The First Facility Management Blog

In the early hours of Saturday, June 27, 2009, something seriously wrong happened to a nearly completed 13 story block of residential flats in the suburbs of Shanghai. No, it wasn’t destroyed by Transformers (as depicted in the photoshopped image); experts speculate that the building’s stability was compromised by an excavation project taking place close to the building’s unreinforced concrete piles.

From Reuters:

Exposed pilings stood in the remains of the building’s foundations. It appeared to be almost complete with fitted windows and a finished, tiled facade. Other similar-looking blocks in the same property development were still standing nearby.

Shoddy construction and the use of sub-standard materials is a concern in China’s construction sector as the country scrambles to build out cities and finish massive infrastructure projects to keep pace with fast economic growth.

Construction-related accidents last year included the collapse of a steel arch on a new railway bridge, which killed at least seven and a crane which fell on a kindergarten killing five. The collapse of dozens of schools during last year’s Sichuan earthquake, sometimes when buildings around them withstood the tremor, also led to a wave of public outrage about corrupt officials and construction firms.

Stephen Kennett of Building Answers reports, “It is understood workers were excavating beneath the block at the Lotus Riverside development to make space for an underground car park at the time of the collapse. With little or no reinforcement in the piles, they wouldn’t be able to resist the lateral loads and as a result have sheared.”

Only one worker was killed—noteworthy in a collapse of this scale. Authorities are still investigating the cause of the accident.

“Love Land,” a theme park with risqué exhibits was shut down before it even opened. Under construction in the city of Chongqing in China, the site was ordered by local officials last weekend to be dismantled.

A reason was not given for shutting down the sex theme park; however, photographs of the adult-only attraction had been circulated on the Internet over the weekend, which prompted backlash from some of the population.

Exhibits included giant sized reproductions of male and female anatomy, dissertations on how the topic of sex is treated in various cultures, workshops, and a photography exhibition about the history of sex. The displays would also have included lessons on safe sex, according to the park manager.

Local officials must have been aware of the construction of the park (which was slated to open in October). However, it seems that the backlash proved too much to go ahead with opening this facility. Maybe next time!

The Chinese Building Technologies (BT) industry experienced a moderate growth in 2008 with a level of 13% year on year. Signs have indicated that it is in the early maturity stage of its life cycle. Growth rates are slowing down and products’ profit margins have started to fall.

According to Frost & Sullivan’s China Consultant for Automation and Electronics practice Sandy Wu, companies are prioritizing building their brand’s name allocating a high proportion for promotion expenditure. In terms of technologies, participants are increasing offers for custom interfaces and proprietary integration.

Unlike other mature markets such as the US, Germany, and UK with a growth rate of no more than 5%, China has great potential deriving from demand for new Building Automation Systems (BAS), services and maintenances, and retrofitting markets on top of heavy investments in construction and urbanization trends. She said, “The market concentration of the top three companies in 2008 is less than 20%, well below the average level of 50% in the mature market, which implies a tendency for mergers and acquisitions.”

Wu continues, “The toughest challenge for the growth of the BT market in China is the high initial cost and expenditure associated with the installation of integrated building automation systems. A shortage of skilled people is another challenge affecting market growth.”

The Chinese economy growth rate fell to 9% in 2008 and has witnessed a severe slowdown since the reform. In the past few months, the impact of the global financial crisis has been transmitted to economy sectors as indicated by the deceleration of industrial production growth and weaker real estate investment.

According to Wu, companies in the BT industry are affected in three major aspects under such circumstances. Firstly, demand from traditional end users such as office buildings, retail, and wholesale trade buildings is anticipated to shrink. The investment growth in office buildings declined to zero in 2008 and is estimated to fall into negative territory in 2009.

Secondly, in many cases, low price is the sole decisive factor to win a contract, pushing providers to adopt poor quality products with low price. Furthermore, the market lacks accountability from building management and control systems (BMCS) providers. It is hard to test if the system is functioning as claimed upon commissioning, particularly in an energy efficient system.

Thirdly, with an increasing number of small-to-medium sized companies entering the market over the last few years when large investments were put into the property sector, the differentiation becomes even more difficult. In order to survive in the sluggish real estate market, companies need to strive to concentrate on innovation, cost control, and seek new profit growth points.

