Sustainable Construction And Private Finance Initiative Construction Essay

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In 1987 the Brundtland Report, also known as Our Common Future, alerted the world to the urgency of making progress toward economic development that could be sustained without depleting natural resources or harming the environment. The report was published by an international group of politicians, civil servants and experts on the environment and development, and provided a key statement on sustainable development defining it as: "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (Brundtland Report, 1987).

The Brundtland Report was primarily concerned with securing a global equity, redistributing resources towards poorer nations whilst encouraging their economic growth. The report also suggested that equity, growth and environmental maintenance are simultaneously possible and that each country is capable of achieving its full economic potential whilst at the same time enhancing its resource base. The report also recognised that achieving this equity and sustainable growth would require technological and social change.

The report highlighted three fundamental components to sustainable development: environmental protection, economic growth and social equity. The environment should be conserved and our resource base enhanced, by gradually changing the ways in which we develop and use technologies. Developing nations must be allowed to meet their basic needs of employment, food, energy, water and sanitation. If this is to be done in a sustainable manner, then there is a definite need for a sustainable level of population. Economic growth should be revived and developing nations should be allowed a growth of equal quality to the developed nations.

In June 1992, the Rio Earth Summit declared that "the right to development must be fulfilled so as to equitably meet developmental and environmental needs of present and future generations." Sustainable Development is not just about the environment, but about the economy and society as well. The Earth Summit which took place over 12 days in June 1992 in Rio de Janeiro, Brazil, was the largest environmental conference ever held, attracting over 30,000 people including more than 100 heads of state. The objectives of the conference were to build upon the hopes and achievements of the Brundtland Report. In the centre of the summit was among other the question of how to relieve the global environmental system through the introduction to the paradigm of sustainable development. In the summit it was also emphasised that economic and social progress depends critically on the preservation of the natural resource base with effective measures to prevent environmental degradation (Earth Summit, 1992)

The construction industry and the built environment must be counted as two of the key areas if we are to attain a sustainable development in our societies. In the European Union (EU) buildings are responsible for more than 40% of all waste. In addition, the construction sector is the EU's largest industrial sector, contributing approximately 11% to the GNP and having more than 25 million people directly and indirectly engaged (Agenda 21 on Sustainable Construction CIB, 1999). Sustainable construction adopts different priorities in different countries. There are widely different views and interpretations between developed and transition and developing countries. The developed economies are in a position to devote more attention to creating a more sustainable building stock by upgrading, by new developments or the use of new innovative technologies (ibid).

All public procurement should be made consistent with Government policies for delivering sustainable development, most notably in terms of carbon reduction, waste minimisation, water efficiency, community regeneration and social inclusion. PFI has a key role to play within procurement due to the scale of investment involved; the greater ease of influencing the small number of actors involved; and the way in which PFI contracts secure the long-term engagement of contractors. Sustainability considerations are not sufficiently embedded in the PFI process to ensure consistent delivery, and success is highly reliant on the motivation and expertise of individual public sector clients and private contractors (Green Alliance, 2004).

Sustainability is still seen as a novel concept within the construction industry with no settled definition and no settled body of existing practice and processes. The industry has to understand what sustainability is in its context and focus on creation, sustaining and dissemination of knowledge for sustainable construction across the multiple stake holders involved in construction projects. There is a growing realization and acceptance throughout different societies that there is a need for a more responsible approach to the environment. This new trend embraces societal and economic issues, under the umbrella concepts of sustainability and sustainable development.

The construction industry has been identified as the focus for attention since creating and running the built environment accounts for about half of all energy used and approximately half of all landfill (CIRIA, 2001). DETR (2000) states that UK construction sites and demolition produce 72 million tonnes of waste each year, representing 17% of the UK's total waste burden. Commercial waste from construction adds up to 30 million tonnes, a further 7% of the UK total. Poor design and site management leads to 10 million tonnes of non-used materials each year that are delivered to vacant sites (Crossely, 2002). Globally, the construction industry is arguably one of the most resource-intensive and environmentally damaging industries in the world. Construction accounts for 40% of the total flow of raw materials into the global economy every year - some 3 billion tons. The majority of these materials are stone, gravel, sand, clay, iron ore and other quarried material (Rodman and Lenssen, 1995). Rodman &I

