17:05 04.06.2024

The Project Management of Ukraine’s Reconstruction Projects - Build Quickly, but Leave Space for ESG in 5-10 Years - iC consulenten partner Markus Querner

17 min read
The Project Management of Ukraine’s Reconstruction Projects - Build Quickly, but Leave Space for ESG in 5-10 Years - iC consulenten partner Markus Querner

Interview of Markus Querner, a partner of the Austrian engineering company iC consulenten, for Interfax-Ukraine


Text: Oksana Gryshyna


Ukraine is currently facing a challenging recovery mission, as problems continue to grow and resources remain limited. In your experience, what role does project management play in prioritisation and optimisation within the scope of a project?

Management is an important factor in the success of a project because construction always involves high costs and the need to strictly adhere to a time schedule. iC has extensive expertise in high-rise construction, the design and construction supervision of tunnels and the design, supervision and management of infrastructure projects from healthcare sector to energy.

We are invited to participate in large projects in Austria and all over the world. While being strong in subway construction, not only in Vienna but also in other cities worldwide, our portfolio also includes projects for all other infrastructure elements, such as hospitals, airports and railway stations. Recently completed projects in Vienna include the reconstruction of the Austrian Parliament and the construction of the Northern Hospital.

In Ukraine, we are performing project management functions in more than 20 communities. Among the large programmes, carried out in partnership with Nefco and with funds from the European Union, are the new construction and reconstruction of housing for IDPs and the recovery and reconstruction of critical infrastructure.

Project management has much to contribute in terms of knowledge and expertise in tendering and time, cost and quality management. These three pillars: the time, cost and quality of the project, as well as knowledge of tendering and contract management, are the same for different projects. Thus, if you are well versed in these issues, you can manage many projects to a guaranteed quality. For this reason, project management is a big challenge in all countries, from Ukraine to Austria.

Since we already hold this knowledge in Austria, it is our pleasure to pass it on to other countries where we work, including Ukraine. For example, iC is now the largest engineering office in Slovenia. This office started small when we brought experts to Slovenia to implement projects and train people. Now a local staff of more than 100 manages projects, including tunnel design, independently.

Markus, could you explain the project management stages in the example of the Vienna hospital that you mentioned before and show the effect of good project management?

The municipality of Vienna decided to build a large hospital, with investment costs of over a billion euros. To reduce costs and speed up the construction process, it was decided to launch a tender with more than 100 different contractors instead of one large general contractor. Our task was to prepare contracts with the hospital’s management at the tender stage, conclude contracts with over 100 contractors and then manage and coordinate these contracts further. This project took a little longer than planned, which was inevitable, but, in the end, we got a well-built hospital where there have been no operational issues since the beginning.

This is always the most crucial part – to bring the project to the “working” stage. It was the same with the Austrian Parliament renovation project, which has been in operation for a year now. Various stakeholders were involved in this renovation, and of course they had different opinions on how the project should be implemented. But, de facto, this is a success story, because everyone who now uses the Parliament is very satisfied with the work.

Please name the main tasks and challenges facing the project teams during the project implementation stage. Feel free to compare Austria and Ukraine.

I can tell you because I used to work in Odesa (with Uniqa Real Estate). The fundamental problem lies with people. Graduates – civil engineers, designers, etc. – come after university and start working on projects, where the key success factor is human interaction. If the project manager establishes successful interaction, the project is likely to succeed. Usually, there are no problems with communication if the contracts and the project management ensure that all project participants have enough time and resources to do their job properly.

I don’t like to start a project with the understanding that it’s impossible or impractical for contractors to work with the available budget. To stay within the budget, they would have to put their team under stringent constraints, which has never improved the quality of a project.

So the keys to success, among others, are human interaction and giving people the resources they need to do their jobs. Then they can work to their full potential.

Speaking of project management practices, how many people are usually involved?

It all depends on the scope and complexity of the project. For small projects, one person may be enough to monitor the project twice a week. During the intensive phases, we’ll need a few more people. Small projects can employ up to 10 people. These include a time-planning expert, a cost-management expert and a tender and contract management expert. And, of course, people who organise the documentation and all the software tools. In major projects, such as hospital, airport or large tunnelling projects, there can be up to 100 people involved in project management.

Do teams work on several projects simultaneously?

Yes, to ensure the efficiency of our teams, we optimise resources. For example, if we know that we have some super expert in time planning who can do more than one project at a time, we will assign them to work on three projects in parallel. In addition, we have different functions within the company, and project management teams may contact them on complex issues, such as electricity, building physics or statics.

What digital tools are used in project management?

We digitise the entire process from the beginning to the end. For example, we survey the site using drones at the start of a project, and also laser scan the building to see if it matches the design or the available drawings. Thus, we can get drawings of historic buildings, even if their plans are not preserved.