Speaking of the Chinese government’s stimulus policy, Wu says, “In view of the significant growth slowdown, the government has adopted fiscal expansion plans, industry specific stimulus policies, as well as aggressive monetary easing.”

It is anticipated that a few vertical markets of the BT industry may benefit from the RMB4 trillion fiscal stimulus package. About 45% of the stimulus package is set aside for infrastructure related projects, bringing opportunities in railway and metro.

Wu elaborates, “Nearly RMB40 billion is estimated to be invested in healthcare, stimulating new construction or retrofitting demand of healthcare facilities. Unprecedented emphasis has been put on environmental protection, with 9% of the stimulus package. Other hot sub-sectors include water/wastewater treatment plants and nuclear power plants.”

With regards to the industry specific stimulus policy, steel, auto, equipment manufacturing, and textile industries have been put on the aid list, while real estate is still uncertain in this scope. Because of the lack of clarity in the timing of implementation, the short-term impact on growth is particularly hard to estimate at this point.

Given the complex macroeconomic environment, Frost and Sullivan predicts the Chinese BT industry to experience a slowdown with a CAGR of 8.9% from 2007 to 2012.

Although the downward trend of interest rates have a positive impact on the real estate market, the commercial property which accounts for over 50% of the overall demand in BT industry, has cooled off as expected due to the developers’ weak sales and tightening cash flow. Although, it still has long-term potential, considering the secular urbanisation trend.

“Compared with deceleration in property markets, heavy fixed assets investment have been put into industrial sectors,” Wu says. “Opportunities in BT industry can be sought in the sectors with characteristics such as abundant cash flow like cigarette manufacturing and power plants or having a strict requirement in environmental control like pharmaceutical and R&D centres,” she continues.

In order to achieve the target of sustainable growth on the way to modern society, the central government has put the priorities on energy saving and environmental protection. There could be a tendency to develop more energy efficient products or integrate energy management systems to cut down the energy consumption in buildings though it still has a long way to go.

The property market in China is showing more resilience while India has been hard hit by the global economic downturn, according to the recently released RICS Global Commercial Property Survey. Most of the Chinese indicators remain in positive territory, with both supply and demand holding up and expectations generally upbeat. Fourteen percent more Chartered Surveyors expect an increase in floor space to be let and sold throughout China in the coming months, while 18% more Surveyors are reporting a rise in capital values.

On the other hand, India has experienced a significant commercial property downturn in Q3 2008. Rising interest rates, higher inflation, and a continuing lack of liquidity is impacting significantly on business confidence. Forty-five percent more Chartered Surveyors reported a fall in occupier demand compared to just 6% in the last quarter. The balance of surveyors reporting investor purchases plummeted from a flat zero balance to -73.

RICS Chief Economist Simon Rubinsohn said, “The worsening economic climate is taking its toll on the commercial property markets in most parts of the world, and the credit crunch has now extended its grip into emerging markets. Large interest rate cuts by central banks should eventually provide some support. However, with liquidity still tight and tenant demand softening further pressure on the commercial sector is inevitable in the near term.

The 2008 Olympic Games officially begin tonight, and over the next 16 days millions of people will converge in the city of Beijing. In the lead up to this global event, we’ve heard about the numerous venues built to supplement China’s existing sports facilities. This year’s Olympic Games will take place across 31 competition facilities (12 new, 11 pre-existing, and 8 temporary). There are also three non competition facilities–Olympic Village, Olympic Media Village, and the Olympic Main Press Center.

 

Managing and securing all of those spaces will no doubt require diligence by the various facility, security, and hospitality staffs. Following are some of the companies involved in the activities.

