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Building Capacity & Capability : A Commercial Perspective

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  1. Building Capacity & Capability : A Commercial Perspective FIG Commission 4: Hydrography Gordon Johnston Hydrographic Professional Services

  2. OVERVIEW • INTRODUCTION • Part 1: Building Long Term Capability • FIG • Building Capacity and a Hydrographic Capability • Setting the Commercial scene • Experiences from the Commercial Industry • Influencing Parameters in attracting commercial industry to Hydrography • Thoughts for Building Capacity • Summary • Part 2: The Economic Benefits of Hydrography • Starting Point: Capacity Building is Possible

  3. What is FIG?

  4. What is FIG? • FIG: The Federation Internationale de Geometrics is the top level Non Government Organisation (NGO) for surveyors. It is an umbrella organisation for national surveying institutions and groups. • FIG links over 100 National bodies in areas such as Standards of Competence, Technical Standards, policy and legislative reviews. • As many national NGOs represent individuals in their chosen profession, such as Land or Hydrographic surveying, it means that FIG ultimately represents the individual surveyor, not their commercial company or national surveying organisation. • E.g. Individual links to APSG, American Petroleum Survey Group. • FIG has a small central directorate of 3/4 people and functions largely on the sponsorship of national organisations who take turns in holding the presidency of the FIG. This is renewed every four years at the main FIG Conference. • There are 9 Technical Commissions that cover the areas of surveying. Hydrography is Commission 4.

  5. FIG Commission 4 • FIG Commission 4 (Comm. 4) • Commission 4 is Hydrography and as part of the 9 Technical Commissions it represents FIG at international level to link national bodies, often not the Hydrographic Office, in areas such as Standards of Competence, technical developments, training, policy and best practice. • Mr Adam Greenland (NZ) is the current chair of Comm. 4. At the 2006 FIG meeting in Munich, Germany, the new Chair of Commission 4, will be appointed, Mr Andrew Layzack (Canada). • It is Commission 4 that is represented on the International Advisory Board (IAB). This is agreed by way of bilateral Memoranda of Understanding (MOU). • Commission 4 recognises the importance of the continued development of individuals and encourages national groups to co-operate in developing and sustaining skilled personnel. • Next Meeting: Munich Germany, October 2006

  6. The International Advisory Board • The international Advisory Board on the Standards of Competence of Hydrographic Surveyors and Nautical Cartographers. • Meets annually and consists of FIG (4), IHO (4) and ICA (2) members

  7. The International Advisory Board • Two prime functions: • Review submitted courses (4-9 per annum) • Update and Maintain Standards (IHO M-5, M-8)

  8. The International Advisory Board • The IAB recognises the importance of promoting Hydrographic courses. It further recognises that it is also important to encourage individuals. The role of the individual is a topic of its current strategic review. The IAB (& FIG): Encourage Hydrographic Surveying capability and competent individuals

  9. Building Capacity

  10. BUILDING CAPACITY • Building Sustainable Capacity • Long term commitment of Sponsor Member State (MS), a Bank and Industry. • Cooperative approach to the overall needs must allow gains by all but different expectations exist. • How will the requirements be identified? S-55 plus IHO and Financial Standards? • Plans may not require full commercial support in all cases but CB may be the secondary goal by some groups who can gain access to funding. • Areas include: • Education and Training Technical assistance with a Commitment to a number of years of infrastructure support Continuing development:- Coverage, personnel, products Data collection and Data Management Technological transfer

  11. SETTING THE COMMERCIAL SCENE • PRIVATE INDUSTRY: A disparate group of companies that undertake data collection and presentation: Not a united community. • ORGANISATION: Several industry groups exist but FIG (Federation International Geometric) is most senior. Hydrography is Commission 4. Other informal groups of the Hydrographic Society and IMCA, the International Maritime Contractors' Association. • ACTIVITIES: Inshore, shallow water engineering tasks through many variations to deepwater, long-range, route surveys. Part of the portfolio is the more traditional Hydrographic capability for safety of navigation tasks. The “Hunter Gatherers” of data. • TECHNOLOGY: Varied and is not always the latest and so costs, quality and timescales differ. Assets may be hired or leased to fulfill the requirements, including the vessels. • PROJECTS: Undertaken as specific contracts. Traditionally the relationship is as a Client and Contractor, much less often a Partnership. Consequently relatively short term.

