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Sat 5 Jun 2010 04:00 AM

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The cost of compliance

Successful project management comes down to meeting contract targets without compromising on the quality of steel rebar and other essential construction materials.

The cost of compliance
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The cost of compliance
Emirates Steel says UK Cares approval gives them a competitive edge over non-certified companies.
The cost of compliance
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The cost of compliance
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Successful project management comes down to meeting contract targets without compromising on the quality of steel rebar and other essential construction materials.

Major construction projects are some of the largest and most complex investments organisations face. From initial plans to hand-over dates, contract negotiations and material supply, to final developer sign-off, the process is a protracted and complicated one, made all the more difficult with additional pressures placed on project managers to ensure buildings remain on spend, time and compliance targets.

Monitoring compliance is itself a complex task: ensuring the project remains true to the contract and that all changes made filter through to the right people is one matter, while the procurement of materials - and ensuring that they meet required standards is another major issue that project managers and developers face.

It's a task made trickier in this region by the fact that there are no unilateral building codes or standards in practice across the GCC. There are plans to implement a set of statutes in the UAE, but quite when that will happen is a matter for debate. What isn't up for debate is that the potential for companies to cut corners and save costs by using products that may not be quite up to the job is there, and that the problem is a concern for the future of construction throughout the region.

One of the more troubling areas is in the production of steel rebar for concrete reinforcing. Concrete's compression properties are outstanding, but it lacks corresponding tensile properties to give it the strength to be used for load-bearing spans, without the use of steel reinforcing bars, or rebars.

The problem is, cheap and unproven rebar is notoriously easy to manufacture: you just need a mould and a supply of molten steel to produce something that resembles the real thing. It doesn't take a structural engineer or metallurgist to work out that not all steel rebar is created equal, and that using rebar from an unqualified source is an exceptionally risky business.

"They say that in concrete, you bury your mistakes," says Ben Bowsher, executive director of UK Cares, the British based certification body primarily concerned with compliance of reinforcing and pre-stressing steels for construction.

"And the temptation is certainly there, during lean times, to use products that save you money. I'm not saying that I've seen examples of it here in the UAE, but the temptation is always there, and it's worrying," Bowsher said. "I've even heard the term ‘blending' used and that's just as worrying. Mixing material from a known source with rebar of an unknown quality is just as troubling because you never know where it's going to be used."

Certification is simply a risk-reducing tool. It eliminates the need for procurement managers and purchasing officers to check in to the backgrounds of their suppliers or have products individually testing for quality or performance. UK Cares certification includes technical assessment at every step of the production and supply process to ensure rebar not only meets the required standards, but that its technical specifications also meet those stipulated by British Standards.

It's not a simple process. It can take UK Cares anywhere from a couple of months to approve a cutting and bending company's procedures, and up to a year (and even longer if changes have to be made) to approve a steel mill. Audits are carried out twice a year, and certificates are issued on an annual basis to ensure companies maintain standards.

The process also costs. UK Cares is a non-profit organisation but it's not a charity, so the cost of sending its representatives out to approve and audit companies has to be met by the companies themselves. The market price for steel rebar market price is about $650 (AED 2,400) per ton - and Bowsher estimates the cost of approval and annual audits, across the board, to be around 40p (AED 2) per ton of rebar produced.

"Even if it was 50p or £1 per ton, it's not a lot of money for peace of mind," Bowsher said. "We know that customers of the 70 companies with UK Cares approval worldwide are able to sleep at night knowing that products they ordered and paid for are exactly what they specified," he added.There are now 10 companies in the UAE and one each in Saudi Arabia, Qatar, Bahrain and Oman that carry UK Cares certification, and each produces rebar with its own mark so that customers can quickly identify products from genuine approved suppliers. The latest to join the ranks is Abu Dhabi based company Emirates Steel.

It's the latest feather in the cap for the company that is one of the first Category 3 companies to be accredited under Abu Dhabi's new Emirates Health and Safety Management System (EMSMS). Last year, the Abu Dhabi Executive Council issued an executive decree on the implementation of EHSMS Regulatory Framework in different industries within the emirate to protect workers, the environment and to ensure the conservation of natural resources.

As soon as the decree was issued, Emirates Steel implemented its own Integrated Management System (IMS) to ensure its procedures were in approved to ISO 14001 (Environmental) and 18001 (Occupational health and safety management) levels. It also began the UK Cares assessment process.

"Emirates Steel's initiative in developing and implementing its IMS not only stems from its desire to excel in the steel industry, but also to protect the health and safety of our employees and the community, as well as our environment," Abdel Moneim Tawfik, Emirates Steel's Quality Assurance Manager said. "Cares approval is a formal recognition of Emirates Steel's commitment to deliver quality products and ensure customer satisfaction. Cares certification is accepted globally and gives a competitive edge over other non-accredited steel producers."

While monitoring costs money, so too do changes to production methods - and it's a concern looming on the horizon as the steel industry looks to become more environmentally focused.

"The LEED (Leadership in Energy and Environmental Design) system is good in many ways," Bowsher said, "The steel industry is going to have to change if we're to improve our sustainability and low-carbon targets. It's not going to be easy: producing steel is not a clean process - but there are lots of things we can do to improve it."

"We have to work more closely with the LEED framework to introduce techniques to reduce factory carbon footprints. It's what governments are demanding, and we have to change with it," he said.

While very few disagree that adopting ecological principles are admirable, the LEED ranking system itself has come under fire from several quarters for adding to the total build cost, without necessarily improving green credentials. Incremental charges for design, documenting compliance, administrative fees and compliance verification all add up, with some claiming as much as 30% could be tacked on to the total build cost for following LEED ideals.

Architect Frank Gehry, the man behind the Guggenheim Museum in Bilbao and its Abu Dhabi equivalent, has been vocal in his views about the system: "A lot of LEED is given for bogus stuff", adding that the costs were "enormous" and "don't pay you back in your lifetime."

The LEED program is largely voluntary, but more and more clients are pushing for projects that follow its principles. However, LEED's detractors argue that the additional costs could be ploughed back in to developments to make them more environmentally friendly, rather than being spent on administrative processes. The same could be said for spending AED2 on every ton of rebar to ensure that it meets international standards. While it seems a trifling amount, it soon adds up with the quantities of steel rebar being used in construction throughout the GCC.

"With more and more pre-cast concrete being used, I'd hate to think of the consequences of using substandard rebar and that slab failing while being craned in to position," Bowsher concluded.

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