Johnson Controls has installed sustainable building solutions in 18 Olympic stadiums and supporting facilities. The company’s installation covers 123 million square feet of Olympics grounds, monitoring more than 58,000 points in stadiums and office buildings. Venues containing Johnson Controls products include:

*National Stadium (Bird’s Nest) with a YORK dual-duty brine centrifugal chillers, ice thermal storage system and chiller plant automation system

*National Indoor Stadium, or Turtle’s Back, with YORK centrifugal chillers connecting to Metasys building management system

*CCTV Headquarters Building, or collaboration building: YORK centrifugal chillers, dual-duty brine centrifugal chillers and ice-thermal storage system, connected to Metasys building management system

*Beijing Olympic Tower: YORK centrifugal chillers and a variable speed drive

*Beijing Olympic Green Tennis Court: Metasys building management system

*Beijing Olympic Forest Park: Metasys building management system

Meanwhile, GE Energy is providing long-term services for a new power plant that will supply electricity for the Beijing 2008 Olympic Games, as well as heat and power for the city of Beijing in the future. Under a 10-year contractual services agreement (CSA) signed with Beijing Taiyanggong Gas-Fired Thermal Power Co. Ltd (Taiyanggong) of China, GE will provide all parts, repairs and services for two GE Frame 9FA+e gas turbines at the new plant. The agreement also includes risk-sharing mechanisms and performance guarantees to help ensure that the 750-megawatt facility provides reliable and cost-effective heat and power to Beijing.

Taiyanggong is owned by Beijing Energy Investment Holding Co. and SP Power Development Co. Ltd.

GE is a worldwide partner of the Olympic Games. The company has provided support for more than 400 infrastructure projects such as Taiyanggong in and around Beijing, including work at all 37 official Olympic Games competition venues and 168 commercial buildings.

Olympic Village is using Echelon’s LonWorks® technology to create an energy efficiency lighting control system. The smart LonWorks based control system integrates all lighting subsystems to optimize energy usage while maintaining a safe and aesthetically pleasing environment.

The Olympic Village is the largest non-competition venue in Beijing, and will accommodate over 23,000 athletes and team officials for both the 2008 Olympic and Paralympic Games. The Village has over 370,000 square meters of apartment space, including 22 six-floor buildings and 20 nine-floor buildings, and facilities such as general information centers, meeting rooms, medical clinics, religious centers, multiple restaurants, a library, parking areas, and entertainment and leisure activity centers.

The smart lighting control system integrates lighting subsystems for the apartments, public areas, car park areas, and all landscape and beautification lighting. The system was installed by Lang Meng Technology, Inc., a firm that provides smart home and lighting control solutions based on LonWorks technology.

Panasonic ASTROVISION large display screen systems and enhanced RAMSA professional audio systems will be used across the Olympic venues. Twin 152 square meter ASTROVISION LED screens and 264 RAMSA WS-LA3 large format array loudspeakers will show the action in the “Bird’s Nest” National Stadium.

An official worldwide partner of the Olympic Games, Panasonic is also involved in the security operations. More than 2,000 AV surveillance cameras are installed to help ensure safety and security.

Also involved in security at the Games is Vicon Industries. The producer of video surveillance systems has had its camera domes and pan-and-tilt drives chosen to be part of an integrated video surveillance system to be installed at the “Bird’s Nest.” The opening ceremony tonight and the closing ceremony on August 24 will take place in that facility, which seats 91,000 people.

Vicon China, headquartered in Hong Kong with offices throughout China, is providing local support for this project.

In other security measures, ICx Technologies, a developer of advanced sensor technologies, won the contracts to supply IdentiFINDERs to the Government of China for use at the Olympics. IdentiFINDERS are handheld, radioisotope identification devices (RIID) that are able to locate, measure, and identify sources or contaminations from gamma and neutron radiation.

The units are able to differentiate between dangerous radioactive materials, medical and naturally occurring radioisotopes, such as bananas. This type of equipment is being deployed to detect radioactive materials that might be used as a weapon by terrorists in a radiological dispersal device, a so-called “dirty bomb”.

All the people involved in the Olympics will need to eat, and ARAMARK Corporation will meet those needs as the official catering service provider for 2008 Summer Games. The Beijing Organizing Commmittee (BOCOG) chose the company in May 2008. The signing of the contract with BOCOG marks the 14th time ARAMARK has been selected to serve at the Olympic Games.

ARAMARK, together with its partner Beijing Tourism Group, is providing catering services for the Athletes’ Village, Media Villages, International Broadcast Center, and the Main Press Center at the 2008 Summer Olympic and Paralympic Games in Beijing. ARAMARK will serve more than 3.5 million meals throughout the 60-day duration of both the Olympic and Paralympic Games. In addition, ARAMARK managed the design and construction of the kitchen and dining facilities for the Olympic catering venues.

Let The Games Begin!