In general, all project management tasks are digitised, from the tender to the minutes of meetings, which we enter into the database so that we can find what was said on a particular topic at any time. This is much easier than searching for information in a long Word document. Of course, we also use time planning, monitoring and cost planning software.

Artificial intelligence tools have also started to gain popularity, primarily for keeping minutes, getting summaries and translating documents (which is becoming faster and more efficient). I think that, in five years, everyone will get used to using such tools, even if this is still difficult in some cases. For example, it may help solve the issue of the shortage of engineers.

You mentioned laser scanning. To what extent is this tool effective (not illustrative) for historic buildings?

Laser scanning is developing very rapidly now and helping to solve several problems with historic buildings, the most acute of which is the lack of drawings. Laser scanning takes 1-2 days, and in one week you get a 3D BIM model, which may be used to start the design process.

In Ukraine, the problem of historic buildings is very acute. Yes, there are initiatives to restore them, but, against the backdrop of other restoration priorities, there will not be many resources and investments for such projects in the upcoming years. Thanks to laser scanning and the creation of 3D models it is becoming possible to continue the restoration or improve the building later.

I want to emphasise that hardware is not extremely expensive, and training people is quite feasible. Our young engineers in Ukraine and Austria want to work with these digital tools, e.g., drones or laser scanning. We need to allow them to work with these technologies.

Did the Ministry of Recovery involve your experts in the creation of design offices in the regions?

This is an important initiative that they are taking to build local capacity, but we are not yet involved. However, we are interested in helping.

With what scale of project is project management assistance crucial?

Project management may help achieve an impact for a project of any size, from the smallest to the largest. Of course, this will be small project management for small projects and larger for large projects.

As with all other skills, if your company or department has no project management expertise at all, but you need to complete one, two or three projects, it is definitely important to get these skills from the outside to start the process.

Many new institutions have recently been established in Ukraine, including the Recovery Agency. New teams have been brought in with experience of other sectors but they should not be expected to implement hundreds of projects in parallel and they obviously require support. And this is the responsibility of consultants or companies like us, who help municipalities with the first few projects. Eventually, they will cope on their own and create their own teams. It is important to grant them this time to develop these capacities.

We are used to developing this in new departments or new countries like we did in Slovenia. Our office there is now very well established and operating without our help. I think what can be done is to bring in experts, train people and show them how things works. They pick up on this and learn. It is a natural process. People are eager to learn and do great things on their own.

At what stage of the construction or reconstruction process should a project management team be involved?

Optimally, from the very beginning, and at least from the design stage. This allows them to calculate all possible options for project implementation and choose the best one. Projects that allocate enough time and resources to the design stage are usually cheaper, faster and easier to implement. However, cases when we are asked to take over when issues have already arisen on the construction site are still not an exception. Of course we get involved, but we always tell our clients: “Please involve us at the beginning. It would create additional cost – but it would also create additional cost if the situation goes wrong.”

What is the global average for such services as a proportion of the project cost? And does this vary between Ukraine and the EU?

I don’t think so. Yes, the cost of construction may differ, but the percentage of the cost of construction represented by project management is almost the same. This depends on the size and complexity of the project. Project management varies from 0.5% for major projects to a maximum of 5% for small ones, with an average of 2-3%. The smaller the project, the higher the cost of project management. After all, one always needs to hold tenders, adhere to a schedule and monitor costs. This scope of responsibilities is the same, whether a project is worth 500,000 or 5 million euros.

Are there any Ukrainian specialists in your team? How do you assess the quality of education and training offered by Ukrainian universities for these specialists?

It’s also a global practice: Everywhere in the world, you need locals to implement projects. Knowledge of local specifics is extremely important for project management. What I know about Ukraine from my colleagues and my own experience is that Ukrainian engineers and experts are just as well trained as Austrian ones. The technical universities are good and you have professionals and young people striving to acquire new knowledge. To successfully implement projects, well-trained people are required, and you have them. What we can contribute is knowledge, the latest technology and, maybe, new trends and the lessons learned from these.

Our Ukrainian office is growing. If necessary, and if the client requires it, we invite international specialists; if there is no such requirement and there is enough expertise, local experts are enough. But experience is important when it comes to project management. If Ukraine is going to build a hospital worth a billion euros, then, of course, we need someone with the relevant experience that is not available in Ukraine. This was the case with the Zaporizhzhia Bridge, where we performed the function of technical supervision because structures of this scale had not been built in Ukraine for decades. Another example is the management of construction waste, including asbestos. We have been communicating and working on this issue for many years in Ukraine, but it is only now becoming formalised and controlled.

With a total of 650 people in our company, we have deep knowledge and have learned plenty of lessons from other projects and countries. This experience helps us to raise standards for Ukrainian projects and, hence, provide more optimal solutions.

You emphasise that you are happy to share your experience. Do you have any experience of cooperation with educational institutions?

