International Business Handling

International Construction Management.

The case of the project:
Refurbishment of 7 Hotels in East Germany


Presented by: Vourvoutsiotis Apostolos
International Business Handling
Georg-Simon-Ohm University of Applied Sciences
Nrnberg 19.05.2000


International Business Handling
Table of contents:

What is International Construction Management
Construction Management Models
Technical Olympic S.A.
The project
Companies involved at the project-Organization
The curriculum of the project
Problems
Chances and Risks
Conclusions


International Business Handling
What is International Construction Management
What is Construction Management
What is different in International Construction Management
The companies involved
The contracts
Human Resources
Investments
Standards
Procurement
The scale and the budget of the project


International Business Handling
Construction Management Models



PURE CM CM-GC DESIGN-CM











International Business Handling
Technical Olympic S.A.
was founded in 1965, in 1967 became Societe Anonyme and went Public
in the Athens Stock Exchange Market on 10/04/1994
Company is active in all fields of construction and employs 495 persons
Subsidiaries and related companies:
Technical Olympic (UK) Limited, based in London
Technical Olympic Deutschland GmbH, based in Berlin
Technical Olympic USA, Inc., based in the USA.
Technical Olympic based in Romania
Dilos Marinas SA, Athens
Mochlos SA, Patras
Toxotis SA, based in Athens
Potidaia S.A., Thessaloniki
Meltemi Kastri SA, Athens
Turnover (GRD in millions)



Year 1992 1993 1994 1995 1996 1997
Value 4700 6637 6102 5507 7231 12172

International Business Handling
THE PROJECT: Refurbishment of 7 Hotels in East
Germany
PROJECT DESCRIPTION :
The projects concerns the complete renovation of the following seven hotels in
Germany:
- Hotel Am Schurzenberg - Sport Hotel - Am Fichtelberg --Berghotel Friedrichroda -
Stephanshohe - Strote bekar - Ferienhotel Templin
PROJECT DATES : 1996 - 1998
CLIENT : Euromill Real Estate Deutschland Gmbh
PROJECT BUDGET : 199,000,000 DM


International Business Handling
The main characteristics of the project
English management, culture, site protocol and legal
framework
Multicultural environment - official language English
Strategy of Technical Olympic Deutschland GmbH was to
establish new business in Germany
Investments from Thailand
T.O. was potential investor

International Business Handling
Companies involved at the project-Organization
Client: Euromill Real Estate
Deutschland GmbH, Berlin
Project Management:
EC HARRIS GmbH Co
& KG, Berlin
Architect: Daw &
partners, London
Investors,
Consortium of
Thai Banks
General Contractor: Technical Olympic Deutschland GmbH,
Berlin
C1 C1 C1
Schellerha
u
Freiedrichroda Templin Oberwiesenthal
C1 C1 C1 C1

International Business Handling
Role allocation
Needs assessment, project planning
Management and decision making
process
Obtain the required permits
Preparation of the Bid package
Communication with the GC and the
architect
Quality, cost and master schedule
control
Progress payment to GC and
Negotiation for additional works and
handling of claims
Handover agreement


Bidding process and prequalification
Providing alternatives for building
specifications
Evaluation of the proposals and
contracting
Communication with the subcontractors
and the PM
Safety management
Quoting, billing and progress payment
to subcontarctors
Quality, cost and master schedule
control
Project Management (PM) General Contractor (GC)

International Business Handling
The curriculum of the project
95 96 97 98
Installation
Schellerhau, 224 rooms Contract
Templin, 776 rooms
Oberwiesenthal, 448 rooms Establishment of TO Deutschland GmbH
Friedrichsroda, 750 rooms
October 97, the collapse of the Asian Market
11,7
2,6
4
20

International Business Handling
Project Process
Contacts between T.O. and Thai Investors
Feasibility study, rough cost estimation
Employ the Managers and staff
Sign the contract
Establishment of T.O. Deutschland GmbH
The first project starts. Completion of the first 2 projects and the next 2
projects start
Uncertainties before and after the collapse of the Asian market
Payments from Thailand were blocked and Euromill increase the
pressure to T.O. to invest in the project
T.O. Deutscland GmbH and subcontractors are still unpaid
Legal procedure
T.O. Deutschland GmbH was sold to an English company




International Business Handling
Problems derived during the project from:

Company's culture
Choice of Human Resources, mentality, less productivity
Internal communication
Understanding of local way of doing business
Standards
Materials
Site protocol
The collapse of the Asian market and the unpaid invoices
Legal framework




International Business Handling
Chances and Risks in the Project
Contracting risk.
Business risks.
Exchange risks. The investor was
from Thailand.
To go bankrupted
Legal risks. The applicable legal
system.
Profit - project budget potential up to
300 million DM
Image - shareholders value
Gain experience
Business establishment in a new
market

Risks Chances

International Business Handling
Conclusions
Human factor. It is important in International projects to find the right employees
concerning culture, behavior, mentality, flexibility and understanding of the local
market.
Choice of the local legal and tax consultant.
Define the contract framework.
Feasibility study
Constant and effective communication between stakeholders