By Conrad Egbert
After making their name on large-scale oil and gas developments, Project Management Companies are now increasingly turning their attention to the construction industry. Conrad Egbert explores the role of the PMC and how it fits into more traditional procurement methods.
Project Management Companies (PMCs) have, until now, mostly been used in the oil and gas industry. But with the number and scale of projects currently under construction in the Middle East increasing, PMCs seem to be focusing their attention on the construction market more than ever before.
But is the demand for PMCs genuinely on the increase, or is it a case of creating a niche in the market in order to capitalise on the construction boom?
Phil Edmondson, general manager for locally-based PMC, Edara, said: "PMCs should be involved before any of the consultants and before an architect is even appointed. That should be the process.
"That isn't the way it's done here though, which is wrong. When a client has a piece of land, it needs to know what all of its options are. As project managers, we are qualified to provide that sort of advice and carry out other necessary details like costing, and a feasibility study.
"But the usual way of functioning here is that the client first gets the architect on board, which comes up with a design, and then it gets someone to give it a cost for that design. The architect ends up managing the entire process, including gathering resources and selecting a contractor, which it is not really qualified to do - that is a specialised service that PMCs are qualified to handle."
While the other key players in the construction arena - developers, contractors and architects - feel that PMCs have their place in the market, they think it is limited only to very large projects involving multiple contracts and many contractors.
"PMCs are only needed on large projects that cross the US $100 million (AED368 million) mark and involve many contracts on one project," said Ani Ray, regional director, TAV Gulf.
"For projects that are below $50 million, PMCs are not required. A consultant or architect could handle the job almost as well. We have worked in both situations and sometimes the involvement of PMCs on small projects can actually make the flow of things rather difficult for everyone. But on big projects, they're a necessity."
Edmondson added that architects concentrate on design rather than budget and when a PMC is brought on board, the project, more often than not, has to be redesigned.
"Every client has a budget. What an architect does not do is concentrate on the cost. They never look at cost, they never control cost and they are not qualified to control costs. Only the cost consultant and the project managers are [qualified to do this]."
Edmondson added: "Most of the time, when we are brought on board after the architect, we end up value engineering - which is cutting back the design to suit the budget.
Most clients don't understand the importance of project managers and what they can do. I would like to see any client tell me that they had a budget and that their architects have achieved it. And I don't think that would be true unless they completely cut back the design and the size of their building from what they originally wanted."
But Ahmed Saffarini, an architect working for consultancy firm, Adnan Saffarini Engineering Consultant, argued that architects do design within budget.
"When we design a project, cost and design are of equal priority. Of course, sometimes it is not easy to try and match a client's expectations with the budget that has been provided, but then in such cases we try and strike a balance. On most projects here, a consultant is all that is needed.
"A PMC may be needed when the project is very big and involves the construction of a satellite town or a small city where there are many contracts handed out to various companies. Their job is mostly coordinating and organising, and on small projects, a third party is not required to carry that out," he added.
Abid Junaid, executive director, ETA Star, said that the current trend among Dubai developers is to appoint consultants with architectural skills, who do the design, architecture, tendering and even the post-tendering supervision and management of a project, and that this process works.
"A majority of the jobs are done like this," he said.
"The consultant does everything. PMCs are needed for mega projects where the owner wants to break up the project into several packages and award them to independent contractors. This is when there is a need to have a PMC, otherwise the consultant can easily do the project management.
"Having a PMC on board does not necessarily increase productivity, but it does improve coordination if there are many contractors."
At the moment, it is mostly the government-owned developers that tend to take advantage of the presence of PMCs. It will be interesting to see if their services will be more in demand across the construction industry over the next few years.For all the latest construction news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.