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Turkey Review

The Radisson has profited from Turner’s techniques.

Turner’s technique enhances profits

With thin profit margins being a key concern of project developers in Turkey’s construction market, Turner International suggests techniques that can foster higher earnings.

01 September 2005

Turner – which has already provided construction management services to some of the larger projects in Turkey, including the Turkiye Is Bankasi Headquarters, Ataturk Airport International Terminal and car park, and the Radisson SAS renovation project – says that the key to enhancing profits lies in effective project management.

The strong pace of Turkey’s economic growth since 2001 has stimulated improvement in the consumer, industrial and services sectors, but has yet to generate significant growth in the construction industry, says Caryn Conlon, director of business development and marketing for Turner.
Even though wide-ranging reforms have helped to restore economic fundamentals, construction continues to trickle in Turkey for various reasons. Even when securing work, the situation remains challenging as thin profit margins are being stretched further by higher commodity prices, heightened demand for sophisticated designs, complex security, and new technologies.

New challenges & opportunities
The construction management delivery approach is ideally suited to capture additional value. Essentially, it is a more efficient delivery system that treats the traditional development, investment, design and construction phases as integrated tasks, rather than separate linear functions. These integrated tasks are assigned to a construction team composed of the owner, the construction manager (CM), the architect/ engineer and the contractor in a manner that fosters teamwork and efficiencies.
Market dynamics, terrorism and competition have had a profound effect on the design and development of airport facilities. With an eye on limited resources, many airport authorities are seeking different solutions. Restricted by staffing levels, funds and development expertise, authorities are embracing privatisation as a means of outsourcing the funding, design, construction and operational expertise involved in these highly complex projects.
“Construction management is ideally suited to privatisation and its emphasis on time as money,” says Tom McCool, Turner Construction – International’s project manager on Istanbul’s new Atatürk International Terminal and car park. “As the construction manager on the project we were able to help achieve not only timely delivery, but also brought in substantial savings that actually offset our fees,” he adds.
“Another example is the recent rebound in the hospitality industry,” says Conlon, where a confluence of trends focused on individualism pits service against budgets.”
Architect Ellis Katz, executive vice president, director of the hospitality studio for John Portman and Associates, explains: “With today’s technology, guests can be welcomed in a very personal way. For example, frequent travellers can be greeted with their favorite beverage, newspaper and snack, all in a guest room furnished to the guest’s preferences.”
Hybrid programs offer condo-hotels, mixed-use urban complexes and resort villages. Interiors can be designed so that new environments are easily changed. Hotel lobbies morph into casual living rooms, pools second as open-air nightclubs and conference centres turn into movie cinemas and theatres. Consequently, owners are seeking more cost and time sensitive delivery solutions. “As the construction team leader, a CM functions as an extension of the owner’s team and business objective, fostering interaction and communication, ensuring goal congruence while keeping the project’s process on track,” says Conlon.
Martin James, Turner’s project manager on the 225-room Radisson Hotel Stadt renovation in Istanbul, advises: “The CM should be employed at the programming stage to work with the architect in developing the requirements that will govern the project’s design, schedule and budget.”
Consequently, the pre-construction phase has evolved into a key determinant for success. Although opportunities to find cost and time efficiencies still exist during the bid packaging phase and other construction efforts, the most substantial cost and time savings are found in the early design phase.
Sophisticated designs, new technologies and limited resources at times also require alternative methods, equipment and materials. CMs who have a background in building can prove to be valuable in these cases as they provide construable solutions that mitigate risks by avoiding errors.
As the project enters the building phase, the CM proactively manages the construction of the project, ensuring that cost limits are not exceeded without the knowledge and agreement of the owner. The CM manages the procurement effort, coordinates contractors, assures adherence to design and quality requirements and provides current budget and schedule updates as the work proceeds.
The CM continuously monitors productivity, manpower, details, quality and cost to implement the intent of the design and the project schedule. The technical skills and discipline of the CM protects the quality and time aspects of the project. “Communication, planning and record keeping are the key to a successful project,” says James. “The Radisson Hotel Stadt was completed on time and on budget due to coordination among the building team.”
The needs of today’s owners can be served not only by technical solutions, but most effectively by expertise from specialists such as CMs. Through a disciplined approach of construction management, projects can achieve quality results on time and within budget, and often with a realisation of savings to the owner that more than offset the CM’s fees, Conlon concludes.