New NEC4 DBO may not favour SA projects
Energy efficiency for Nigeria
ON POLICYMAKERS ’ DESKS
New NEC4 DBO may not favour SA projects
The latest addition to the international NEC suite of contracts , the NEC4 Design Build and Operate ( DBO ), was developed to cater for contracts where there is a single point of responsibility for the development and construction of an asset . But it is unlikely to pioneer a new direction for NEC contracts , according to construction specialist MDA Consulting director , Euan Massey . Instead , he believes that its use will be limited in the South African context and that using the new contract requires extensive work by legal experts with a specialised understanding of DBO contracts in the construction sector . “ The NEC , which strives to achieve simplicity and flexibility with each new version of its suite of contracts , leaves the document sparse on details on how to structure the relationship between phases crucial to DBO contracts : the designbuild phase and the operations phase . It envisages that important aspects of the financing of the project are covered in the scope of works and therefore does not cover maintenance management nor the replacement of key assets . Payment options are also not included in the NEC4 DBO contract ,” says Massey .
NEC4 Alliance
In a significant departure from other DBO contracts , contractors do not retain ownership of the works until full payment has been made . “ Once the works have been completed , ownership of the works transfers to the commissioning party , commonly known as the employer . As a result , NEC4 DBO is likely to only be used where the employer finances the works ,” he says . New concepts in the NEC4 DBO include operational requirements and a performance table . These allow the parties to agree performance targets
Unlike other DBO contracts , contractors do not retain ownership of the works until full payment has been made .
and an associated pain / gain share and may include timeous completion of the works , throughput and maintenance . The assessment of change is carried out with reference to defined cost and the performance table . Overall , Massey says that while the NEC4 DBO aligns with the other NEC contracts , its use will be limited in South Africa given that most DBO contracts are contractor financed and relate to works with significant design obligations . “ As a result , the NEC4 DBO contract will require extensive work in adequately defining the scope ,” he says .
Energy efficiency for Nigeria
Nigeria ’ s first Building Energy Efficiency Code ( BEEC ) was officially launched in Abuja by the Federal Minister for Power , Works and Housing , Babatunde Raji Fashola ( SAN ). The BEEC is a set of minimum standards for energy efficient building in Nigeria . Chilufya Lombe , director at Solid Green Consulting , says that energy efficiency has a bigger impact than renewables . “ It is easier to build a building to consume 30 to 40 % less energy than to pay to add renewable technology onto an inefficient building . In other words , we are talking about buildings that perform well from a first principles point of view ,” Lombe adds . As technical consultants on the BEEC , Solid Green was commissioned to carry out work in four parts , namely :
• to investigate existing building practices and establish a typical baseline for residential and office buildings ;
• to research building labels and incentive schemes that could encourage people to make use of the BEEC ;
• to provide guidance on enforcement and control , including identifying training requirements for building code enforcement personnel , building industry professionals , developers and financiers ; and
• to investigate energy modelling tools and their suitability for use in the Nigerian market .
While research for the BEEC was conducted mainly in the Federal Capital Territory ( FCT ), the new minimum energy efficiency requirements can be adopted by any Nigerian state . The scope of these minimum requirements cover two building categories – residential and office buildings . Lombe explains , “ We used modelling and simulations to determine the expected energy performance of a Business as Usual building ( BAU model ). We then reviewed simulated variations of the BAU model as well as international references to identify the minimum efficient requirements . The simulations consider the various climatic conditions found in Nigeria .” Numerous stakeholder engagements were conducted in the FCT state , including workshops with design engineers , architects , financiers , technical advisors , officials from the Ministry and the State Department of Development Control . This ensured that
4 - CEC January 2018