Construction has an immense contribution to make to everyone's quality of life and in enabling the positive impacts of its work to be achieved in a more sustainable manner. Construction outputs alter the nature, function and appearance of the towns and countryside. The construction industry is characterised by its extensive supply chain and its numerous stakeholders. The sustainability issues of concern to construction firms are wide-ranging and include such matters as health and safety, multiple environmental aspects, community development, social accountability, ethics and integrity, labour rights and corruption, and stakeholder engagement. The fact that the construction industry is Europe's largest industrial employer implies that it has specifically more extensive social responsibilities than all other industrial sectors. Moreover, the fact that construction accounts for around 50% of Europe's annual capital investment, implies that its immense environmental impacts need to be carefully managed. The construction industry is able to provide solutions for most of these economic, social and technical challenges resulting from these impacts, but at the same time it emphasises that a joint effort of all actors concerned is necessary in order to achieve more realistic and sustainable results. FIEC (2005).

Sustainable development is a pattern of resource use that aims to meet human needs while preserving the environment, ensuring that these needs can be met not only in the present but also into the future. 'Sustainability' is becoming a central concern for all. It is a concern that has grown out of a wider recognition that rising populations and economic development are threatening a progressive degradation of the earth's resources. The construction, maintenance and use of structures impacts substantially on our environment and is currently contributing significantly to irreversible changes in the world's climate, atmosphere and ecosystem.

The Economic Pillar: The construction industry accounts for an estimated 9.9% of GDP and provides 50.8% of Europe's gross fixed capital formation. In order to develop in a sustainable manner, legislators and public authorities should ensure that firms are able to operate within an adequate and balanced regulatory framework and a fair competitive environment. A prerequisite for sustainable development is a healthy economic environment, in which enterprises can develop their commercial activities and raise their profitability.

The Social Pillar: Its 2.4 million enterprises (EU 22) (Figures for 2004 excluding Latvia; Lithuania and Malta), of which 97% are SMEs with fewer than 20 employees, makes the construction industry Europe's largest industrial employer. This implying significant responsibility for social issues, in particular training, health and safety of its estimated 14 million operatives (EU 22) accounting for 7.2% of total employment.

The Environmental Pillar: About 50% of the raw materials taken from the Earth's crust are used in construction and the built environment produces approximately one third of all greenhouse gas emissions. The waste arising from construction and demolition activities constitutes one of Europe's largest waste streams, the larger proportion of which is however recycled.

Waste from construction and demolition materials and soil equals 70 million tonnes and includes material delivered to sites but never used. The industry produces annually three times the waste produced by all UK households combined (DTI, 2004, p. 19). The construction industry is facing pressure to increase the sustainability of its practice (Parkin, 2000). This pressure implies a major change in the industry's understanding of the demands of society and its clients and in its own sense of corporate social responsibility in its work practices. Kibert (1999) summarises the aims of a sustainable construction practice in the following principles:

Landfill Tax (1996): Influences waste management practices by encouraging greater diversion of waste from landfill - greater and more innovative re-use and recycling of materials. The UK Government introduced the Landfill Tax in 1996 to provide a fiscal incentive to minimise waste as well as to identify opportunities for dealing with waste in a more productive way. When launched, for active waste the cost was set at £7 per tonne while inactive waste attracted a tax of £2 per tonne. In 1999 the rate for active waste was increased to £10 per tonne and through an annual escalator this higher rate rose to £15 per tonne by 2004. Such taxes continue to add costs throughout the industry, and are best avoided.

The contract specification for a public private partnership affords the opportunity and freedom to potential contractors to propose innovative solutions which integrate the design, construction, operation and maintenance of a new or existing public facility. It should be expressed in terms of the service outputs and outcomes required rather than a tightly specified list of inputs. In some cases, the main outputs of projects may be sustainable objectives, for example targets for recycling and composting in PFI projects for waste management, may require bidders as part of their method statement, to explain how they will comply with the environmental requirements in the specification. This might involve preparation of an environmental impact assessment by bidders of their proposed work. Throughout the PFI project the project team will be expected to develop and maintain a business case. The final business case will present all the relevant information which will enable a decision to be made about a contract award. The business case will therefore need to take account of the environmental requirements of the project, and in its final form, to provide an assessment of the preferred option with appropriate commentary.