We give lectures at the Technical University of Vienna. This allows us to do two things at the same time: share our knowledge and meet young, skilled engineers to attract them to our company, as we are fighting for the brightest minds. So we do this all the time (I have a lecture at the Technical University this week). Of course, we are also ready, and keen, to implement this experience in other countries. If there is an opportunity to hold a lecture for young engineers on, for example, BIM modelling or similar, we are always ready. This practice (successful companies sharing practical experience with students) works very well in the United States. We witness how efficiently these universities work, and European universities are attempting to implement the same practices.

Which sector, private or public, is more interested in project management services?

Both. Private or public, high-rise construction or infrastructure, every department, every project developer, and every government agency implements project management in construction or requires the relevant knowledge.

Are there any examples of both positive and negative experiences in communication and the capacity assessment of local project management teams?

Communities need to know how to work, for example, with international financial institutions or international organisations who are interested in cooperating with these communities. The best way to help is to engage in the project and teach the communities how to work and what to do. After all, it is often very difficult to conduct tenders and work with IFIs and organisations who are now willing to share a lot of knowledge, money and other things with countries. iC is one of the companies that has adapted to the IFI rules, but we see that 

many engineering offices in Austria do not know these procedures. So, there are only a few large international companies, and we want to be among those who accumulate this knowledge. I think that the involvement of specialists, including those from iC, will teach the community how to work with such instruments.

Given the recent approval by the European Parliament of increased energy efficiency standards for buildings in the EU, including the requirement for all new buildings to have zero emissions by 2030, how much are these issues taken into account during project implementation? Do you offer such solutions and are they well received by customers and communities?

In this regard, we should consider Austria and Ukraine separately. Updated European laws and regulations are changing the way we see buildings and construction. In Austria, this is a challenge. Without the relevant knowledge of ESG (Economic Social Corporate Governance) and attention to the CO2 issue, no project shall be implemented.

As for Ukraine, you have to consider these requirements in two stages. Ukraine should reconstruct, restore and create the necessary infrastructure as quickly and efficiently as possible. But, given the attention to ESG and CO2 issues in Europe, you can implement these projects while thinking through the second phase of reconstruction with ESG criteria in mind. In other words you should, firstly, rebuild Ukraine as fast as possible, but keep in mind the possibility of, for example, in 5-10 years, installing photovoltaic panels on the roof and planting a lot of vegetation to reduce the heat in cities. So the roof has to be stronger because of the wind loads. But, first of all, you have to construct the buildings. We went through this in Austria after World War II. There was no discussion about beautiful historic buildings, only about how to rebuild housing and infrastructure. However, in the second stage, of course, you will have a chance to improve the buildings. If we think about these improvements right now, during design, we will be able to do it faster and easier.

How do you consider new trends that will influence urban planning policy in the coming decades when discussing the details with a client or community? For example, evaluating aspects such as the circular economy.

The issue of the circular economy and the reuse of construction materials is being discussed very actively in Austria and Europe. If you have a major mission to accomplish, such as rebuilding a country, this can be part of your approach. Sometimes, to speed things up, you might just have to complete projects in the shortest way possible without thinking about reusing materials. But I’m sure that, with a two-stage approach, you need to think about it from the very beginning, namely, from the design stage, and probably build in two stages so that the project is implemented in as timely and efficient a manner as possible.

What steps should be taken in Ukraine to make project management a key part of construction and reconstruction projects?

First of all, the training of specialists – involving universities, courses, companies like us. Not only is training important, but also the application of knowledge in practice. Involve as many foreign companies as possible in the sharing of knowledge. At the same time, try to teach those people who will definitely stay within the country. It is better not to involve those people who just complete tasks and leave. Pass this knowledge on to those you are sure about.

Second, it is important to convey the benefits of project management to city mayors. Prove to them that project management can increase project efficiency as much as possible.

The key point is to reconsider the issue of motivation. Project managers and engineers in Ukraine now receive a certain percentage of the construction cost. So who would be interested in reducing this cost? But there is a globally practiced bonus system that motivates people to reduce project time and costs. In Austria, this practice is very common. This is a GMP contract, a guaranteed maximum price, where contractors receive the necessary budget for the project, but they get a bonus if they complete the work faster or at a lower cost. And it works.

In Ukraine, we need to increase the presence of motivated stakeholders at every step of the project. When an official receives a state budget for a project, what is their motivation to optimise or improve a solution? For example, by not installing individual gas boilers during the reconstruction of high-rise buildings. Therefore, I think that the scope of the tasks facing Ukraine should be revised, in which case there will certainly be an opportunity to save costs.

Another point that is not yet in focus in Ukraine is recovery programmes and projects and, namely, preparing buildings for the future, for climate change. Climate change is a fact and we need to take some actions to prevent buildings from overheating excessively. In Austria, we develop parks, design roofs with vegetation and switch from cars to trains and public transport. Such transformations will impact all countries, including Ukraine, even if they are impossible to imagine now. These are huge transformational challenges, which is why I see a great future for engineers.