  12. The Commercial Scene 2 • COMMERCE: Activities to gain some financial reward. Outgoings less than Income! • RISK: A generally risk averse attitude is taken by commercial survey companies. They will not undertake projects with huge risk (in their assessment. This impacts on the type and quality of responses that may be received from an Invitation To Tender (or Request For Proposal). • CONTRACTS: Many varied examples and versions exist for Hydrographic Survey work including lump sums, Time and Materials, Co-operative arrangements with shared risk and shared use of products etc • CURRENT STATUS: The offshore Oil & Gas industry is very busy and the resources, especially personnel and vessels, are in short supply. Commercial rates are at a high and there are some long term (3-5 years) contracts.


  14. THE COMMERCIAL SURVEY COMPANY • The Organisational Structure • The Market & Client Base • The Process of gaining commercial work


  16. The Small Survey Organisation

  17. THE MAIN MARKET AREAS • Hydrographic Surveys - Safety of Navigation, Ports & HO’s • Geophysical 'Site' Surveys - Shallow Hazards for E&P companies and Telecommunication companies • Geotechnical Surveys - Sampling, coring and analysis • Oceanographic Observations- Water level and currents • Construction Work - Support to large Engineering projects especially during installation and confirmation of as-laid units for Engineering Groups • LIDAR Surveys - Shallow water reconnaissance, HO’s • ROV Operations - Associated with Engineering and Construction work as well as annual maintenance and inspection programmes for various activities.

  18. THE MARKET SECTORS • SECTOR VALUE year 2000 2006 est. • Oil and Gas$221m $345m • Submarine Telecommunication Cables $47.5m $30m • Ports & Harbours $182m $230m • Hydrographic Surveys $261m $340m • Others $22m $50m • (Defence*, Wind Farms, Engineering) • * Commercial contracts not Military • TOTAL $685m $995m


  20. PREVIOUS INITIATIVES AND EXPERIENCES • Previous Initiatives experienced difficulties such as too high an expectation of what they are able to get and for how much money that would cost. • Government agencies tend to talk to each other ☺ • What is achievable and reasonable.  Perhaps too much influence from academia and the equipment manufacturers’ sales teams. Short term goals don’t meet CB criteria. • MS do not all appreciate the costs of data collection and the value of the data once acquired. Thus any lack of understanding suggests a greater need for education programs to continue. • Industry should provide a solution to a problem, not just the survey data. Often the problems are wider than technical challenges to the survey itself so Industry is not always best able to support studies. • Regional Hydrographic Commissions to date have not really played a visible role to Industry, however………. ☺?

  21. COMMERCIAL EXPERIENCES • Projects awarded for 1 year through to 5+ years: Restricts investment • Size of project work varies but $500k to $30m+ • Activity closely monitored by MS: Good, Short term & Specific Goals • MS lacks resources to monitor: Less Good, Longer periods & often Incomplete goals • MS that award their own surveys usually do so to increase data collection. This often meets a short term objective. Does not create ongoing capability or a sustainable capacity unless part of a strategy of outsourcing and technical development. • MS that have limited infrastructure and contract commercial companies can gain data but not always the products for release. Commercial difficulties will impact severely on this type of project. • Collaboration between a group of MS with a competent HO in support offers an efficient way to derive short term gains AND meet longer term goals. • Specialist capability sought by MS in support of deep water activities.

  22. COMMERCIAL EXPERIENCES Resources applied where it can make a difference is fundamental to developing trust and a relationship with the supporters of Hydrography

  23. COMMERCIAL EXPERIENCES(2) • Experiences: some hazards • Too optimistic and ambitious a plan involving too many parameters and changes • New technology • Training developed • Update large scale charts and large areas. • Failure to recognise the risks and limitations • Poor progress and late delivery of items • Change in financial environment • Commercial organisation reviews its business and commitment • Withdraws from further activity

  24. COMMERCIAL EXPERIENCES(3) • Good Experiences: • Short term specific goals stated by MS. E.g. deep water task, or area of survey for nautical charting improvement. • Long term Contracts or at least a commitment to continue to offer annual contracts. This is typically as part of an HO strategy. If properly constructed will maintain good relationship with a commercial company. • HO approves and appoints suitable QC and QA process. • Industry have supplied both services and products to create a sustainable environment based on their experience. This needs added elements to secure technology transfer to the MS such as Training, an academic role, a wide range of use for the data. • Collaboration between a group of MS with regional interests, funding, SoL interests or the environment. • Summary: Agree, commit to, maintain & monitor a clear set of achievable goals.


