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International Business Handling

International Construction Management.

The case of the project:

Refurbishment of 7 Hotels in East Germany

Presented by: Vourvoutsiotis Apostolos


Georg-Simon-Ohm University of Applied Sciences

Nürnberg 19.05.2000




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




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




Construction Management Models

PURE CM CM-GC DESIGN-CM




Technical Olympic S.A.

was founded in 1965, in 1967 became Societe Anonyme and went Publicin 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) Yea r 1992 1993 1994 1995 1996 1997

a lue 4700 6637 6102 5507 7231 12172




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




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




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 FreiedrichrodaTemplin Oberwiesenthal

C1 C1 C1 C1




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 andcontracting

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)




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




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




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




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




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

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