ENGINEERING FIRMS AND THE CURRENT ECONOMIC CRISIS

Transcription

1 ENGINEERING FIRMS AND THE CURRENT ECONOMIC CRISIS Pablo Bueno FIDIC EC Member CEO TYPSA Group SEPTEMBER 2009

2 ENGINEERING FIRMS AND THE CURRENT CRISIS Pablo Bueno CEO TYPSA Group TYPSA Consulting Engineers and Architects based in Spain - 16 offices in Spain - 22 offices in the world - over 2000 staff -revenue ,750,000 - $235,840,811* * 1 = $1.44 (08/09/09)

3 PRE-CRISIS ENGINEERING FIRMS AND THE CURRENT CRISIS

4 NEW SCENARIO ENGINEERING FIRMS AND THE CURRENT CRISIS

5 CONSEQUENCES FOR ENGINEERING FIRMS ENGINEERING FIRMS AND THE CURRENT CRISIS

6 NEED FOR REACTIVATION PLANS TO: STIMULATE THE ECONOMY CREATE EMPLOYMENT

7 Project sustainability management Financing facilities What reactivation plans Reducing delays in payment should concentrate on Reducing energy consumption in transportation and buildings Improvements in energy efficiency Investing in infrastructure

8 Reduction in delays in payment Investment in infrastructure Financing facilities Reduction of energy consumption in transportation and buildings Project sustainability management Improvements in energy efficiency

9 ECONOMIC STIMULUS PLANS. INVESTMENT IN PUBLIC WORKS BUDGET FOR PUBLIC WORKS (in billions) BUDGET FOR PUBLIC WORKS (billion US $) BUDGET FOR PUBLIC WORKS ( billion ) % OF GDP UK 20 (GBP) GERMANY 50 (euro) FRANCE 26 (euro) USA 787 (US dollars) CHINA 4000 (yuan) JAPAN 7500 (yen) Source: International Monetary Fund

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11 COMPANY ACTION WHAT WE CAN DO TO SURVIVE THE CRISIS

12 COMPANY ACTION WHAT WE CAN DO TO SURVIVE THE CRISIS

13 CONSULTING ENGINEERING SERVICES HAVE THE GREATEST IMPACT ON THE LIFE-CYCLE COST OF THE PROJECT YET ARE THE LEAST COSTLY COMPONENT Typical Life-Cycle Cost and Impact on Project Success Engineering Life Cycle Cost Impact on Project Success Construction Operation & Maintenance

14 Repercussion of investment in engineering on infrastructure costs 250,0 200,0 150,0 100,0 Original Construction Contract 50,0 0,0 Source: Own analysis 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0 13,0 14,0 15,0 16,0 17,0 18,0 19,0 20,0 21,0 22,0 23,0 24,0 Millions Engineering Investment Millions invested in Engineering

15 Repercussion of investment in engineering on infrastructure costs 250,0 200,0 150,0 100,0 Original Construction Contract 50,0 0,0 Source: Own analysis 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0 13,0 14,0 15,0 16,0 17,0 18,0 19,0 20,0 21,0 22,0 23,0 24,0 Millions Engineering Investment Cost of Additions and Modifications Millions invested in Engineering

16 Repercussion of investment in engineering on infrastructure costs 250,0 200,0 150,0 100,0 Original Construction Contract 50,0 0,0 Source: Own analysis 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0 13,0 14,0 15,0 16,0 17,0 18,0 19,0 20,0 21,0 22,0 23,0 24,0 Millions Cost of 25 years maintenance Engineering Investment Cost of Additions and Modifications Millions invested in Engineering

17 Repercussion of investment in engineering on infrastructure costs 250,0 200,0 150,0 Total Cost 100,0 Original Construction Contract 50,0 0,0 Source: Own analysis 0,0 1,0 2,0 3,0 4,0 5,0 6,0 7,0 8,0 9,0 10,0 11,0 12,0 13,0 14,0 15,0 16,0 17,0 18,0 19,0 20,0 21,0 22,0 23,0 24,0 Millions Cost of 25 years maintenance Engineering Investment Cost of Additions and Modifications Millions invested in Engineering

18 TOTAL PUBLIC INVESTMENT PER YEAR IN INFRASTRUCTURE IN SPAIN (IN BILLION INCLUDING CENTRAL, REGIONAL AND LOCAL) Original construction contracts Incidents Source: Spanish Ministry of Public Works

19 A TOTAL OF 40 BILLION IS SPENT ON INFRASTRUCTURE IN SPAIN PER YEAR BUT 1% MORE INVESTED IN ENGINEERING WOULD SAVE HALF THE INCIDENTS RELATED TO DESIGN DEFICIENCIES + 1% invested in Engineering (+ 300 M ) - 50% incidents (- 5 Bn) INCIDENTS 4.7 BILLION EUROS SAVED Source: Own analysis

20 RATIO OF JOBS GENERATED Nº NEW JOBS DIRECTLY GENERATED PER MILLION EUROS INVESTED IN CONSTRUCTION OR ENGINEERING IN SPAIN Source: Own analysis

21 TO SUM UP: INVESTMENT IN ENGINEERING CREATES BETWEEN 2 AND 4 TIMES MORE DIRECT EMPLOYMENT IN COMPARISON TO INVESTMENT IN CONSTRUCTION 10 M INVESTED IN CONSTRUCTION OF PUBLIC WORKS GENERATES 40 DIRECT JOBS 10 M IN CONSTRUCTION + 1 M IN ENGINEERING GENERATES 52 DIRECT JOBS AND CREATES 50% MORE INFRASTRUCTURE. INVESTING 10% IN ENGINEERING PRODUCES 30% MORE DIRECT JOBS AND GENERATES 50% MORE INFRASTRUCTURE

22 This crisis is our opportunity to design tomorrow s sustainable world today, making full use of our active role and added value. Pablo Bueno FIDIC EC Member CEO TYPSA Group SEPTEMBER 2009