  26. INFLUENCING PARAMETERS ON INDUSTRY • Influencing Parameters in attracting commercial industry to Hydrography: • Location of work (for data collection) • Size of contract • Period of contract • Profitability • Technical risk in meeting specifications • Benefits in Personnel, Market • Stable programme of work with investment opportunities • Personnel: Must see organised structure and Continuing Development opportunities. Use Cat B/A then a Competency Scheme to measure value and progress.

  27. SUSTAINING SERVICES • Public-Private Partnerships can be created. • Privatisation of a service could be considered. • Concessions for operators and long term commitment could be linked. • Examples of Port initiatives have demonstrated various ways in which the Stakeholders collaborate to create a win-win situation. • There is no standard approach and model for Hydrographic services, however the World Bank produced a Port Reform Toolkit with useful guidance and strategies. • See: •

  28. SOURCE OF THE SPECIFICATIONS • Full Scope of Work with Detailed Specifications. • Scope of Work with Specifications, but including opportunity to Offer Variations. • Scope of Work Provided with Specifications to be Provided by Contractor. • Specifications created by one of the following: Comprehensive dialogue with potential suppliers Reference to Academic centres of excellence Adoption of parameters claimed by equipment manufacturers Creation of Specifications from existing documentation • Often the specific project timescales does not allow for extended bid preparation, variations and discussions to develop improved or amended specifications or clear investment strategy for the MS.

  29. BID EVALUATION - PREPARATION • The review process – Technical/commercial/management. • Previous work, pricing and experience - review. • Contractual limitations - liabilities, exceptions etc. • Taxes, Bonds, Scheduling, Currency. Today Yesterday

  30. PREPARATION OF THE COMMERCIAL BID • Consideration of any bid constraints • Assessment of client specifications - suitability, alternatives etc. • Assessment of insurance implications • Assessment of risk • Pricing, including the provision of survey vessels • Invoicing program (credit, disputes, variations etc.)

  31. THE INSURANCE PROBLEM Who will be liable? For Salvage The Environment To Re-instate Op’s

  32. PREPARATION OF THE TECHNICAL BID • Review of the Specifications stated: IHO, LINZ NOAA etc • Consideration of methods: E/S, MBES, SSS etc. • Availability of suitable equipment. • Availability of skilled personnel: • Data collectors, Processors and QC • The influence of survey vessels and their suitability: • A large commercial investment that must be suitable • for the proposed works and operations. • Previous work and experience - review & provide track records.

  33. VARIATIONS • The commercial importance of Variations. • Reasons for Variations. • The process for Variations - communication and agreement.

  34. PRICING • Direct Costs • Indirect Costs • Depreciation, Maintenance and Insurance • Phased payments or scheduling • The Profit Margin!

  35. INFLUENCING CHALLENGES • Observations: • The contracts all offer different commercial terms and conditions. • The timescales of the work vary. • The technology required and, sometimes, specified is varied. • The actual data collection criteria may be different. • Associated and related data collection or survey activities may be competing with or influencing the project. • Conclusion: • There are not sufficient common standards to enable the Capacity Building initiative to be seen as an efficient process. • Specifically history of development, timescales, funding, internal government processes and competition.

  36. Member States


  38. Thoughts and Comments • Projects need to be identified through some appropriate assessment. Is this ONLY an IHO/IMO task to determine who is the most needy? • Well maybe but perhaps industry can provide a commercial perspective for gaining financial support. FIG & Industry can help in accessing funding organisations. Definitely build on previous US, Australian, French and UK work. • Preparation of the Project requirements should involve both the MS and a supporting (Peer?) HO from a Regional Hydrographic Commission. • Why? Improves the timescale of the process. • Industry should be prepared to do more than collect data: Desk Study, Training, Equipment, Data Management. Why? Commitment • Industry has resources and better utilisation of assets is always welcome. Industry will look to IHO & FIG to create the environment. • Industry must see the HO’s or RHC’s (IHO) as useful groups to collaborate with on identifying opportunities.

  39. Thoughts and Comments • Standards for Assessment and defining Projects are required. • Clear processes to describe the chain of events and get industry involved as early as possible. • FIG offers access to experienced and professional resources. • Competition will remain and even increase between industry and HO’s therefore a clear set of procedures and roles and responsibilities need to be set to guide MS, HO’s and Industry. • Why? Essential to have a united front for Financial Support & Success. We must market Hydrography!

