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About the Allee project and the effects of the crisis on the building industry

 

Interview with Tamás Fonda managing director and Levente Horváth (Tomlin Ltd.)

The Tomlin Ltd. was established 6-7 years ago. Its civil and mechanical engineers have almost 20 years expertise. As transaction company they can provide help from the embrional state until opening the building, practically in the facility management as well. 

We were interested what aspects they find important and on what kind of basis they choose their subcontractors and we can get an insight into the working mechanism of a transaction company. 

What is your partners like and how many persons participating?

We have already worked with several western investors and investment fonds, among our special clients there is ING, the American School, Futureal, Thalesz and so on but all our clients are equally important for us. 

Effected by the crisis and the narrowing market we also had to contract tasks. All players of the building industry suffers from the financial crisis and this is disappointing mainly if we have to say good bye colleagues who are both professional and humanely outstanding persons. 

From the building material dealer to the contractor we have got over a difficult period of time and we hope that it will finish soon. 

In conncetion with the Allee project you had to face serious challanges, how were you chosen? 

We won the Allee project after a more-round tender based on the price, resources and professional references. It is not possible to decide just based on the price because the risk of the investment is really big, so the expertise is in a lot of cases a more important factor. At the beginning of the project we made a cost estimation based on that planning can be started. 

In all phase of the project we make proposals but the investor has to make the final decision. We make monthly reports in all cases to be able to assess and rate the quality and value of work. Our clients accept and follow this assessment in every case.

How do you choose subcontractors? 

We have invited restricted tenders regarding the Allee project, we do not recommend open tenders because in this case we receive a lot of unserious offers do not having any professional knowledge and expertise. 

In the past years it was a tradition in the building industry that the investor contracted with the general contractor, but in case of Allee construction management proved to be cost saving and and effective.

How many approvals do you need for this kind of project?

The number of main approvals is 20-30, but including the authorized approvals as well we can speak about one hundred. Although the system of approvals seems to be complicated this is in the reality a regulated system. It is though a serious task because to one approval belong several authorized approvals as well. Since the local authorities have a flexible attitude towards this question the authorisation process ran surprisingly smooth. 

To what extent are the prices fixed concerning such a project, what is the tolerance limit of the investor? 

Since there are flat rate contracts with assigned technical content, there are not any tolerance limit, there are possible changes coming from technical needs or tenant demands, but these are built in the contract posteriorly. 

As part of the risk assessment different costs got into the reserve (rainfall, snowfall, unexpected difficulties), but can be planned in advance. Everybody worked at fixed price for example in the case of waste transport we could remain within the pre-set budget. 

Archeology was for instance such kind of unexpected factor, in the case of Allee we had 54 days delay but fortunatelly we could keep time.

For how long time was Allee planned?

It was planned for 80-100 years, but because of the fast changes in customer habits it will be rebuilt sooner. For example, the department store Skála was planned at the time of its contruction in 1970 for 80 years. If the pace of development will be as fast as it was in the past periode of time then it might stand a new building here in 30-40 years. 

How is it possible to plan such a project? 

It must be planned well in advanced, the schedule must contain reserves. The team was bigger than usual, at the peak time 33-34 persons managed it. The co-ordination of the management was another co-ordinating task. It must be clear that we have planned parts of the work in tender system, and the implementation plans were made by the contractors. The planning of the design packages had to be co-ordinate as well, so that was a quite complex task. 

Have the Tomlin Ltd. profited professionally, were there any enquiry in connection with the project? 

This is not that fast procedure, but both Hungarians and foreigners have contacted us and we are proud of this project and it proved to be a very useful reference. 

How big was the competition regarding waste transport?

It was remarkable competition but Multiszint Ltd. was the best in price-quality relationship but what they promised they have also performed concerning deadline, price and quality.

It was an articulated request of ING to protect our environment as much as possible and they expected that even in the field of waste management. Waste was selected on this site and Multiszint offered solutions at reasonable price and quality. 

What do you recommend to workers of the construction industry for the time of crisis? 

Stamina … Seriously, for inverstors the most important is the professional and comprehensive time and cost management in a transparent and controlable structure. 

It is also a problem for contractors that price is a crucial factor and they undergo the price race. This is just matter of time because a lot of them will fail and on the middle run not the price but the quality will be important. 

It can be the major message that not just the price counts though presentation, referencies will become more and more important. More important than many of us could think.