:

1. Environmental consideration should be included in the tender documents before tender procedures
2. Clear and unambiguous requirements. Clearly defined priorities
3. Awarding criteria: transparent, objective and clearly stated in the tender documents

Going further into the procurement guidelines:

• Limit the competitors to the capable ones for the specific project, either based on technical or performance requirements.
• In case for life cycle cost awarding criteria, a system of life cycle costs performance indicators must be developed
• Tenderers my be encourages to present alternative technical solutions taking into account environmental aspects

4th Question: What incentives would exist to promote Sustainable construction?

Report of the Working Group on Sustainable Construction (participants: the EU Commission, the Member States, and the Industry). Includes a convincing argument: whole life costs of construction is financially reasonable.

Until recently, it was not like that: the criteria was fitness for purpose at the lowest possible construction cost. Environmental impact of a structure has always been of lesser importance. Also, fiscal systems of taxation tend to favour low capital costs.

O&M costs, in many cases, far exceed the costs of construction

For most clients therefore, there should be a genuine interest is procuring built assets with low O&M costs.

A problem: budgets for construction of public authorities, a matter of responsibility.

A Final Issue: Export Credit Insurance Agencies requirements

OECD Draft Agreement on "Common approaches on environment and officially supported export credits": the agencies must examine the environmental impacts , the exporter will provide the information.

The burden to provide environmental impact assessments cannot be left solely to the contractor.

When the contractor is asked for, normally nothing can be done: "alea jacta est".

EIC urges the community of consulting engineers to advise their clients: to carefully study the environmental aspects, especially when export credits are needed and include related information in the tender documents. Large contracts (dams, etc.)

Conclusion

The contractors are fully aware of the importance of Sustainability.

The construction industry is more than willing to make its contribution towards Sustainability.

The first step in the process must come from the demand side, supported by the society as a whole.

Besides that, all links in the supply chain must comply with their responsibilities.

I feel optimistic: Sustainable solutions for construction can and will be found, and out two organizations, FIDIC and EIC can contribute an importance share to this development.

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