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