  40. Thoughts and Comments • IHO: Offers mainly Technical Assistance • The IHO may be seen as too Bureaucratic and institutional by Industry • The IHO may be seen as too Technical by MS. • Funding • The EDB, World Bank etc. have many projects. Hydrography could be part of many more of them than is currently the case. • My experience is money is assigned to clear projects with clear outcomes. e.g. Cruise liner safety, port infrastructures. • We must identify possible projects that Hydrography could get support with. Not necessarily the main Project Goal. E.g.Resource Exploitation • The Environment: Pollution, Species preservation, recreation. • Navigation: SOLAS V must be exploited. • Trade & Commerce: Shipping routes, ports & harbours building trade • and reducing Insurance costs. • Recommendation: Build a realistic Business Case

  41. Capacity Building

  42. How to Develop a CB Program • Cooperation between stakeholders should enable the case to fund a Hydrographic survey project to be developed more easily. • The review must expand upon the safety of life case and include social, environmental, political and institutional benefits and gains. • The problems requiring solutions represent GAINS that may not be related to Capacity Building. • The IHO could provide guidelines on the type of Project structure and management (technical & project at least) in order to generate effective conditions for building capacity. • IHO stewardship of the Capacity Building selection process and possibly the funding process also would facilitate the aim of collecting data and rendering charts etc. • Marketing Hydrography and identifying possible projects in a wider context will aid this and MS HO’s and Industry should not see each other as the competitor.

  43. How to Develop a Program 2 • The Capacity Building initiative will take Time • Must identify ways to speed up the process and deliver against expectations of Organisations, MS, IHO, Funding groups and industry. • Technical and commercial liaison must be supported by a Financial element to gain funding and awarding work to suitable organisations or companies with clear incentives for results. • Industry is NOT a White Knight • Realistic goals and benefits must be identified and included in any proposals to 3rd party groups. Capacity Building will not happen for it’s own sake. Usually because the data is not recognised as being important enough. • Industry is NOT a threat • We (Industry) must also find partners and act in a cooperative nature through adaptation and evolving to meet needs.

  44. Planning Funding Funding Data Collection Data Collection QC QC Data Management Applications throughout the Survey Chain The Survey market can be looked at as a chain or sequence of events. Estimated value $500m pa To make progress with Capacity Building the prime areas of expertise should be recognised and activity focussed. Value Chain Hydrographic Surveys HO’s Survey Companies IHO Stewardship Team • Market Growth : up to 10% of annual commercial activity $50m • Industry can deploy technologies and develop certain alliances with Standards

  45. Planning Funding Funding Data Collection Data Collection QC QC Data Management Applications throughout the Survey Chain The value chain could be developed to more focus on the strengths of the stakeholders Value Chain Hydrographic Surveys HO’s Survey Companies IHO Stewardship Team • To develop Capacity Building all participants need to gain something • Standards, education and cooperation projects must continue

  46. Summary (1) • The IHO can take a firm and positive role to lead a true initiative that will make a difference. • The IHO could unite the commercial sector by developing Standards and guidelines for adoption in supporting less well developed MS to meet their SOLAS V obligations. • Industry will find ways to support the initiative and lobby for funding. IHO can help by being realistic and developing a relationship with the commercial sector. • Achievable aims and common goals must be defined and stated. • To create a Sustainable Capacity Building program the stakeholders must be represented when forming plans and from the commercial perspective…..

  47. Summary (1a)

  48. Summary (2) • Acknowledge the true cost of data collection surveys. • Maybe Charts are no longer the correct deliverable? • Consider more innovative approaches to Capacity Building through Marine Highways, and data for ENC/MIS and spatial database use. • Generate Terms & Conditions of contract to support investment and stability. This should be linked to an efficient review, tendering and award process to guide the MS and their Peer HO’s using proven models. • Keep “In Touch” with reality = Industry and Funding groups. • FIG is the nearest thing to a Commercial grouping of Industry that can, through it’s Commission 4 Work Groups, support and aid the IHO in developing Standards and building relationships.

  49. Actions (1) • IHO and RHC • Establish Strategy and set Timescales of goals. • Educate, lobby and encourage MS. • Develop KPI & Standards for Assessment. • Create Stewardship of CB programs and encourage RHC’s to cooperate in developing programs. • Gain much more access to Financial Expertise & support. Not just Technical support & advice. • IHO could support a Regional Funding Activist to access Banks and international agencies. • Continue with Industrial Liaison and create Case Studies to support claims for investment. Encourage the use of RHC events for dialogue with Industry.

  50. Actions (2) • Industry - FIG and Companies • Build relationships with RHCs. • Access Funding Groups to lobby the need to provide solutions to problems. • Identify short term opportunities and goals within the Capacity Building initiative to meet funding requirements. • Cooperate with academia and HO’s to develop capacity for the long term. • Industry is interested in follow-on activities for ports, construction etc. and should focus on that long term strategy.