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| Careers Interview: We Need to Do Better Issue 42 - June 2008 Construction veteran, John Battersby, Group Managing Director of BK Asia Pacific, says that there is much room for improvement in the construction industry today. Earlier this year, John Battersby celebrated the 25th anniversary of his arrival in Asia at a cocktail party at the Hong Kong Club. From first setting down in Hong Kong in 1983 to work on a contractor's claim on the MTR Island Line to his recent work with the Lighthouse Club, he has been involved in Hong Kong's construction industry for as long as most of us can remember. How did you get started in the construction industry? Most people have never heard of what a quantity surveyor (QS) does, but luckily my father was associated with the construction industry through his work for the UK Ministry of Housing, and he suggested it to me. I was attracted by the fact that, being a QS, you have to learn about everything to do with construction. It's not just measuring things. In order to produce bills of quantities and contract documents you have to understand the construction process, to know how things are built. In the latter years of my career in the UK in the late 70s and early 80s, the industry had become very aggressive, contractors wouldn't pay subcontractors, and employers were very difficult in terms of payment. It was a bit like a war. Claims became very much part of the industry and I got into that at an early stage and became a bit of a specialist. I found out that most people didn't really know much about that process, in some ways in those days it was the case that, in the land of the blind, the one eyed man is king. How have things changed in your 25 years here in Asia? In my first few years here it was a very refreshing change from the UK where relationships in the construction industry had gotten so bad that people weren't even talking to each other. In those days, some clients I dealt with such as the MTR, acted very professionally, a lot of the senior managers were excontractors. In the private sector, I was later told my my employer (Shui On) that a contract is something we sign and put away in a drawer and never look at it again. That was the way construction used to be in Hong Kong. However, you need to put this in context that this was a time when contractors had been making margins of 30 or 40 percent, and subcontractors more than that. If you're making those kinds of margins you can absorb an awful lot of problems and the last thing you want to do is ruin relationships by making claims and commencing arbitrations. Those days are long gone, and now for some time we have been talking of margins in single figures for civil engineering projects, which don't even cover the risks that contractors are taking on. It doesn't even cover the estimating risk which is the tolerance to which it is possible to accurately estimate the cost of something. On large building projects I have seen margins of less than one percent, which is totally ridiculous..
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| What are the effects of this change? What I've found in my time in Hong Kong is that, in those early days, projects would have a very professional team with very senior people who had a lot of experience. But over the years this experience has been diluted within the industry. Projects are bigger, but they don't have the same experience per dollar due to the cut-throat competition that exists today. Unfortunately, at BKAsiaPacific we get work from other people's problems. I don't like that- its bad news. I have for a long time been trying to sell, and been partially successful, our expertise in contract administration, project management, planning and programming. progress monitoring. By looking forward to identify potential problems and putting mechanisms in place to deal with them when they arise, their effects on cost and completion date can be mitigated. But the industry in Hong Kong has a short term mentality, and this is our biggest problem. Nobody wants to take the time to do things properly, they want to get away with doing or paying as little as possible. One of the bad aspects of the industry is the unhealthy interest in dispute resolution. Whether they're a QS, an engineer or even an architect. People are spending time going to courses on mediation, arbitration or adjudication. If they spent that time going back to their roots to learn how to construct, plan and price their projects properly, the industry would be much better. I think we're trying to do too much with too little resources. You need experienced people to manage and administer projects, you can't just wake up one day and say "let's spend all this money on these new projects." There is very little effective hands on management, from planning, estimation of time and cost, managing and supervising. This results in problems, and most of it is due to incompetence. Its not easy to manage a construction project, its hard work. That's why you need well trained people with experience. There's a big problem with human resources, especially in the area of practical training. Nowadays, you've got people with practically no experience coming into the industry and demanding to be paid commensurate with their degree. We used to leave school at 16 or 18, now people effectively leave school in their early 20s. In the past, construction professionals would serve an apprenticeship and have five years practical experience by that age. The effects of this are seen throughout the construction process. For example, as a surveyor you're worthless unless you have that on-site experience. Programmers are employed because of their knowledge of Primavera, not because of their experience in building things. You can't plan or price a project unless you have got the experience of building it. Good surveyors and programmers should be more experienced people who have the in-depth knowledge of how to build but they tend to be young engineers who don't have that experience. What is the solution? Construction is the most complex of industries, every single project is different. It requires the best management. To get the best management you need to pay the most money. The finance industry, the manufacturing industry, they pay more money to get the best. You need to attract bright young people to the industry, and they're going to look at the rewards. It's a difficult industry, its hard work to do it properly. Nowadays everybody wants to be a manager, to be an arbitrator, to be a lawyer. They should go back to being a good engineer, a good architect, or a good QS, to design, price and build things properly. That experience should go back down to doing the job. I think a lot of people would actually prefer to do that, but the problem is that there's no money in it. Lawyers, claims consultants and arbitrators earn far more from the industry than engineers, architects and surveyors. The industry needs to address this problem. RFP
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Key title: RFP magazine
Abbreviated key title: RFP mag.
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