The business case should demonstrate that any specified environmental standards are reasonable, achievable and cost effective. It will also need to present any cost assumptions relating to a Public Sector Comparator (PSC) for the project. The inclusion of sustainable technologies with what might appear to be higher up front capital costs will need to be explained in terms of their cost effectiveness over the lifetime of the contract and the environmental benefits they deliver (Green Alliance, 2004).

Quality schemes are key drivers in improving performance in the public sector (Highways Agency, 2004). PFI is aimed to formulate the integration between the design, build and service operation, to incorporate innovative design, re-engineering, avoidance of over specification, the implementation of new materials, more efficient management, to guarantee maintenance at the appropriate time (HM Treasury Taskforce, 1999). DBFO encourages good long-term quality due to the concessionaire being bound to an extended term of maintenance (typically 30 years). Previously maintenance was neglected, due to the lack of budget, resulting in the quality of roads deteriorating as a result of the re-surfacing maintenance not being carried out at the appropriate time.

During pre-commencement the Project Partners combined to maximise the use of project derived excavated materials. Opportunities were also sought to utilise locally available secondary aggregates from sustainable sources: by-products of the heavy industry historically located in the area. This has significantly reduced the environmental impact on the community by negating the demand for primary aggregates and reducing long distance haulage movements on the project. The NSDR Scheme saved a considerable amount of cost (£2.0 M) by using recycled material and secondary aggregates instead of purchasing primary materials (The Big Picture:WRAP,2004). The specific cost savings by using recycled materials in highways maintenance and construction are:

The re-cycled materials are used in general granular fill, capping and unbound sub-base of road building. The re-cycled materials are: concrete aggregate, asphalt, blast furnace slag, steel slag, pulverized fuel ash and spent railway ballast. These re-cycled materials produced well graded granular material (Class 1A); selected coarse graded granular material (Class 6F2); selected granular material (Class 6F3); and granular sub-base material (Type 1).

Using local and recycled materials was a contract requirement. Overall, 95% of all aggregates used in the Newport SDR are recycled and secondary materials. This success can be attributed to the geographical location of the principal stockpiles of recycled and secondary aggregates, the ingenuity of the site team, together with a favourable specification. The slag came from a former steel mill in the area, and using it helped pump money back into the local economy. Excavation fill from early work, including old curbing and other concrete or asphalt products, was also used.

In most construction projects, contractors focus on keeping up-front costs low. For this project, however, the lengthy concession period forced the team to think about costs relating to the entire life of the project. Because the project depended on toll income calculated on the basis of 68 percent road availability, using materials that required less maintenance and repair meant fewer highway closures and more toll revenue. This "whole-life costing" allowed the contractor to use some high-quality items such as stainless steel columns for the River Usk Bridge.

Newport SDR also received the top award in the Environmental Best Practice in the Building and Construction Sector category for its use of excavations from contaminated land and the local secondary aggregate market. The project included some 460,000 tonnes of new engineering fill to construct around 9.5 km of road. By working with local suppliers recommended by the Environment Agency, around 95 per cent of the engineering fill was procured from secondary or recycled aggregate sources. Morgan Est's efforts to implement environmental best practice are combined in a process of continuous improvement and one of the most important areas it has been addressing is the re-use of materials. This sustainable approach also reduces materials purchase and transportation costs. Morgan Est is raising the profile of environmental best practice throughout its supply chain as part of its continuing process of vendor assessment. All members of the supply chain are made aware of Morgan Est's environmental policy and all sub-contractors that come on site receive an induction that covers environmental issues. Additionally the company's procurement team is working towards ensuring that materials are purchased from verified sustainable sources. The team has also started to collect data to identify suppliers that have an environmentally sound record and follow environmental best practice. (Interview, October 2004)